TIDMLIVN
LivaNova PLC (NASDAQ:LIVN; LSE: LIVN) ("LivaNova" or the
"Company"), a market-leading medical technology and innovation
company, today reported results for the fourth quarter and full
year ended December 31, 2016.
For the fourth quarter of 2016, worldwide sales were
$311million, a decrease of 2.3 percent on a reported basis and a
decrease of 1.6 percent on a constant-currency basis, as compared
to the previous year. On a U.S. Generally Accepted Accounting
Principles (GAAP) basis, fourth quarter 2016 loss per share was
($0.61). Fourth quarter 2016 adjusted diluted earnings per share
were $0.85. For full-year 2016, worldwide sales were $1.2 billion,
an increase of 0.8 percent on a reported basis and increase of 1.0
percent on a constant-currency basis, as compared to the previous
year. On a GAAP basis, full-year 2016 loss per share was ($1.29).
Full-year 2016 adjusted diluted earnings per share were $3.05.
"Despite it being a challenging year for top-line growth, we
were able to deliver adjusted earnings per share at the high end of
our projected range," said Damien McDonald, chief executive
officer. "2016 was LivaNova's first full year as a public company
and we made significant progress in many areas - launching several
key products, driving merger and restructuring synergies, aligning
inventory levels and consolidating balance sheet strength. We
implemented numerous measures to reinforce our foundation and
simplify our business model. This positions LivaNova for a stronger
future, driving sustainable growth, continued financial leverage
and value to our shareholders."
Fourth Quarter 2016 Results
The following table highlights worldwide sales for the fourth
quarter of 2016 compared to the same period in 2015:
Three Months EndedDecember 31, % Change ConstantCurrency %Change
In $ millions 2016 2015
Cardiopulmonary $124.7 $130.0 (4.0 %) (3.4 %)
Heart Valves 34.0 34.9 (2.6 %) (2.2 %)
Cardiac Surgery 158.7 164.9 (3.7 %) (3.2 %)
Cardiac Rhythm 61.0 60.7 0.6 % 1.3 %
Management
Neuromodulation 90.5 91.5 (1.1 %) (0.3 %)
Other 0.4 0.9 (54.7 %) (53.5 %)
Total Net Sales $310.6 $318.0 (2.3 %) (1.6 %)
-- Numbers may not add due to rounding. Constant currency % change is
considered a non-GAAP metric.
For discussion purposes, all sales growth rates below reflect
comparable, constant currency growth. The difference between
constant currency growth and reported growth reflects the impact
from currency fluctuations in the various currencies in which we
operate.
Three months ended December 31, 2016
Worldwide sales for the fourth quarter were $311 million, down
1.6 percent compared to the fourth quarter of 2015.
For the three business franchises, sales were as follows:
Cardiac Surgery
Cardiac Surgery sales, which include cardiopulmonary products
and heart valves, were $159million, representing a 3.2 percent
decrease versus the comparable period in 2015.
Sales in cardiopulmonary products were $125 million, down
3.4percent from the fourth quarter of 2015. A decline in the
Company's 3T Heater-Cooler devices, as a result of import
restrictions in the U.S., the introduction of our loaner program
across geographies and the timing of heart-lung machine orders in
Europe offset share gains and strong demand in Europe and emerging
markets for oxygenators.
Heart valve sales, including tissue and mechanical heart valves,
were $34 million, a decrease of 2.2percent compared to the same
period the previous year. Strength in tissue valves, driven by
strong demand for Perceval in both the U.S. and Europe was offset
by declines in mechanical valves globally, with on-going inventory
alignment in emerging markets, particularly China.
Cardiac Rhythm Management (CRM)
CRM sales for the period totaled $61 million, an increase of 1.3
percent as compared to the fourth quarter of 2015, primarily due to
the launch of our KORA 250 pacemaker in Japan.
Neuromodulation
Neuromodulation sales were $91 million in the fourth quarter, a
slight decline from the prior year period, primarily due to four
less selling days this quarter and inventory alignment in our
European business, which offset favorable results from the
continued adoption of the Company's newest VNS Therapy device,
AspireSR, in the U.S.
Financial Performance
On a U.S. GAAP basis, fourth quarter 2016 net loss from
operations was $37 million, primarily due to costs related to the
3T Heater-Cooler Remediation Plan, impairment of goodwill in our
CRM business franchise and restructuring expenses. Adjusted income
from operations for the fourth quarter of 2016 was $57 million, an
increase of 27.9% as compared to the fourth quarter of 2015,
primarily driven by improvements in gross margin and a significant
reduction in operating expenses resulting from merger synergy and
restructuring activities.
Full-Year 2016 Results
The following table highlights selected financial worldwide
sales for the full-year 2016 compared to the same period in
2015:
Twelve Months EndedDecember 31, % Change ConstantCurrency %Change
In $ millions 2016 2015
Cardiopulmonary $474.4 $476.4 (0.4 %) (0.1 %)
Heart Valves 137.3 140.2 (2.1 %) (1.6 %)
Cardiac Surgery 611.7 616.6 (0.8 %) (0.5 %)
Cardiac Rhythm 249.1 260.5 (4.4 %) (4.7 %)
Management
Neuromodulation 351.4 324.3 8.3 % 8.8 %
Other 1.7 3.2 (45.4 %) (42.6 %)
Total Net Sales $1,213.9 $1,204.6 0.8 % 1.0 %
-- Numbers may not add due to rounding. Constant currency % change is
considered a non-GAAP metric.
For discussion purposes, all sales growth rates below reflect
comparable, constant currency growth. The difference between
constant currency growth and reported growth reflects the impact
from currency fluctuations in the various currencies in which we
operate.
