LivaNova (LIVN) Q4 2022 earnings summary

Executive summary

• FY2022 revenue was $1.022B, down 1.3% YoY; net loss narrowed to $86.2M from $135.8M, while operating loss widened to $76.8M, including a $129.4M ACS goodwill impairment.

• Cardiopulmonary and Neuromodulation revenue grew, offset by a steep ACS decline as severe COVID-19 ECMO demand eased; the heart failure trial was subsequently halted.

Financial highlights

• Revenue $1,021.8M vs $1,035.4M in 2021; gross profit $707.2M vs $706.0M.

• Operating loss $76.8M vs $0.8M; net loss $86.2M vs $135.8M. 2022 included $129.4M goodwill impairment; 2021 included $60.2M debt-extinguishment loss.

• Basic and diluted loss per share were both $1.61 vs $2.68 in 2021.

• Operating cash flow was $69.9M vs $102.5M; cash and cash equivalents ended 2022 at $214.2M, plus $301.4M restricted cash.

Outlook and guidance

• Current business plan expects liquidity sources to cover operating, working capital, capital expenditure and debt-service needs for the 12 months from the report date.

• Cost-optimization program initiated in Q2 2022 includes workforce reductions targeted for completion by mid-2023; estimated total restructuring costs are $10.0M.

• ANTHEM-HFrEF enrollment is being stopped and the heart failure program wound down after study data failed to show a sufficiently strong expected functional or mortality benefit.