Good morning, everyone. I'm Ashley Lee, the CFO at Artivion, and joining me today is Josh Wells, our VP of Development. Before we get started, I just want to say that this presentation does contain forward-looking statements. So I wanted maybe just to kind of give you a little bit of background on where we've been as an organization and kind of, you know, where we are and where we're headed. You know, going back about 10 years ago, we had two main products. It was Allograft Tissue Processing and BioGlue surgical adhesive. We were essentially an aortic company at that time, but as you can see that our addressable market opportunity was limited. You know, we were profitable and we were growing at the time, but we really didn't have an extended runway for growth. And so right about that time is when our current CEO, Pat Mackin, joined the company. And one of the things that he did when he came in was first to assemble a management team, and he brought along with him several of his key executives from Medtronic. Our head of sales, our general counsel, and our head of clinical are all ex-Medtronic. All of our commercial leaders in our four major commercial geographies all worked for Pat at Medtronic. Our VP of Regulatory Affairs is ex-FDA. We just added a new VP of R&D from Gore. So, you know, I guess the point is that this management team has run significantly larger businesses and certainly has the capability to manage Artivion as we anticipate this growth going forward. So one of the things, you know, that we did, after the management team was assembled was to essentially, you know, hone in on what our strategy was. And after spending, you know, a lot of time doing that, you know, this is kind of what we settled on. I mean, if you look at us today, we are a company that focuses on cardiac and vascular surgeons who perform aortic repair. And I think one of the things that really differentiates us from a lot of our competitors is really our customer intimacy. You know, we really, pay attention to exactly what our customer's needs are, and then we either will go out and acquire or develop technologies to meet those needs. And as a result of that, you know, we believe that we can, deliver, deliver, double-digit growth through 2024. And at that point, when we expect a lot of our pipeline to start to begin to be commercialized here in the U.S., we expect that growth to accelerate. So, you know, if you look at the last, you know, six or seven years, we've made a lot of investment to grow this organization. We've invested about $700 million over the last six to seven years, and you can see it's been in the form of M&A, developing our product pipeline, investing in capacity in our global manufacturing facilities, and then also addressing and investing in our commercial channels. So I'll share a little bit about the M&A initiative. In 2016, we acquired On-X, a mechanical valve manufacturer based in Austin, Texas. You know, it is the only valve that can currently be implanted and maintained on a lower dose of Coumadin. That acquisition has turned out extremely well for us. In 2017, we acquired JOTEC, primarily an endograft stent graft manufacturer based just outside of Stuttgart, Germany. In 2019, we entered into a distribution agreement with an option to acquire Endospan. It's an Israeli-based company who has a very unique aortic repair product. It's an endovascular technology. And then following that, in 2020, we acquired Ascyrus. This is a company that has a very unique stent that is used for the repair of acute Type A aortic dissections. The result of all that is this portfolio that you see on the page here. You know, the interesting thing about this, if you look on the left side of the slide here, BioGlue and our tissue technology is on the lower left. Those are the technologies that I spoke about. And then everything else on the slide here was either acquired. You know, BioGlue and On-X are approved in essentially all markets around the globe. The tissue technologies on the bottom left are predominantly a U.S.-based business. But everything on the right side of the page is predominantly approved in Europe and then in certain other markets around the globe that acknowledge CE Mark. Therein lies one of the really big opportunities for the company is, you know, we're gonna be bringing the majority of this portfolio on the right side of the slide to the U.S. And when we do that, you know, these are, you know, predominantly 90% gross margin products that we'll be commercializing in the US. And at that time, we expect to see just a significant amount of operating leverage going forward. And we're getting very close to that. If you look at this AMDS technology... Does that have a pointer on it? Let's see. Yeah, right here, this AMDS technology, that's currently in clinical trials right now. We're expecting that to enroll here sometime within the next month. This is a technology through our partner, Endospan. They're currently enrolling now. Both of those products, we anticipate getting approval in the US