Artivion at Stifel 2025 Healthcare Conference: Strategic Focus on Aortic Technologies

On Wednesday, 12 November 2025, Artivion Inc. (NYSE:AORT) presented at the Stifel 2025 Healthcare Conference, outlining its strategic focus on aortic technologies and commitment to addressing unmet clinical needs. The company highlighted recent acquisitions, product launches, and financial performance, reflecting a confident outlook. However, challenges remain in balancing organic growth with potential mergers and acquisitions.

Key Takeaways

• Artivion emphasizes its strategic focus on aortic technologies and divesting non-aortic assets.
• The company expects double-digit revenue growth and EBITDA growth at twice that rate.
• Recent acquisitions and product launches, like AMDS and On-X, drive growth.
• Artivion aims to bring new high-margin aortic technologies to market every two years.
• The company resolved a tissue business backlog and anticipates mid-single-digit growth in that segment next year.

Financial Results

• Artivion projects double-digit revenue growth, with EBITDA growing twice as fast.
• Recent quarters have seen approximately 15% revenue growth, with EBITDA outpacing this.
• Gross margins are expected to reach 70%, supported by the AMDS product line.
• The On-X mechanical heart valve business has grown over 20%.

Operational Updates

• Artivion is focused on ensuring production capacity for high-margin products.
• The company resolved a tissue business backlog after a cyber incident.
• SG&A leverage is expected to improve, supporting sustainable growth.

Future Outlook

• Artivion plans to launch new high-margin aortic technologies in the U.S. and Japan every two years.
• The Nexus launch is anticipated in 2027/2028, with the Artisan trial for Arcevo underway.
• The company prioritizes positioning itself for potential acquisitions like EndoSpan.

Q&A Highlights

• Analysts inquired about AMDS performance and On-X growth.
• Discussions included market size, gross margin expansion, and future acquisitions.

Readers are encouraged to refer to the full transcript for a more detailed understanding of Artivion’s strategic plans and financial performance.

Full transcript - Stifel 2025 Healthcare Conference:

Unidentified speaker, Host: Good morning, everybody. We’re here for our first meeting of the day, and I’d like to welcome to kick things off the Artivion team to my left, Pat Mackin, Chairman, President, and Chief Executive Officer, and Lance Berry, EVP, CFO, and Chief Operating Officer. It’s outstanding to have you both here with us at the 2025 Stifel Healthcare Conference. I’m here with John McCauley as well. John and I cover Artivion, and we see Artivion as one of the most exciting stories in the coverage universe: innovation and just an exciting innovation pipeline that’s really increasingly visible, complete with a steady cadence of additional innovation, accelerating revenue growth, fundamental shift in gross margin profile. This story really checks a lot of boxes for investors and for us. Thank you again so much for joining us.

Just to get us started, Pat, we’ve known each other a long time, back to Medtronic days. You’ve been here at Artivion for a decade or so. Talk to us about your vision when you came in. It feels like all the work you did, everything you put in place strategically, is really, truly coming to fruition. Where are we in the realization of your vision, and where do we go? What’s next as we look over the next three, five years?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, first, thanks for having us here. Yeah, as I reflect back over kind of the 10 years, you know, what’s interesting is that then CryoLife, the roots of the company were in the aorta. The company started with SynerGraft Pulmonary Valves for kids and young adults. Then they got into BioGlue, which is the only sealant used for acute type A dissection. Really, they were an aorta company. They had bought a bunch of other stuff that was non-aortic, which step one was we divested all that. We really set a strategy to focus on cardiac and vascular surgeons who treat the aorta. Really, I think the unique part of our strategy, like people always ask us, what’s different about your company, is that we go really deep with our customers on their biggest clinical challenges.

What are their biggest unmet needs, and how can we provide technologies to help them treat those patients? If you look back over a five-year period, we did four transactions. In 2016, we acquired On-X. The whole reason behind that was we were treating young adults with the pulmonary valve, and we knew that one of the big issues with young adults was, you know, blood thinner was the Achilles heel of the mechanical valve, but they needed a longevity solution. You know, On-X really provided that. It was the first product with a low INR, so that got us kind of cemented in that space, and we’ll talk more about that later. The next was we acquired a German stent graft company called Jotec two years later, and that focus was really around minimally invasive treatment of the aorta. It’s all catheter-based.

