Earnings per diluted share of $0.04; $0.08 before items; Gross
margins up from 55 percent in Q1 2006 to 61 percent in Q1 2007;
2007 revenue guidance raised ATLANTA, May 1 /PRNewswire-FirstCall/
-- CryoLife, Inc. (NYSE:CRY), a biomaterials, medical device and
tissue processing company, announced today that revenues for the
first quarter of 2007 increased 26 percent to $24.5 million
compared to $19.4 million in the first quarter of 2006. Net income
in the first quarter of 2007 was $1.4 million, and $0.04 per basic
and fully diluted common share, compared to a net loss of ($1.8)
million, and ($0.08) per basic and fully diluted common share, in
the first quarter of 2006. Excluding a $686,000 charge related to
executive retirement benefits and a $374,000 charge related to
stock-based compensation, adjusted non-GAAP net income for the
first quarter of 2007 was $2.4 million, and $0.09 per basic and
$0.08 per fully diluted common share. Excluding a $244,000 charge
related to stock-based compensation, and a $248,000 income tax
charge for the adjustment of the income tax valuation related to
foreign deferred tax liabilities, the adjusted non-GAAP net loss
for the first quarter of 2006 was ($1.3) million, and ($0.06) per
basic and fully diluted common share. Steven G. Anderson, president
and chief executive officer of CryoLife, Inc., stated, "The
Company's return to profitability reflects the results of last
year's successful strategic review by the board of directors and
management." BioGlue(R) revenues were a record $11.2 million for
the first quarter of 2007 compared to $9.8 million in the first
quarter of 2006, an increase of 14 percent. U.S. BioGlue revenues
were $8.3 million and $7.4 million in the first quarter of 2007 and
2006, respectively. International BioGlue revenues were $2.9
million and $2.4 million in the first quarter of 2007 and 2006,
respectively. Tissue processing revenues in the first quarter of
2007 increased 39 percent to $13.0 million compared to $9.3 million
in the first quarter of 2006. While some of this revenue growth was
due to price increases, unit shipments of tissues also rose as the
result of an increase in tissue procurement and improved processing
yields. Total product and tissue processing gross margins were 61
percent in the first quarter of 2007 compared to 55 percent in the
first quarter of 2006. Tissue processing gross margins were 41
percent in the first quarter of 2007 compared to 28 percent in the
first quarter of 2006. The increase in total product and tissue
processing gross margins was primarily the result of price
increases and an improvement in tissue processing yields. General,
administrative, and marketing expenses in the first quarter of 2007
were $12.3 million compared to $11.3 million in the first quarter
of 2006. General, administrative, and marketing expenses in the
first quarter of 2007 included a $686,000 charge related to
executive retirement benefits and a $374,000 charge for stock-based
compensation. General, administrative, and marketing expenses for
the first quarter of 2006 include $244,000 for stock- based
compensation. R&D expenses were $1.1 million in the first
quarter of 2007 compared to $909,000 in the first quarter of 2006.
As of April 30, 2007, the Company had approximately $10.3 million
in cash, cash equivalents, marketable securities (at market), and
restricted securities, of which $1.7 million was received from the
U.S. Department of Defense as advance funding for the development
of protein hydrogel technology for use on the battlefield. 2007
Guidance The Company expects annual product and tissue processing
revenues for the full year of 2007 to be between $92.0 million and
$96.0 million. The Company expects tissue processing revenues
between $47.5 million and $50.5 million, and BioGlue revenues
between $43.5 million and $44.5 million, for the full year of 2007.
The Company expects continuing improvements in its gross margins
for the full year of 2007 due to more of its tissue processing
revenues being generated from cardiac and vascular tissue shipments
versus orthopedic tissue shipments. The Company expects general,
administrative and marketing expenses of between $46.0 million and
$48.0 million, and research and development expenses of between
$4.0 million and $5.0 million, for the full year of 2007. Webcast
and Conference Call Information The Company will hold a
teleconference call and live webcast today at 10:00 a.m. Eastern
Time to discuss the financial results followed by a question and
answer session hosted by Mr. Anderson. To listen to the live
teleconference, please dial 201-689-8261 a few minutes prior to
10:00 a.m. A replay of the teleconference will be available May 1 -
9, 2007 and can be accessed by calling (toll free) 877-660-6853 or
201-612-7415. The account number for the replay is 244 and the
conference number is 237837. The live webcast and replay can be
accessed by going to the Investor Relations section of the CryoLife
Web site at http://www.cryolife.com/ and selecting the heading
Webcasts & Presentations. About CryoLife, Inc. Founded in 1984,
CryoLife, Inc. is a leader in the processing and distribution of
implantable living human tissues for use in cardiac and vascular
surgeries throughout the United States and Canada. The Company's
BioGlue(R) Surgical Adhesive is FDA approved as an adjunct to
sutures and staples for use in adult patients in open surgical
repair of large vessels. BioGlue is also CE marked in the European
Community and approved in Canada and Australia for use in soft
tissue repair. The Company also distributes the CryoLife-O'Brien(R)
stentless porcine heart valve and the SG Model 100 vascular graft,
which are CE marked for distribution within the European Community.
Statements made in this press release that look forward in time or
that express management's beliefs, expectations or hopes are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include
those regarding anticipated revenues, expenses and gross margin
improvements for 2007 and future growth and financial improvement.
