ARTIVION INC
For the period ended Jun 30, 2024. Filed Aug 9, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 9, 2024
AORT$20.21-20.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000784199-24-000172
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000784199-24-000215
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 123 current paragraphs.
63 unchanged; 45 reworded; 14 added; 4 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Revenues increased 10% and 13% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The increase in revenues for the three months ended June 30, 2024 was due to an increase in revenues from aortic stent grafts, On-X products, surgical sealants, and preservation services, partially offset by a decrease in revenues from other products. The increase in revenues for the six months ended June 30, 2024 was due to an increase in revenues from aortic stent grafts, preservation services, On-X products, and surgical sealants, partially offset by a decrease in revenues from other products.
Current report
Revenues from the sales of On-X products increased 15% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices.
Current report
Revenues from the sales of On-X products increased 13% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices.
Current report
Domestic revenues from the sales of On-X products accounted for 59% and 61% of total On-X revenues for the three and six months ended June 30, 2024, respectively, as compared to 58% and 59% of total On-X revenues for the three and six months ended June 30, 2023, respectively.
Current report
Revenues from the sales of surgical sealants increased 7% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase was primarily due to an increase in average sales prices and an increase in the volume of milliliters sold.
Current report
Revenues from tissue processing increased 7% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This increase was primarily due to an increase in average sales prices, partially offset by a decrease in certain tissues shipped.
Current report
The increase in the cost of products for the six months ended June 30, 2024 was primarily due to an increase in the cost of certain aortic stent grafts shipped, and the volume of primarily On-X and aortic stent grafts shipped, as compared to the six months ended June 30, 2023.
Current report
Cost of preservation services for the three months ended June 30, 2024 was impacted by an increase in the cost of certain tissues shipped, partially offset by a decrease in the volume of tissues shipped, as compared to the three months ended June 30, 2023.
Current report
Gross margin increased 9% and 13% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023.
Current report
The increase in gross margin for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023, was due to an increase in the volume and favorable pricing of certain aortic stent grafts, On-X products, and certain tissues shipped as well as favorable pricing of surgical sealants shipped during the six months ended June 30, 2024. This increase was partially offset by an increase in the cost of certain aortic stent grafts and tissues shipped during the six months ended June 30, 2024.
Current report
Gain from Sale of Non-Financial Assets
Current report
Gain from sale of non-financial assets for the three and six months ended June 30, 2023 consisted of the net $14.3 million received as part of the Baxter Transaction upon receipt of the PerClot PMA in May 2023.
Current report
Other Expense, Net
Current report
Net cash provided by operating activities was $642,000 and $755,000 for the six months ended June 30, 2024 and 2023, respectively.
Removed paragraphs (4)
Previous report
Revenues increased 17% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in revenues for the three months ended March 31, 2024 was due to an increase in revenues from all products and preservation services.
Previous report
Gross margin increased 17% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.
Previous report
Other Expense (Income), Net
Previous report
Net cash used in operating activities was $5.5 million and $6.2 million for the three months ended March 31, 2024 and 2023, respectively.
Reworded paragraphs (45)
Previous wording
Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, surgical sealants, On-X mechanical heart valves and related surgical products, and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita Open NEO, E-vita Open Plus, the Ascyrus Medical Dissection Stent (“AMDS”) hybrid prosthesis, NEXUS and NEXUS DUO (the “NEXUS Products”), E-vita Thoracic 3G, and Artivex products. Abdominal stent grafts include our E-xtra Design Engineering, E-nside, E-tegra, E-ventus BX, and E-liac products. Surgical sealants include BioGlue Surgical Adhesive (“BioGlue”) products. In addition to these four major product families, we also sell or distribute PhotoFix bovine surgical patches. We began to manufacture and supply PerClot® hemostatic powder during the second quarter of 2023 (as part of the Transitional Manufacturing and Supply Agreement (“TMSA”) of the Baxter Transaction, described below).