in 2025. And then we're gonna be following that with this particular device right here. You know, we're expecting to start clinical trials on the NEO in 2024, followed by E-nside, and then, E-liac and E-ventus a little bit later. So we're gonna have a steady cadence of PMA approvals in the U.S. over the next several years that we expect to really drive growth. You know, we talked about investing in our channels. We currently have about 185 salespeople located around the globe. You know, the areas that we're probably still doing some investing in is Asia Pacific, and then less to a lesser extent, Latin America. In EMEA, we'll probably look to go direct in a few select more markets over the coming years, but, you know, that's just gonna be on a really opportunistic basis. So if you go out, you know, three or four years, you could see this channel expand to maybe 220-225. But, you know, for the most part, the heavy investing in building out these channels has been made. The other thing that we spoke about was investing in our manufacturing facilities. You can see, you know, we have a facility just outside of Atlanta. That's where we manufacture and process BioGlue and process our allograft tissues. Austin, Texas, is where we manufacture our On-X valves, and in Germany, where we manufacture our stent grafts. We just did significant expansions at both of these facilities right here, where we've essentially doubled our capacity. So from a capital and an investment standpoint, we've really made all the investment that we need to really drive our growth for the, you know, for the next five plus years. Then our product pipeline. You know, we received a PMA approval for PerClot a little bit earlier this year. This is a product that we actually sold to Baxter. We're currently selling to them under a distribution agreement. At some point over the next, I'd say year and a half, we anticipate that they're gonna be transferring that manufacturing to a third party. But until then, we're gonna be shipping product to them at transfer price. The PROACT PMA mitral trial has completed and enrolled. We're still in discussions with the FDA as to what the status of that is, and we'll likely have an update on that in our third quarter conference call. The AMDS PMA, this is the aortic dissection stent graft. That trial should complete enrollment a little bit later this month, so we'll have an update about that in our conference call as well. We talked about NEXUS. This is the product, another novel aortic arch repair device, through our partner, Endospan. They're anticipating enrollment completion next year and an approval in 2025. And then I just talked a little about the NEO. This is a trial that we should be starting sometime during 2024. So we've got, you know, an extensive pipeline. And even after this, there are probably two or three other products that are in the pipeline. And so again, we should have a steady cadence of products coming out over the next several years. And we also recently rebranded the company. We were formerly CryoLife, which was probably more descriptive of a technology as opposed to a company. And so you can see here that we clearly have a focus on aortic repair. So again, you know, I began the presentation in describing kind of like where we were. This was about 10 years ago. You know, again, low growth company, very profitable, not a lot of runway for growth, you know, just vis-a-vis our small TAM. We're kind of like right here right now. We've, you know, done a lot of the heavy lifting, the M&A, putting together the product portfolio. We've got the pipeline in good shape, invested in facilities, invested in our channel, and, you know, through the first half of this year, we were growing just under 11%. We believe that once some of these other products that I just spoke about get approved, that our growth should accelerate. So we're currently, like, right about here, and with this certainly significantly increased TAM that we have, we think that we've got a lot of runway for growth going forward. A couple of other slides. We presented these at our Investor Day back in March of 2022. You know, we committed to delivering $400 million in revenue through the end of 2024. I will say that was at a Euro-USD exchange rate of 1.13. Obviously, the dollar is stronger than that at this point. But you know, I will say that because of our large expense base that we have in Europe, you know, just based on currency, if we're a little bit below that, it's not gonna have any significant impact on our cash flow. The other thing that we did was committed to delivering $75+ million in adjusted EBITDA by the end of 2024. And if we do that, we expect that our leverage should decrease significantly between now and the end of 2024 to just around 3x. So just some quick financial highlights. You know, you can see the last three years and the trailing twelve months ended in June 2023. I will, you know, just point out here that... Sorry about that. You know, we had talked about all this investment that we've made