Q4 2024 Artivion Inc Earnings Call

If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.

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It is now my pleasure to introduce your host Blaine, Oregon from Jill Martin Group. Thank you you may begin.

Speaker Change: Thanks, operator, good afternoon, and thank you for joining the call today, joining me today from our coupons management team are Pat Mackin, CEO and Lance Berry CFO.

Speaker Change: Before we begin I'd like to make the following statements to comply with the safe Harbor requirements of the private Securities Litigation Reform Act of 1095.

Speaker Change: Comments made on this call that look forward in time involve risks and uncertainties and are forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Speaker Change: The forward looking statements include statements made as to the Companys or managements intentions hopes beliefs expectations or predictions of the future. These forward looking statements are subject to a number of risks uncertainties estimates and assumptions that may cause actual results to differ materially from these forward looking statements additional information concerning.

Speaker Change: Additional information concerning certain risks and uncertainties that may.

Speaker Change: Impact. These forward looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today. You can also find a brief presentation with detail as highlighted on today's call on the Investor Relations section of <unk> website, now I will turn it over to <unk> CEO Pat Mackin.

Speaker Change: On <unk> as.

Speaker Change: As we achieve total constant currency revenue growth of 10% excluding per o'clock.

Speaker Change: We also expanded EBITDA margins by 310 basis points, resulting in adjusted EBITDA growth of 32% year over year.

Speaker Change: Italy is to deliver product.

The forward looking statements include statements made as the companys or managements intentions hopes beliefs expectations or predictions of the future. These forward looking statements are subject to a number of risks uncertainties estimates and assumptions that may cause actual results to differ materially from these forward looking statements additional information concerning.

Speaker Change: While making breakthrough progress on several key clinical and regulatory initiatives and further expanding our global footprint.

Speaker Change: We entered the new year with even greater conviction in our ability to execute our best in class multi pronged PMA focused pipeline.

Speaker Change: And deliver sustained double digit revenue growth.

Additional information concerning certain risks and uncertainties that may.

Speaker Change: While growing EBITDA at least twice the rate of constant currency revenue growth.

Kevin: Impacting these forward looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today. You can also find a brief presentation with details are highlighted on today's call on the Investor Relations section of <unk> website, now I'll turn it over to Kevin CEO Pat Mackin.

Speaker Change: Before reviewing our fourth quarter performance and our expectations for 2025 I'd like to provide an update on the previously disclosed November 'twenty for cyber security incident.

Speaker Change: Immediately upon discovering that the threat actor had access to our systems.

Speaker Change: We initiated business continuity plans took just took action to take certain systems offline and engaged external advisors to contain and remediate the incident.

Kevin: On a year of activity on because we achieved total constant currency revenue growth of 10% excluding per clock.

Speaker Change: Due to our team's immediate response, we mitigated the threat actors ability to adversely impact our systems in a short term disruption to our business.

Kevin: We also expanded EBITDA margins by 310 basis points, resulting in adjusted EBITDA growth of 32% year over year.

Speaker Change: While we effectively operated for the final few weeks of the quarter. We estimate the incident had a negative impact of approximately $4 5 million on our Q4 revenue.

Kevin: He has to deliver positive.

Kevin: While making breakthrough progress on several key clinical and regulatory initiatives and further expanding our global footprint.

Speaker Change: We are now back to operating at normal levels. However, our manufacturing facilities in tissue processing operations were not operating at a normal level from the beginning of the incident in late November through January.

Kevin: We entered the new year with even greater conviction in our ability to execute our best in class multi pronged PMA focused pipeline.

Kevin: And deliver sustained double digit revenue growth.

Kevin: While growing EBITDA at least twice the rate of constant currency revenue growth.

Speaker Change: Although this is challenged near term tissue and on X supply, we do not expect this incident to meaningfully impact our business for the full year of 2025, and our 2025 guidance reflects us.

Kevin: Before reviewing our fourth quarter performance and our expectations for 2025 I'd like to provide an update on the previously disclosed November 'twenty for cyber security incident.

Speaker Change: Specifically, we expect our tissue revenues to be significantly lower than normal in Q1.

Kevin: Immediately upon discovering that the threat actor had access to our systems. We initiated business continuity plans took just took action to take certain systems offline and engaged external advisors to contain and remediate the incident.

Speaker Change: The difference being recovered over the remainder of the year.

Speaker Change: As we've discussed previously a significant portion of our tissue revenue comes from Cindy graph pulmonary valves.

Speaker Change: In this case, our demand outstrip supply for these valves every quarter and therefore, we hold no inventory.

Kevin: Due to our team's immediate response, we mitigated the threat actors ability to adversely impact our systems in a short term disruption to our business.

Speaker Change: Importantly, we continue to receive normal levels of donations and process tissue throughout the period of the cyber incident.

Kevin: While we effectively operated for the final few weeks of the quarter. We estimate the incident had a negative impact of approximately $4 5 million on our Q4 revenue.

Speaker Change: And therefore, we do not anticipate any meaningful impact for the full year.

Speaker Change: However, the lead times associated with tissue that were in process or received during that time period will be longer than normal resulting in tissue that would have been released in Q1 being released later in the year.

Kevin: We are now back to operating at normal levels. However, our manufacturing facilities in tissue processing operations were not operating at a normal level from the beginning of the incident in late November through January.

Speaker Change: Similarly, but to a lesser extent our lead times for Onyx were temporarily extended and as a result, we.

Kevin: Although this is challenge near term tissue and Onyx supply, we do not expect this incident to meaningfully impact our business for the full year of 2025, and our 2025 guidance reflects us.

Speaker Change: We expect to have some stocking distributor orders.

Speaker Change: That would have occurred in Q1 to occur later in the year.

Speaker Change: Lance will provide additional details in his remarks in his remarks on the impact to Q4 as well as the timing of our 2025 revenues.

Kevin: Specifically, we expect our tissue revenues to be significantly lower than normal in Q1.

Speaker Change: Now on to our Q4 results from a financial perspective, our Q4 performance was driven by continued growth across our product portfolio as well as well as continued benefit from regulatory approvals and commercial footprint expansion in key international markets like Latin America.

Kevin: The difference being recovered over the remainder of the year.

Kevin: As we've discussed previously a significant portion of our tissue revenue comes from Syngraft pulmonary valves.

Kevin: In this case, our demand outstrip supply for these valves every quarter and therefore, we hold no inventory.

Speaker Change: From a product category perspective on X revenue increased 10% year over year on a constant currency basis, as we continue to take market share globally.

Kevin: Importantly, we continue to receive normal levels of donations and process tissue throughout the period of the cyber incident.

Kevin: And therefore, we do not anticipate any meaningful impact for the full year.

Speaker Change: We're the only mechanical aortic heart valve that can be maintained at a low INR of one five to two point out.

Kevin: However, the lead times associated with tissue that were in process or received during that time period will be longer than normal resulting in tissues that would've been released in Q1 being released later in the year.

Speaker Change: Based on feedback from the field, our recent market share gains and the proven clinical benefits of the on X aortic valve, we maintain a strong conviction that the onyx is the best in class aortic valve on the market and we will continue to take market share worldwide.

Kevin: Similarly, but to a lesser extent our lead times for Onyx were temporarily extended and as a result.

In addition, we are encouraged by significant new data that was presented at the society of thoracic Surgeons meeting at the end of January.

We expect to have some stocking distributor orders.

That would have occurred in Q1 to occur later in the year.

Speaker Change: Lance will provide additional details in his remarks on the impact to Q4 as well as the timing of our 2025 revenues.

Speaker Change: The data, which also publishing Jack simultaneously, which is the journal of American College of Cardiology show.

Speaker Change: Show that across 109000 patients from the STS database mechanical aortic valves had a statistically significant improvement in mortality compared to surgically implanted.

Kevin: Now onto our Q4 results from a financial perspective, our Q4 performance was driven by continued growth across our product portfolio as well as well as continued benefit from regulatory approvals and commercial footprint expansion in key international markets like Latin America.

Speaker Change: Patients under 60.

Speaker Change: This is a significant opportunity for the on X valve and gives us even greater confidence that we should be able to continue to double digit growth for the foreseeable future.

Kevin: From a product category perspective on X revenue increased 10% year over year on a constant currency basis, as we continue to take market share globally, where the only mechanical aortic heart valve, but it can be maintained at a low INR of one five to two point out.

Speaker Change: Also in Q4, our stent graft revenues grew 8% on a constant currency basis in the fourth quarter compared to the same period last year and one is one of the areas more heavily impacted by the cyber incident, which Lance will cover in more detail in his section.

Kevin: Based on feedback from the field, our recent market share gains and the proven clinical benefits of the on X aortic valve, we maintain a strong conviction that the onyx is the best in class aortic valve on the market and will continue to take market share worldwide.

Speaker Change: Our stent graft portfolio.

Portfolio remains a key component to our growth strategy and we're encouraged by it.

Speaker Change: Which were driven by our differentiated product portfolio that are focused on complex segments of the stent graft market.

Kevin: In addition, we are encouraged by significant new data that was presented at the society of thoracic Surgeons meeting at the end of January.

Speaker Change: Today the products at our stent graft portfolio are primarily sold in Europe, where we leverage our existing direct sales infrastructure to create significant cross selling opportunities across our unique aortic product offerings.

Kevin: The data, which also published and Jack simultaneously, which is the journal of American College of Cardiology show that across 109000 patients from the STS database mechanical aortic valves had a statistically significant improvement in mortality compared to surgically implanted.

Speaker Change: Our pipeline consists largely of bringing some of these proven products to the U S and Japanese markets, representing significant growth opportunity.

Speaker Change: I will detail shortly our expectations for the impact of Mds in the U S.

Kevin: Patients under 60.

Kevin: This is a significant opportunity for the on X valve and cause us even greater confidence that we should be able to continue to double digit growth for the foreseeable future.

<unk> grew 7% on a constant currency basis compared to the same period last year.

Speaker Change: As a reminder, we received regulatory approval for Baidu in China last quarter, and we're continuing to work through some additional administrative steps to get access to the hospital level.

Kevin: Also in Q4, our stent graft revenues grew 8% on a constant currency basis in the fourth quarter compared to the same period last year and one is one of the areas more heavily impacted by the cyber incident, which Lance will cover in more detail in his section.

Speaker Change: These steps are expected to take about six to nine months. Therefore, we expect to begin commercializing bio grow in China in the second half of 2025.

Kevin: Our stent graft.

Kevin: Portfolio remains a key component to our growth strategy and we're encouraged by it.

Speaker Change: <unk> has been a great product for patients for many years and we're excited to be able to bring this technology to another large market.

Kevin: Which were driven by our differentiated product portfolio that are focused on complex segments of the stent graft market.

Speaker Change: Debate that approximately 12000 patients with acute type a dissections could benefit from baidu each year.

Kevin: Today the products at our stent graft portfolio are primarily sold in Europe, where we leverage our existing direct sales infrastructure to create significant cross selling opportunities across our unique aortic product offerings.

Speaker Change: Lastly, tissue processing, which was the area most heavily impacted by the cyber incident declined 8% year over year on a constant currency basis in Q4.