These future events may not occur as and when expected, if at all,
and, together with the Company's business, are subject to various
risks and uncertainties. These risks and uncertainties include that
the Company's recently announced strategic directives may not
generate anticipated revenue and earnings growth, the Regeneration
Technologies, Inc. ("RTI") exchange and service agreement may not
result in some or all of the positive benefits anticipated, that
sources of cardiovascular and vascular tissue procurement for RTI
may choose not to make that tissue available to the Company or may
not be able to meet the Company's tissue processing standards, or
the Company may otherwise be unable to replace the orthopedic
revenues that it expects to decrease as a result of the RTI
agreement with cardiovascular or vascular revenues, that expected
cost savings and synergies from the RTI agreement may not occur
when and as anticipated, the Company's efforts to continue to
increase revenue may not be effective, since their effectiveness is
subject to such factors as competitive pressures and tissue
availability, that the Company's efforts to develop and introduce
new products outside the U.S. may be unsuccessful, that the
Company's efforts to improve procurement and tissue processing
yields may not continue to prove effective, the possibility that
the FDA could impose additional restrictions on the Company's
operations, require a recall, or prevent the Company from
processing and distributing tissues or manufacturing and
distributing other products, that products and services under
development, including BioDisc, may not be commercially feasible,
the Company's SynerGraft products may not receive FDA approval when
anticipated or at all, that the Company may not have sufficient
borrowing or other capital availability to fund its business, that
pending litigation cannot be settled on terms acceptable to the
Company, that the Company may not have sufficient resources to pay
punitive damages (which are not covered by insurance) or other
liabilities in excess of available insurance, the possibility of
decreases in the Company's working capital if cash flow does not
improve, that to the extent the Company does not have sufficient
resources to pay the claims against it, it may be forced to cease
operations or seek protection under applicable bankruptcy laws,
changes in laws and regulations applicable to CryoLife, and other
risk factors detailed in CryoLife's Securities and Exchange
Commission filings, including CryoLife's Form 10-K filing for the
year ended December 31, 2006, its most recent Form 10-Q, and the
Company's other SEC filings. The Company does not undertake to
update its forward-looking statements. Media Contacts: D. Ashley
Lee Katie Brazel Executive Vice President, Fleishman Hillard Chief
Financial Officer and Phone: 404-739-0150 Chief Operating Officer
Phone: 770-419-3355 CRYOLIFE, INC. Financial Highlights (In
thousands, except share data) Three Months Ended March 31, 2007
2006 (Unaudited) Revenues: Human tissue preservation services $
12,961 $ 9,339 Products 11,395 10,052 Research grants 168 58 Total
revenues 24,524 19,449 Costs and expenses: Human tissue
preservation services 7,632 6,763 Products 1,948 1,923 General,
administrative, and marketing 12,335 11,312 Research and
development 1,058 909 Interest expense 153 147 Interest income (97)
(107) Change in valuation of derivative (45) 56 Other expense
(income), net 89 (13) Total costs and expenses 23,073 20,990
Earnings (loss) before income taxes 1,451 (1,541) Income tax
expense 97 239 Net income (loss) $ 1,354 $ (1,780) Effect of
preferred stock (243) (243) Net loss applicable to common shares $
1,111 $ (2,023) Loss per common share: Basic $ 0.04 $ (0.08)
Diluted $ 0.04 $ (0.08) Weighted average common shares outstanding:
Basic 24,987 24,758 Diluted 25,519 24,758 Revenues from: Vascular $
6,139 $ 4,044 Cardiovascular 4,973 3,573 Orthopaedic 1,849 1,722
Total preservation services 12,961 9,339 BioGlue 11,163 9,757 Other
implantable medical devices 232 295 Total Products 11,395 10,052
Other 168 58 Total revenues $ 24,524 $ 19,449 Domestic revenues $
21,402 $ 16,642 International revenues 3,122 2,807 Total revenues $
24,524 $ 19,449 CRYOLIFE, INC. Financial Highlights (In thousands)
March 31, December 31, 2007 2006 (Unaudited) Cash and cash
equivalents, marketable securities, at market, and restricted
securities $9,530 $8,669 Trade receivables, net 13,908 12,553 Other
receivables 1,407 1,403 Deferred preservation costs, net 20,623
19,278 Inventories 5,694 5,153 Total assets 83,416 79,865
Shareholders' equity 53,030 52,088 CRYOLIFE, INC. Unaudited
Reconciliation of Adjusted Net Income (Loss) (In thousands, except
share data) Three Months Ended March 31, 2007 2006 Net income
(loss) - as reported $ 1,354 $ (1,780) Adjustments to net (loss)
income: Executive retirement benefits 686 -- Stock-based
compensation 374 244 Income taxes -- 248 Adjusted net income (loss)
$ 2,414 $ (1,288) Effect of preferred stock (243) (243) Adjusted
net income (loss) applicable to common shares $ 2,171 $ (1,531)
Adjusted weighted average common shares outstanding - Basic 24,987
24,758 Adjusted income (loss) per common share - Basic $ 0.09 $
(0.06) Numerator for adjusted diluted income (loss) per common
share: Adjusted net income (loss) 2,414 (1,288) Less effect of
preferred stock (243) (243) Add back effect of preferred stock 243
-- Adjust for effect of derivative (gain) loss in net income (45)
-- Adjusted net income (loss) applicable to common stock 2,369
(1,531) Denominator for adjusted diluted income (loss) per common
share: Basic weighted-average common shares 24,987 24,758
Adjustment for stock options 532 -- Adjustment for preferred stock
2,389 -- Adjusted weighted average common shares outstanding -
Diluted 27,908 24,758 Adjusted income (loss) per common share -
Diluted $ 0.08 $ (0.06) For additional information about the
company, visit CryoLife's Web site: http://www.cryolife.com/
DATASOURCE: CryoLife, Inc. CONTACT: D. Ashley Lee, Executive Vice
President, Chief Financial Officer and Chief Operating Officer,
CryoLife, Inc., +1-770-419-3355; or Katie Brazel of Fleishman
Hillard, +1-404-739-0150, for CryoLife, Inc. Web site:
http://www.cryolife.com/
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