CryoLife Reports Fourth Quarter and Full Year 2020 Financial Results

News provided by

CryoLife, Inc.

Feb 11, 2021, 16:05 ET

ATLANTA, Feb. 11, 2021 /PRNewswire/ --

Fourth Quarter and Recent Business Highlights:

  • Achieved total revenues of $67.9 million in the fourth quarter 2020 versus $69.7 million in the fourth quarter of 2019
    • Total revenues decreased 3% on a GAAP basis and 5% on a non-GAAP proforma constant currency basis versus fourth quarter 2019
    • Excluding TMR, fourth quarter revenues decreased 2% on a non-GAAP proforma basis and 3% on a non-GAAP proforma constant currency basis versus fourth quarter 2019
  • Achieved net loss of ($3.5) million, or ($0.09) per share
  • Achieved non-GAAP net income of $7.9 million, or $0.20 per share

CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the fourth quarter and full year ended December 31, 2020. 

"Despite the ongoing impact of COVID-19 on our business, we were able to generate solid quarterly results and advance our key operational goals.  We completed the integration of Ascyrus, launched our newest JOTEC products, and made good progress on enrollment in our PROACT Xa clinical trial," commented Pat Mackin, Chairman, President, and Chief Executive Officer. "Additionally, our manufacturing facilities continued to run at near capacity and our supply chain remains largely intact.  We also continued to invest in our commercial channels and R&D programs related to products that we believe will deliver revenue in 2021 and 2022, including our regulatory approvals for U.S. PerClot, BioGlue China and PROACT Mitral.  We also progressed in our efforts to obtain regulatory approval for Ascyrus in the US and other countries.  These fundamental drivers, combined with declining COVID-19 infection rates and accelerating vaccination programs in various regions around the world, make us optimistic that the second half of 2021 should be the start of a prolonged period of growth for CryoLife."

Fourth Quarter 2020 Financial Results
Total revenues for the fourth quarter of 2020 were $67.9 million, reflecting a decrease of 3% on a GAAP basis and a decrease of 5% on a non-GAAP proforma constant currency basis, both compared to the fourth quarter of 2019.  Revenue performance across all product lines reflected the impact of the COVID-19 pandemic on the number of procedures using our products.

Net loss for the fourth quarter of 2020 was $(3.5) million, or $(0.09) per fully diluted common share, compared to net loss of ($0.7) million, or ($0.02) per fully diluted common share for the fourth quarter of 2019.  Non-GAAP net income for the fourth quarter of 2020 was $7.9 million, or $0.20 per fully diluted common share, compared to non-GAAP net income of $4.2 million, or $0.11 per fully diluted common share for the fourth quarter of 2019.  Loss for the fourth quarter of 2020 includes pretax expense of $4.8 million of business development costs primarily related to the Ascyrus acquisition, partially offset by pretax benefit of  $1.2 million resulting from a change in the Company's paid time off policy and a non-cash pretax benefit of $3.0 million related to the reversal of performance-based stock compensation because financial targets were not met due to the impact of COVID-19.

Full Year 2020 Financial Results
Total revenues for 2020 were $253.2 million, reflecting a decrease of 8% on both a GAAP and non-GAAP proforma constant currency basis, both compared to the full year of 2019.  Revenue performance across all product lines reflected the impact of the COVID-19 pandemic on the number of procedures using our products.

Net loss for 2020 was ($16.7) million, or ($0.44) per fully diluted common share, compared to net income of $1.7 million, or $0.05 per fully diluted common share for the full year of 2019.  Non-GAAP net income for the full year of 2020 was $9.7 million, or $0.25 per fully diluted common share, compared to non-GAAP net income of $12.9 million, or $0.34 per fully diluted common share for the full year of 2019.  Loss for the full year of 2020 includes pretax expense of $12.3 million of business development costs primarily related to the Ascyrus and Endospan transactions, partially offset by pretax benefit of $1.2 million resulting from a change in the Company's paid time off policy and a non-cash pretax benefit of $3.0 million related to the reversal of performance-based stock compensation because financial targets were not met due to the impact of COVID-19.

The independent registered public accounting firm's audit report with respect to the Company's fiscal year-end financial statements will not be issued until the Company completes its annual report on Form 10-K.  Accordingly, the financial results reported in this earnings release are preliminary pending completion of the audit.

2021 Financial Outlook
Due to continued uncertainties resulting from the COVID-19 global pandemic, the Company is not issuing 2021 financial guidance at this time.

