Senior Medical Device Analyst at Oppenheimer. Pleased to have with us this morning, Pat Mackin, CEO, and Lance Berry, CFO of Artivion. Gentlemen, it's a pleasure to have you. Do appreciate you taking the time this morning. Hey, good morning, Suraj. Pat, Lance, let me just jump right in. You know, obviously, you know, you guys have been on a nonstop, you know, for almost three plus years during COVID, beat and raise, beat and raise, beat and raise. Unfortunately, in Q4, there was a cyber breach that caused some minor dislocation. Pat, we know the impact in Q4. Maybe you can talk about the remediation efforts and, you know, how should we think about Q1 specifically related to the cyber breach? Yeah, maybe. I'll take that one and let Pat jump in. I think first thing is just to think about how the business is operating today. You know, anything happening today is working as normal. If we receive, you know, donated heart today, if we ship product out to customers to invoice and bill, close our books, that's all operating normal, basically the way it did before the event occurred. The only real thing that's left over is, and we talked about this on our Q4 earnings call, is in our tissue processing business, donations continued normally throughout the whole event. We were able to keep processing. We were doing a lot of things manually, and it's just going to make the timeframe from, you know, when we receive a donation until we're able to release that is going to be a lot longer than normal for things that occurred during that period of time. I think, as you know, Suraj, there's a good portion of our tissue business that is certain sizes and configurations that we sell out immediately as soon as it's available. The result means that, you know, tissue that would have been released in Q1 and been revenue is going to get deferred into later quarters, you know, hopefully mainly Q2, but, you know, the rest of the year. That's just creating a shift of revenue out of Q1 into later quarters. We're confident the demand will be there, and it's just a question of when we can release the tissue. Now, that's unusual to help everyone with that. We just gave specific guidance for Q1 to help everyone with what the impact was and tried to be clear with people that we just view that as timing and that that's all. Got it. Lance, if I could push you on that, do you think consensus correctly reflects, at least implicitly, any residual cyber impact? I mean, I said we gave specific guidance for Q1. I mean, I think the consensus number is right at the midpoint of that. I mean, that would seem to be in line with what we told people we expected. Got it. Got it. Pat, Lance, again, you know, I know we were on the road not too long ago, and I think so forcing the $100 million convert, you know, that was on top of investors' minds, and you guys talked about it. Unfortunately, the stock has pulled back. Give us your updated thoughts. I think so it's still June or maybe I'm forgetting, maybe July, you'll have that window open. Just kind of give us your updated thoughts. Part of the reason I ask is obviously with just the macro level drama of every day, right? What are you all thinking and how do you all navigate this? Yeah, so the converts due in July and the strike price is $23.46. So if the stock price is $23.46 or higher, it's the same number of shares to convert. It's, you know, 4.26 million shares regardless of price. We've been very clear that we would prefer to use shares to take out the convert to delever. That's our preference. We filed an 8-K as required back in December that said that shares is how we would settle the convert if it was in the money. I think everyone should continue to expect that if the stock price is, you know, $23.46 or higher. Like I said, it doesn't matter to us what the stock price is, you know, as long as it's north of that. It's the same number of shares. If for some reason it drops below that, as you know, things are a little volatile market-wise right now. We do have a safety net. Our private debt that we put in about a year ago has a delayed draw term loan feature of $100 million. If that was, you know, if it dropped below $23.46 and we owed the $100 million back in cash, we would just draw down on the delayed draw term loan and make that payment. You know, we're in good shape either way. You know, hope we can use shares, but if we can't, it's fine. Got it. Pat, you know, obviously the number one question that is on everyone's mind, you know, there were some other companies presenting this morning, and I think they were like, you know, there's too much of uncertainty, right, overall. A decent chunk of your business is OUS. Obviously we haven't seen, you know, the future. I don't mean to ask you with exact confidence how you see this play out, but help us understand, you know, how should we think about Artivion's FX exposure? You know, if tariffs come into play, how should we think about any impact from that? Would you all need to move manufacturing somewhere or are you all relatively buffered from some of these macro level shocks, FX excluded, obviously? Yeah, so, you know, I know that's been all over the news and has created a lot of choppiness in the market. I mean, as it stands today, and again, I can't, you know, talking about future scenarios aside, as it stands today, we're extremely well positioned. We basically make everything