LivaNova Reports First-Quarter 2024 Results
LivaNova PLC (Nasdaq: LIVN) reported strong first-quarter 2024 results with revenue of $294.9 million, a 12.0% increase, and adjusted diluted earnings per share of $0.73. The company raised its full-year 2024 revenue guidance to grow between 6-7% on a constant-currency basis. LivaNova achieved positive trial outcomes in the OSPREY clinical study for obstructive sleep apnea. The company closed a private offering of $345.0 million convertible senior notes due 2029 and repurchased $230.0 million exchangeable senior notes due 2025.
Strong revenue growth of 12.0% in the first quarter of 2024.
Adjusted diluted earnings per share of $0.73 for the same period.
Raised full-year 2024 revenue guidance to grow between 6-7% on a constant-currency basis.
Achieved positive trial outcomes in the OSPREY clinical study for obstructive sleep apnea.
Closed a private offering of $345.0 million convertible senior notes due 2029 and repurchased $230.0 million exchangeable senior notes due 2025.
Reported a U.S. GAAP diluted loss per share of $0.78 for the first quarter of 2024.
Foreign currency expected to be a 1 percent headwind based on current exchange rates for full-year 2024.
Company unable to predict certain items impacting GAAP measures that would not impact non-GAAP measures.
Insights
Examining LivaNova's report, the notable increase in revenues, particularly a
Furthermore, the positive adjustment to the full-year revenue guidance, now at a
From a cash flow perspective, the projected adjusted free cash flow in the range of
Within the medical technology sector, LivaNova's focus on Cardiopulmonary and Neuromodulation products is particularly relevant. The
Moreover, the successful completion and positive outcome of the OSPREY clinical trial for obstructive sleep apnea (OSA) treatment is a significant development. Clinical success not only validates the company's research and development capabilities but also opens doors for future revenue streams, pending regulatory approvals. These are strategic considerations for investors looking at the long-term value creation and market share capture.
From a financial structuring viewpoint, LivaNova’s strategic moves in the debt market, notably the closure of a
Financial Summary and Highlights(1)
-
First-quarter revenue of
$294.9 million 12.0% on a reported basis and12.4% on a constant-currency basis, as compared to the prior-year period. Excluding the impact of the Advanced Circulatory Support (ACS) segment wind down, revenue increased13.5% on a constant-currency basis -
First-quarter
U.S. GAAP diluted loss per share was$0.78 $0.73 -
Closed private offering of
$345.0 million 2.50% convertible senior notes due 2029 and repurchased$230.0 million 3.00% exchangeable senior notes due 2025 - Achieved a positive predictive outcome of trial success in the OSPREY clinical study for moderate to severe obstructive sleep apnea (OSA) and concluded enrollment
"In the first quarter, LivaNova achieved double-digit revenue and operating income growth in both the Cardiopulmonary and Neuromodulation segments,” said Vladimir Makatsaria, Chief Executive Officer of LivaNova. "I am grateful to our teams around the world for their exceptional work and dedication to serving our patients and customers. Looking ahead, our priorities continue to emphasize execution, innovation and talent development. We are confident that by delivering in each of these areas, we will improve patient outcomes and create shareholder value.”
First-Quarter 2024 Results
The following table summarizes revenue for the first quarter of 2024 by segment (in millions):
|
|
|
Three Months Ended March 31, |
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% Change |
|
Constant-
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|
|
|
2024 |
|
2023 |
|
|
|||
Cardiopulmonary |
|
|
|
|
|
14.8 % |
|
15.7 % |
||
Neuromodulation |
|
133.9 |
|
120.7 |
|
10.9 % |
|
11.0 % |
||
Other (2) |
|
5.1 |
|
7.0 |
|
(25.9) % |
|
(26.5) % |
||
Total Net Revenue |
|
|
|
|
|
12.0 % |
|
12.4 % |
||
Less: ACS (3) |
|
4.1 |
|
6.2 |
|
(33.2) % |
|
(33.6) % |
||
Total Net Revenue, Excluding ACS (1) |
|
|
|
|
|
13.0 % |
|
13.5 % |
||
(1) |
Constant-currency percent change and total revenue excluding revenue from the ACS segment wind down are non-GAAP measures. Constant-currency percent change excludes the impact from fluctuations in the various currencies in which the Company operates as compared to reported percent change. |
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(2) |
Includes revenue from the Company’s former ACS reportable segment, and rental and site services income not allocated to segments. |
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(3) |
Includes the results from the wind down portion of the Company's former ACS reportable segment. |
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Cardiopulmonary revenue increased
Neuromodulation revenue increased
Earnings Analysis
On a
On a
Full-Year 2024 Guidance
LivaNova now expects revenue for full-year 2024 to grow between 6 and 7 percent on a constant-currency basis. When excluding the impact of the ACS segment wind down, the Company now expects revenue for full-year 2024 to grow between 8 and 9 percent on a constant-currency basis. Foreign currency is now expected to be a 1 percent headwind based on current exchange rates.