Twelve months ended December 31, 2016
Worldwide sales for full-year 2016 were $1.2billion, up 1.0
percent compared to full-year net sales in 2015, primarily due to
strong adoption of AspireSR and the U.S. launch of Perceval, our
sutureless valve.
For the three business franchises, sales were as follows:
Cardiac Surgery
Cardiac Surgery sales, which include cardiopulmonary products
and heart valves, were $612 million, down slightly versus full-year
2015.
Sales in cardiopulmonary products were $474 million, relatively
flat with the full-year 2015, primarily due to a decline in the
Company's 3T Heater-Cooler devices, as a result of import
restrictions in the U.S. and more recently, the loaner program,
offset by strong sales and share gains in INSPIRE, our newest
oxygenator.
Heart valve sales, including tissue and mechanical heart valves,
were $137 million, a decrease of 1.6percent compared to the
previous year. Strength in tissue valves, driven by strong demand
for Perceval in both the U.S. and Europe, was offset by declines in
mechanical valves.
Cardiac Rhythm Management (CRM)
CRM sales totaled $249 million, a decrease of 4.7 percent as
compared to full-year 2015. Positive performance of the Company's
newest high-voltage device PLATINIUM and favorable year-over-year
results with its KORA 250 pacemaker were offset by declines in our
Europe low-voltage business, as a result of continued pricing
pressure and delayed product launches.
Neuromodulation
Neuromodulation sales were $351 million for the full-year 2016,
an increase of 8.8 percent over the prior year period, driven
primarily by continued adoption of the Company's newest VNS Therapy
device, AspireSR, and strong new patient growth in the U.S.
Financial Performance
On a U.S. GAAP basis, loss from operations for full-year 2016
was $28 million. Adjusted income from operations for full-year 2016
was $219 million, an increase of 26.9 percent as compared to
full-year 2015.
2017 Projections
LivaNova expects worldwide net sales for full-year 2017 to grow
between 1and 3 percent on a constant-currency basis. Adjusted
diluted earnings per share for 2017 are expected to be in the range
of $3.25 to $3.45.
Key non-GAAP reconciliation items to the projected 2017 adjusted
diluted earnings per share are as follows:
Earnings Per Share
Estimated merger and integration charges $0.05 - $0.08
Estimated charges for restructuring $0.29 - $0.33
Amortization of intangible assets related $0.80
to purchase price accounting
Estimated charges related to equity compensation $0.29 - $0.33
In 2017, the company estimates that adjusted cash flow from
operations, excluding integration, restructuring and 3T remediation
payments, will be in the range of $190 to $210 million. Capital
expenditures are projected to range between $40 million to $50
million. Depreciation and amortization is expected to be in the
mid-$30 million range.
"We have created a solid foundation and are on track for
continued progress in 2017 with initiatives to advance our growth,
drive product launches and fund our equity investments, which
remain exciting opportunities for the company," said McDonald. "We
expect continued progress as we execute on our synergy targets and
retain our focus, energy and discipline as a company. Together, we
believe these efforts will enable LivaNova to most effectively
serve the needs of our customers and patients, and deliver strong
value to our shareholders."
Webcast and Conference Call Instructions
The conference call will be available to interested parties
through a live audio webcast commencing at 8:00 a.m. Central time
(9:00 a.m. Eastern time, 2:00 p.m. UK time) and accessible through
the Investor Relations section of the LivaNova corporate website at
www.LivaNova.com. To listen to the conference call live by
telephone, dial (844) 239-5285 (if dialing from within the U.S.) or
(512) 961-6524 (if dialing from outside the U.S.). The conference
ID is 40640458.
Within 24 hours of the webcast, a replay will be available under
the "News & Events / Presentations" section of the Investor
Relations portion of the LivaNova website, where it will be
archived and accessible for approximately 12 months.
About LivaNova
LivaNova PLC is a global medical technology company built on
nearly five decades of experience and a relentless commitment to
improve the lives of patients around the world. LivaNova's advanced
technologies and breakthrough treatments provide meaningful
solutions for the benefit of patients, healthcare professionals and
healthcare systems. Headquartered in London and with a presence in
more than 100 countries worldwide, the company employs more than
4,500 employees. LivaNova operates as three business franchises:
Cardiac Surgery, Neuromodulation and Cardiac Rhythm Management,
with operating headquarters in Mirandola (Italy), Houston (U.S.A.)
and Clamart (France), respectively.
Financial Alignment, Combined Sales & Operating Results,
Business Franchise Structure and Constant Currency
Cyberonics Inc., the predecessor company to LivaNova, previously
reported on a 52/53 week fiscal year calendar ending in April. With
the formal change in the fiscal calendar to a fiscal year ended
December 31, the historical Neuromodulation business franchise
sales have been aligned to correspond as closely as possible to
calendar quarters.
Although LivaNova was a shell company with no business
operations until the closing date of the merger on October 19,
2015, the sales results disclosed for periods up to and beyond that
date are being provided on a combined basis, a non-GAAP formulation
that combines the results of legacy Sorin Group S.p.A. (Sorin) and
Cyberonics for the periods completed prior to the merger and
periods that include results both before and after the closing of
the merger. The Company believes that presenting the results of
Sorin and Cyberonics in such a manner offers a meaningful
representation to investors of the combined company's sales for
these periods.
Non-GAAP operating results, unaudited, have been included for
2015. These results have been prepared by management and adjusted
for non-GAAP items as if the merger had occurred on January 1, 2015
but should not be considered as an alternative to Proforma Income
Statements to be provided in accordance with SEC filings. Certain
adjustments to legacy Sorin operating results have occurred in
order to present the results in U.S. dollars and to align these
results as closely as possible to the presentation of LivaNova
financial results. Company management uses these measurements as
aids in monitoring the Company's ongoing financial performance from
quarter to quarter and year to year on a regular basis and for
benchmarking against other medical technology companies. Management
believes that the presentation of these results provides a
meaningful representation of the combined company's operating
results for the periods presented.
