(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name on each exchange on which registered | ||||||
Emerging growth company |
☐ |
Exhibit | Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
LivaNova PLC | |||||
Date: February 24, 2021 | By:/s/ Keyna Skeffington | ||||
Name: Keyna Skeffington | |||||
Title: Senior Vice President & General Counsel | |||||
$ in millions | Three Months Ended December 31, | % Change | Constant-Currency % Change | |||||||||||
Business / Product Line: | 2020 | 2019 | ||||||||||||
Cardiopulmonary | $122.1 | $132.6 | (7.9) | % | (10.0) | % | ||||||||
Heart Valves | 24.2 | 32.1 | (24.6) | % | (27.2) | % | ||||||||
Advanced Circulatory Support | 13.3 | 8.8 | 50.4 | % | 50.3 | % | ||||||||
Cardiovascular | 159.6 | 173.5 | (8.0) | % | (10.1) | % | ||||||||
Neuromodulation | 109.2 | 113.1 | (3.5) | % | (3.8) | % | ||||||||
Other | 0.8 | 1.0 | (22.8) | % | (27.3) | % | ||||||||
Total Net Sales | $269.6 | $287.6 | (6.3) | % | (7.7) | % |
$ in millions | Twelve Months Ended December 31, | % Change | Constant-Currency % Change | |||||||||||
Business / Product Line: | 2020 | 2019 | ||||||||||||
Cardiopulmonary | $446.7 | $504.7 | (11.5) | % | (11.4) | % | ||||||||
Heart Valves | 88.0 | 120.0 | (26.6) | % | (26.6) | % | ||||||||
Advanced Circulatory Support | 42.3 | 31.9 | 32.6 | % | 32.6 | % | ||||||||
Cardiovascular | 577.1 | 656.6 | (12.1) | % | (12.0) | % | ||||||||
Neuromodulation | 354.4 | 424.5 | (16.5) | % | (16.4) | % | ||||||||
Other | 2.7 | 3.0 | (8.8) | % | (10.7) | % | ||||||||
Total Net Sales | $934.2 | $1,084.2 | (13.8) | % | (13.7) | % |
Melissa Farina Vice President, Investor Relations Phone: +1 (281) 228 7262 e-mail: investorrelations@LivaNova.com |
LIVANOVA PLC | |||||||||||||||||||||||||||||
NET SALES | |||||||||||||||||||||||||||||
(U.S. dollars in millions) | |||||||||||||||||||||||||||||
Three Months Ended December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | % Change at Actual Currency Rates | % Change at Constant-Currency Rates(1) | ||||||||||||||||||||||||||
Cardiopulmonary | |||||||||||||||||||||||||||||
US | $36.3 | $41.9 | (13.3) | % | (13.3) | % | |||||||||||||||||||||||
Europe | 34.6 | 35.7 | (3.1) | % | (9.6) | % | |||||||||||||||||||||||
Rest of World | 51.2 | 55.0 | (6.8) | % | (7.9) | % | |||||||||||||||||||||||
Total | 122.1 | 132.6 | (7.9) | % | (10.0) | % | |||||||||||||||||||||||
Heart Valves | |||||||||||||||||||||||||||||
US | 3.5 | 5.2 | (33.2) | % | (33.2) | % | |||||||||||||||||||||||
Europe | 8.4 | 9.8 | (13.8) | % | (19.6) | % | |||||||||||||||||||||||
Rest of World | 12.3 | 17.1 | (28.1) | % | (29.6) | % | |||||||||||||||||||||||
Total | 24.2 | 32.1 | (24.6) | % | (27.2) | % | |||||||||||||||||||||||
Advanced Circulatory Support | |||||||||||||||||||||||||||||
US | 13.0 | 8.5 | 53.3 | % | 53.3 | % | |||||||||||||||||||||||
Europe | 0.2 | 0.2 | N/M | N/M | |||||||||||||||||||||||||
Rest of World | 0.1 | 0.1 | N/M | N/M | |||||||||||||||||||||||||
Total | 13.3 | 8.8 | 50.4 | % | 50.3 | % | |||||||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||||||||
US | 52.8 | 55.6 | (5.0) | % | (5.0) | % | |||||||||||||||||||||||
Europe | 43.2 | 45.7 | (5.5) | % | (11.8) | % | |||||||||||||||||||||||
Rest of World | 63.5 | 72.1 | (11.9) | % | (13.0) | % | |||||||||||||||||||||||
Total | 159.6 | 173.5 | (8.0) | % | (10.1) | % | |||||||||||||||||||||||
Neuromodulation | |||||||||||||||||||||||||||||
US | 85.2 | 89.5 | (4.8) | % | (4.8) | % | |||||||||||||||||||||||
Europe | 11.5 | 12.2 | (5.2) | % | (10.7) | % | |||||||||||||||||||||||
Rest of World | 12.5 | 11.4 | 8.9 | % | 10.9 | % | |||||||||||||||||||||||
Total | 109.2 | 113.1 | (3.5) | % | (3.8) | % | |||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
US | — | — | N/A | N/A | |||||||||||||||||||||||||
Europe | — | — | N/A | N/A | |||||||||||||||||||||||||
Rest of World | 0.8 | 1.0 | (22.8) | % | (27.3) | % | |||||||||||||||||||||||
Total | 0.8 | 1.0 | (22.8) | % | (27.3) | % | |||||||||||||||||||||||
Totals | |||||||||||||||||||||||||||||
US | 138.0 | 145.1 | (4.9) | % | (4.9) | % | |||||||||||||||||||||||
Europe | 54.8 | 57.9 | (5.4) | % | (11.6) | % | |||||||||||||||||||||||
Rest of World | 76.8 | 84.6 | (9.2) | % | (10.0) | % | |||||||||||||||||||||||
Total | $269.6 | $287.6 | (6.3) | % | (7.7) | % | |||||||||||||||||||||||
(1) | 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. | ||||||||||||||||||||||||||||
* | The sales results presented are unaudited. Numbers may not add precisely due to rounding. |
LIVANOVA PLC | |||||||||||||||||||||||||||||
NET SALES | |||||||||||||||||||||||||||||
(U.S. dollars in millions) | |||||||||||||||||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||||||||||||||||
2020 | 2019 | % Change at Actual Currency Rates | % Change at Constant-Currency Rates (1) | ||||||||||||||||||||||||||
Cardiopulmonary | |||||||||||||||||||||||||||||