Kevin: Our pipeline consists largely of bringing some of these proven products to the U S and Japanese markets, representing significant growth opportunity.

Speaker Change: From a geographic standpoint, we continue to see results from our growth initiatives across Latin American and Asia Pacific.

Kevin: I will detail shortly our expectations for the impact of Mds in the U S.

Speaker Change: Primarily through new regulatory approvals and commercial footprint expansion.

Kevin: <unk> grew 7% on a constant currency basis compared to the same period last year.

Speaker Change: Latin America, and Asia Pacific delivered constant currency revenue growth.

Speaker Change: Respectively in the fourth quarter as in 'twenty, six and 11% for the full year.

Kevin: As a reminder, we received regulatory approval for Baidu in China last quarter, and we're continuing to work through some additional administrative steps to get access to the hospital level.

Speaker Change: We continue to anticipate strong revenue growth for both regions over the coming years as we continue to leverage our industry, leading product portfolio in those regions.

Kevin: These steps are expected to take about six to nine months. Therefore, we expect to begin commercializing bio glue in China in the second half of 2025.

Speaker Change: I will now turn to our product pipeline and our significantly our recent significant regulatory development with the Mds H D E.

Kevin: <unk> has been a great product for patients for many years and we're excited to be able to bring this technology to another large market.

Speaker Change: Stated simply the humanitarian device exemption or H D. E represents a significant milestone achievement for our two neon.

Kevin: To meet that approximately 12000 patients with acute type a dissections could benefit from Bible each year.

Speaker Change: For context, an H D as a marketing application for a product that has been designated a humanitarian use device.

Kevin: Lastly, tissue processing, which was the area most heavily impacted by the cyber incident declined 8% year over year on a constant currency basis in Q4.

Speaker Change: <unk> received humanitarian use device and breakthrough designations due to its intended benefit for patients in the treatment and diagnosis of a rare disease or condition, which other comparable options currently exist.

Kevin: From a geographic standpoint, we continue to see results from our growth initiatives across Latin American and Asia Pacific.

Speaker Change: The HD allows for commercial distribution of <unk> in the United States prior to the receipt of any PMA.

Kevin: Primarily through new regulatory approvals and commercial footprint expansion.

Kevin: Latin America, and Asia Pacific delivered constant currency revenue growth.

Speaker Change: The H D for Andy S was granted based on the full primary cohort 30 day data from the persevered U S IDE trial.

Kevin: That respectively in the fourth quarter as in 'twenty, six and 11% for the full year.

Kevin: We continue to anticipate strong revenue growth for both regions over the coming years as we continue to leverage our industry, leading product portfolio in those regions.

Speaker Change: The results from the <unk> trial, and the original Darts trial demonstrates superior clinical benefits of the ground breaking nature of this technology.

Speaker Change: And we believe this hte validates even further.

Kevin: I will now turn to our product pipeline and our significant recent significant regulatory development with the a M. D. S. H D E.

Speaker Change: Data from her severe trial, which completed enrollment of November of 2023 demonstrated statistically significant reduction in all cause mortality and primary major adverse events.

Kevin: Stated simply the humanitarian device exemption or H D. E represents a significant milestone achievement for our kidney odd.

Speaker Change: More specifically the persevered area out to 30 days the primary endpoint demonstrated a statistically significant 72% reduction ports.

Kevin: For context, an H D as a marketing application for a product that has been designated a humanitarian use device.

Speaker Change: Mortality and a 54% reduction in major adverse events compared to the current standard of care.

Kevin: <unk> received humanitarian use device and breakthrough designations due to its intended benefit for patients and the treatment or diagnosis of a rare disease or condition, which other comparable options currently exist.

Speaker Change: Finally, the results of both of these trials demonstrate know Dane tiers in any patient treated with <unk>, including the now five year data is follow up from the Dart study.

Kevin: The HD allows for commercial distribution of Mds in the United States prior to the receipt of any PMA.

For context, <unk> occur in up to 70% of patients following a hemi arch repair without andas.

The H D for Andy S was granted based on the full primary cohort 30 day data from the persevered U S IDE trial.

Speaker Change: The elimination of Dean is an important clinical outcome as patients who experienced a dean will have worse clinical outcomes, including increased mortality.

Kevin: The results from the <unk> trial, and the original Darts trial demonstrates superior clinical benefits of the ground breaking nature of this technology.

Speaker Change: <unk> growth and re operation.

Speaker Change: Since receiving the HD the one year data from AMD has persevered clinical trial was presented at a late breaking session at the STS in Los Angeles in late January.

Kevin: And we believe this hte validates even further.

Kevin: Data from persevered trial, which completed enrollment of November of 2023 demonstrated statistically significant reduction in all cause mortality and primary major adverse events.

Speaker Change: Late breaking data from our <unk> personal field trial demonstrated sustained benefit of Andas MBS out to one year with mortality in the Mds grew 50% lower than the referenced cohort.

Kevin: More specifically the persevered area up to 30 days the primary endpoint demonstrated a statistically significant 72% reduction ports.

Speaker Change: There were also zero occurrence of gain compared to the reference cohort.

Kevin: Mortality and a 54% reduction in major adverse events compared to the current standard of care.

Speaker Change: Which could have a range of up to 70%.

Speaker Change: In addition, there were minimal new occurrences of stroke renal failure, requiring dialysis or myocardial infarction. These.

Kevin: Finally, the results of both these trials demonstrate know Dane tiers in any patient treated with Andy S. Including the now five year data is follow up from the Dart study.

These data build on the positive findings from the 30 day Readouts.

Speaker Change: Further supporting the life saving nature of the MBS technology.

Kevin: For context, Dana here's occur in up to 70% of patients following a hemi arch repair without of MBS.

So we're very excited by the FDA decision to grant the Hte. It is now will now enable us to begin selling the product ahead of the PMA approval, but also the HD stands to meaningfully benefit patient outcomes and save lives.

Kevin: The elimination of Dean is an important clinical outcome as patients who experienced a dean will have worse clinical outcomes, including increased mortality.

Kevin: Air to growth and re operation.

Speaker Change: Lance will cover the expected financial impact of the H D. In 2025, but I did want to cover some specifics related to the HD in the product.

Kevin: Since receiving the H D. The one year data from AMD has persevered clinical trial was presented at a late breaking session at the.

Speaker Change: There are three steps at each center will have to complete before them planning and Andas as part of the MBS launch process.

Kevin: S T S in Los Angeles in late January.

Kevin: Late breaking data from our ambulance person field trial demonstrated sustained benefit of Andas MBS out to one year with mortality in the Mds grew 50% lower than the referenced cohort.

Speaker Change: First each hospital would need to receive a site wide IRB before implanting the MBS.

Speaker Change: Except in the case of an emergency use.

Kevin: There were also zero occurrence of gain compared to the reference cohort.

Speaker Change: Second we will need to have Andy is approved by the hospital value analysis Committee.

Kevin: Which could have a range of up to 70%.

Speaker Change: Third surges in their clinical staff will need to be trained on the device.

Kevin: In addition, there were minimal new occurrences of stroke renal failure, requiring dialysis or myocardial infarction. These.

Speaker Change: Lastly from a market perspective for those of you familiar with <unk>. There is a limit of 8000 devices that can be implanted annually.

Kevin: These data build on the positive findings from the 30 day Readouts further supporting the life saving nature of the MBS technology.

Speaker Change: In the case of MBS. This limit is larger than the total number of acute debakey type one dissections occur annually in the U S. So from a practical standpoint. This limit is not an issue.

Kevin: Yeah.

Kevin: So we're very excited by the FDA decision to grant the H D E and is now well that will enable us to begin selling that product ahead of the PMA approval, but it also the H D stands to meaningfully benefit patient outcomes and save lives.

Speaker Change: So I'd like to update you on our pipeline.

Speaker Change: And yes, we are focused on securing our PMA.

Speaker Change: In Q4, we submitted our second PMA module for Mds.

Kevin: Lance will cover the expected financial impact of the H D. In 2025, but I did want to cover some specifics related to the HD in the product.

The FDA and are currently working to complete some additional non clinical bench top testing.

Speaker Change: This testing is pursuant to recently adopted international standards by the FDA and is not related specifically to M. D. S.

Kevin: There are three steps at each center will have to complete before implanting in India as part of the a M. D S launch process.

Kevin: First each hospital would need to receive a site wide IRB before I am planning to MBS, except in the case of an emergency use.

Speaker Change: To account for this additional testing submission as well as the FDA review time of this data. We now anticipate we are now anticipating PMA approval for <unk> in mid 2026.

Kevin: Second we will need to have Andy is approved by the hospital value analysis Committee.

Speaker Change: Importantly, given the H D E. We do not view this delay is having a meaningful impact on our ability to generate <unk> revenue in the meantime.

Kevin: Third surges in their clinical staff will need to be trained on the device.

Lastly from a market perspective for those of you familiar with Hte's. There is a limit of 8000 devices that can be implanted annually.

Speaker Change: Additionally, endo span is expected to present, its 30 day data from its use.

Speaker Change: Yeah.

Kevin: In the case of MBS. This limit is larger than the total number of acute debakey type one dissections occur annually in the U S. So from a practical standpoint. This woman does not an issue.

Speaker Change: And for its Nexus aortic stent graft system at the Ats annual meeting in early May.

Speaker Change: Assuming the data shows the initial trial endpoints have been met Nexus remains on track for approval in the second half of 2026.

Kevin: So I'd like to update you on our pipeline.

Kevin: And yes, we are focused on securing our PMA.

Speaker Change: Yeah.

Speaker Change: Our strong financial clinical and regulatory performance in 2024 position us well for 2025 and beyond and reinforce our confidence that we can deliver sustainable double digit revenue growth.

Kevin: In Q4, we submitted our second PMA module for Andy S to.

Kevin: The F D. A and are currently working to complete some additional non clinical bench top testing.

Kevin: This testing is pursuant to recently adopted international standards by the FDA and is not related specifically to M. D. S.

Speaker Change: Drive EBITDA margin expansion and grow adjusted EBITDA at twice the rate of constant currency revenue growth.

Lance: With that I'll now turn the call over to Lance.

Kevin: To account for this additional testing submission as well as the FDA review time of this data. We now anticipate we are now anticipating PMA approval for MTS in mid 2026.

Lance: Thanks, Pat and good afternoon, everyone before I begin I'd like to remind you to please refer to our press release published earlier today for information regarding our non-GAAP results, including a reconciliation of these results to our GAAP results. Additionally, all percentage changes discussed will be on a year over year basis and revenue growth rates will be in constant currency unless otherwise.

Kevin: Importantly, given the H D E. We do not view this delay is having a meaningful impact on our ability to generate a mds revenue in the meantime.

Kevin: Additionally, endo span is expected to present, its 30 day data from its use.

Lance: Noted.

Lance: Total revenues were $97 3 million for the fourth quarter of 2024, 3% compared to Q4 of 2023.

Kevin: Yeah.

Kevin: As far as Nexus aortic stent graft system at the Ats annual meeting in early May.

Lance: Meanwhile, adjusted EBITDA increased approximately 15% from $15 3 million to $17 6 million in the fourth quarter of 2024.

