8-K
ARTIVION, INC. (AORT)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________
FORM 8-K
___________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 3, 2022
___________________________________________
ARTIVION, INC.
(Exact name of registrant as specified in its charter)
___________________________________________
| Delaware | 1-13165 | 59-2417093 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br>Identification No.) |
1655 Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: (770) 419-3355
___________________________________________________________________________________
(Former name or former address, if changed since last report)
| Title of each class | Trading Symbol(s) | Name of each exchange <br>on which registered |
|---|---|---|
| Common Stock, $0.01 par value | AORT | NYSE |
___________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On November 3, 2022, Artivion, Inc. (“Artivion”) issued a press release announcing its financial results for the third quarter ended September 30, 2022. Artivion hereby incorporates by reference herein the information set forth in its press release dated November 3, 2022, a copy of which is attached hereto as Exhibit 99.1. Except as otherwise provided in the press release, the press release speaks only as of the date of such press release and it shall not create any implication that the affairs of Artivion have continued unchanged since such date.
The information provided pursuant to this Item 2.02 is to be considered “furnished” pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, nor shall it be deemed incorporated by reference into any of Artivion’s reports or filings with the Securities and Exchange Commission, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing.
Except for the historical information contained in this report, the statements made by Artivion are forward-looking statements that involve risks and uncertainties. All such statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Artivion’s future financial performance could differ significantly from the expectations of management and from results expressed or implied in the press release. Please refer to the last paragraph of the text portion of the press release for further discussion about forward-looking statements. For further information on risk factors, please refer to “Risk Factors” contained in Artivion’s most recently filed Form 10-K and its subsequent filings with the Securities and Exchange Commission, as well as in the press release attached as Exhibit 99.1 hereto. Artivion disclaims any obligation or duty to update or modify these forward-looking statements.
Item 9.01(d) Exhibits
(d)Exhibits.
| Exhibit Number | Description |
|---|---|
| 99.1* | Press Release dated November 3, 2022. |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
*Furnished herewith, not filed.
-2-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Artivion, Inc. has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 3, 2022
| ARTIVION, INC. | |
|---|---|
| By: | /s/ D. Ashley Lee |
| Name: | D. Ashley Lee |
| Title: | Executive Vice President and<br><br>Chief Financial Officer |
-3-
Document
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
| Artivion | Gilmartin Group LLC |
|---|---|
| D. Ashley Lee | Brian Johnston / Lynn Lewis |
| Executive Vice President & | Phone: 332-895-3222 |
| Chief Financial Officer | investors@artivion.com |
| Phone: 770-419-3355 |
Artivion Reports Third Quarter 2022 Financial Results
Third Quarter and Recent Business Highlights:
•Achieved revenue of $76.8 million in the third quarter of 2022 versus $72.2 million in the third quarter of 2021, an increase of 6% on a GAAP basis and 11% on a non-GAAP constant currency basis
•On-X revenues increased 17% on a GAAP basis and 19% on a non-GAAP constant currency basis in the third quarter of 2022 compared to the third quarter of 2021
ATLANTA, GA – (November 3, 2022) – Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced its financial results for the third quarter ended September 30, 2022.
“We remain well positioned to deliver on our growth strategy, particularly given the continued fundamental strength of our business. During the third quarter we made substantial progress on each of our key three-year strategic growth initiatives delivering year-over-year total revenue growth of 6% on a GAAP basis and 11% on a non-GAAP constant currency basis. These results were driven by growth across all four of our major product lines, including 19% growth in On-X revenue and 13% growth in tissue processing, both on a constant currency basis. Internationally, we delivered 25% revenue growth in Asia Pacific and 22% revenue growth in Latin America, both on a constant currency basis, driven by the continued expansion of our commercial footprint and securement of additional regulatory approvals. Our third quarter performance continues the momentum we have built throughout the year, resulting in a constant currency revenue growth of 11% year-over-year for the first nine months of 2022. We expect continued strong performance through the remainder of the year as we remain focused on executing on our key objectives,” said Pat Mackin, Chairman, President, and Chief Executive Officer.