Adjusted diluted earnings per share for 2024 are now expected to be in the range of
As discussed in the section entitled "Use of Non-GAAP Financial Measures" below, the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Accordingly, the Company is unable to reconcile the forward-looking non-GAAP financial measures included in this section to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts.
Webcast and Conference Call Instructions
The Company will host a live audiocast at 1 p.m.
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(1) |
Constant-currency percent change, total revenue excluding revenue from the ACS segment wind down, adjusted operating income, adjusted diluted earnings per share and adjusted free cash flow are non-GAAP measures. Constant-currency percent change excludes the impact from fluctuations in the various currencies in which the Company operates as compared to reported percent change. For an explanation of these and other non-GAAP measures used in this news release, see the section entitled "Use of Non-GAAP Financial Measures." For reconciliations of certain non-GAAP measures, see the tables that accompany this news release. |
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About LivaNova
LivaNova PLC is a global medical technology company built on nearly five decades of experience and a relentless commitment to provide hope for patients and their families through medical technologies, delivering life-changing solutions in select neurological and cardiac conditions. Headquartered in
Use of Non-GAAP Financial Measures
In this news release, management has disclosed financial measurements that present financial information not in accordance with GAAP. Company management uses these measurements as aids in monitoring the Company’s ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking against other medical technology companies. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, operating performance measures as prescribed by GAAP.
In this news release, the Company refers to comparable, constant-currency percent change in revenue. Management believes that referring to comparable, constant-currency percent change is the most useful way to evaluate the revenue performance of LivaNova and to compare the revenue performance of current periods to prior periods on a consistent basis. Constant-currency percent change, a non-GAAP financial measure, measures the change in revenue between current and prior-year periods using average exchange rates in effect during the applicable prior-year period.
LivaNova calculates forward-looking non-GAAP financial measures based on internal forecasts that omit certain amounts that would be included in GAAP financial measures. For example, forward-looking net revenue growth projections are estimated on a constant-currency basis and exclude the impact of foreign currency fluctuations. Forward-looking non-GAAP adjusted diluted earnings per share guidance exclude other items such as, but not limited to, changes in fair value of derivatives and contingent consideration arrangements and asset impairment charges that would be included in comparable GAAP financial measures. The most directly comparable GAAP measure for constant-currency net revenue, non-GAAP adjusted tax rate and adjusted diluted earnings per share are net revenue, the effective tax rate and earnings per share, respectively. The most directly comparable GAAP measure for adjusted free cash flow is net cash provided by operating activities. Adjusted free cash flow is defined as net cash provided by operating activities less cash used for the purchase of property, plant and equipment excluding the impact of 3T litigation settlement payments, CARES Act tax stimulus benefits and gains related to dividends received from investments and further adjusted as needed for other one-time, nonrecurring, unusual or infrequent charges, expenses or gains, including associated expenses, that may not be indicative of the Company's core business. However, non-GAAP financial adjustments on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors, including but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, the ultimate outcome of legal proceedings, gains or losses on the potential sale of businesses or other assets, restructuring costs, merger and integration activities, changes in fair value of derivatives and contingent consideration arrangements, asset impairment charges and the tax impact of the aforementioned items, tax law changes or other tax matters. Accordingly, forward-looking non-GAAP financial measures and reconciliations to the most directly comparable forward-looking GAAP financial measures are not available without unreasonable effort.