US | $132.5 | $161.5 | (17.9) | % | (17.9) | % | |||||||||||||||||||||||
Europe | 122.1 | 135.6 | (10.0) | % | (11.7) | % | |||||||||||||||||||||||
Rest of World | 192.1 | 207.6 | (7.5) | % | (6.1) | % | |||||||||||||||||||||||
Total | 446.7 | 504.7 | (11.5) | % | (11.4) | % | |||||||||||||||||||||||
Heart Valves | |||||||||||||||||||||||||||||
US | 12.5 | 18.9 | (33.9) | % | (33.9) | % | |||||||||||||||||||||||
Europe | 31.3 | 40.5 | (22.9) | % | (24.3) | % | |||||||||||||||||||||||
Rest of World | 44.3 | 60.6 | (26.9) | % | (25.9) | % | |||||||||||||||||||||||
Total | 88.0 | 120.0 | (26.6) | % | (26.6) | % | |||||||||||||||||||||||
Advanced Circulatory Support | |||||||||||||||||||||||||||||
US | 41.1 | 30.8 | 33.5 | % | 33.5 | % | |||||||||||||||||||||||
Europe | 1.0 | 0.7 | N/M | N/M | |||||||||||||||||||||||||
Rest of World | 0.2 | 0.4 | N/M | N/M | |||||||||||||||||||||||||
Total | 42.3 | 31.9 | 32.6 | % | 32.6 | % | |||||||||||||||||||||||
Cardiovascular | |||||||||||||||||||||||||||||
US | 186.1 | 211.2 | (11.9) | % | (11.9) | % | |||||||||||||||||||||||
Europe | 154.3 | 176.9 | (12.8) | % | (14.4) | % | |||||||||||||||||||||||
Rest of World | 236.6 | 268.6 | (11.9) | % | (10.6) | % | |||||||||||||||||||||||
Total | 577.1 | 656.6 | (12.1) | % | (12.0) | % | |||||||||||||||||||||||
Neuromodulation | |||||||||||||||||||||||||||||
US | 282.5 | 335.3 | (15.8) | % | (15.8) | % | |||||||||||||||||||||||
Europe | 39.0 | 46.3 | (15.7) | % | (17.0) | % | |||||||||||||||||||||||
Rest of World | 32.9 | 43.0 | (23.4) | % | (20.3) | % | |||||||||||||||||||||||
Total | 354.4 | 424.5 | (16.5) | % | (16.4) | % | |||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||
US | — | — | N/A | N/A | |||||||||||||||||||||||||
Europe | — | — | N/A | N/A | |||||||||||||||||||||||||
Rest of World | 2.7 | 3.0 | (8.8) | % | (10.7) | % | |||||||||||||||||||||||
Total | 2.7 | 3.0 | (8.8) | % | (10.7) | % | |||||||||||||||||||||||
Totals | |||||||||||||||||||||||||||||
US | 468.6 | 546.5 | (14.2) | % | (14.2) | % | |||||||||||||||||||||||
Europe | 193.4 | 223.2 | (13.4) | % | (14.9) | % | |||||||||||||||||||||||
Rest of World | 272.2 | 314.5 | (13.4) | % | (12.0) | % | |||||||||||||||||||||||
Total | $934.2 | $1,084.2 | (13.8) | % | (13.7) | % | |||||||||||||||||||||||
(1) | 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. | ||||||||||||||||||||||||||||
* | The sales results presented are unaudited. Numbers may not add precisely due to rounding. |
LIVANOVA PLC AND SUBSIDIARIES | ||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | ||||||||||||||||||||
(U.S. dollars in millions, except per share amounts) | ||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
Net sales | $269.6 | $287.6 | ||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales - exclusive of amortization | 95.9 | 78.2 | ||||||||||||||||||
Product remediation | 1.0 | 4.6 | ||||||||||||||||||
Selling, general and administrative | 110.3 | 130.5 | ||||||||||||||||||
Research and development | 44.5 | 23.7 | ||||||||||||||||||
Merger and integration expenses | 0.7 | 9.1 | ||||||||||||||||||
Restructuring expenses | 5.5 | 7.7 | ||||||||||||||||||
Impairment of disposal group | 180.2 | — | ||||||||||||||||||
Impairment of goodwill | 21.3 | 42.4 | ||||||||||||||||||
Impairment of long-lived assets | 6.8 | 91.3 | ||||||||||||||||||
Amortization of intangibles | 9.0 | 10.7 | ||||||||||||||||||
Decommissioning provision | 42.2 | — | ||||||||||||||||||
Litigation provision, net | (0.1) | 33.2 | ||||||||||||||||||
Operating loss from continuing operations | (247.7) | (144.0) | 72.1 | % | ||||||||||||||||
Interest expense, net | (16.0) | (4.4) | ||||||||||||||||||
Foreign exchange and other losses | (33.9) | (1.7) | ||||||||||||||||||
Loss from continuing operations before tax | (297.6) | (150.1) | 98.2 | % | ||||||||||||||||
Income tax benefit | (18.3) | (6.7) | ||||||||||||||||||
Losses from equity method investments | — | — | ||||||||||||||||||
Net loss from continuing operations | (279.3) | (143.4) | 94.8 | % | ||||||||||||||||
Net (loss) income from discontinued operations, net of tax | (0.5) | 0.2 | ||||||||||||||||||
Net loss | ($279.8) | ($143.2) | 95.4 | % | ||||||||||||||||
Basic loss per share: | ||||||||||||||||||||
Continuing operations | ($5.74) | ($2.96) | ||||||||||||||||||
Discontinued operations | (0.01) | — | ||||||||||||||||||
($5.75) | ($2.96) | |||||||||||||||||||
Diluted loss per share: | ||||||||||||||||||||
Continuing operations | ($5.74) | ($2.96) | ||||||||||||||||||
Discontinued operations | (0.01) | — | ||||||||||||||||||
($5.75) | ($2.96) | |||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 48.6 | 48.4 | ||||||||||||||||||
Diluted | 48.6 | 48.4 | ||||||||||||||||||
* Numbers may not add precisely due to rounding. |
Adjusted Financial Measures (U.S. dollars in millions, except per share amounts) | |||||||||||||||||||||||