Current wording
Artivion, Inc. (“Artivion,” the “Company,” “we,” or “us”), is a leader in the manufacturing, processing, and distribution of medical devices and implantable human tissues used in cardiac and vascular surgical procedures for patients with aortic disease. We have four major product families: aortic stent grafts, On-X® mechanical heart valves and related surgical products (“On-X” products), surgical sealants, and implantable cardiac and vascular human tissues. Aortic stent grafts include aortic arch stent grafts, abdominal stent grafts, and synthetic vascular grafts. Aortic arch stent grafts include our E-vita®Open NEO, E-vita Open Plus, the Ascyrus Medical Dissection Stent (“AMDS”) hybrid prosthesis, the NEXUS® endovascular stent graft system (“NEXUS”), the NEXUS DUOTM aortic arch stent graft (“NEXUS DUO”), and E-vita Thoracic 3G products. Abdominal stent grafts include our E-xtra Design Engineering (including Artivex TM), E-nside TM, E-tegra TM, E-ventus TM BX, and E-liac TM products. Surgical sealants include our BioGlue®Surgical Adhesive products (“BioGlue”). In addition to these four major product families, we also sell or distribute PhotoFix® bovine surgical patches (“PhotoFix”). We began to manufacture and supply PerClot® hemostatic powder (“PerClot”) during the second quarter of 2023 (as part of the Transitional Manufacturing and Supply Agreement (“TMSA”) of the Baxter Transaction, described below).
Previous wording
We reported quarterly revenues of $97.4 million for the three months ended March 31, 2024, a 17% increase from the three months ended March 31, 2023. The increase in revenues for the three months ended March 31, 2024 was due to an increase in revenues from all products and preservation services. Constant currency revenues, as defined below, increased 16% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023.
Current wording
We reported quarterly revenues of $98.0 million for the three months ended June 30, 2024, a 10% increase from the three months ended June 30, 2023. The increase in revenues for the three months ended June 30, 2024 was due to an increase in revenues from aortic stent grafts, On-X products, surgical sealants, and preservation services, partially offset by a decrease in revenues from other products. Constant currency revenues, as defined below, increased 10% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.
Previous wording
See the “Results of Operations” section below for additional analysis of the three months ended March 31, 2024.
Current wording
See the “Results of Operations” section below for additional analysis of the three and six months ended June 30, 2024.
Previous wording
Constant currency revenues increased 16% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. See “Non-GAAP Measures of Financial Performance” below for further background on our non-GAAP measures.
Current wording
Constant currency revenues increased 10% and 13% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. See “Non-GAAP Measures of Financial Performance” below for further background on our non-GAAP measures.
Previous wording
A detailed discussion of the changes in product revenues and preservation services revenues for the three months ended March 31, 2024 is presented below.
Current wording
A detailed discussion of the changes in product revenues and preservation services revenues for the three and six months ended June 30, 2024 is presented below.
Previous wording
Revenues from products increased 14% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase for the three months ended March 31, 2024 was due to an increase in revenues from all products. A discussion of the changes in product revenues for aortic stent grafts, On-X products, surgical sealants, and other product revenues is presented below.
Current wording
Revenues from products increased 11% and 12% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The increase for the three and six months ended June 30, 2024 was due to an increase in revenues from aortic stent grafts, On-X products, and surgical sealants, partially offset by a decrease in revenues from other products. A discussion of the changes in product revenues for aortic stent grafts, On-X products, surgical sealants, and other product revenues is presented below.
Previous wording
Sales of certain products through our direct sales force and distributors across Europe and various other countries are denominated in a variety of currencies including Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, and Swiss Francs with a concentration denominated in Euros. Each currency is subject to exchange rate fluctuations. For the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, the US Dollar weakened in comparison to major currencies, resulting in revenue increases when these foreign currency denominated transactions were translated into US Dollars. Future changes in these exchange rates could have a material, adverse effect on our revenues denominated in these currencies. Additionally, our sales to many distributors around the world are denominated in US Dollars, and although these sales are not directly impacted by currency exchange rates, we believe that some of our distributors may delay or reduce purchases of products in US Dollars depending on the relative price of these goods in their local currencies.