Kevin: Assuming the data shows the initial trial endpoints have been met Nexus remains on track for approval in the second half of 2026.

Lance: Adjusted EBITDA margin was 18% in the fourth quarter of 100, its E 170 basis point improvement over the prior year driven by a 210 basis point reduction in non-GAAP, adjusted general and administrative and marketing expense as a percentage of revenue.

Kevin: Yeah.

Kevin: Our strong financial clinical and regulatory performance in 2024 position us well for 2025 and beyond and reinforce our confidence that we can deliver sustainable double digit revenue growth drive EBITDA margin expansion and grow adjusted EBITDA at twice the rate of constant currency revenue growth with that.

Lance: For the full year total revenues were $388 5 million up nine 4% constant currency and constant currency, excluding Kirk lot. Despite the approximate one percentage point headwind from the cyber incident.

Lance: I'll now turn the call over to Lance.

Lance: Thanks, Pat and good afternoon, everyone before I begin I'd like to remind you to please refer to our press release published earlier today for information regarding our non-GAAP results, including a reconciliation of these results to our GAAP results. Additionally, all percentage changes discussed will be on a year over year basis and revenue growth rates will be in constant currency unless otherwise.

Lance: Adjusted EBITDA grew 32% for the full year three times the rate of revenue growth. This resulted in adjusted EBITDA margin of 18%, a 310 basis point improvement from 2023.

Lance: As Pat mentioned, we deliver these results against the challenging backdrop from the November 2020 for cyber incident.

Lance: As noted.

Lance: Total revenues were $97 3 million for the fourth quarter of 2024 up 3% compared to Q4 of 2023.

Lance: Due to great work by our team. The incident was managed with minimal impact to our customers. Today, we are operating at normal levels with some minor inefficiencies, which we expect to be resolved in the near term.

Lance: While adjusted EBITDA increased approximately 15% from $15 3 million to $17 6 million in the fourth quarter of 2024, adjusted EBITDA margin was 18% in the fourth quarter of 100.

Lance: To quantify we estimated that the disruption associated with it that had a negative revenue impact of approximately $4 $5 million and negative adjusted EBITDA impact of approximately $2 million in Q4.

170 basis point improvement over the prior year, driven by a 210 basis point reduction in non-GAAP, adjusted general and administrative and marketing expense as a percentage of revenue.

Lance: As a result, the cyber incident reduced Q4 revenue growth, but an estimated 5% and full year growth by approximately 1%.

Lance: For the full year total revenues were $388 5 million up nine 4% constant currency and temporary.

Lance: We're pleased with our adjusted EBITDA results, which landed above the midpoint of our guidance. Despite the Q4 challenges and reflect strong operational leverage.

Lance: Currency, excluding Kirk lot. Despite the approximate one percentage point headwind from the cyber incident.

Lance: We continue to service customers throughout the temporary disruption and do not expect any meaningful impact on our business from the incident for the full year of 2025.

Lance: Adjusted EBITDA grew 32% for the full year three times the rate of revenue growth. This resulted in adjusted EBITDA margin of 18%, a 310 basis point improvement from 2023.

Lance: However, it will have some impact on the individual quarters for the year, which I will cover in the guidance section of our prepared remarks.

Lance: As Pat mentioned, we deliver these results against a challenging backdrop from the November 2020 for cyber incident.

Lance: To help contextualize, our Q4 results I will provide you some additional details on the estimated impacts of the 2020 for cyber event.

Pat: Due to great work by our team the incident was managed with minimal impact to our customers.

Pat: They were operating at normal levels with some minor inefficiencies, which you expect to be resolved in the near term.

Lance: We were unable to ship approximately $1 million worth of orders on the last day of the quarter that were ready to be shipped this $1 million of split evenly between tissue and stent grafts.

Pat: To quantify we estimated that the disruption associated with the bit had a negative revenue impact of approximately $4 $5 million and negative adjusted EBITDA impact of approximately $2 million in Q4.

Lance: The remaining $3 5 million in cyber event.

Lance: Cyber incident headwinds related to parts of the business, where we do not typically carry an inventory buffer.

As we have previously discussed demand in a large part of our tissue business outstrip supply every quarter and therefore, we hold no inventory, while we continued to receive and process tissues throughout the incident.

Pat: As a result, the cyber incident reduced Q4 revenue growth, but an estimated 5% and full year growth by approximately 1%.

Pat: We're pleased with our adjusted EBITDA results, which landed above the midpoint of our guidance. Despite the Q4 challenges and reflect strong operational leverage.

Lance: Due to the cyber event, we were less efficient and unable to process as much tissue as we normally would have within the quarter.

Pat: We continue to service customers throughout the temporary disruption and do not expect any meaningful impact on our business from the incident for the full year of 2025.

Lance: We estimate this had a roughly $2 million negative impact.

Lance: The last one 5 million of impact was related to a portion of our student graph business that is made to order. We continue to produce this product, but less efficiently than normal resulting in less product availability than would otherwise have been anticipated.

Pat: However, it will have some impact on the individual quarters for the year, which I will cover in the guidance section of our prepared remarks.

Pat: To help contextualize, our Q4 results I will provide you some additional details on the estimated impacts of the 2020 for cyber event.

Lance: On bio Lou and honest, we were able to meet demand with inventory on hand as reflected in these product perspective, Q4 growth rates, which were juniors generally inline with our expectations.

Pat: We were unable to ship approximately $1 million worth of orders on the last day of the quarter that were ready to be shipped this $1 million of split evenly between tissue and stiff grass.

Lance: From a.

Lance: Like my own perspective on a constant currency basis on X revenues increased 10%.

Pat: The remaining $3 5 million in cyber event.

Lance: It grew 8% while group revenues grew 7% in tissue processing.

Pat: Cyber incident headwinds related to parts of the business, where we do not typically carry an inventory buffer.

Lance: Processing revenues declined 8% in the fourth quarter.

Pat: As we have previously discussed demand in a large part of our tissue business outstrip supply every quarter and therefore, we hold no inventory, while we continued to receive and process tissue throughout the incident.

Lance: Excluding the estimated impact from the cyber incident tissue processing would've grown approximately 3% instead of brass would've grown approximately 16%.

Lance: Other revenue declined by approximately $600000 in the fourth quarter of 2024 driven by per club.

Pat: Due to the cyber event, we were less efficient and unable to process as much tissue as we normally would have within the quarter.

Lance: As a reminder, we sold the per club business in 2021 and are currently in the process of transferring manufacturing as a result, we expect to continue generating a limited amount of zero margin revenue from PERC lot until the transfer is complete.

Pat: We estimate this had a roughly $2 million negative impact there.

Pat: The last one 5 million of impact was related to a portion of our <unk> business that is made to order. We continue to produce this product, but less efficiently than normal resulting in less product availability than what otherwise have been anticipated.

Lance: For context, excluding per cloud our underlying business would have grown 10% for the full year 2024, compared to 2023 and 11% excluding both per clock and the cyber incident.

Pat: On bio glue in August we were able to meet demand with inventory on hand as reflected in these product perspective, Q4 growth rates, which were junior generally inline with our expectations.

Lance: Our as reported expenses include approximately $4 $6 million associated with the cyber incident, which are excluded from our adjusted EBITDA.

Pat: From a product line perspective on a constant currency basis on X revenues increased 10%.

Lance: The $4 $6 million impact consists of external advisor fees and an idled plant George we will also occur incur additional cyber related expenses in 2025, we anticipate seeking insurance reimbursement reimbursement for some of these costs, but that process will take some time and we will exclude any insurance proceeds that we received from adjusted EBITDA.

Pat: This grew 8% while group revenues grew 7% in tissue.

Pat: Processing revenues declined 8% in the fourth quarter.

Pat: Excluding the estimated impact from the cyber incident tissue processing would've grown approximately 3% instead of grass would've grown approximately 16%.

Lance: Though at that time as well.

Pat: Other revenue declined by approximately $600000 in the fourth quarter of 2024 driven by per club.

Lance: Gross margins were 63% in Q4 and were negatively impacted by approximately two percentage points by the idle plant charge gross margins were generally in line with prior year other than the impact of the idle plant charge.

Pat: As a reminder, we sold the per club business in 2021 and are currently in the process of transferring manufacturing as a result, we continue expect to continue generating a limited amount of zero margin revenue from park lot until the transfer is complete.

Lance: General administrative and marketing expenses in the fourth quarter were $51 4 million compared to $50 3 million in the fourth quarter of 2023.

For context, excluding per cloud of underlying business would have grown 10% for the full year 2024, compared to 2023 and 11% excluding both per club and the cyber incident.

Lance: non-GAAP general and administrative and marketing expenses were $47 5 million in the fourth quarter compared to $47 4 million in the fourth quarter of 2023.

Pat: Our as reported expenses included approximately $4 $6 million associated with the cyber incident, which are excluded from our adjusted EBITDA. The $4 $6 million impact consists of external advisor fees and an idle plant George.

Lance: R&D expenses for the fourth quarter were $7 $4 million compared to $7 $6 million in the fourth quarter of 2023.

Lance: Interest expense net of interest income was $9 4 million as compared to $5 8 million in the prior year.

Pat: We will also occur incur additional cyber related expenses in 2025, we anticipate seeking insurance reimbursement and reimbursement for some of these costs, but that process will take some time and we will exclude any insurance proceeds that we received from adjusted EBITDA at that time as well.

Lance: Other income and expense this quarter included foreign currency translation loss.

Lance: $4 million.

Lance: Free cash flow was $8 $7 million in the fourth quarter of 2024.

Lance: As of December 31, we had approximately 53 $5 million in cash and $314 3 million in debt.

Pat: Gross margins were 63% in Q4 and were negatively impacted by approximately two percentage points by the idle plant charge gross margins were generally in line with prior year other than the impact of the idle plant charge.

Lance: Net of $5 8 million of unamortized loan origination cost.

Lance: We do not anticipate the need to raise additional capital to fund our debt obligations, our investments in our channels or our pipeline in the foreseeable future.

General administrative and marketing expenses in the fourth quarter were $51 4 million compared to $50 3 million in the fourth quarter of 2023, non-GAAP general and administrative and marketing expenses were $47 5 million in the fourth quarter compared to $47 4 million in the fourth quarter of 2023.

Lance: Our net leverage at the end of Q4 was three eight down from <unk>.

Lance: Per year.

Lance: In regard to our capital structure as stated in our 8-K filing in December we anticipate all outstanding notes of our convertible debt due July of 2025 to convert to common stock at maturity. We believe this approach will optimize our balance sheet as we can to continue to focus on a multi year commitment to deleverage and reduce our interest expense.

Pat: R&D expenses for the fourth quarter were $7 $4 million compared to $7 $6 million in the fourth quarter of 2023.

Pat: Interest expense net of interest income was $9 4 million as compared to $5 8 million in the prior year.

Lance: In summary, 2024 was an excellent year excluding per client, we grew revenue, 10% and adjusted EBITDA, an outstanding 32% and made incredible progress on our product pipeline.

Pat: Other income and expense this quarter included foreign currency translation loss.

Pat: $4 million.