Three Months Ended December 31, | % Change (1) | ||||||||||||||||||||||
2020 | 2019 | ||||||||||||||||||||||
Adjusted SG&A (1) | $93.7 | $107.5 | (12.9) | % | |||||||||||||||||||
Adjusted R&D (1) | 39.0 | 37.6 | 3.6 | % | |||||||||||||||||||
Adjusted operating income from continuing operations (1) | 48.6 | 55.3 | (12.1) | % | |||||||||||||||||||
Adjusted net income from continuing operations (1) | 34.9 | 48.8 | (28.3) | % | |||||||||||||||||||
Adjusted diluted earnings per share from continuing operations (1) | $0.71 | $1.00 | (28.5) | % | |||||||||||||||||||
(1) | Adjusted financial measures are non-GAAP measures and exclude specified items as described and reconciled in the "Reconciliation of GAAP to non-GAAP Financial Measures" contained in the press release. |
Statistics (as a % of net sales, except for income tax rate) | |||||||||||||||||||||||||||||
GAAP Three Months Ended December 31, | Adjusted (1) Three Months Ended December 31, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
Gross profit | 64.1 | % | 71.2 | % | 67.2 | % | 69.7 | % | |||||||||||||||||||||
SG&A | 40.9 | % | 45.4 | % | 34.7 | % | 37.4 | % | |||||||||||||||||||||
R&D | 16.5 | % | 8.2 | % | 14.5 | % | 13.1 | % | |||||||||||||||||||||
Operating (loss) income from continuing operations | (91.9) | % | (50.1) | % | 18.0 | % | 19.2 | % | |||||||||||||||||||||
Net (loss) income from continuing operations | (103.6) | % | (49.9) | % | 13.0 | % | 17.0 | % | |||||||||||||||||||||
Income tax rate | 6.2 | % | 4.5 | % | (0.1) | % | 5.3 | % | |||||||||||||||||||||
(1) | Adjusted financial measures are non-GAAP measures and exclude specified items as described and reconciled in the "Reconciliation of GAAP to non-GAAP Financial Measures" contained in the press release. |
LIVANOVA PLC AND SUBSIDIARIES | ||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED | ||||||||||||||||||||
(U.S. dollars in millions, except per share amounts) | ||||||||||||||||||||
Twelve Months Ended December 31, | ||||||||||||||||||||
2020 | 2019 | % Change | ||||||||||||||||||
Net sales | $934.2 | $1,084.2 | ||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales - exclusive of amortization | 308.1 | 323.5 | ||||||||||||||||||
Product remediation | 7.9 | 15.8 | ||||||||||||||||||
Selling, general and administrative | 427.8 | 506.5 | ||||||||||||||||||
Research and development | 152.9 | 146.8 | ||||||||||||||||||
Merger and integration expenses | 7.3 | 23.5 | ||||||||||||||||||
Restructuring expenses | 7.6 | 12.3 | ||||||||||||||||||
Impairment of disposal group | 180.2 | — | ||||||||||||||||||
Impairment of goodwill | 21.3 | 42.4 | ||||||||||||||||||
Impairment of long-lived assets | 6.8 | 142.5 | ||||||||||||||||||
Amortization of intangibles | 38.3 | 40.4 | ||||||||||||||||||
Decommissioning provision | 42.2 | — | ||||||||||||||||||
Litigation provision, net | 3.9 | (0.6) | ||||||||||||||||||
Operating loss from continuing operations | (269.9) | (168.9) | 59.8 | % | ||||||||||||||||
Interest expense, net | (40.7) | (14.3) | ||||||||||||||||||
Foreign exchange and other losses | (33.4) | (2.5) | ||||||||||||||||||
Loss from continuing operations before tax | (344.0) | (185.7) | 85.2 | % | ||||||||||||||||
Income tax benefit | (0.7) | (30.2) | ||||||||||||||||||
Losses from equity method investments | (0.3) | — | ||||||||||||||||||
Net loss from continuing operations | (343.5) | (155.5) | 120.9 | % | ||||||||||||||||
Net (loss) income from discontinued operations, net of tax | (1.5) | 0.4 | ||||||||||||||||||
Net loss | ($345.0) | ($155.2) | 122.3 | % | ||||||||||||||||
Basic (loss) income per share: | ||||||||||||||||||||
Continuing operations | ($7.07) | ($3.22) | ||||||||||||||||||
Discontinued operations | (0.03) | 0.01 | ||||||||||||||||||
($7.10) | ($3.21) | |||||||||||||||||||
Diluted (loss) income per share: | ||||||||||||||||||||
Continuing operations | ($7.07) | ($3.22) | ||||||||||||||||||
Discontinued operations | (0.03) | 0.01 | ||||||||||||||||||
($7.10) | ($3.21) | |||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||
Basic | 48.6 | 48.3 | ||||||||||||||||||
Diluted | 48.6 | 48.3 | ||||||||||||||||||
* Numbers may not add precisely due to rounding. |
Adjusted Financial Measures (U.S. dollars in millions, except per share amounts) | |||||||||||||||||||||||
Twelve Months Ended December 31, | |||||||||||||||||||||||
2020 | 2019 | % Change (1) | |||||||||||||||||||||
Adjusted SG&A (1) | $368.8 | $421.6 | (12.5) | % | |||||||||||||||||||
Adjusted R&D (1) | 150.9 | 152.9 | (1.3) | % | |||||||||||||||||||
Adjusted operating income from continuing operations (1) | 97.5 | 179.7 | (45.7) | % | |||||||||||||||||||
Adjusted net income from continuing operations (1) | 61.9 | 150.4 | (58.9) | % | |||||||||||||||||||
Adjusted diluted earnings per share from continuing operations (1) | $1.27 | $3.08 | (58.9) | % | |||||||||||||||||||
