PR Newswire | Nov 4, 2021 04:06PM EDT

11/04 15:05 CDT

CryoLife Reports Third Quarter 2021 Financial Results ATLANTA, Nov. 4, 2021

ATLANTA, Nov. 4, 2021 /PRNewswire/ --

Third Quarter and Recent Business Highlights:

* Achieved total revenues of $72.2 million in the third quarter 2021 versus $65.1 million in the third quarter of 2020, an increase of 11% on a GAAP basis and 9% on a non-GAAP proforma constant currency basis * Net income was $10.6 million, or $0.26 per share, in the third quarter of 2021 * Non-GAAP net loss was ($1.2) million, or ($0.03) per share, in the third 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 third quarter ended September 30, 2021.

"Despite meaningful headwinds from the Delta variant in the third quarter, we still generated revenue growth on both a GAAP and pro forma constant currency basis compared to the prior year and compared to 2019, driven by our recent product launches and strength in our U.S. On-X aortic valve business. We've also made progress in driving growth across APAC and LATAM as we continue to expand our commercial footprint and seek new regulatory approvals," said Pat Mackin, Chairman, President, and Chief Executive Officer.

"Additionally, we have submitted PMAs to FDA for PerClot and PROACT Mitral and anticipate receiving approvals for both in 2022. We've also made significant progress with enrollment in our PROACT Xa clinical trial and continue to advance several other programs which are expected to deliver incremental growth beginning in 2024."

"Given our solid financial foundation, performance of our new products, market expansion opportunities and a strong pipeline, CryoLife is very well positioned now and for the future."

Third Quarter 2021 Financial ResultsTotal revenues for the third quarter of 2021 were $72.2 million, reflecting an increase of 11% on a GAAP basis and 9% on a non-GAAP proforma constant currency basis, both compared to the third quarter of 2020.

Net income for the third quarter of 2021 was $10.6 million, or $0.26 per fully diluted common share, compared to net loss of ($2.9) million, or ($0.08) per fully diluted common share for the third quarter of 2020. Non-GAAP net loss for the third quarter of 2021 was ($1.2) million, or ($0.03) per fully diluted common share, compared to non-GAAP net income of $4.9 million, or $0.13 per fully diluted common share for the third 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 November 5, 2021.

2021 Financial OutlookThe Company is maintaining its second half of 2021 proforma constant currency growth outlook of between 7 and 10% compared to the second half of 2019, but due to the strengthening dollar, revenues for the full year are expected to be between $296.0 and $299.0 million dollars and fourth quarter revenues are expected to be between $76.5 and $79.5 million dollars, reflecting pro forma constant currency growth of between 9.5% and 13.7% over the fourth quarter of 2019. This forecast is based on our estimates of the current and an anticipated diminishing impact of COVID-19 on our business.

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, including non-GAAP revenue, non-GAAP net income, non-GAAP EBITDA, and non-GAAP adjusted operating income. 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 revenues are adjusted for revenues of acquired and divested product lines and the impact of changes in currency exchange. 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; gain from sale of non-financial assets; depreciation and amortization expense; interest income and expense; non-cash interest expense; loss (gain) on foreign currency revaluation; stock-based compensation expense; corporate rebranding expense; and income tax expense (benefit). 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 acquisitions, or non-cash expense related to amortization of previously acquired tangible and intangible assets. The Company has adjusted for the impact of acquired and divested product lines and 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.

Webcast and Conference Call InformationThe Company will hold a teleconference call and live webcast later today, November 4, 2021 at 4:30 p.m. ET to discuss the results followed by a question and answer session. To participate in the conference call dial 862-298-0702. An audio replay will be available through November 11, 2021 and can be accessed by dialing (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13724263.