The Company also believes adjusted financial measures such as adjusted gross profit percentage, adjusted selling, general and administrative expense, adjusted research and development expense, adjusted other operating expenses, adjusted operating income, adjusted income tax expense, adjusted net income and adjusted diluted earnings per share, are measures by which LivaNova generally uses to facilitate management review of the operational performance of the company, to serve as a basis for strategic planning and to assist in the design of compensation incentive plans. Additionally, the Company also uses the non-GAAP liquidity measure adjusted free cash flow. Furthermore, adjusted financial measures allow investors to evaluate the Company’s core performance for different periods on a more comparable and consistent basis, and with other entities in the medical technology industry by adjusting for items that are not related to the ongoing operations of the Company or incurred in the ordinary course of business.
Safe Harbor Statement
Certain statements in this news release, other than statements of historical or current fact, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements include, but are not limited to, LivaNova’s plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events and involve known and unknown risks that are difficult to predict. As a result, the Company’s actual financial results, performance, achievements or prospects may differ materially from those expressed or implied by these forward-looking statements. Generally, you can identify forward-looking statements by the use of words such as “may,” “could,” “seek,” “guidance,” “predict,” “potential,” “likely,” “believe,” “will,” “should,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “forecast,” “foresee” or variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based on estimates and assumptions that, while considered reasonable by LivaNova and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. There are a number of risks, uncertainties and other important factors, many of which are beyond the Company’s control, that could cause the Company’s actual results to differ materially from the forward-looking statements contained in this news release, and include, but are not limited to, the following risks and uncertainties: volatility in the global market and worldwide economic conditions, including as caused by the invasion of
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the Company’s business, including those described in the “Risk Factors” section of the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the United States Securities and Exchange Commission by LivaNova.
Readers are cautioned not to place undue reliance on the Company's forward-looking statements, which speak only as of the date of this news release. The Company undertakes no obligation to update publicly any of the forward-looking statements in this news release to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If LivaNova updates one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect to those or other forward-looking statements.
Essenz is a trademark of LivaNova
LIVANOVA PLC |
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NET REVENUE - UNAUDITED |
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( |
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|
|
Three Months Ended March 31, |
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|
|
2024 |
|
2023 |
|
% Change |
|
Constant-Currency
|
|
Cardiopulmonary |
|
|
|
|
|
|
|
||
|
|
|
|
|
27.7 % |
|
27.7 % |
||
|
40.9 |
|
36.4 |
|
12.5 % |
|
10.3 % |
||
Rest of World |
64.4 |
|
59.8 |
