LivaNova PLC (Nasdaq: LIVN), a market-leading medical technology
company, today reported fourth-quarter and full-year 2024 results
and issued full-year 2025 guidance.
Financial Summary and
Highlights(1)
- Fourth-quarter revenue of $321.8 million increased 3.8% on a
reported basis, 4.7% on a constant-currency basis, and 6.8% on an
organic basis as compared to the prior-year period
- Fourth-quarter U.S. GAAP diluted earnings per share of $1.02
and adjusted diluted earnings per share of $0.81
- Full-year 2024 revenue of $1.25 billion increased 8.7% on a
reported basis, 9.3% on a constant-currency basis, and 10.7% on an
organic basis as compared to the prior-year
- Full-year 2024 U.S. GAAP diluted earnings per share of $1.16
and adjusted diluted earnings per share of $3.38
- Full-year 2024 net cash provided by operating activities of
$183.0 million and adjusted free cash flow of $162.9 million
- Expects full-year 2025 revenue to grow between 5.0% and 6.0% on
a constant-currency basis and between 6.0% and 7.0% on an organic
basis. Adjusted diluted earnings per share for 2025 is expected to
be in the range of $3.65 to $3.75. Adjusted free cash flow is
expected to be in the range of $135 million to $155 million
- Announced the OSPREY clinical study for moderate-to-severe
obstructive sleep apnea met its primary safety and efficacy
endpoints as well as a significant reduction of apnea-hypopnea
index and oxygenation desaturation index against baseline values
through six months of therapy
- Announced the publication of two pivotal articles chronicling
the treatment-resistant depression unipolar cohort data set in the
RECOVER clinical study; the articles concluded that active VNS
TherapyTM, as compared to sham, safely and effectively demonstrated
clinically meaningful therapeutic effects on depressive symptoms
and positive effects on quality of life and daily function
- In January 2025, announced Natalia Kozmina's appointment as
Chief Human Resources Officer
"In 2024, LivaNova delivered strong revenue growth, expanded
operating margin, and significantly improved cash generation," said
Vladimir Makatsaria, Chief Executive Officer of LivaNova. "We are
pleased with these results and the clinical milestones achieved in
both the obstructive sleep apnea and difficult-to-treat depression
programs. We look forward to building on this momentum in 2025 with
a continued focus on talent, innovation, growth, and operational
excellence."
(1) Constant-currency percent change,
organic revenue percent change, organic revenue, adjusted operating
income, adjusted diluted earnings per share, and adjusted free cash
flow are non-GAAP measures. Constant-currency percent change
excludes the impact from fluctuations in the various currencies in
which the Company operates as compared to reported percent change.
Organic revenue percent change excludes the impact of acquisitions,
divestitures, and currency translation effects. Organic revenue
excludes the impact of acquisitions and divestitures. For an
explanation of these and other non-GAAP measures used in this news
release, see the section entitled "Use of Non-GAAP Financial
Measures." For reconciliations of certain non-GAAP measures, see
the tables that accompany this news release. As discussed in the
section entitled "Use of Non-GAAP Financial Measures" below, the
Company is unable to predict with a reasonable degree of certainty
the type and extent of certain items that would be expected to
impact GAAP measures but would not impact the non-GAAP measures.
Accordingly, the Company is unable to reconcile the forward-looking
non-GAAP financial measures included in this paragraph to their
most directly comparable forward-looking GAAP financial measures
without unreasonable efforts.
Fourth-Quarter 2024
Results
The following table summarizes revenue by segment (in
millions):
Three Months Ended
December 31,
% Change
Constant- Currency %
Change
2024
2023
Cardiopulmonary
$181.7
$165.3
9.9
%
11.2
%
Neuromodulation
137.6
136.9
0.5
%
1.0
%
Other Revenue (1)
2.5
7.9
(67.8
)%
(67.2
)%
Total Net Revenue
$321.8
$310.1
3.8
%
4.7
%
Less: ACS (2)
0.1
6.3
(98.7
)%
N/A
Total Organic Net Revenue
$321.7
$303.8
5.9
%
6.8
%
(1)
"Other Revenue" includes revenue
from the Company’s former ACS reportable segment, as well as rental
and site services income not allocated to segments.
(2)
Includes the results from the
wind-down portion of the Company's former ACS reportable
segment.
•
Numbers may not add precisely due
to rounding. Segment financial information presented herein
reflects LivaNova's change in segments, effective in the first
quarter 2024, for all periods presented.
Fourth-quarter 2024 cardiopulmonary revenue increased 9.9% on a
reported basis and 11.2% on a constant-currency basis versus the
fourth quarter of 2023 with growth across all regions, driven by
strong consumables demand and Essenz™ Perfusion System sales.
Fourth-quarter 2024 neuromodulation revenue increased 0.5% on a
reported basis and 1.0% on a constant-currency basis versus the
fourth quarter of 2023 with growth in the U.S., mostly offset by a
decline in the Europe and Rest of World regions.
Earnings Analysis
On a U.S. GAAP basis, fourth-quarter 2024 operating income was
$37.0 million, as compared to an operating loss of $88.0 million
for the fourth quarter of 2023. Adjusted operating income for the
fourth quarter of 2024 was $55.6 million, as compared to adjusted
operating income of $48.0 million for the fourth quarter of
2023.
On a U.S. GAAP basis, fourth-quarter 2024 diluted earnings per
share was $1.02, as compared to diluted earnings per share of $0.30
in the fourth quarter of 2023. Fourth-quarter 2024 adjusted diluted
earnings per share was $0.81, as compared to adjusted diluted
earnings per share of $0.87 in the fourth quarter of 2023.
