ATLANTA, Oct. 30, 2019 /PRNewswire/ --
Third Quarter and Recent Business Highlights:
- Total revenues were $67.9 million
in the third quarter of 2019, reflecting year over year growth of
5% and a 6% increase on a non-GAAP constant currency basis, both
compared to the third quarter of 2018
-
- On-X® revenues increased 12%, and 12% on a non-GAAP
constant currency basis, both compared to the third quarter of
2018
- JOTEC® revenues increased 5%, and 9% on a non-GAAP
constant currency basis, both compared to the third quarter of
2018
- Net loss was ($134,000), or
$0.00 per fully diluted common share;
non-GAAP net income was $2.2 million,
or $0.06 per fully diluted common
share
CryoLife, Inc. (NYSE: CRY), a leading cardiac and
vascular surgery company focused on aortic disease, announced today
its financial results for the third quarter ended September 30, 2019.
"Our third quarter results were in line with our expectations,
and through the first three quarters of 2019 we have delivered
constant currency growth of 8% relative to the same period last
year," said Pat Mackin, Chairman,
President, and Chief Executive Officer. "The anticipated
effects from continued currency headwinds and temporary issues with
TMR handpiece supply in the US are causing us to lower our full
year top line guidance. We believe the upcoming launch of
three next-generation JOTEC products in the EU combined with the
recent addition of NEXUS, manufacturing improvements at JOTEC, and
the anticipated commencement of the PROACT Xa trial position us
well for 2020 and beyond."
Third Quarter 2019 Financial Results
Total revenues
for the third quarter of 2019 were $67.9
million, reflecting growth of 5%, and 6% on a non-GAAP
constant currency basis, both compared to the third quarter of
2018. The increase was driven by revenue growth from On-X,
JOTEC, and tissue processing.
Net loss for the third quarter of 2019 was ($134,000), or $0.00 per fully diluted common share, compared to
a net income of $1.6 million, or
$0.04 per fully diluted common share
for the third quarter of 2018. Net loss for the third quarter
of 2019 includes $1.2 million in
business development expenses. Non-GAAP net income for the
third quarter of 2019 was $2.2
million, or $0.06 per fully
diluted common share, compared to non-GAAP net income of
$3.1 million, or $0.08 per fully diluted common share for the
third quarter of 2018.
2019 Financial Outlook
CryoLife expects total revenues for 2019 to be in the range of
$276.5 million to $278.5 million. This compares to the
previous expected range of $280.0
million to $284.0 million for
the year, with the change due to the effects of foreign currency
and a lack of availability of TMR handpieces in the fourth quarter
of 2019. Non-GAAP earnings per share are still expected to be
between $0.28 and $0.32 for the full year.
All numbers are presented on a GAAP basis except where expressly
referenced as non-GAAP. The Company does not provide GAAP
income per common share on a forward-looking basis because the
Company is unable to predict with reasonable certainty business
development and acquisition-related expenses, purchase accounting
fair value adjustments, and any unusual gains and losses without
unreasonable effort. These items are uncertain, depend on
various factors, and could be material to results computed in
accordance with GAAP.
The Company's financial guidance for 2019 is subject to the
risks identified below.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures.
Investors should consider this non-GAAP information in addition to,
and not as a substitute for, financial measures prepared in
accordance with U.S. GAAP. In addition, this non-GAAP
financial information may not be the same as similar measures
presented by other companies. The Company's non-GAAP net
income and non-GAAP EBITDA results exclude (as applicable) business
development and integration expenses, amortization expense,
inventory basis step-up expense, loss on foreign currency
revaluation, and stock-based compensation expense. The
Company believes that these non-GAAP presentations provide useful
information to investors regarding unusual non-operating
transactions; the operating expense structure of the Company's
existing and recently acquired operations, without regard to its
on-going efforts to acquire additional complementary products and
businesses and the transaction and integration expenses incurred in
connection with recently acquired and divested product lines; and
the operating expense structure excluding fluctuations resulting
from foreign currency revaluation and stock-based compensation
expense. The Company believes it is useful to exclude certain
expenses because such amounts in any specific period may not
directly correlate to the underlying performance of its business
operations or can vary significantly between periods as a result of
factors such as acquisitions, or non-cash expense related to
amortization of previously acquired tangible and intangible
assets. The Company has excluded the impact of changes in
currency exchange from certain revenues to evaluate growth rates on
a constant currency basis. The Company does, however, expect
to incur similar types of expenses and currency exchange impacts in
the future, and this non-GAAP financial information should not be
viewed as a statement or indication that these types of expenses
will not recur.
