Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Artivion Inc (AORT, Financial) reported a 10% year-over-year constant currency revenue growth in Q2 2024, reaching $98 million.
- Adjusted EBITDA grew by 35% year-over-year, showcasing strong financial performance.
- The On-X product line saw a 15% revenue increase, indicating strong market share gains.
- Significant revenue growth was observed in Latin America and Asia-Pacific, with increases of 25% and 15% respectively.
- The company successfully amended its credit facility and option purchase agreements with Endospan, improving acquisition terms and financial flexibility.
Negative Points
- Gross margins slightly decreased from 65.1% to 64.6% due to fluctuations in geographic and product mix.
- Other revenue declined by approximately $1.3 million, a 42% decrease, primarily due to timing of PerClot orders from Baxter.
- Interest expenses increased to $8 million from $6.1 million in the prior year.
- The company anticipates continued inventory dynamics affecting PerClot orders through the balance of 2024.
- Despite strong growth, North America only saw a 5% revenue increase, which is lower compared to other regions.
Q & A Highlights
Q: Can you explain the EBITDA growth expectations for the second half of the year and any potential investments impacting it?
A: Lance Berry, CFO, explained that while Q2 showed strong EBITDA growth, Q3 might see slightly lighter growth due to timing. The company expects a strong second half overall, with Q3 typically being the lowest revenue quarter due to seasonality.
Q: Could you provide insights into the growth and pricing strategy for the On-X product line?
A: Patrick Mackin, CEO, noted that On-X has consistently grown around 15% annually since acquisition. The company is increasing prices based on strong clinical data showing significant reductions in major bleeding, positioning On-X as a leading aortic valve option.
Q: What is the current market share for On-X, and how is it performing internationally?
A: Mackin stated that On-X is growing double digits in both the U.S. and international markets. The product holds over 50% market share in the U.S. and around 20-25% internationally, with significant growth opportunities abroad.
Q: Can you discuss the progress and potential of the NEXUS aortic arch stent graft system?
A: Mackin highlighted that the TRIOMPHE trial for NEXUS is nearing completion, with 50 out of 60 patients enrolled. The technology offers a minimally invasive alternative to open chest surgery, with significant potential for adoption and market expansion.
Q: How does Artivion view its sales force productivity and scalability?
A: Berry emphasized that Artivion's sales force is highly experienced, with most U.S. reps having over 10 years with the company. The sales force is capable of handling multiple product lines, allowing for significant leverage and scalability without needing proportional increases in sales staff.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