Full-Year 2024 Results
The following table summarizes revenue by segment (in
millions):
Year Ended December
31,
% Change
Constant- Currency %
Change
2024
2023
Cardiopulmonary
$683.5
$604.1
13.1
%
14.1
%
Neuromodulation
554.2
519.7
6.6
%
7.0
%
Other Revenue (1)
15.7
29.7
(47.2
)%
(47.1
)%
Total Net Revenue
$1,253.4
$1,153.5
8.7
%
9.3
%
Less: ACS (2)
11.6
25.2
(54.0
)%
N/A
Total Organic Net Revenue
$1,241.8
$1,128.4
10.1
%
10.7
%
(1)
"Other Revenue" includes revenue
from the Company’s former ACS reportable segment, as well as rental
and site services income not allocated to segments.
(2)
Includes the results from the
wind-down portion of the Company's former ACS reportable
segment.
•
Numbers may not add precisely due
to rounding. Segment financial information presented herein
reflects LivaNova's change in segments, effective in the first
quarter 2024, for all periods presented.
Full-year 2024 cardiopulmonary revenue increased 13.1% on a
reported basis and 14.1% on a constant-currency basis versus
full-year 2023 with growth across all regions, driven by Essenz
Perfusion System sales and strong consumables demand.
Full-year 2024 neuromodulation revenue increased 6.6% on a
reported basis and 7.0% on a constant-currency basis versus
full-year 2023 with growth in the Rest of World and U.S. regions,
partially offset by a decline in Europe.
Earnings Analysis
On a U.S. GAAP basis, full-year 2024 operating income was $129.1
million, as compared to an operating loss of $68.5 million for
full-year 2023. Adjusted operating income for full-year 2024 was
$239.2 million, as compared to adjusted operating income of $169.3
million for full-year 2023.
On a U.S. GAAP basis, full-year 2024 diluted earnings per share
was $1.16, as compared to diluted earnings per share of $0.32 for
full-year 2023. Full-year 2024 adjusted diluted earnings per share
was $3.38, as compared to adjusted diluted earnings per share of
$2.80 for full-year 2023.
Additional Update
On February 26, 2025, the Italian Supreme Court will hold a
public hearing in connection with the SNIA litigation. While the
Company does not anticipate a decision at the hearing, it expects a
decision during the first half of 2025 in response to all of the
appeals of LivaNova and counter-appeals submitted by the Italian
Public Administrations.
Full-Year 2025 Guidance
LivaNova expects full-year 2025 revenue to grow between 5.0% and
6.0% on a constant-currency basis and between 6.0% and 7.0% on an
organic basis. Foreign currency is expected to be a headwind of
1.5% to 2.0% based on current exchange rates.
Adjusted diluted earnings per share for 2025 is expected to be
in the range of $3.65 to $3.75, assuming a share count of
approximately 55 million for full-year 2025. In 2025, the Company
estimates that adjusted free cash flow will be in the range of $135
million to $155 million.
As discussed in the section entitled "Use of Non-GAAP Financial
Measures" below, the Company is unable to predict with a reasonable
degree of certainty the type and extent of certain items that would
be expected to impact GAAP measures but would not impact the
non-GAAP measures. Accordingly, the Company is unable to reconcile
the forward-looking non-GAAP financial measures included in this
section to their most directly comparable forward-looking GAAP
financial measures without unreasonable efforts.
Webcast and Conference Call
Instructions
The Company will host an audiocast for interested parties
commencing at 1 p.m. London time (8 a.m. Eastern Time) on Tuesday,
February 25, 2025 that will be accessible at
www.livanova.com/events. Listeners should register in advance and
log on approximately 10 minutes early to ensure proper setup. To
listen to the conference call by telephone, dial +1 833 470 1428
(if dialing from within the U.S.) or +1 929 526 1599 (if dialing
from outside the U.S.). The conference call access code is 982570.
Within 24 hours of the audiocast, a replay will be available at
www.livanova.com/events, where it will be archived and accessible
for approximately 90 days.
About LivaNova
LivaNova PLC is a global medical technology company built on
nearly five decades of experience and a relentless commitment to
provide hope for patients and their families through medical
technologies, delivering life-changing solutions in select
neurological and cardiac conditions. Headquartered in London,
LivaNova employs approximately 2,900 employees and has a presence
in more than 100 countries for the benefit of patients, healthcare
professionals, and healthcare systems worldwide. For more
information, please visit www.livanova.com.
Use of Non-GAAP Financial Measures
To supplement financial measures presented in accordance with
generally accepted accounting principles in the United States (U.S.
GAAP or GAAP), management has disclosed certain additional measures
not presented in accordance with GAAP known as “non-GAAP financial
measures” or “adjusted financial measures.” Company management uses
these non-GAAP measures to monitor the Company’s operational
performance 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, operational performance measures as
prescribed by GAAP.
In this news release, the Company refers to revenue and
percentage change in revenue on a comparable, constant-currency,
and organic basis. Company management believes that these non-GAAP
measures provide a useful way to evaluate the revenue performance
of LivaNova and to compare the revenue performance of current
periods to prior periods on a consistent basis. Constant-currency
percent change measures the change in revenue between current and
prior-year periods using average exchange rates in effect during
the applicable prior-year period. Organic revenue percent change
excludes the impact of acquisitions, divestitures, and currency
translation effects.
LivaNova calculates forward-looking non-GAAP financial measures
based on internal forecasts that omit certain amounts that would be
included in GAAP financial measures. For example, forward-looking
net revenue growth projections are estimated on a constant-currency
basis and exclude the impact of foreign currency fluctuations.
