LivaNova (LIVN) Q4 2020 earnings summary

Executive summary

• COVID-19 materially reduced 2020 sales and operating results as elective and non-emergency procedures were delayed; revenue fell 13.8% YoY to $934.2M.

• Priorities: profitable core growth, pipeline delivery, margin improvement and stronger cash generation; stabilization in elective procedures was expected to continue through 2021.

Financial highlights

• Revenue was $934.2M, down 13.8% YoY; operating loss from continuing operations was $269.9M versus $168.9M in 2019.

• Net loss was $345.0M, or $(7.10) per diluted share, versus a $155.2M net loss, or $(3.21) per diluted share, in 2019.

• Significant 2020 charges included $180.2M impairment of the Heart Valves disposal group, $21.3M goodwill impairment and a $42.2M Saluggia decommissioning provision.

• Cash used in operating activities was $79.4M; year-end cash and equivalents were $252.8M, versus $61.1M at year-end 2019.

Outlook and guidance

• Advanced Circulatory Support growth was expected to exceed 20% in 2021 and beyond, supported by LifeSPARC and an expanded salesforce.

• Recovery in cardiac procedures was expected to support Cardiopulmonary results through 2021; recovery remained dependent on COVID-19 conditions and varied by geography.

• RECOVER was targeted to transition to a registry by late 2022 or early 2023; the OSA confirmatory study was expected to start mid-2021.

• ANTHEM-HFrEF enrollment exceeded 300 patients; an FDA PMA filing decision was expected in H1 2022.

• Next-generation heart-lung machine regulatory approval and commercialization were expected in 2022.