AORT - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the Artivion Fourth Quarter and Year-end 2024 Financial Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Laine Morgan from the Gilmartin Group. Thank you.

You may begin.

Dorothy Morgan

Thanks, operator. you the thank today. and afternoon, for call joining Good

are Artivion's CEO; Joining from team Pat me today CFO. management Mackin, Berry, and Lance

statements include we the or statements as that harbor forward-looking and within future. from XXXX. The uncertainties, to of comply Act Before assumptions of may intentions, and XXXX. Securities to like uncertainties following expectations Reform company's on Act estimates Private the in I'd beliefs, to this These the subject that time made statements materially management's these risks, risks cause predictions made call forward-looking Litigation make Reform or number are statements with forward of Litigation meaning are requirements to the safe the Securities of forward-looking Comments actual statements. of a and the differ look Private forward-looking results hopes, statements the begin, of to involve

certain is today. in concerning release information filings risks and was impact the that time may the SEC in earlier issued from Additional time that contained forward-looking company's uncertainties statements press and these to

You the can of Relations a also Artivion details the Investor website. section today's call presentation highlighted with on find on brief

Mackin. over I'll CEO, Now turn to Artivion's it Pat

James Mackin

year growth Artivion constant Difficulty] PerClot. achieved currency we of total [Technical at as revenue excluding XX%,

deliver least currency clinical rate revenue to expanding key also while growth. footprint. We constant in EBITDA pipeline, several [Technical basis our greater multipronged our double-digit us We our conviction deliver the making revenue of enabling ability growth, with and execute progress year margins points, at XXX on positive best-in-class, resulting of by twice initiatives even growth EBITDA Difficulty] expanded global to regulatory year-over-year, PMA-focused in growing adjusted the and entered new XX% sustained EBITDA breakthrough and while further

and remediate accessed to systems, our take threat took the team's previously upon the our business response, performance incident. Due action short-term immediate actor we systems XXXX, cybersecurity systems external continuity had to impact plans, engaged off-line to provide the update to an the and November and and quarter to I'd our fourth our disclosed threat Immediately disruption adversely mitigated discovering on for contain our business. certain that the actor's expectations ability to like the 'XX reviewing Before advisors we incident. initiated

While we quarter, of million QX final negative impact incident estimate approximately a for operated effectively $X.X the few the weeks had we revenue. on of the our

We are now back to levels. at operating normal

normal facilities November not from manufacturing late However, and at a incident the in were through operating our January. operations tissue level of the processing beginning

tissue incident near-term do and of impact supply, On-X expect XXXX, business challenged has our the not that. this guidance this year our we XXXX Although, for and reflects to full meaningfully

significantly we remainder year. over expect our the than normal being in to lower of tissue Specifically, difference the the recovered revenues with QX, be

As our we supply of a inventory. every outstrips from comes demand revenue our In SynerGraft quarter, tissue discussed for significant therefore, no valves we previously, valves. and hold case, pulmonary portion this these

meaningful Importantly, of therefore, of impact do not tissue for cyber normal the we to donations any process continue full incident. And and period anticipate throughout receive we year. the levels the

our in additional orders expect the XXXX timing as occurred stocking Lance in extended. later have would to the impact for lesser result, However, to his that tissues occur in released On-X as resulting normal, distributor in in QX QX would than have provide a tissue that during released in details some the will the period we QX, our on times being process year. Similarly, extent, remarks a be temporarily well as And longer lead time with were were the received year. have associated that of in to that revenues. but to lead been will or later times

growth constant perspective, portfolio, share a currency like Latin across our continue take that to benefit of markets expansion with the results. maintained the valve only our on market market basis the as QX that at international as, from is share on mechanical and key valve, share strong the worldwide. conviction to category X.X. Based increased by maintain regulatory America. From take X.X well continue a market financial aortic best-in-class on the product year-over-year aortic footprint and recent continued INR the our approvals aortic in proven On-X will as our performance globally commercial on market product and we of heart low feedback driven can clinical valve a From be Now to perspective, to QX from XX% a continued we revenue a field, was gains On-X benefits On-X the

the detail In the are at addition, mortality basis us we presented greater that to growth foreseeable future. Also X% the double-digit Cardiology, Journal we for stent data, the for at on revenues in of grew graft from QX, Surgeons and that gives aortic which to XXX,XXX significant On-X confidence in continue new published a constant simultaneously, Thoracic the even valve our a which able should in Society of was data currency database, meeting be one showed heavily significant last in which in Lance was across patients JACC compared is impacted valves that end also compared incident, period the under XX. This cover implanted his January. American to of by quarter is surgically significant fourth the statistically to College encouraged of the The cyber patients improvement year and the of had in more will a section. by more the areas opportunity same STS mechanical

products opportunities infrastructure Europe, to product and Difficulty] to are product portfolio our our complex stent by differentiated remains portfolio a in driven which that on by leverage our offerings. portfolio are we're graft focused segments sales of market. Today, are the aortic encouraged our in significant sold our the Our [Technical stent our we stent component strategy, primarily existing unique cross-selling across growth create graft direct graft where key

to will same detail for of I basis opportunity. to expectations significant largely our in compared the last impact Our markets, AMDS year. X% on period of bringing currency a shortly of grew the products constant the representing consists and the pipeline growth these U.S. BioGlue Japanese proven some U.S.

