CryoLife Reports Second Quarter 2021 Financial Results

Rhea-AI Summary

CryoLife, Inc. (NYSE: CRY) reported strong financial results for Q2 2021, achieving total revenues of $76.1 million, a 42% increase year-over-year. Despite a net loss of ($2.2) million or ($0.06) per share, the company posted non-GAAP net income of $4.8 million, equivalent to $0.12 per share. Growth was driven by new product launches and recovery in procedure volumes. The company anticipates a 7%–10% revenue increase in H2 2021, projecting full-year revenues between $296 million and $300 million.

Positive

• Q2 2021 revenues rose to $76.1 million, a 42% increase YOY.
• Non-GAAP net income improved to $4.8 million or $0.12 per share.
• The company expects a 7%–10% revenue increase in H2 2021.

Negative

• Net loss of $2.2 million reported for Q2 2021.
• Minimal contribution from PerClot expected in H2 2021.

ATLANTA, July 29, 2021 /PRNewswire/ --

Second Quarter and Recent Business Highlights:

• Achieved total revenues of $76.1 million in the second quarter 2021 versus $53.8 million in the second quarter of 2020, an increase of 42% on a GAAP basis and 35% on a non-GAAP proforma constant currency basis
• Net loss was ($2.2) million, or ($0.06) per share, in the second quarter of 2021
• Non-GAAP net income was $4.8 million, or $0.12 per share, in the second quarter of 2021 

CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the second quarter ended June 30, 2021.

"For the second consecutive quarter we saw revenue growth on both a GAAP and pro forma constant currency basis compared to the prior year, and more importantly compared to 2019. Growth was driven by our new product launches outside of the U.S., a normalization in procedure volumes in the U.S., continued recovery in Europe, and strength in our U.S. On-X business," commented Pat Mackin, Chairman, President, and Chief Executive Officer.

"Additionally, we continued to advance our regulatory strategy and are on track to file PMAs for PerClot and PROACT Mitral in the third quarter. PROACT Mitral, if approved, is expected to drive growth in 2022 and 2023. We also made solid progress on enrollment in our PROACT Xa clinical trial while advancing R&D programs designed to fuel growth beginning in 2024."

Second Quarter 2021 Financial Results
Total revenues for the second quarter of 2021 were $76.1 million, reflecting an increase of 42% on a GAAP basis and 35% on a non-GAAP proforma constant currency basis, both compared to the second quarter of 2020.

Net loss for the second quarter of 2021 was ($2.2) million, or ($0.06) per fully diluted common share, compared to net loss of ($3.7) million, or ($0.10) per fully diluted common share for the second quarter of 2020. Non-GAAP net income for the second quarter of 2021 was $4.8 million, or $0.12 per fully diluted common share, compared to non-GAAP net loss of ($525,000), or ($0.01) per fully diluted common share for the second quarter of 2020.

The financial results reported in this earnings release are preliminary pending the Company's filing of its quarterly report on Form 10-Q, which it expects to file on July 30, 2021.

2021 Financial Outlook
The Company expects revenue in the second half of 2021 to increase 7% – 10% on a pro forma constant currency basis compared to the second half of 2019, which excludes PerClot, resulting in full year 2021 revenues of between $296.0 million and $300.0 million at a EUR/USD exchange rate of 1.20.   Revenues for the third quarter of 2021 are expected to be between $71.0 million and $73.0 million. This forecast is based on our estimates of the current and anticipated impact of Covid-19 on our business and contemplates minimal contribution from PerClot in the second half of 2021 due to the sale of our PerClot product line and Baxter's assumption of distribution for SMI PerClot outside of the U.S.

The Company's financial performance for the remainder of 2021 and future periods 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, non-GAAP EBITDA, and non-GAAP adjusted operating income results exclude (as applicable) business development, integration, and severance expense; depreciation and amortization expense; interest income and expense; non-cash interest expense; gain on foreign currency revaluation; stock-based compensation expense; corporate rebranding expense; and income tax expense (benefit).  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, July 29, 2021 at 4:30 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 August 5, 2021 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13721548.