(1) | Adjusted financial measures are non-GAAP measures and exclude specified items as described and reconciled in the "Reconciliation of GAAP to non-GAAP Financial Measures" contained in the press release. |
Statistics (as a % of net sales, except for income tax rate) | |||||||||||||||||||||||||||||
GAAP Twelve Months Ended December 31, | Adjusted (1) Twelve Months Ended December 31, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
Gross profit | 66.2 | % | 68.7 | % | 66.1 | % | 69.6 | % | |||||||||||||||||||||
SG&A | 45.8 | % | 46.7 | % | 39.5 | % | 38.9 | % | |||||||||||||||||||||
R&D | 16.4 | % | 13.5 | % | 16.2 | % | 14.1 | % | |||||||||||||||||||||
Operating (loss) income from continuing operations | (28.9) | % | (15.6) | % | 10.4 | % | 16.6 | % | |||||||||||||||||||||
Net (loss) income from continuing operations | (36.8) | % | (14.3) | % | 6.6 | % | 13.9 | % | |||||||||||||||||||||
Income tax rate | 0.2 | % | 16.2 | % | 3.2 | % | 11.2 | % | |||||||||||||||||||||
(1) | Adjusted financial measures are non-GAAP measures and exclude specified items as described and reconciled in the "Reconciliation of GAAP to non-GAAP Financial Measures" contained in the press release. |
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, 2020 | GAAP Financial Measures | Merger and Integration Expenses (A) | Restructuring Expenses (B) | Depreciation and Amortization Expenses (C) | Impairments (D) | Product Remediation Expenses (E) | Financing Transactions (F) | Non-recurring Legal, Contingent Consideration and Other Reserves (G) | Stock-based Compensation Costs (H) | Certain Tax Adjustments (I) | Certain Interest Adjustments (J) | Adjusted Financial Measures | ||||||||||||||||||||||||||
Cost of sales - exclusive of amortization | $95.9 | $— | $— | ($0.4) | $— | $— | $— | ($6.7) | ($0.5) | $— | $— | $88.3 | ||||||||||||||||||||||||||
Product remediation | 1.0 | — | — | — | — | (1.0) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Gross profit percent | 64.1 | % | — | % | — | % | 0.1 | % | — | % | 0.4 | % | — | % | 2.5 | % | 0.2 | % | — | % | — | % | 67.2 | % | ||||||||||||||
Selling, general and administrative | 110.3 | — | — | — | — | — | (0.2) | (10.0) | (6.5) | — | — | 93.7 | ||||||||||||||||||||||||||
Selling, general and administrative as a percent of net sales | 40.9 | % | — | % | — | % | — | % | — | % | — | % | (0.1) | % | (3.7) | % | (2.4) | % | — | % | — | % | 34.7 | % | ||||||||||||||
Research and development | 44.5 | — | — | — | — | — | — | (4.3) | (1.2) | — | — | 39.0 | ||||||||||||||||||||||||||
Research and development as a percent of net sales | 16.5 | % | — | % | — | % | — | % | — | % | — | % | — | % | (1.6) | % | (0.5) | % | — | % | — | % | 14.5 | % | ||||||||||||||
Decommissioning provision | 42.2 | — | — | — | — | — | — | (42.2) | — | — | — | — | ||||||||||||||||||||||||||
Litigation provision, net | (0.1) | — | — | — | — | — | — | 0.1 | — | — | — | — | ||||||||||||||||||||||||||
Other operating expenses | 223.4 | (0.7) | (5.5) | (9.0) | (208.2) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Operating (loss) income from continuing operations | (247.7) | 0.7 | 5.5 | 9.4 | 208.2 | 1.0 | 0.2 | 63.1 | 8.2 | — | — | 48.6 | ||||||||||||||||||||||||||
Operating margin percent | (91.9) | % | 0.3 | % | 2.1 | % | 3.5 | % | 77.2 | % | 0.4 | % | 0.1 | % | 23.4 | % | 3.1 | % | — | % | — | % | 18.0 | % | ||||||||||||||
Income tax (benefit) expense | (18.3) | (0.3) | 0.4 | (1.3) | 23.1 | 0.3 | — | (0.1) | (0.4) | (3.7) | 0.3 | — | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | (279.3) | 1.0 | 5.2 | 10.7 | 185.1 | 0.7 | 32.2 | 62.6 | 8.7 | 3.7 | 4.5 | 34.9 | ||||||||||||||||||||||||||
Diluted EPS - Continuing Operations | ($5.74) | $0.02 | $0.11 | $0.22 | $3.78 | $0.01 | $0.66 | $1.28 | $0.18 | $0.08 | $0.09 | $0.71 |
GAAP results for the three months ended December 31, 2020 include: | |||||
(A) | Merger and integration expenses related to our legacy companies and recent acquisitions | ||||
(B) | Restructuring expenses related to organizational changes | ||||
(C) | Includes depreciation and amortization associated with purchase price accounting | ||||
(D) | Impairments primarily associated with the classification of Heart Valves as held for sale | ||||
(E) | Costs related to the 3T Heater-Cooler remediation plan | ||||
(F) | Costs associated with our June 2020 financing transactions, including the mark-to-market adjustment for the exchangeable option feature and capped call derivatives | ||||
(G) | 3T Heater-Cooler litigation provision, legal expenses primarily related to 3T Heater-Cooler defense, settlements and other matters, remeasurement of contingent consideration related to acquisitions and provision for decommissioning at our Saluggia site | ||||
(H) | Non-cash expenses associated with stock-based compensation costs | ||||