Webcast and Conference Call Information
The Company
will hold a teleconference call and live webcast later today,
October 30, 2019 at 5:30 p.m. ET to discuss the results followed by a
question and answer session. To listen to the live
teleconference, please dial 201-689-8261. A replay of the
teleconference will be available through November 6, 2019 and can be accessed by calling
(toll free) 877-660-6853 or 201-612-7415. The Conference ID
for the replay is 13695440.
The live webcast and replay can be accessed by going to the
Investor Relations section of the CryoLife website at
www.cryolife.com and selecting the heading Webcasts &
Presentations.
About CryoLife, Inc.
Headquartered in suburban
Atlanta, Georgia, CryoLife is a
leader in the manufacturing, processing, and distribution of
medical devices and implantable tissues used in cardiac and
vascular surgical procedures focused on aortic repair.
CryoLife markets and sells products in more than 100 countries
worldwide. For additional information about CryoLife, visit
our website, www.cryolife.com.
Forward Looking Statements
Statements made in this
press release that look forward in time or that
express management's beliefs, expectations, or hopes are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such
forward-looking statements reflect the views of management at the
time such statements are made. These statements include our
revenue and non-GAAP earnings per share guidance, and our beliefs
that the effects of our TMR handpiece supply in the US are
temporary and that the upcoming launch in the EU of three of
our next-generation JOTEC products, combined with the recent
addition in the EU of NEXUS, manufacturing improvements at JOTEC,
and anticipated commencement of the PROACT Xa trial position us
well for 2020 and beyond." These forward-looking
statements are subject to a number of risks, uncertainties,
estimates, and assumptions that may cause actual results to differ
materially from current expectations. These risks and
uncertainties include the risk factors detailed in our Securities
and Exchange Commission filings, including our Form 10-K for year
ended December 31, 2018.
CryoLife does not undertake to update its forward-looking
statements, whether as a result of new information, future events,
or otherwise.
CRYOLIFE, INC. AND
SUBSIDIARIES
|
Financial
Highlights
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
$
|
47,484
|
|
$
|
45,152
|
|
$
|
147,053
|
|
$
|
138,063
|
Preservation
services
|
|
20,397
|
|
|
19,446
|
|
|
59,472
|
|
|
56,979
|
Total
revenues
|
|
67,881
|
|
|
64,598
|
|
|
206,525
|
|
|
195,042
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of products