We saw the outcomes, and we do research with our customers, and we saw outcomes for, for example, thoracoabdominals, open thoracoabdominals were terrible. We had a great solution that was all catheter-based, so we acquired that company. That got us deeper in with the vascular guys. One of the things that came with that acquisition was the Frozen Elephant Trunk, which we’re super excited about that market segment, but that got us doing more research about kind of what are the challenges there. It kind of came up that there’s a bunch of patients that can’t withstand surgery that need their arch worked on. That led us to EndoSpan, which is a relationship, not an acquisition, which we can talk about more, but that’s a total repair of the aortic arch with a catheter with some phenomenal results.

That led us talking to more cardiac and vascular surgeons about the aortic arch, which led us to AMDS and the company called Ascyrus. A year later, we acquired that technology for acute type A’s because we, again, in our market research, one of the biggest challenges was the mortality, morbidity of the acute type A. Really, it’s a, you know, a roll-up of very differentiated aortic technologies that meet a substantially unmet clinical need in the aorta. We obviously levered up to do it, and you know, you can talk and talk, and people look kind of like, well, show us the money. I think what you see now is that coming to fruition with the pipeline.

I mean, we can talk more about the pipeline, but that was really the genesis of where this all came from, was the focus on the aorta and just being disciplined about our strategy.

Unidentified speaker, Host: John’s going to take it from here, but just to follow up on that, are there a lot more similar opportunities, innovation opportunities surrounding the aorta? Or again, as we look ahead, just the biggest of big pictures?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, you know, again.

Unidentified speaker, Host: Where do you go from here?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: One of the things I’ve learned over 30 years of doing this is that you can’t always figure out exactly the timing of an acquisition. You may want something, it’s not available, you may not be ready, and then it becomes available. You know, it’s not always up to you when something happens. You know, we were very aggressive on the M&A front, some degree out of necessity because we needed to do something. You know, we levered up pretty heavy because some assets became available before we really wanted them to become available, but I didn’t want to lose them. I think the benefit of that, and I think it’s very unique for a company like this, is all those acquisitions got us a crazy pipeline. We’ve got like seven PMAs. I don’t need to buy anything. Now, again, we will be opportunistic. We’re going to watch.

You know, we always are very, you know, we’re very close with our customers about, you know, something that may be new in the space. From our business model, we do not need to acquire anything, which is also unique, right?

Unidentified speaker, Host: Yeah, that’s great. John, over to you.

John McCauley, Analyst, Stifel: Yeah, Pat, you brought up the product pipeline, and I just wanted to start off with AMDS, sort of the first one that you’ve really gotten going here in the U.S. Just as I look at our model in the third quarter, 31% organic growth in the aortic stent graft line was, I think, the highest number since we picked up coverage. Just want to get a better understanding of how much of that is AMDS versus the core business for, let’s just say, ex-AMDS business performance.

Unidentified speaker, Host: I’ll let Lance take that one.

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Yeah, we do not break the detail out, but, you know, we have said historically pre-AMDS HDE in the U.S. that we expect the stent graft line to be a mid-teens type growth business. You know, I think that is a reasonable assumption to assume that that business is in that type of zip code without the, you know, the U.S. AMDS, and then that incremental growth is being driven by the U.S.