in the U.S. except for our stent grafts in Germany, which we don't sell any in the U.S. So any of the current tariffs that have been contemplated really have zero impact on our company. Got it. Got Got it. Pat, AMDS obviously has been dominating client conversations. You know, you've also talked about AMDS on the calls, and you'll have had an HDE for a little short period right now. As you all look for IRBs and to get the ball rolling, any initial feedback you could provide in terms of the training that's needed, proctoring, feedback, you know, just kind of how you're seeing it versus your earlier expectations? Yeah, yeah. Just as a refresher for everyone, we got approval, you know, in that first week of December. Took a couple of weeks to go through the internal R&D closeout process, which you have to do. We were basically ready to ship, you know, AMDS by the end of the year. You know, let's call it a January 1 start. We had our sales meeting in kind of the middle of January. We presented the one-year data at STS at the end of January. We've got, you know, with the reps and managers in the US, we've got, you know, 60 feet on the street, and they're super motivated, and we're out actively engaging with accounts as we speak, working with the IRB, getting through value analysis committee, and then getting surgeons trained. You know, our first surgeon training is coming up on Friday. We've got a number of surgeons attending that. It's a pretty simple training as we've talked previously. You know, this technology is just basically adding the AMDS at the end of the standard of care operation, which takes about five minutes. We do have a one-day training program, which involves didactics, you know, tabletop models, as well as some cadaver training. We can train surgeons at their sites, so it's not going to be a, you know, a limiting factor in the rollout of the product. You know, I think it's, you know, I think we're off to a good start. We've got a lot of excitement from customers, a lot of excitement from our commercial team. It's just we got to go through the process. You know, I think we're, you know, optimistic as we see things rolling out now. Got it. Pat, I'll just ask this client question. You know, it says, I presume in your 8-Ks as an example of this risk in January 2025, the CBER FDA issued two final guidance documents directed at the reduction of risk of transmission of tuberculosis in process human tissue, da da da. The guidance, which is low, we believe this guidance is, if implemented as written, could significantly reduce the supply of safe implantable human tissue. So maybe you can just kind of give us your updated thoughts on this risk, you know, just in terms of you'll presumably have mentioned in your. Yeah, I mean, you know, we deal with, you know, regulatory bodies all the time. This is not uncommon. I think in this particular circumstance, there were some new guidance documents that came out. There was a lot of pushback from AATB, which represents all the tissue providers, also from a lot of the surgeon societies. This is kind of, frankly, is in limbo right now. They extended the implementation by 90 days. You know, we'll see what comes out next. I think this is, you know, we remain to, you know, we want to be, you know, cautious as we put out these, you know, fully transparent in our, you know, disclosures. I think this one is not, you know, at least on the surface, doesn't seem to be like a big deal at this point. I think the other big thing is our most important product in that segment is the decellularized pulmonary valve. And decellularized pulmonary valves should fall out of this guidance. You know, we'll wait to see. It's more kind of in the sausage-making kind of state right now. I can't really comment more than that. Got it. Okay. Pat, obviously you came on board. You acquired On-X. It is, you know, just delivered to what you had originally said. Talk to us in terms of your latest thoughts about going upstream, i.e., higher in age. You and I have had multiple conversations on the SAVR versus TAVR dynamic and low risk. I think you have gone on record saying, you know, if we start going upstream, i.e., Artivion starts going upstream in age, the TAM for On-X could double. Give us your updated thoughts. You know, what are you seeing in the marketplace? Is this more drawn out? Are you seeing some tectonic plate shifts already happening? Yeah, so I think, you know, you've been involved with On-X since we acquired them. And, you know, we've grown that business 13% a year over the last eight years. We continue to take market share. You know, as you know, we just had this post-approval data come out about a year ago. We feel like we can continue to take share in the mechanical segment. The newest piece of information is this huge data set that was presented at STS and 109,000 valves showing a mortality benefit to mechanical valves versus bioprosthetic valves in patients under 60. That is a huge opportunity for the company. You know, you're very familiar with the valve space. It's not just the surgeon. We're going to have to get the, you know, we're going to have to educate the referring cardiologists, which will take some time. I mean, I, you know, one of the questions we, you know, continue to get, you know, early on was about, you know, TAVR, you know, sneaking into our area. The data on that continues to come out and