reminder, China we BioGlue a benefit has year. through each another and patients able months. These A to Type for approximately China great regulatory with half technology work BioGlue steps level. to in are we for large commercializing additional some XX,XXX to XXXX. BioGlue for we estimate take Therefore, get As the BioGlue administrative last product be a the hospital expected of and quarter, we're X to excited expect X that steps years, bring many access continuing to to in acute in begin to received to second this to We about patients market. are from dissections could been approval

most America approvals growth and to new by for respectively, from [Technical through across and the in Asia the growth Pacific area a year-over-year declined we fourth Pacific, see the Difficulty] heavily XX% and constant Lastly, our tissue which primarily constant processing, standpoint, and expansion. Latin currency on cyber currency initiatives basis quarter Latin footprint in results X% commercial geographic revenue was continue impacted incident, year. regulatory Asia QX. From America of the delivered a and full XX%

product years HDE. recent Stated significant Exemption, strong revenue and represents Device the achievement for growth will over turn regions. I our as development the AMDS anticipate portfolio now to or industry-leading significant for Artivion. to regulatory with in leverage coming our our simply, continue we the those regions product continue milestone Humanitarian to HDE, We both pipeline a

The due diagnosis Breakthrough For for Use Designations context, AMDS rare Device. application options area The the is to receipt based from And IDE trial, disease HDE benefit the clinical with other the enrollment benefits Device demonstrate patients adverse on for a and HDE primary currently XX% any Humanitarian significant this and PMA. the of the nature November adverse completed significant full DARTS the mortality mortality HDE cohort PERSEVERE PERSEVERE been a IDE statistically allows events U.S. all-cause primary this care. a PERSEVERE data an days, marketing exist. The of for XX of and in in commercial designated to from that in validates has believe compared AMDS and demonstrated trial comparable a even or for was reduction which major XX% in of in statistically AMDS reduction demonstrated of States United intended to superior major from treatment received reduction product the a of condition, out endpoint primary results a HDE standard the the Use prior and XX-day events. More the to a specifically, the Humanitarian distribution groundbreaking granted data further current XXXX, trial its of original the we trial. in technology.

DARTS the with treated results of study. in the both now X-year trials tears patient the follow-up DANE demonstrate datas from Finally, no AMDS, including these any

Angeles January. cohort. with range For lower elimination the cohort, from AMDS following sustained X AMDS occurrence occur of experience AMDS an without worse hemiarch Difficulty] the including a will The could reference and benefit of compared demonstrated PERSEVERE increased DANE reference a up XX%. clinical context, at who have X a DANE out patients late-breaking to repair XX% the were at clinical tears X-year have sessions of trial to to [Technical was XX% data in the up clinical DANE STS than mortality data growth in reoperation. Since group outcomes, receiving the year, AMDS late important in Los presented patients in DANE PERSEVERE is also Late-breaking of There HDE, AMDS. our aortic from trial mortality the outcome as to which of

were build requiring positive the the the stroke, supporting the data there minimal infarction. findings XX-day addition, on or technology. new of failure nature renal life-saving of further myocardial readouts, AMDS In These occurrences dialysis, from

that to XXXX, only we impact save of begin of the and before patient process. implanting grant outcomes to will to financial There specifics I to will to enable the of have the PMA some product in the ahead very HDE related approval, meaningfully the but AMDS FDA will complete launch now an excited center benefit and cover want the to steps the are by did also but AMDS the So and HDE us decision HDE selling the HDE cover stands X the part lives. Lance product. each as expected are

First, each the the to of case except IRB in use. site-wide hospital implanting a emergency need AMDS, will before an receive

hospital will Second, have approved value committee. the need we analysis by to AMDS

to on be will their clinical trained and need the surgeons device. staff Third,

is for that a U.S. Lastly, from total of X,XXX AMDS, dissections there familiar limit case occur In DeBakey is with I be this the in type number the limit annually of implanted you the those annually. acute devices that of can perspective, than market of larger HDEs, a

So this not from is issue. standpoint, limit a an practical

to this working pipeline. you recently second we the as to AMDS is QX, pursuant review some for update FDA non-clinical standards international specifically account In for to like the adopted we now approval well This FDA, PMA. our is to testing, FDA and to securing are we PMA On I'd currently AMDS time testing submitted on this on our as of module by data, AMDS. To focused for complete and AMDS, not Now, our are PMA submission, mid-XXXX. additional are additional in anticipating testing. benchtop the related

we the revenue in on given a not delay impact view having to HDE, our Importantly, the do AMDS meaningful meantime. ability this as generate