Mr. Mackin added, “We also made good progress in advancing our product pipeline, which is expected to drive growth in both the near and long term. We continue to anticipate FDA PMA approval for PROACT Mitral and for PerClot by year end. Meanwhile, we continue to make progress
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on patient enrollment in the PERSEVERE trial to secure FDA approval for AMDS, a simple, elegant stent graft solution to treat aortic arch disease. Taken as a whole, we continue to see meaningful opportunities to grow our total addressable market through pipeline development as well as to maintain momentum with our existing portfolio in our current markets.”
Third Quarter 2022 Financial Results
Total revenues for the third quarter of 2022 were $76.8 million, reflecting an increase of 6% on a GAAP basis and 11% on a non-GAAP constant currency basis, both compared to the third quarter of 2021.
R&D expenses for the third quarter of 2022 include a $4.7 million charge for estimated costs associated with the termination and wind-down of the PROACT Xa study as recommended by the Data and Safety Monitoring Board (“DSMB”). The majority of these costs include future administrative costs that will be incurred during the fourth quarter of 2022 and the first quarter of 2023, as well as the estimated cost of clinical drugs purchased for patients participating in the study and not expected to be recovered. These costs are non-recurring and have been excluded for purposes of calculating adjusted EBITDA and non-GAAP earnings per share.
Net loss for the third quarter of 2022 was ($13.7) million, or ($0.34) per fully diluted common share, compared to net income of $10.6 million, or $0.26 per fully diluted common share for the third quarter of 2021. Non-GAAP net loss for the third quarter of 2022 was ($1.9) million, or ($0.05) per fully diluted common share, compared to non-GAAP net loss of ($1.2) million, or ($0.03) per fully diluted common share for the third quarter of 2021. Net loss in the third quarter of 2022 includes pretax losses related to foreign currency revaluation of $3.7 million.
2022 Financial Outlook
Artivion is narrowing its constant currency revenue growth to between 9% and 10% for the full year of 2022 compared to 2021. With the continued appreciation of the dollar versus other major currencies, full year revenues are now expected to be between $313.0 million and $316.0 million.
The Company's financial performance for 2022 and future periods is subject to the risks identified below.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, including non-GAAP revenue, non-GAAP net income, non-GAAP EBITDA, and non-GAAP general, administrative, and marketing expenses. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with US 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 the impact of changes in currency exchange. The Company’s non-GAAP net income; non-GAAP EBITDA; and non-GAAP general, administrative, and marketing results exclude (as applicable) depreciation and amortization expense; interest income and expense; stock-based compensation expense; loss or gain on foreign currency revaluation; expenses related to the DSMB recommended termination of the PROACT Xa clinical trial; income tax expense or benefit; corporate rebranding expense; business development, integration, and severance income or expense; non-cash interest expense; and gain from sale of non-financial assets. 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
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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 impact of recent acquisitions, non-cash expense related to amortization of previously acquired tangible and intangible assets, and any related adjustments to their carrying values. The Company has adjusted for the impact of 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, including the reconciliation of GAAP to non-GAAP financial measures.”
Webcast and Conference Call Information
The Company will hold a teleconference call and live webcast later today, November 3, 2022, 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 a few minutes prior to 4:30 p.m. ET. The teleconference replay will be available approximately one hour following the completion of the event and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The conference number for the replay is 13733812.
The live webcast and replay can be accessed by going to the Investors section of the Artivion website at www.Artivion.com and selecting the heading Webcasts & Presentations.
About Artivion, Inc.
