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CryoLife Reports Fourth Quarter and Full Year 2020 Financial Results

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

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

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

investors@cryolife.com

 

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SOURCE CryoLife, Inc.

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