Additionally, in present Endospan Annual early the its XX-day U.S. for Meeting its [Technical expected stent Difficulty] from graft data aortic system NEXUS to its at and May. is AATS

endpoints initial second have half NEXUS for on the Assuming the of remains met, shows track the trial in XXXX. approval data been

turn beyond. us position over currency Our And adjusted XXXX revenue to expansion, rate sustainable of we constant strong regulatory double-digit EBITDA the financial, twice and well growth, growth. With and margin reinforce drive for the our in that, revenue EBITDA confidence clinical now grow and deliver at that call XXXX I'll Lance. can performance

Lance Berry

Thanks, Pat, and afternoon, good everyone.

remind to published results begin, of I'd our non-GAAP you our results. reconciliation refer results, press like for I our please including information to GAAP Before earlier today to a to regarding release these

increased Additionally, rates a XXXX, for a on of to X% of the XXX of marketing point XXXX. million XXX of discussed will and up EBITDA XXXX. adjusted $XX.X Adjusted margin basis, EBITDA and changes as XX% basis point revenue currency administrative in otherwise basis million quarter fourth adjusted non-GAAP in QX all constant $XX.X the over quarter fourth year-over-year will revenues to Meanwhile, general compared expense percentage million by quarter, the in improvement XX% the driven revenue. were from fourth approximately unless $XX.X reduction growth be prior a in i.e., be percentage and was year, noted. Total

full Adjusted $XXX.X For year, This for EBITDA full Xx from improvement million, the EBITDA the XX%, from were and revenues XXXX. currency, margin excluding XX% XXX revenue point the X grew a year, percentage in cyber of of XX% incident. up basis constant X.X% total the growth. PerClot, constant the point currency headwind approximate adjusted resulted despite rate

against minor XXXX our delivered to we incident great mentioned, managed negative the impact to we work inefficiencies, with Today, $X.X Pat a and As impact in negative are revenue some resolved near incident. these $X by minimal which November normal from the levels approximately a Due we term. To approximately of challenging expect with million, the cyber at adjusted results with we to our disruption estimate in QX. be the customers. that had backdrop was the of team, EBITDA event associated impact million operating quantify,

and of full with challenges estimated guidance the As by our incident strong growth a approximately EBITDA leverage. landed the the cyber which midpoint X% despite growth an and adjusted reduced reflects QX results, result, revenue pleased X%. We're operational QX our year by above

service the year and business incident for temporary customers disruption, the meaningful not impact We our continue the full do throughout on any from to expect XXXX.

an the with business not details $X will of some some I million additional the quarter cover year, million between contextualize impact headwinds cyber do estimated of were However, shipped. event. We the were buffer. our ready QX in million of This carry section that split be typically we approximately on $X ship on remarks. To $X.X guidance quarters help unable grafts. parts provide it XXXX will the tissue The which cyber last have to the worth orders inventory stent of impacts you on for prepared our day remaining to I'll evenly in results, and the to of incident related the was where the individual

business quarter, and supply we As demand tissue we a outstrips have in previously part our discussed, therefore, every no inventory. large hold of

While $X of have we this impact. The to less the had our million a we the process as made-to-order. portion were that tissue normally $X.X last process continue the cyber is event, graft would as to tissue incident, of related negative we and throughout due roughly quarter. unable to stent to receive much was within business estimate efficient impact We and a million

XX% a grew BioGlue product grew We On-X to basis, generally efficiently were QX continue to been able less on product, product with in normal, but X% and on perspective, line processing constant [Technical in we resulting expectations. inventory anticipated. On the and than otherwise a demand have in X% Difficulty] meet hand than growth revenues revenues availability would produce X%, this On-X, tissue these as less our rates, line reflected with respective were From currency which revenues in BioGlue increased declined quarter. fourth products'

Excluding the Other X% in $XXX,XXX grown approximately of have stent the graft grown processing declined XXXX, by have driven approximately would from revenue XX%. fourth tissue cyber estimated would approximately by the incident, PerClot. quarter impact and

the sold we As transferring a reminder, are process currently in XXXX PerClot manufacturing. the business in and of

generating continue we complete. X the As until a of PerClot to is limited from transfer expect revenue margin a result, amount

our both underlying full and would to compared PerClot for XXXX, excluding XXXX year cyber and PerClot, excluding the business incident. XX% XX% context, For the have grown

expenses as-reported consists million million from with $X.X associated incident, approximately charge. idle of and an which advisor The our excluded fees Our adjusted are cyber included plant $X.X external EBITDA. impact the

