EX-99.1 2 aort-2024x8k63024ex991.htm EX-99.1 Document
Exhibit 99.1
imagea.jpg
FOR IMMEDIATE RELEASE

Contacts:
ArtivionGilmartin Group LLC
Lance A. BerryBrian Johnston / Laine Morgan
Executive Vice President &Phone: 332-895-3222
Chief Financial Officerinvestors@artivion.com
Phone: 770-419-3355

Artivion Reports Second Quarter 2024 Financial Results

Second Quarter Highlights:

•Achieved revenue of $98.0 million in the second quarter of 2024 versus $89.3 million in the second quarter of 2023, an increase of 10% on both a GAAP and constant currency basis
•Net loss was ($2.1) million or ($0.05) per fully diluted share and non-GAAP net income was $2.9 million or $0.07 per fully diluted share in the second quarter of 2024
•Adjusted EBITDA increased 35% to $18.6 million in the second quarter of 2024 compared to $13.8 million in the second quarter of 2023
•Raised FY24 revenue guidance to 10% to 12% year-over-year growth on a constant currency basis, an increase of 0.5% at the midpoint
•Raised FY24 adjusted EBITDA guidance to 28% to 34% year-over-year growth, an increase of 1% at the midpoint

ATLANTA, GA – (August 8, 2024) – Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced financial results for the second quarter ended June 30, 2024.

“In the second quarter, we continued to make substantial progress on our strategic growth initiatives to drive sustained and profitable growth, and we further solidified our position as the leader in the aortic disease space. Revenue growth in the second quarter was driven by year-over-year constant currency growth in On-X of 15% and stent grafts of 13%, both compared to the second quarter of 2023. We also saw continued revenue strength across Latin America and Asia Pacific, which grew 25% and 15%, respectively, in the second quarter on a constant currency basis compared to the same period last year. In addition to our strong revenue performance, adjusted EBITDA grew 35% this quarter, demonstrating our ability to scale the business and continue to expand adjusted EBITDA margins,” said Pat Mackin, Chairman, President, and Chief Executive Officer.

Mr. Mackin concluded, “Given our second quarter performance, we are raising our full year revenue and adjusted EBITDA expectations for 2024.”

Second Quarter 2024 Financial Results
Total revenues for the second quarter of 2024 were $98.0 million, an increase of 10% on both a GAAP basis and constant currency basis, both compared to the second quarter of 2023.
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Net loss for the second quarter of 2024 was ($2.1) million, or ($0.05) per fully diluted common share, compared to net loss of ($3.4) million, or ($0.08) per fully diluted common share for the second quarter of 2023. Non-GAAP net income for the second quarter of 2024 was $2.9 million, or $0.07 per fully diluted common share, compared to non-GAAP net income of $2.3 million, or $0.06 per fully diluted common share for the second quarter of 2023. Non-GAAP net income for the second quarter of 2024 includes pretax losses related to foreign currency revaluation of $0.9 million.

2024 Financial Outlook
Artivion is raising its revenue guidance range and now expects constant currency revenue growth of between 10% to 12% for the full year 2024, compared to the 9% to 12% previously provided. Growth rates are compared to 2023. The Company expects revenues to be in the range of $388 to $396 million compared to the previously articulated range of $386 to $396 million. At current rates, the Company expects negligible year-over-year currency impact on the full year 2024 revenues.

Additionally, Artivion is raising its adjusted EBITDA guidance range and now expects growth of between 28% and 34% for the full year 2024, compared to the 26% to 34% previously provided. Growth rates are compared to 2023. The Company expects adjusted EBITDA to be in the range of $69 to $72 million compared to the previously articulated range of $68 to $72 million.

The Company's financial performance for 2024 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 adjusted EBITDA, non-GAAP general, administrative, and marketing expenses, and free cash flows. 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 adjusted EBITDA, non-GAAP general, administrative, and marketing, and free cash flows results exclude (as applicable) depreciation and amortization expense, interest income and expense, stock-based compensation expense, loss or gain on foreign currency revaluation, income tax expense or benefit, corporate rebranding expense, business development, integration, and severance income or expense, loss on extinguishment of debt, and non-cash interest expense. 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 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
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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 on August 8, 2024, at 4:30 p.m. ET to discuss the results, followed by a question and answer session. To participate in the conference call dial 201-689-8261 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 13746922.

