CryoLife Reports Second Quarter 2019 Financial Results

ATLANTA, July 30, 2019 /PRNewswire/ -- 

Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)

Second Quarter and Recent Business Highlights:

  • Total revenues were $71.1 million in the second quarter of 2019, reflecting year over year growth of 4% and a 7% increase on a non-GAAP constant currency basis, both compared to the second quarter of 2018
    • BioGlue® revenues increased 5%, and 7% on a non-GAAP constant currency basis, both compared to the second quarter of 2018
    • On-X® revenues increased 4%, and 5% on a non-GAAP constant currency basis, both compared to the second quarter of 2018
    • JOTEC® revenues were flat, and increased 8% on a non-GAAP constant currency basis, both compared to the second quarter of 2018
  • Net income was $2.8 million, or $0.07 per fully diluted common share; non-GAAP net income was $4.1 million, or $0.11 per fully diluted common share

CryoLife, Inc. CRY, a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the second quarter ended June 30, 2019. 

"Our second quarter performance marked another period of consistent growth despite headwinds.  We also continued to make important progress advancing our clinical pipeline and R&D programs" said Pat Mackin, Chairman, President, and Chief Executive Officer.  "We expect the second half of 2019 to commence the start of a multi-year launch of next generation products into existing and new geographies.  This is an exciting time in our history and we are confident we have the right mix of differentiated products supported by our experienced sales organization to take the Company to higher levels of revenue performance."

Second Quarter 2019 Financial

Total revenues for the second quarter of 2019 were $71.1 million, reflecting growth of 4%, and 7% on a non-GAAP constant currency basis, both compared to the second quarter of 2018.  The non-GAAP increase was driven by revenue growth from BioGlue, On-X, JOTEC, and tissue processing. 

Net income for the second quarter of 2019 was $2.8 million, or $0.07 per fully diluted common share, compared to a net income of $226,000, or $0.01 per fully diluted common share for the second quarter of 2018.  Non-GAAP net income for the second quarter of 2019 was $4.1 million, or $0.11 per fully diluted common share, compared to non-GAAP net income of $3.9 million, or $0.10 per fully diluted common share for the second quarter of 2018. 

2019 Financial Outlook

CryoLife is reiterating its full-year financial guidance, with total revenues for 2019 expected to be in the range of $280 million to $284 million and non-GAAP earnings per share expected to be between $0.28 and $0.32

All numbers are presented on a GAAP basis except where expressly referenced as non-GAAP.  The Company does not provide GAAP income per common share on a forward-looking basis because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any unusual gains and losses without unreasonable effort.  These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP.

The Company's financial guidance for 2019 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 and integration expenses, amortization expense, inventory basis step-up expense, loss on foreign currency revaluation, and stock-based compensation expense.  The Company believes that these non-GAAP presentations provide useful information to investors regarding unusual non-operating transactions; the operating expense structure of the Company's existing and recently acquired operations, without regard to its on-going efforts to acquire additional complementary products and businesses and the transaction and integration expenses incurred in connection with recently acquired and divested product lines; and the operating expense structure excluding fluctuations resulting from foreign currency revaluation and stock-based compensation expense.  The Company believes it is useful to exclude certain expenses because such amounts in any specific period may not directly correlate to the underlying performance of its business operations or can vary significantly between periods as a result of factors such as acquisitions, or non-cash expense related to amortization of previously acquired tangible and intangible assets.  The Company has excluded the impact of changes in currency exchange from certain revenues to evaluate growth rates on a constant currency basis.  The Company does, however, expect to incur similar types of expenses and currency exchange impacts in the future, and this non-GAAP financial information should not be viewed as a statement or indication that these types of expenses will not recur.

Webcast and Conference Call Information

The Company will hold a teleconference call and live webcast later today, July 30, 2019 at 4:30 p.m. EDT 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 7, 2019 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13692463.