the line proceeds $XX.X that We other by fourth will and receive million for charge. General, were by also and compared generally with we margins that take exclude QX XXXX. R&D the in idle than to time quarter seeking will Other [Technical compared administrative flow prior year. expense EBITDA in fourth Free the of million included cash idle marketing million were of charge. Interest million the well. Gross million any expenses in approximately general marketing million the XXXX. some of in insurance additional in translation were cyber-related We quarter that as insurance the X to $XX.X percentage margins were million. will income fourth $X.X in the in but some foreign and negatively adjusted incur from these of quarter process XXXX. prior time, anticipate currency compared in quarter fourth in costs, million this reimbursement fourth and $X.X expenses points expenses administrative the XX% Difficulty] were $XX.X million to XXXX. income the was at net we fourth to of was year quarter $X.X $X compared plant the plant were quarter Gross impact interest for XXXX. of impacted expense Non-GAAP quarter expenses loss the and of in as fourth million $X.X $X.X $XX.X quarter

in We XX, of investments the our million debt we unamortized foreseeable obligations, the $XX.X net to costs. to loan of capital our $X.X million approximately of not need debt, in December million pipeline As in fund channels cash anticipate additional or $XXX.X raise and had future. in do our our origination

net maturity. believe our continue XXXX, interest QX year. In to from stock of our expense. In at was to filing and regard we down convertible of on July capital debt our reduce as balance outstanding anticipate convert notes in our stated year. to We [Technical end focus approach leverage will our as excellent X-K all multiyear structure, commitment common summary, December, at Our to an our the optimize sheet we in due was X.Xx, Difficulty] to this XXXX prior deleverage

made we PerClot, adjusted on revenue incredible product grew progress and Excluding EBITDA XX% pipeline. outstanding and our an XX%

people to the for While outstanding. And XXXX. for due cyber impact initial our and on QX the our outlook still year was frustrating full now our year results, full the incident was performance our

currency revenue. foreign impact for and X a to full negative on point We representing we current range percentage million. as-reported year expect approximately million $XXX expect constant currency growth of to XXXX, $XXX XX% have of an reported the revenue between rates, XX% At

to range low year term, double-digits margin $XX expect revenue the XX% million ahead, overall R&D the expansion of the XXXX, of grow growth over we midpoint ] growth in for adjusted top business differentiated adjusted of general our by to expect EBITDA line our XXXX, basis expense we at be products EBITDA driven and over best-in-class XXX points full of representing our look year-over-year [ long ranges. XX% and $XX million our to the we portfolio to pipeline. With continued the As management, and

by the July, shares to Assuming our the the guidance is in the range, end to net debt of below of EBITDA maturity leverage expect we at midpoint Xx convertible converted at year. be

We slightly expect AMDS in expectations to R&D mix X% about continued and our sales, from which is X% end U.S. of is infrastructure. force points, XXX from and XXXX in gross at margins sales global and to G&A of improve longer-term XXXX, leverage to sales basis by below to benefit driven by increase high our expense in towards the sales expected closer expectations. of came

We to cash free continue XXXX. expect be positive to full the flow for year

the For AMDS positive point. tissue before for double-digits, for annual dynamics revenue, quarter XXXX, the similar XXXX, of X anticipated HDE. seen and stent BioGlue and benefited the which of HDE. for the in for On-X consideration of expect growth we we approximately increase, company rates by In except also in mid-single total had rates In XXXX the means of for price mid-teens impact in XXXX, as AMDS low benefit full growth general, that percentage the in SGPV digits, X the graft the

under AMDS will outlined, timing the several revenue there XXXX. in of therefore, from and Pat contribution impact that factors are AMDS As revenue HDE the

the adoption such driving as committee approvals and HDE AMDS under outside IRB factors In largely approvals control. are value our addition, analysis of some

move growth positive call. At to a to next factors in have of more X impact benefits and product be invest for have assuming any beyond. point point, on HDE, launched detail from to expect and in with forward the making high-margin and our EBITDA. to we impact expect adjusted are our adjusted successfully significant more much we we currency is our this look this visibility to In Longer XXXX will activities. X these AMDS constant through positioned ensure XXXX rate providing X during this minimal We to EBITDA percentage is launch as as we contribution year, each stronger term, product in to year year, investments on we the necessary first on focused

XXXX create first As will The we in anticipate the not tissue it times in lead result quarter, extended relates impact cyber tissue but the incident it catch of up XXXX some full do releases an the will to XXXX. have quarterly the and half on we will expect the in expect we year over do 'XX, quarters. fluctuation the cadence, QX between business in fewer first to of QX remainder while

existing we on in On-X December normal QX hand, our and were demand to meet Additionally, in able were inventory On-X below with throughput while levels. January

Also, anticipate QX we anticipate be distributor result, As we quarter remainder QX, we minimal but up in each of sales we AMDS lower-than-normal the On-X over of in will sequentially grow catch have a the and XXXX. will of sales to year.