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.  Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of the date of this press release and reflect the view of management as of the date of this press release. Such forward-looking statements reflect the views of management at the time such statements are made.  These statements include our belief that PROACT Mitral should help drive our growth in 2022 and 2023; our expectation that the PROACT Xa clinical trial and advanced R&D programs will deliver additional growth opportunities for us beginning in 2024; our forecasted revenue growth of 7%-10% for the second half of 2021 compared to the second half of 2019 (on a pro forma constant currency basis), resulting in forecasted full year revenues of between $296.0 million and $300.0 million at a EUR/USD exchange rate of 1.20; our forecast of third quarter 2021 revenues of between $71.0 million and $73.0 million; and our estimates of the current and anticipated impact of COVID-19 on our business for the second half of 2021. 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, including that the benefits anticipated from the Ascyrus Medical LLC transaction and Endospan distribution agreement may not be achieved, that our product candidates may not receive regulatory approval, that our products that obtain regulatory approval may not be accepted by the market, and the continued effects of COVID-19, including decelerating vaccination or vaccine adoption rates, or government mandates implemented to address the effects of the pandemic could adversely impact our results.  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, 2020.  CryoLife does not assume any obligation, and expressly disclaims any duty to update any of its forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:
CryoLife	Gilmartin Group LLC
D. Ashley Lee	Brian Johnston / Lynn Lewis
Executive Vice President, Chief Financial Officer and	Phone: 631-807-1986
Chief Operating Officer	investors@cryolife.com
Phone: 770-419-3355

 

CryoLife, Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (In thousands, except per share data) (Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2021			2020			2021			2020
Revenues:
Products	$	56,076		$	37,268		$	109,421		$	83,688
Preservation services		20,072			16,503			37,814			36,512
Total revenues		76,148			53,771			147,235			120,200
Cost of products and preservation services:
Products		16,178			10,040			31,089			23,080
Preservation services		9,457			7,841			17,795			17,059
Total cost of products and preservation services		25,635			17,881			48,884			40,139
Gross margin		50,513			35,890			98,351			80,061
Operating expenses:
General, administrative, and marketing		40,830			32,288			79,468			71,290
Research and development		8,360			5,522			16,114			11,878
Total operating expenses		49,190			37,810			95,582			83,168
Operating income (loss)		1,323			(1,920)			2,769			(3,107)
Interest expense		4,855			3,652			8,895			7,040
Interest income		(18)			(66)			(42)			(168)
Other (income) expense, net		(1,331)			(740)			600			2,922
Loss before income taxes		(2,183)			(4,766)			(6,684)			(12,901)
Income tax benefit		(5)			(1,077)			(1,368)			(2,547)
Net loss	$	(2,178)		$	(3,689)		$	(5,316)		$	(10,354)
Loss per common share:
Basic	$	(0.06)		$	(0.10)		$	(0.14)		$	(0.27)
Diluted	$	(0.06)		$	(0.10)		$	(0.14)		$	(0.27)
Weighted-average common shares outstanding:
Basic		38,943			37,520			38,841			37,455
Diluted		38,943			37,520			38,841			37,455
Net loss	$	(2,178)		$	(3,689)		$	(5,316)		$	(10,354)
Other comprehensive income (loss):
Foreign currency translation adjustments		2,973			4,434			(7,317)			(29)
Comprehensive income (loss)	$	795		$	745		$	(12,633)		$	(10,383)

 

CryoLife, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands)
	June 30,			December 31,
	2021			2020
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	50,473		$	61,412
Restricted securities		554			546
Trade receivables, net		49,672			45,964
Other receivables		3,612			2,788
Inventories, net		76,362			73,038
Deferred preservation costs		41,276			36,546
Prepaid expenses and other		16,105			14,295
Total current assets		238,054			234,589
Goodwill		255,484			260,061
Acquired technology, net		177,023			186,091
Operating lease right-of-use assets, net		48,359			18,571
Other intangibles, net		38,817			40,966
Property and equipment, net		36,417			33,077
Deferred income taxes		1,681			1,446
Other assets		14,662			14,603
Total assets	$	810,497		$	789,404
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of contingent consideration	$	17,300		$	16,430
Accounts payable		10,773			9,623
Accrued compensation		9,808			10,192
Accrued expenses		7,625			7,472
Accrued procurement fees		4,013			3,619
Taxes payable		3,338			2,808
Current maturities of operating leases		2,473			5,763
Current portion of long-term debt		1,652			1,195
Other liabilities		1,962			3,366
Total current liabilities		58,944			60,468
Long-term debt		308,050			290,468
Non-current maturities of operating leases		47,440			14,034
Contingent consideration		46,900			43,500
Deferred income taxes		29,583			34,713
Deferred compensation liability		5,503			5,518
Other liabilities		12,242			11,990
Total liabilities	$	508,662		$	460,691
Commitments and contingencies
Shareholders' equity:
Preferred stock		--			--
Common stock (issued shares of 40,742 in 2021 and 40,394 in 2020)		407			404
Additional paid-in capital		305,157			316,192
Retained earnings		11,493			20,022
Accumulated other comprehensive (loss) income		(574)			6,743
Treasury stock, at cost, 1,487 shares as of June 30, 2021  and December 31, 2020, respectively		(14,648)			(14,648)
Total shareholders' equity		301,835			328,713
Total liabilities and shareholders' equity	$	810,497		$	789,404

