Artivion Reports First Quarter 2024 Financial Results
Artivion, Inc. (NYSE: AORT) reported strong first quarter 2024 financial results with revenue of $97.4 million, an increase of 17% on a GAAP basis. Net income was $7.5 million, and non-GAAP adjusted EBITDA increased by 60%. The company revised its FY24 revenue guidance to 9-12% growth. The On-X aortic valve post-market clinical study showed promising results, lowering the risk of major bleeding by 87%. Artivion raised the lower end of its revenue guidance for 2024 and expects non-GAAP adjusted EBITDA to increase by 26-34% compared to 2023.
Strong revenue growth of 17% on a GAAP basis in the first quarter of 2024.
Net income of $7.5 million and non-GAAP adjusted EBITDA increased by 60%.
Positive results from the On-X aortic valve post-market clinical study with an 87% reduction in major bleeding risk.
Revised FY24 revenue guidance to 9-12% growth and raising the lower end of the revenue expectations.
Expecting non-GAAP adjusted EBITDA to increase by 26-34% for the full year 2024 compared to 2023.
- None.
Insights
The release of Artivion's Q1 2024 results, showing a significant revenue increase of
The upward revision in full-year revenue guidance, with anticipated growth of
However, investors should be cautious about the reliance on non-GAAP measures and currency adjustments, which can sometimes provide a more favorable view of a company's financials than GAAP measures. It's also important to monitor how the negligible currency impact forecast for the full year will play out given the volatile nature of currency markets.
Artivion's strategic emphasis on aortic disease and related surgical solutions has positioned them well in a specialized and growing market. The reported
The clinical data highlighting the lower risk of major bleeding with the use of the On-X aortic valve strengthens the company's value proposition. Clinical superiority in medical devices is a strong driver for adoption, which could lead to increased sales and market share. Given that these technological advances can be a critical differentiator in the medical device industry, elements such as these could greatly influence Artivion's competitive edge and financial future.
Investors should keep an eye on research and development efforts, regulatory approvals and the integration of new technologies which are important for maintaining growth momentum in the high-stakes medical device sector.
First Quarter Highlights:
- Achieved revenue of
$97.4 million $83.2 million 17% on a GAAP basis and16% on a non-GAAP constant currency basis - Net income was
$7.5 million $0.18 $2.6 million $0.06 - Non-GAAP adjusted EBITDA increased
60% to$17.3 million $10.8 million - Revised FY24 revenue guidance to
9% to12% year-over-year growth on a constant currency basis, an increase of0.5% at the midpoint
"We are very pleased with our first quarter results as we maintained growth momentum and executed on key operational priorities. Revenue growth in the first quarter was driven by year-over-year constant currency growth in tissue processing of
Mr. Mackin added, "In addition to our strong commercial results, we were pleased to see positive long-term results from the On-X aortic valve post-market clinical study, the results of which were presented at AATS in April. This study showed that the use of the On-X aortic valve lowers the risk of major bleeding by
Mr. Mackin concluded, "In light of our strong first quarter performance, we are raising the midpoint of our full year revenue expectations and remain confident in our ability to meet or exceed our adjusted EBITDA target for 2024."
First Quarter 2024 Financial Results
Total revenues for the first quarter of 2024 were
Net income for the first quarter of 2024 was
2024 Financial Outlook
Artivion is raising the lower end of its revenue guidance and now expects constant currency revenue growth of between
Additionally, Artivion continues to expect non-GAAP adjusted EBITDA to increase between
The Company's financial performance for 2024 and future periods is subject to the risks identified below.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, including non-GAAP revenue, non-GAAP net income, non-GAAP adjusted EBITDA, non-GAAP general, administrative, and marketing expenses, and free cash flows. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with US 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 revenues are adjusted for the impact of changes in currency exchange. The Company's non-GAAP net income; non-GAAP adjusted EBITDA; non-GAAP general, administrative, and marketing, and free cash flows results exclude (as applicable) depreciation and amortization expense; interest income and expense; stock-based compensation expense; loss or gain on foreign currency revaluation; income tax expense or benefit; corporate rebranding expense; business development, integration, and severance income or expense; loss on extinguishment of debt; and non-cash interest expense. The Company generally uses non-GAAP financial measures to facilitate management's review of the operational performance of the company and as a basis for strategic planning. Company management 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 impact of recent acquisitions, non-cash expense related to amortization of previously acquired tangible and intangible assets, and any related adjustments to their carrying values. The Company has adjusted for the impact of changes in currency exchange from certain revenues to evaluate comparable product 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. Company management encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety, including the reconciliation of GAAP to non-GAAP financial measures.