quarterly quarter we guidance not While clarity. do first onetime a regular basis, on providing plan quarterly cadence, guidance provide for to non-typical expected are XXXX we revenue given the for

will the are On-X this represents our over clear less and million $XX to $XX This reported as would caught primarily million of the We million some expect. up we million. be to normally anticipate of XXXX, inventory $XX our forecasting in the year back prospects be we strong tissue results, tissue of remainder our the quarter We proud will progress revenues revenue turn On-X $XX business roughly comments. first than of range XXXX that, to-date I beyond. With closing call for excited full about summary, and are his levels. In desired Pat through and to to of the processing we return backlog and we XXXX our are in

James Mackin

Lance. Thanks,

in on XXXX the our and We're drivers full deliver on On-X us heard, for BioGlue valves, us will for U.S. we just specifically, I in revenue the the the recent for beyond. regulatory as already the continued AMDS have under which growth mortality the mentioned, X-year-olds bioprosthetic double-digit AMDS twice begin side process strategy in as about is versus So valves. Number to data, key revenue HDE which benefit following focusing and allows China mechanical EBITDA. More us performance our prior in versus we're with The working. pleased in tissue positions patients EBITDA fast XXXX, our on three, valves well commercializing help now. for growth and PMA, to strong approval. you've growth

in primary to BioGlue for will which We which showing get to should [Technical year, the their want of said to us revenue here aortic our focused to is continue about PMA four, we the our mission up half And their drive As for growth. Number we're we line. disease. With Difficulty] that operator, then next please second mid-XXXX. trial our this continued partner NEXUS back surgeons will globe be and talked endpoint that dedication on PMA finally, that, the FDA assuming in to gives early script, their open be access to employees leading in to for May, submitting full AMDS. the around of our PMA, our pushing being going XX-day approval. I they a data, thank the which

Operator

comes question of the first line with Our Instructions] Wise [Operator Stifel. from Rick

Frederick Wise

more just us your the start perspective just early like that that. us progress off sounds It for physician more interested, could the you AMDS number feedback, Maybe commercial color, going early well, Maybe let's are of can setup give with ahead. the through the it's more to talk year on detail, hospitals you but date.

James Mackin

Thanks, Yes. Rick.

didn't highly that my a commercial script, in the presented of the couple January, weeks and in of kind at team, later, building already well. end paperwork the so of December. In DANEs, obviously, X-year of the internal kind weeks need DANEs. went our still which Two with We start just had January, the device to do, PERSEVERE HDE year late me really mentioned control done become We, the and until received of data reference reduction what we we to-date. or XX% we trained we've whereas where a had early cohort X U.S. extremely selling the really in XX% highly let up we no blocks shipment for at and to available trained. They're show of I motivated December. So mortality

the graft IRB, to A is of to X you've Our of down of in and kind our the internal got can stent value the the which in pursuing number. But and trained. get that. steps, street we've on AMDS the We're commercial roughly We're you going report in got not through speak. then going team got accounts scorecard. to guys, are break the got give go process you tell of committee, every get to of, as an kind is XX that number you, centers mix number we'll U.S. to all are then I quarter analysis our in feet the surgeons actively -- that we

Frederick Wise

some the I don't the me strong implanted, they're would, going want throughout so these have of And understand. or think gotten On-X come about back? to competitive high, device on they talk will procedure, usual, wouldn't again, wouldn't confidence might that, and very kind revenue tissue competing patients better that understand part us side, the year. you it to of have not you confuses be just on lost denser and help you just if clearly better And your just return than but XXX% the help that that the that me is

Lance Berry

Yes.

can a Pat I'll Rick, shot So take jump and first, in. at then that

we So some mean, they there as obviously, we demand supply. ours. And every supply are tissues donations processing because to I our device. mean, receive than just going longer. the every them, level that just will is other it's And have be That get will release throughout taking this I when -- quarter, demand get patients confidence we're there's exceeds just that are can't because of significantly these a wait it's that they and similar process, high devices be higher can that to whole have patients far purchased other to we've quarter just single continued so there's just getting by customers. normal that there can't that But some and

why So the any change course because because any demand, see wasn't it's that normal the that don't we basically year. the over reason to just that. I mean, we underlying up And of in the shouldn't catch still we impacted. were don't donations coming and see

James Mackin

in every mean, of presented that I fueling the think the mean, under the Ross it's X have. younger the at best you was if the I data. pulmonary data, of right? segments, American valve and clinical Ross for aortic there I is is our kind valve part we the tissue XX. We what's drivers sell at On-X for Heart literally patients shows for big data, the November, business it operation So Yes. look large business data

but cyber had of on a I but process, take think we how them. And able I the cyber for basically missing at valves is sell some tissue level the we depleted it's [Technical we every in but the we because it On-X. through weren't was then longer during normal because lot had making some much So Yes, your get now? to we grow On-X event, for month. to the XX% were in enough mean, same we'll really do Difficulty] right point inventory of one a fourth quarter stuff WIP a we event. We in, going know throughout are out fair, we to exactly to us brought like, which