The sales and operating results for legacy Cyberonics for the
quarters ended March 31, June 30 and September 30 were aligned to
provide comparative information. The actual periods ended on March
27, June 26 and September 25 respectively.
LivaNova (as the successor to Sorin and Cyberonics on a combined
basis) operates under a Business Franchise structure with Cardiac
Surgery, CRM and Neuromodulation accounting for substantially all
of the sales during the periods referred to herein. The combined
company also operates a New Ventures group, dedicated to developing
new technologies.
Use of Non-GAAP Financial Measures
In this press release, management has disclosed financial
measurements that present financial information not necessarily in
accordance with Generally Accepted Accounting Principles (GAAP).
Company management uses these measurements as aids in monitoring
the Company's ongoing financial performance from quarter to quarter
and year to year on a regular basis and for benchmarking against
other medical technology companies. Non-GAAP financial measures
used by the Company may be calculated differently from, and
therefore may not be comparable to, similarly titled measures used
by other companies. These non-GAAP financial measures should be
considered along with, but not as alternatives to, the operating
performance measure as prescribed by GAAP.
Unless otherwise noted, all sales growth rates in this release
reflect comparable, constant currency growth. Management believes
that referring to comparable, constant currency growth is the most
useful way to evaluate the sales performance of LivaNova and to
compare the sales performance of current periods to prior periods
on a consistent basis. Constant currency growth, a non-GAAP
financial measure, measures the change in sales between current and
prior year periods using average exchange rates in effect during
the applicable prior year period.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended. Forward-looking statements are
not historical facts but are based on certain assumptions of
management and describe the Company's future plans, strategies and
expectations. Forward-looking statements can generally be
identified by the use of forward-looking terminology, including,
but not limited to, "may," "could," "seek," "guidance," "predict,"
"potential," "likely," "believe," "will," "expect," "anticipate,"
"estimate," "plan," "intend," "forecast," or variations of these
terms and similar expressions, or the negative of these terms or
similar expressions. Forward-looking statements contained in this
press release are based on information presently available to
LivaNova and assumptions that the Company believes to be
reasonable, but are inherently uncertain. As a result, the
Company's actual results, performance or achievements may differ
materially from those expressed or implied by these forward-looking
statements, which are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors
that are, in some cases, beyond the Company's control. Investors
are cautioned that all such statements involve risks and
uncertainties, including without limitation, statements concerning
achieving a stronger future, driving sustainable growth and value
to our shareholders, projected net sales, adjusted diluted earnings
per share, cash flow from operations, capital expenditures and
depreciation and amortization for 2017, advancing our growth,
driving product launches and funding our equity investments,
executing on our synergy targets and retaining our focus, energy
and discipline as a company, serving the needs of our customers and
patients, and delivering strong value to our shareholders.
Important factors that may cause actual results to differ include,
but are not limited to: (i) risks that the legacy businesses of
Cyberonics, Inc. and Sorin S.p.A. (together, the "combined
companies") will not be integrated successfully or that the
combined companies will not realize estimated cost savings, value
of certain tax assets, synergies and growth, or that such benefits
may take longer to realize than expected; (ii) the inability of
LivaNova to meet expectations regarding the timing, completion and
accounting of tax treatments; (iii) risks relating to unanticipated
costs of integration, including operating costs, customer loss or
business disruption being greater than expected; (iv)
organizational and governance structure; (v) reductions in customer
spending, a slowdown in customer payments and changes in customer
demand for products and services; (vi) unanticipated changes
relating to competitive factors in the industries in which LivaNova
operates; (vii) the ability to hire and retain key personnel;
(viii) the ability to attract new customers and retain existing
customers in the manner anticipated; (ix) the reliance on and
integration of information technology systems; (x) changes in
legislation or governmental regulations affecting LivaNova; (xi)
international, national or local economic, social or political
conditions that could adversely affect LivaNova, its partners or
its customers; (xii) conditions in the credit markets; (xiii)
business and other financial risks inherent to the industries in
which LivaNova operates; (xiv) risks associated with assumptions
made in connection with critical accounting estimates and legal
proceedings; (xv) LivaNova's international operations, which are
subject to the risks of currency fluctuations and foreign exchange
controls; (xvi) and the potential of international unrest, economic
downturn or effects of currencies, tax assessments, tax
adjustments, anticipated tax rates, raw material costs or
availability, benefit or retirement plan costs, or other regulatory
compliance costs. The foregoing list of factors is notexhaustive.
You should carefully consider the foregoing factors and the other
risks and uncertainties that affect the Company's business,
including those described in the "Risk Factors" section of Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, the Registration Statement on Form S-4 and
other documents filed from time to time with the United States
Securities and Exchange Commission by LivaNova. LivaNova does not
give any assurance (1) that LivaNova will achieve its expectations,
or (2) concerning any result or the timing thereof, in each case,
with respect to any regulatory action, administrative
proceedings, government investigations, litigation, warning
letters, consent decree, cost reductions, business strategies,
earnings or revenue trends or future financial results.
All information in this press release is as of the date of its
release. The Company does not undertake or assume any obligation to
update publicly any of the forward-looking statements in this press
release to reflect actual results, new information or future
events, changes in assumptions or changes in other factors
affecting forward-looking statements, except to the extent required
by applicable law. If we update one or more forward-looking
statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking
statements. We caution you not to place undue reliance on any
forward-looking statements, which are made only as of the date of
this press release.
For more information, please visit www.LivaNova.com.
