Artivion(US:AORT)2020-08-01 01:24Financial Data and Key Metrics Changes - Total revenues for Q2 2020 were $53.8 million, a decrease of 24% compared to Q2 2019, and a decrease of 23% on a constant currency basis [6][16] - Gross margins improved to 67% in Q2 2020 from 66% in Q2 2019, primarily due to a reduction in unit costs [16] - The company reported a net loss of approximately $3.7 million, or $0.10 per fully diluted share, with a non-GAAP net loss of $835,000, or $0.02 per share [17] Business Line Data and Key Metrics Changes - Tissue processing revenues decreased by 17%, On-X revenues decreased by 18%, BioGlue revenues decreased by 31%, and JOTEC revenues decreased by 23% compared to Q2 2019, all affected by the COVID-19 pandemic [16] - Monthly revenue performance showed improvement: April down 39%, May down 22%, and June down 15% compared to the same months in 2019 [7][10] Market Data and Key Metrics Changes - Revenue recovery was noted as hospitals resumed procedures starting in May, with optimism for continued improvement in Q3 and Q4 [6][10] - Asia performed best in Q2 compared to last year, while Latin America was the worst performer due to the pandemic's impact [38] Company Strategy and Development Direction - The company plans to continue investing in growth initiatives and R&D projects while managing expenses carefully [11][18] - Upcoming product launches include next-generation JOTEC products, with limited market releases already initiated [13] - The company is on track to file a PMA for PerClot in the U.S. and respond to the Chinese FDA for BioGlue by year-end [15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for Q3 and Q4, anticipating a strong year in 2021 based on current knowledge [8][19] - The company remains in a strong liquidity position, having completed a $100 million convertible debt offering [12][19] - Management emphasized the resilience of their product portfolio and the ability to adapt to the ongoing pandemic [60] Other Important Information - The company has implemented cost reduction initiatives, including hiring freezes and reductions in discretionary spending, while still investing in key clinical and R&D programs [18] - The company has maintained operations at or near capacity across its manufacturing sites, avoiding significant supply chain disruptions [11] Q&A Session Summary Question: Update on PROACT trial interest levels - Management noted high patient interest in the PROACT trial, which allows enrollment via telehealth, facilitating participation during the pandemic [23][25] Question: Commentary on NEXUS and U.S. trial timing - Management acknowledged that NEXUS faced setbacks due to travel restrictions for physician proctors but remains optimistic about its potential [29][30] Question: Update on On-X mitral trial - The On-X mitral trial completed enrollment at the end of last year, with data analysis expected in Q1 2021 [32] Question: JOTEC supply disruption status - Management confirmed that JOTEC supply issues have been resolved, with inventory levels up 32% [41] Question: July revenue performance and Northeast recovery - Management indicated that July performance is better than previous months, with strong recovery noted in the Northeast [46][48] Question: NeoPatch feedback and contribution expectations - Positive customer feedback has been received for NeoPatch, with expectations for a relaunch as conditions normalize [50]