John McCauley, Analyst, Stifel: That’s helpful. Lance, maybe just to go back to some other comments you made on the call, you talked about 2026, just some early high-level thoughts. Talked about the Artisan trial for Arcevo kicking off, impacting R&D. You also talked about maybe tougher comps just based on the AMDS launch. Just want to tell you, I mean, consensus come out at 11% revenue growth, 18% adjusted EBITDA on 2026. I mean, do you have any reaction to those numbers just with what you said on the call?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Yeah, so, you know, I think first of all, we do not have any formal long-range guidance, but we do state that we expect to be able to grow revenue double digits and EBITDA twice as fast as revenue for honestly a long time, okay, on an annual basis. We think we can do that for several years, many years. You know, so that is kind of a starting point. Now, we have done actually quite a bit better than that. In the recent two quarters, more like 15% growth and EBITDA growing even more than two times the revenue growth. I think right now, as we look out to 2026, I just wanted to make sure people were not assuming that we were going to do better than our stated long-term objectives. You know, we will have some tougher comps, in particular in the second half of 2026 for AMDS.

Even though we’re growing EBITDA more than 2X top line growth right now, we’re going to have a heavier R&D cost next year with a full year of the Artisan trial. I think it’s really more just with two really, you know, fantastic quarters, making sure everyone understood as we look to 2026, you know, kind of ground themselves back in that long-range commentary around double digit and twice the rate of top line growth on the bottom line. I think consensus is right in line with that and is a really good spot.

John McCauley, Analyst, Stifel: Great, that’s helpful. Back to AMDS, an interesting dynamic we picked up during our physician due diligence. A lot of doctors mentioned the idea that AMDS could actually be market expanding for acute type A’s in the sense that there’s more centers that could potentially treat these patients and treat them more quickly. I just wanted to get your reaction to that idea, and is this anything that you’re seeing in early use so far?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, no, it was actually, I thought you guys did a great job with that research. You know, it shouldn’t make sense. If you look at malperfusion, AMDS treats acute type A’s. Patients with malperfusion, even in the best centers, have a 30% mortality. We showed in the Persevere trial, we could take that down to 10%. So just that alone is a 20-point change in, you know, in mortality. I think the second thing is, and I try to think back to, you know, when does this happen before? I go back to, I was with Medtronic and we launched, I launched their drug-eluting stent internationally. Back in 2006, it was, you’ll remember the door to balloon time. It was the whole concept was an interventional cardiology for STEMIs.

If you could disseminate this technology to every cath lab in the country within 90 minutes of door to balloon, so heart attack, you have them getting a balloon within 90 minutes, that you could reduce mortality. American Heart ACC put that program in place. Within two years, 75% of all centers in the U.S. got to 90 minutes door to balloon, and they cut mortality by 15%. Like it’s kind of the same thing here, right? It’s a little different. There are 1,000 centers that do this. The mortality of malperfusion patients is over 30%. If you can get AMDS into every center that does acute type A’s, you can reduce mortality. Every aortic surgeon can do AMDS. It’s simple, it’s easy.

One of the problems with, it gets to your point about, you know, why this could be market expanding is a hospital transfer for a really sick patient from Amarillo to Dallas is like a 10% mortality just for the ride. The mortality is 2% per hour. If you can get this technology into these centers in Wichita or wherever these guys do them, you can really treat the patients right there on the spot, and the technology can make them as good as the best centers. I think that door to balloon time is a really, it does not have to be 90 minutes, but I mean, you are literally talking about time is mortality.

John McCauley, Analyst, Stifel: Yes. That’s an interesting dynamic. Another AMDS question. Now AMDS is on the market. It’s competing against Frozen Elephant Trunk device. It’s also competing against hemianchor repair as options for these patients. I just was curious what you’re seeing at sites where they offer all three. I mean, are you seeing doctors continue to use the other two? What sort of rates are you seeing for AMDS?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, it’s a good question. It’s complex, and I’ll try to make it simplified, right? You have to look at three different lenses. One is the disease state, two is the technology that’s available, and three is the surgeon and their abilities, okay? Then throw the patient in there as well because that also confounds things. Acute type A’s, you’re correct, there’s three options. Device-wise, technology-wise, they can do a hemianchor, they can do an AMDS, they can do a frozen elephant trunk. When you do the surgeon lens, only about 10% of US heart surgeons can do a frozen elephant trunk, which leaves you with 90% are going to have to do a hemianchor or an AMDS. We think with the data from Persevere on mortality and Dane, that they should really be doing a lot of these with AMDS.