Current wording
Sales of certain products through our direct sales force and distributors across Europe and various other countries are denominated in a variety of currencies including Euros, Brazilian Reals, Polish Zlotys, British Pounds, Canadian Dollars, and Swiss Francs with a concentration denominated in Euros. Each currency is subject to exchange rate fluctuations. For the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, the US Dollar weakened in comparison to major currencies, resulting in revenue increases when these foreign currency denominated transactions were translated into US Dollars. Future changes in these exchange rates could have a material, adverse effect on our revenues denominated in these currencies. Additionally, our sales to many distributors around the world are denominated in US Dollars, and although these sales are not directly impacted by currency exchange rates, we believe that some of our distributors may delay or reduce purchases of products in US Dollars depending on the relative price of these goods in their local currencies.
Previous wording
Revenues from the sales of On-X products increased 11% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This increase was primarily due to an increase in volume of units sold and, to a lesser extent, the effect of average sales prices and the effect of foreign exchange rates.
Current wording
Revenues from the sales of aortic stent grafts increased 18% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, the effect of foreign exchange rates and an increase in average sales prices.
Previous wording
Constant currency revenues from the sales of aortic stent grafts increased 19% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Revenues for the three months ended March 31, 2024 increased in all geographies, with the most significant increase in Europe, the Middle East, and Africa (collectively, “EMEA”). The revenue increase in EMEA for the three months ended March 31, 2024 was primarily due to an increase in buying patterns in direct (to hospitals) markets.
Current wording
Constant currency revenues from the sales of aortic stent grafts increased 13% and 16% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. Revenues for the three and six months ended June 30, 2024 increased primarily in Europe, the Middle East, and Africa (collectively, “EMEA”) and, to a lesser extent, in Latin America and Asia Pacific (“APAC”). The revenue increase in EMEA for the three and six months ended June 30, 2024 was primarily due to an increase in buying patterns in direct (to hospitals) markets.
Previous wording
The On-X products include the On-X aortic and mitral heart valves and the On-X ascending aortic prosthesis (“AAP”) for heart valve replacement. Revenues from the sales of On-X products include revenues from the distribution of CarbonAid® CO 2 diffusion catheters and from the sale of Chord-X® ePTFE sutures for mitral chordal replacement. On-X product revenue also includes revenue generated from pyrolytic carbon coating services for OEM customers.
Current wording
On-X products include the On-X aortic and mitral heart valves and the On-X ascending aortic prosthesis (“AAP”) for heart valve replacement. Revenues from the sales of On-X products include revenues from the distribution of CarbonAid® CO 2 diffusion catheters and from the sale of Chord-X® ePTFE sutures for mitral chordal replacement. On-X products revenue also includes revenue generated from pyrolytic carbon coating services for OEM customers.
Previous wording
Constant currency revenues from the sales of On-X products increased 11% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Revenues for the three months ended March 31, 2024 increased primarily in North America. The increase in revenues in North America for the three months ended March 31, 2024 was impacted by customer buying patterns.
Current wording
Constant currency revenues from the sales of On-X products increased 15% and 13% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. Revenues for the three and six months ended June 30, 2024 increased in all geographies, with the most significant increase in North America. The increase in revenues in North America for the three and six months ended June 30, 2024 was impacted by customer buying patterns.
Previous wording
Revenues from the sales of surgical sealants increased 2% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This increase was primarily due to an increase in average sales prices due to a favorable sales mix in direct (to hospitals) markets, partially offset by a decrease in volume of milliliters sold.
Current wording
Revenues from the sales of surgical sealants increased 12% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This increase was primarily due to an increase in the volume of milliliters sold and, to a lesser extent, an increase in average sales prices.