The Company's financial performance for 2021 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 and non-GAAP EBITDA results exclude (as applicable) business development, integration, and severance expense; depreciation and amortization expense; interest income and expense; non-cash interest expense; loss 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, February 11, 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 February 18, 2021 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13715710.

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 foreword-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 beliefs that, despite the ongoing impact of COVID-19 on our business, we were able to generate solid quarterly results, advance on our key operational goals, and make good progress on enrollment in our PROACT Xa clinical trial; our R&D programs in which we continued to invest in 2020, such as U.S. PerClot, BioGlue China and PROACT Mitral, will deliver revenue in 2021 and 2022, and our fundamental drivers, combined with declining COVID-19 infection rates and accelerating vaccination programs in various regions around the world, starting in the second half of 2021, should lead to a prolonged period of growth for CryoLife.  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 may not be achieved and the continued effects of COVID-19 and government mandates implemented to address 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.

CryoLife, Inc. and Subsidiaries

Financial Highlights

(In thousands, except per share data)


(Unaudited)


Three Months Ended

Twelve Months Ended

December 31,

December 31,


2020

2019

2020

2019

Revenues:










Products

$

50,502

$

50,193

$

179,299

$

197,246

Preservation services

17,394

19,504

73,928

78,976

Total revenues

67,896

69,697

253,227

276,222












Cost of products and preservation services:










Products

14,050

14,001

50,128

55,022

Preservation services

9,255

9,144

35,315

38,187

Total cost of products and preservation services

23,305

23,145

85,443

93,209












Gross margin

44,591

46,552

167,784

183,013












Operating expenses:










General, administrative, and marketing

36,103

37,609

141,136

143,011

Research and development

6,574

5,312

24,207

22,960

Total operating expenses

42,677

42,921

165,343

165,971












Operating income


1,914

3,631

2,441

17,042












Interest expense

4,718

3,626

16,698

14,886

Interest income

(36)

(130)

(217)

(738)

Other (income) expense, net

(2,676)

(1,412)

3,134

1,250












(Loss) income before income taxes

(92)

1,547

(17,174)

1,644

Income tax expense (benefit)

3,366

2,228

(492)

(76)












Net (loss) income

$

(3,458)

$

(681)

$

(16,682)

$

1,720












(Loss) income per common share:










Basic

$

(0.09)

(0.02)

$

(0.44)

$

0.05

Diluted

$

(0.09)

(0.02)

$

(0.44)

$

0.05












Weighted-average common shares outstanding:










Basic

38,613

37,274

37,861

37,118

Diluted

38,613

37,274

37,861

37,860

CryoLife, Inc. and Subsidiaries

Financial Highlights

(In thousands)


Unaudited

Unaudited

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2020

2019

2020

2019

Products:










BioGlue

$

17,083

$

17,777

$

62,068

$

68,611

Aortic stents and stent grafts

17,731

16,038

61,663

64,974

On-X

13,668

13,345

48,053

50,096

PhotoFix

1,113

1,002

4,169

3,754

PerClot

801

981

2,882

3,795

CardioGenesis cardiac laser therapy

106

1,050

464

6,016

          Total products

50,502

50,193

179,299

197,246












Preservation services:










Cardiac tissue

9,135

10,145

$

37,893

$

40,879

Vascular tissue

8,195

9,359

35,852

38,097

NeoPatch

64

--

183

--

Total preservation services

17,394

19,504

73,928

78,976












Total revenues

$

67,896

$

69,697

$

253,227

$

276,222












Revenues:


U.S.

$

35,103

$

37,005

$

138,274

$

150,553

International

32,793

32,692

114,953

125,669

Total revenues

$

67,896

$

69,697

$

253,227

$

276,222

December 31,

December 31,

2020

2019

Cash, cash equivalents, and restricted securities

$

61,958

$

34,294

Total current assets

234,589

187,390

Total assets

789,404

605,654

Total current liabilities

60,468

45,195

Total liabilities

460,691

319,958

Shareholders' equity

328,713

285,696

CryoLife, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Net (Loss) Income and Diluted (Loss) Income Per Common Share

(In thousands, except per share data)


(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,


2020

2019

2020

2019

GAAP:










(Loss) income before income taxes

$

(92)

$

1,547

$

(17,174)

$

1,644

Income tax expense (benefit)

3,366

2,228

(492)

(76)

Net (loss) income

$

(3,458)

$

(681)