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, but are not limited to, those regarding our full year revenue expectations and our confidence in our ability to meet or exceed our adjusted EBITDA target for 2024; the timeline for regulatory approval for AMDS and other products; that our revenues for the full year 2024 will be in the range of $388 and $396 million, representing revenue growth of between 10% to 12% compared to 2023 on a constant currency basis; expect, at current exchange rates, negligible currency impact on the 2024 full year revenues; and expect non-GAAP adjusted EBITDA to increase between 28% and 34% for the full year 2024 compared to 2023, resulting in non-GAAP adjusted EBITDA in the range of $69 to $72 million in 2024. 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, but not limited to, the unpredictability of the timing and outcome of regulatory decisions, the benefits anticipated from the Ascyrus Medical LLC transaction and Endospan agreements and our operational improvements in our tissue and stent graft business may not be achieved at all or at the levels we anticipate or had originally anticipated; the benefits anticipated from our clinical trials and regulatory approvals may not be achieved or achieved on our anticipated timelines; and the benefits anticipated from our expansion into APAC and LATAM may not be achieved or achieved on our anticipated timelines. 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, 2023, and our Form 10-Q for the quarter ended June 30, 2024. 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
June 30,		Six Months Ended
June 30,
2024202320242023
Revenues:
Products$73,210 $66,003 $144,324 $128,294 
Preservation services24,809 23,248 51,126 44,186 
Total revenues98,019 89,251 195,450 172,480 
Cost of products and preservation services:
Products24,545 20,977 48,295 40,510 
Preservation services10,150 10,190 20,885 20,159 
Total cost of products and preservation services34,695 31,167 69,180 60,669 
Gross margin63,324 58,084 126,270 111,811 
Operating expenses:
General, administrative, and marketing49,320 57,241 80,009 107,606 
Research and development7,497 7,418 14,443 14,641 
Total operating expenses56,817 64,659 94,452 122,247 
Gain from sale of non-financial assets— (14,250)— (14,250)
Operating income6,507 7,675 31,818 3,814 
Interest expense8,304 6,356 16,130 12,452 
Interest income(353)(265)(727)(340)
Loss on extinguishment of debt— — 3,669 — 
Other expense, net983 4,241 2,392 3,278 
(Loss) income before income taxes(2,427)(2,657)10,354 (11,576)
Income tax (benefit) expense(306)725 4,942 5,338 
Net (loss) income$(2,121)$(3,382)$5,412 $(16,914)
(Loss) income per share:
Basic$(0.05)$(0.08)$0.13 $(0.41)
Diluted$(0.05)$(0.08)$0.13 $(0.41)
Weighted-average common shares outstanding:
Basic 41,683 40,755 41,487 40,595 
Diluted41,683 40,755 42,405 40,595 
Net (loss) income$(2,121)$(3,382)$5,412 $(16,914)
Other comprehensive (loss) income:
Foreign currency translation adjustments(2,727)1,026 (5,864)$5,647 
Unrealized gain (loss) from foreign currency intra-entity loans, net of tax404 800 2,013 (205)
Comprehensive (loss) income$(4,444)$(1,556)$1,561 $(11,472)
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Artivion, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
In Thousands
June 30,
2024		December 31,
2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$55,019 $58,940 
Trade receivables, net73,890 71,796 
Other receivables5,063 2,342 
Inventories, net80,802 81,976 
Deferred preservation costs, net50,674 49,804 
Prepaid expenses and other19,514 15,810 
Total current assets284,962 280,668 
Goodwill244,008 247,337 
Acquired technology, net135,151 142,593 
Operating lease right-of-use assets, net41,655 43,822 
Property and equipment, net37,440 38,358 
Other intangibles, net29,261 29,638 
Deferred income taxes3,309 1,087 
Other long-term assets13,753 8,894 
Total assets$789,539 $792,397 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$11,728 $13,318 
Accrued expenses16,490 12,732 
Accrued compensation13,995 18,715 
Current maturities of operating leases3,283 3,395 
Taxes payable1,734 3,840 
Accrued procurement fees1,472 1,439 
Current portion of long-term debt268 1,451 
Other current liabilities1,612 2,972 
Total current liabilities50,582 57,862 
Long-term debt313,295 305,531 
Contingent consideration 48,210 63,890 
Non-current maturities of operating leases41,967 43,977 
Deferred income taxes21,719 21,851 
Deferred compensation liability7,455 6,760 
Non-current finance lease obligation3,202 3,405 
Other long-term liabilities8,053 7,341 
Total liabilities$494,483 $510,617 
Commitments and contingencies
Shareholders’ equity:
Preferred stock— — 
Common stock (75,000 shares authorized, 43,279 and 42,569 shares issued in 2024 and 2023, respectively)433 426 
Additional paid-in capital367,627 355,919 
Retained deficit (42,495)(47,907)
Accumulated other comprehensive loss (15,861)(12,010)
Treasury stock, at cost, 1,487 shares as of June 30, 2024 and December 31, 2023(14,648)(14,648)
Total shareholders’ equity295,056 281,780 
Total liabilities and shareholders’ equity$789,539 $792,397 
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Artivion, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
In Thousands
(Unaudited)
Six Months Ended
June 30,
20242023
Net cash flows from operating activities:
Net income (loss)$5,412 $(16,914)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization11,800 11,501 
Non-cash compensation7,730 7,279 
Non-cash lease expense 3,897 3,631 
Loss on extinguishment of debt3,669 — 
Write-down of inventories and deferred preservation costs1,508 2,021 
Deferred income taxes994 (8,073)
Fair value adjustment of long-term loan— 5,000 
Gain from sale of non-financial assets— (14,250)
Change in fair value of contingent consideration(15,680)15,700 
Other 1,178 1,836 
Changes in operating assets and liabilities:
Inventories and deferred preservation costs(2,165)(6,921)
Prepaid expenses and other assets(5,224)(2,317)
Accounts payable, accrued expenses, and other liabilities(6,031)1,607 
Receivables(6,446)655 
Net cash flows provided by operating activities642 755 
Net cash flows from investing activities:
Proceeds from sale of non-financial assets, net— 14,250 
Payments for Endospan Agreement— (5,000)
Capital expenditures(6,124)(5,015)
Net cash flows (used in) provided by investing activities(6,124)4,235 
Net cash flows from financing activities:
Proceeds from issuance of debt190,000 — 
Proceeds from revolving credit facility30,000 — 
Proceeds from exercise of stock options and issuance of common stock3,587 2,581 
Proceeds from financing insurance premiums— 3,558 
Principal payments on short-term notes payable(1,027)(529)
Payment of debt issuance costs(10,044)— 
Repayment of debt(211,688)(1,381)
Other(272)(825)
Net cash flows provided by financing activities556 3,404 
Effect of exchange rate changes on cash and cash equivalents1,005 1,030 
(Decrease) increase in cash and cash equivalents(3,921)9,424 
Cash and cash equivalents beginning of period58,940 39,351 
Cash and cash equivalents end of period$55,019 $48,775 
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Artivion, Inc. and Subsidiaries
Financial Highlights
In Thousands
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Products:
Aortic stent grafts$32,190$28,359$64,293$54,509
On-X20,64517,94640,32635,602
Surgical sealants18,54516,56635,52633,269
Other1,8303,1324,1794,914
Total products73,21066,003144,324 128,294 
Preservation services 24,80923,24851,12644,186
Total revenues$98,019$89,251$195,450$172,480
North America48,66246,26899,59089,513
Europe, the Middle East, and Africa34,14530,14367,73358,072
Asia Pacific9,6538,37517,26216,253
Latin America5,5594,46510,8658,642
Total revenues$98,019$89,251$195,450$172,480
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Artivion, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Revenues 
In Thousands
(Unaudited)

