Artivion(US:AORT)2025-05-05 21:32Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $99 million, representing 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 fully catch up by the end of Q3 2025 [9][15] - The ongoing launch of AMDS in the U.S. is expected to penetrate a $150 million annual market opportunity [33] - The company aims to leverage positive clinical data to drive growth in the On X heart valve segment, targeting a $100 million market expansion opportunity [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit revenue growth and twice that rate for EBITDA in 2025 [20][31] - The company anticipates strong revenue growth in the second half of 2025 due to ramping AMDS sales and an easier comparable in Q4 [28] - Management highlighted the positive reception from the clinical community regarding AMDS and the potential for significant market expansion [51] 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] - The company does not anticipate the need to raise additional capital to fund its debt obligations or investments in the foreseeable future [25] Q&A Session Summary Question: Contribution of AMDS to growth and onboarding of facilities - Management noted that AMDS contributed to the strong growth, but specific numbers were not disclosed. They are encouraged by the reception from the clinical community and the progress in onboarding facilities [38][40] Question: Tissue growth expectations for the year - Management expects to return to mid-single-digit growth for tissue processing for the full year, with the backlog being cleared by Q2 and Q3 [41][43] Question: Cash flow expectations for the year - Management expects to be free cash flow positive for the year, with Q1 typically being the worst quarter for cash flow due to seasonal expenses [53][54] 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 for the full year, with AMDS expected to improve overall growth rates by 1-2 percentage points [64] Question: Timing for acquiring Endospan - The option to acquire Endospan will trigger upon FDA approval, which is expected in the second half of 2026 [75] 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][81]