Forward-looking non-GAAP adjusted diluted earnings per share
guidance exclude items such as, but not limited to, changes in fair
value of derivatives and contingent consideration arrangements and
asset impairment charges that would be included in comparable GAAP
financial measures. The most directly comparable GAAP measure for
adjusted free cash flow is net cash provided by operating
activities. Adjusted free cash flow is defined as net cash provided
by operating activities less cash used for the purchase of
property, plant, and equipment excluding the impact of 3T
litigation settlement payments, cybersecurity incident insurance
proceeds, CARES Act tax stimulus benefits, SNIA financing costs,
and gains related to dividends received from investments and
further adjusted as needed for other charges, expenses or gains
that may not be indicative of the Company's operational
performance. However, non-GAAP financial adjustments on a
forward-looking basis are subject to uncertainty and variability as
they are dependent on many factors, including but not limited to,
the effect of foreign currency exchange fluctuations, impacts from
potential acquisitions or divestitures, the ultimate outcome of
legal proceedings, gains or losses on the potential sale of
businesses or other assets, restructuring costs, merger and
integration activities, changes in fair value of derivatives, and
contingent consideration arrangements, asset impairment charges and
the tax impact of the aforementioned items, tax law changes, or
other tax matters. Accordingly, the Company does not reconcile
non-GAAP financial measures on a forward-looking basis as it is
impractical to do so without unreasonable effort.
Adjusted financial measures such as organic revenue, adjusted
cost of sales, adjusted gross profit, adjusted selling, general,
and administrative expense, adjusted research and development
expense, adjusted other operating expenses, adjusted operating
income, adjusted income before tax, adjusted income tax expense,
adjusted net income, and adjusted diluted earnings per share, are
measures that LivaNova generally uses to facilitate management
review of the operational performance of the company, to serve as a
basis for strategic planning, and in the design of incentive
compensation plans. Additionally, the Company uses the non-GAAP
liquidity measure adjusted free cash flow. The Company believes
that the presentation of these adjusted financial measures allows
investors to evaluate the Company’s operational performance for
different periods on a more comparable and consistent basis, and
with other medical technology companies by adjusting for items that
are not related to the operational performance of the Company or
incurred in the ordinary course of business.
Safe Harbor Statement
Certain statements in this news release, other than statements
of historical or current fact, are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act, and Section 21E of the
Exchange Act. These statements include, but are not limited to,
LivaNova’s plans, objectives, strategies, financial performance and
outlook, trends, the amount and timing of future cash
distributions, prospects or future events, and involve known and
unknown risks that are difficult to predict. As a result, the
Company’s actual financial results, performance, achievements, or
prospects may differ materially from those expressed or implied by
these forward-looking statements. Generally, forward-looking
statements can be identified by the use of words such as “may,”
“could,” “seek,” “guidance,” “predict,” “potential,” “likely,”
“believe,” “will,” “should,” “expect,” “anticipate,” “estimate,”
“plan,” “intend,” “forecast,” “foresee,” or variations of these
terms and similar expressions, or the negative of these terms or
similar expressions. Such forward-looking statements are
necessarily based on estimates and assumptions that, while
considered reasonable by LivaNova and its management based on their
knowledge and understanding of the business and industry, are
inherently uncertain. These statements are not guarantees of future
performance, and stockholders should not place undue reliance on
forward-looking statements. There are a number of risks,
uncertainties, and other important factors, many of which are
beyond the Company’s control, that could cause the Company’s actual
results to differ materially from the forward-looking statements
contained in this news release, and include, but are not limited
to, the following risks and uncertainties: volatility in the global
market and worldwide economic conditions, including as caused by
the invasion of Ukraine, the evolving instability in the Middle
East, inflation, changing interest rates, foreign exchange
fluctuations, and changes to existing trade agreements and
relationships between the U.S. and other countries, including the
implementation of tariffs, trade restrictions, and sanctions; risks
relating to supply chain pressures; cybersecurity incidents or
other disruptions to the Company’s information technology systems
or those of third parties with which the Company interacts; costs
of complying with privacy and security of personal information
requirements and laws; changes in technology, including the
development of superior or alternative technology or devices by
competitors and/or competition from providers of alternative
medical therapies; failure of R&D investments or investment
collaborations to be successful; failure to maintain appropriate
working relationships with healthcare professionals to aid in the
continuing development of products; the risk of quality issues and
the impacts thereof; risks relating to recalls, replacement of
inventory, enforcement actions, or product liability claims;
failure to comply with, or changes in, laws, regulations, or
administrative practices affecting government regulation of the
Company’s products; failure to retain key personnel, succession
plan, and negotiate with local works councils; failure to obtain
approvals or reimbursement in relation to the Company’s products;
unfavorable results from clinical studies or failure to meet
milestones; pending or existing climate change; global healthcare
policy changes that may lead to restricted access and pricing as
well as payback requirements and limited reimbursement; changes or
reduction in reimbursement for the Company’s products or failure to
comply with rules relating to reimbursement of healthcare goods and
services; failure to comply with rules relating to healthcare goods
and services as well as anti-bribery laws; product liability,
intellectual property, shareholder-related, environmental-related,
income tax, and other litigation, disputes, losses, and costs,
including in the case of the Company’s 3T Heater-Cooler litigation;
risks associated with environmental laws and regulations as well as
environmental liabilities, violations, and litigation, including in
the case of Saluggia and SNIA; failure to protect the Company’s
proprietary intellectual property; risks relating to the Company’s
indebtedness; failure of divestitures and/or new acquisitions to
further the Company’s strategic objectives or strengthen the
Company’s existing businesses; the potential for impairments of
intangible assets, goodwill, and other long-lived assets; changes
in tax laws and regulations, including exposure to additional
income tax liabilities; effectiveness of the Company’s internal
controls over financial reporting; changes in the Company’s
profitability and/or failure to manage costs and expenses;
fluctuations in future quarterly operating results and/or
variations in revenue and operating expenses relative to estimates;
and other unknown or unpredictable factors that could harm the
Company’s financial performance.