Revenues for the
Three Months Ended
June 30,		Percent
Change
From Prior
Year
20242023
US GAAPUS GAAPExchange Rate EffectConstant CurrencyConstant Currency
Products:
Aortic stent grafts$32,190$28,359$148 $28,50713%
On-X20,64517,946(3)17,94315%
Surgical sealants18,54516,566— 16,56612%
Other1,8303,132(2)3,130-42%
Total products73,21066,00314366,14611%
Preservation services24,80923,248(6)23,2427%
Total$98,019$89,251$137$89,38810%
North America48,662 46,268 (11)46,257 5%
Europe, the Middle East, and Africa34,145 30,143 177 30,320 13%
Asia Pacific9,653 8,375 (1)8,374 15%
Latin America5,559 4,465 (28)4,437 25%
Total$98,019$89,251$137$89,38810%

Revenues for the
Six Months Ended
June 30,		Percent
Change
From Prior
Year
20242023
US GAAPUS GAAPExchange Rate EffectConstant CurrencyConstant Currency
Products:
Aortic stent grafts$64,293$54,509896 $55,40516%
On-X40,32635,602101 35,70313%
Surgical sealants35,52633,269118 33,3876%
Other4,1794,9143 4,917-15%
Total products144,324128,2941,118129,41212%
Preservation services51,12644,186(4)44,18216%
Total$195,450$172,480$1,114$173,59413%
North America99,590 89,513 (7)89,506 11%
Europe, the Middle East, and Africa67,733 58,072 982 59,054 15%
Asia Pacific17,262 16,253 (1)16,252 6%
Latin America10,865 8,642 140 8,782 24%
Total$195,450$172,480$1,114$173,59413%
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Artivion, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
General, Administrative, and Marketing Expense, Adjusted EBITDA, and Free Cash Flows
In Thousands
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Reconciliation of G&A expense, GAAP to adjusted G&A, non-GAAP:
General, administrative, and marketing expense, GAAP$49,320 $57,241 $80,009 $107,606 
  Business development, integration, and severance expense (income) 2,033 11,101 (15,354)16,098 
  Corporate rebranding expense— 69 — 218 
  Abandonment of CardioGenesis Cardiac laser therapy business— 160 — 160 
Adjusted G&A, non-GAAP$47,287 $45,911 $95,363 $91,130 