(I) | Primarily relates to discrete tax items and the tax impact of intercompany transactions | ||||
(J) | Primarily relates to non-cash interest expense on our Senior Secured Term Loan and Cash Exchangeable Senior Notes and intellectual property migration | ||||
* 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, 2019 | GAAP Financial Measures | Merger and Integration Expenses (A) | Restructuring Expenses (B) | Depreciation and Amortization Expenses (C) | Impairments (D) | Product Remediation Expenses (E) | Acquisition Costs (F) | Non-recurring Legal and Contingent Consideration and Other Reserves (G) | Stock-based Compensation Costs (H) | Certain Tax Adjustments (I) | Certain Interest Adjustments (J) | Adjusted Financial Measures | ||||||||||||||||||||||||||
Cost of sales - exclusive of amortization | $78.2 | $— | $— | ($0.4) | $— | $— | $— | $9.7 | ($0.3) | $— | $— | $87.2 | ||||||||||||||||||||||||||
Product remediation | 4.6 | — | — | — | — | (4.6) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Gross profit percent | 71.2 | % | — | % | — | % | 0.1 | % | — | % | 1.6 | % | — | % | (3.4) | % | 0.1 | % | — | % | — | % | 69.7 | % | ||||||||||||||
Selling, general and administrative | 130.5 | — | — | (0.1) | — | — | (0.4) | (15.5) | (7.1) | — | — | 107.5 | ||||||||||||||||||||||||||
Selling, general and administrative as a percent of net sales | 45.4 | % | — | % | — | % | — | % | — | % | — | % | (0.1) | % | (5.4) | % | (2.5) | % | — | % | — | % | 37.4 | % | ||||||||||||||
Research and development | 23.7 | — | — | — | (2.7) | — | 3.3 | 14.4 | (1.1) | — | — | 37.6 | ||||||||||||||||||||||||||
Research and development as a percent of net sales | 8.2 | % | — | % | — | % | — | % | (0.9) | % | — | % | 1.2 | % | 5.0 | % | (0.4) | % | — | % | — | % | 13.1 | % | ||||||||||||||
Litigation provision, net | 33.2 | — | — | — | — | — | — | (33.2) | — | — | — | — | ||||||||||||||||||||||||||
Other operating expenses | 161.2 | (9.1) | (7.7) | (10.7) | (133.7) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Operating (loss) income from continuing operations | (144.0) | 9.1 | 7.7 | 11.2 | 136.4 | 4.6 | (2.9) | 24.6 | 8.4 | — | — | 55.3 | ||||||||||||||||||||||||||
Operating margin percent | (50.1) | % | 3.2 | % | 2.7 | % | 3.9 | % | 47.4 | % | 1.6 | % | (1.0) | % | 8.6 | % | 2.9 | % | — | % | — | % | 19.2 | % | ||||||||||||||
Income tax (benefit) expense | (6.7) | 0.3 | 1.1 | 1.1 | 11.3 | 1.0 | (0.6) | 0.2 | 0.4 | (5.6) | 0.3 | 2.7 | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | (143.4) | 8.9 | 6.5 | 10.2 | 125.1 | 3.6 | (2.3) | 24.4 | 8.1 | 5.6 | 2.1 | 48.8 | ||||||||||||||||||||||||||
Diluted EPS - Continuing Operations | ($2.96) | $0.18 | $0.13 | $0.21 | $2.56 | $0.07 | ($0.05) | $0.50 | $0.17 | $0.11 | $0.04 | $1.00 |
GAAP results for the three months ended December 31, 2019 include: | |||||||||||||||||||||||||||||||||||||||||
(A) | Merger and integration expenses related to our legacy companies and recent acquisitions | ||||||||||||||||||||||||||||||||||||||||
(B) | Restructuring expenses related to organizational changes | ||||||||||||||||||||||||||||||||||||||||
(C) | Includes depreciation and amortization associated with purchase price accounting | ||||||||||||||||||||||||||||||||||||||||
(D) | Impairment of Transcatheter Mitral Valve Replacement goodwill, intangible assets and other long-lived assets | ||||||||||||||||||||||||||||||||||||||||
(E) | Costs related to the 3T Heater-Cooler remediation plan | ||||||||||||||||||||||||||||||||||||||||
(F) | Costs related to acquisitions | ||||||||||||||||||||||||||||||||||||||||
(G) | 3T Heater-Cooler litigation provision, legal expenses primarily related to 3T Heater-Cooler defense, settlements and other matters, remeasurement of contingent consideration related to acquisitions and AR reserves | ||||||||||||||||||||||||||||||||||||||||
(H) | Non-cash expenses associated with stock-based compensation costs | ||||||||||||||||||||||||||||||||||||||||
(I) | Primarily relates to discrete tax items and the tax impact of intercompany transactions | ||||||||||||||||||||||||||||||||||||||||
(J) | Primarily relates to intellectual property migration, interest related to 3T Heater-Cooler litigation settlement and other non-recurring impacts to interest expense | ||||||||||||||||||||||||||||||||||||||||
* 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 | ||||||||||||||||||||||||||||||||||||||
Twelve Months Ended December 31, 2020 | GAAP Financial Measures | Merger and Integration Expenses (A) | Restructuring Expenses (B) | Depreciation and Amortization Expenses (C) | Impairments (D) | Product Remediation Expenses (E) | Financing Transactions (F) | Non-recurring Legal, Contingent Consideration and Other Reserves (G) | Stock-based Compensation Costs (H) | Certain Tax Adjustments (I) | Certain Interest Adjustments (J) | Adjusted Financial Measures | ||||||||||||||||||||||||||