I data talked presented at We up the just new will about, STS. catch that was that in

shows basically of if the valve you're data. it patients, a we And XXX,XXX under get tissue age you will the more got die if that know, You you XX. just

process, got But cyber of about year a them So and and SGPV feel the with the guidance and the we've have there bit we're And XX%, were the We Ross. materials. to through event. On-X strongly on we the super for to very full tied of XX% for we've just both up get got bullish it. kind

Frederick Wise

the Is you this fully 'XX. last you news it what's AMDS conservatism? like delayed why submitted want I time to quarter. just delay I'm out I time the not device me, module out? seems clear mean, fourth the one line good us I'm sure one the pushing that to just pushed for And -- make Help if here? it for the I delay understand. better could. in PMA second line understanding And just mid are

James Mackin

Yes. No, that's Rick. fair,

HDE, modules January. were this which is that on. which to there's our testing to the discussions on obviously companies one We literally, We to this the do the XXX% modules. the we're in when stuff of having us focused were have all for new going any it bench all I So -- XXXX. We was the and testing say recent notified about, We X and got FDA to discussions makes in of the going in about is, implantable think early. started the we devices, I They're sense. AMDS. no standards. will We applying there PMA submitted devices, PMA in approval first of on some unrelated international are And status things submitting working that HDE,

going the when revenue between the takes And quarters. only real a have X the how with this test change So is long getting kind testing us of to trajectory. to IRB. is everyone just and don't difference and it it's comfortable pretty which isn't I big new some look they submissions that the what want to the to feel add do. And is testing is And and -- people. this everything do, PMA a going transparent it going a impact. to new an at has being we we're HDE the and you personally And else, think

in, going keep to we're we're that's with mean, I yes, that folks. transparent So working try but bring and being the it -- to

Operator

of from Markets. Lake Frank Takkinen Our next Street the Capital question line with comes

Frank Takkinen

into implanting you with penetration Can those in implanting sites on with sales start one, also products? I'll U.S. you maybe other and see have with many remind you force the your how us sites sites or existing the just AMDS. potential

James Mackin

picture, there's I do Yes. I X,XXX big DeBakey type centers that dissection. about say would

centers. is rule As of of mean, where basically thumb, probably a the in XX% top centers, all we're XXX as thumb stuff I But of those which volume -- the to focused. rule we sell a is

So skewed to larger go after again, in volume them, obviously tends impractical. at to the be we Also, going but centers. call we're all X,XXX the once. not It's all obviously to

immediately. -- So launch. go have of cadence which of And through the obviously, But kind centers kind we we're then and have to work great after -- we'll whole the I we've have ones that which on to we volume coverage would a follow of done for larger have we first. go the already of going prioritization, say we after XX%

Frank Takkinen

it operational bottleneck What what one to now just And the level, that kind steps at distraction? the processing leadership the help occur? is on us Is that is just Is cybersecurity is need incident. Can more extra an then business you of processing? the it or occurring unit preventing exactly producing to tissue?

Lance Berry

Things having that manually use our have for systems a for time. to -- period do we were would normally of we

to or period that were where at that just January. time in tissues to are time received through it event get it everything. the that so really that that takes either extending basically is donations through of And process And the relates of the

a plus lot to longer get a But it already our it's time. receive a have it. there a it's we whatever X-month processes normal intensive take lead going in and and just -- period, more normally, if So was through where a systems process donation it will lot through was to it's labor today,

Frank Takkinen

appreciate about then kind And you maybe I QX help cadence one just year? in Can the of EBITDA on of throughout the last adjusted us the for commentary think me. revenue light QX revenue.

Lance Berry

on think going I of be on It's kind with have you like adjusted to timing EBITDA we're I drop of the going a think the through that expenses mean, go Yes. to through proportionately is got going differences not I revenue. out revenue. And because QX year. QX lowest we're bunch of think cut to to definitely, of just

James Mackin

I revenue grow going onetime. what give top which -- exactly We're mean, the unexpected been through. guidance, mean, the event It revenue fast. obviously given kind also telling as year think we I But was double-digits I bottom line go to to of we've cyber people. range EBITDA. and Yes. EBITDA the twice this the is and with full you painful least the line and of an at We've was

mean, Our guidance with. team EBITDA very revenue comfortable we job did like, we've kind given revenue to and trying to guidance parcel responding out year of direction. you QX, full feel great a I some But it.

Operator

from Kalia line question Suraj the of comes Our next with Oppenheimer & Company.

