LivaNova (LIVN) Q4 2021 earnings summary

Executive summary

• 2021 net sales rose 10.8% to $1.035B; excluding Heart Valves, sales grew 17.1% at constant currency. Operating loss narrowed to $0.8M from $273.9M, while net loss was $135.8M.

• Adjusted free cash flow increased to $84M from $24M; adjusted operating margin improved 500 bps as cost actions supported cash generation despite COVID-19 headwinds.

Financial highlights

• Net sales were $1.035B vs. $934.2M in 2020; gross profit was $706.0M vs. $594.8M.

• Net loss from continuing operations was $135.8M, or $2.68 diluted loss per share, compared with $347.3M and $7.15 in 2020.

• Operating loss from continuing operations was $0.8M vs. $273.9M; 2021 included a $60.2M loss on debt extinguishment.

• Excluding Heart Valves, net sales increased 17.1% at constant currency; reported total sales growth was 10.8%.

Outlook and guidance

• 2022 priorities include continued U.S. epilepsy implant recovery as patients return to in-person visits and hospital capacity improves; replacement implants are expected to remain solid.

• Essenz heart-lung machine commercialization and RECOVER and ANTHEM-HFrEF data readouts were expected before year-end 2022.

• Cardiopulmonary recovery is expected as cardiac procedures approach pre-pandemic levels and Essenz launches; ACS growth faces tougher COVID-19 comparisons, partly offset by higher non-COVID utilization.