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.  Such forward-looking statements reflect the views of management at the time such statements are made.  These statements include our belief that we expect the second half of 2019 to commence the start of a multi-year launch of next generation products into existing and new geographies and we have the right mix of differentiated products supported by our experienced sales organization to take the Company to higher levels of revenue performance.  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.  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, 2018.  CryoLife does not undertake to update 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)



(Unaudited)



Three Months Ended



Six Months Ended



June 30,



June 30,



2019



2018





2019





2018

Revenues:























Products

$

51,168



$

49,313



$

99,569



$

92,911

Preservation services



19,971





19,183





39,075





37,533

Total revenues



71,139





68,496





138,644





130,444

























Cost of products and preservation services:























Products



14,489





13,550





28,315





27,707

Preservation services



9,684





9,095





19,090





17,658

Total cost of products and preservation services



24,173





22,645





47,405





45,365

























Gross margin



46,966





45,851





91,239





85,079

























Operating expenses:























General, administrative, and marketing



34,623





34,727





71,143





72,075

Research and development



5,841





5,719





11,389





11,089

Total operating expenses



40,464





40,446





82,532





83,164

Operating income



6,502





5,405





8,707





1,915

























Interest expense



3,811





4,103





7,705





7,759

Interest income



(233)





(30)





(349)





(89)

Other expense, net



185





1,466





262





1,285

























Income (loss) before income taxes



2,739





(134)





1,089





(7,040)

Income tax benefit



(93)





(360)





(1,446)





(3,411)

























Net income (loss)

$

2,832



$

226



$

2,535



$

(3,629)

























Income (loss) per common share:























Basic

$

0.08



$

0.01



$

0.07



$

(0.10)

Diluted

$

0.07



$

0.01



$

0.07



$

(0.10)

























Weighted-average common shares outstanding:























Basic



37,156





36,318





36,968





36,233

Diluted



37,838





37,249





37,789





36,233

 

 

 

CRYOLIFE, INC. AND SUBSIDIARIES

Financial Highlights

(In thousands)



























(Unaudited)



(Unaudited)



Three Months Ended



Six Months Ended



June 30,



June 30,



2019



2018





2019





2018

Products:























BioGlue

$

17,933



$

17,069



$

35,155



$

33,039

JOTEC



17,208





17,205





33,162





31,665

On-X



12,410





11,888





24,141





22,197

CardioGenesis cardiac laser therapy



1,898





1,578





3,612





2,924

PerClot



784





968





1,834





1,940

PhotoFix



935





605





1,665





1,146

          Total products



51,168





49,313





99,569





92,911

























Preservation services:























Cardiac tissue



10,500





9,055





19,430





17,158

Vascular tissue



9,471





10,128





19,645





20,375

Total preservation services



19,971





19,183





39,075





37,533

























Total revenues

$

71,139



$

68,496



$

138,644



$

130,444

























Revenues:























   U.S.

$

38,239



$

36,719



$

75,563



$

71,607

International



32,900





31,777





63,081





58,837

Total revenues

$

71,139



$

68,496



$

138,644



$

130,444

 

 







































(Unaudited)



















June 30,



December 31,















2019



2018

























Cash, cash equivalents, and restricted securities













$

40,255



$

42,236

Total current assets















188,557





179,168

Total assets















597,123





571,091

Total current liabilities















37,468





34,523

Total liabilities















314,970





296,024

Shareholders' equity















282,153





275,067

 

 

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,



2019



2018



2019



2018

GAAP:























Income (loss) before income taxes

$

2,739



$

(134)



$

1,089



$

(7,040)

Income tax benefit



(93)





(360)





(1,446)





(3,411)

Net income (loss)

$

2,832



$

226



$

2,535



$

(3,629)

























Diluted income (loss) per common share:

$

0.07



$

0.01



$

0.07



$

(0.10)

























Reconciliation of income (loss) before income























taxes, GAAP to adjusted net income,























      non-GAAP:























Income (loss) before income taxes, GAAP

$

2,739



$

(134)



$

1,089



$

(7,040)

Adjustments:























Business development and integration expenses



203





1,294





1,312





5,016

Amortization expense



2,557





2,753





5,136





5,488

Inventory basis step-up expense



--





1,237





--





2,743

Adjusted income before income taxes,























non-GAAP



5,499





5,150





7,537





6,207

Income tax expense calculated at a























pro forma tax rate of 25%



1,375





1,288





1,884





1,552

Adjusted net income, non-GAAP

$

4,124



$

3,862



$

5,653



$

4,655

























Reconciliation of diluted income (loss) per























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























Diluted income (loss) per common share, GAAP:

$

0.07



$

0.01



$

0.07



$

(0.10)

Adjustments:























Business development and integration expenses



--





0.03





0.03





0.13

Amortization expense



0.06





0.07





0.13





0.14

Inventory basis step-up expense



--





0.03





--





0.07

Tax effect of non-GAAP adjustments



--





(0.03)





(0.03)





(0.08)

Effect of 25% pro forma tax rate



(0.02)





(0.01)





(0.05)





(0.04)

Adjusted diluted income per common share,























 non-GAAP:

$

0.11



$

0.10



$

0.15



$

0.12

























Diluted weighted-average common























shares outstanding



37,838





37,249





37,789





37,152

 

 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

Revenues

(In thousands, except per share data)

































(Unaudited)



(Unaudited)



Three Months Ended



Six Months Ended



June 30,



June 30,



2019



2018

Growth Rate



2019



2018

Growth Rate

Reconciliation of total revenues, GAAP to



























total revenues, non-GAAP:



























Total revenues, GAAP

$

71,139



$

68,496

4%



$

138,644



$

130,444

6%

Impact of changes in currency exchange



--





(1,738)







--





(3,074)



Total constant currency revenues, non-GAAP

$

71,139



$

66,758

7%



$

138,644



$

127,370

9%





























Reconciliation of total BioGlue revenues, GAAP to



























total BioGlue revenues, non-GAAP:



























Total BioGlue revenues, GAAP

$

17,933



$

17,069

5%



$

35,155



$

33,039

6%

Impact of changes in currency exchange



--





(295)







--





(517)



Total constant currency BioGlue revenues, non-GAAP

$

17,933



$

16,774

7%



$

35,155



$

32,522

8%





























Reconciliation of total On-X revenues, GAAP to



























total On-X revenues, non-GAAP:



























Total On-X revenues, GAAP

$

12,410



$

11,888

4%



$

24,141



$

22,197

9%

Impact of changes in currency exchange



--





(91)







--





(168)



Total constant currency On-X revenues, non-GAAP

$

12,410



$

11,797

5%



$

24,141



$

22,029

10%





























Reconciliation of total JOTEC revenues, GAAP, to



























total JOTEC revenues, non-GAAP:



























Total JOTEC revenues, GAAP

$

17,208



$

17,205

0%



$

33,162



$

31,665

5%

Impact of changes in currency exchange



--





(1,299)







--





(2,284)



Total constant currency JOTEC revenues, non-GAAP

$

17,208



$

15,906

8%



$

33,162



$

29,381

13%

 

 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

Adjusted EBITDA

(In thousands, except per share data)































(Unaudited)





(Unaudited)



Three Months Ended





Six Months Ended



June 30,





June 30,



2019



2018





2019



2018

Reconciliation of net income (loss), GAAP

























to adjusted EBITDA, non-GAAP:

























Net income (loss), GAAP

$

2,832



$

226





$

2,535



$

(3,629)

Adjustments:

























Depreciation and amortization expense



4,381





4,730







8,731





9,106

Income tax benefit



(93)





(360)







(1,446)





(3,411)

Interest income



(233)





(30)







(349)





(89)

Interest expense



3,811





4,103







7,705





7,759

Inventory basis step-up expense



--





1,237







--





2,743

Business development and integration expenses



203





1,294







1,312





5,016

Loss on foreign currency revaluation



176





1,477







250





1,458

Stock-based compensation expense



2,266





1,872







4,119





3,120

Adjusted EBITDA, non-GAAP

$

13,343



$

14,549





$

22,857



$

22,073



























 

 

Contacts:







CryoLife

Gilmartin Group LLC

D. Ashley Lee   

Greg Chodaczek / Lynn Lewis

Executive Vice President, Chief Financial Officer and

Phone:  646-924-1769

Chief Operating Officer

investors@cryolife.com

Phone: 770-419-3355



 

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SOURCE CryoLife, Inc.

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