|
7.8 % |
|
11.0 % |
||
Total |
155.9 |
|
135.7 |
|
14.8 % |
|
15.7 % |
||
Neuromodulation |
|
|
|
|
|
|
|
||
|
105.9 |
|
94.5 |
|
12.1 % |
|
12.1 % |
||
|
13.4 |
|
13.3 |
|
1.0 % |
|
(1.4) % |
||
Rest of World |
14.5 |
|
13.0 |
|
12.2 % |
|
15.5 % |
||
Total |
133.9 |
|
120.7 |
|
10.9 % |
|
11.0 % |
||
Other Revenue (3) |
5.1 |
|
7.0 |
|
(25.9) % |
|
(26.5) % |
||
Totals |
|
|
|
|
|
|
|
||
|
160.6 |
|
140.3 |
|
14.5 % |
|
14.5 % |
||
|
54.3 |
|
49.6 |
|
9.5 % |
|
7.2 % |
||
Rest of World |
80.0 |
|
73.5 |
|
8.8 % |
|
12.0 % |
||
Total |
|
|
|
|
12.0 % |
|
12.4 % |
||
|
|
|
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|
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(1) |
Constant-currency percent change, a non-GAAP financial measure, measures the change in revenue between current and prior-year periods using average exchange rates in effect during the applicable prior-year period. |
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(2) |
Includes countries in |
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(3) |
Other revenue primarily includes revenue from the Company’s former ACS reportable segment and rental and site services income not allocated to segments. |
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LIVANOVA PLC AND SUBSIDIARIES |
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED |
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( |
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|||
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|
Three Months Ended March 31, |
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|
|||||
|
|
2024 |
|
2023 |
|
% Change |
|||
Net revenue |
|
|
|
|
|
|
|
|
|
Cost of sales |
|
87.5 |
|
|
89.3 |
|
|
|
|
Gross profit |
|
207.4 |
|
|
174.1 |
|
|
19.1 |
% |
Operating expenses: |
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|
|
|
|
|
|||
Selling, general and administrative |
|
129.9 |
|
|
124.1 |
|
|
|
|
Research and development |
|
45.7 |
|
|
50.0 |
|
|
|
|
Other operating expense |
|
15.6 |
|
|
2.3 |
|
|
|
|
Operating income (loss) |
|
16.2 |
|
|
(2.3 |
) |
|
(793.7 |
)% |
Interest expense |
|
(15.9 |
) |
|
(13.4 |
) |
|
|
|
Loss on debt extinguishment |
|
(25.5 |
) |
|
— |
|
|
|
|
Foreign exchange and other income/(expense) |
|
(9.1 |
) |
|
25.5 |
|
|
|
|
(Loss) income before tax |
|
(34.2 |
) |
|
9.8 |
|
|
(450.1 |
)% |
Income tax expense |
|
7.7 |
|
|
2.4 |
|
|
|
|
Net (loss) income |
|
( |
) |
|
|
|
|
(669.1 |
)% |
|
|
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|
|
|
|||
Basic (loss) income per share |
|
( |
) |
|
|
|
|
|
|
Diluted (loss) income per share |
|
( |
) |
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|
|||
Weighted average common shares outstanding: |
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|
|
|
|
|
|||
Basic |
|
54.0 |
|
|
53.6 |
|
|
|
|
Diluted |
|
54.0 |
|
|
53.9 |
|
|
|
|
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Adjusted Financial Measures ( |
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|
Adjusted (1) Three Months Ended March 31, |
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|
|||
|
|
|
2024 |
|
2023 |
|
% Change |
|
Adjusted SG&A |
|
|
|
|
|
4.6 % |
||
Adjusted R&D |
|
42.9 |
|
46.2 |
|
(7.1) % |
||
Adjusted operating income |
|
53.1 |
|
26.8 |
|
98.3 % |
||
Adjusted net income |
|
40.0 |
|
23.3 |
|
71.4 % |
||
Adjusted diluted earnings per share |
|
|
|
|
|
69.8 % |
||
|
|
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|
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|
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|
(1) |