Headquartered in suburban Atlanta, Georgia, Artivion, Inc. is a medical device company focused on developing simple, elegant solutions that address cardiac and vascular surgeons’ most difficult challenges in treating patients with aortic diseases. Artivion’s four major groups of products include: aortic stent grafts, surgical sealants, On-X mechanical heart valves, and implantable cardiac and vascular human tissues. Artivion markets and sells products in more than 100 countries worldwide. For additional information about Artivion, visit our website, www.artivion.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 beliefs that we expect our strong momentum to continue through the remainder of the year as we remain focused on executing on our key objectives; our product pipeline is expected to drive growth in both the near and long term; we believe there are meaningful opportunities to grow our total addressable market through pipeline development as well as to maintain momentum with our existing portfolio in our current markets; we continue to anticipate FDA PMA approval for PROACT Mitral and for PerClot this year; and we will deliver year-over-year constant currency revenue growth of 9-10% in 2022 versus 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 agreements may not be achieved; the benefits anticipated from our clinical trials may not be achieved or achieved on our anticipated timeline; our products may not be able to consistently retain their existing regulatory approvals or special regulatory approvals in order to be commercialized; products in our pipeline
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may not receive regulatory approval at all or receive regulatory approval on our anticipated timelines; our products that obtain regulatory approval may not be adopted by the market as much as we anticipate or at all; and the continued effects of COVID-19, including new COVID-19 variants, and continued hospital staffing shortages and macroeconomic factors such as inflation and currency exchange 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 the year ended December 31, 2021. Artivion does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
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Artivion, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income
In Thousands, Except Per Share Data
(Unaudited)
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Revenues: | ||||||||
| Products | $ | 55,248 | $ | 53,107 | $ | 171,726 | $ | 162,528 |
| Preservation services | 21,590 | 19,100 | 62,665 | 56,914 | ||||
| Total revenues | 76,838 | 72,207 | 234,391 | 219,442 | ||||
| Cost of products and preservation services: | ||||||||
| Products | 17,743 | 15,503 | 53,381 | 46,592 | ||||
| Preservation services | 10,351 | 8,915 | 29,375 | 26,710 | ||||
| Total cost of products and preservation services | 28,094 | 24,418 | 82,756 | 73,302 | ||||
| Gross margin | 48,744 | 47,789 | 151,635 | 146,140 | ||||
| Operating expenses: | ||||||||
| General, administrative, and marketing | 41,051 | 39,053 | 118,989 | 118,521 | ||||
| Research and development | 11,799 | 9,972 | 30,575 | 26,086 | ||||
| Total operating expenses | 52,850 | 49,025 | 149,564 | 144,607 | ||||
| Gain from sale of non-financial assets | — | (15,923) | $ | — | (15,923) | |||
| Operating (loss) income | (4,106) | 14,687 | 2,071 | 17,456 | ||||
| Interest expense | 4,805 | 4,100 | 12,854 | 12,995 | ||||
| Interest income | (40) | (18) | (86) | (60) | ||||
| Other expense, net | 3,661 | 2,661 | 7,564 | 3,261 | ||||
| (Loss) income before income taxes | (12,532) | 7,944 | (18,261) | 1,260 | ||||
| Income tax expense (benefit) | 1,181 | (2,638) | 3,100 | (4,006) | ||||
| Net (loss) income | $ | (13,713) | $ | 10,582 | $ | (21,361) | $ | 5,266 |
| (Loss) income per share: | ||||||||