Cost of sales - exclusive of amortization | $308.1 | $— | $— | ($1.4) | $— | $— | $— | $12.2 | ($1.9) | $— | $— | $317.0 | ||||||||||||||||||||||||||
Product remediation | 7.9 | — | — | — | — | (7.9) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Gross profit percent | 66.2 | % | — | % | — | % | 0.1 | % | — | % | 0.8 | % | — | % | (1.3) | % | 0.2 | % | — | % | — | % | 66.1 | % | ||||||||||||||
Selling, general and administrative | 427.8 | — | — | (1.4) | — | — | (2.6) | (25.3) | (29.7) | — | — | 368.8 | ||||||||||||||||||||||||||
Selling, general and administrative as a percent of net sales | 45.8 | % | — | % | — | % | (0.1) | % | — | % | — | % | (0.3) | % | (2.7) | % | (3.2) | % | — | % | — | % | 39.5 | % | ||||||||||||||
Research and development | 152.9 | — | — | (0.1) | — | — | — | 1.6 | (3.5) | — | — | 150.9 | ||||||||||||||||||||||||||
Research and development as a percent of net sales | 16.4 | % | — | % | — | % | — | % | — | % | — | % | — | % | 0.2 | % | (0.4) | % | — | % | — | % | 16.2 | % | ||||||||||||||
Decommissioning provision | 42.2 | — | — | — | — | — | — | (42.2) | — | — | — | — | ||||||||||||||||||||||||||
Litigation provision, net | 3.9 | — | — | — | — | — | — | (3.9) | — | — | — | — | ||||||||||||||||||||||||||
Other operating expenses | 261.4 | (7.3) | (7.6) | (38.3) | (208.2) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Operating (loss) income from continuing operations | (269.9) | 7.3 | 7.6 | 41.2 | 208.2 | 7.9 | 2.6 | 57.5 | 35.1 | — | — | 97.5 | ||||||||||||||||||||||||||
Operating margin percent | (28.9) | % | 0.8 | % | 0.8 | % | 4.4 | % | 22.3 | % | 0.8 | % | 0.3 | % | 6.2 | % | 3.8 | % | — | % | — | % | 10.4 | % | ||||||||||||||
Income tax (benefit) expense | (0.7) | — | 0.4 | 3.2 | 23.1 | 1.4 | — | 2.2 | 0.6 | (28.1) | — | 2.1 | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | (343.5) | 7.3 | 7.2 | 38.0 | 185.1 | 6.4 | 30.0 | 54.8 | 34.5 | 28.1 | 14.0 | 61.9 | ||||||||||||||||||||||||||
Diluted EPS - Continuing Operations | ($7.07) | $0.15 | $0.15 | $0.78 | $3.79 | $0.13 | $0.61 | $1.12 | $0.71 | $0.58 | $0.29 | $1.27 |
GAAP results for the twelve months ended December 31, 2020 include: | ||||||||||||||||||||||||||||||||||||||
(A) | Merger and integration expenses related to our legacy companies and recent acquisitions | |||||||||||||||||||||||||||||||||||||
(B) | Restructuring expenses related to organizational changes | |||||||||||||||||||||||||||||||||||||
(C) | Includes depreciation and amortization associated with purchase price accounting | |||||||||||||||||||||||||||||||||||||
(D) | Impairments primarily associated with the classification of Heart Valves as held for sale | |||||||||||||||||||||||||||||||||||||
(E) | Costs related to the 3T Heater-Cooler remediation plan | |||||||||||||||||||||||||||||||||||||
(F) | Costs associated with our June 2020 financing transactions, including the mark-to-market adjustment for the exchangeable option feature and capped call derivatives | |||||||||||||||||||||||||||||||||||||
(G) | 3T Heater-Cooler litigation provision, legal expenses primarily related to 3T Heater-Cooler defense, settlements and other matters, remeasurement of contingent consideration related to acquisitions and provision for decommissioning at our Saluggia site | |||||||||||||||||||||||||||||||||||||
(H) | Non-cash expenses associated with stock-based compensation costs | |||||||||||||||||||||||||||||||||||||
(I) | Primarily relates to discrete tax items and the tax impact of intercompany transactions | |||||||||||||||||||||||||||||||||||||
(J) | Primarily relates to non-cash interest expense on our Senior Secured Term Loan and Cash Exchangeable Senior Notes, interest related to the 3T Heater-Cooler matter, intellectual property migration and interest reversed upon the settlement of a tax litigation matter | |||||||||||||||||||||||||||||||||||||
* 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 | ||||||||||||||||||||||||||||||||||||||
Twelve Months Ended December 31, 2019 | GAAP Financial Measures | Merger and Integration Expenses (A) | Restructuring Expenses (B) | Depreciation and Amortization Expenses (C) | Impairments (D) | Product Remediation Expenses (E) | Acquisition Costs (F) | Non-recurring Legal and Contingent Consideration and Other Reserves (G) | Stock-based Compensation Costs (H) | Certain Tax Adjustments (I) | Certain Interest Adjustments (J) | Adjusted Financial Measures | ||||||||||||||||||||||||||
Cost of sales - exclusive of amortization | $323.5 | $— | $— | ($2.4) | $— | $— | $— | $10.2 | ($1.3) | $— | $— | $329.9 | ||||||||||||||||||||||||||
Product remediation | 15.8 | — | — | — | — | (15.8) | — | — | — | — | — | — | ||||||||||||||||||||||||||
Gross profit percent | 68.7 | % | — | % | — | % | 0.2 | % | — | % | 1.5 | % | — | % | (0.9) | % | 0.1 | % | — | % | — | % | 69.6 | % | ||||||||||||||