The foregoing list of factors is not exhaustive. 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 the Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and other documents filed from time to time with the U.S.
Securities and Exchange Commission by LivaNova.
Readers are cautioned not to place undue reliance on the
Company's forward-looking statements, which speak only as of the
date of this news release. The Company undertakes no obligation to
update publicly any of the forward-looking statements in this news
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 LivaNova updates one or more forward-looking
statements, no inference should be drawn that the Company will make
additional updates with respect to those or other forward-looking
statements.
VNS Therapy and Essenz are trademarks of LivaNova USA, Inc.
LIVANOVA PLC
NET REVENUE - UNAUDITED
(U.S. dollars in millions)
Three Months Ended December
31,
2024
2023
% Change
Constant-Currency %
Change
Cardiopulmonary
U.S.
$64.5
$60.5
6.7
%
6.7
%
Europe (1)
47.6
46.2
3.1
%
4.0
%
Rest of World (1)
69.5
58.6
18.6
%
21.4
%
181.7
165.3
9.9
%
11.2
%
Neuromodulation
U.S.
110.5
106.5
3.8
%
3.8
%
Europe (1)
14.0
16.4
(14.6
)%
(15.6
)%
Rest of World (1)
13.1
14.1
(6.8
)%
(1.0
)%
137.6
136.9
0.5
%
1.0
%
Other Revenue (2)
2.5
7.9
(67.8
)%
(67.2
)%
Totals
U.S.
175.1
173.2
1.1
%
1.1
%
Europe (1)
61.6
62.6
(1.5
)%
(1.1
)%
Rest of World (1)
85.1
74.4
14.5
%
17.9
%
$321.8
$310.1
3.8
%
4.7
%
(1)
"Europe" includes the UK,
Germany, France, Italy, the Netherlands, Spain, Belgium, Poland,
Sweden, Switzerland, Austria, Norway, Portugal, Finland, and
Denmark. Excluding Europe and the U.S., "Rest of World" includes
all other countries where LivaNova operates.
(2)
"Other Revenue" includes revenue
from the Company’s former ACS reportable segment, as well as rental
and site services income not allocated to segments.
•
Numbers may not add precisely due
to rounding. Segment financial information presented herein
reflects LivaNova's change in segments, effective in the first
quarter 2024, for all periods presented.
LIVANOVA PLC
NET REVENUE - UNAUDITED
(U.S. dollars in millions)
Year Ended December
31,
2024
2023
% Change
Constant-Currency %
Change
Cardiopulmonary
U.S.
$242.5
$202.4
19.8
%
19.8
%
Europe (1)
168.0
157.4
6.7
%
6.2
%
Rest of World (1)
273.0
244.3
11.7
%
14.3
%
683.5
604.1
13.1
%
14.1
%
Neuromodulation
U.S.
441.0
407.5
8.2
%
8.2
%
Europe (1)
54.9
57.4
(4.4
)%
(5.6
)%
Rest of World (1)
58.3
54.8
6.4
%
11.1
%
554.2
519.7
6.6
%
7.0
%
Other Revenue (2)
15.7
29.7
(47.2
)%
(47.1
)%
Totals
U.S.
695.1
635.0
9.5
%
9.5
%
Europe (1)
220.0
214.8
2.4
%
1.7
%
Rest of World (1)
338.3
303.7
11.4
%
14.3
%
$1,253.4
$1,153.5
8.7
%
9.3
%
(1)
"Europe" includes the UK,
Germany, France, Italy, the Netherlands, Spain, Belgium, Poland,
Sweden, Switzerland, Austria, Norway, Portugal, Finland, and
Denmark. Excluding Europe and the U.S., "Rest of World" includes
all other countries where LivaNova operates.
(2)
"Other Revenue" includes revenue
from the Company’s former ACS reportable segment, as well as rental
and site services income not allocated to segments.
•
Numbers may not add precisely due
to rounding. Segment financial information presented herein
reflects LivaNova's change in segments, effective in the first
quarter 2024, for all periods presented.
LIVANOVA PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME - UNAUDITED
(U.S. dollars in millions, except per
share amounts)
Three Months Ended December
31,
2024
2023
Net revenue
$321.8
$310.1
Cost of sales
102.5
120.0
Gross profit
219.4
190.2
Operating expenses:
Selling, general, and administrative
135.6
133.3
Research and development
43.3
46.2
Impairment of long-lived assets
—
90.0
Other operating expenses
3.4
8.7
Operating income (loss)
37.0
(88.0
)
Interest expense
(15.8
)
(15.6
)
Foreign exchange and other
income/(expense)
35.2
9.3
Income (loss) before tax
56.5
(94.3
)
Income tax expense (benefit)
0.6
(110.7
)
Net income
$55.9
$16.3
Basic income per share
$1.03
$0.30
Diluted income per share
$1.02
$0.30
Weighted average common shares
outstanding:
Basic
54.4
54.0
Diluted
54.7
54.3
•
Numbers may not add precisely due to
rounding.