and really being an inflection point for the company right now. We really are now just beginning to see all of that manifest itself in our bottom line. And as you can see right here, that the trends in our operating cash flow over the last two years, ending in the trailing twelve-month period, there's certainly all these metrics are improving. Operating cash flow, free cash flow, this is trailing twelve months. We do think that we are getting pretty close to the point where we are going to be free cash flow positive on a trailing twelve-month basis going forward. And again, as our business continues to grow and we see that leverage, we think that this should, you know, improve rapidly. You can see, our bank EBITDA is just shy of $60 million, resulting in a net leverage of around 4.7 times. The last thing that I'll mention here too, is that, we do have two late-breaking publications and presentations at the European Association for Cardio-Thoracic Surgery meeting in Vienna later this week, on Thursday. You know, the PERSEVERE is the clinical trial that I spoke about, that we should be enrolling a little bit later this month. We're gonna be presenting the first 52 of the 93 patients, the 30-day safety data. You know, these are like hard endpoints. These are like death, myocardial infarction, heart attacks, stroke, dialysis. You know, these aren't, you know, whether you can walk an extra 15 steps. You know, these are really hard endpoints, and this 30-day safety data is gonna be presented on the first 52 patients a little bit later this week. And then, you know, On-X. You know, we, you know, completed a trial and got an approval back in 2015 to use, On-X with 50% less Coumadin as compared to competitors, and that's really fueled, you know, 13% compounded annual growth in that product line since then. You know, the FDA mandated that we, perform a 510 patient post-approval study, for, that valve, and the results of that is also gonna be, presented on this Thursday as well. So again, just some quick highlights for, you know, some upcoming events. So I'll just leave it at that and maybe- Hi, guys. Welcome. My name is Anna Yang. I'm with the High Yield Research Team at Deutsche Bank, and we thank Ashley and Josh for joining us today. We're gonna go into some questions for our fireside, and then if we have time, we'll leave it to any questions from the audience. Okay? Welcome to it. Maybe we can start off with just sort of the macro environment in sort of 2023. You've given us guidance for 2023, and at the midpoint of your revenue guidance, we're halfway through the year. We're pretty much halfway there, but I think on the adjusted EBITDA side, you know, halfway through the year, with, like, $25 million and, based on the $52 million guidance that you've given us, you would have to do about $27 million in the back half. That implies some margin expansion in the back half of the year. Can you bridge us to what would be those driving factors of that margin expansion in the back half? Yeah. So we have a lot of, like, really good tailwinds working for us. And you know, the first is we had a major pricing initiative on a highly clinically differentiated product line back in May of this year. And you know, in the second quarter, we saw some pretty good results from that price increase. They stuck, and we're still seeing some good traction with that. So we're gonna get the full benefit of that in the second half of this year. You know, in addition to that, we're always looking to take price where we can even in this environment. A lot of our portfolio is highly clinically differentiated, so it does allow us and afford us some opportunity to grow... go out and grab price in you know, certain situations. So that's one thing. You know, the other thing or another thing is the supply of our SynerGraft pulmonary valves, we sell these for about $25,000 a piece, is greatly improving. We've made some process improvement initiatives. Recently, we're already starting to see the benefit of that. So, we expect our tissue business to perform extremely well, not only into the second half of this year, but beyond that. Our stent graft supply in Germany, over the last, I'd say, 6-9 months, maybe even a year, you know, we've talked publicly about some of the challenges that we've had in our supply over there, predominantly related to labor. It's a very tough job market in Southwest Germany. You know, we finally had to bite the bullet in August, September timeframe last year and significantly increase our wages there. We were successful. You know, we hired 75 people in the fourth quarter, in the first quarter of this year. You know, a lot of those people became fully trained as the year went on in 2023, and now our supply challenges coming out of Germany have essentially been resolved. You know, PerClot, the product that we sold to Baxter, we got a PMA approval for that earlier this year. We just started shipping to Baxter at the very end of Q2. We're gonna have a full second half of revenue from that arrangement, so we expect