Previous wording
Constant currency revenues from the sales of surgical sealants increased 1% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in revenues for the three months ended March 31, 2024 was primarily due to revenue increases in EMEA, partially offset by revenue decreases in Asia Pacific (“APAC”). The increase in revenues in EMEA for the three months ended March 31, 2024 was primarily due to an increase in buying patterns in direct markets. The decrease in revenues in APAC for the three months ended March 31, 2024 was impacted by customer buying patterns.
Current wording
Constant currency revenues from the sales of surgical sealants increased 12% and 6% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The increase in revenues for the three months ended June 30, 2024 was due to revenue increases in all geographies, with the most significant increase in North America. The increase in revenues for the six months ended June 30, 2024 was primarily due to revenue increases in EMEA and North America, partially offset by revenue decrease in APAC. The increase in revenues in EMEA for the three and six months ended June 30, 2024 was primarily due to an increase in buying patterns in direct markets. The increase in North America was due to customer buying patterns. The decrease in revenues in APAC for the six months ended June 30, 2024 was impacted by customer buying patterns in certain markets.
Previous wording
Domestic revenues from the sales of surgical sealants accounted for 51% of total surgical sealant revenues for both the three months ended March 31, 2024 and 2023.
Current wording
Domestic revenues from the sales of surgical sealants accounted for 47% and 49% of total surgical sealant revenues for the three and six months ended June 30, 2024, respectively, as compared to 48% and 50% of total surgical sealant revenues for the three and six months ended June 30, 2023, respectively.
Previous wording
Other revenues increased 32% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in other revenues for the three months ended March 31, 2024 was primarily due to an increase in PerClot product revenues.
Current wording
Other revenues decreased 42% and 15% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The decrease in other revenues for the three and six months ended June 30, 2024 was due to a decrease in PerClot product revenues as a result of timing of shipments.
Previous wording
Revenues from tissue processing increased 26% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The increase in revenues for the three months ended March 31, 2024 was primarily due to an increase in average sales prices and, to a lesser extent, an increase in tissues shipped.
Current wording
Revenues from tissue processing increased 16% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase was primarily due to an increase in average sales prices, and, to a lesser extent, a change in the mix of tissues shipped.
Previous wording
Cost of products increased 22% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Cost of products for the three months ended March 31, 2024 and 2023 included costs related to aortic stent grafts, On-X products, surgical sealants, and other products.
Current wording
Cost of products increased 17% and 19% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. Cost of products for the three and six months ended June 30, 2024 and 2023 included costs related to aortic stent grafts, On-X products, surgical sealants, and other products.
Previous wording
The increase in the cost of products for the three months ended March 31, 2024 was primarily due to an increase in the volume of all products shipped except for surgical sealants and, to a lesser extent, the cost of aortic stent grafts shipped, as compared to the three months ended March 31, 2023.
Current wording
The increase in the cost of products for the three months ended June 30, 2024 was primarily due to an increase in the cost of certain aortic stent grafts shipped, and the volume of all products shipped except for other products, as compared to the three months ended June 30, 2023.
Previous wording
Cost of preservation services increased 8% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Cost of preservation services included costs for cardiac and vascular tissue preservation services.
Current wording
Cost of preservation services was flat for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. Cost of preservation services increased 4% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. Cost of preservation services included costs for cardiac and vascular tissue preservation services.
Previous wording
The increase in the cost of preservation services for the three months ended March 31, 2024 was primarily due to an increase in the volume and, to a lesser extent, the cost of tissues shipped, as compared to the three months ended March 31, 2023.
Current wording
The increase in the cost of preservation services for the six months ended June 30, 2024 was primarily due to an increase in the cost of certain tissues shipped, partially offset by the mix of tissues shipped, as compared to the six months ended June 30, 2023.
Previous wording
The increase in gross margin for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was due to an increase in average sales prices of certain tissues, surgical sealants, as well as an increase in the average sales prices, volume and change in the mix of certain aortic stent grafts shipped. This increase was partially offset by an increase in the cost of aortic stent grafts, certain tissues, and surgical sealants shipped during the three months ended March 31, 2024.