Adjusted Financial Measures (U.S.
dollars in millions, except per share amounts) - Unaudited
Three Months Ended December
31,
2024
2023
Adjusted SG&A
$127.0
$119.9
Adjusted R&D
40.3
42.1
Adjusted operating income
55.6
48.0
Adjusted net income
44.2
47.3
Adjusted diluted earnings per share
$0.81
$0.87
Statistics (as a % of net revenue,
except for income tax rate) - Unaudited
GAAP Three Months Ended
December 31,
Adjusted Three Months
Ended December 31,
2024
2023
2024
2023
Gross profit
68.2
%
61.3
%
69.3
%
67.7
%
SG&A
42.1
%
43.0
%
39.5
%
38.7
%
R&D
13.5
%
14.9
%
12.5
%
13.6
%
Operating income (loss)
11.5
%
(28.4
)%
17.3
%
15.5
%
Net income
17.4
%
5.3
%
13.7
%
15.2
%
Income tax rate
1.0
%
117.3
%
19.8
%
(2.9
)%
LIVANOVA PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME - UNAUDITED
(U.S. dollars in millions, except per
share amounts)
Year Ended December
31,
2024
2023
Net revenue
$1,253.4
$1,153.5
Cost of sales
382.6
382.3
Gross profit
870.9
771.3
Operating expenses:
Selling, general, and administrative
526.3
518.1
Research and development
182.5
193.8
Impairment of long-lived assets
—
90.0
Other operating expenses
33.0
37.8
Operating income (loss)
129.1
(68.5
)
Interest expense
(63.1
)
(58.9
)
Loss on debt extinguishment
(25.5
)
—
Foreign exchange and other
income/(expense)
47.8
46.1
Income (loss) before tax
88.3
(81.2
)
Income tax expense (benefit)
25.1
(98.9
)
Loss from equity method investments
—
(0.1
)
Net income
$63.2
$17.5
Basic income per share
$1.17
$0.33
Diluted income per share
$1.16
$0.32
Weighted average common shares
outstanding:
Basic
54.2
53.9
Diluted
54.6
54.2
•
Numbers may not add precisely due to
rounding.
Adjusted Financial Measures (U.S.
dollars in millions, except per share amounts) - Unaudited
Year Ended December
31,
2024
2023
Adjusted SG&A
$469.1
$456.0
Adjusted R&D
171.2
178.1
Adjusted operating income
239.2
169.3
Adjusted net income
184.3
152.0
Adjusted diluted earnings per share
$3.38
$2.80
Statistics (as a % of net revenue,
except for income tax rate) - Unaudited
GAAP Year Ended
December 31,
Adjusted Year Ended
December 31,
2024
2023
2024
2023
Gross profit
69.5
%
66.9
%
70.2
%
69.6
%
SG&A
42.0
%
44.9
%
37.4
%
39.5
%
R&D
14.6
%
16.8
%
13.7
%
15.4
%
Operating income (loss)
10.3
%
(5.9
)%
19.1
%
14.7
%
Net income
5.0
%
1.5
%
14.7
%
13.2
%
Income tax rate
28.4
%
121.7
%
21.0
%
5.7
%
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions, except per
share amounts)
Specified Items
Three Months Ended December 31,
2024
GAAP Financial
Measures
Restructuring Expenses
(1)
Depreciation and Amortization
Expenses (2)
Financing Transactions
(3)
Contingent Consideration
(4)
Certain Legal & Regulatory
Costs (5)
Stock-based Compensation Costs
(6)
Certain Tax Adjustments
(7)
Certain Interest Adjustments
(8)
Adjusted Financial
Measures
Cost of sales
$102.5
$—
($1.7
)
$—
($1.6
)
$—
($0.3
)
$—
$—
$98.9
Gross profit percent
68.2
%
—
%
0.5
%
—
%
0.5
%
—
%
0.1
%
—
%
—
%
69.3
%
Selling, general, and administrative
135.6
—
(2.6
)
—
—
(0.3
)
(5.8
)
—
—
127.0
Selling, general, and administrative as a
percent of net revenue
42.1
%
—
%
(0.8
)%
—
%
—
%
(0.1
)%
(1.8
)%
—
%
—
%
39.5
%
Research and development
43.3
—
—
—
(1.4
)
(0.8
)
(0.9
)
—
—
40.3
Research and development as a percent of
net revenue
13.5
%
—
%
—
%
—
%
(0.4
)%
(0.2
)%
(0.3
)%
—
%
—
%
12.5
%
Other operating expenses
3.4
(0.5
)
—
—
—
(2.9
)
—
—
—
—
Operating income
37.0
0.5
4.2
—
3.0
4.0
6.9
—
—
55.6
Operating margin percent
11.5
%
0.2
%
1.3
%
—
%
0.9
%
1.2
%
2.2
%
—
%
—
%
17.3
%
Net income
55.9
0.5
4.2
(27.6
)
3.0
4.0
6.9
(10.3
)
7.6
44.2
Net income as a percent of net revenue
17.4
%
0.2
%
1.3
%
(8.6
)%
0.9
%
1.2
%
2.2
%
(3.2
)%
2.4
%
13.7
%
Diluted EPS
$1.02
$0.01
$0.08
($0.50
)
$0.05
$0.07
$0.13
($0.19
)
$0.14
$0.81
GAAP results for the three months
ended December 31, 2024 include:
(1)
Restructuring expenses related to
organizational changes
(2)
Depreciation and amortization
associated with purchase price accounting
(3)
Mark-to-market adjustments for
the 2025 and 2029 Notes embedded and capped call derivatives
(4)
Remeasurement of contingent
consideration related to the ImThera acquisition
(5)
Legal expenses primarily related
to 3T Heater-Cooler defense, 3T Heater-Cooler litigation provision,
cybersecurity incident costs net of insurance reimbursement, and
Medical Device Regulation ("MDR") costs
(6)
Non-cash expenses associated with
stock-based compensation costs
(7)
The impact of valuation
allowances, discrete tax items, the tax impact of intercompany
transactions, and the tax impact on non-GAAP adjustments
(8)
Interest expense on the Term