LIVANOVA PLC
QUARTERLY SALES TR
BY BUSINESS UNIT
U.S. dollars in millions,
CONSTANT CURRENCY
1Q15 2Q15 3Q15 4Q15 FY15 1Q16 2Q16 3Q16 4Q16 FY16 4Q16 vs.4Q15 FY16 vs.FY15
Net Sales
Cardio Pulmonary $107.5 $125.9 $113.0 $130.0 $476.4 $113.4 $123.6 $113.3 $125.5 $475.8 (3.4 %) (0.1 %)
Heart Valves 34.7 36.4 34.2 34.9 140.2 33.4 37.0 33.4 34.2 137.9 (2.2 %) (1.6 %)
Cardiac Surgery 142.2 162.3 147.2 164.9 616.6 146.8 160.7 146.6 159.6 613.7 (3.2 %) (0.5 %)
Total
CRM 70.4 75.6 53.9 60.7 260.5 62.9 68.1 55.8 61.4 248.2 1.3 % (4.7 %)
Neuromodulation 70.1 78.4 84.3 91.5 324.3 81.6 90.1 90.0 91.2 353.0 (0.3 %) 8.8 %
Other 0.7 0.7 0.8 0.9 3.2 0.5 0.4 0.5 0.4 1.8 (53.5 %) (42.6 %)
Total $283.4 $317.1 $286.1 $318.0 $1,204.6 $291.8 $319.3 $292.9 $312.8 $1,216.8 (1.6 %) 1.0 %
LIVANOVA PLC
QUARTERLY SALES TR
BY BUSINESS UNIT
U.S. dollars in millions,
REPORTED
1Q15 2Q15 3Q15 4Q15 FY15 1Q16 2Q16 3Q16 4Q16 FY16 4Q16 vs.4Q15 FY16 vs.FY15
Net Sales
Cardio Pulmonary $107.5 $125.9 $113.0 $130.0 $476.4 $110.9 $124.0 $114.8 $124.7 $474.4 (4.0 %) (0.4 %)
Heart Valves 34.7 36.4 34.2 34.9 140.2 32.5 37.1 33.7 34.0 137.3 (2.6 %) (2.1 %)
Cardiac Surgery 142.2 162.3 147.2 164.9 616.6 143.4 161.1 148.5 158.7 611.7 (3.7 %) (0.8 %)
Total
CRM 70.4 75.6 53.9 60.7 260.5 61.7 69.6 56.8 61.0 249.1 0.6 % (4.4 %)
Neuromodulation 70.1 78.4 84.3 91.5 324.3 81.4 90.0 89.5 90.5 351.4 (1.1 %) 8.3 %
Other 0.7 0.7 0.8 0.9 3.2 0.4 0.4 0.5 0.4 1.7 (54.7 %) (45.4 %)
Total $283.4 $317.1 $286.1 $318.0 $1,204.6 $287.0 $321.0 $295.3 $310.6 $1,213.9 (2.3 %) 0.8 %
* The sales results presented are unaudited.
Numbers may not add due to rounding.
LIVANOVA
PLC
QUARTERLY SALES TR
BY REGION
U.S. dollars in millions,
REPORTED
1Q15 2Q15 3Q15 4Q15 FY15 1Q16 2Q16 3Q16 4Q16 FY16 4Q16 vs.4Q15 FY16 vs.FY15
Cardio
Pulmonary
US $32.9 $43.0 $39.8 $45.9 $161.7 $34.5 $39.2 $39.4 $41.3 $154.4 (10.0 %) (4.5 %)
Europe 33.6 37.1 31.7 35.6 137.9 31.5 34.9 28.3 33.8 128.5 (4.9 %) (6.8 %)
Rest of 41.0 45.9 41.5 48.5 176.9 45.0 49.9 47.2 49.5 191.5 2.2 % 8.3 %
World
Total 107.5 125.9 113.0 130.0 476.4 110.9 124.0 114.8 124.7 474.4 (4.0 %) (0.4 %)
Heart Valve
US 6.7 6.7 6.1 5.8 25.2 6.5 7.1 7.4 6.8 27.7 17.4 % 9.8 %
Europe 12.8 13.0 10.3 10.9 46.9 11.4 12.5 9.7 10.7 44.3 (1.6 %) (5.5 %)
Rest of 15.2 16.8 17.8 18.2 68.1 14.7 17.5 16.6 16.5 65.3 (9.6 %) (4.1 %)
World
Total 34.7 36.4 34.2 34.9 140.2 32.5 37.1 33.7 34.0 137.3 (2.6 %) (2.1 %)
Cardiac
Surgery
US 39.6 49.6 45.9 51.7 186.9 40.9 46.3 46.8 48.1 182.1 (6.9 %) (2.5 %)
Europe 46.3 50.0 41.9 46.5 184.8 42.9 47.4 38.0 44.5 172.8 (4.1 %) (6.5 %)
Rest of 56.2 62.7 59.3 66.7 245.0 59.7 67.4 63.7 66.1 256.8 (1.0 %) 4.8 %
World
Total 142.2 162.3 147.2 164.9 616.6 143.4 161.1 148.5 158.7 611.7 (3.7 %) (0.8 %)
CRM
US 4.5 3.9 3.9 3.1 15.5 3.0 2.3 2.2 2.5 9.9 (20.9 %) (36.0 %)
Europe 51.0 52.3 44.8 50.5 198.6 50.0 54.4 44.7 48.1 197.2 (4.8 %) (0.7 %)
Rest of 14.9 19.4 5.1 7.0 46.4 8.7 12.9 9.8 10.5 41.9 49.1 % (9.7 %)
World
Total 70.4 75.6 53.9 60.7 260.5 61.7 69.6 56.8 61.0 249.1 0.6 % (4.4 %)
Neuromodulation
US 57.5 63.6 70.9 76.8 268.8 70.2 75.8 74.9 77.6 298.5 1.0 % 11.0 %