Current wording
The increase in gross margin for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023, was due to an increase in the volume and favorable pricing of certain aortic stent grafts, surgical sealants, and On-X products shipped as well as favorable pricing of certain tissues shipped during the three months ended June 30, 2024. This increase was partially offset by an increase in the cost of certain aortic stent grafts and tissues shipped during the three months ended June 30, 2024.
Previous wording
Gross margin as a percentage of total revenues was flat for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Gross margin as a percentage of total revenues was positively impacted by favorable prices of certain tissues shipped and a mix of certain aortic stent grafts shipped, partially offset by the mix of surgical sealants shipped and an increase in the cost of aortic stent grafts shipped during the three months ended March 31, 2024.
Current wording
Gross margin as a percentage of total revenues was flat for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023. Gross margin as a percentage of total revenues was positively impacted by favorable prices of certain tissues and certain aortic stent grafts shipped, offset by an increase in the cost of aortic stent grafts and certain tissues shipped during the three and six months ended June 30, 2024.
Previous wording
General, administrative, and marketing expenses decreased 39% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The decrease in General, administrative, and marketing expenses for the three months ended March 31, 2024 was primarily due to business development income, partially offset by an increase in personnel-related costs.
Current wording
General, administrative, and marketing expenses decreased 14% and 26% for the three and six months ended June 30, 2024, respectively, as compared to the three and six months ended June 30, 2023. The decrease in General, administrative, and marketing expenses for the three and six months ended June 30, 2024 was primarily due to a decrease in business development expense, partially offset by an increase in personnel-related costs.
Previous wording
General, administrative, and marketing expenses included $17.4 million of business development income for the three months ended March 31, 2024, as compared to $5.0 million of business development expense for the three months ended March 31, 2023. We incurred $17.5 million of business development income during the three months ended March 31, 2024 related to the fair value adjustments for the Ascyrus contingent consideration, as compared to $4.8 million of business development expense during the three months ended March 31, 2023. The reduction in the fair value for the three months ended March 31, 2024 was primarily due to an increase in the credit risk spread resulting from the change in the inputs related to the newly issued Credit Facilities further discussed in Part I, Item 1, Note 7 of the “Notes to Condensed Consolidated Financial Statements.”
Current wording
General, administrative, and marketing expenses included $2.0 million of business development expense and $15.4 million of business development income for the three and six months ended June 30, 2024, respectively, as compared to $11.1 million and $16.1 million of business development expense for the three and six months ended June 30, 2023, respectively. We incurred $1.8 million of business development expense and $15.7 million of business development income during the three and six months ended June 30, 2024, respectively, related to the fair value adjustments for the Ascyrus contingent consideration, as compared to $10.9 million and $15.7 million of business development expense during the three and six months ended June 30, 2023, respectively. The reduction in the fair value for the six months ended June 30, 2024 was primarily due to an increase in the credit risk spread resulting from the change in the inputs related to the newly issued Credit Facilities further discussed in Part I, Item 1, Note 9 of the “Notes to Condensed Consolidated Financial Statements.”
Previous wording
Research and development expenses decreased 4% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. Research and development spending for the three months ended March 31, 2024 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts and other products.
Current wording
Research and development expenses increased 1% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. Research and development expenses decreased 1% for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. Research and development spending for the three and six months ended June 30, 2024 was primarily focused on clinical work to gain regulatory approvals for certain aortic stent grafts and other products.
Previous wording
Interest expense was $7.8 million and $6.1 million for the three months ended March 31, 2024 and 2023, respectively. Interest expense for the three months ended March 31, 2024 and 2023 primarily relates to interest on debt. The increase in interest expense for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023, was primarily due to an increase in the interest rate on the Credit Facilities as a result of our debt refinancing in January 2024.