Those patients with an acute type A will eventually go on to have a chronic dissection or an aneurysm. Then your technology is Frozen Elephant Trunk or Nexus, and the decision between that’s very patient-dependent, whether it’s open surgery or endosurgery, because some patients can’t tolerate the open surgery. Now you’re talking about the biggest centers in the country, right? The high-volume aortic centers. I think the great thing, which goes back to Rick’s question about strategy, is that was our strategy, was to have all the pieces on the chessboard. We’re somewhat agnostic. We want what’s best for the patients. We have AMDS, we have Frozen Elephant Trunk, and we have Nexus, eventually assuming we acquire them. That’s a comprehensive aortic strategy and a solution to the kind of the patient.

To some degree, like who does what, you know, we’ll have to figure that over time, but we have them all.

John McCauley, Analyst, Stifel: For now, at centers where you have specialists, I mean, to what extent are they, and I’m talking about aortic specialists, to what extent are they?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, I mean, I do think, you know, again, I think you guys picked this up in your research as well. I mean, big academic centers that can do Frozen Elephant Trunk, they’ll replace the total arch. The smaller centers, which is 90% of them, so it’s even mid-sized centers, they don’t do Frozen Elephant Trunks and they can’t replace the total arch, so they’re going to do either a hemianchor or an AMDS. That is where a huge opportunity is for us. Even the big centers are using AMDS. These are typically emergency cases, patients flown in on Medivax at 2:00 A.M., you don’t have your normal team, and you’re just trying to get the patient out of there alive.

We’ve even seen our market research and even in practice where these big centers that can do a total arch will actually use AMDS because of the results and because of the challenging nature of the patient population.

John McCauley, Analyst, Stifel: That makes sense. On the earnings call, you also mentioned the new DRG, MS-DRG 209, I believe, and it confirms reimbursement for complex aortic arch procedures. Just curious, were you getting any pushback before this DRG, and now do you feel like reimbursement for AMDS has sort of sorted the boxes checked and it’s not something to focus on?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Yeah, so we really didn’t see reimbursement as a barrier to adoption. The reimbursement under the previous code that AMDS would have fallen under was still really good. However, this is quite a bit more, which is obviously positive to the extent that the price of the device was causing anyone heartburn. I think this would pretty much remove that. Obviously, one of the hurdles to adoption is really just the time of going through the bureaucracy of getting through the value analysis committee. I haven’t sat in one of those, but I would assume that a much higher reimbursement for the device than previous would be a tailwind for moving that along through that process. Overall, it wasn’t really a problem before, but obviously, you know, more is better.

John McCauley, Analyst, Stifel: Got it. Shifting gears a bit, it is been incredible to watch On-X this year. Mechanical heart valve business, sort of the last two quarters, growing at 20% plus. I mean, we think back about just mechanical heart valve markets in general, it feels like it is like 20 years plus since it is sort of seen those levels of growth that has really defied expectations. Just can you talk about what is going right this year and what you are seeing in terms of either winning share from bioprosthetic surgical valves or other mechanical valve competition?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: How sustainable is this?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, it’s, you know, to understand On-X, I mean, I think there’s five pieces you need in the kind of the story, right? The whole story started a decade ago when we acquired the company. They did the first clinical trial to get low INR, which means you can cut the blood thinner in half, and they saw a 60% reduction in bleeding. We launched that, you know, that trial, and we started taking market share. We took market share for a good seven, eight years, consistently growing kind of, I think, an average of about 15%. Just as that was kind of like maybe you’re going to start to asymptote, we had a second trial. The FDA made us do a post-approval trial in 500 patients.

That data showed, and this was in the real world in 60 centers kind of once it was disseminated, and that was even better. We showed an 80% reduction in bleeding. We did some research that showed we were going to take more share in the mechanical segment. Those first two are really us really taking share in the mechanical segment. The new information was in January of this year. There was a significant paper that came out at STS. It was published in JACC, the Journal of American College of Cardiology. It was fascinating. It is in 109,000 patients. What they showed is that at the age of 60 and younger, if you compare a mechanical valve and a tissue valve, there is a survival advantage to the mechanical valve. That is pretty amazing.