Europe 8.7 8.9 8.4 9.2 35.2 6.4 9.4 8.5 7.7 31.9 (15.8 %) (9.2 %)
Rest of 3.9 6.0 4.9 5.5 20.3 4.8 4.9 6.2 5.2 21.0 (5.2 %) 3.3 %
World
Total 70.1 78.4 84.3 91.5 324.3 81.4 90.0 89.5 90.5 351.4 (1.1 %) 8.3 %
Other
US - - - - - - - - - - N/A N/A
Europe - - - 0.2 0.3 0.1 0.1 - - 0.1 N/A N/A
Rest of 0.7 0.7 0.8 0.7 2.9 0.4 0.3 0.5 0.4 1.6 (36.2 %) (44.1 %)
World
Total 0.7 0.7 0.8 0.9 3.2 0.4 0.4 0.5 0.4 1.7 (54.7 %) (45.4 %)
Total
US 101.6 117.1 120.8 131.6 471.2 114.1 124.4 123.8 128.1 490.5 (2.7 %) 4.1 %
Europe 106.1 111.2 95.2 106.4 418.8 99.3 111.2 91.2 100.3 402.1 (5.7 %) (4.0 %)
Rest of 75.7 88.8 70.2 79.9 314.6 73.5 85.4 80.2 82.2 321.4 2.8 % 2.1 %
World
Total $283.4 $317.1 $286.1 $318.0 $1,204.6 $287.0 $321.0 $295.3 $310.6 $1,213.9 (2.3 %) 0.8 %
* The sales results presented are unaudited.
Numbers may not add due to rounding.
LIVANOVA
PLC
QUARTERLY SALES TR
BY REGION
U.S. dollars in millions,
CONSTANT CURRENCY
1Q15 2Q15 3Q15 4Q15 FY15 1Q16 2Q16 3Q16 4Q16 FY16 4Q16 vs.4Q15 FY16 vs.FY15
Cardio
Pulmonary
US $32.9 $43.0 $39.8 $45.9 $161.7 $34.5 $39.2 $39.4 $41.3 $154.4 (10.0 %) (4.5 %)
Europe 33.6 37.1 31.7 35.6 137.9 32.4 34.6 28.8 35.4 131.1 (0.5 %) (4.9 %)
Rest of 41.0 45.9 41.5 48.5 176.9 46.6 49.8 45.1 48.8 190.3 0.6 % 7.6 %
World
Total 107.5 125.9 113.0 130.0 476.4 113.4 123.6 113.3 125.5 475.8 (3.4 %) (0.1 %)
Heart Valve
US 6.7 6.7 6.1 5.8 25.2 6.5 7.1 7.4 6.8 27.7 17.4 % 9.8 %
Europe 12.8 13.0 10.3 10.9 46.9 11.7 12.4 9.9 11.1 45.0 1.7 % (4.0 %)
Rest of 15.2 16.8 17.8 18.2 68.1 15.2 17.6 16.1 16.3 65.2 (10.6 %) (4.3 %)
World
Total 34.7 36.4 34.2 34.9 140.2 33.4 37.0 33.4 34.2 137.9 (2.2 %) (1.6 %)
Cardiac
Surgery
US 39.6 49.6 45.9 51.7 186.9 40.9 46.3 46.8 48.1 182.1 (6.9 %) (2.5 %)
Europe 46.3 50.0 41.9 46.5 184.8 44.0 47.0 38.7 46.5 176.1 0.0% (4.7 %)
Rest of 56.2 62.7 59.3 66.7 245.0 61.8 67.4 61.2 65.1 255.5 (2.5 %) 4.3 %
World
Total 142.2 162.3 147.2 164.9 616.6 146.8 160.7 146.6 159.6 613.7 (3.2 %) (0.5 %)
CRM
US 4.5 3.9 3.9 3.1 15.5 3.0 2.3 2.2 2.5 9.9 (20.9 %) (36.0 %)
Europe 51.0 52.3 44.8 50.5 198.6 51.2 53.5 44.8 49.2 198.7 (2.7 %) 0.1 %
Rest of 14.9 19.4 5.1 7.0 46.4 8.7 12.3 8.8 9.8 39.6 39.7 % (14.7 %)
World
Total 70.4 75.6 53.9 60.7 260.5 62.9 68.1 55.8 61.4 248.2 1.3 % (4.7 %)
Neuromodulation
US 57.5 63.6 70.9 76.8 268.8 70.2 75.8 74.9 77.6 298.5 1.0 % 11.0 %
Europe 8.7 8.9 8.4 9.2 35.2 6.6 9.4 9.0 8.4 33.5 (8.2 %) (4.9 %)
Rest of 3.9 6.0 4.9 5.5 20.3 4.8 4.9 6.1 5.2 21.1 (4.5 %) 3.6 %
World
Total 70.1 78.4 84.3 91.5 324.3 81.6 90.1 90.0 91.2 353.0 (0.3 %) 8.8 %
Other
US - - - - - - - - - - N/A N/A
Europe - - - 0.2 0.3 0.1 0.1 - - 0.1 N/A N/A
Rest of 0.7 0.7 0.8 0.7 2.9 0.5 0.3 0.5 0.4 1.7 (34.7 %) (41.1 %)
World
Total 0.7 0.7 0.8 0.9 3.2 0.5 0.4 0.5 0.4 1.8 (53.5 %) (42.6 %)
Total
US 101.6 117.1 120.8 131.6 471.2 114.1 124.4 123.8 128.1 490.5 (2.7 %) 4.1 %
Europe 106.1 111.2 95.2 106.4 418.8 101.9 110.0 92.5 104.0 408.4 (2.2 %) (2.5 %)
Rest of 75.7 88.8 70.2 79.9 314.6 75.8 84.9 76.6 80.6 317.9 0.8 % 1.0 %
World
Total $283.4 $317.1 $286.1 $318.0 $1,204.6 $291.8 $319.3 $292.9 $312.8 $1,216.8 (1.6 %) 1.0 %
* The sales results presented are unaudited.