$

(16,682)

$

1,720












Diluted (loss) income per common share:

$

(0.09)

$

(0.02)

$

(0.44)

$

0.05












Diluted weighted-average common










shares outstanding

38,613

37,274

37,861

37,860












Reconciliation of (loss) income before income taxes,












GAAP to adjusted net income, non-GAAP










(Loss) income before income taxes, GAAP

$

(92)

$

1,547

$

(17,174)

$

1,644

Adjustments:










Business development, integration, and severance expense


4,839

526

12,320

3,088

Amortization expense

4,334

3,054

13,764

10,850

Non-cash interest expense

1,395

406

3,656

1,631

Corporate rebranding expense


15

--

336

--

Adjusted income before income taxes,












non-GAAP

10,491

5,533

12,902

17,213












Income tax expense calculated at a










pro forma tax rate of 25%

2,623

1,383

3,226

4,303

Adjusted net income, non-GAAP

$

7,868

$

4,150

$

9,676

$

12,910












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










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










Diluted (loss) income per common share, GAAP:

$

(0.09)

$

(0.02)

$

(0.44)

$

0.05

Adjustments:










Business development, integration, and severance expense


0.12

0.02

0.32

0.28

Amortization expense

0.11

0.08

0.36

0.08

Non-cash interest expense

0.04

0.01

0.09

0.04

Effect of 25% pro forma tax rate

0.09

0.05

0.10

(0.01)

Corporate rebranding expense


--

--

0.01

--

Tax effect of non-GAAP adjustments

(0.07)

(0.03)

(0.19)

(0.10)

Adjusted diluted income per common share,










 non-GAAP:

$

0.20

$

0.11

$

0.25

$

0.34












Diluted weighted-average common










shares outstanding

39,100

37,914

38,369

37,860

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

Twelve Months Ended

December 31,

December 31,

2020

2019

Growth
Rate

2020

2019

Growth
Rate

Reconciliation of total revenues, GAAP to












total revenues, non-GAAP:












Total revenues, GAAP

$

67,896

$

69,697

-3%

$

253,227

$

276,222

-8%

Including AMDS prior to acquisition  


--

547


2,088

2,339

Total GAAP revenues including
AMDS

67,896

70,244

-3%

255,315

278,561

-8%

Impact of changes in currency exchange

--

1,024


--

(708)

Total constant currency revenues including
AMDS, non-GAAP

$

67,896

$

71,268

-5%

$

255,315

$

277,853

-8%














Reconciliation of total revenues, GAAP to












total revenues, non-GAAP:












Total revenues, GAAP

$

67,896

$

69,697

-3%

$

253,227

$

276,222

-8%

Including AMDS prior to acquisition  


--

547


2,088

2,339

Excluding CardioGenesis cardiac laser therapy


(106)

(1,050)


(464)

(6,016)

Total GAAP revenues including
AMDS and excluding CardioGenesis

67,790

69,194

-2%

254,851

272,545

-6%

Impact of changes in currency exchange

--

1,024


--

(708)

Total constant currency revenues including
AMDS and excluding CardioGenesis, non-GAAP

$

67,790

$

70,218

-3%

$

254,851

$

271,837

-6%

(Unaudited)

(Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2020

2019

2020

2019

Reconciliation of net (loss) income, GAAP to













adjusted EBITDA, non-GAAP:











Net (loss) income, GAAP

$

(3,458)

$

(681)

$

(16,682)

$

1,720

Adjustments:











Depreciation and amortization expense

5,894

5,060


20,712

18,317

Interest expense

4,718

3,626


16,698

14,886

Business development, integration, and severance
expense


4,839

526


12,320

3,088

Stock-based compensation expense

(520)

2,218


6,912

8,799

Corporate rebranding expense

15

--


336

--

Interest income

(36)

(130)


(217)

(738)

Income tax expense (benefit)

3,366

2,228


(492)

(76)

(Income) loss on foreign currency revaluation

(2,688)

(1,437)


(1,829)

1,232

Adjusted EBITDA, non-GAAP

$

12,130

$

11,410

$

37,758

$

47,228

Contacts:


CryoLife

D. Ashley Lee

Executive Vice President, Chief Financial Officer and

Chief Operating Officer

Phone: 770-419-3355

Gilmartin Group LLC

Brian Johnston / Lynn Lewis

Phone:  631-807-1986

[email protected]

SOURCE CryoLife, Inc.

Related Links

http://www.cryolife.com

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