Adjusted financial measures are non-GAAP measures and exclude specified items as described and reconciled in the “Reconciliation of GAAP to non-GAAP Financial Measures” contained in the news release. |
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Statistics (as a % of net revenue, except for income tax rate) - Unaudited |
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|||
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|
GAAP Three Months Ended March 31, |
|
Adjusted (1) Three Months Ended March 31, |
|||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
Gross profit |
|
70.3 % |
|
66.1 % |
|
71.0 % |
|
68.8 % |
||
SG&A |
|
44.0 % |
|
47.1 % |
|
38.4 % |
|
41.1 % |
||
R&D |
|
15.5 % |
|
19.0 % |
|
14.5 % |
|
17.5 % |
||
Operating income (loss) |
|
5.5 % |
|
(0.9) % |
|
18.0 % |
|
10.2 % |
||
Net (loss) income |
|
(14.2) % |
|
2.8 % |
|
13.6 % |
|
8.9 % |
||
Income tax rate |
|
(22.6) % |
|
24.3 % |
|
20.8 % |
|
6.2 % |
||
|
|
|
|
|
|
|
|
|
|
|
(1) |
Adjusted financial measures are non-GAAP measures and exclude specified items as described and reconciled in the “Reconciliation of GAAP to non-GAAP Financial Measures” contained in the news release. |
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RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED
( |
||||||||||||||||||||
|
|
Specified Items |
|
|
||||||||||||||||
Three Months Ended March 31, 2024 |
GAAP
|
Restructuring
|
Depreciation
|
Financing
|
Contingent
|
Certain Legal
|
Stock-based
|
Certain Tax
|
Certain
|
Adjusted
|
||||||||||
Cost of sales |
|
|
$— |
|
( |
) |
$— |
|
|
|
$— |
|
( |
) |
$— |
|
$— |
|
|
|
Gross profit percent |
70.3 |
% |
— |
% |
0.6 |
% |
— |
% |
(0.1 |
)% |
— |
% |
0.1 |
% |
— |
% |
— |
% |
71.0 |
% |
Selling, general and administrative |
129.9 |
|
— |
|
(2.6 |
) |
— |
|
— |
|
(6.1 |
) |
(7.8 |
) |
— |
|
— |
|
113.3 |
|
Selling, general and administrative as a percent of net revenue |
44.0 |
% |
— |
% |
(0.9 |
)% |
— |
% |
— |
% |
(2.1 |
)% |
(2.7 |
)% |
— |
% |
— |
% |
38.4 |
% |
Research and development |
45.7 |
|
— |
|
— |
|
— |
|
— |
|
(0.8 |
) |
(2.0 |
) |
— |
|
— |
|
42.9 |
|
Research and development as a percent of net revenue |
15.5 |
% |
— |
% |
— |
% |
— |
% |
— |
% |
(0.3 |
)% |
(0.7 |
)% |
— |
% |
— |
% |
14.5 |
% |
Other operating expense |
15.6 |
|
(9.2 |
) |
— |
|
— |
|
— |
|
(6.4 |
) |
— |
|
— |
|
— |
|
— |
|
Operating income |
16.2 |
|
9.2 |
|
4.3 |
|
— |
|
(0.1 |
) |
13.2 |
|
10.2 |
|
— |
|
— |
|
53.1 |
|
Operating margin percent |
5.5 |
% |
3.1 |
% |
1.5 |
% |
— |
% |
— |
% |
4.5 |
% |
3.5 |
% |
— |
% |
— |
% |
18.0 |
% |
Net (loss) income |
(41.9 |
) |
9.2 |
|
4.3 |
|
40.3 |
|
(0.1 |
) |
13.2 |
|
10.2 |
|
(2.8 |
) |
7.6 |
|
40.0 |
|
Net (loss) income as a percent of net revenue |
(14.2 |
)% |
3.1 |
% |
1.5 |
% |
13.7 |
% |
— |
% |
4.5 |
% |
3.5 |
% |
(1.0 |
)% |
2.6 |
% |
13.6 |
% |
Diluted EPS |
( |
) |
|
|
|
|
|
|
$— |
|
|
|
|
|
( |
) |
|
|
|
|
GAAP results for the three months ended March 31, 2024 include: |
|
(A) |
Restructuring expenses related to organizational changes |
(B) |
Includes depreciation and amortization associated with purchase price accounting |
(C) |
Loss on debt extinguishment, as well as mark-to-market adjustments for the embedded derivative features and capped call derivatives |
(D) |
Remeasurement of contingent consideration related to ImThera acquisition |
(E) |
3T Heater-Cooler litigation provision, cybersecurity incident costs, legal expenses primarily related to 3T Heater-Cooler defense, costs related to the SNIA matter and Medical Device Regulation ("MDR") costs |
(F) |
Non-cash expenses associated with stock-based compensation costs |
(G) |
The impact of valuation allowances, discrete tax items, the tax impact of intercompany transactions and the tax impact on non-GAAP adjustments |