Numbers may not add due to rounding.
LIVANOVA PLC
QUARTERLY SALES
U.S. dollars in millions
Three Months Ended December 31, 2016
2016 2015 % Change atActual CurrencyRates % Change atConstant CurrencyRates
Cardio Pulmonary
US $41.3 $45.9 (10.0 %) (10.0 %)
Europe 33.8 35.6 (4.9 %) (0.5 %)
Rest of World 49.5 48.5 2.2 % 0.6 %
Total 124.7 130.0 (4.0 %) (3.4 %)
Heart Valve
US 6.8 5.8 17.4 % 17.4 %
Europe 10.7 10.9 (1.6 %) 1.7 %
Rest of World 16.5 18.2 (9.6 %) (10.6 %)
Total 34.0 34.9 (2.6 %) (2.2 %)
Cardiac Surgery
US 48.1 51.7 (6.9 %) (6.9 %)
Europe 44.5 46.5 (4.1 %) 0.0 %
Rest of World 66.1 66.7 (1.0 %) (2.5 %)
Total 158.7 164.9 (3.7 %) (3.2 %)
CRM
US 2.5 3.1 (20.9 %) (20.9 %)
Europe 48.1 50.5 (4.8 %) (2.7 %)
Rest of World 10.5 7.0 49.1 % 39.7 %
Total 61.0 60.7 0.6 % 1.3 %
Neuromodulation
US 77.6 76.8 1.0 % 1.0 %
Europe 7.7 9.2 (15.8 %) (8.2 %)
Rest of World 5.2 5.5 (5.2 %) (4.5 %)
Total 90.5 91.5 (1.1 %) (0.3 %)
Other
US - - N/A N/A
Europe - 0.2 N/A N/A
Rest of World 0.4 0.7 (36.2 %) (34.7 %)
Total 0.4 0.9 (54.7 %) (53.5 %)
Total
US 128.1 131.6 (2.7 %) (2.7 %)
Europe 100.3 106.4 (5.7 %) (2.2 %)
Rest of World 82.2 79.9 2.8 % 0.8 %
Total $310.6 $318.0 (2.3 %) (1.6 %)
* The sales results presented are unaudited. Numbers may not add due to rounding.
LIVANOVA PLC
FY16 SALES
U.S. dollars in millions
Twelve Months Ended December 31, 2016
2016 2015 % Change atActual CurrencyRates % Change atConstant CurrencyRates
Cardio Pulmonary
US $154.4 $161.7 (4.5 %) (4.5 %)
Europe 128.5 137.9 (6.8 %) (4.9 %)
Rest of World 191.5 176.9 8.3 % 7.6 %
Total 474.4 476.4 (0.4 %) (0.1 %)
Heart Valve
US 27.7 25.2 9.8 % 9.8 %
Europe 44.3 46.9 (5.5 %) (4.0 %)
Rest of World 65.3 68.1 (4.1 %) (4.3 %)
Total 137.3 140.2 (2.1 %) (1.6 %)
Cardiac Surgery
US 182.1 186.9 (2.5 %) (2.5 %)
Europe 172.8 184.8 (6.5 %) (4.7 %)
Rest of World 256.8 245.0 4.8 % 4.3 %
Total 611.7 616.6 (0.8 %) (0.5 %)
CRM
US 9.9 15.5 (36.0 %) (36.0 %)
Europe 197.2 198.6 (0.7 %) 0.1 %
Rest of World 41.9 46.4 (9.7 %) (14.7 %)
Total 249.1 260.5 (4.4 %) (4.7 %)
Neuromodulation
US 298.5 268.8 11.0 % 11.0 %
Europe 31.9 35.2 (9.2 %) (4.9 %)
Rest of World 21.0 20.3 3.3 % 3.6 %
Total 351.4 324.3 8.3 % 8.8 %
Other
US - - N/A N/A
Europe 0.1 0.3 N/A N/A
Rest of World 1.6 2.9 (44.1 %) (41.1 %)
Total 1.7 3.2 (45.4 %) (42.6 %)
Total
US 490.5 471.2 4.1 % 4.1 %
Europe 402.1 418.8 (4.0 %) (2.5 %)
Rest of World 321.4 314.6 2.1 % 1.0 %
Total $1,213.9 $1,204.6 0.8 % 1.0 %
* The sales results presented are unaudited. Numbers may not add due to rounding.