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. Forward-looking statements include statements related to future regulatory approvals, the progress and future results of clinical trials, future product launches, commercial footprint expansion, market performance of our current and future products, revenue and earnings growth related to current and newly introduced products, our forecasted revenue and earnings, and the effects of the COVID-19 pandemic on our business. 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 the benefits anticipated from our clinical trials may not be achieved or achieved on our anticipated timelines, that our product candidates may not receive regulatory approval or receive regulatory approval on our anticipated timelines, 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 Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenues:

Products $ 53,107 $ 45,109 $ 162,528 $ 128,797

Preservation services 19,100 20,022 56,914 56,534

Total revenues 72,207 65,131 219,442 185,331

Cost of products and preservation services:

Products 15,503 12,998 46,592 36,078

Preservation services 8,915 9,001 26,710 26,060

Total cost of products and preservation services 24,418 21,999 73,302 62,138

Gross margin 47,789 43,132 146,140 123,193

Operating expenses:

General, administrative, and marketing 39,053 33,743 118,521 105,033

Research and development 9,972 5,755 26,086 17,633

Total operating expenses 49,025 39,498 144,607 122,666

Gain from sale of non-financial assets (15,923) -- (15,923) --

Operating income 14,687 3,634 17,456 527

Interest expense 4,100 4,940 12,995 11,980

Interest income (18) (13) (60) (181)

Other expense, net 2,661 2,888 3,261 5,810

Income (loss) before income taxes 7,944 (4,181) 1,260 (17,082)

Income tax benefit (2,638) (1,311) (4,006) (3,858)

Net income (loss) $ 10,582 $ (2,870) $ 5,266 $ (13,224)

Income (loss) per share:

Basic $ 0.27 (0.08) $ 0.13 (0.35)

Diluted $ 0.26 $ (0.08) $ 0.13 $ (0.35)

Weighted-average common shares outstanding:

Basic 39,086 37,912 38,924 37,608

Diluted 44,453 37,912 39,496 37,608

Net income (loss) $ 10,582 $ (2,870) $ 5,266 $ (13,224)

Other comprehensive income (loss):

Foreign currency translation adjustments (5,010) 8,698 (12,327) 8,669

Comprehensive income (loss) $ 5,572 $ 5,828 $ (7,061) $ (4,555)

CryoLife, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands)

September 30, December 31,

2021 2020

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents $ 64,587 $ 61,412

Restricted securities 538 546

Trade receivables, net 49,682 45,964

Other receivables 5,494 2,788

Inventories, net 78,319 73,038

Deferred preservation costs 42,619 36,546

Prepaid expenses and other 16,104 14,295

Total current assets 257,343 234,589

Goodwill 252,441 260,061

Acquired technology, net 171,788 186,091

Operating lease right-of-use assets, net 46,913 18,571

Other intangibles, net 36,001 40,966

Property and equipment, net 36,973 33,077

Deferred income taxes 3,974 1,446

Other assets 13,221 14,603

Total assets $ 818,654 $ 789,404

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Current portion of contingent consideration $ 17,600 $ 16,430

Accounts payable 9,528 9,623

Accrued compensation 11,990 10,192

Accrued expenses 9,091 7,472

Accrued procurement fees 3,296 3,619

Taxes payable 3,129 2,808

Current maturities of operating leases 3,053 5,763

Current portion of long-term debt 1,640 1,195

Other liabilities 1,803 3,366

Total current liabilities 61,130 60,468

Long-term debt 307,765 290,468

Non-current maturities of operating leases 45,765 14,034

Contingent consideration 47,300 43,500

Deferred income taxes 27,339 34,713

Deferred compensation liability 5,571 5,518

Other liabilities 12,243 11,990

Total liabilities $ 507,113 $ 460,691

Commitments and contingencies

Shareholders' equity:

Preferred stock -- --

Common stock (issued shares of 40,816 in 2021 and 40,394 in 2020) 408 404

Additional paid-in capital 309,290 316,192

Retained earnings 22,075 20,022

Accumulated other comprehensive (loss) income (5,584) 6,743

Treasury stock, at cost, 1,487 shares as of September 30, 2021 (14,648) (14,648) and December 31, 2020, respectively