Pat: Free cash flow was $8 $7 million in the fourth quarter of 2024.

Lance: While the cyber incident was frustrating due to the impact on our people and our Q4 results our full year performance was still outstanding.

As of December 31, we had approximately 53 $5 million in cash and $314 3 million in debt.

Lance: And now for our initial outlook for the full year 2025.

Lance: We expect constant currency growth of between 10 and 14% for the full year 2025, representing a reported revenue range of $420 million to $435 million.

Pat: Net of $5 8 million of unamortized loan origination cost.

Pat: We do not anticipate the need to raise additional capital to fund our debt obligations, our investments in our channels or our pipeline in the foreseeable future.

Lance: At current rates, we expect foreign currency to have an approximate two percentage point negative impact on as reported revenue.

Pat: Net leverage at the end of Q4 was three eight down from <unk>.

Pat: Per year.

Pat: In regard to our capital structure as stated in our 8-K filing in December we anticipate all outstanding notes of our convertible debt due July of 2025 to convert to common stock at maturity. We believe this approach will optimize our balance sheet as we can to continue to focus on a multi year commitment to deleverage and reduce our interest expense.

As we look ahead, we expect the business to grow low double digits year over year over the long term driven by our portfolio of different air products and our best in class R&D pipeline.

Lance: With our continued top line revenue growth and general expense management, we expect adjusted EBITDA to be in the range of $84 million to $91 million for the full year 2025, representing 18% to 28% growth over 2024, and 200 basis points of adjusted EBITDA margin expansion at the midpoint of our ranges.

Pat: In summary, 2024 was an excellent year excluding per client, we grew revenue, 10% and adjusted EBITDA, an outstanding 32% and made incredible progress on our product pipeline.

Lance: Assuming the convertible debt is converted to shares at maturity in July at.

Pat: While the cyber incident was frustrating due to the impact on our people and our Q4 results our full year performance was still outstanding.

Lance: At the midpoint of our EBITDA guidance range, we expect net leverage to be below two by the end of the year.

Pat: And now for our initial outlook for the full year 2025.

Lance: We expect gross margins to improve by about 100 basis points driven by mixed benefit from U S. A N D S sales and continued leverage from our glue.

We expect constant currency growth of between 10 and 14% for the full year 2025, representing a reported revenue range of $420 million to $435 million.

Lance: Global sales force and G&A infrastructure.

Lance: R&D expense came in slightly below expectations in 2024, 7% of sales and is expected to increase to closer to 8% of sales in 2025, which is towards the high end of our longer term expectations.

Pat: At current rates, we expect foreign currency to have an approximately two percentage point negative impact on as reported revenue.

Pat: As we look ahead, we expect that business to grow low double digits year over year over the long term driven by our portfolio of different air products and our best in class R&D pipeline.

Lance: We continue to expect free cash flow to be positive for the fourth.

Lance: Bob.

For revenue, we expect similar dynamics as seen in 2024, except for the anticipated positive impact of the a M. D. S. H D.

Pat: With our continued top line revenue growth and general expense management, we expect adjusted EBITDA to be in the range of $84 million to $91 million for the full year 2025, representing 18% to 28% growth over 2024, and 200 basis points of adjusted EBITDA margin expansion at the midpoint of our ranges.

In 2024, we also had the benefit of one full quarter of the S. G. P. D price increase which benefited total company 2024 growth rates by approximately one percentage point.

Lance: In general that means for 2025 annual growth rates for tissue and bio glue in the mid single digits for on X in the low double digits and for state Ras in the mid teens before consideration of the a M D. S H E.

Pat: Assuming the convertible debt is converted to shares at maturity in July.

Pat: At the midpoint of our EBITDA guidance range, we expect net leverage to be below two by the end of the year.

Pat: We expect gross margins to improve by about 100 basis points driven by mixed benefit from U S. <unk> sales and continued leverage from our <unk>.

Lance: As Pat outlined there are several factors that will impact the timing of Andas revenue under the H D E and therefore revenue contribution from MTS in 2025.

Pat: Global Salesforce and G&A infrastructure.

Lance: In addition, some factors driving <unk> adoption or the H D E such as IRB approvals the value analysis Committee approval are largely outside of our control.

Pat: R&D expense came in slightly below expectations in 2024, 7% of sales and is expected to increase to closer to 8% of sales in 2025, which is towards the high end of our longer term expectations. We continue to expect free cash flow to be positive for the full year 'twenty.

Lance: We expect to have much more visibility in each of these factors that moved through the year and look forward to providing more detail on our next call.

Lance: At this point, we are assuming a one to two percentage point positive impact during 2022.

Pat: Bob.

Pat: For revenue, we expect similar dynamics as seen in 2024, except for the anticipated positive impact of the <unk> and.

Lance: So our constant currency growth rate from AMD S. H D with minimal impact on adjusted EBITDA as we invest in year one launch activities in.

Pat: In 2024, we also had the benefit of one full quarter of the <unk> price increase which benefited total company 2024 growth rates by approximately one percentage point.

Lance: In this first year will be focused on making any investments necessary to ensure the product is launched successfully and is positioned for stronger contribution in 2026 and beyond.

Pat: In general that means for 2025 annual growth rates for tissue and bio glue in the mid single digits for on X in the low double digits and for state Ras in the mid teens before consideration of the a M D. S H E.

Lance: Longer term, we expect this higher margin product and had significant benefits to our adjusted EBITDA.

Lance: As it relates to quarterly cadence, while we do not anticipate the cyber incident will have an impact on the full year 'twenty five.

Pat: As Pat outlined there are several factors that will impact the timing of Andas revenue under the H D E and therefore revenue contribution from Mds in 2025.

Lance: We do expect you will create some fluctuation between quarters.

Lance: The extended lead times in the tissue business in Q4, 2024, and the first half of Q1 'twenty 'twenty five reserved will result in fewer tissue releases in the first quarter, but we expect to catch up over the remainder of 2025.

Pat: In addition, some factors driving <unk> adoption or the hte, such as IRB approvals the value analysis committee approvals are largely outside of our control.

Pat: We expect to have much more visibility in each of these factors has moved through the year and look forward to providing more detail on our next call.

Lance: Additionally, while we were able to meet an X demand in Q4 with existing inventory on hand are honest throughput in December and January were below normal levels. As a result, we anticipate we will have lower than normal distributor sales of ion X in Q1, but we will catch up catch up over the remainder of the year.

Pat: At this point, we are assuming a one to two percentage point positive impact during 2020.

Pat: Two our constant currency growth rate from <unk> <unk> with minimal impact on adjusted EBITDA as we invest in year one launch activities in.

Lance: Also we anticipate AMD ourselves to be minimal in Q1 and grow sequentially each quarter of 2025.

Pat: In this first year will be focused on making any investments necessary to ensure the product is launched successfully and is positioned for stronger contribution in 2026 and beyond.

Lance: While we do not plan to provide quarterly guidance on a regular basis given the expected non typical quarterly cadence, we are providing onetime guidance for our.

Pat: Longer term, we expect this higher margin product and its significant benefits to our adjusted EBITDA.

Lance: First quarter 2025 revenue for clarity.

Pat: As it relates to quarterly cadence, while we do not anticipate the cyber incident will have an impact on the full year 'twenty five.

Lance: We are forecasting our first quarter reported revenue to be in the range of $94 million to $96 million.

Pat: We do expect you will create some fluctuation between quarters.

This represents roughly $10 million less of primarily tissue and some on X revenues than we would normally expect we anticipated $10 million will be caught up over the remainder of 2025 as we clear our tissue processing backlog and return on X inventory to desired levels.

Pat: The extended lead times in the tissue business in Q4, 2024, and the first half of Q1 2025, we reserved will result in fewer tissue releases in the first quarter, but we expect to catch up over the remainder of 2025.

Lance: In summary, we are proud of our progress to date through our strong full year 2020 for results and we are excited about the prospects of the business in 2025 and beyond.

Pat: Additionally, while we were able to be honest demand in Q4 with existing inventory on hand are honest throughput in December and January were below normal levels. As a result, we anticipate we will have lower than normal distributor sales of Rx in Q1, but we will catch up catch up over the remainder of the year.

Pat Mackin: With that I will turn the call back to Pat for his closing comments. Thanks.

Pat Mackin: Thanks Lance.

As you've just heard our strategy is working we're pleased with our strong performance in 2024, which position us well for double digit growth on the revenue side and twice as fast or EBITDA.

Pat: Also we anticipate <unk> sales to be minimal in Q1 and grow sequentially each quarter of 2025.

Pat Mackin: More specifically we had the following key growth drivers will help us deliver on our continued revenue and EBITDA growth for 2025 and beyond.

Pat: While we do not plan to provide quarterly guidance on a regular basis given the expected non typical quarterly cadence, we are providing onetime guidance for our.

Pat Mackin: A&D S. H D allows us to begin commercializing aimed yes in the U S. Prior to the PMA, which we're already in full process now.

Pat: First quarter 2025 revenue for clarity.

Pat: We are forecasting our first quarter reported revenue to be in the range of <unk> $94 million to $96 million.

Pat Mackin: The recent data I mentioned about the on X versus bio prosthetic valves, focusing on the mortality benefit in under six year olds in patients for mechanical valves versus tissue valves.

Pat: This represents roughly $10 million less of primarily tissue and some on X revenues than we would normally expect we anticipated $10 million will be caught up over the remainder of 2025 as we clear our tissue processing backlog and return on X inventory to desired levels.

Pat Mackin: Number three <unk>.

Pat Mackin: <unk>, China regulatory approval as we said in the script.

Pat Mackin: Like the second half of this year, which you continue to drive our bio glue revenue growth.

Pat Mackin: Number four we're gonna be submitting our full PMA for Mds, we talked about that pushing back to mid 2026, and then finally nexus PMA I'll be showing their 30 day data, which is the primary endpoint of their F. D. A trial here in early May which gives us access to our next PMA, assuming they get approval.

Pat: In summary, we are proud of our progress to date through our strong full year 2020 for results and we are excited about the prospects of the business in 2025 and beyond with that I will turn the call back to Pat for his closing comments. Thanks, Lance So as you've just heard our strategy is working we're pleased with our strong performance in 2024, which.

Speaker Change: I want to thank our employees around the globe for their continued dedication to our mission and for being a leading partner to surgeons focused on aortic disease with that operator, please open up the lines.

Pat: This isn't us well for double digit growth on the revenue side and twice as fast or EBITDA.

Pat: More specifically we had the following key growth drivers will help us deliver on our continued revenue and EBITDA growth for 2025 and beyond.

Speaker Change: Thank you.

Pat: A&D is H D allows us to begin commercializing aimed yes in the U S. Prior to the PMA, which we're already in full process now.

Speaker Change: We will now be conducting a question and answer session. If you will.

Speaker Change: And I have to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question you.

Pat: The recent data I mentioned about the on X versus bio prosthetic valves, focusing on the mortality benefit in under six year olds in patients for mechanical valves versus tissue valves.

Speaker Change: You May press star two to remove yourself from the queue for participants using speaker equipment, it may be necessary to pick up the handset before pressing.

