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LivaNova Reports First Quarter 2016 Results

rst Quarter 2016 Results

LONDON, 2016-05-04 13:00 CEST (GLOBE NEWSWIRE) --
LivaNova PLC (NASDAQ:LIVN) (LSE:LIVN) (“LivaNova” or the “Company”), a
market-leading medical technology and innovation company, today reported
results for the first quarter ended March 31, 2016.

For the first quarter of 2016, worldwide sales were $287 million, an increase
of 3.0 percent on a constant currency1 basis as compared to the previous year.
On a reported basis, sales increased by 1.2 percent for this period. First
quarter 2016 adjusted2 diluted earnings per share were $0.54. On a U.S.
Generally Accepted Accounting Principles (GAAP) basis, first quarter 2016
diluted loss per share were ($0.83).

“LivaNova has started the year with solid results in line with our
expectations, driven primarily by continued momentum in our Neuromodulation
business with AspireSR®,” said André-Michel Ballester, Chief Executive Officer.
“We made significant progress on the regulatory front with approvals during
the quarter of both our Perceval sutureless valve in the U.S. and our KORA 250
fully MRI compatible pacemaker in Japan. Looking forward, we believe our
regulatory progress as well as our keen focus on execution positions us well to
deliver on our synergy targets and financial commitments for 2016. We look
forward to continuing to deliver high-quality devices that meet the needs of
our customers and patients around the world.”


1 Constant currency growth measures the change in sales between the current and
prior year periods using average exchange rates in effect during the applicable
prior year period.

2 Adjusted measures exclude certain specified items as described later in this
press release and the attached schedules. Adjusted measures are based on
selected non-GAAP operating results highlights in our 2015 Annual and Fourth
Quarter Financial Results published on February 24, 2016.

First-Quarter 2016

The following table highlights selected financial results3 for the first
quarter of 2016 compared to the same period in 2015:

Three Months Ended % Change Constant
March 31, Currency
% Change
In $ millions 2016 2015
Cardiac Surgery $ 143.4 $ 142.2 0.9 % 3.2 %
Cardiopulmonary $ 110.9 $ 107.5 3.1 % 5.5 %
Heart Valves $ 32.5 $ 34.7 (6.2 %) (3.7 %)
CRM4 $ 61.7 $ 70.4 (12.3 %) (10.7 %)
Neuromodulation $ 81.4 $ 70.1 16.0 % 16.4 %
Other $ 0.4 $ 0.7 N/A N/A
Total Net Sales $ 287.0 $ 283.4 1.2 % 3.0 %

-- Numbers may not add due to rounding.

For discussion purposes, all sales growth rates below reflect comparable,
constant currency growth.

Three months ended March 31, 2016
For the three primary Business Units, sales were as follows:

Cardiac Surgery
Cardiac Surgery sales, which include cardiopulmonary products and heart valves,
were $143 million, representing a 3.2 percent increase versus the comparable
period in 2015.

Sales in cardiopulmonary products were $111 million, an increase of 5.5 percent
compared to the first three months of 2015. This was due to high demand for
our heart lung machines, particularly in the U.S., and strong demand for
oxygenators in emerging markets as well as in Japan and Australia.

Heart valve sales, including tissue and mechanical heart valves, were $33
million, a decrease of 3.7 percent compared to the same period the previous
year. Results were driven by strength in Perceval in Europe, which was more
than offset by weakness in mechanical valves in China and traditional tissue
valves globally. Perceval in Europe has continued to gain momentum across the
region, and physician response of Perceval in the U.S. has been positive since
the launch early in the quarter.


3 See the discussion of “Financial Alignment, Combined Sales & Operating
Results, Business Unit Structure and Constant Currency” below. The sales
results presented are unaudited.

4 Cardiac Rhythm Management.

Cardiac Rhythm Management
CRM sales for the period totaled $62 million, a decrease of 10.7 percent,
primarily a result of timing as we transitioned customers from KORA 100 to our
recent MRI compatible device KORA 250 in Japan. This was partially offset by
strong performance of our newest high-voltage device Platinium, which was
launched last November in Europe and Japan.

Neuromodulation sales were $81 million in the first quarter, an increase of
16.4 percent, driven primarily by continued adoption of our newest VNS therapy
device AspireSR in the U.S. and new patient growth.

Financial Performance
Adjusted income from operations5 for the first quarter of 2016 was $44 million,
an increase of 17.9 percent as compared to first quarter of 2015. On a U.S.
GAAP basis, first quarter 2016 loss from operations was $36.1 million.
“Adjusted income from operations for the quarter reflects sound cost controls
and early results from the synergy targets outlined on prior calls. Further
cost reduction will result from the CRM restructuring announced on March 10,
2016. Gross margin also continues to be in line with our projections”, said
Vivid Sehgal, Chief Financial Officer. “With the expectation of higher sales
in the second half of 2016, continued reduction of debt and ongoing tax
planning activities, our focus on leveraging the income statement should be
reflected in the full year’s results”.