| Basic | $ | (0.34) | $ | 0.27 | $ | (0.53) | $ | 0.13 |
| Diluted | $ | (0.34) | $ | 0.26 | $ | (0.53) | $ | 0.13 |
| Weighted-average common shares outstanding: | ||||||||
| Basic | 40,115 | 39,086 | 39,999 | 38,924 | ||||
| Diluted | 40,115 | 44,453 | 39,999 | 39,496 | ||||
| Net (loss) income | $ | (13,713) | $ | 10,582 | $ | (21,361) | $ | 5,266 |
| Other comprehensive loss: | ||||||||
| Foreign currency translation adjustments | (16,895) | (5,010) | (35,466) | (12,327) | ||||
| Comprehensive (loss) income | $ | (30,608) | $ | 5,572 | $ | (56,827) | $ | (7,061) |
Page 5 of 11
Artivion, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
In Thousands
| September 30,<br>2022 | December 31,<br>2021 | |||
|---|---|---|---|---|
| (Unaudited) | ||||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 37,572 | $ | 55,010 |
| Trade receivables, net | 57,159 | 53,019 | ||
| Other receivables | 7,880 | 5,086 | ||
| Inventories, net | 73,044 | 76,971 | ||
| Deferred preservation costs, net | 45,483 | 42,863 | ||
| Prepaid expenses and other | 16,851 | 14,748 | ||
| Total current assets | 237,989 | 247,697 | ||
| Goodwill | 234,773 | 250,000 | ||
| Acquired technology, net | 148,060 | 166,994 | ||
| Operating lease right-of-use assets, net | 41,320 | 45,714 | ||
| Property and equipment, net | 36,286 | 37,521 | ||
| Other intangibles, net | 31,112 | 34,502 | ||
| Deferred income taxes | 6,103 | 2,357 | ||
| Other assets | 7,088 | 8,267 | ||
| Total assets | $ | 742,731 | $ | 793,052 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 10,721 | $ | 10,395 |
| Accrued compensation | 11,079 | 13,163 | ||
| Accrued expenses | 10,088 | 7,687 | ||
| Taxes payable | 5,293 | 3,634 | ||
| Accrued procurement fees | 2,302 | 3,689 | ||
| Current maturities of operating leases | 3,061 | 3,149 | ||
| Current portion of long-term debt | 1,562 | 1,630 | ||
| Other liabilities | 1,886 | 1,606 | ||
| Total current liabilities | 45,992 | 44,953 | ||
| Long-term debt | 306,674 | 307,493 | ||
| Contingent consideration | 44,800 | 49,400 | ||
| Non-current maturities of operating leases | 40,915 | 44,869 | ||
| Non-current finance lease obligation | 3,450 | 4,374 | ||
| Deferred income taxes | 34,058 | 28,799 | ||
| Deferred compensation liability | 5,082 | 5,952 | ||
| Other liabilities | 6,652 | 6,484 | ||
| Total liabilities | $ | 487,623 | $ | 492,324 |
| Commitments and contingencies | ||||
| Shareholders' equity: | ||||
| Preferred stock | — | — | ||
| Common stock (issued shares of 41,816 in 2022 and 41,397 in 2021) | 418 | 414 | ||
| Additional paid-in capital | 334,077 | 322,874 | ||
| Retained (deficit) earnings | (19,386) | 1,975 | ||
| Accumulated other comprehensive loss | (45,353) | (9,887) | ||
| Treasury stock, at cost, 1,487 shares as of September 30, 2022 and December 31, 2021 | (14,648) | (14,648) | ||
| Total shareholders' equity | 255,108 | 300,728 | ||
| Total liabilities and shareholders' equity | $ | 742,731 | $ | 793,052 |
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Artivion, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
In Thousands
(Unaudited)
| Nine Months Ended<br>September 30, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Net cash flows from operating activities: | ||||
| Net (loss) income | $ | (21,361) | $ | 5,266 |
| Adjustments to reconcile net (loss) income to net cash from operating activities: | ||||
| Depreciation and amortization | 17,016 | 18,008 | ||
| Non-cash compensation | 9,189 | 7,471 | ||
| Non-cash lease expense | 5,656 | 5,566 | ||
| Deferred income taxes | 5,097 | (8,128) | ||
| Write-down of inventories and deferred preservation costs | 3,116 | 3,987 | ||
| Non-cash interest expense | 1,372 | 2,025 | ||
| Change in fair value of contingent consideration | (4,600) | 4,970 | ||
| Gain from sale of non-financial assets | — | (15,923) | ||