to benefit from that. These two publications that I just spoke about, being presented in Vienna a little bit later this week, you know, we will have to wait and see, you know, obviously, you know, what's said. But we feel pretty good about those two publications being able to help continue to drive revenue growth in those two particular product lines. So that's talking about like revenue opportunities. Now, if you look at on the expense side, you know, we are very mindful of spending. As I've, you know, said during the presentation, we've made a lot of our investment already. You know, we still got investment to do, but a lot of the heavy lifting has already been done. So we expect spending increases to certainly start to moderate and, you know, go down. The other thing is, if you look at our R&D, we're currently, you know, spending somewhere in the $30-$35 million range on an annual basis. A lot of products that we, or projects that we have in our R&D pipeline are, I won't say discretionary, but we can defer them and really not impact our revenue outlook for the next three or more years. Some of these are, like, way out on the time horizon. So to the extent that we need to rein in spending, we do have some levers to pull, and we can defer some products and some projects and spending should we need to. I think, you know, the combination of all of that still gives us, you know, confidence that we'll be able to deliver on these commitments that we made. Okay. I guess you touched on the Germany facility, and you sort of filled out the positions that you need to fill out, and they're kind of up and running. So are stent supplies sort of back to where you expect them, or is there a little bit more wood chopped in terms of getting the supply up there? No, we're exactly where we need to be, at this point. You know, we've got a pretty decent supply and, you know, we should be able to deliver on the growth targets that we laid out for that product line, which is between 15% and 20%. Mm-hmm. And you also touch on sort of pricing and the ability to take additional pricing. What are those conversations that you're having with your clients in terms... And I think when we, when we think about healthcare, you know, on the provider side and the hospital side, they're dealing with so much additional costs on their end. Are they giving you any sort of pushback in terms of your pricing strategy? Or are they kind of receptive? Because, you know, I think when you think about the product and where you service in terms of the benefits to some of those institutions, in terms of being able to perform a procedure using one of your products, they're quite lucrative for those systems. Mm-hmm. Have you sort of had any sort of pushback from clients, in terms of, like, pricing, just because on their end, they're having so many additional costs? Yeah. Well, you know, the first thing I'll say is like, you know, no customer likes price increases- Mm-hmm Regardless of who you are. But, but I will tell you that a lot of our product portfolio is highly clinically differentiated, and so that certainly makes it a little easier when you go out and try to take price. You know, we talked about the one major pricing initiative that we launched in May of this year, and that has gone pretty well. But, you know, the one thing that I'll say about a lot of the procedures where our products are used, these are very highly reimbursed procedures. You know, so none of our products are reimbursed separately. They're all just covered under, you know, a DRG in the hospital. The procedures where our products are used are some of the most highly reimbursed procedures in the hospital, and they are some of the most highly profitable for the hospital. So, you know, we've been able to be pretty successful to this point in capturing price. I'm gonna jump to PerClot. You mentioned that you guys got the approval earlier this year, and the agreement that you have with Baxter. Can you just kind of walk us through the relationship with Baxter? Like, are you selling to them at a certain margin? And like, what, what can we expect, sort of the contribution, if you're willing to share, for top line and then sort of what margins we can expect that at? Right. And then beyond that, beyond sort of the 18-month agreement you have in place, is there an opportunity to maybe continue that relationship or, you know, any discussions that you've had with Baxter on that end? Yeah. So, right now, we sell PerClot to Baxter at a fixed transfer price, and the agreement was to run for 21 months, and it can be extended if necessary. So in the meantime, you know, Baxter is looking to transfer that manufacturing process to another third party. And you know, that is, you know, currently scheduled to happen probably sometime very late next year or sometime early in 2025. Again, subject to extension, you know, if the parties deem that that is desirable and necessary. As far as, like, expectations for revenue, we don't break that out separately. The PerClot revenue is included in