Webcast and Conference Call Information
The company will hold a teleconference call and live webcast on May 6, 2024, at 4:30 p.m. ET to discuss the results, followed by a question and answer session. To participate in the conference call dial 201-689-8261 a few minutes prior to 4:30 p.m. ET. The teleconference replay will be available approximately one hour following the completion of the event and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The conference number for the replay is 13744600.
The live webcast and replay can be accessed by going to the Investors section of the Artivion website at www.Artivion.com and selecting the heading Webcasts & Presentations.
About Artivion, Inc.
Headquartered in suburban
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, but are not limited to, those regarding our full year revenue expectations and our confidence in our ability to meet or exceed our adjusted EBITDA target for 2024; the timeline for regulatory approval for AMDS and other products; that our revenues for the full year 2024 will be in the range of
Artivion, Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) In Thousands, Except Per Share Data (Unaudited) | |||
Three Months Ended | |||
2024 | 2023 | ||
Revenues: | |||
Products | $ 71,114 | $ 62,291 | |
Preservation services | 26,317 | 20,938 | |
Total revenues | 97,431 | 83,229 | |
Cost of products and preservation services: | |||
Products | 23,750 | 19,533 | |
Preservation services | 10,735 | 9,969 | |
Total cost of products and preservation services | 34,485 | 29,502 | |
Gross margin | 62,946 | 53,727 | |
Operating expenses: | |||
General, administrative, and marketing | 30,689 | 50,365 | |
Research and development | 6,946 | 7,223 | |
Total operating expenses | 37,635 | 57,588 | |
Operating income (loss) | 25,311 | (3,861) | |
Interest expense | 7,826 | 6,096 | |
Interest income | (374) | (75) | |
Loss on extinguishment of debt | 3,669 | — | |
Other expense (income), net | 1,409 | (963) | |
Income (loss) before income taxes | 12,781 | (8,919) | |
Income tax expense | 5,248 | 4,613 | |
Net income (loss) | $ 7,533 | $ (13,532) | |
Income (loss) per share: | |||
Basic | $ 0.18 | $ (0.33) | |
Diluted | $ 0.18 | $ (0.33) | |
Weighted-average common shares outstanding: | |||
Basic | 41,290 | 40,432 | |
Diluted | 47,886 | 40,432 | |
Net income (loss) | $ 7,533 | $ (13,532) | |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (3,137) | 4,621 | |
Unrealized gain (loss) from foreign currency intra-entity loans, net of tax | 1,609 | (1,005) | |
Comprehensive income (loss) | $ 6,005 | $ (9,916) | |
Artivion, Inc. and Subsidiaries Condensed Consolidated Balance Sheets In Thousands | |||
March 31, | December 31, | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 51,118 | $ 58,940 | |
Trade receivables, net | 74,301 | 71,796 | |
Other receivables | 2,272 | 2,342 | |
Inventories, net | 81,716 | 81,976 | |
Deferred preservation costs, net | 50,151 | 49,804 | |
Prepaid expenses and other | 17,227 | 15,810 | |
Total current assets | 276,785 | 280,668 | |
Goodwill | 245,030 | 247,337 | |
Acquired technology, net | 138,474 | 142,593 | |
Operating lease right-of-use assets, net | 42,492 | 43,822 | |
Property and equipment, net | 37,788 | 38,358 | |
Other intangibles, net | 29,506 | 29,638 | |
Deferred income taxes | 668 | 1,087 | |
Other long-term assets | 13,264 | 8,894 | |
Total assets | $ 784,007 | $ 792,397 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 10,378 | $ 13,318 | |
Accrued compensation | 10,843 | 18,715 | |
Accrued expenses | 15,926 | 12,732 | |
Taxes payable | 2,090 | 3,840 | |
Current maturities of operating leases | 3,214 | 3,395 | |
Accrued procurement fees | 1,418 | 1,439 | |
Current portion of long-term debt | 270 | 1,451 | |
Other current liabilities | 1,691 | 2,972 | |
Total current liabilities | 45,830 | 57,862 | |
Long-term debt | 313,004 | 305,531 | |
Contingent consideration | 46,420 | 63,890 | |
Non-current maturities of operating leases | 42,861 | 43,977 | |
Deferred income taxes | 22,343 | 21,851 | |
Deferred compensation liability | 7,445 | 6,760 | |