Suraj Kalia

a First in breach, I've guys COVID. even despite a finish strong worth, to missed had run and X-year and for foremost, and the what a beat the year never you congrats it's cyber on have

retrospective right? incident. argument XXX,XXX you macro for So that like needed trajectory analysis talked On-X patient that missionary usage points XX to you, be the declining, let's maybe that unfortunate below, is analyses mechanical strong it's that is directionally that overall work valves Pat, about, yes, this mechanical my to the Artivion get to reverse indicated what to say, XX this Pat, said, question, having a that dominate is the deliver? from of should valve made it level same also there Pat, XX. But to guess and So would I kind token, was expectation by

James Mackin

Yes.

So can a comments. of make maybe I couple

a So XX it's you they this valve, STS And of you're breaker at XX. presented and at And lines tissue patients. a looked -- and got as late XXX,XXX mechanical study. was if actual valve a the the the basically under cross age was basically, at or

they're over market And it actually shown So -- if by it a actually -- as U.S. you has years mechanical at. as a mechanical the that market that's just far valve. And a declining, been number were benefit under XX, growing. was by valve had way, you survival that looking the getting mechanical actually valve that

way away been and question, ago. And data after smackdown. But know really along. group, to plans there it surgeons, think of saying, from think valves have I I you said, we've with and have from discussant that surgeon by It in don't -- Mayo wrong So down the the has it's midpoint but cardiologists surgeons was under out of blown I much year. to I we'll are actually should say, you on pretty were Clinic point, years the and one, you your basically the if some was market been kind working of referring think, where guys we've actually you XX-year-olds walking place and be heard guys been been mechanical the getting your if got XX to growing, in was, our putting all patients doing a I think talk

data under So showing XX there's your coupled with actually this do an this But valves there's recent I under a recent out reduction stuff showing patients our we patients post-approval JACC, can doubled some that. in can after which means On-X business. to do mortality in of -- accelerate bleeding, XX% going to XX, data in point, we start some think benefit

looks hawing, like you to long always doing How a people of for be keep guys while. So are it hemming you going growing to were Well, like and kind XX%. keep able On-X that?

Suraj Kalia

been we data. share other, I X the terms XX-day trajectory? me the in clinical belaboring now From has AMDS, the forgive the on XX-day question this. Any color X-year the a has the right, or us? everyone year, Pat, so have know the noise in conversation ground? with you asked What's for of What on community could to to

James Mackin

had with and this actually data about heart Yes. weekend. again, last I this a We was is just meeting -- surgeons. at surgical just presented XX was

in patients, acute have in the -- amount that these being Type table. of, these I way, a device of die by this other used have for -- a an been analysts support to the is strong. I like lot lot it's done. A there think work mean is of overwhelming patients think, The shown extremely I dissections on

us is took have life-saving patients reduction which FDA And who So extremely devastating truly mortality, down XX% is very going this a pathway. And think to on is a a I for why HDE high. device, buzz the is be the in condition. this important physician this this the device

we're of part [Technical think so Difficulty] a I So the is AMDS take bullish our away. is really on great reason

We force. have a great sales

We data. have clinical great

be patients. There's hard to We great competition. we're have technology to going to no pushing get this a device. And

Suraj Kalia

obviously then as queue. said especially FY will quick strong, X% one, to 'XX, on has X% been last And for you And hop be I'll back I believe LatAm. we there one FX. look in OUS hit

kind wrong. -- But if Forgive I of number just got that me

Lance Berry

-- X% Yes.

Lance Berry

X percentage point.

James Mackin

Yes. It's really the euro.

Lance Berry

rates. X It's points at percentage current

Suraj Kalia

about through buffers quite higher? Just because OUS, a to you bit to the of think in terms as quite look, uncertain. being relative OUS -- in color, contribution, just the relative regulatory still place? Hence, environment additional contribution as we any and should And is understand the are policy-wise I'm trying what how just all U.S., think

James Mackin

U.S., -- I'm sure I the side the as regulatory far as the But not U.S., all part are think I we're about I But impacted mean, if comes mean, our where things. understood is about which is the of which of biggest I Europe, region thanks. XX-XX heavily the growing. us the outside obviously regions is in. for by the FX euro, Yes,

Lance Berry

significant comments you contribution think, or know had hedge given I But our EBITDA, that the then, Europe. a do was manufacturing don't about as that natural in we relates we revenue about EBITDA pretty contribution. if to contribution. it have And I about

on small some EBITDA, has it impact so significant. XXXX And but not it's

Operator

Our next Needham Matson Mike Company. the with question & of line comes from

Michael Matson

or right. company? remind Can goes, potentially as you the sure I a I'm be whether on as acquire decision but to probably that, just would Endospan that make you be to that's just the more to timeframe, XXXX assuming the earliest when not would us want have far on it make in