Facilities, non-cash interest expense on the 2025 and 2029 Notes
and Revolving Credit Facility, and interest income on the
collateral for the SNIA litigation guarantee and delayed draw on
Term Facilities
•
Numbers may not add precisely due
to rounding.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions, except per
share amounts)
Specified Items
Three Months Ended
December 31, 2023
GAAP Financial
Measures
Restructuring Expenses
(1)
Depreciation and Amortization
Expenses (2)
Impairment (3)
Financing Transactions
(4)
Contingent Consideration
(5)
Certain Legal & Regulatory
Costs (6)
Stock-based Compensation Costs
(7)
Certain Tax Adjustments
(8)
Certain Interest Adjustments
(9)
Adjusted Financial
Measures
Cost of sales
$120.0
$—
($3.6
)
($12.6
)
$—
($3.4
)
$—
($0.2
)
$—
$—
$100.2
Gross profit percent
61.3
%
—
%
1.2
%
4.1
%
—
%
1.1
%
—
%
0.1
%
—
%
—
%
67.7
%
Selling, general, and administrative
133.3
—
(2.8
)
—
—
—
(3.6
)
(7.0
)
—
—
119.9
Selling, general, and administrative as a
percent of net revenue
43.0
%
—
%
(0.9
)%
—
%
—
%
—
%
(1.2
)%
(2.3
)%
—
%
—
%
38.7
%
Research and development
46.2
—
—
—
—
(1.5
)
(1.6
)
(1.1
)
—
—
42.1
Research and development as a percent of
net revenue
14.9
%
—
%
—
%
—
%
—
%
(0.5
)%
(0.5
)%
(0.3
)%
—
%
—
%
13.6
%
Other operating expenses
8.7
0.1
—
—
—
—
(8.8
)
—
—
—
—
Operating (loss) income
(88.0
)
(0.1
)
6.4
102.6
—
4.8
14.0
8.3
—
—
48.0
Operating margin percent
(28.4
)%
—
%
2.1
%
33.1
%
—
%
1.6
%
4.5
%
2.7
%
—
%
—
%
15.5
%
Net income
16.3
(0.1
)
6.4
102.6
(2.6
)
4.8
12.4
8.3
(109.3
)
8.3
47.3
Net income as a percent of net revenue
5.3
%
—
%
2.1
%
33.1
%
(0.8
)%
1.6
%
4.0
%
2.7
%
(35.2
)%
2.7
%
15.2
%
Diluted EPS
$0.30
$—
$0.12
$1.89
($0.05
)
$0.09
$0.23
$0.15
($2.01
)
$0.15
$0.87
GAAP results for the three months
ended December 31, 2023 include:
(1)
Restructuring expenses related to
organizational changes
(2)
Depreciation and amortization
associated with purchase price accounting
(3)
ACS inventory obsolescence
adjustment and impairment of long-lived assets
(4)
Mark-to-market adjustment for the
embedded and capped call derivatives associated with the 2025
Notes
(5)
Remeasurement of contingent
consideration related to acquisitions
(6)
3T Heater-Cooler litigation
provision, legal expenses primarily related to 3T Heater-Cooler
defense, costs related to the SNIA matter, MDR costs, and
cybersecurity incident costs
(7)
Non-cash expenses associated with
stock-based compensation costs
(8)
The impact of valuation
allowances, discrete tax items, R&D tax credits, the tax impact
of intercompany transactions, and the tax impact on non-GAAP
adjustments
(9)
Non-cash interest expense on the
2025 Notes and Revolving Credit Facility, interest expense on the
Term Facilities, and interest income on the collateral for the SNIA
litigation guarantee and delayed draw on Term Facilities
•
Numbers may not add precisely due
to rounding.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions, except per
share amounts)
Specified Items
Year Ended
December 31, 2024
GAAP Financial
Measures
Restructuring Expenses
(1)
Depreciation and Amortization
Expenses (2)
Impairment (3)
Financing Transactions
(4)
Contingent Consideration
(5)
Certain Legal & Regulatory
Costs (6)
Stock-based Compensation Costs
(7)
Certain Tax Adjustments
(8)
Certain Interest Adjustments
(9)
Adjusted Financial
Measures
Cost of sales
$382.6
$—
($6.8
)
$—
$—
($1.3
)
$0.7
($1.2
)
$—
$—
$374.0
Gross profit percent
69.5
%
—
%
0.5
%
—
%
—
%
0.1
%
(0.1
)%
0.1
%
—
%
—
%
70.2
%
Selling, general, and administrative
526.3
—
(10.5
)
—
—
—
(20.4
)
(26.3
)
—
—
469.1
Selling, general, and administrative as a
percent of net revenue
42.0
%
—
%
(0.8
)%
—
%
—
%
—
%
(1.6
)%
(2.1
)%
—
%
—
%
37.4
%
Research and development
182.5
—
0.2
—
—
(2.0
)
(3.1
)
(6.4
)
—
—
171.2
Research and development as a percent of
net revenue
14.6
%
—
%
—
%
—
%
—
%
(0.2
)%
(0.2
)%
(0.5
)%
—
%
—
%
13.7
%
Other operating expenses
33.0
(13.4
)
—
—
—
—
(19.7
)
—
—
—
—
Operating income
129.1
13.4
17.1
—
—
3.3
42.4
33.9
—
—
239.2
Operating margin percent
10.3
%
1.1
%
1.4
%
—
%
—
%
0.3
%
3.4
%
2.7
%
—
%
—
%
19.1
%
Net income
63.2
13.4
17.1
5.8
(1.9
)
3.3
42.4
33.9
(24.0
)
31.0
184.3
Net income as a percent of net revenue
5.0
%
1.1
%
1.4
%
0.5
%
(0.1
)%
0.3
%
3.4
%
2.7
%
(1.9
)%
2.5
%
14.7
%
Diluted EPS
$1.16
$0.24
$0.31
$0.11
($0.03
)
$0.06
$0.78
$0.62
($0.44
)
$0.57
$3.38
GAAP results for the year ended
December 31, 2024 include:
(1)
Restructuring expenses related to
organizational changes
(2)
Depreciation and amortization
associated with purchase price accounting
(3)
Impairment of investment in
ShiraTronics, Inc.