Selling, general and administrative | 506.5 | — | — | (0.5) | — | — | (1.1) | (57.6) | (25.6) | — | — | 421.6 | ||||||||||||||||||||||||||
Selling, general and administrative as a percent of net sales | 46.7 | % | — | % | — | % | — | % | — | % | — | % | (0.1) | % | (5.3) | % | (2.4) | % | — | % | — | % | 38.9 | % | ||||||||||||||
Research and development | 146.8 | — | — | (0.2) | (3.6) | — | 1.9 | 13.6 | (5.6) | — | — | 152.9 | ||||||||||||||||||||||||||
Research and development as a percent of net sales | 13.5 | % | — | % | — | % | — | % | (0.3) | % | — | % | 0.2 | % | 1.3 | % | (0.5) | % | — | % | — | % | 14.1 | % | ||||||||||||||
Litigation provision, net | (0.6) | — | — | — | — | — | — | 0.6 | — | — | — | — | ||||||||||||||||||||||||||
Other operating expenses | 261.0 | (23.5) | (12.3) | (40.4) | (184.9) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Operating (loss) income from continuing operations | (168.9) | 23.5 | 12.3 | 43.5 | 188.5 | 15.8 | (0.7) | 33.3 | 32.6 | — | — | 179.7 | ||||||||||||||||||||||||||
Operating margin percent | (15.6) | % | 2.2 | % | 1.1 | % | 4.0 | % | 17.4 | % | 1.5 | % | (0.1) | % | 3.1 | % | 3.0 | % | — | % | — | % | 16.6 | % | ||||||||||||||
Income tax (benefit) expense | (30.2) | 3.5 | 2.3 | 9.3 | 23.7 | 4.6 | (0.1) | 5.6 | 6.0 | (6.8) | 1.1 | 19.0 | ||||||||||||||||||||||||||
Net (loss) income from continuing operations | (155.5) | 19.9 | 10.0 | 34.2 | 164.8 | 11.2 | (0.6) | 27.7 | 26.6 | 6.8 | 5.3 | 150.4 | ||||||||||||||||||||||||||
Diluted EPS - Continuing Operations | ($3.22) | $0.41 | $0.20 | $0.70 | $3.38 | $0.23 | ($0.01) | $0.57 | $0.54 | $0.14 | $0.11 | $3.08 |
GAAP results for the twelve months ended December 31, 2019 include: | |||||||||||||||||||||||||||||||||||||||||
(A) | Merger and integration expenses related to our legacy companies and recent acquisitions | ||||||||||||||||||||||||||||||||||||||||
(B) | Restructuring expenses related to organizational changes | ||||||||||||||||||||||||||||||||||||||||
(C) | Includes depreciation and amortization associated with purchase price accounting | ||||||||||||||||||||||||||||||||||||||||
(D) | Impairment of Transcatheter Mitral Valve Replacement goodwill, intangible assets and other long-lived assets and Obstructive Sleep Apnea intangible assets and other long-lived assets | ||||||||||||||||||||||||||||||||||||||||
(E) | Costs related to the 3T Heater-Cooler remediation plan | ||||||||||||||||||||||||||||||||||||||||
(F) | Costs related to acquisitions | ||||||||||||||||||||||||||||||||||||||||
(G) | 3T Heater-Cooler litigation provision, 3T insurance recovery, legal expenses primarily related to 3T Heater-Cooler defense, settlements and other matters, remeasurement of contingent consideration related to acquisitions and AR reserves | ||||||||||||||||||||||||||||||||||||||||
(H) | Non-cash expenses associated with stock-based compensation costs | ||||||||||||||||||||||||||||||||||||||||
(I) | Primarily relates to discrete tax items and the tax impact of intercompany transactions | ||||||||||||||||||||||||||||||||||||||||
(J) | Primarily relates to intellectual property migration, interest related to 3T Heater-Cooler litigation settlement and other non-recurring impacts to interest expense | ||||||||||||||||||||||||||||||||||||||||
* Numbers may not add precisely due to rounding. |
LIVANOVA PLC AND SUBSIDIARIES | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED | ||||||||||||||
(U.S. dollars in millions) | ||||||||||||||
December 31, 2020 | December 31, 2019 | |||||||||||||
ASSETS | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $252.8 | $61.1 | ||||||||||||
Accounts receivable, net of allowance | 184.4 | 257.8 | ||||||||||||
Inventories | 126.7 | 164.2 | ||||||||||||
Prepaid and refundable taxes | 60.2 | 37.8 | ||||||||||||
Assets held for sale | 70.5 | — | ||||||||||||
Prepaid expenses and other current assets | 24.8 | 28.6 | ||||||||||||
Total Current Assets | 719.4 | 549.4 | ||||||||||||
Property, plant and equipment, net | 163.8 | 181.4 | ||||||||||||
Goodwill | 922.3 | 915.8 | ||||||||||||
Intangible assets, net | 437.6 | 607.5 | ||||||||||||
Operating lease assets | 50.5 | 54.4 | ||||||||||||
Investments | 31.1 | 27.3 | ||||||||||||
Deferred tax assets | 3.0 | 68.7 | ||||||||||||
Other assets | 83.5 | 7.4 | ||||||||||||
Total Assets | $2,411.4 | $2,411.8 | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current Liabilities: | ||||||||||||||
Current debt obligations | $13.3 | $77.4 | ||||||||||||
Accounts payable | 73.7 | 85.9 | ||||||||||||
Accrued liabilities and other | 95.4 | 120.1 | ||||||||||||
Current litigation provision liability | 28.6 | 146.0 | ||||||||||||
Taxes payable | 16.5 | 12.7 | ||||||||||||
Accrued employee compensation and related benefits | 51.9 | 70.4 | ||||||||||||
Liabilities held for sale | 29.7 | — | ||||||||||||