 

CryoLife, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows (In thousands) (Unaudited)
	Six Months Ended
	June 30,
		2021			2020
Net cash flows from operating activities:
Net loss	$	(5,316)		$	(10,354)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization		11,999			9,642
Non-cash compensation		4,595			5,074
Change in fair value of contingent consideration		4,270			--
Non-cash lease expense		3,575			3,518
Write-down of inventories and deferred preservation costs		2,988			1,217
Deferred income taxes		(4,269)			(1,894)
Other		2,174			859
Changes in operating assets and liabilities:
Accounts payable, accrued expenses, and other liabilities		(1,166)			(142)
Prepaid expenses and other assets		(2,076)			(3,422)
Receivables		(5,454)			7,644
Inventories and deferred preservation costs		(11,712)			(12,902)
Net cash flows used in operating activities		(392)			(760)
Net cash flows from investing activities:
Capital expenditures		(7,249)			(3,776)
Other		205			(705)
Net cash flows used in investing activities		(7,044)			(4,481)
Net cash flows from financing activities:
Proceeds from exercise of stock options and issuance of common stock		2,321			1,175
Proceeds from issuance of convertible debt		--			100,000
Proceeds from revolving line of credit		--			30,000
Proceeds from financing insurance premiums		--			2,816
Repayment of revolving line of credit		--			(30,000)
Payment of debt issuance costs		(2,219)			(3,647)
Redemption and repurchase of stock to cover tax withholdings		(1,831)			(1,728)
Repayment of term loan		(1,405)			(1,389)
Other		(603)			(1,041)
Net cash flows (used in) provided by financing activities		(3,737)			96,186
Effect of exchange rate changes on cash, cash equivalents, and restricted securities		242			879
(Decrease) increase in cash, cash equivalents, and restricted securities		(10,931)			91,824
Cash, cash equivalents, and restricted securities beginning of period		61,958			34,294
Cash, cash equivalents, and restricted securities end of period	$	51,027		$	126,118

 

CryoLife, Inc. and Subsidiaries Financial Highlights  (In thousands)
	(Unaudited)						(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2021			2020			2021			2020
Products:
Aortic stents and stent grafts	$	21,064		$	13,174		$	41,269		$	28,642
Surgical sealants		17,864			12,437			35,692			29,174
On-X		14,726			10,116			27,821			22,318
Other		2,422			1,541			4,639			3,554
Total products		56,076			37,268			109,421			83,688
Preservation services		20,072			16,503			37,814			36,512
Total revenues	$	76,148		$	53,771		$	147,235		$	120,200
Revenues:
U.S.	$	39,006		$	30,392		$	75,324		$	66,839
International		37,142			23,379			71,911			53,361
Total revenues	$	76,148		$	53,771		$	147,235		$	120,200

 

CryoLife, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Revenues and Adjusted EBITDA (In thousands, except per share data)
	(Unaudited)							(Unaudited)
	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2021			2020		Growth Rate		2021			2020		Growth Rate
Reconciliation of total revenues, GAAP to
total revenues, non-GAAP:
Total revenues, GAAP	$	76,148		$	53,771	42%		$	147,235		$	120,200	22%
Including AMDS prior to acquisition		--			699				--			1,397
Total GAAP revenues including AMDS		76,148			54,470	40%			147,235			121,597	21%
Impact of changes in currency exchange		--			1,810				--			3,534
Total constant currency revenues including AMDS, non-GAAP	$	76,148		$	56,280	35%		$	147,235		$	125,131	18%

 

	(Unaudited)							(Unaudited)
	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2021			2020				2021			2020
Reconciliation of operating income (loss), GAAP to
adjusted operating income, non-GAAP:
Operating income (loss)	$	1,323		$	(1,920)			$	2,769		$	(3,107)
Amortization expense		4,238			3,000				8,498			6,033
Business development, integration, and severance expense		3,359			653				4,829			1,476
Corporate rebranding expense		47			--				62			321
Adjusted operating income, non-GAAP	$	8,967		$	1,733			$	16,158		$	4,723