(H) |
Non-cash interest expense on the 2025 cash exchangeable senior notes, 2029 convertible senior notes and 2021 Revolving Credit Facility, interest expense on the Term Facilities and interest income on the collateral for the SNIA litigation guarantee and delayed draw on Term Facilities |
|
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED
( |
|
|||||||||||||||||||||
|
|
Specified Items |
|
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Three Months Ended March 31, 2023 |
GAAP Financial Measures |
Merger and Integration Expenses (A) |
Restructuring Expenses (B) |
Depreciation and Amortization Expenses (C) |
Financing Transactions (D) |
Contingent Consideration (E) |
Certain Legal & Regulatory Costs (F) |
Stock-based Compensation Costs (G) |
Certain Tax Adjustments (H) |
Certain Interest Adjustments (I) |
Adjusted Financial Measures |
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Cost of sales |
|
|
$— |
|
$— |
|
( |
) |
$— |
|
( |
) |
$— |
|
( |
) |
$— |
|
$— |
|
|
|
Gross profit percent |
66.1 |
% |
— |
% |
— |
% |
1.4 |
% |
— |
% |
1.2 |
% |
— |
% |
0.2 |
% |
— |
% |
— |
% |
68.8 |
% |
Selling, general and administrative |
124.1 |
|
— |
|
— |
|
(2.9 |
) |
— |
|
— |
|
(4.5 |
) |
(8.5 |
) |
— |
|
— |
|
108.3 |
|
Selling, general and administrative as a percent of net revenue |
47.1 |
% |
— |
% |
— |
% |
(1.1 |
)% |
— |
% |
— |
% |
(1.7 |
)% |
(3.2 |
)% |
— |
% |
— |
% |
41.1 |
% |
Research and development |
50.0 |
|
— |
|
— |
|
0.1 |
|
— |
|
(1.8 |
) |
(0.5 |
) |
(1.6 |
) |
— |
|
— |
|
46.2 |
|
Research and development as a percent of net revenue |
19.0 |
% |
— |
% |
— |
% |
— |
% |
— |
% |
(0.7 |
)% |
(0.2 |
)% |
(0.6 |
)% |
— |
% |
— |
% |
17.5 |
% |
Other operating expense |
2.3 |
|
(0.3 |
) |
(0.7 |
) |
— |
|
— |
|
— |
|
(1.3 |
) |
— |
|
— |
|
— |
|
— |
|
Operating (loss) income |
(2.3 |
) |
0.3 |
|
0.7 |
|
6.4 |
|
— |
|
4.8 |
|
6.3 |
|
10.6 |
|
— |
|
— |
|
26.8 |
|
Operating margin percent |
(0.9 |
)% |
0.1 |
% |
0.3 |
% |
2.4 |
% |
— |
% |
1.8 |
% |
2.4 |
% |
4.0 |
% |
— |
% |
— |
% |
10.2 |
% |
Net income |
7.4 |
|
0.3 |
|
0.7 |
|
6.4 |
|
(21.0 |
) |
4.8 |
|
6.3 |
|
10.6 |
|
0.8 |
|
7.0 |
|
23.3 |
|
Net income as a percent of net revenue |
2.8 |
% |
0.1 |
% |
0.3 |
% |
2.4 |
% |
(8.0 |
)% |
1.8 |
% |
2.4 |
% |
4.0 |
% |
0.3 |
% |
2.7 |
% |
8.9 |
% |
Diluted EPS |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP results for the three months ended March 31, 2023 include: |
|
(A) |
Merger and integration expenses related to the acquisition of ALung Technologies, Inc. |
(B) |
Restructuring expenses related to organizational changes |
(C) |
Includes depreciation and amortization associated with purchase price accounting |
(D) |
Mark-to-market adjustment for the exchangeable option feature and capped call derivatives |
(E) |
Remeasurement of contingent consideration related to acquisitions |
(F) |
3T Heater-Cooler litigation provision, legal expenses primarily related to 3T Heater-Cooler defense, costs related to the SNIA matter and MDR costs |
(G) |
Non-cash expenses associated with stock-based compensation costs |
(H) |
Discrete tax items, R&D tax credits and the tax impact of intercompany transactions |
(I) |
Non-cash interest expense on the 2025 cash exchangeable senior notes and 2021 Revolving Credit Facility, interest expense on the Term Facilities and interest income on the collateral for the SNIA litigation guarantee |
|
|
LIVANOVA PLC AND SUBSIDIARIES |
||||
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED |
||||
( |
||||
|
|
March 31, 2024 |
|
December 31, 2023 |
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Restricted cash |