does not look good in TAVR in patients under 65. Now we're seeing data where, you know, tissue valves do not look good in patients under 65. We just need to get the word out, but it really provides our kind of next wave of growth for On-X for kind of years to come. I mean, I think this is a huge opportunity for the company to exploit the clinical, the proven clinical advantage of On-X in patients under 65. Fair point. Pat, you know, obviously you'll have, so On-X is a lot of, it's sort of a, you know, well-oiled machine right now with some call options. Understood. AMDS, you know, let's say next year we start kicking into high gear. Pat, the next stop after AMDS, should we think about Endospan in terms of NEXUS and you guys acquiring Endospan in maybe early 2027? Is that the next stop, you know, on this EBIT expansion journey? How should we think about that? And then we. Yeah, I mean, you know, if you look at, you know, our pipeline, I mean, this is a, you know, it's kind of a well-thought-out pipeline, right? It goes from AMDS to NEXUS to Arcevo to our branched thoraco abdominal. It just, you know, it's got every two years a PMA spits out. You know, we've got a big data readout coming on Endospan NEXUS in, you know, five weeks or so at AATS. The pivotal cohort for the TRIOMPHE trial will be presented at AATS out in Seattle. That's the 60 patient chronic dissections, which is going to be the evaluation for the FDA PMA. Right, I haven't seen the data. I mean, assuming the data is good, they've got then have to get FDA approval. If we, you know, the data looks good and they get approval and we decide to acquire them, it would probably be in that Q1 of 2027 timeframe. Would we, Pat, to push you on that, looking at the data of TRIOMPHE, would we have a reasonably good idea how Artivion would lean after the data? I guess what I'm trying to get at is, would there be some clear markers where we would like, you know, damn, this data is really. Yeah, I think. The done deal. Yeah, let's just be clear about the transaction, right? The deal was struck that Endospan has to get FDA approval. That triggers my option to acquire. You know, you could use, one could surmise if there's really strong data that comes out in early May that Artivion possibly will acquire them. You're not going to know until we buy them. I'm not going to, I mean, you can call me the next day and I'll say, yeah, the data looks great. We'll let you know after they get PMA approval. Right? I mean, I'm just being straight with you. Got it. No, fair enough. Fair points. Lance, obviously you'll have given guidance for FY25, but, you know, we all talk about, you know, some of the general higher level non-company specific uncertainties. How do you see specifically related to OpEx leverage in 2025? You know, what are the, you know, what are the levers you can pull on that, you know, because EBIT expansion is obviously a key part of your LRP strategy? Yeah, so far, I really haven't seen anything that causes us any concern about our ability to continue to drive EBITDA margin expansion. And it's some of the things that Pat's already talked about. I think at a high level, you know, the two things that clearly are on people's minds are, you know, FX and tariffs, right? So, you know, as Pat said, you know, from a tariff standpoint, basically everything we sell in the US, we make in the US. And then we don't really have any large, like, OUS supplier type risks, you know, in the manufacturing processes. So we don't see that as a big concern at the moment. And then FX, I mean, obviously impacts the top line in raw numbers, but we're pretty well hedged with our, you know, German manufacturing. So it doesn't have a significant impact on EBITDA. Those two big things that obviously could be creating concerns for other companies aren't a big concern for us. As we look at it right now, you know, our big three things that are going to drive EBITDA margin expansion, which is, you know, continuing to leverage G&A, continuing to leverage our sales force, which is kind of a unique opportunity that we have. Then adding a third leg to the stool this year, which is gross margin expansion from mix with AMDS launch in the U.S. Those things are all still intact. We don't see any of the current macro environment things changing that at the moment. Lance, going back to AMDS, right? You just mentioned that one of the themes that you and Pat have talked about on the road and on calls is the inherent leverage. You don't need to hire a new, you know, sales force to sell AMDS. Lance, if I could, let's say 2025 is a wash, right? At what point, let's say tomorrow, you'll start AMDS sales? Is it four quarters, six quarters before we should start thinking about sales leverage or sales rep productivity starts picking up and we start, you know, getting a feel of how that flows through? Yeah, we talked about for 2025, we're telling people to, you know, keep expectations in check. We're year one of a launch. Obviously, we're going to be doing whatever we need to do to make sure that that launch goes as good as it possibly can. I think as we move into 2026, you know, I'm not going to, you know, nail quarters down for a year that I haven't even given guidance for. I think in full year 2026, we definitely should see that benefit in the numbers. Got it. The, you know, how many 600 or so accounts, that seems to be the initial