(4)
Loss on debt extinguishment, as
well as mark-to-market adjustments for the 2025 & 2029 Notes
embedded and capped call derivatives
(5)
Remeasurement of contingent
consideration related to the ImThera acquisition
(6)
3T Heater-Cooler litigation
provision, legal expenses primarily related to 3T Heater-Cooler
defense, cybersecurity incident costs net of insurance
reimbursement, MDR costs, and costs related to the SNIA matter
(7)
Non-cash expenses associated with
stock-based compensation costs
(8)
The impact of valuation
allowances, discrete tax items, the tax impact of intercompany
transactions, and the tax impact on non-GAAP adjustments
(9)
Interest expense on the Term
Facilities, non-cash interest expense on the 2025 and 2029 Notes
and Revolving Credit Facility, and interest income on the
collateral for the SNIA litigation guarantee and delayed draw on
Term Facilities
•
Numbers may not add precisely due
to rounding.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions, except per
share amounts)
Specified Items
Year Ended
December 31, 2023
GAAP Financial
Measures
Merger and Integration
Expenses (1)
Restructuring Expenses
(2)
Depreciation and Amortization
Expenses (3)
Impairment (4)
Financing Transactions
(5)
Contingent Consideration
(6)
Certain Legal & Regulatory
Costs (7)
Stock-based Compensation Costs
(8)
Certain Tax Adjustments
(9)
Certain Interest Adjustments
(10)
Adjusted Financial
Measures
Cost of sales
$382.3
$—
$—
($14.7
)
($12.6
)
$—
($3.8
)
$—
($1.0
)
$—
$—
$350.2
Gross profit percent
66.9
%
—
%
—
%
1.3
%
1.1
%
—
%
0.3
%
—
%
0.1
%
—
%
—
%
69.6
%
Selling, general, and administrative
518.1
—
—
(11.5
)
—
—
—
(21.3
)
(29.4
)
—
—
456.0
Selling, general, and administrative as a
percent of net revenue
44.9
%
—
%
—
%
(1.0
)%
—
%
—
%
—
%
(1.8
)%
(2.6
)%
—
%
—
%
39.5
%
Research and development
193.8
—
—
0.2
—
—
(5.6
)
(4.3
)
(6.0
)
—
—
178.1
Research and development as a percent of
net revenue
16.8
%
—
%
—
%
—
%
—
%
—
%
(0.5
)%
(0.4
)%
(0.5
)%
—
%
—
%
15.4
%
Other operating expenses
37.8
(0.1
)
(1.0
)
—
—
—
—
(36.8
)
—
—
—
—
Operating (loss) income
(68.5
)
0.1
1.0
26.0
102.6
—
9.4
62.4
36.4
—
—
169.3
Operating margin percent
(5.9
)%
—
%
0.1
%
2.3
%
8.9
%
—
%
0.8
%
5.4
%
3.2
%
—
%
—
%
14.7
%
Net income
17.5
0.1
1.0
26.0
102.6
(24.2
)
9.4
60.9
36.4
(108.1
)
30.5
152.0
Net income as a percent of net revenue
1.5
%
—
%
0.1
%
2.3
%
8.9
%
(2.1
)%
0.8
%
5.3
%
3.2
%
(9.4
)%
2.6
%
13.2
%
Diluted EPS
$0.32
$—
$0.02
$0.48
$1.89
($0.45
)
$0.17
$1.12
$0.67
($1.99
)
$0.56
$2.80
GAAP results for the year ended
December 31, 2023 include:
(1)
Merger and integration expenses
related to the acquisition of ALung Technologies, Inc.
(2)
Restructuring expenses related to
organizational changes
(3)
Depreciation and amortization
associated with purchase price accounting
(4)
ACS inventory obsolescence
adjustment and impairment of long-lived assets
(5)
Mark-to-market adjustment for the
embedded and capped call derivatives associated with the 2025
Notes
(6)
Remeasurement of contingent
consideration related to acquisitions
(7)
3T Heater-Cooler litigation
provision, legal expenses primarily related to 3T Heater-Cooler
defense, the Saluggia site provision, costs related to the SNIA
matter, MDR costs, and cybersecurity incident costs
(8)
Non-cash expenses associated with
stock-based compensation costs
(9)
The impact of valuation
allowances, discrete tax items, R&D tax credits, the tax impact
of intercompany transactions, and the tax impact on non-GAAP
adjustments
(10)
Non-cash interest expense on the
2025 Notes and Revolving Credit Facility, interest expense on the
Term Facilities, and interest income on the collateral for the SNIA
litigation guarantee and delayed draw on Term Facilities
•
Numbers may not add precisely due
to rounding.
LIVANOVA PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS -
UNAUDITED
(U.S. dollars in millions)
December 31, 2024
December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents
$428.9
$266.5
Restricted cash
294.7
311.4
Accounts receivable, net of allowance
193.2
215.1
Inventories
147.6
147.9
Prepaid and refundable taxes
30.5
20.1
Prepaid expenses and other current
assets
32.4
27.2
Total Current Assets
1,127.2
988.2
Property, plant and equipment, net
170.3
154.2
Goodwill
750.0
782.9
Intangible assets, net
237.3
261.2
Operating lease assets
46.8
50.8
Investments
25.1
22.8
Deferred tax assets
111.9
118.9
Long-term derivative assets
23.7
38.5
Other assets
14.1
12.1
Total Assets
$2,506.4
$2,429.6
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities:
Current debt obligations
$78.0
$18.1
Accounts payable
69.7
80.8
Accrued liabilities and other
118.5
107.3
Current litigation provision liability
12.9
10.8
Taxes payable
32.5
23.3
Accrued employee compensation and related
benefits
80.5
94.6
Total Current Liabilities
392.1
335.0
Long-term debt obligations
549.6
568.5
Contingent consideration
84.2
80.9
Deferred tax liabilities
10.9
11.6
Long-term operating lease liabilities
40.1
45.4
Long-term employee compensation and
related benefits
12.8
17.3
Long-term derivative liabilities
51.8
45.6
Other long-term liabilities
44.5
47.7
Total Liabilities
1,186.1
1,151.9
Total Stockholders’ Equity
1,320.3
1,277.6
Total Liabilities and Stockholders’
Equity
$2,506.4
$2,429.6
• Numbers may not add precisely due to
rounding.