our other revenue line in our PNL, and, you know, so that PerClot, along with a couple of other product lines, but it's included there, and we don't break that out separately. Okay. And just to confirm, that is contemplated in both your 2023 guidance and the longer term 2024 goals that you've set out? Correct. Correct. Okay, perfect. I guess we can move in terms of timeline, PROACT mitral. What has the discussion been with the FDA thus far? And you know, it's taken a little longer, I think, than what you originally anticipated. And given the data readouts, has it been productive? Have they given you any indication- Mm-hmm. of, like, what you need to do to get to the next step? Yeah. So, you know, we continue to remain in conversations with the FDA. I'm not gonna get into, like, you know, the specifics there. But, you know, we'll likely have an update on where exactly we stand on the ProAct mitral PMA in our next quarterly conference call. You know, we made this comment back, I think it was in our last conference call, that it would certainly be nice to have the ProAct PMA approval. You know, it, it's a nice market. You know, it's about a $40 million market. So, you know, it would obviously be nice to have it, but in the unfortunate event that we don't get the approval- Mm-hmm. It's not gonna hinder our ability to deliver on the financial outlook that we've committed to. Yes. So if you get the approval, it would be upside to the- Right. to the numbers that you've given us? Correct. Okay. Okay, I guess we can sort of transition to that 2024 goal that you've given us, around $75 million-$80 million of adjusted EBITDA. If we, if we look at it today, LTM EBITDA is roughly around $46 million, and you expect to end the year around $52 million at a minimum, if not above that. But this sort of implies that adjusted EBITDA, there's a big sort of bullish to get from where we are today to that- Yes 70, even the $75 million number. So, you know, if you could help us kind of bridge what are the most important parts to kind of get you to that guidance that you've given? Yeah, you know, and I kind of went over those in an earlier question, but I do think it bears repeating. You know, I think that we have several opportunities on the revenue front to really significantly grow revenue compared to 2023 levels. You know, the pricing initiatives, the supply is improving in our tissue heart valve business. Supply is improving in our stent graft manufacturing in Germany. You know, these pricing initiatives are gonna. You know, we initiated them in May of this year, and they're gonna annualize, you know, for the full year. We're gonna have a full year of PerClot revenue in 2024 versus 2023. And then, you know, as I indicated, you know, we've got these two, late-breaking, publications coming out in Vienna later this week. And on top of that, it's just really, very good, tight, you know, spending, control, you know? And, and again, I think that that combination of all those, should allow us to, you know, reach the, the targets that, that we set out. Okay. And on your leverage target, about roughly 3x, if you meet all these goals, I think that where we are today implies that you would need to also generate some cash in between now and then. And you've given us... You know, in Q2, you were slightly cash flow positive. Mm-hmm. Could you maybe walk us through, like, maybe the cadence of what you expect cash generation to be from the back end of this year to next year, and how you see it playing out? Yeah. So we haven't given out any, you know, formal guidance and aren't planning on doing that till the end of 2024, but I can make some general comments. You know, we generated $5 million in free cash flow in the second quarter of this year. And you know, I stated this in our previous conference call, we're not yet at the point where we are going to commit to delivering positive free cash flow on an individual quarter basis going forward, or on a trailing 12-month basis, although we are very close to being able to do that. Could that happen, you know, towards the end of this year? It very well could. But you know, we're not committing to that at this point. But, you know, based on everything that I've spoken about, you know, the, the spending, you know, both from a CapEx side, from the investment in our channels, coupled with, you know, the, increased revenue, revenue growth that we're expecting to see, you know, I think that that all, you know, kind of bodes well for improving free cash flow, and I do think that we are getting very close to being able to, commit to delivering, that on a consistent basis going forward. I guess I'll leave some time if anyone in the audience has a question. If not, I can keep going. No? No? ... It does not. No, this is predominantly the momentum that we've seen in our existing businesses, coupled with, you know, these pricing strategies that we've implemented, as well as improvement in supply both in our stent graft business as well as our tissue business. So it does not assume any PMA