Non-current finance lease obligation | 3,268 | 3,405 | |
Other long-term liabilities | 7,851 | 7,341 | |
Total liabilities | $ 489,022 | $ 510,617 | |
Commitments and contingencies | |||
Shareholders' equity: | |||
Preferred stock | — | — | |
Common stock (75,000 shares authorized, 43,224 and 42,569 shares issued in 2024 and 2023, respectively) | 432 | 426 | |
Additional paid-in capital | 363,113 | 355,919 | |
Retained deficit | (40,374) | (47,907) | |
Accumulated other comprehensive loss | (13,538) | (12,010) | |
Treasury stock, at cost, 1,487 shares as of March 31, 2024 and December 31, 2023 | (14,648) | (14,648) | |
Total shareholders' equity | 294,985 | 281,780 | |
Total liabilities and shareholders' equity | $ 784,007 | $ 792,397 | |
Artivion, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows In Thousands (Unaudited) | |||
Three Months Ended | |||
2024 | 2023 | ||
Net cash flows from operating activities: | |||
Net income (loss) | $ 7,533 | $ (13,532) | |
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||
Depreciation and amortization | 5,909 | 5,734 | |
Deferred income taxes | 4,299 | (2,167) | |
Loss on extinguishment of debt | 3,669 | — | |
Non-cash compensation | 3,478 | 3,341 | |
Non-cash lease expense | 1,920 | 1,802 | |
Write-down of inventories and deferred preservation costs | 723 | 1,123 | |
Change in fair value of contingent consideration | (17,470) | 4,800 | |
Other | 644 | 754 | |
Changes in operating assets and liabilities: | |||
Inventories and deferred preservation costs | (1,380) | (3,222) | |
Prepaid expenses and other assets | (2,268) | (2,014) | |
Receivables | (3,334) | 3,540 | |
Accounts payable, accrued expenses, and other liabilities | (9,216) | (6,313) | |
Net cash flows used in operating activities | (5,493) | (6,154) | |
Net cash flows from investing activities: | |||
Capital expenditures | (3,611) | (2,843) | |
Net cash flows used in investing activities | (3,611) | (2,843) | |
Net cash flows from financing activities: | |||
Proceeds from issuance of debt | 190,000 | — | |
Proceeds from revolving credit facility | 30,000 | — | |
Proceeds from exercise of stock options and issuance of common stock | 3,528 | 2,581 | |
Principal payments on short-term notes payable | (1,027) | — | |
Payment of debt issuance costs | (9,998) | — | |
Repayment of debt | (211,627) | (690) | |
Other | (139) | (720) | |
Net cash flows provided by financing activities | 737 | 1,171 | |
Effect of exchange rate changes on cash and cash equivalents | 545 | (752) | |
Decrease in cash and cash equivalents | (7,822) | (8,578) | |
Cash and cash equivalents beginning of period | 58,940 | 39,351 | |
Cash and cash equivalents end of period | $ 51,118 | $ 30,773 | |
Artivion, Inc. and Subsidiaries Financial Highlights In Thousands (Unaudited) | |||
Three Months Ended | |||
2024 | 2023 | ||
Products: | |||
Aortic stent grafts | $ 32,103 | $ 26,150 | |
On-X | 19,681 | 17,656 | |
Surgical sealants | 16,981 | 16,703 | |
Other | 2,349 | 1,782 | |
Total products | 71,114 | 62,291 | |
Preservation services | 26,317 | 20,938 | |
Total revenues | $ 97,431 | $ 83,229 | |
50,928 | 43,244 | ||
33,588 | 27,929 | ||
7,609 | 7,878 | ||
5,306 | 4,178 | ||
Total revenues | $ 97,431 | $ 83,229 | |
Artivion, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Revenues In Thousands (Unaudited) | |||||||||
Revenues for the Three Months Ended March 31, | Percent Change From Prior Year | ||||||||
2024 | 2023 | ||||||||
US GAAP | US GAAP | Exchange | Constant | Constant | |||||
Products: | |||||||||
Aortic stent grafts | $ 32,103 | $ 26,150 | $ 748 | $ 26,898 | 19 % | ||||
On-X | 19,681 | 17,656 | 104 | 17,760 | 11 % | ||||
Surgical sealants | 16,981 | 16,703 | 118 | 16,821 | 1 % | ||||
Other | 2,349 | 1,782 | 5 | 1,787 | 31 % | ||||
Total products | 71,114 | 62,291 | 975 | 63,266 | 12 % | ||||
Preservation services | 26,317 | 20,938 | 2 | 20,940 | 26 % | ||||
Total | $ 97,431 | $ 83,229 | $ 977 | $ 84,206 | 16 % | ||||
50,928 | 43,244 | 6 | 43,250 | 18 % | |||||
33,588 | 27,929 | 805 | 28,734 | 17 % | |||||
7,609 | 7,878 | — | 7,878 | -3 % | |||||
5,306 | 4,178 | 166 | 4,344 | 22 % | |||||