Pat: Number three.

Speaker Change: One moment, please while we poll for questions.

<unk>, China regulatory approval as we said in the script.

Yeah.

Like the second half of this year, which should continue to drive our bio grew revenue growth.

Speaker Change: Our first question comes from the line of Rick Wise with Stifel.

Pat: Number four we're gonna be submitting our full PMA for Mds, we talked about that pushing back to mid 2026, and then finally nexus PMA I'll be showing their 30 day data, which is the primary endpoint of their FDA trial here in early May which gives us access to our next PMA, assuming they get approval.

Speaker Change: Please proceed with your question.

Speaker Change: Yeah.

Speaker Change: Thank you and good afternoon, Pat Thailand.

Speaker Change: Maybe let's just start off with.

Speaker Change: Ah, you're really Mds commercial progress to date and it sounds like it's going well, but.

Speaker Change: Can you give us more detail more color more perspective on.

Pat: I want to thank our employees around the globe for their continued dedication to our mission and for being a leading partner to surgeons focused on aortic disease with that operator, please open up the lines.

Speaker Change: The number of hospitals that are interested.

Speaker Change: The early physician feedback.

Speaker Change: Just you know.

Pat: Thank you.

Speaker Change: The.

Pat: Okay.

The set up for for the year ahead, and maybe you could talk us through that.

Speaker Change: We will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question you May press star two to remove yourself from the queue participants using speaker equipment, it may be necessary to pick up the handset before pressing.

Speaker Change: Yes, Thanks, Rick So let me just start with kind of the building blocks of what we've already done today, we obviously receive the H D. In early December.

Speaker Change: One moment, please while we poll for questions.

Speaker Change: We had a couple of weeks of internal kind of paper, we need to do so the the device didn't really become available for shipment in selling until really late late December.

Speaker Change: Okay.

Rick Wise: Our first question comes from the line of Rick Wise with Stifel.

In January we've trained our U S commercial team, which went extremely well, they're they're highly motivated and highly trained.

Please proceed with your question.

Speaker Change:

Speaker Change: Thank you and good afternoon, Pat Thailand.

Speaker Change: Maybe let's just start off with.

Speaker Change: Two weeks later at the end of January we presented the one year persevere data that I mentioned in my script.

Speaker Change: Ah you're early Mds commercial progress to date, it sounds like it's going well, but can.

Speaker Change: Where we show a 50% reduction in mortality at one year and still no Danes.

Speaker Change: Can you give us more detail more color more perspective on.

Speaker Change: Whereas the control or the reference cohort at up to 70% Dave.

The number of hospitals that are interested.

Speaker Change: Early physician feedback.

Speaker Change: Our commercial team is in the process of.

Speaker Change: Just you know.

Speaker Change: Three steps, which is you've got to get an IRB you've been gotta go through value analysis Committee and then the surgeons Gotta get trained.

Speaker Change: The.

The set up for for the year.

Year ahead, maybe you could talk us through that.

Speaker Change: A number of centers that are in the mix of that we're not going to kind of break down and give you guys are kind of our internal scorecard. We're gonna will report the number.

Speaker Change: Yes, Thanks, Rick So let me just start with kind of the building blocks of what we've already done today.

Speaker Change: Obviously received the H D in early December.

Speaker Change: Every quarter in our stent graft number but I can tell you we've got you know.

Speaker Change: We had a couple of weeks of internal kind of paper, we need to do so the the device didn't really become available for shipment in selling until really late late December.

Speaker Change: Roughly 55 feet on the street in the U S.

Speaker Change: They're all actively pursuing <unk> accounts as we speak.

Speaker Change: In January we've trained our U S commercial team.

Speaker Change: Gotcha.

Speaker Change: I don't want to be denser than usual, but help me better understand you're clearly very high strong confidence.

Speaker Change: Which went extremely well, they're highly motivated and highly trained.

Speaker Change: Two weeks later at the end of January we presented the one year persevere data that I mentioned in my script.

Speaker Change: 100% of the lost revenue.

Speaker Change: Returns throughout the year.

Speaker Change: Where we show a 50% reduction in mortality at one year and still no Danes.

Speaker Change: Throughout the year.

Speaker Change: And again I.

Speaker Change: The part that confuses me is just that.

Whereas the control or the reference cohort had up to 70% days.

Speaker Change: You'd think that Wouldnt. These patients that you might have implanted.

Speaker Change: Our commercial team is in the process of.

Speaker Change: They've gotten.

Speaker Change: You know the three steps, which is you've got to get an IRB you've gotta go through value analysis Committee and then the surgeons Gotta get trade.

Speaker Change: Competitive device or some kind of competing.

Speaker Change: Procedure, and so theyre not going to come back and just talk about it on the tissue and on the Unexcited. If you would just help us better understand.

Speaker Change: Okay.

Speaker Change: Number of centers that are in the mix of that we're not going to kind of break down and give you guys are kind of our internal scorecard.

Speaker Change: Yeah, So I'll take a shot at that first silicon in packaging can jump in.

Speaker Change: So I mean honestly theres going be some patients that just cant wait and we'll have to get some other.

Speaker Change: We're gonna will report the number.

Speaker Change: Every quarter in our stent graft number but I can tell you we've got.

Speaker Change: Some of the device.

Speaker Change: Roughly 55 feet on the street in the U S that are.

Speaker Change: The demand is so far exceeds our supply every single quarter that I mean every quarter. There are patients that are getting other devices, because they can't get ours.

Speaker Change: We're all actively pursuing <unk> accounts as we speak.

Speaker Change: Gotcha.

Speaker Change: And we.

Speaker Change: I don't want to be denser than usual, but help me better understand you're clearly very high strong confidence that 100% of the lost revenue.

Speaker Change: We just have a high level of confidence that when we can release these tissues that they will be purchased.

Speaker Change: Customers there there's just.

Speaker Change: Significantly higher demand than there is supply and because we've continued to receive donations abnormal throughout this whole process and you know we're processing. It's just that it's taking longer. So it's basically just that I mean, because the donations coming in we're still normal and that wasn't impacted and because we do.

Speaker Change: Turns throughout the.

Throughout the year.

Speaker Change: Again.

Speaker Change: The part that confuses me is just that.

Speaker Change: You'd think that Wouldnt. These patients that you might've implanted it wouldn't have gotten.

Speaker Change: Device or some kind of competing and procedure and so they're not going to come back and just talk about it on the tissue and on the Unexcited. If you would just help us better understand.

Speaker Change: See any change to the underlying demand we don't see any reason why we shouldn't catch that up over the course of the year.

Speaker Change: Yeah, So I'll take a shot at the first hurricane impact can jump in.

Speaker Change: I think part of it part of it.

Speaker Change: Part of what's fueling it is the data.

Speaker Change: So I mean, obviously, there's going be some patients that just cant wait and we'll have to get some other.

Speaker Change: Right. So if you look at the two segments the big drivers for our tissue business and for the on X business.

Speaker Change: Some of the device.

Speaker Change: Is the clinical data I mean, the raw data that was raw data presented at American Heart November that shows. It's it's the best aortic valve operation for you know for younger patients under a kind of 50.

The demand is so far exceeds our supply every single quarter that I mean every quarter. There are patients that are getting other devices, because they can't get ours.

Speaker Change: We literally sell every large pulmonary valve we have.

Speaker Change: And.

Speaker Change: We just have a high level of confidence that when we can release these tissues that they will be purchased.

Speaker Change: I think your point is fair like where are we missing out on some right now yeah, but we know exactly how much tissue, we brought in which was at the normal level throughout the cyber event.

Speaker Change: <unk> customers there is just.

Speaker Change: Significantly higher demand than there is supply and because we've continued to receive donations as normal throughout this whole process and we're processing.

Speaker Change: We had to do some of them. He says he's going to take us longer to get it through the process.

Speaker Change: But we will sell every one of them.

Speaker Change: And then St products.

Speaker Change: This is taking longer so it's basically just that I mean, because the donations coming in we're still normal and that wasn't impacted and because we don't see any change to the underlying demand. We don't see any reason why we shouldn't catch that up over the course of the year.

Speaker Change: We were able because we.

Speaker Change: <unk> had enough stuff and with too.

Speaker Change: Basically grow on X, 10% in the fourth quarter during a cyber event, but we really depleted a lot of inventory, because we werent, making valves for them up.

Speaker Change: We will catch that up in the new data I just talked about that was presented at STS.

Speaker Change: Yeah, I mean, I think part of it part of it part of what's fueling it is the data right. So if you look at the two segments the big drivers for our tissue business and for the on X business.

You had 109000 patients that basically shows that you will die more if you've got a tissue valve if you're under the age of 60.

Speaker Change: As is the clinical data I mean, the raw data that was raw data presented at American Heart November that shows. It's it's the best aortic valve operation for you know for younger patients under a kind of 50.

Speaker Change: So we just got the data so we're super bullish on on both Onyx and the S. E T V for Ross.

Speaker Change: And we've got the materials, we just have to get them through the process and we will.

Speaker Change: We're kind of tied up for a bit there with the cyber event, but we've got full year guidance of 10% to 14%.

Speaker Change: We literally sell every large pulmonary valve we have.

Speaker Change: I think your point is fair like what are we missing out on some right now yeah, but we know exactly how much tissue, we brought in which was at the normal level throughout the cyber event.

Speaker Change: And feel very strongly about it.

Speaker Change: Gotcha and just one last one for me if I could I just wanted to make sure I'm fully understanding.

Speaker Change: We had to do some of them. He says he's going to take us longer to get it through the process, but we will sell every one of them.

Speaker Change: The timeline delay the PMA timeline delay for the Mds device are pushed out to mid 2006.

Speaker Change: And then same products.

Speaker Change: We were able because we.

Speaker Change: This conservatism I mean, it seems like good news that you submitted the second module in in the fourth quarter.

Speaker Change: <unk> had enough stuff and with.

Speaker Change: To basically grow at X, 10% in the fourth quarter during a cyber event, but we really depleted a lot of inventory because we werent, making valves for a month.

Speaker Change: I'm just not clear what's delayed here and why are you pushing it out help us better understand.

Speaker Change: We will catch that up in the new data I just talked about that was presented at the STS.

Speaker Change: But it's fair Rick.

Speaker Change: I will say.

Speaker Change: 109000 patients that basically shows that you will die more if you get a tissue valve. If you are under the age of 60.

Speaker Change: When we were working on the H D E.

Speaker Change: Literally there was no PMA discussions going on we focused 100% on the H D, which obviously I think makes sense.

Speaker Change: So we just got the data so we're super bullish on on both Onyx and the S. G. P V for Ross.

Speaker Change: We got that approval.

Speaker Change: We were submitting modules, we submitted two modules in 2000 22024.

Speaker Change: We've got the materials, we just have to get them through the process and we will.

Speaker Change: We were kind of tied up for a bit there where the cyber event, but we've got full year guidance of 10% to 14%.

Speaker Change: We started having our first discussions about the.

Speaker Change: The status of the PMA in January.

Speaker Change: <unk>.

Speaker Change: And feel very strongly about it.