Current wording
Interest expense was $8.3 million and $16.1 million for the three and six months ended June 30, 2024, respectively, as compared to $6.4 million and $12.5 million for the three and six months ended June 30, 2023, respectively. Interest expense for the three and six months ended June 30, 2024 and 2023 primarily relates to interest on debt. The increase in interest expense for the three and six months ended June 30, 2024, as compared to the three and six months ended June 30, 2023, was primarily due to an increase in the interest rate on the Credit Facilities as a result of our debt refinancing in January 2024.
Previous wording
During the three months ended March 31, 2024 we recorded a loss on extinguishment of debt of $3.7 million in connection with the extinguishment of our previously existing term loan. See Part I, Item 1, Note 7 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new credit and guaranty agreement.
Current wording
During the six months ended June 30, 2024 we recorded a loss on extinguishment of debt of $3.7 million in connection with the extinguishment of our previously existing term loan. See Part I, Item 1, Note 9 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new credit and guaranty agreement.
Previous wording
Other expense (income), net was $1.4 million of expense and $1.0 million of income for the three months ended March 31, 2024 and 2023, respectively. Other expense (income), net for the three months ended March 31, 2024 and 2023 primarily included the realized and unrealized effects of foreign currency gains and losses.
Current wording
Other expense, net was $1.0 million and $2.4 million for the three and six months ended June 30, 2024, respectively, as compared to $4.2 million and $3.3 million for the three and six months ended June 30, 2023, respectively. Other expense, net for the three and six months ended June 30, 2024 primarily included the realized and unrealized effects of foreign currency gains and losses. Other expense, net for the three and six months ended June 30, 2023 primarily included a $5.0 million expense related to a payment to Endospan for achievement of certain milestones related to the NEXUS products.
Previous wording
We incurred income before income taxes for the three months ended March 31, 2024 and experienced a loss before income taxes for the three months ended March 31, 2023. The income before income taxes for the three months ended March 31, 2024 was positively impacted by the change in fair value of our financial instruments, partially offset by an increase in certain operating expenses to support revenue expansion and an increase in interest expense. The loss before income taxes for the three months ended March 31, 2023 was impacted by an increase in certain operating expenses to support revenue expansion, an increase in interest expense, and the change in fair value of our financial instruments.
Current wording
We incurred a loss before income taxes for the three months ended June 30, 2024 and 2023. We incurred income before income taxes for the six months ended June 30, 2024, as compared to a loss before income taxes for the six months ended June 30, 2023. The loss before income taxes for the three months ended June 30, 2024 was impacted by an increase in certain operating expenses to support revenue expansion, an increase in interest expense, and the change in fair value of our financial instruments. The income before income taxes for the six months ended June 30, 2024 was positively impacted by the change in fair value of our financial instruments, partially offset by an increase in certain operating expenses to support revenue expansion, debt extinguishment costs, and an increase in interest expense. The loss before income taxes for the three and six months ended June 30, 2023 was impacted by the change in fair value of our financial instruments, an increase in certain operating expenses to support revenue expansion, and an increase in interest expense.
Previous wording
Our effective income tax rate was an expense of 41% and 52% for the three months ended March 31, 2024 and 2023, respectively. The change in the tax rate for the three months ended March 31, 2024 was primarily due to changes in pre-tax book profit, valuation allowance against our net deferred tax assets, non-deductible executive compensation, the foreign derived intangible income deduction, the research and development tax credit, and changes in our certain tax position liabilities, as compared to the three months ended March 31, 2023.
Current wording
Our effective income tax rate was a benefit of 13% and an expense of 48% for the three and six months ended June 30, 2024, respectively, as compared to an expense of 27% and 46% for the three and six months ended June 30, 2023, respectively. The change in the tax rate for the three and six months ended June 30, 2024 was primarily due to changes in pre-tax book profit, valuation allowance against our net deferred tax assets, non-deductible executive compensation, the foreign derived intangible income deduction, the research and development tax credit, changes in our uncertain tax position liabilities, and tax-effected impact of stock based compensation, as compared to the three and six months ended June 30, 2023.
Previous wording
We incurred net income and diluted income per common share for the three months ended March 31, 2024, as compared to net loss and diluted loss per common share for the three months ended March 31, 2023. Net income and diluted income per common share for the three months ended March 31, 2024 was primarily due to income before income taxes, as discussed above.