We saw, and again, we were not doing anything from a marketing standpoint when that came out because we were in the middle of the AMDS launch. We literally saw our numbers, the step function change in the numbers. Two weeks ago, another paper came out published in Annals, 140,000 patients at a decade. What they looked at was, and this is actually, I think, really important, the STS database is the largest surgical database in the world. They have 97% of all valves that were done in the last decade. That is like amazing follow-up for a clinical trial. Okay, so 140,000 patients, aortic valves, tissue versus mechanical. When you look at the incidence of patients either dying or having a re-op, 87% of the mechanical valves did not die or re-op. 69% of the tissue valves did not die or have a re-op.

It’s a 20-point difference in dying or having a re-op. And that’s in patients under 65. This is all brand new data. We are just starting to market this to cardiologists. We’ve done a bunch of research. There is a $100 million market in bioprosthetic valves, and we’re going to be going after that. As you well know, in looking at other technologies, it’ll take us several years to get that word out. We are very confident that that is a, you know, a sustainable opportunity. Now, I can’t tell you what the line looks like. I mean, you know, the CFO will keep me in check. I know that this is a, this is a big opportunity, but I can’t tell you exactly. Is it going to be 20% every quarter for the next five years, or is it going to, you know, go like this?

The last point I’d make is we’re going to train all 1,000 centers on AMDS in the next three years. I’m going to a training, I’m leaving here to go to Charlotte. We’re going to train another 25 surgeons, and we will probably mention this new On-X data. I think it’s to really understand the story, you really got to understand our position in the mechanical market. We’ve taken share, we continue to take share. This new data, the research we did with cardiologists was fascinating. They were blown away by the data. If we can just get the message out to those cardiologists, it will continue to drive the growth. I think, you know.

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: The CEO seems very enthusiastic last year. So just put 20% in our model.

John McCauley, Analyst, Stifel: Yes, thank you for the follow-up, Rick. You know, our commentary historically has been around On-X that, you know, we think this can be a durable double-digit growth business, which in and of itself is kind of amazing given, you know, this is a decade-plus old product. It has shown it can do that for many, many years. I think clearly, you know, we’re going to be disappointed if we can’t do better than what we have seen historically. It’s a little early on for us to commit to like, hey, this is going to be a 20%+ growth business for the next several years. I think we just need to get a little more into this. This is very fresh. I mean, one of these papers came out two weeks ago.

We got to get organized a little bit better and start driving this information to see what we can do before we commit to something like that. Definitely, it’s a big opportunity. We talk about this $100 million market expansion opportunity. That’s the US. Obviously, these concepts apply globally, right? There’s an opportunity outside the US as well. Give us a little bit of time before we have a hard commit. I’ll have to be on the hook in February when we give guidance. Clearly, there’s an opportunity for it to grow at an accelerated rate from what it’s done previously.

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Exciting to hear. Yeah, John?

John McCauley, Analyst, Stifel: Yeah, to go back to where Rick sort of started, just wanted to maybe level set on the cadence of the innovation pipeline over the next few years. Just by what you’ve said recently, it sounds like 2026 data for Nexus, revenue contribution potentially, assuming you acquired in maybe 2027, 2028. Arcevo, I think the next time, the trial’s just getting going now, so maybe talk about the timelines there. Just those two, I mean, do we have our dates and structure of it right? Is there any more we should be thinking about in the pipeline?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, so I think one of the pieces of our business model goes back to Rick’s first question, right? Is we did all these deals and the fruits of those labors are just starting to kind of come through, right? So AMDS with the HDE, you know, call it the launch 2025, 2026, assuming EndoSpan gets Nexus approved, you know, second half of next year, we launch that 2027, 2028. We just enrolled our first patient in the Artisan trial, which has put us on track for the Arcevo device in 2029 and 2030. And then we have another one behind it and another one behind it. So like literally every two years, we’re planning on bringing a PMA that is a high ASP, high margin aortic technology in the U.S. and then Japan.