and preservation services:
|
|
|
|
|
|
|
|
|
|
|
|
Products
|
|
12,706
|
|
|
12,459
|
|
|
41,021
|
|
|
40,166
|
Preservation
services
|
|
9,953
|
|
|
9,425
|
|
|
29,043
|
|
|
27,083
|
Total cost of
products and preservation services
|
|
22,659
|
|
|
21,884
|
|
|
70,064
|
|
|
67,249
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
45,222
|
|
|
42,714
|
|
|
136,461
|
|
|
127,793
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
General,
administrative, and marketing
|
|
34,259
|
|
|
32,871
|
|
|
105,402
|
|
|
104,946
|
Research and
development
|
|
6,259
|
|
|
5,225
|
|
|
17,648
|
|
|
16,314
|
Total operating
expenses
|
|
40,518
|
|
|
38,096
|
|
|
123,050
|
|
|
121,260
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
4,704
|
|
|
4,618
|
|
|
13,411
|
|
|
6,533
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
3,555
|
|
|
4,104
|
|
|
11,260
|
|
|
11,863
|
Interest
income
|
|
(259)
|
|
|
(52)
|
|
|
(608)
|
|
|
(141)
|
Other expense,
net
|
|
2,400
|
|
|
(1,542)
|
|
|
2,662
|
|
|
(257)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes
|
|
(992)
|
|
|
2,108
|
|
|
97
|
|
|
(4,932)
|
Income tax (benefit)
expense
|
|
(858)
|
|
|
543
|
|
|
(2,304)
|
|
|
(2,868)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(134)
|
|
$
|
1,565
|
|
$
|
2,401
|
|
$
|
(2,064)
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per
common share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.00
|
|
$
|
0.04
|
|
$
|
0.06
|
|
$
|
(0.06)
|
Diluted
|
$
|
0.00
|
|
$
|
0.04
|
|
$
|
0.06
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
37,255
|
|
|
36,526
|
|
|
37,065
|
|
|
36,331
|
Diluted
|
|
37,255
|
|
|
37,610
|
|
|
37,850
|
|
|
36,331
|
CRYOLIFE, INC. AND
SUBSIDIARIES
|
Financial
Highlights
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Products:
|
|
|
|
|
|
|
|
|
|
|
|
BioGlue
|
$
|
15,679
|
|
$
|
15,646
|
|
$
|
50,834
|
|
$
|
48,685
|
JOTEC
|
|
15,774
|
|
|
15,004
|
|
|
48,936
|
|
|
46,669
|
On-X
|
|
12,610
|
|
|
11,298
|
|
|
36,751
|
|
|
33,495
|
CardioGenesis cardiac
laser therapy
|
|
1,354
|
|
|
1,590
|
|
|
4,966
|
|
|
4,514
|
PerClot
|
|
980
|
|
|
882
|
|
|
2,814
|
|
|
2,822
|
PhotoFix
|
|
1,087
|
|
|
732
|
|
|
2,752
|
|
|
1,878
|
Total products
|
|
47,484
|
|
|
45,152
|
|
|
147,053
|
|
|
138,063
|
|
|
|
|
|
|
|
|
|
|
|
|
Preservation
services:
|
|
|
|
|
|
|
|
|
|
|
|
Cardiac
tissue
|
|
11,304
|
|
|
9,502
|
|
|
30,734
|
|
|
26,660
|
Vascular
tissue
|
|
9,093
|
|
|
9,944
|
|
|
28,738
|
|
|
30,319
|
Total preservation
services
|
|
20,397
|
|
|
19,446
|
|
|
59,472
|
|
|
56,979
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
$
|
67,881
|
|
$
|
64,598
|
|
$
|
206,525
|
|
$
|
195,042
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
U.S.