Current wording
We incurred a net loss and a diluted loss per common share for the three months ended June 30, 2024 and 2023. We incurred a net income and a diluted income per common share for the six months ended June 30, 2024, as compared to a net loss and a diluted loss per common share for the six months ended June 30, 2023. Net loss and diluted loss per common share for the three months ended June 30, 2024 was primarily due to loss before income taxes, as discussed above. Net income and diluted income per common share for the six months ended June 30, 2024 was primarily due to income before income taxes, as discussed above.
Previous wording
Historically, we believe the demand for most of our aortic stent grafts is seasonal, with a decline in demand generally occurring in the third quarter due to the summer holiday season in Europe. We are uncertain whether the demand for AMDS and the NEXUS Products is seasonal, as these products have not fully penetrated many markets and, therefore, the nature of any seasonal trends may not yet be obvious.
Current wording
Historically, we believe the demand for most of our aortic stent grafts is seasonal, with a decline in demand generally occurring in the third quarter due to the summer holiday season in Europe.
Previous wording
We do not believe the demand for our other products is seasonal.
Current wording
We do not believe the demand for our On-X and other products is seasonal.
Previous wording
As of March 31, 2024 net working capital (current assets of $276.8 million less current liabilities of $45.8 million) was $231.0 million, with a current ratio (current assets divided by current liabilities) of 6 to 1, as compared to net working capital of $222.8 million and a current ratio of 5 to 1 at December 31, 2023.
Current wording
As of June 30, 2024 net working capital (current assets of $285.0 million less current liabilities of $50.6 million) was $234.4 million, with a current ratio (current assets divided by current liabilities) of 6 to 1, as compared to net working capital of $222.8 million and a current ratio of 5 to 1 at December 31, 2023.
Previous wording
Our primary cash requirements for the three months ended March 31, 2024 were for the payoff of our previously existing credit agreement, debt issuance costs and interest payments under our Credit Facilities (defined below), interest payments under our Convertible Senior Notes (defined below), general working capital needs, and capital expenditures for facilities and equipment.
Current wording
Our primary cash requirements for the six months ended June 30, 2024 were for the payoff of our previously existing credit agreement, debt issuance costs and interest payments under our Credit Facilities (defined below), interest payments under our Convertible Senior Notes (defined below), general working capital needs, and capital expenditures for facilities and equipment.
Previous wording
We recognized $5.8 million of interest expense on the Credit Facilities for the three months ended March 31, 2024, of which $341,000 represents non-cash amortization of debt issuance costs. There was approximately $6.2 million of unamortized debt issuance costs related to the Initial Term Loan Facility as of March 31, 2024.
Current wording
We recognized $6.9 million and $12.7 million of interest expense on the Credit Facilities for the three and six months ended June 30, 2024, respectively, of which $298,000 and $639,000 represent non-cash amortization of debt issuance costs for the three and six months ended June 30, 2024, respectively. There was approximately $6.0 million of unamortized debt issuance costs related to the Initial Term Loan Facility as of June 30, 2024.
Previous wording
The proceeds of the initial borrowings were used along with cash on hand to pay off our previously existing credit agreement, dated as of December 1, 2017, and pay related fees and expenses. As a result of this transaction, we recorded a loss on extinguishment of debt of $3.7 million during the three months ended March 31, 2024 on our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). See Part I, Item 1, Note 7 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new Ares Credit Agreement.
Current wording
The proceeds of the initial borrowings were used along with cash on hand to pay off our previously existing credit agreement, dated as of December 1, 2017, and pay related fees and expenses. As a result of this transaction, we recorded a loss on extinguishment of debt of $3.7 million during the six months ended June 30, 2024 on our Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. See Part I, Item 1, Note 9 of the “Notes to Condensed Consolidated Financial Statements” for further discussion of our new Ares Credit Agreement.