Speaker Change: One of the things the FDA notified us about and this is unrelated to any of this recent stuff is there was some news testing bench testing they that our Indiana International standards, they're applying it to all companies in all devices implantable devices, which we're going to have to do for him. Yeah. So this is a kind of a new test some new testing they want.

Speaker Change: Gotcha and just one last one for me if I could I just wanted to make sure I'm fully understanding.

Speaker Change: The timeline delay the PMA timeline delay for the Mds device.

Speaker Change: Got to mid 2016 is this conservatism I mean, it seems like good news that you submitted the second module in the in the fourth quarter.

Speaker Change: It has to do with everyone who's going to have to do and when you look at what the testing is and how long it takes and the emissions and everything else, it's going to add two quarters, and we're just being transparent with people.

Speaker Change: I'm, just not clear what's delayed here.

Speaker Change: Why are you pushing it out help us better understand.

I personally don't think it has a big impact.

Rick Wise: No it's fair Rick.

Speaker Change: The only the only real difference between the H D and the PMA is getting an IRB.

Speaker Change: So I will say.

Speaker Change: When we were working on the Hte literally there was no PMA discussions going on we focused 100% on the H D, which obviously I think makes sense.

Speaker Change: And we feel pretty comfortable that this isn't going to change kind of the revenue trajectory. So yeah. I mean, we're going to keep working it and try to bring that in but that stuff, we're being transparent with folks.

Speaker Change: We got that approval.

Speaker Change: We were submitting modules, we submitted two modules in 2000 22024.

Speaker Change: Gotcha. Thank you.

Thank you.

Speaker Change: We started having our first discussions about.

Speaker Change: Our next question comes from the line of Frank Pakenham make Street capital markets. Please proceed with your question.

Speaker Change: The status of the PMA in January.

One of the things the FDA notified us about and this is unrelated to any of this recent stuff.

Speaker Change: Alright, thanks for taking the questions I'll also start with one again Mds can you remind us just how many implanting signs of potential implanting science you see in the U S and the penetration into those sites you have with your existing sales force with other products.

Speaker Change: Is there was some news testing bench testing they that are in their international standards, they're applying it to all companies in all devices implantable devices.

Speaker Change: We're going to have to do for him. Yeah. So this is a kind of a new test some new testing they want us to do which everybody is going to have to do and when you look at what the testing is and how long it takes and the submissions and everything else, it's going to add two quarters, and we're just being transparent with people.

Speaker Change: Yeah, I would say big picture.

Speaker Change: There's about 1000 centers that do a debakey type one dissection.

Speaker Change: Sure.

Speaker Change: As a rule of thumb, we basically sell stuff to all those centers, but as a rule of thumb you know 80% of the volume is probably in the top 600 centers, which is where we're focused.

Speaker Change: I personally don't think it has a big impact.

Speaker Change: The only the only.

Speaker Change: The real difference between the <unk>, the H D and the PMA is getting an IRB.

Speaker Change: And we feel pretty comfortable that this isn't going to change kind of the revenue trajectory. So yeah. I mean, we're going to keep working it and try to bring that in but that's the we're being transparent with folks.

Speaker Change: So again, we call it home they were not obviously to go after all 1000 at once it's obviously in practical also the volume tends to be skewed.

Speaker Change: To the larger centers so.

Speaker Change: Gotcha. Thank you.

Speaker Change: We have I would say we have great coverage.

Speaker Change: The 80% of the volume immediately and we'll have to work through kind of a prioritization, which we've already done.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Frank <unk> with Lake Street Capital markets. Please proceed with your question.

Speaker Change: Which ones. We go after first but obviously, we're going to go after the larger centers and that follow we have a whole kind of cadence to that to that launch.

Speaker Change: Alright, thanks for taking the questions I'll also start with one maybe on Mds can you remind us just how many implanting signs of potential implanting science you see in the U S and the penetration into those sites you have with your existing sales force with other products.

Speaker Change: Okay. That's helpful. And then just one more on the cyber security incident can you help us out at the operational level. What is what is occurring that is preventing the processing is it extra steps that now need to occur or is it just business unit leadership distraction, what exactly is kind of a bottleneck to producing or <unk>.

Speaker Change: Yeah, I would say big picture.

Speaker Change: There's about 1000 centers that do a debakey type one dissection.

Speaker Change: <unk>.

Speaker Change: As a rule of thumb, we basically sell stuff to all of those centers, but as a rule of thumb, 80% of the volume is probably in the top 600 centers, which is where we're focused.

Speaker Change: <unk> the tissue.

Speaker Change: Things that we have we would normally use our systems, where we were having to do manually for a period of time.

Speaker Change: And so that is just extending the period of time that it takes to get through everything and it really relates to tissue debride or in process at the time of the event.

Speaker Change: So again, we call on all of them, but we're not obviously going to go after all 1000 at once it's obviously in practical.

Speaker Change: Or that were donations are received.

Speaker Change: So the volume tends to be skewed.

Speaker Change: To the larger centers so.

Speaker Change: Basically through January.

We have I would say we have great coverage of the 80% of the volume immediately.

Speaker Change: If we receive a donation today processes through our systems normally and it'll have a normal lead time, but you know there was a <unk>.

Speaker Change: And we'll have to work through kind of prioritization, which we've already done.

Speaker Change: Two months period, plus whatever was already in process, where it's just it just is a lot more labor intensive and it's going to take a lot longer to get through.

Speaker Change: Which which ones we go after first.

Speaker Change: But obviously, we're gonna go after the larger centers and then follow up we have a whole kind of cadence to that to that launch.

Speaker Change: Okay. Thanks, and then just last one from me I appreciate the commentary on Q1 revenue.

Speaker Change: Okay. That's helpful. And then just one more on the cyber security incident can you help us at an operational level. What is what is occurring that is preventing the processing is it extra steps that now need to occur or is it just business unit leadership distraction, what exactly is kind of a bottleneck to producing or <unk>.

Speaker Change: Can you help us maybe think about Q1 adjusted EBITDA in light of the revenue cadence throughout the year.

Speaker Change: Yes, I mean I think.

Speaker Change: Definitely Q1 is going to be the lowest adjusted EBITDA.

Speaker Change: Testing the tissue.

Speaker Change: Of the year and I think you've got to kind of think through that Fortunately with drop through in revenue.

Speaker Change: Things that we have we would normally use our systems, where we were having to do manually for a period of time.

Speaker Change: It's not like we're going to go cut a bunch of expenses out of Q1, just because we're gonna have timing differences on revenue.

Speaker Change: And so that is just extending the period of time that it takes to get through everything and it really relates to tissues. The reader in process at the time of the event.

Speaker Change: I also think I mean.

Speaker Change: We give we give full year revenue and EBITDA guidance.

Speaker Change: Or that were donations are received.

Speaker Change: Which is exactly what we've been telling people, we're gonna grow the top line double digits in the bottom line at least twice as fast.

Speaker Change: Basically through January.

Speaker Change: We receive a donation today it processes through our systems normally and it'll have a normal lead time, but you know there was a.

We've given you the kind of the range of revenue and EBITDA.

Speaker Change: This was obviously the cyber event was a unexpected one time it.

Speaker Change: Two months period, plus whatever was already in process, where it's just it just is a lot more labor intensive and it's going to take a lot longer to get through it.

Speaker Change: It was painful to go through our team did a great job responding to it but you know trying to parcel out like <unk>.

Speaker Change: Yeah.

Speaker Change: Okay. Thanks, and then just last one for me.

Speaker Change: Q1, we've given you kind of some revenue direction.

Appreciate the commentary on kind of Q1 revenue.

Speaker Change: Full year EBITDA guidance and revenue guidance, we're feel we feel very comfortable with so.

Speaker Change: Can you help us maybe think about Q1 adjusted EBITDA in light of the revenue cadence throughout the year.

Okay.

Speaker Change: Yes, I mean I think.

Speaker Change: That's helpful. Appreciate the commentary thanks, guys.

Speaker Change: Definitely Q1 is going to be the lowest adjusted EBITDA.

Speaker Change: Thank you.

Speaker Change: Of the of the year and I think you've got to kind of think through that Fortunately with drop through on revenue. It's not like we're going to go cut a bunch of expenses out of Q1, just because we're going to have timing differences on revenue.

Speaker Change: Next question comes from the line of Suraj.

An island company. Please proceed with your question.

Speaker Change: Hey, Pat Pat.

Speaker Change: Pipelines can you hear me alright.

Speaker Change: Hey, Suraj.

Speaker Change: But I also think I mean.

Speaker Change:

Speaker Change: We give we give full year revenue and EBITDA guidance.

Pat Mackin: First and foremost congrats on a strong finish to the year.

Speaker Change: Which is exactly what we can tell people, we're going to grow the top line double digits in the bottom line at least twice as fast.

Speaker Change: Despite the cyber breach and.

Speaker Change: You guys have had a full year run for what it's worth and I've never missed a beat even in Covid. So it's unfortunate.

Speaker Change: We are giving you the kind of the range of revenue and EBITDA.

Speaker Change: This was obviously the cyber event was a unexpected one time.

Speaker Change: This macro level incident.

Speaker Change: That having said the 190000 patient retrospective analyses that you talked about.

Speaker Change: It was painful to go through our team did a great job responding to it but you know trying to parcel out like you know what.

Speaker Change: Yes.

Directionally points like that is a strong argument to be made that mechanical valves.

Speaker Change: Q1, we've given you kind of some revenue direction.

Speaker Change: Full year EBITDA guidance and revenue guidance, we're feel we feel very comfortable with so.

Speaker Change: Dominate 60 below maybe 60 to 65, but by the theme token part that analyses also indicated that overall the mechanical valve usage was <expletive>.

Speaker Change: Okay.

Speaker Change: That's helpful. Appreciate the commentary thanks, guys.

Speaker Change: Declining right. So I guess my question to you is what kind of missionary work as needed.

Speaker Change: Thank you IRA.

Speaker Change: Our next question comes from the line of Suraj Kalia with.

Speaker Change: Let's see from from Octavian.

In Iowa and company. Please proceed with your question.

Speaker Change: To reverse this trajectory and get to the expectation that unexplored delever.

Speaker Change: Hey, Pat Pat.

Speaker Change: Pipelines can you hear me alright.

Speaker Change: Hey, Suraj.

Speaker Change: Yes, so maybe maybe I can make a couple of comments. So this this was presented as a late breaker at S. T S and it's a 109000 patients in.

Speaker Change:

First and foremost congrats on a strong finish to the year.

Speaker Change: Despite the cyber breach and.

Speaker Change: And they basically looked at if if you've got a tissue valve or a mechanical valve and you were under the age of 70 was the was the actual study.

Speaker Change: You guys have about a four year run for what it's worth and I've never missed a beat even in Covid. So it's unfortunate.

Speaker Change: This macro level incident.

Speaker Change: That having said the 190000 patient retrospective analyses that you talked about.

Speaker Change: And basically the lines cross at 60.

Speaker Change: So if you if you were under 60, you actually had a survival benefit by getting a mechanical valve as far as the the.

Speaker Change: Yes.

Speaker Change: Directionally point like that is a strong argument to be made that mechanical valves.