| Other | 151 | 678 | ||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses and other assets | (1,788) | (2,268) | ||
| Accounts payable, accrued expenses, and other liabilities | (2,103) | 65 | ||
| Inventories and deferred preservation costs | (5,781) | (16,986) | ||
| Receivables | (10,900) | (8,032) | ||
| Net cash flows used in operating activities | (4,936) | (3,301) | ||
| Net cash flows from investing activities: | ||||
| Acquisition of intangible assets | (1,123) | (726) | ||
| Capital expenditures | (6,924) | (10,524) | ||
| Proceeds from sale of non-financial assets, net | — | 19,000 | ||
| Other | — | 722 | ||
| Net cash flows (used in) provided by investing activities | (8,047) | 8,472 | ||
| Net cash flows from financing activities: | ||||
| Proceeds from exercise of stock options and issuance of common stock | 3,344 | 3,531 | ||
| Redemption and repurchase of stock to cover tax withholdings | (1,791) | (1,898) | ||
| Repayment of term loan | (2,033) | (2,397) | ||
| Payment of debt issuance costs | — | (2,219) | ||
| Other | (300) | (439) | ||
| Net cash flows used in financing activities | (780) | (3,422) | ||
| Effect of exchange rate changes on cash and cash equivalents | (3,675) | 1,418 | ||
| (Decrease) increase in cash and cash equivalents | (17,438) | 3,167 | ||
| Cash and cash equivalents beginning of period | 55,010 | 61,958 | ||
| Cash and cash equivalents end of period | $ | 37,572 | $ | 65,125 |
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Artivion, Inc. and Subsidiaries
Financial Highlights
In Thousands
(Unaudited)
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Products: | ||||||||
| Aortic stent grafts | $ | 19,674 | $ | 20,896 | $ | 69,013 | $ | 62,165 |
| Surgical sealants | 17,374 | 16,544 | 49,022 | 52,236 | ||||
| On-X | 16,456 | 14,022 | 47,082 | 41,843 | ||||
| Other | 1,744 | 1,645 | 6,609 | 6,284 | ||||
| Total products | 55,248 | 53,107 | 171,726 | 162,528 | ||||
| Preservation services | 21,590 | 19,100 | 62,665 | 56,914 | ||||
| Total revenues | $ | 76,838 | $ | 72,207 | $ | 234,391 | $ | 219,442 |
| Revenues: | ||||||||
| US | $ | 41,250 | $ | 36,205 | $ | 119,938 | $ | 111,529 |
| International | 35,588 | 36,002 | 114,453 | 107,913 | ||||
| Total revenues | $ | 76,838 | $ | 72,207 | $ | 234,391 | $ | 219,442 |
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Artivion, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Revenues and General, Administrative, and Marketing Expense
In Thousands
(Unaudited)
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Growth Rate | 2022 | 2021 | Growth Rate | |||||
| Reconciliation of total revenues, GAAP to total revenues, non-GAAP: | ||||||||||
| Total revenues, GAAP | $ | 76,838 | $ | 72,207 | 6% | $ | 234,391 | $ | 219,442 | 7% |
| Impact of changes in currency exchange | — | (3,287) | — | (7,358) | ||||||
| Total constant currency revenue, non-GAAP | $ | 76,838 | $ | 68,920 | 11% | $ | 234,391 | $ | 212,084 | 11% |
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| 2022 | 2021 | 2022 | 2021 | |||||||
| Reconciliation of G&A expenses, GAAP to adjusted G&A, non-GAAP: | ||||||||||
| General, administrative, and marketing expense,<br>GAAP | $ | 41,051 | $ | 39,053 | $ | 118,989 | $ | 118,521 | ||
| Corporate rebranding expense | 251 | 461 | 1,423 | 523 | ||||||
| Business development, integration, and severance expense (income) | 864 | 1,309 | (3,816) | 6,138 | ||||||
| Adjusted G&A, non-GAAP | $ | 39,936 | $ | 37,283 | $ | 121,382 | $ | 111,860 |
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Artivion, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Adjusted EBITDA
In Thousands
(Unaudited)
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Reconciliation of net (loss) income, GAAP to adjusted EBITDA, non-GAAP: | ||||||||
| Net (loss) income, GAAP | $ | (13,713) | $ | 10,582 | $ | (21,361) | $ | 5,266 |