|
$
|
37,981
|
|
$
|
36,516
|
|
$
|
113,548
|
|
$
|
108,123
|
International
|
|
29,900
|
|
|
28,082
|
|
|
92,977
|
|
|
86,919
|
Total
revenues
|
$
|
67,881
|
|
$
|
64,598
|
|
$
|
206,525
|
|
$
|
195,042
|
|
(Unaudited)
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2019
|
|
2018
|
Cash, cash
equivalents, and restricted securities
|
$
|
37,177
|
|
$
|
42,236
|
Total current
assets
|
|
181,354
|
|
|
179,168
|
Total
assets
|
|
592,602
|
|
|
571,091
|
Total current
liabilities
|
|
42,190
|
|
|
34,523
|
Total
liabilities
|
|
315,101
|
|
|
296,024
|
Shareholders'
equity
|
|
277,501
|
|
|
275,067
|
CRYOLIFE, INC. AND
SUBSIDIARIES
|
Reconciliation of
GAAP to Non-GAAP
|
Net (Loss) Income
and Diluted (Loss) Income Per Common Share
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
|
2019
|
|
|
2018
|
|
|
2019
|
|
|
2018
|
GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes
|
$
|
(992)
|
|
$
|
2,108
|
|
$
|
97
|
|
$
|
(4,932)
|
Income tax (benefit)
expense
|
|
(858)
|
|
|
543
|
|
|
(2,304)
|
|
|
(2,868)
|
Net (loss)
income
|
$
|
(134)
|
|
$
|
1,565
|
|
$
|
2,401
|
|
$
|
(2,064)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss)
income per common share:
|
$
|
0.00
|
|
$
|
0.04
|
|
$
|
0.06
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of (loss) income before income taxes,
|
|
|
|
|
|
|
|
|
|
|
|
GAAP to adjusted
net income, non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income
before income taxes, GAAP
|
$
|
(992)
|
|
$
|
2,108
|
|
$
|
97
|
|
$
|
(4,932)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Business development
and integration expenses
|
|
1,250
|
|
|
1,917
|
|
|
2,562
|
|
|
6,933
|
Amortization
expense
|
|
2,660
|
|
|
2,707
|
|
|
7,796
|
|
|
8,195
|
Gain on On-X escrow
settlement
|
|
--
|
|
|
(2,675)
|
|
|
--
|
|
|
(2,675)
|
Inventory basis step-up
expense
|
|
--
|
|
|
62
|
|
|
--
|
|
|
2,805
|
Adjusted income
before income taxes,
|
|
|
|
|
|
|
|
|
|
|
|
non-GAAP
|
|
2,918
|
|
|
4,119
|
|
|
10,455
|
|
|
10,326
|
Income tax expense
calculated at a
|
|
|
|
|
|
|
|
|
|
|
|
pro forma tax rate of
25%
|
|
730
|
|
|
1,030
|
|
|
2,614
|
|
|
2,582
|
Adjusted net
income, non-GAAP
|
$
|
2,188
|
|
$
|
3,089
|
|
$
|
7,841
|
|
$
|
7,744
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of diluted (loss) income per common share, GAAP
|
|
|
|
|
|
|
|
|
|
|
|
to adjusted
diluted income per common share, non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income
(loss) per common share, GAAP:
|
$
|
0.00
|
|
$
|
0.04
|
|
$
|
0.06
|
|
$
|
(0.06)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Business development
and integration expenses
|
|
0.03
|
|
|
0.05
|
|
|
0.06
|
|
|
0.19
|
Amortization
expense
|
|
0.07
|
|
|
0.08
|
|
|
0.20
|
|
|
0.22
|
Gain on On-X escrow
settlement
|
|
--
|
|
|
(0.07)
|
|
|
--
|
|
|
(0.07)
|
Inventory basis step-up
expense
|
|
--
|
|
|
--
|
|
|
--
|
|
|
0.07
|
Tax effect of non-GAAP
adjustments
|
|
(0.02)
|
|
|
(0.02)
|
|
|
(0.05)
|
|
|
(0.10)
|
Effect of 25% pro forma
tax rate
|
|
(0.02)
|
|
|
--
|
|
|
(0.06)
|
|
|
(0.04)
|
Adjusted diluted
income per common share,
|
|
|
|
|
|
|
|
|
|
|
|
non-GAAP:
|
$
|
0.06
|
|
$
|
0.08
|
|
$
|
0.21
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted-average common
|
|
|
|
|
|
|
|
|
|
|
|
shares
outstanding
|
|
