Artivion Reports Fourth Quarter and Full Year 2022 Financial Results

Fourth Quarter and Recent Business Highlights:

• Achieved revenue of $79.4 million in the fourth quarter of 2022 versus $79.4 million in the fourth quarter of 2021, flat on a GAAP basis and an increase of 5% on a non-GAAP constant currency basis
• Achieved revenue of $313.8 million for the full year of 2022 versus $298.8 million for the full year of 2021, an increase of 5% on a GAAP basis and 9% on a non-GAAP constant currency basis
• On-X revenues increased 8% on a GAAP basis and 11% on a non-GAAP constant currency basis in the fourth quarter of 2022 compared to the fourth quarter of 2021
• Aortic stent graft revenues increased 2% on a GAAP basis and 16% on a non-GAAP constant currency basis in the fourth quarter of 2022 compared to the fourth quarter of 2021
• Received CE mark for BioGlue

ATLANTA, Feb. 16, 2023 /PRNewswire/ -- Artivion, Inc. (NYSE: AORT), a leading cardiac and vascular surgery company focused on aortic disease, today announced its financial results for the fourth quarter and full year ended December 31, 2022.

"We achieved on-target constant currency revenue growth of 9% for the full year 2022 and remain well positioned to continue executing on our strategy to deliver strong top line and bottom line growth in 2023 and beyond. Through 2022, aortic stent graft revenue grew 20% year-over-year while On-X revenue grew 13%, and tissue processing revenue grew 8%, all on a constant currency basis. Asia Pacific and Latin American revenue grew 30% and 38%, respectively, on a constant currency basis compared to last year. During the fourth quarter, revenue growth was driven by aortic stent grafts, where revenue growth rebounded sequentially from the third quarter and increased 16%, and On-X, which grew 11% on a constant currency basis in the fourth quarter compared to 2021," said Pat Mackin, Chairman, President, and Chief Executive Officer.

Mr. Mackin added, "In addition, we received in the fourth quarter 2022 CE Mark for BioGlue under the MDR and, based on recent interactions with the FDA, we are confident that we will receive PMA approval for PerClot. We have also had strong recent success in recruiting, hiring, and retaining production employees at our German manufacturing facility, so that this facility is now nearly fully staffed. A larger production workforce will facilitate future growth in aortic stent graft revenue. Meanwhile, patient enrollment continues in the PERSEVERE trial to secure FDA approval for AMDS, a simple, elegant stent graft solution to treat aortic arch disease. We remain confident that we have meaningful opportunities to grow our total addressable market through pipeline development. We also anticipate maintaining momentum with our existing portfolio in our current markets. In light of these factors, we are optimistic that we will meet our commitments to deliver, by year-end 2024, double-digit compounded annual constant currency revenue growth and achieve adjusted EBITDA in excess of $75 million."

Fourth Quarter 2022 Financial Results
Total revenues for the fourth quarter of 2022 were $79.4 million, flat on a GAAP basis and an increase of 5% on a non-GAAP constant currency basis, both compared to the fourth quarter of 2021.

Net income for the fourth quarter of 2022 was $2.2 million, or $0.05 per fully diluted common share, compared to net loss of ($20.1) million, or ($0.51) per fully diluted common share for the fourth quarter of 2021. Non-GAAP net income for the fourth quarter of 2022 was $4.2 million, or $0.10 per fully diluted common share, compared to non-GAAP net loss of ($141,000), or $0.00 per fully diluted common share for the fourth quarter of 2021. Non-GAAP net income for the fourth quarter of 2022 includes pretax gains related to foreign currency revaluation of $4.5 million.

Full Year 2022 Financial Results
Total revenues for 2022 were $313.8 million, reflecting an increase of 5% on a GAAP basis and 9% on a non-GAAP constant currency basis compared to the full year of 2021.

Net loss for 2022 was ($19.2) million, or ($0.48) per fully diluted common share, compared to net loss of ($14.8) million, or ($0.38) per fully diluted common share for the full year of 2021. Non-GAAP net income for the full year of 2022 was $2.1 million, or $0.05 per fully diluted common share, compared to non-GAAP net income of $4.9 million, or $0.12 per fully diluted common share for the full year of 2021. Non-GAAP net income for the full year of 2022 includes pretax losses related to foreign currency revaluation of $3.1 million.

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 and the Company's filing of its annual report on Form 10-K.

2023 Financial Outlook
Artivion expects its constant currency revenue growth to be between 8.0% and 12.0% for the full year 2023 compared to 2022, and expects revenues to be in a range of between $331 million and $343 million. Artivion expects adjusted EBITDA, as reported, to increase greater than 20% in 2023 compared to 2022, resulting in adjusted EBITDA in excess of $50.0 million in 2023.

The Company's financial performance for 2023 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; clinical trial termination expense; 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 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, February 16, 2023, 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 13735085.

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 remain well positioned to continue executing on our strategy to deliver strong top line and bottom line growth in 2023 and beyond; we are confident that we will receive PMA approval for PerClot; our larger production workforce in Hechingen Germany will facilitate future growth in aortic stent graft revenue; we remain confident that we have meaningful opportunities to grow our total addressable market through pipeline development; we anticipate maintaining momentum with our existing portfolio in our current markets; we are optimistic that, in light of these factors, we will meet our commitments to deliver, by year-end 2024, double-digit compounded annual constant currency revenue growth and achieve adjusted EBITDA in excess of $75 million; we will deliver year-over-year constant currency revenue growth of 8 to 12% in 2023 versus 2022; and our projections for 2023 financial results, including that 2023 revenues are expected to be between $331 million and $343 million and 2023 adjusted EBITDA is expected to increase greater than 20% in 2023 compared to 2022 and to be in excess of $50 million. 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 at all or at the levels we had originally anticipated; 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 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 pandemics, including COVID-19 and new COVID-19 variants, and continued hospital staffing shortages 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, 2022. 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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SOURCE Artivion, Inc.