2016 Projections
The Company today reiterated its guidance for full year 2016.

For full year 2016, the Company expects revenue growth on a constant-currency
basis in the range of 3 to 5 percent. This includes growth in Cardiac Surgery
of 3 to 5 percent, growth in Neuromodulation of 9 to 11 percent and growth in
CRM of 1 to 2 percent.

The Company continues to expect adjusted gross profit in the range of 64 to 65
percent of net sales, R&D expenses between 11 and 12 percent of net sales, and
adjusted income from operations in the range of $205 to $230 million. Adjusted
EBITDA is expected to be in the range of $235 to $260 million.

Finance costs and the Company’s share of losses from minority investments are
expected to be approximately $20 to $25 million, and the adjusted effective tax
rate is expected to be between 24 and 26 percent. The Company continues to
project adjusted diluted earnings per share (EPS) in the range of $2.95 to
$3.15. This is based on a share count of approximately 50 million shares on a
fully diluted basis.


5 Adjusted measures exclude certain specified items as described later in this
press release and the attached schedules. Adjusted measures are based on
selected non-GAAP operating results highlights in our 2015 Annual and Fourth
Quarter Financial Results published on February 24, 2016.

Webcast and Conference Call Instructions
The conference call will be available to interested parties through a live
audio webcast commencing at 8:00 AM Central time (9:00 AM Eastern Time, 2:00 pm
UK Time) and accessible through the Investor Relations section of the LivaNova
corporate website at To listen to the conference call live
by telephone, dial 877-809-8594 (if dialing from within the U.S.) or
440-996-5677 (if dialing from outside the U.S.). The conference ID is
73271166. Please click here for a list of available local international
numbers for the call.

Within 24 hours of the webcast, a replay will be available under the "Events &
Presentations" section of the Investor Relations portion of the LivaNova
website, where it will be archived and accessible for approximately 12 months.

About LivaNova

LivaNova PLC is a global medical technology company formed by the merger of
Sorin S.p.A, a leader in the treatment of cardiovascular diseases, and
Cyberonics Inc., a medical device company with core expertise in
neuromodulation. LivaNova transforms medical innovation into meaningful
solutions for the benefit of patients, healthcare professionals, and healthcare
systems. The Company employs approximately 4,600 employees worldwide and is
headquartered in London, U.K. With a presence in more than 100 countries,
LivaNova operates as three business units: Cardiac Surgery, Cardiac Rhythm
Management, and Neuromodulation, with operating headquarters in Clamart
(France), Mirandola (Italy) and Houston (U.S.), respectively.

LivaNova is listed on NASDAQ and is admitted to the standard listing segment of
the Official List of the UK’s Financial Conduct Authority and to trading on the
London Stock Exchange (LSE) under the ticker symbol “LIVN”.

Financial Alignment, Combined Sales & Operating Results, Business Unit
Structure and Constant Currency

Cyberonics, the predecessor company to LivaNova, previously reported on a 52/53
week fiscal year calendar ending in April. With the formal change in the
fiscal calendar to a fiscal year ended December 31, the historical
Neuromodulation business unit sales have been aligned to correspond as closely
as possible to calendar quarters.

Although LivaNova was a shell company with no business operations until the
closing date of the merger on October 19, 2015, the sales results disclosed for
periods up to and beyond that date are being provided on a combined basis, a
non-GAAP formulation that combines the results of legacy Sorin and Cyberonics
for the periods completed prior to the merger and periods that include results
both before and after the closing of the merger. The Company believes that
presenting the results of Sorin and Cyberonics in such a manner offers a
meaningful representation to investors of the combined company’s sales for
these periods.

Non-GAAP operating results, unaudited, have been included for each of the
quarters ended March 31, 2015, June 30, 2015, September 30, 2015 and December
31, 2015 and for the year ended December 31, 2015. These results have been
prepared by management and adjusted for non-GAAP items as if the merger had
occurred on January 1, 2015 but should not be considered as an alternative to
Proforma Income Statements to be provided in accordance with SEC filings.
Certain adjustments to legacy Sorin operating results have occurred in order to
present the results in US dollars and to align these results as closely as
possible to the presentation of LivaNova financial results. Company management
uses these measurements as aids in monitoring the Company’s ongoing financial
performance from quarter to quarter and year to year on a regular basis and for
benchmarking against other medical technology companies. Management bel...

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