Again, that’s the model and why we think we can grow double digits top line and twice as fast on the bottom line for a long time.

John McCauley, Analyst, Stifel: For those key products, could you just help if you have the numbers handy or memorized, just the key markets for each of those products and the TAM that it adds to Artivion?

Pat Mackin, Chairman, President, and Chief Executive Officer, Artivion: Yeah, so the, you know, AMDS, the US TAM is like $150 million. We’ve talked about that kind of extensively. The US TAM for Nexus, the current iteration is probably in the $150 million range. Arcevo in the US is like $80 million. Those are the next three PMAs. The Japanese markets for those technologies are in the $50 million-$70 million range for each one of those.

John McCauley, Analyst, Stifel: I’m curious, as these products sort of start to flow more through revenues, the impact on gross margins, just in the third quarter, you did 65.6% for the total business. The medical device division, which includes AMDS, did 68.3% and really started to pick up. I’m just curious, I mean, we have margins, gross margins up about 150 basis points next year. AMDS, I think, is probably the major lever. Could you just talk about the drivers for improvement and how these aortic products can help transform the gross margin profile of the business?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Yeah, so, you know, in total, you talk about the medical device division, but if we just take, you know, take a little higher the total, you know, the company’s been, you know, more like a 65% gross margin business for a while, which is actually really good when you think about how big a percentage of our business is either allograft tissue or outside the US, which is typically lower gross margins. So, you know, we’ve been driving a lot of EBITDA margin expansion with really without any gross margin expansion. And now we’ve been talking about once these products come to the US that we’d have this gross margin expansion opportunity through MIX. I think this year’s, to your point, is the first year we’re actually seeing that come through with AMDS.

We think we can continue that basically just because of the cadence of new products that Pat’s discussed for the foreseeable future. I mean, I think, you know, long range, I’m not going to put a timeframe on it, but we think we can get total company gross margins to 70% at some point just through MIX. And, you know, that’s without really relying on any underlying efficiencies in manufacturing or anything like that. That’s just basically bringing these products to the highest gross margin market in the world.

John McCauley, Analyst, Stifel: Lance, just to follow up on that, gosh, we’ve known each other for a long time, and I think you’re an amazing CFO and you’re doing a fantastic job here. What the heck do you know about operations? You’re the Chief Operating Officer. I think that’s how Pat wanted me to phrase it. Tell us the priorities operationally for the company and how that’s going to impact on this, maybe part of that aspect of margin improvement going forward.

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Rick, I’ll tell you, and you’ll understand this. What I know is how to make sure I have awesome people.

John McCauley, Analyst, Stifel: Oh, I like that.

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: That I am good at. That scales. If you think about, you know, what are the priorities, I think it is really making sure that the inside of the business can keep up with the outside of the business, right? We have this really great growth opportunity and, you know, let’s make sure that our infrastructure keeps pace, right? Step one being, you know, let’s make sure we have adequate capacity for all these high margin products. Like it would be great if we could reduce costs, but the higher priority is to make sure we never run out, right? That would be step one. I would say from there, let’s just make sure that the rest of the business is really scalable as this business grows, right? I think we are trying to be balanced in that.

I think that’s another reason why you could always grow earnings faster. You know, you could just cut expenses. We’re trying to have sustained revenue and EBITDA growth for many, many years. That’s kind of my focus is to make sure that we bring the inside of the business along as the outside of the business takes off.

John McCauley, Analyst, Stifel: That’s great. To build on Rick’s question, we talked about gross margins, we talked about operations. Just in terms of operating leverage, over the last two quarters, we looked and the top line’s outgrown adjusted G&A by about 300 basis points. As AMDS is launching, is this the sort of difference, the delta, we should be expecting? Just in terms of rep ads, hires, building out the clinical support team, I mean, are you where you need to be now? Is there any more that you plan on adding?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Yeah, so I think if you think about leverage, definitely expect to get SG&A leverage going forward. We’ve been doing that for several years. We have a great opportunity there. In general, the vast majority of our cases do not require case coverage. So that makes the sales force way more leverageable than a lot of med tech companies. Now, having said that, with both this On-X and AMDS opportunity, we’re definitely thinking about some, not extensive, but you know, some targeted rep ads probably in 2026 to make sure that we maximize that opportunity. For context though, I mean, we’re talking about a sales force that’s 55-60 people in the US. You know, this is not like a massive increase that we’re talking about here. You know, like we could go crazy and increase it 20%, and that’s 10 people.