low-hanging fruit that you all would be targeting the way we, at least that you all have talked about in the past? Yeah, I mean, the, you know, the way we kind of break this up, there's about 1,000 heart hospitals in the U.S. that do acute type A aortic valves that can use kind of our product portfolio. Six hundred of those represent 80% of the volume, right? With 50 reps on the ground, we cover those 600 pretty well. That is kind of our primary focus is that first 600. Got it. Pat, I know another thing that you all have talked about, top line grows, let's say 10-12, 15%. Your goal is to grow EBIT much faster over time, generate organic cash flows, pay down debt. And I believe in, Lance, please correct me if I'm wrong, eventually get to net debt leverage like in the twos or somewhere in that ballpark. Maybe I'm screwing that up. Help us understand your updated thoughts. You know, obviously you have the company specific, but now the macro environment is also, you know, it might have caused you to tweak some of that thought. Love to get your, you guys' updated thoughts in terms of how you're seeing that strategy or the goal play out. Yeah. So again, just maybe to reframe at a high level what we tell people, we don't have formal long-range plan targets out there. What we've said is, you know, we think we can grow the top line double digits for an extended period of time, for years. We can continue to drive EBITDA margin expansion and grow EBITDA at twice the rate of sales for years. The reason we can do that is the underlying dynamics of, you know, our differentiated products, the markets they're in, and our pipeline. That's at a high level we've told people. You know, one of the first big things is to get AMDS that makes the double digits, you know, a lot easier. That's kind of the first of these pipeline products to fall. That has occurred. Really, and we've talked a little bit about how some of the things that are creating anxiety for people in a lot of businesses aren't directly impacting us right now. I mean, if there's something new tomorrow, we'll have to reassess that. The things that are creating a lot of uncertainty for a lot of companies aren't really creating a lot of uncertainty for us at the moment. Therefore, I mean, we're not reassessing anything. I mean, we think our plan is good and intact, and we're just focused on executing it. Fair point. Fair point. Pat, I know we are going to be up on time shortly, but Pat, what is the one thing that, you know, obviously I've seen you for what, almost seven plus years now, eight years coming up. What would you say is one thing that the street is not fully appreciating? I mean, valuation, I understand. Okay. I'm just saying the key from a key fundamentals perspective about Artivion overall that the street is either not understanding, not appreciating, or not digesting it. Yeah, I would say it's probably the chassis we have in place to drive, you know, and what Lance talked about, the leverage, the, you know, I don't think there's a lot of companies out there. I think when you step back and say, you know, how many companies are growing double digit top line, twice as fast bottom line, expanding gross margin, delevering, increasing cash flow, and have four PMAs in the pipeline and don't need to raise any money? I think that it's looking and putting that all together with a fairly de-risked pipeline. I mean, most of our products in the pipeline already have data generated that is larger than the U.S. FDA trial is going to be. You have a super de-risked pipeline, and we've pretty much been doing it. Before we Before we got the new product. I think, you know, just continuing to do what we're doing. I think it's just a, it's a very unique model that I don't think people, if they sit down, I mean, I joke with Lance that, you know, if you give us 10 minutes and let Lance show you five slides, you'll be interested in a company. Pat, if I again, just wrapping it up, what would you say is, as we exit, let's say the first half of the year, right? What would you say is, and this might be a little unfair, forgive me for this, one metric where you would say, guys, keep an eye out for this? We know the cadence of products. You've very clearly articulated it over the last year and a half. What would you say is the one metric you would say, guys, keep an eye out for this? Because investors' attention span is short, right? And you need something to clearly show all of this is playing out. What would you say? Is it gross margin or is it EBIT margin expansion? I think, look, I realize people have short attention spans. I mean, we gave guidance, you know, in the middle of February that was 200 basis points higher than we've given previously. It's, you know, it's 12%-14%, excuse me, 10%-14% with a midpoint of 12. I mean, we give yearly guidance. I mean, breaking stuff down into quarters. You know, we had a cyber attack we talked about in the fourth quarter that we've had to kind of work through the system in the first quarter. I mean, measure us on how we do this year. We told you we'd grow between 10 and 14% and double our EBITDA. Measure us on how we do this year. Got it. Perfect. Gentlemen, always a pleasure. Congrats on all the progress. You know, hopefully the street catches up to what the fundamentals are. We do appreciate your time this morning. Thank you so much. Thanks, Suraj. Thanks. Thanks, everyone.