LIVANOVA PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT
OF INCOME (LOSS)
U.S. dollars in millions,
except per share amounts
Three Months EndedDecember 31, 2016
Net sales $310.6
Cost of sales 111.3
Product remediation 35.3
Gross Profit 164.0
Operating expenses
Selling, general and administrative 123.5
Research and development 28.4
Merger and integration expense -
Restructuring expense 18.7
Amortization of intangibles 11.6
Goodwill Impairment 18.3
Total operating expenses 200.5
Income (loss) from operations (36.5 )
Interest income (expense), net (3.4 )
Foreign exchange and 3.5
other - gain (loss)
Income (loss) before income taxes (36.3 )
Loss from equity method investments (3.2 )
Income tax expense (benefit) (9.8 )
Net (loss) income ($29.8 )
Earnings (Loss) Per Common Share:
Basic ($0.61 )
Diluted ($0.61 )
Weighted Average Common
Shares Outstanding
Basic 48.5
Diluted 48.5
Adjusted Gross Profit (1) $200.1
Adjusted SG&A (1) $115.0
Adjusted R&D (1) $28.0
Adjusted Income from Operations (1) $57.1
Adjusted Net Income (1) $41.5
Adjusted Diluted Earnings $0.85
Per Share (1)
Statistics (as a % of net sales, except for income tax rate)
GAAP ThreeMonths EndedDecember 31, Adjusted (1) Three Months EndedDecember 31,
2016 2016 2015
Gross Profit 52.8 % 64.4 % 61.9 %
SG&A 39.8 % 37.0 % 36.8 %
R&D 9.1 % 9.0 % 11.1 %
Income (loss) from Operations (11.7 %) 18.4 % 14.0 %
Net (loss) income (9.6 %) 13.4 % n/a
Income Tax Rate (26.9 %) 21.0 % n/a
(1) Adjusted financial measures are Non-GAAP measures and exclude
specified items as described and reconciled to compare GAAP
financial measures in the Reconciliation of GAAP to non-GAAP
Financial Measures contained in the press release.
* Numbers may not add due to rounding.
n/a is not applicable; there is
no applicable adjusted net income or tax rate reported for 4Q15.
LIVANOVA PLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT
OF INCOME (LOSS)
U.S. dollars in millions,
except per share amounts
Twelve Months EndedDecember 31, 2016
Net sales $1,213.9
Cost of sales 472.0
Product remediation 37.5
Gross Profit 704.4
Operating expenses
Selling, general and 469.2
administrative
Research and development 122.5
Merger and integration expense 20.5
Restructuring expense 55.9
Amortization of intangibles 45.5
Goodwill impairment 18.3
Total operating expenses 732.0
Income (loss) from operations (27.6 )
Interest income (expense), net (8.9 )
Foreign exchange and 3.5
other - gain (loss)
Income (loss) before (33.0 )
income taxes
Loss from equity method (22.6 )
investments
Income tax expense (benefit) 7.1
Net (loss) income ($62.8 )
Earnings (Loss) Per
Common Share:
Basic ($1.29 )
Diluted ($1.29 )
Weighted Average Common
Shares Outstanding
Basic 48.9
Diluted 48.9
Adjusted Gross Profit (1) $784.6
Adjusted SG&A (1) $445.5
Adjusted R&D (1) $120.5
Adjusted Income from $218.6
Operations (1)
Adjusted Net Income (1) $149.3
Adjusted Diluted Earnings $3.05
Per Share (1)
Statistics (as a % of net sales, except for income tax rate)
GAAP TwelveMonths EndedDecember 31, Adjusted (1) Twelve Months EndedDecember 31,
2016 2016 2015
Gross Profit 58.0 % 64.6 % 63.1 %
SG&A 38.7 % 36.7 % 36.9 %
R&D 10.1 % 9.9 % 11.9 %
Income (loss) from Operations (2.3 %) 18.0 % 14.3 %
Net (loss) income (5.2 %) 12.3 % n/a
Income Tax Rate 21.6 % 24.9 % n/a
(1) Adjusted financial measures are Non-GAAP measures and exclude
specified items as described and reconciled to compare GAAP
financial measures in the Reconciliation of GAAP to non-GAAP
Financial Measures contained in the press release.
* Numbers may not add due to rounding.
n/a is not applicable; there is
no applicable adjusted net income or tax rate reported for FY15.
LIVANOVA PLC AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
U.S. dollars in millions, except per share amounts
Three Months Ended December 31, 2016 Sales Gross Profit Income FromOperations Net Income(Loss) Diluted EPS
GAAP Financial Measures $310.6 $164.0 ($36.5 ) ($29.8 ) ($0.61 )
Specified Items
Merger and integration expense (A) - - - -
Restructuring expense (B) - 18.7 12.1 0.25
Amortization of intangible assets (C) 0.9 12.9 13.4 0.27
Impairment of goodwill (D) - 18.3 18.3 0.38
3T product remediation (E) 35.3 35.3 23.8 0.49
Other Income Expenses & Litigations (F) - 4.3 3.6 0.07
Impact of inventory step-up (G) - - - -
Equity compensation (H) (0.1 ) 4.0 1.7 0.03
Certain tax adjustments (I) - - (1.6 ) (0.03 )
Adjusted financial measures $310.6 $200.1 $57.1 $41.5 $0.85
GAAP results for the three months ended December 31, 2016 include:
(A) Expenses related to merger and integration activities
(B) Corporate-related severance, shared-service synergies and recent organizational changes
(C) Amortization expense associated with intangible assets recorded at fair value in purchase accounting
(D) Impairment of CRM segment goodwill
(E) Costs related to the 3T Heater-Cooler Remediation Plan
(F) Cost of $2.6M related to the reassessment of earn-out provisions for two legacy distributor acquisitions; $0.7M related to a provision for a tax penalty for previous years under audit in a foreign jurisdiction
(G) Includes amortization of inventory step-up associated with purchase accounting
(H) Includes $4.0M related to SG&A, $0.1M related to R&D, and $0.1M related to Cost of Sales
(I) Relates to the impact of restructuring initiatives, including IP migration
Twelve Months Ended December 31, 2016 Sales Gross Profit Income FromOperations Net Income(Loss) Diluted EPS
GAAP Financial Measures $1,213.9 $704.4 ($27.6 ) ($62.8 ) ($1.29 )
Specified Items
Merger and integration expense (A) - 20.5 14.6 0.30