Previous wording
On June 18, 2020 we issued $100.0 million aggregate principal amount of 4.25% Convertible Senior Notes with a maturity date of July 1, 2025 (the “Convertible Senior Notes”). The Convertible Senior Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. The initial conversion rate of the Convertible Senior Notes is 42.6203 shares per $1,000 principal amount, which is equivalent to a conversion price of approximately $23.46 per share, subject to adjustments. We use the if-converted method for assumed conversion of the Convertible Senior Notes for the diluted earnings per share calculation. The fair value and the effective interest rate of the Convertible Senior Notes as of March 31, 2024 was approximately $113.4 million and 5.05%, respectively. The fair value was based on market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy.
Current wording
On June 18, 2020 we issued $100.0 million aggregate principal amount of 4.25% Convertible Senior Notes with a maturity date of July 1, 2025 (the “Convertible Senior Notes”). The Convertible Senior Notes may be settled in cash, stock, or a combination thereof, solely at our discretion. The initial conversion rate of the Convertible Senior Notes is 42.6203 shares per $1,000 principal amount, which is equivalent to a conversion price of approximately $23.46 per share, subject to adjustments. We use the if-converted method for assumed conversion of the Convertible Senior Notes for the diluted earnings per share calculation. The fair value and the effective interest rate of the Convertible Senior Notes as of June 30, 2024 was approximately $125.5 million and 5.05%, respectively. The fair value was based on market prices observable for similar instruments and is considered Level 2 in the fair value hierarchy.
Previous wording
We use the indirect method to prepare our cash flow statement and, accordingly, the operating cash flows are based on our net income, which is then adjusted to remove non-cash items, items classified as investing and financing cash flows, and changes in operating assets and liabilities from the prior year end. For the three months ended March 31, 2024 these non-cash items primarily included $17.5 million of fair value adjustments of financial instruments, $5.9 million of depreciation and amortization expenses, $4.3 million of deferred income tax changes, $3.7 million of loss on extinguishment of debt, $3.5 million of non-cash compensation, and $1.9 million of non-cash lease expenses.
Current wording
We use the indirect method to prepare our cash flow statement and, accordingly, the operating cash flows are based on our net income, which is then adjusted to remove non-cash items, items classified as investing and financing cash flows, and changes in operating assets and liabilities from the prior year end. For the six months ended June 30, 2024 these non-cash items primarily included $15.7 million of fair value adjustments of financial instruments, $11.8 million of depreciation and amortization expenses, $7.7 million of non-cash compensation, $3.9 million of non-cash lease expenses, $3.7 million of loss on extinguishment of debt, $1.5 million of write-down of inventories and deferred preservation costs, and $1.0 million of deferred income tax changes.
Previous wording
Our working capital needs, or changes in operating assets and liabilities, also affected cash from operations. For the three months ended March 31, 2024 these included the unfavorable effect of $9.2 million due to timing differences between the recording of accounts payable, accrued expenses, and other liabilities and the payment of cash, $3.3 million due to the timing differences between recording receivables and the receipt of cash, $2.3 million due to an increase in prepaid expenses and other assets, and $1.4 million due to an increase in inventory balances and deferred preservation costs.
Current wording
Our working capital needs, or changes in operating assets and liabilities, also affected cash from operations. For the six months ended June 30, 2024 these included the unfavorable effect of $6.4 million due to the timing differences between recording receivables and the receipt of cash and $6.0 million due to timing differences between the recording of accounts payable, accrued expenses, and other liabilities and the payment of cash, $5.2 million due to an increase in prepaid expenses and other assets, and $2.2 million due to an increase in inventory balances and deferred preservation costs.
Showing the first 40 of 45 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Revenues from the sales of aortic stent grafts increased 14% for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. This increase was primarily due to an increase in the volume of units sold and, to a lesser extent, an increase in average sales prices.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Revenues from the sales of aortic stent grafts increased 23% for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This increase was primarily due to an increase in the volume and, to a lesser extent, the effect of foreign exchange rates.