Total | $ 97,431 | $ 83,229 | $ 977 | $ 84,206 | 16 % | ||||
Artivion, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP General, Administrative, and Marketing Expense, Adjusted EBITDA, and Free Cash Flows In Thousands (Unaudited) | |||
Three Months Ended | |||
2024 | 2023 | ||
Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP: | |||
General, administrative, and marketing expense, GAAP | $ 30,689 | $ 50,365 | |
Business development, integration, and severance (income) expense | (17,387) | 4,997 | |
Corporate rebranding expense | — | 149 | |
Adjusted G&A, non-GAAP | $ 48,076 | $ 45,219 | |
Three Months Ended | |||
2024 | 2023 | ||
Reconciliation of net income (loss), GAAP to adjusted EBITDA, non-GAAP: | |||
Net income (loss), GAAP | $ 7,533 | $ (13,532) | |
Adjustments: | |||
Interest expense | 7,826 | 6,096 | |
Depreciation and amortization expense | 5,909 | 5,734 | |
Income tax expense | 5,248 | 4,613 | |
Loss on extinguishment of debt | 3,669 | — | |
Stock-based compensation expense | 3,478 | 3,341 | |
Loss (gain) on foreign currency revaluation | 1,410 | (973) | |
Corporate rebranding expense | — | 149 | |
Interest income | (374) | (75) | |
Business development, integration, and severance (income) expense | (17,387) | 5,452 | |
Adjusted EBITDA, non-GAAP | $ 17,312 | $ 10,805 | |
Three Months Ended | |||
2024 | 2023 | ||
Reconciliation of cash flows from operating activities, GAAP to free cash flows, non-GAAP: | |||
Net cash flows used in operating activities | $ (5,493) | $ (6,154) | |
Capital expenditures | (3,611) | (2,843) | |
Free cash flows, non-GAAP | $ (9,104) | $ (8,997) | |
| Artivion Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Net Income and Diluted Income Per Common Share In Thousands, Except Per Share Data (Unaudited) | |||
Three Months Ended | |||
2024 | 2023 | ||
GAAP: | |||
Income (loss) before income taxes | $ 12,781 | $ (8,919) | |
Income tax expense | 5,248 | 4,613 | |
Net income (loss) | $ 7,533 | $ (13,532) | |
Diluted income (loss) per common share | $ 0.18 | $ (0.33) | |
Diluted weighted-average common shares outstanding | 47,886 | 40,432 | |
Reconciliation of income (loss) before income taxes, GAAP to adjusted income, non-GAAP: | |||
Income (loss) before income taxes, GAAP: | $ 12,781 | $ (8,919) | |
Adjustments: | |||
Amortization expense | 3,867 | 3,881 | |
Loss on extinguishment of debt | 3,669 | — | |
Non-cash interest expense | 580 | 462 | |
Corporate rebranding expense | — | 149 | |
Business development, integration, and severance (income) expense | (17,387) | 5,452 | |
Adjusted income before income taxes, non-GAAP | 3,510 | 1,025 | |
Income tax expense calculated at a tax rate of | 878 | 256 | |
Adjusted net income, non-GAAP | $ 2,632 | $ 769 | |
Reconciliation of diluted income (loss) per common share, GAAP to adjusted diluted income per common share, non-GAAP: | |||
Diluted income (loss) per common share, GAAP: | $ 0.18 | $ (0.33) | |
Adjustments: | |||
Amortization expense | 0.09 | 0.10 | |
Loss on extinguishment of debt | 0.09 | — | |
Non-cash interest expense | 0.01 | 0.01 | |
Business development, integration, and severance (income) expense | (0.41) | 0.13 | |
Tax effect of non-GAAP adjustments | 0.05 | (0.06) | |
Effect of | 0.05 | 0.17 | |
Adjusted diluted income per common share, non-GAAP | $ 0.06 | $ 0.02 | |
Reconciliation of diluted weighted-average common shares outstanding GAAP to diluted weighted-average common shares outstanding, non-GAAP: | |||
Diluted weighted-average common shares outstanding, GAAP: | 47,886 | 40,432 | |
Adjustments: | |||
Effect of dilutive stock options and awards | — | 418 | |
Effect of convertible senior notes | (5,707) | — | |
Diluted weighted-average common shares outstanding, non-GAAP | 42,179 | 40,850 | |
Contacts: | |
Artivion | Gilmartin Group LLC |
Lance A. Berry | Brian Johnston / Laine Morgan |
Executive Vice President & | Phone: 332-895-3222 |
Chief Financial Officer | investors@artivion.com |
Phone: 770-419-3355 | |
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SOURCE Artivion, Inc.
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