PR Newswire | Jul 29, 2021 04:06PM EDT

07/29 15:05 CDT

CryoLife Reports Second Quarter 2021 Financial Results ATLANTA, July 29, 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 ResultsTotal 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 OutlookThe 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 MeasuresThis 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 InformationThe 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 StatementsStatements 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 Phone: 631-807-1986and

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 407 40440,394 in 2020)

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 (14,648) (14,648) and December 31, 2020, respectively

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 242 879securities

(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 76,148 54,470 40% 147,235 121,597 21%AMDS

Impact of changes in currency exchange -- 1,810 -- 3,534

Total constant currency revenues including $ 76,148 $ 56,280 35% $ 147,235 $ 125,131 18%AMDS, non-GAAP

(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-GAAP^1 39,497 37,520 39,440 37,455

^1- Diluted weighted-average common shares outstanding, non-GAAP does notinclude the dilutive impact ofthe Senior Convertible Notes

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SOURCE CryoLife, Inc.