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Reconciliation of net (loss) income, GAAP to adjusted EBITDA, non-GAAP:
Net (loss) income, GAAP$(2,121)$(3,382)$5,412 $(16,914)
Adjustments:
Interest expense8,304 6,356 16,130 12,452 
Depreciation and amortization expense5,891 5,767 11,800 11,501 
Stock-based compensation expense4,252 3,938 7,730 7,279 
Income tax (benefit) expense(306)725 4,942 5,338 
Loss on extinguishment of debt— — 3,669 — 
Loss (gain) on foreign currency revaluation943 (797)2,353 (1,770)
  Abandonment of CardioGenesis Cardiac laser therapy business— 390 — 390 
Corporate rebranding expense— 69 — 218 
Gain from sale of non-financial assets— (14,250)— (14,250)
Interest income(353)(265)(727)(340)
  Business development, integration, and severance expense (income) 2,033 15,270 (15,354)20,722 
Adjusted EBITDA, non-GAAP$18,643 $13,821 $35,955 $24,626 

Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
Reconciliation of cash flows from operating activities, GAAP to free cash flows, non-GAAP:
Net cash flows provided by operating activities$6,135 $6,909 $642 $755 
Capital expenditures(2,513)(2,172)(6,124)(5,015)
Free cash flows, non-GAAP$3,622 $4,737 $(5,482)$(4,260)
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Artivion Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP
Net Income and Diluted Income Per Common Share
In Thousands, Except Per Share Data
(Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
2024202320242023
GAAP:
(Loss) income before income taxes$(2,427)$(2,657)$10,354 $(11,576)
Income tax (benefit) expense(306)725 4,942 5,338 
Net (loss) income$(2,121)$(3,382)$5,412 $(16,914)
Diluted (loss) income per common share$(0.05)$(0.08)$0.13 $(0.41)
Diluted weighted-average common shares outstanding41,683 40,755 42,405 40,595 
Reconciliation of (loss) income before income taxes, GAAP to adjusted income, non-GAAP:
(Loss) income before income taxes, GAAP:$(2,427)$(2,657)$10,354 $(11,576)
Adjustments:
Amortization expense3,793 3,806 7,660 7,687 
Loss on extinguishment of debt— — 3,669 — 
Non-cash interest expense484 464 1,064 926 
Abandonment of CardioGenesis Cardiac laser therapy business— 390 — 390 
Corporate rebranding expense— 69 — 218 
Gain from sale of non-financial assets— (14,250)— (14,250)
Business development, integration, and severance expense (income) 2,033 15,270 (15,354)20,722 
Adjusted income before income taxes, non-GAAP3,883 3,092 7,393 4,117 
Income tax expense calculated at a tax rate of 25%970 773 1,848 1,029 
Adjusted net income, non-GAAP$2,913 $2,319 $5,545 $3,088 
Reconciliation of diluted income (loss) per common share, GAAP to adjusted diluted income per common share, non-GAAP:
Diluted income (loss) per common share, GAAP:$(0.05)$(0.08)$0.13 $(0.41)
Adjustments:
Amortization expense0.09 0.09 0.18 0.19 
Loss on extinguishment of debt— — 0.09 — 
Non-cash interest expense0.01 0.01 0.02 0.02 
Abandonment of CardioGenesis Cardiac laser therapy business— 0.01 — 0.01 
Corporate rebranding expense— — — 0.01 
Gain from sale of non-financial assets— (0.34)— (0.34)
Business development, integration, and severance expense (income) 0.05 0.37 (0.36)0.50 
Tax effect of non-GAAP adjustments(0.04)(0.03)0.01 (0.10)
Effect of 25% tax rate0.01 0.03 0.06 0.20 
Adjusted diluted income per common share, non-GAAP$0.07 $0.06 $0.13 $0.08 
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:41,683 40,755 42,405 40,595 
Adjustments:
Effect of dilutive stock options and awards941 419 — 444 
Diluted weighted-average common shares outstanding, non-GAAP42,624 41,174 42,405 41,039 
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