 

	(Unaudited)							(Unaudited)
	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2021			2020				2021			2020
Reconciliation of net loss, GAAP to
adjusted EBITDA, non-GAAP:
Net loss, GAAP	$	(2,178)		$	(3,689)			$	(5,316)		$	(10,354)
Adjustments:
Depreciation and amortization expense		5,993			4,743				11,999			9,642
Interest expense		4,855			3,652				8,895			7,040
Business development, integration, and severance expense		3,359			653				4,829			1,476
Stock-based compensation expense		2,115			2,510				4,595			5,074
Corporate rebranding expense		47			--				62			321
Income tax benefit		(5)			(1,077)				(1,368)			(2,547)
Interest income		(18)			(66)				(42)			(168)
(Gain) loss on foreign currency revaluation		(1,364)			(744)				522			2,919
Adjusted EBITDA, non-GAAP	$	12,804		$	5,982			$	24,176		$	13,403

 

CryoLife, Inc. and Subsidiaries Reconciliation of GAAP to Non-GAAP Net Income (Loss) and Diluted Income (Loss) Per Common Share (In thousands, except per share data)
	(Unaudited)						(Unaudited)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
		2021			2020			2021			2020
GAAP:
Loss before income taxes	$	(2,183)		$	(4,766)		$	(6,684)		$	(12,901)
Income tax benefit		(5)			(1,077)			(1,368)			(2,547)
Net loss	$	(2,178)		$	(3,689)		$	(5,316)		$	(10,354)
Diluted loss per common share:	$	(0.06)		$	(0.10)		$	(0.14)		$	(0.27)
Diluted weighted-average common shares outstanding		38,943			37,520			38,841			37,455
Reconciliation of loss before income taxes,
GAAP to adjusted income (loss), non-GAAP
Loss before income taxes, GAAP:	$	(2,183)		$	(4,766)		$	(6,684)		$	(12,901)
Adjustments:
Amortization expense		4,238			3,000			8,498			6,033
Business development, integration, and severance expense		3,359			653			4,829			1,476
Non-cash interest expense		1,004			413			1,572			818
Corporate rebranding expense		47			--			62			321
Adjusted income (loss) before income taxes,
non-GAAP		6,465			(700)			8,277			(4,253)
Income tax expense (benefit) calculated at a
pro forma tax rate of 25%		1,616			(175)			2,069			(1,063)
Adjusted net income (loss), non-GAAP	$	4,849		$	(525)		$	6,208		$	(3,190)
Reconciliation of diluted loss per common share, GAAP
to adjusted diluted loss per common share, non-GAAP:
Diluted loss per common share, GAAP:	$	(0.06)		$	(0.10)		$	(0.14)		$	(0.27)
Adjustments:
Amortization expense		0.11			0.09			0.22			0.16
Business development, integration, and severance expense		0.08			0.02			0.12			0.04
Non-cash interest expense		0.03			0.01			0.04			0.02
Corporate rebranding expense		--			--			--			0.01
Tax effect of non-GAAP adjustments		(0.05)			(0.03)			(0.09)			(0.06)
Effect of 25% pro forma tax rate		0.01			--			0.01			0.02
Adjusted diluted income (loss) per common share,
non-GAAP	$	0.12		$	(0.01)		$	0.16		$	(0.08)
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:		38,943			37,520			38,841			37,455
Adjustments:
Stock options		325			--			326			--
Contingently returnable shares		229			--			273			--
Diluted weighted-average common shares outstanding, non-GAAP1		39,497			37,520			39,440			37,455
1- Diluted weighted-average common shares outstanding, non-GAAP does not include the dilutive impact of the Senior Convertible Notes

 

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SOURCE CryoLife, Inc.

FAQ

What were CryoLife's revenues for Q2 2021?

CryoLife reported revenues of $76.1 million for Q2 2021.

What was CryoLife's net loss in Q2 2021?

CryoLife had a net loss of $2.2 million, or $0.06 per share, in Q2 2021.

What is CryoLife's revenue outlook for the second half of 2021?

CryoLife expects revenue growth of 7% to 10% in the second half of 2021.

What is the expected revenue range for CryoLife in 2021?

The company projects full-year revenues between $296 million and $300 million.

What was CryoLife's non-GAAP net income for Q2 2021?

The non-GAAP net income for Q2 2021 was $4.8 million, or $0.12 per share.