Speaker Change: The mechanical valve market declining it actually it was shown over years, the mechanical valve market has actually been growing and by the way. That's just a U S number that they're looking at so we've actually been the.

Speaker Change: Dominate 60 below maybe 60% 65, but by the same token part that analyses also indicated that overall the mechanical valve usage was <expletive>.

The market has actually been growing.

Speaker Change: Declining right. So I guess my question to you is what kind of missionary work as needed.

But its way down from where it was say 10 years ago.

Speaker Change:

Speaker Change: And I think to your point I think one if you talk to surgeons.

Let's see from from Octavian.

Speaker Change: Surgeons were really.

Speaker Change: Blown away by the data and guys walking out of there, saying I don't know if you heard the discussion was.

Speaker Change: To reverse this trajectory and get to the expectation that Phoenix would delever.

Speaker Change: It was from the Mayo clinic, and basically said you guys have been doing patients wrong and you should've been putting mechanical valves in under six year old Hall.

Speaker Change: Yes, so maybe maybe I can make a couple of comments. So this this was presented as a late breaker at STS and its 109000 patients and.

Speaker Change: It was a pretty pretty much of smacked out and but I think to your question I think you know getting after referring cardiologists with our with our surgeon group and we've got some some plans in place.

Speaker Change: And they basically looked at if if you've got a tissue valve or a mechanical valve and you were under the age of 70 was the was the actual study.

Speaker Change: That'd be working on kind of midpoint of the year.

Speaker Change: And basically the lines cross at 60.

Speaker Change: So if you if you were under 60, you actually had a survival benefit by getting a mechanical valve and as far as the the.

Speaker Change: So I do think Theres some to your point, there's some stuff we can do to accelerate that but this recent onyx post approval data.

Speaker Change: Showing an 87% reduction in bleeding coupled with this recent data out of Jack.

Speaker Change: The mechanical valve market declining it actually.

Speaker Change: It was shown over years, the mechanical valve market has actually been growing and that's by the way. That's just a U S number that they're looking at so we've actually been.

Speaker Change: Showing a mortality benefit in patients under 60 means.

Speaker Change: It means we can actually start going after.

Speaker Change: Valves in patients under 60.

Speaker Change: The market has actually been growing.

Speaker Change: Which doubled our business.

Speaker Change: But its way down from where it was say 10 years ago.

Speaker Change: So people were always kind of like him in and on what you guys did you guys keep growing on X, 10%, how long would it be able to keep doing that well it looks like for a while.

Speaker Change: And I think to your point I think one if you talk to surgeons.

Speaker Change: Surgeons were really blown away by the data and guys walking out of there said I don't know if you heard the discussion was from the Mayo clinic and basically said you guys have been doing patients wrong and you should've been putting mechanical valves in under six year old all along.

Speaker Change: Got it.

Pat Mackin: Pat on Mds I know everyone has asked a question on the others. So forgive me for belaboring. This.

Pat Mackin: From 30 days to one year right. We now have the data what has been the conversation in the clinical community in terms of the 30 days to one year trajectory.

Speaker Change: It was a pretty pretty much of smacked out.

Speaker Change: And but I think to your question I think you know getting after referring cardiologists with our with our surgeon group and we've got some some plans in place.

Pat Mackin: You know, what's the noise in the ground any any color you could share with us.

Speaker Change: That'd be working on kind of midpoint of the year.

Speaker Change: So I do think there is some to your point, there's some stuff we can do to accelerate that but there's this recent onyx post approval data.

Pat Mackin: Yeah, I was actually just at a.

Speaker Change: Surgical meeting with about 60 heart Surgeons what did we have this data was presented again and this is just last weekend.

Speaker Change: Showing an 87% reduction in bleeding coupled with this recent data out of Jack.

Speaker Change: I think there is overwhelming it's been shown in work that other analysts have done.

Speaker Change: Showing a mortality benefit in patients under 60.

Speaker Change: It means we can actually start going after.

Speaker Change: Valves in patients under 60.

The amount of I think.

Speaker Change: Which doubles our business.

Speaker Change: Support for this device being used in acute type a dissections is extremely strong.

Speaker Change: So people were always kind of like him in and on what you guys. You guys keep growing on X, 10%, how long would it be able to keep doing that well it looks like for a while.

Speaker Change: I mean to have a.

Speaker Change: So a lot of these patients by the way of life patients die on the table. So.

Speaker Change: Yeah.

Speaker Change: 72% reduction in mortality. This is truly a life saving device, which is why the F D. A.

Speaker Change: Got it.

Speaker Change: Pat on Mds I know everyone has asked a question on the others. So forgive me for belaboring. This.

Took us down to H D E pathway.

Speaker Change: And I think this is gonna be a a very important device for patients who have this devastating condition.

Speaker Change: So D D. Two one year right. We now have the data out what has been the conversation in the clinical community in terms of the <unk> two one year trajectory.

Speaker Change: And the physician Buzz on this is extremely high so I think part of the reason, we're so bullish on.

Speaker Change: R R.

Speaker Change: You know, what's the noise in the ground any any color you could share with us.

Speaker Change: Is it as a MBS is is really a.

Speaker Change: Great taken we have a great sales force, we have great clinical data, we have a great device, there's no competition and.

Speaker Change: Yeah, I was actually just a.

Speaker Change: Surgical meeting with about 60 heart surgeons.

Speaker Change: We have this data was presented again and this is just last weekend.

Speaker Change: We're gonna be pushing hard to get this technology to patients.

Speaker Change: I think there is overwhelming.

Speaker Change: Got it and last one quick one and then I'll hop back in queue.

Speaker Change: It's been shown in work that other analysts have done.

Speaker Change: O U S has obviously been strong, especially late Pam and yeah.

Speaker Change: The amount of I think.

Speaker Change: As you look for FY 'twenty five I believe you said there'll be 1% to 2% hit on FX forgive me, if I got that number wrong, but just kind of ask too.

Speaker Change: Support for this device being used in acute type a dissections is extremely strong.

I mean to have a go.

Speaker Change: A lot of these patients by the way of life patients die on the table. So.

Speaker Change: Yes, it's really the euro.

Speaker Change: Two percentage points at current rates.

Speaker Change: 72% reduction in mortality. This is truly a life saving device, which is why the F D. A.

Speaker Change: And should we still think about O U S. Just in terms of relative contribution to the U S. B.

Speaker Change: Took us down on the HDD pathway.

Speaker Change: And I think this is going to be a a very important device for patients who have this devastating condition.

Speaker Change: Being quite a bit higher but just any additional color because you know.

Speaker Change: The physician Buzz on this is extremely high so I think part of the reason, we're so bullish on.

Speaker Change: The regulatory and policy wise the environment.

Speaker Change: It's quite uncertain.

Speaker Change: And so I'm just trying to understand how as you think through all U S contribution what are the relative buffers in place gentlemen, Thank you for taking my questions.

Speaker Change: All right.

Speaker Change: Is it as a MBS is is really a.

Speaker Change: Great taken we have a great sales force, we have great clinical data, we have a great device there's no competition.

Speaker Change: Yeah. Thanks.

Speaker Change: As far as the I'm not sure if I understood the part about the regulatory side of things but.

Speaker Change: And you know.

Speaker Change: We're gonna be pushing hard to get this technology to patients.

Speaker Change: Got it and last one quick one then I'll hop back in queue.

Speaker Change: We're about 50 50 U S.

Speaker Change: Outside the U S. The biggest region for US is obviously Europe, which is heavily impacted by the euro which is where the FX comes in.

Speaker Change: O U S has obviously been strong, especially late Hammond.

Speaker Change: You know as you look for FY 'twenty five I believe you said there'd be 1% to 2% hit on FX forgive me, if I got that number wrong, but just kind of has to do.

Speaker Change: But all of our regions are growing.

Speaker Change: And the other thing you might have.

Speaker Change: The comment was about contribution I don't know what that was about revenue contribution or about EBITDA contribution, but as it relates to EBITDA, we have a pretty significant natural hedge given our manufacturing that we do in Europe and so you.

Speaker Change: Yes, it's really the euro.

Speaker Change: It's two percentage points at current rates.

Speaker Change: And it should we still think about O U S. Just in terms of relative contribution to the U S as being quite a bit higher.

Speaker Change: You know it is that it had some small impact on 2025, EBITDA, but it's not significant.

Speaker Change: Just any additional color.

Speaker Change: The regulatory and policy wise that environment is quite uncertain.

Speaker Change: Thank you.

Yeah.

Speaker Change: And so I'm just trying to understand how as you all things to all U S contribution what are the relative buffers in place gentlemen, Thank you for taking my questions.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Mike Matson with Needham <unk> Company. Please proceed with your question.

Mike Matson: Yeah. Thanks.

Speaker Change: Yeah. Thanks.

Mike Matson: Can you just remind us on his first and those span goes.

Speaker Change: I think as far as the I'm not sure if I understood the part about the regulatory side of things but.

Mike Matson: When would be the earliest the potentially have to make a decision on whether or not to acquire the company I'm, assuming it would be probably more in the 2026 timeframe, but just want to make sure that that's right.

Speaker Change: I mean, we're about 50 50 U S.

Speaker Change: Outside the U S.

Speaker Change: The biggest region for US is obviously Europe, which is heavily impacted by the euro which is where the FX comes in.

Mike Matson: Yes, that's correct, Mike I think the exciting thing that's coming up here pretty quickly is there going to be they're going to be presenting there they're kind of the pivotal data of the PMA core sets the 60 patient trial.

Speaker Change: But all of our regions are growing.

Speaker Change: You bet.

Speaker Change: The comment was about contribution I don't know if that was about revenue contribution or about EBITDA contribution, but as it relates to EBITDA, we had a pretty significant natural hedge.

Mike Matson: Trial that'll be paced.

Speaker Change: Given our manufacturing that we do in Europe.

Mike Matson: That'll bet that you'll have the full dataset at.

Speaker Change: So.

You know it is that it had some small impact on 2025, EBITDA, but it's not significant.

Mike Matson: At Ats in May in Seattle, So not so far away and then basically it's just kind of the same process. We went through with prior PMA, which is.

Speaker Change: Thank you.

Mike Matson: They'll hit one year follow up in October.

Mike Matson: It'll hit when you follow up on October, but to get that data together and submit the PMA.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Mike Matson with Needham <unk> Company. Please proceed with your question.

We're saying second half of 'twenty six.

Mike Matson: They'd get approval.

Yeah. Thanks.

Mike Matson: It means we have 90 days post that to make a decision, which so depending on when they get approval with did they get approval in Q4.

Can you just remind us on as far as spend goes.

Speaker Change: When would be the earliest the potentially have to make a decision on whether or not to acquire the company I'm, assuming it would be probably more in the 2026 timeframe, but just want to make sure that that's right.

We'd have to make a decision in Q1 of 'twenty seven.

Mike Matson: Okay. Thanks, and then just as far as the the convertible debt goes I guess why why not roll it over into a new convert versus just letting it exchanging it for shares basically.

Speaker Change: Yeah. That's that's correct, Mike you know I think the exciting thing that's coming up here pretty quickly is there going to be they're going to be presenting there they're kind of the pivotal data of the PMA core sets the 60 patient trial.