37,940
|
|
|
37,610
|
|
|
37,850
|
|
|
37,351
|
CRYOLIFE, INC. AND
SUBSIDIARIES
|
Reconciliation of
GAAP to Non-GAAP
|
Revenues
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2019
|
|
2018
|
Growth
Rate
|
|
2019
|
|
2018
|
Growth
Rate
|
Reconciliation
of total revenues, GAAP to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total revenues,
non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues,
GAAP
|
$
|
67,881
|
|
$
|
64,598
|
5%
|
|
$
|
206,525
|
|
$
|
195,042
|
6%
|
Impact of changes in
currency exchange
|
|
--
|
|
|
(701)
|
|
|
|
--
|
|
|
(3,775)
|
|
Total constant
currency revenues, non-GAAP
|
$
|
67,881
|
|
$
|
63,897
|
6%
|
|
$
|
206,525
|
|
$
|
191,267
|
8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of total On-X revenues, GAAP to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total On-X
revenues, non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total On-X revenues,
GAAP
|
$
|
12,610
|
|
$
|
11,298
|
12%
|
|
$
|
36,751
|
|
$
|
33,495
|
10%
|
Impact of changes in
currency exchange
|
|
--
|
|
|
(46)
|
|
|
|
--
|
|
|
(214)
|
|
Total constant
currency On-X revenues, non-GAAP
|
$
|
12,610
|
|
$
|
11,252
|
12%
|
|
$
|
36,751
|
|
$
|
33,281
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of total JOTEC revenues, GAAP, to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
total JOTEC
revenues, non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total JOTEC revenues,
GAAP
|
$
|
15,774
|
|
$
|
15,004
|
5%
|
|
$
|
48,936
|
|
$
|
46,669
|
5%
|
Impact of changes in
currency exchange
|
|
--
|
|
|
(496)
|
|
|
|
--
|
|
|
(2,780)
|
|
Total constant
currency JOTEC revenues, non-GAAP
|
$
|
15,774
|
|
$
|
14,508
|
9%
|
|
$
|
48,936
|
|
$
|
43,889
|
11%
|
CRYOLIFE, INC. AND
SUBSIDIARIES
|
Reconciliation of
GAAP to Non-GAAP
|
Adjusted
EBITDA
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
|
September
30,
|
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
Reconciliation
of net (loss) income, GAAP to
|
|
|
|
|
|
|
|
|
|
|
|
|
adjusted EBITDA,
non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income,
GAAP
|
$
|
(134)
|
|
$
|
1,565
|
|
|
$
|
2,401
|
|
$
|
(2,064)
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
4,526
|
|
|
4,530
|
|
|
|
13,257
|
|
|
13,636
|
Income tax (benefit)
expense
|
|
(858)
|
|
|
543
|
|
|
|
(2,304)
|
|
|
(2,868)
|
Interest
income
|
|
(259)
|
|
|
(52)
|
|
|
|
(608)
|
|
|
(141)
|
Interest
expense
|
|
3,555
|
|
|
4,104
|
|
|
|
11,260
|
|
|
11,863
|
Gain on On-X escrow
settlement
|
|
--
|
|
|
(2,675)
|
|
|
|
--
|
|
|
(2,675)
|
Inventory basis step-up
expense
|
|
--
|
|
|
62
|
|
|
|
--
|
|
|
2,805
|
Business development
and integration expenses
|
|
1,250
|
|
|
1,917
|
|
|
|
2,562
|
|
|
6,933
|
Loss on foreign
currency revaluation
|
|
2,419
|
|
|
683
|
|
|
|
2,669
|
|
|
2,141
|
Stock-based
compensation expense
|
|
2,462
|
|
|
1,565
|
|
|
|
6,581
|
|
|
4,685
|
Adjusted EBITDA,
non-GAAP
|
$
|
12,961
|
|
$
|
12,242
|
|
|
$
|
35,818
|
|
$
|
34,315
|
Contacts:
CryoLife
D. Ashley
Lee
Executive Vice
President, Chief Financial Officer and
Chief Operating Officer
Phone:
770-419-3355
|
Gilmartin Group
LLC
Greg Chodaczek / Lynn
Lewis
Phone:
646-924-1769
investors@cryolife.com
|
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SOURCE CryoLife, Inc.