We will have some, so we haven’t really had historically had hardly any. We are going to have some in next year to make sure that we’re maximizing the opportunity. I think we still have a great opportunity for SG&A leverage. I also think with having gross margin expansion now, it gives us a little more flexibility to again make some targeted investments in SG&A and not be completely reliant upon that for our leverage. We can get to that 2X and not lean on it quite so hard, which I think is great. The other thing is an example is, you know, we’re probably going to, as a percentage of sales, you know, we talk about R&D as being in the 7-8% range. You know, 2025 is going to be closer to 7%. 2026 might be closer to 8%, right?

That gross margin expansion is really helpful in allowing us to manage that while still hitting that 2X EBITDA target.

John McCauley, Analyst, Stifel: If I could just sneak in one more, I see we’re coming up on time. You talked about underlying trends in the tissue business on the call. Seems like you’ve worked through most of the backlog following the cyber incident, expecting flattish growth this year. Sounds like mid-single digits again next year. Just can you talk about where you stand from a supply perspective today and your confidence in return to mid-single digits next year?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Yeah, so that was pretty disruptive to the team, the hangover impact from our cyber attack. I believe it was right around this time last year when that happened. We’ve got that behind us. That was the last part of the business that was dealing with any kind of residual from that. That’s all in the rearview mirror now. Now it’s really more about just really what’s underlying donations. We’ve seen good steady donations, you know, throughout the year. I feel good about how that’s heading next year. The team’s doing a good job at, you know, chipping away at incremental improvements. You know, the step function, a couple of years ago we had a big step function improvement in yields.

I think that’s going to be challenging, but the team is great about trying to just get a little bit better all the time to help offset if there’s any, you know, fluctuations in donations. I think the team’s doing a good job and there’s reason to feel good about, you know, this returning to a normal type situation.

John McCauley, Analyst, Stifel: Lance, talk to us a little bit about just at a high level without getting me saying all the particulars. You’ve done just an outstanding job, you know, repairing the balance sheet, getting it in good shape, managing cash flow. From a cash flow, cash management, balance sheet perspective, what are the key priorities now as you look ahead over the next year or two?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: Number one priority is to put ourselves in a position to do the EndoSpan acquisition if we want to. We did amend our debt agreement and put in place a $150 million delayed draw term loan. We are in good shape. Assuming all goes well and EndoSpan gets their Nexus approval, we will have an ability to exercise that option, no problem. Also, we have a milestone payment for AMDS on PMA approval. That is like $25 million. We need to be able to fund that. From there, I think the business can really turn into a much more solid cash flow generator and we can really start paying that debt down. I think those would be the priorities, make sure that we can deal with those two near-term things and then start paying that debt down aggressively.

John McCauley, Analyst, Stifel: Right. And just as we, you know, as we draw to a close, Pat, I mean, this does seem like an amazing period for the company. You’re just firing all cylinders. What, you know, we’ve asked a lot of questions. What do you feel like you wish people understood better or aren’t asking enough about?

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: They understand a lot better now than they did two years ago.

John McCauley, Analyst, Stifel: For sure.

Lance Berry, EVP, CFO, and Chief Operating Officer, Artivion: No, I think it’s just, it’s this unique focus on a customer segment and a disease state. We’re very focused and we have all of our team rowing in that direction, bringing aortic technologies to surgeons so they can treat their patients. We just have a series of them. As Lance said, whether it’s the, you know, the pipeline, the operations, you know, the channel, I mean, everybody’s rowing in the same direction to deliver these technologies to patients and it’s working pretty well.

John McCauley, Analyst, Stifel: It’s exciting to see. Long may you prosper. Thank you both for being.

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