Mike Matson: Yeah, I don't think we have all the different obviously relative to the convert or we could roll it into the.

Mike Matson: Existing private debt that we have.

Speaker Change: Trial that'll be paced.

We just felt like at this point in time, it would be best to deleverage.

Speaker Change: That'll that you'll have the full dataset.

Speaker Change: At Ats in May in Seattle, So not so far away and then basically it's just kind of the same process. We went through with prior PMA, which is.

Mike Matson: Get that down lower hopefully, we're going to get great news and execute our option on into span and this has put us in an even better position to do that so that's the drivers behind the thought around using shares yeah. We've talked to we talked to our shareholders all the time and.

Speaker Change: They'll hit one year follow up in October.

Speaker Change: The one year follow up in October, but to get that data together and then submit the PMA.

Speaker Change: We're saying second half of 'twenty six.

Mike Matson: It's one of the things we're talking about it I think.

Speaker Change: They'd get approval.

Mike Matson: People would like to see us Delever and as Lance said at the midpoint of our EBITDA guidance.

Speaker Change: It means we have 90 days post that to make a decision, which so depending on when they get approval with did they get approval in Q4.

Mike Matson: Our guidance for 2025, if we you know.

Mike Matson: The transition that convert to shares we're gonna be sitting around too.

Speaker Change: We'd have to make a decision in Q1 of 'twenty seven.

Speaker Change: Okay. Thanks, and then just as far as the convertible debt goes I guess why why not roll it over into a new convert versus just letting it exchanging it for shares basically.

Mike Matson: It feels a lot better than three eight.

Speaker Change: Yeah for sure.

Mike Matson: Yes.

Mike Matson: Okay got it thank you.

Speaker Change: Thank you. Our next question comes from the line of Daniel started with citizen. Please proceed with your question.

Speaker Change: Yeah, I don't think we have all of the different obviously relative to the convert or we could roll it into the.

Speaker Change: Existing private debt that we have we just felt like at this point in time, it would be best to deleverage and.

Daniel: Yeah, great. Thank you. So first one just on guidance I.

Speaker Change: I appreciate the cadence and the commentary around first quarter, but just back of the envelope. If we plug in the midpoint for the first quarter and have improvements throughout the year gives us two second half 'twenty five closer to mid to high teens growth is that kind of the right way, we should be thinking about it or just anything else you can give us on the cadence would be it would be great.

Speaker Change: Get that down lower hopefully, we're going to get great news and execute our option on into span and so just put us in an even better position to do that so that's the drivers behind the thought around using shares yeah, we've talked to we talked to our shareholders all the time.

Speaker Change: Yeah. So I think there's a couple of things right. So one is.

Speaker Change: So one of the things we're talking about it.

Speaker Change: I think people would like to see us Delever and as Lance said at the midpoint of our EBITDA.

Speaker Change: The cyber thing did create a timing issue, which is unfortunate, but we're being very transparent with everybody.

Speaker Change: Guidance for 2025, if we you know.

Speaker Change: It's a timing thing we are underlying business, it's totally fine and it's taken us some time to process the tissue in the buildup of inventory at Onyx I told you all the good news on both of those product lines.

Speaker Change: The transition that convert to shares we're gonna be sitting around two.

Speaker Change: Which feels a lot better than three eight.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: I think a couple other things one andas will build throughout the year.

Speaker Change: Okay got it thank you.

Speaker Change: Right. We just launched we just trained our sales force in the second week of January.

Speaker Change: Thank you. Our next question comes from the line of Daniel started with citizens. Please proceed with your question.

Speaker Change: So we've got to go through that process I talked about we've got to get you know.

Speaker Change: IRB value analysis training, so we will definitely build <unk> throughout the year, obviously Q4 is gonna be a pretty easy comp given the cyber event that we just talked about so I think when you when you put that all together and then you spread more inventory for Onyx later in the year tissue is getting pushed later in the year.

Daniel: Yeah, great. Thank you. So first one just on guidance I.

Daniel: I appreciate the cadence and the commentary around first quarter, but just back of the envelope. If we plug in the midpoint for the first quarter an improvement throughout the year gives us two second half 'twenty five closer to mid to high teens growth is that kind of the right way, we should be thinking about it or just anything else you can give us on the cadence would be it would be great.

Speaker Change: You add that altogether it holds together.

Speaker Change: Yeah, I wouldn't be I wouldn't be putting guidance out like because if I didn't believe it.

Daniel: Yeah. So I think there's a couple of things right. So one is.

Speaker Change: No totally got it.

Daniel: The cyber thing did create a timing issue, which is unfortunate, but we're being very transparent with everybody.

Speaker Change: I guess, just one follow up on guidance, but more on the on the bottom line or EBITDA rather.

Speaker Change: You mentioned contributions are from more operating leverage and within SG&A, but.

Daniel: It's a timing thing we are our underlying business, it's totally fine and it's taken us some time to process the tissue in the buildup of inventory at Onyx I told you all the good news on both of those product lines.

Speaker Change: Pretty sure you said some will come from the M D as benefits.

Speaker Change: How much is that adding to the EBITDA look you know I think we've talked about a 90% gross margins for that product, but what's the EBITDA margin, we should be thinking about as kind of the math on on the EBITDA leverage is we're expecting about up about one point percentage point of gross margin expansion.

Daniel: I think a couple of other things.

Daniel: <unk> will build throughout the year.

Daniel: Right. We just launched we just trained our sales force in the second week of January.

Daniel: So we've got to go through that process I talked about we've got to get you know.

Daniel: IRB value analysis training, so we will definitely build <unk> throughout the year, obviously Q4 is gonna be a pretty easy comp given the cyber event that we just talked about so I think when you when you put that all together and then you spread more inventory for Onyx later in the year because she was getting pushed later in the year.

Speaker Change: About two percentage points of leverage out of SG&A and then we're going to increase our spend in R&D by about a percentage point as compared to last year.

Speaker Change: Okay, great. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question.

Daniel: You add that altogether it holds together.

Daniel: Yeah, I wouldn't be I wouldn't be putting guidance out like because if I didn't believe it.

Jeffrey Cohen: Okay. Thanks.

Daniel: No totally got it.

Jeffrey Cohen: Thanks for taking our questions. This morning.

Daniel: I guess, just one follow up on guidance, but more on the on the bottom line or EBITDA rather.

Jeffrey Cohen: Lewis who talks about.

Jeffrey Cohen: Gross margin improvement of over 100 basis points could you just clarify.

Daniel: You mentioned contributions are from more operating leverage and within SG&A, but.

Jeffrey Cohen: Full year over full year, that's related to the fourth quarter correct.

Daniel: Pretty sure you said some will come from the <unk> benefits.

Jeffrey Cohen: Correct, that's full year now obviously there'll be more benefit in the second half because that's when we expect to have more ambulance revenues and that's really what's driving the benefit but yes, the 100 basis points.

Daniel: How much is that adding to the EBITDA look you know I think we've talked about 90% gross margins for that product, but what's the EBITDA margin, we should be thinking about as kind of the math on on the EBITDA leverage is we're expecting about up about one point percentage point of gross margin expansion.

Jeffrey Cohen: Great.

Jeffrey Cohen: Okay got it and do you think you'll break out AMD us at some point separately.

Daniel: About two percentage points of leverage out of SG&A and then we're going to increase our spend in R&D by about one percentage point as compared to last year.

Jeffrey Cohen: Or.

Jeffrey Cohen: And gross.

Jeffrey Cohen: That's not the plan, but we definitely think you'll expect to see the impact in our student graph number pretty clearly.

Daniel: Okay, great. Thank you very much.

Jeffrey Cohen: Got it and then just one more for me you talked about so we should expect to see the 60 patient data.

Daniel: Thank you.

Speaker Change: Our next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question.

Jeffrey Cohen: Russia Conference in May.

Kurt: I understand correct Kurt.

Jeffrey Cohen: Okay. Thanks.

Jeffrey Cohen: Correct.

Speaker Change: Okay, I got it but it does for us thanks for taking the question.

Jeffrey Cohen: Thanks for taking our questions just wanted to get.

Speaker Change: Lewis who talks about.

Jeff: Thanks, Jeff.

Speaker Change: Gross margin improvement over 100 basis points can you just clarify.

Jeffrey Cohen: Thank you.

Jeffrey Cohen: And we have reached the end of our question and answer session and I would like to turn the floor back to Pat Mackin for closing remarks.

Speaker Change: Full year over full year, that's related to the fourth quarter correct.

Speaker Change: Correct, that's full year now obviously there'll be more benefit in the second half because that's when we expect to have more a MTS revenues and that's really what's driving the benefit but yes, the 100 basis points.

Jeffrey Cohen: Yeah, well thanks for thanks for joining the call and you know as you're obviously.

Jeffrey Cohen: <unk> dealt with a challenging cyber event in the fourth quarter and still delivered a good year.

Jeffrey Cohen: We've got some stuff you've got to clean up and you know on the tissue side and on X inventory.

Speaker Change: Alright perfect.

Okay got it and do you think you'll break out AMD us at some point separately.

Jeffrey Cohen: It's kind of out of the first quarter.

Jeffrey Cohen: But we're super excited about our A&D S. H E. This long term onyx data showing a mortality benefit where we can double that opportunity launching <unk> in China and this raw stay of data that keeps coming out strong and stronger than where we sell every pulmonary valve we have so.

Speaker Change: Or.

Speaker Change: And gross.

Speaker Change: That's not the plan, but we definitely think you'll expect to see the impact in our student graph number pretty clearly.

Speaker Change: Got it and then just one more for me you talked about just so we should expect to see the 60 patient data.

Jeffrey Cohen: As you heard from our guidance, we're pretty bullish on the company and I appreciate your attention and look forward to updating you on our progress on our next call.

Speaker Change: Russia Conference in May.

Speaker Change: I understand correct correct.

Okay, I got it but it does for us thanks for taking the question.

Speaker Change: This does concludes today's conference.

Jeffrey Cohen: You may disconnect your lines at this time, thank you for your participation.

Jeffrey Cohen: Thanks, Jeff.

Speaker Change: Thank you.

And we have reached the end of the question and answer session.

Speaker Change: I would like to turn the floor back to Pat Mackin for closing remarks.

Speaker Change: Yeah, well thanks for thanks for joining the call and you know as you're obviously.

<unk> dealt with a challenging cyber event in the fourth quarter and still delivered a good year.

Speaker Change: We've got some stuff you've got to clean up and you know on the tissue side in an on X inventory.

Speaker Change: It's kind of out of the first quarter.

Speaker Change: But we're super excited about our A&D S. H D. E. This long term onyx data showing a mortality benefit where we can double that opportunity launching <unk> in China and this raw state data that keeps coming out stronger and stronger than where we sell every pulmonary valve we have so.

As you heard in the guidance, we're pretty bullish on the company.

Speaker Change: Appreciate your attention and look forward to updating you on our progress on our next call.

Speaker Change: This does concludes today's conference.

Speaker Change: You may disconnect your lines at this time, thank you for your participation.

Yeah.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Mhm.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Yeah.