Artivion(US:AORT)2025-05-05 20:30Financial Data and Key Metrics Changes - The company reported total revenues of $99 million for Q1 2025, reflecting a 4% increase compared to Q1 2024 [21] - Adjusted EBITDA increased approximately 1% from $17.3 million to $17.5 million in Q1 2025 [21] - Adjusted EBITDA margin was 17.7% in Q1 2025, relatively flat compared to Q1 2024 [22] - Gross margins decreased to 64.2% in Q1 2025 from 64.6% in Q1 2024 due to lower revenue from higher margin preservation services [23] Business Line Data and Key Metrics Changes - Strength graft revenues grew 19% on a constant currency basis in Q1 2025 compared to the same period last year [10] - On X revenue increased by 11% year over year on a constant currency basis [13] - BioGlue revenues grew 9% on a constant currency basis compared to the same period last year [14] - Tissue processing revenues declined 23% year over year on a constant currency basis due to the backlog caused by a cybersecurity incident [14] Market Data and Key Metrics Changes - Revenues in Latin America increased by 26%, EMEA increased by 14%, Asia Pacific increased by 8%, while North America declined by 6% compared to Q1 2024 [22] - Latin America and Asia Pacific delivered constant currency revenue growth of 268% respectively in Q1 2025 [15] Company Strategy and Development Direction - The company is focused on ramping up On X supply and clearing the tissue processing backlog, with expectations to be fully caught up by the end of Q3 2025 [9][15] - The ongoing launch of AMDS in the U.S. is a key growth driver, with approximately 150 facilities actively seeking IRB and Value Analysis Committee approvals [12][13] - The company aims to capitalize on the $100 million market expansion opportunity for mechanical valves based on new clinical data [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering sustainable double-digit revenue growth and driving EBITDA margin expansion [20] - The company raised its full-year 2025 revenue guidance to expect constant currency growth of between 11% to 14% [26] - Management noted that the unfavorable impact of preservation services in Q1 will be fully caught up by the end of Q3, with AMDS sales expected to grow sequentially each quarter [27] Other Important Information - The company incurred approximately $4.7 million in Q1 2025 associated with the cybersecurity incident, which is excluded from adjusted EBITDA [23] - The net leverage at the end of Q1 was 4.0, down from 4.5 in the prior year [26] Q&A Session Summary Question: Contribution of AMDS to growth and onboarding of facilities - Management indicated that AMDS contributed to the growth but did not break out specific numbers, and the onboarding of facilities is progressing well with a 100% hit rate on targeted accounts [39][41] Question: Tissue growth expectations for the year - Management expects tissue growth to return to mid-single digits for the full year, with the backlog from the cybersecurity incident being cleared [43][45] Question: Cash flow expectations for the year - Management anticipates being free cash flow positive for the year, with Q1 typically being the worst quarter for cash flow due to seasonal expenses [56][58] Question: Growth rates for On X and stent grafts - Management expects On X to continue double-digit growth and stent grafts to grow at a mid-teens rate, with AMDS expected to improve overall growth rates by 1-2 percentage points [66] Question: Timing for potential acquisition of Endospan - The option to acquire Endospan will trigger upon FDA approval, with a decision required within 90 days of approval [76][78] Question: Nexus data and its implications - Management expressed optimism about the Nexus data and its potential for FDA approval, which would trigger the acquisition option [76][80]