| Adjustments: | ||||||||
| Depreciation and amortization expense | 5,519 | 6,009 | 17,016 | 18,008 | ||||
| Interest expense | 4,805 | 4,100 | 12,854 | 12,995 | ||||
| Stock-based compensation expense | 3,089 | 2,876 | 9,189 | 7,471 | ||||
| Loss on foreign currency revaluation | 3,668 | 2,576 | 7,555 | 3,097 | ||||
| Clinical trial termination expense | 4,741 | — | 4,741 | — | ||||
| Income tax expense (benefit) | 1,181 | (2,638) | 3,100 | (4,006) | ||||
| Corporate rebranding expense | 251 | 461 | 1,423 | 523 | ||||
| Gain from sale of non-financial assets | — | (15,923) | — | (15,923) | ||||
| Interest income | (40) | (18) | (86) | (60) | ||||
| Business development, integration, and severance expense (income) | 864 | 1,309 | (3,816) | 6,138 | ||||
| Adjusted EBITDA, non-GAAP | $ | 10,365 | $ | 9,334 | $ | 30,615 | $ | 33,509 |
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Artivion 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)
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| GAAP: | ||||||||
| (Loss) income before income taxes | $ | (12,532) | $ | 7,944 | $ | (18,261) | $ | 1,260 |
| Income tax expense (benefit) | 1,181 | (2,638) | 3,100 | (4,006) | ||||
| Net (loss) income | $ | (13,713) | $ | 10,582 | $ | (21,361) | $ | 5,266 |
| Diluted (loss) income per common share | $ | (0.34) | $ | 0.26 | $ | (0.53) | $ | 0.13 |
| Diluted weighted-average common shares outstanding | 40,115 | 44,453 | 39,999 | 39,496 | ||||
| Reconciliation of (loss) income before income taxes, GAAP to adjusted (loss) income, non-GAAP: | ||||||||
| (Loss) income before income taxes, GAAP: | $ | (12,532) | $ | 7,944 | $ | (18,261) | $ | 1,260 |
| Adjustments: | ||||||||
| Amortization expense | 3,686 | 4,203 | 11,675 | 12,701 | ||||
| Clinical trial termination expense | 4,741 | — | 4,741 | — | ||||
| Corporate rebranding expense | 251 | 461 | 1,423 | 523 | ||||
| Non-cash interest expense | 459 | 453 | 1,372 | 2,025 | ||||
| Gain from sale of non-financial assets | — | (15,923) | — | (15,923) | ||||
| Business development, integration, and severance expense (income) | 864 | 1,309 | (3,816) | 6,138 | ||||
| Adjusted (loss) income before income taxes, non-GAAP | (2,531) | (1,553) | (2,866) | 6,724 | ||||
| Income tax (benefit) expense calculated at a pro forma tax rate of 25% | (633) | (388) | (717) | 1,681 | ||||
| Adjusted net (loss) income, non-GAAP | $ | (1,898) | $ | (1,165) | $ | (2,149) | $ | 5,043 |
| Reconciliation of diluted (loss) income per common share, GAAP to adjusted diluted (loss) income per common share, non-GAAP: | ||||||||
| Diluted (loss) income per common share, GAAP: | $ | (0.34) | $ | 0.26 | $ | (0.53) | $ | 0.13 |
| Adjustments: | ||||||||
| Amortization expense | 0.09 | 0.11 | 0.29 | 0.33 | ||||
| Effect of 25% pro forma tax rate | 0.10 | (0.11) | 0.19 | (0.11) | ||||
| Clinical trial termination expense | 0.12 | — | 0.12 | — | ||||
| Non-cash interest expense | 0.01 | 0.01 | 0.03 | 0.05 | ||||
| Corporate rebranding expense | — | 0.01 | 0.03 | 0.01 | ||||
| Gain from sale of non-financial assets | — | (0.41) | — | (0.40) | ||||
| Business development, integration, and severance expense (income) | 0.03 | 0.04 | (0.09) | 0.15 | ||||
| Tax effect of non-GAAP adjustments | (0.06) | 0.06 | (0.09) | (0.03) | ||||
| Adjusted diluted (loss) income per common share, non-GAAP | $ | (0.05) | $ | (0.03) | $ | (0.05) | $ | 0.13 |
| 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: | 40,115 | 44,453 | 39,999 | 39,496 | ||||
| Adjustments: | ||||||||
| Effect of dilutive stock options and awards | — | (505) | — | — | ||||
| Effect of convertible senior notes | — | (4,862) | — | — | ||||
| Diluted weighted-average common shares outstanding, non-GAAP | 40,115 | 39,086 | 39,999 | 39,496 |
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