LivaNova PLC 10-Q: Litigation and Restructuring Update

Ticker: LIVN · Form: 10-Q · Filed: 2024-10-31T00:00:00.000Z

Sentiment: neutral

Topics: litigation, restructuring, 10-Q, financial-reporting

TL;DR

LivaNova 10-Q shows pending litigation and restructuring costs; Q3 results also detailed.

AI Summary

LivaNova PLC filed a 10-Q for the period ending September 30, 2024. The filing indicates a pending litigation matter related to CyberLitigation, with a minimum and maximum potential impact related to the A2024 Restructuring Plan. The company also reported on its financial performance for the third quarter of 2024.

Why It Matters

This filing provides insight into potential legal liabilities and restructuring costs that could impact LivaNova's future financial performance and operational stability.

Risk Assessment

Risk Level: medium — The mention of pending litigation and restructuring plans introduces uncertainty regarding future financial obligations and operational changes.

Key Numbers

Key Players & Entities

FAQ

What is the nature of the 'CyberLitigation' mentioned in the filing?

The filing identifies 'CyberLitigation' as a pending litigation matter for LivaNova PLC as of September 30, 2024.

What is the A2024 Restructuring Plan and what is its potential financial impact?

The A2024 Restructuring Plan is mentioned in relation to potential minimum and maximum financial impacts, specifically concerning employee severance, as of September 30, 2024.

What is the reporting period for this 10-Q filing?

The reporting period for this 10-Q filing is for the period ending September 30, 2024.

When was this 10-Q filed with the SEC?

This 10-Q filing was made on October 31, 2024.

Does the filing mention any specific financial figures related to the litigation or restructuring?

While the filing mentions minimum and maximum potential impacts related to the A2024 Restructuring Plan, specific dollar amounts for the litigation or the full restructuring impact are not detailed in the provided excerpt.

Filing Stats: 4,348 words · 17 min read · ~14 pages · Grade level 16.1 · Accepted 2024-10-30 19:05:44

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 1.

Financial Statements (unaudited)

Financial Statements (unaudited) 5 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 29 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 36 4.

Controls and Procedures

Controls and Procedures 36

OTHER INFORMATION

PART II. OTHER INFORMATION 1.

Legal Proceedings

Legal Proceedings 36 1A.

Risk Factors

Risk Factors 37 2. Unregistered Sales of Equity Securities and Use of Proceeds 37 3. Defaults Upon Senior Securities 37 4. Mine Safety Disclosures 37 5. Other Information 37 6. Exhibits 38

Signatures

Signatures 39 DEFINITIONS In this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, the following terms and abbreviations have the meanings listed below. "LivaNova" and the "Company" refer to LivaNova PLC and its consolidated subsidiaries. Abbreviation Definition 2015 Plan LivaNova PLC 2015 Incentive Award Plan 2015 Plan Amendment Amendment No. 2 to the LivaNova PLC 2015 Incentive Award Plan 2021 First Lien Credit Agreement First Lien Credit Agreement between LivaNova PLC and its wholly-owned subsidiary, LivaNova USA, Inc., and Goldman Sachs Bank USA, as First Lien Administrative Agent and First Lien Collateral Agent, entered into on August 13, 2021 2023 Form 10-K LivaNova PLC's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024 2024 Restructuring Plan A plan, initiated during the first quarter of 2024, to enhance LivaNova's focus on its core Cardiopulmonary and Neuromodulation segments 2025 Capped Calls Privately-negotiated capped call transactions entered into with certain financial institutions 2025 Notes $287.5 million aggregate principal amount 3.00% unsecured cash exchangeable senior notes due 2025 by private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act, issued by LivaNova USA on June 17, 2020 2025 Notes Repurchase Transaction Repurchase of $230.0 million aggregate principal amount of the 2025 Notes in privately-negotiated transactions from proceeds from the issuance of the 2029 Notes 2029 Capped Calls Privately-negotiated capped call transactions entered into with certain financial institutions 2029 Notes $345.0 million aggregate principal amount 2.50% unsecured convertible senior notes due 2029 by private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act, issued by LivaNova PLC on March 8, 2024 A&R 2022 Plan Amended and Restated LivaNova PLC 2022 Incentive Award Plan A&R 2022 Plan

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS LIVANOVA PLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) (In thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net revenue $ 318,120 $ 286,113 $ 931,607 $ 843,413 Cost of sales 92,856 84,310 280,088 262,330 Gross profit 225,264 201,803 651,519 581,083 Operating expenses: Selling, general, and administrative 131,661 134,794 390,642 384,795 Research and development 48,805 46,541 139,206 147,651 Other operating expenses 9,180 16,010 29,641 29,145 Operating income 35,618 4,458 92,030 19,492 Interest expense ( 15,878 ) ( 14,986 ) ( 47,303 ) ( 43,232 ) Loss on debt extinguishment — — ( 25,482 ) — Foreign exchange and other income/(expense) 24,701 8,550 12,585 36,810 Income (loss) before tax 44,441 ( 1,978 ) 31,830 13,070 Income tax expense 11,525 5,308 24,469 11,776 Income (loss) from equity method investments 37 ( 32 ) ( 18 ) ( 87 ) Net income (loss) $ 32,953 $ ( 7,318 ) $ 7,343 $ 1,207 Basic income (loss) per share $ 0.61 $ ( 0.14 ) $ 0.14 $ 0.02 Diluted income (loss) per share $ 0.60 $ ( 0.14 ) $ 0.13 $ 0.02 Shares used in computing basic income (loss) per share 54,352 53,989 54,194 53,837 Shares used in computing diluted income (loss) per share 54,585 53,989 54,526 54,107 See accompanying notes to the condensed consolidated financial statements. 5 LIVANOVA PLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (In thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income (loss) $ 32,953 $ ( 7,318 ) $ 7,343 $ 1,207 Other comprehensive income (loss): Unrealized loss on cash flow hedges — — — ( 966 ) Tax effect — — — — Net of tax — — — ( 966 ) Foreign currency translation adjustment 26,116 ( 19,222 ) 1,180 ( 5,716 ) Other comprehensive income (loss), net of tax 26,116 ( 19,222 ) 1,180 ( 6,682 ) Com

View on Read The Filing