Restructuring expense (B) - 55.9 45.5 0.93
Amortization of intangible assets (C) 6.8 52.4 42.5 0.87
Impairment of goodwill (D) - 18.3 18.3 0.37
3T product remediation (E) 37.5 37.5 24.8 0.51
Other Income Expenses & Litigations (F) - 6.9 4.7 0.10
Write-off of investment in minorities (G) - - 9.2 0.19
Impact of inventory step-up (H) 35.2 35.2 26.3 0.54
Equity compensation (I) 0.7 19.3 14.5 0.30
Certain tax adjustments (J) - - 11.4 0.23
Adjusted financial measures $1,213.9 $784.6 $218.6 $149.3 $3.05
GAAP results for the twelve months ended December 31, 2016 include:
(A) Expenses related to merger and integration activities
(B) CRM restructuring announced March 10, 2016, corporate-related severance, shared-service synergies and recent organizational changes
(C) Amortization expense associated with intangible assets recorded at fair value in purchase accounting
(D) Impairment of CRM segment goodwill
(E) Costs related to the 3T Heater-Cooler Remediation Plan
(F) Includes a gain recognized for the reimbursement of $4.7M of earthquake damages incurred in Mirandola (Italy) in 2012; $5.0M for the reserve of certain receivables from a Greece distributor; $2.6M related to the reassessment of earn-out provisions for two legacy distributor acquisitions; $0.8M related litigation settlements with two independent sales agent; $0.7M related to accruals for tax penalties related to previous years; $2.5M related to other litigation
(G) $9.2M related to the impairment of a purchase option for Respicardia
(H) Includes amortization of inventory step-up associated with purchase accounting
(I) Includes $17.7M related to SG&A, $0.9M related to R&D, and $0.7M related to Cost of Sales
(J) Relates to the impact of restructuring initiatives, including IP migration
LIVANOVA PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED
BALANCE SHEETS
U.S. dollars in millions
December 31, 2016 December 31, 2015
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $39.8 $112.6
Short-term investments - 7.0
Accounts receivable, net 275.7 272.4
Inventories 183.5 212.4
Prepaid and refundable 60.6 42.4
income taxes
Prepaid expenses and 60.5 26.6
other current assets
Total Current Assets 620.1 673.4
Property, plant and 223.8 244.6
equipment, net
Goodwill 691.7 745.4
Intangible assets, net 609.2 658.9
Investments 61.1 77.5
Deferred tax assets net 6.0 153.5
Other assets 130.7 5.4
Total Assets $2,342.6 $2,558.7
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Current debt obligations $47.7 $82.5
Accounts payable 93.0 109.6
Accrued liabilities 75.6 63.0
Income taxes payable 22.3 26.7
Accrued employee 78.3 77.3
compensation and
related benefits liability
Total Current Liabilities 316.8 359.1
Long-term debt obligations 75.2 91.8
Deferred income taxes liability 172.5 235.5
Long-term employee compensation 31.7 31.1
and related benefits liability
Other long-term liabilities 39.5 29.7
Total Liabilities 635.7 747.3
Total Stockholders' Equity 1,706.9 1,811.5
Total Liabilities and $2,342.6 $2,558.7
Stockholders' Equity
* Numbers may not add
due to rounding.
LIVANOVA PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOW
U.S. dollars in millions
(Unaudited)
Twelve Months EndedDecember 31st, 2016
Cash Flows from Operating
Activities:
Net (loss) Income ($62.8 )
Non-cash items included
in net (loss) income:
Depreciation 39.9
Amortization 45.5
Stock-based compensation 19.6
Amortization of prepaid 26.0
income taxes
on intercompany transfers
Deferred income tax (26.7 )
(benefit) expense
Impairment of goodwill 18.3
Impairment of property, 6.0
plant and equipment
Loss from equity method 22.6
investments
Other 10.2
Changes in operating assets
and liabilities:
Accounts receivable, net (16.4 )
Inventories 26.7
Other current and non-current (32.7 )
assets
Restructuring reserve 12.4
Accounts payable and 1.6
accrued current
and non-current liabilities
Net cash provided by 90.2
operating activities
Cash Flow from Investing
Activities:
Purchase of short-term (7.1 )
investments
Maturities of short-term 14.1
investments
Purchase of property, (35.3 )
plant and equipment
Intangible assets purchases (1.9 )
Purchase of Equity and Cost (8.0 )
Method Investments
Net cash used in investing (38.2 )
activities
Cash Flow From Financing
Activities:
Short-term borrowing (33.7 )
(repayments)
borrowing, net
Proceeds from long term 7.2
debt obligations
Repayment of long-term (21.1 )
debt obligations
Repayment of trade receivable (23.8 )
advances
Loans to equity method (6.3 )
investees
Proceeds from exercise 8.3
of options for stock
Realized excess tax benefits 2.1
- stock based compensation
Share repurchases (54.5 )
Cash settlement of (2.7 )
compensation-based
stock units
Other financial assets 0.1
and liabilities
Net cash used in financing (124.3 )
activities
Effect of exchange (0.4 )
rate changes
on cash and cash equivalents
Net decrease in cash (72.8 )
and cash equivalents
Cash and cash equivalents 112.6
at beginning of period
Cash and cash equivalents $39.8
at end of period
* Numbers may not add
due to rounding.
Supplementary disclosure of
Cash Flow Information:
Cash paid for interest 7.4
Cash paid for income taxes 47.8
LivaNova PLC Investor Relations and MediaKaren King, +1
281-228-7262Vice President, Investor Relations & Corporate
CommunicationsCorporate.Communications@LivaNova.comFax: +1
281-218-9332
View source version on businesswire.com:
http://www.businesswire.com/news/home/20170301005631/en/
This information is provided by Business Wire
(END) Dow Jones Newswires
March 01, 2017 07:00 ET (12:00 GMT)
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