Total Current Liabilities | 309.1 | 512.6 | ||||||||||||
Long-term debt obligations | 642.3 | 260.3 | ||||||||||||
Contingent consideration | 89.9 | 114.4 | ||||||||||||
Litigation provision liability | 7.9 | 24.4 | ||||||||||||
Deferred tax liabilities | 8.9 | 32.2 | ||||||||||||
Long-term operating lease liabilities | 42.2 | 46.0 | ||||||||||||
Long-term employee compensation and related benefits | 20.6 | 22.8 | ||||||||||||
Long-term derivative liabilities | 121.9 | 0.1 | ||||||||||||
Other long-term liabilities | 49.7 | 15.3 | ||||||||||||
Total Liabilities | 1,292.5 | 1,028.1 | ||||||||||||
Total Stockholders’ Equity | 1,118.8 | 1,383.7 | ||||||||||||
Total Liabilities and Stockholders’ Equity | $2,411.4 | $2,411.8 | ||||||||||||
* Numbers may not add precisely due to rounding. |
LIVANOVA PLC AND SUBSIDIARIES | ||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED | ||||||||||||||
(U.S. dollars in millions) | Twelve Months Ended December 31, | |||||||||||||
2020 | 2019 | |||||||||||||
Operating Activities: | ||||||||||||||
Net loss | ($345.0) | ($155.2) | ||||||||||||
Non-cash items included in net loss: | ||||||||||||||
Impairment of disposal group | 180.2 | — | ||||||||||||
Amortization | 38.3 | 40.4 | ||||||||||||
Deferred tax expense (benefit) | 37.3 | (26.3) | ||||||||||||
Stock-based compensation | 35.1 | 32.6 | ||||||||||||
Depreciation | 29.0 | 30.3 | ||||||||||||
Remeasurement of derivative instruments | 22.1 | — | ||||||||||||
Impairment of goodwill | 21.3 | 42.4 | ||||||||||||
Remeasurement of contingent consideration to fair value | (20.5) | (29.4) | ||||||||||||
Amortization of operating lease assets | 14.0 | 12.3 | ||||||||||||
Amortization of debt issuance costs | 9.7 | 2.2 | ||||||||||||
Impairment of long-lived assets | 6.8 | 142.5 | ||||||||||||
Amortization of income taxes payable on inter-company transfers of property | 2.2 | 2.6 | ||||||||||||
Other | 1.2 | 3.2 | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Accounts receivable, net | 58.8 | (5.3) | ||||||||||||
Inventories | 1.4 | (10.6) | ||||||||||||
Other current and non-current assets | (39.6) | (2.1) | ||||||||||||
Accounts payable and accrued current and non-current liabilities | (0.9) | (38.6) | ||||||||||||
Taxes payable | 3.6 | (8.4) | ||||||||||||
Litigation provision liability, net | (134.3) | (123.7) | ||||||||||||
Net cash used in operating activities | (79.4) | (91.1) | ||||||||||||
Investing Activities: | ||||||||||||||
Purchases of property, plant and equipment | (35.0) | (24.7) | ||||||||||||
Purchases of investments | (3.2) | (2.5) | ||||||||||||
Loans to investees | (2.7) | — | ||||||||||||
Acquisitions, net of cash acquired | (1.7) | (10.8) | ||||||||||||
Proceeds from asset sales | 1.4 | 1.3 | ||||||||||||
Purchases of intangible assets | — | (3.3) | ||||||||||||
Other | (0.7) | (1.3) | ||||||||||||
Net cash used in investing activities | (41.8) | (41.3) | ||||||||||||
Financing Activities: | ||||||||||||||
Proceeds from long-term debt obligations | 886.9 | 197.2 | ||||||||||||
Repayment of long-term debt obligations | (482.1) | (24.2) | ||||||||||||
Proceeds from short-term borrowing (maturities greater than 90 days) | 47.1 | — | ||||||||||||
Repayment of short-term borrowing (maturities greater than 90 days) | (44.8) | — | ||||||||||||
Purchase of capped call | (43.1) | — | ||||||||||||
Debt issuance costs | (23.7) | (3.8) | ||||||||||||
Payment of contingent consideration | (12.0) | (19.0) | ||||||||||||
Closing adjustment payment for sale of CRM business | (14.9) | — | ||||||||||||
Shares repurchased from employees for minimum tax withholding | (5.6) | (7.1) | ||||||||||||
Proceeds from share issuances under ESPP | 3.7 | 4.5 | ||||||||||||
Change in short-term borrowing, net | (0.9) | (1.2) | ||||||||||||
Other | 0.2 | 0.2 | ||||||||||||
Net cash provided by financing activities | 310.8 | 146.6 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 2.2 | (0.2) | ||||||||||||
Net increase in cash and cash equivalents | 191.7 | 13.9 | ||||||||||||
Cash and cash equivalents at beginning of period | 61.1 | 47.2 | ||||||||||||
Cash and cash equivalents at end of period | $252.8 | $61.1 | ||||||||||||
* Numbers may not add precisely due to rounding. |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
GAAP diluted weighted average shares outstanding | 48.6 | 48.4 | 48.6 | 48.3 | |||||||||||||||||||||||||
Add effects of stock-based compensation instruments | 0.3 | 0.4 | 0.2 | 0.5 | |||||||||||||||||||||||||
Adjusted diluted weighted average shares outstanding (1) | 48.9 | 48.8 | 48.8 | 48.8 | |||||||||||||||||||||||||
(1) | Adjusted diluted weighted average shares outstanding is a non-GAAP measure and includes the effects of stock-based compensation instruments, as reconciled in the above table. | ||||||||||||||||||||||||||||
* | Numbers may not add precisely due to rounding. |