|
306.5 |
|
311.4 |
Accounts receivable, net of allowance |
|
209.4 |
|
215.1 |
Inventories |
|
153.2 |
|
147.9 |
Prepaid and refundable taxes |
|
22.5 |
|
20.1 |
Prepaid expenses and other current assets |
|
39.2 |
|
27.2 |
Total Current Assets |
|
1,040.0 |
|
988.2 |
Property, plant and equipment, net |
|
152.2 |
|
154.2 |
Goodwill |
|
771.8 |
|
782.9 |
Intangible assets, net |
|
253.9 |
|
261.2 |
Operating lease assets |
|
50.3 |
|
50.8 |
Investments |
|
22.7 |
|
22.8 |
Deferred tax assets |
|
113.7 |
|
118.9 |
Long-term derivative assets |
|
41.6 |
|
38.5 |
Other assets |
|
13.4 |
|
12.1 |
Total Assets |
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Current debt obligations |
|
|
|
|
Accounts payable |
|
75.9 |
|
80.8 |
Accrued liabilities and other |
|
94.0 |
|
107.3 |
Current litigation provision liability |
|
17.0 |
|
10.8 |
Taxes payable |
|
29.8 |
|
23.3 |
Accrued employee compensation and related benefits |
|
91.4 |
|
94.6 |
Total Current Liabilities |
|
327.8 |
|
335.0 |
Long-term debt obligations |
|
604.8 |
|
568.5 |
Contingent consideration |
|
80.8 |
|
80.9 |
Deferred tax liabilities |
|
11.0 |
|
11.6 |
Long-term operating lease liabilities |
|
43.7 |
|
45.4 |
Long-term employee compensation and related benefits |
|
17.1 |
|
17.3 |
Long-term derivative liabilities |
|
104.9 |
|
45.6 |
Other long-term liabilities |
|
48.1 |
|
47.7 |
Total Liabilities |
|
1,238.1 |
|
1,151.9 |
Total Stockholders’ Equity |
|
1,221.5 |
|
1,277.6 |
Total Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIVANOVA PLC AND SUBSIDIARIES |
|
|
|
|
||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED |
|
|
|
|
||
( |
|
Three Months Ended March 31, |
||||
|
|
2024 |
|
2023 |
||
Operating Activities: |
|
|
|
|
||
Net (loss) income |
|
( |
) |
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
||
Loss on debt extinguishment |
|
25.5 |
|
|
— |
|
Remeasurement of derivative instruments |
|
11.6 |
|
|
(26.3 |
) |
Stock-based compensation |
|
10.2 |
|
|
10.6 |
|
Depreciation |
|
6.3 |
|
|
6.0 |
|
Amortization of debt issuance costs |
|
4.9 |
|
|
5.0 |
|
Amortization of intangible assets |
|
4.3 |
|
|
6.4 |
|
Deferred income tax expense (benefit) |
|
4.8 |
|
|
(0.1 |
) |
Amortization of operating lease assets |
|
2.5 |
|
|
2.6 |
|
Remeasurement of contingent consideration to fair value |
|
(0.1 |
) |
|
4.8 |
|
Other |
|
(0.5 |
) |
|
(0.1 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
||
Accounts receivable, net |
|
2.0 |
|
|
7.6 |
|
Inventories |
|
(8.1 |
) |
|
(11.3 |
) |
Other current and non-current assets |
|
(8.9 |
) |
|
(3.8 |
) |
Accounts payable and accrued current and non-current liabilities |
|
(15.6 |
) |
|
21.4 |
|
Taxes payable |
|
6.9 |
|
|
1.0 |
|
Litigation provision liability |
|
6.2 |
|
|
(10.3 |
) |
Net cash provided by operating activities |
|
10.0 |
|
|
20.8 |
|
Investing Activities: |
|
|
|
|
||
Purchases of property, plant and equipment |
|
(6.4 |
) |
|
(7.7 |
) |
Purchase of investments |
|
— |
|
|
(5.1 |
) |
Other |
|
— |
|
|
1.3 |
|
Net cash used in investing activities |
|
(6.4 |
) |
|
(11.5 |
) |
Financing Activities: |
|
|
|
|
||
Proceeds from long-term debt obligations |
|
335.5 |
|
|
— |
|
Repayment of long-term debt obligations |
|
(234.4 |
) |
|
(1.9 |
) |
Payment of debt extinguishment costs |
|
(39.0 |
) |
|
— |
|
Purchase of capped calls |
|
(31.6 |
) |
|
— |
|
Proceeds from unwind of capped calls |
|
22.5 |
|
|
— |
|
Payment of contingent consideration |
|
(13.8 |
) |
|
— |
|
Shares repurchased from employees for minimum tax withholding |
|
(0.3 |
) |
|
(1.6 |
) |
Payment of debt issuance costs |
|
(1.9 |
) |
|
— |
|