James Mackin

Mike. that's Yes, correct,

when data together X-year means approval, in in XX PMA, and a hit a 'XX, approval the have decision, saying second hit they half October. with will at prior PMA data depending course, of is, process I in think make that's 'XX. far we're of their to excuse say -- of kind let's QX, went get we is PMAs, up same the that the kind data QX October they'll me, exciting have get Difficulty] they'd set that that's here follow-up May be then it's presenting the days quickly away. And the which -- of their just so in will trial they'll you which pretty AATS [Technical post coming so X-year Seattle, of to have in follow-up submit full the get that which so make But they're they thing we we'd approval, to not to going basically, decision then in be pivotal get through XX-patient

Michael Matson

just And I basically? then it guess, -- new for exchanging it letting goes, far the just shares over into debt it why convert convertible roll as as not versus a

Lance Berry

Yes.

that. could point in our like on could deleverage, an at We we lower. time, going debt best to news we just that have We in to private we're it better get even or new roll execute great and put different to multiple options. just it it Endospan, We Hopefully, down option would felt be this existing will roll into us get position the have. convert into this that do and

the the using shares. drivers that's thought around behind So

James Mackin

it's about. things Yes. the think to to us talk as transition Lance than to that feels for around we've if said, We better people like and all the of at delever. them And talk one And shares, to our time, see shareholders I the X.Xx. we which midpoint of guidance we're going lot XXXX, to convert EBITDA our sitting a be Xx, would

Operator

question from Citizens. of next Our with Daniel comes the Stauder line

Daniel Stauder

we the have about on growth. improvement the we kind on can anything just Or first you the just us if cadence of right one, to thinking just and appreciate cadence I the mid guidance. give throughout us should back second the for half teens 'XX commentary to plug way in envelope, the else first that the first high So Is in be around great. quarter. quarter the would closer gets and midpoint to But year, be it?

James Mackin

Yes.

transparent the there's of It's thing a it's couple things, which So very but one with So unfortunate, a create being kind everybody. we're timing right? is a is I and think thing. issue, did cyber -- timing of --

lines. I And inventory business on the us build of fine. it's told in some both to tissue news product and On-X. process underlying totally you up all is Our taken those our time to the good

launched things. the our One, January. week think I in just force AMDS will sales of trained a just other second build the We we couple -- year, throughout right? of

to get So analysis, IRBs, value we've process. got We've that talked got training. through I about. to go

AMDS will definitely talked about. cyber comp be QX Obviously, build event the given throughout a to year. pretty is we the we easy just going So that

the year, So it. you wouldn't put getting when holds putting together it pushed out On-X that together, didn't and I more guidance all think you I later tissues be spread like you the inventory this year, believe in later for if all that together. I Yes, then in add

Daniel Stauder

on EBITDA more just one it. line No, bottom get but guess, I follow-up rather. on the guidance, totally or

adding talked should but I'm to XX% I the EBITDA what's margins leverage are outlook? sure the will margin benefits. come think, contributions is we thinking the SG&A. more operating much gross that pretty mentioned from that You within But some about we've AMDS How EBITDA from be product, about? you for said

Lance Berry

Just to leverage percentage X compared of then percentage our by last kind in expansion, we're math about expecting going is, points of And margin X of we're percentage the X SG&A. EBITDA increase of R&D about year. gross the out point leverage as spend point on about to

Operator

the Ladenburg line comes question Thalmann. Jeffrey Cohen next of from Our with

Jeffrey Cohen

just XXX gross Just year? margin you improvement one. full that Lance, fourth talked related to full Can not is quarter, correct? you points. clarify, of year the That's over about basis

Lance Berry

Correct. That's full year.

basis will in driving there expect points half the yes, because revenues, AMDS benefit [Technical be more XXX the the really have Difficulty] obviously, impact. and that's Now, But what's second we to benefit. that's more when

Jeffrey Cohen

And break do stents or some at it out our think you'll separately within and contained will AMDS point be grafts? you

Lance Berry

That's not see the in plan, our you'll expect to the but we definitely pretty think impact number stent graft clearly.

Jeffrey Cohen

more you this. one talked just about then Pat, And for me.

So the we Endospan, correct? the should to of in data expect at XX-patient conference thoracic see May

James Mackin

Correct.

Operator

back the end of question-and-answer closing the to the reached remarks. would for And session. have floor we And I turn Pat to Mackin like

James Mackin

data in pulmonary excited there's up super Difficulty] still side stronger as to the On-X quarter AMDS stronger a our delivered hear, mortality On-X the got Yes. out with Ross call. where and China; you quarter. But that sell first where and And obviously fourth that on can for long-term challenging every valve tissue of Well, about we [Technical in opportunity; out dealt keeps launching benefit, we're coming we there's a some cyber of BioGlue We've inventory and double clean we the data year. got and joining stuff we the event kind have. showing good HDE; thanks we've

heard your So call. and the updating and pretty in appreciate bullish as company attention, our forward you look on progress guidance, you to on we're next on the the

Operator

this conference. And you. Thank does conclude today's

may you at disconnect participation. this for your Thank time. lines your You

Artivion (AORT) 24 Feb 252024 Q4 Earnings call transcript