LIVANOVA PLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS - UNAUDITED
(U.S. dollars in millions)
Year Ended December
31,
2024
2023
Operating Activities:
Net income
$63.2
$17.5
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock-based compensation
33.9
36.4
Loss on debt extinguishment
25.5
—
Remeasurement of derivative instruments,
net
(25.3
)
(22.9
)
Depreciation
25.1
24.7
Amortization of debt issuance costs
21.6
19.1
Amortization
17.2
25.5
Amortization of operating lease assets
8.8
10.6
Gain on investment revaluation - Ceribell,
Inc.
(7.1
)
—
Deferred income tax expense (benefit)
6.8
(114.4
)
Impairment of investments
5.8
—
Remeasurement of contingent consideration
to fair value
3.3
9.4
Impairment of long-lived assets
—
90.0
ACS inventory obsolescence adjustment
—
12.6
Other
3.0
1.1
Changes in operating assets and
liabilities:
Accounts receivable, net
11.1
(28.9
)
Inventories
(6.8
)
(28.5
)
Other current and non-current assets
(1.6
)
15.3
Accounts payable and accrued current and
non-current liabilities
(14.5
)
19.2
Taxes payable
10.9
7.4
Litigation provision liability
2.3
(19.1
)
Net cash provided by operating
activities
183.0
74.9
Investing Activities:
Purchases of property, plant, and
equipment
(47.1
)
(35.0
)
Purchase of investments
(1.1
)
(6.5
)
Other
0.1
1.2
Net cash used in investing
activities
(48.2
)
(40.3
)
Financing Activities:
Proceeds from long-term debt
obligations
335.5
50.0
Repayment of long-term debt
obligations
(247.5
)
(21.6
)
Payment of debt extinguishment costs
(39.0
)
—
Purchase of capped calls
(31.6
)
—
Proceeds from unwind of capped calls
22.5
—
Payment of contingent consideration
(13.8
)
—
Shares repurchased from employees for
minimum tax withholding
(8.4
)
(7.5
)
Proceeds from exercise of stock
options
6.3
—
Payment of debt issuance costs
(5.9
)
—
Other
0.4
0.6
Net cash provided by financing
activities
18.6
21.5
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(7.7
)
6.2
Net increase in cash, cash equivalents,
and restricted cash
145.7
62.3
Cash, cash equivalents, and restricted
cash at beginning of period
577.9
515.6
Cash, cash equivalents, and restricted
cash at end of period
$723.6
$577.9
• Numbers may not add precisely due to
rounding.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions)
Three Months Ended December
31,
2024
2023
GAAP Financial
Measures
Certain Tax
Adjustments
Adjusted Financial
Measures
GAAP Financial
Measures
Certain Tax
Adjustments
Adjusted Financial
Measures
Income (loss) before tax
$56.5
$—
$55.1
($94.3
)
$—
$45.9
Income tax expense (benefit)
0.6
10.3
10.9
(110.7
)
109.3
(1.3
)
Net income
$55.9
($10.3
)
$44.2
$16.3
($109.3
)
$47.3
Income tax rate
1.0
%
19.8
%
117.3
%
(2.9
)%
Year Ended December
31,
2024
2023
GAAP Financial
Measures
Certain Tax
Adjustments
Adjusted Financial
Measures
GAAP Financial
Measures
Certain Tax
Adjustments
Adjusted Financial
Measures
Income (loss) before tax
$88.3
$—
$233.4
($81.2
)
$—
$161.3
Income tax expense (benefit)
25.1
24.0
49.0
(98.9
)
108.1
9.2
Net income
$63.2
($24.0
)
$184.3
$17.5
($108.1
)
$152.0
Income tax rate
28.4
%
21.0
%
121.7
%
5.7
%
• Numbers may not add precisely due to
rounding.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions)
Three Months Ended December
31,
% Change
Constant- Currency %
Change
2024
2023
GAAP net revenue
$321.8
$310.1
3.8
%
4.7
%
Less: ACS (1)
0.1
6.3
(98.7
)%
N/A
Organic net revenue
$321.7
$303.8
5.9
%
6.8
%
Year Ended December
31,
% Change
Constant- Currency %
Change
2024
2023
GAAP net revenue
$1,253.4
$1,153.5
8.7
%
9.3
%
Less: ACS (1)
11.6
25.2
(54.0
)%
N/A
Organic net revenue
$1,241.8
$1,128.4
10.1
%
10.7
%
(1)
Includes net revenue from the
Company's former ACS reportable segment.
•
Numbers may not add precisely due
to rounding.
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL MEASURES - UNAUDITED
(U.S. dollars in millions)
Year Ended December 31,
2024
Net cash provided by operating
activities
$183.0
Less: Purchases of plant, property, and
equipment
(47.1
)
Less: Cybersecurity incident insurance
proceeds
(5.1
)
Add: 3T Heater-Cooler litigation
payments
17.4
Add: SNIA financing and other costs
14.6
Adjusted free cash flow
$162.9
• Numbers may not add precisely due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250225878166/en/
Briana Gotlin Vice President, Investor Relations Phone: +1 281
895 2382 e-mail: InvestorRelations@livanova.com
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