Repayments of short-term borrowings (maturities greater than 90 days) |
|
— |
|
|
(2.0 |
) |
Other |
|
— |
|
|
0.2 |
|
Net cash provided by (used in) financing activities |
|
37.1 |
|
|
(5.2 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(3.0 |
) |
|
3.3 |
|
Net increase in cash, cash equivalents and restricted cash |
|
37.8 |
|
|
7.3 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
577.9 |
|
|
515.6 |
|
Cash, cash equivalents and restricted cash at end of period |
|
|
|
|
|
|
|
|
|
|
|
||
|
||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED
( |
||||||||||||||||||
|
|
Three Months Ended March 31, |
||||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||||
|
|
GAAP
|
|
Certain Tax
|
|
Adjusted
|
|
GAAP
|
|
Certain Tax
|
|
Adjusted
|
||||||
(Loss) income before tax |
|
( |
) |
|
$— |
|
|
|
|
|
|
|
|
$— |
|
|
|
|
Income tax expense |
|
7.7 |
|
|
2.8 |
|
|
10.5 |
|
|
2.4 |
|
|
(0.8 |
) |
|
1.5 |
|
Net (loss) income |
|
( |
) |
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax rate |
|
(22.6 |
)% |
|
|
|
20.8 |
% |
|
24.3 |
% |
|
|
|
6.2 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED
( |
||||||||||||
|
|
|
Three Months Ended March 31, |
|
% Change |
|
Constant-
|
|||||
|
|
|
2024 |
|
2023 |
|
|
|||||
GAAP net revenue |
|
|
|
|
|
12.0 |
% |
|
12.4 |
% |
||
Less: ACS |
|
4.1 |
|
6.2 |
|
(33.2 |
)% |
|
(33.6 |
)% |
||
Net revenue excluding ACS |
|
|
|
|
|
13.0 |
% |
|
13.5 |
% |
||
|
|
|
|
|
|
|
|
|
|
|||
(1) |
Constant-currency percent change, a non-GAAP financial measure, measures the change in revenue between current and prior-year periods using average exchange rates in effect during the applicable prior-year period. |
|||||||||||
(2) |
Includes net revenue from the Company's former ACS reportable segment. | |||||||||||
|
||||||||||||
The following table presents the reconciliation of GAAP diluted weighted average shares outstanding, used in the computation of GAAP diluted net loss per common share, to adjusted diluted weighted average shares outstanding, used in the computation of adjusted diluted earnings per common share (in millions of shares):
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - UNAUDITED (shares in millions) |
|||
|
|
|
Three Months Ended
|
|
|
|
2024 |
GAAP diluted weighted average shares outstanding |
|
54.0 |
|
Add: Effects of stock-based compensation instruments |
|
0.4 |
|
Adjusted diluted weighted average shares outstanding (1) |
|
54.4 |
|
|
|
|
|
(1) |
Adjusted diluted weighted average shares outstanding is a non-GAAP measure and includes the effects of stock-based compensation instruments, as reconciled in the above table. |
||
|
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501035773/en/
Briana Gotlin
Director, Investor Relations
Phone: +1 281 895 2382
e-mail: InvestorRelations@livanova.com
Source: LivaNova PLC
FAQ
What was the first-quarter 2024 revenue for LivaNova PLC?
LivaNova reported first-quarter 2024 revenue of $294.9 million.
What were the adjusted diluted earnings per share for the first quarter of 2024?
LivaNova reported adjusted diluted earnings per share of $0.73 for the first quarter of 2024.
What was the outcome of the OSPREY clinical study?
LivaNova achieved a positive predictive outcome of trial success in the OSPREY clinical study for obstructive sleep apnea.
What financial offering did LivaNova close in the first quarter?
LivaNova closed a private offering of $345.0 million convertible senior notes due 2029 and repurchased $230.0 million exchangeable senior notes due 2025.
What is the full-year 2024 revenue guidance provided by LivaNova?
LivaNova raised its full-year 2024 revenue guidance to grow between 6-7% on a constant-currency basis.