Total shareholders' equity 311,541 328,713

Total liabilities and shareholders' equity $ 818,654 $ 789,404

CryoLife, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(In thousands)

(Unaudited)

Nine Months Ended

September 30,

2021 2020

Net cash flows from operating activities:

Net income (loss) $ 5,266 $ (13,224)

Adjustments to reconcile net income (loss) to net cash from operatingactivities:

Depreciation and amortization 18,008 14,818

Non-cash compensation 7,471 7,432

Non-cash lease expense 5,566 5,324

Change in fair value of contingent consideration 4,970 --

Non-cash interest expense 2,025 2,261

Change in fair value of long-term loan -- 4,949

Deferred income taxes (8,128) (4,916)

Gain from sale of non-financial assets (15,923) --

Other 4,665 1,631

Changes in operating assets and liabilities:

Accounts payable, accrued expenses, and other liabilities 65 3,230

Prepaid expenses and other assets (2,268) (2,560)

Receivables (8,032) 7,718

Inventories and deferred preservation costs (16,986) (19,744)

Net cash flows (used in) provided by operating activities (3,301) 6,919

Net cash flows from investing activities:

Proceeds from sale of non-financial assets, net 19,000 --

Acquisition of Ascyrus, net of cash acquisition -- (59,643)

Payments for Endospan agreements -- (5,000)

Capital expenditures (10,524) (5,171)

Other (4) (968)

Net cash flows provided by (used in) investing activities 8,472 (70,782)

Net cash flows from financing activities:

Proceeds from exercise of stock options and issuance of common stock 3,531 2,079

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)

Redemption and repurchase of stock to cover tax withholdings (1,898) (1,768)

Payment of debt issuance costs (2,219) (3,647)

Repayment of debt (2,397) (3,727)

Other (439) (463)

Net cash flows (used in) provided by financing activities (3,422) 95,290

Effect of exchange rate changes on cash, cash equivalents, and restricted 1,418 (1,086)securities

Increase in cash, cash equivalents, and restricted securities 3,167 30,341

Cash, cash equivalents, and restricted securities beginning of period 61,958 34,294

Cash, cash equivalents, and restricted securities end of period $ 65,125 $ 64,635

CryoLife, Inc. and Subsidiaries

Financial Highlights

(In thousands)

(Unaudited) (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Products:

Aortic stents and stent grafts $ 20,896 $ 15,290 $ 62,165 $ 43,932

Surgical sealants 16,544 15,811 52,236 44,985

On-X 14,022 12,067 41,843 34,385

Other 1,645 1,941 6,284 5,495

Total products 53,107 45,109 162,528 128,797

Preservation services 19,100 20,022 56,914 56,534

Total revenues $ 72,207 $ 65,131 $ 219,442 $ 185,331

Revenues:

U.S. $ 36,205 $ 36,332 $ 111,529 $ 103,171

International 36,002 28,799 107,913 82,160

Total revenues $ 72,207 $ 65,131 $ 219,442 $ 185,331

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 Nine Months Ended

September 30, September 30,

2021 2020 Growth Rate 2021 2020 Growth Rate

Reconciliation of total revenues, GAAP to

total revenues, non-GAAP:

Total revenues, GAAP $ 72,207 $ 65,131 11% $ 219,442 $ 185,331 18%

Including AMDS prior to acquisition -- 691 -- 2,088

Excluding PerClot post sale -- (498) -- (498)

Impact of changes in currency exchange -- 824 -- 4,358

Total proforma constant currency revenue, non- $ 72,207 $ 66,148 9% $ 219,442 $ 191,279 15%GAAP

(Unaudited) (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Reconciliation of operating income, GAAP to

adjusted operating income, non-GAAP:

Operating income $ 14,687 $ 3,634 $ 17,456 $ 527

Gain from sale of non-financial assets (15,923) -- (15,923) --

Amortization expense 4,203 3,397 12,701 9,430

Operating business development, integration, and 1,309 1,056 6,138 2,532severance expense

Corporate rebranding expense 461 -- 523 321

Adjusted operating income, non-GAAP $ 4,737 $ 8,087 $ 20,895 $ 12,810

(Unaudited) (Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Reconciliation of net income (loss), GAAP to

adjusted EBITDA, non-GAAP:

Net income (loss), GAAP $ 10,582 $ (2,870) $ 5,266 $ (13,224)

Adjustments:

Depreciation and amortization expense 6,009 5,176 18,008 14,818

Interest expense 4,100 4,940 12,995 11,980

Stock-based compensation expense 2,876 2,358 7,471 7,432

Business development, integration, and severance 1,309 6,005 6,138 7,481expense

Loss (gain) on foreign currency revaluation 2,576 (2,073) 3,097 846

Corporate rebranding expense 461 -- 523 321

Interest income (18) (13) (60) (181)

Income tax benefit (2,638) (1,311) (4,006) (3,858)

Gain from sale of non-financial assets (15,923) -- (15,923) --

Adjusted EBITDA, non-GAAP $ 9,334 $ 12,212 $ 33,509 $ 25,615

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 Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

GAAP:

Income (loss) before income taxes $ 7,944 $ (4,181) $ 1,260 $ (17,082)

Income tax benefit (2,638) (1,311) (4,006) (3,858)

Net income (loss) $ 10,582 $ (2,870) $ 5,266 $ (13,224)

Diluted income (loss) per common share: $ 0.26 $ (0.08) $ 0.13 $ (0.35)

Diluted weighted-average common shares outstanding 44,453 37,912 39,496 37,608

Reconciliation of income (loss) before income taxes,

GAAP to adjusted (loss) income, non-GAAP

Income (loss) before income taxes, GAAP: $ 7,944 $ (4,181) $ 1,260 $ (17,082)

Adjustments:

Amortization expense 4,203 3,397 12,701 9,430

Gain from sale of non-financial assets (15,923) -- (15,923) --

Business development, integration, and severance expense 1,309 6,005 6,138 7,481

Non-cash interest expense 453 1,371 2,025 2,261

Corporate rebranding expense 461 -- 523 321

Adjusted (loss) income before income taxes,

non-GAAP (1,553) 6,592 6,724 2,411

Income tax (benefit) expense calculated at a

pro forma tax rate of 25% (388) 1,648 1,681 603

Adjusted net (loss) income, non-GAAP $ (1,165) $ 4,944 $ 5,043 $ 1,808

Reconciliation of diluted income (loss) per common share, GAAP

to adjusted diluted (loss) income per common share, non-GAAP:

Diluted income (loss) per common share, GAAP: $ 0.26 $ (0.08) $ 0.13 $ (0.35)

Adjustments:

Amortization expense 0.11 0.09 0.33 0.25

Gain from sale of non-financial assets (0.41) -- (0.40) --

Business development, integration, and severance expense 0.04 0.16 0.15 0.20

Non-cash interest expense 0.01 0.04 0.05 0.06

Corporate rebranding expense 0.01 -- 0.01 0.01

Tax effect of non-GAAP adjustments 0.06 (0.07) (0.03) (0.13)

Effect of 25% pro forma tax rate (0.11) (0.01) (0.11) 0.01

Adjusted diluted (loss) income per common share,

non-GAAP $ (0.03) $ 0.13 $ 0.13 $ 0.05

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: 44,453 37,912 39,496 37,608

Adjustments:

Effect of dilutive stock options and awards (505) 445 -- 543

Effect of convertible senior notes (4,862) -- -- --

Diluted weighted-average common shares outstanding, non-GAAP 39,086 38,357 39,496 38,151

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SOURCE CryoLife, Inc.