approvals. If we were fortunate enough to get one, you know, a little early in 2024, that would be upside. One more question. Does your product overlapping with any of the product from Boston Scientific? No. You know, I, I don't have our, our competition slide. But the... I mean, if you look at the product line that's been driving the most growth, it's our stent graft product line. And, there's really no one competitor that really lines up very well against us in all areas of the aorta. Probably the areas where we are—maybe if I can show you this. The areas where we're, like, really highly differentiated are, like, right here in the aortic arch and here in the thoracoabdominal area. And, if you look at those, the common thing about those two, there are lots of branches coming off of those areas. You know, the in the arch, it's carrying blood to your arms and to, you know, your brain. Down here, the carrying blood to your visceral organs. These are the areas where we're kind of, like, highly differentiated. You know, we have products in the thoracic area, we have products in the triple A area. Those are the areas that are extremely competitive with companies like Medtronic and Boston Scientific, and Terumo, Gore, Cook, and so forth. But these two areas are the ones where we're, like, really highly differentiated. ... Keep going? Okay. I guess, like, with all these ongoing trials and pipeline assets that you're trying to develop, is there any pipeline milestone payments that we should be keeping our eyes on in the next, like, few quarters, year? Is there anything that we should keep sort of in our view? Yeah, you know, I think that the only one that is on the near-term horizon, and when I say near term, you know, probably through the mid-2025 or so, is the PMA milestone payment, for our AMDS product. So that is this particular product right here. This is the product, the trial that we're currently running. We expect it to enroll later this month. We're expecting approval, you know, sometime in 2025. And, upon PMA approval, we would owe the former shareholders of Ascyrus $25 million. That's not until 2025- Twenty twenty-five. Approval. And that's probably the only significant milestone payment. Now, on the flip side, if Baxter hits certain revenue targets, we would likely earn a revenue milestone payment. That's in 2025 as well, Josh? Yeah. I believe. Yeah. Yeah, it's $10 million net of- Yeah I think, assessment. Yeah. So we, you know, think that we should be able to do it based on what we're seeing right now. That would be an incoming $10 million milestone payment to us. Speaking of the Baxter milestone payment, you did receive, I think, net of $14.5 million from Baxter with the approval of PerClot. Is there any specific plans for that cash? Is it just to put on the balance sheet, invest in the business? Yeah. At this point right now, you know, we are really, you know, focused on operational execution, generating as much cash as we can. You know, we certainly have some upcoming items to address in our capital structure and, you know, we're going to conserve our cash until we have, you know, an actionable strategy to address our refinancing. So we think it's just prudent to keep it on the balance sheet for right now. Okay. And in terms of your capital structure, I think your convertible debt is due in 2025. To the extent that you can give us any update on where your head's at, and what your thoughts are on refinancing that. Yeah. So, you know, if you look at our current capital structure, you know, we have a Term Loan B, about $213 million in it, and then predominantly a $100 million convert that matures in mid-2025, goes current in mid-2024. So, you know, we need to do something to address that somewhere between now and, you know, mid-2024. And so the question that we get from a lot of people is like: "What are you gonna do?" Well, you know, the answer that we give them, it depends, you know, on a lot of factors. You know, one is, you know, how well are we executing operationally? You know, if our EBITDA continues to accelerate as it has started to do this year, you know, we're gonna be in a much better position over the next two to three quarters. Other things to consider, you know, the macro environment, you know, are the markets open for a Term Loan B and for converts? You know, they both seem to be pretty open right now. Equity markets, you know, not so much. They're not doing so well right now. You know, interest rate outlook, you know, where is that? You know, you go back two months ago, and I think everybody thought that interest rates were, you know, much more predictable and they were gonna be stabilized, and now maybe not so much. So it really just kinda depends on all of these factors, and at some point, you know, over the next probably 6-9 months, you know, we're gonna make an appropriate decision to move forward and address that. All right. I think we are at time, but, thank you so much for joining us. Okay. Thank you, everyone else, for joining us as well. Thank you. Thank you, Anna.