Company posts third quarter net income of $1.9 million and $0.07
per share compared to $2.0 million and $0.07 per share in 2006;
Non-GAAP EPS for third quarter was $0.09 compared to $0.00 per
share in 2006 ATLANTA, Nov. 1 /PRNewswire-FirstCall/ -- CryoLife,
Inc. (NYSE:CRY), a biomaterials, medical device and tissue
processing company, announced today that revenues for the third
quarter of 2007 increased 11 percent to $22.2 million compared to
$20.0 million in the third quarter of 2006. Net income in the third
quarter of 2007 was $1.9 million and $0.07 per basic and fully
diluted common share, compared to net income of $2.0 million and
$0.07 per basic and fully diluted common share in the third quarter
of 2006. Excluding a $601,000 charge related to stock-based
compensation, non-GAAP net income in the third quarter of 2007 was
$2.5 million and $0.09 per basic and fully diluted common share.
Excluding a net $2.0 million gain related to the settlement of an
insurance dispute, and a $185,000 charge related to stock-based
compensation, non-GAAP net income in the third quarter of 2006 was
$170,000 and $0.00 per basic and fully diluted common share.
Revenues for the first nine months of 2007 increased 16 percent to
$69.7 million compared to $60.2 million in the first nine months of
2006. Net income in the first nine months of 2007 was $4.6 million
and $0.17 per basic and $0.16 per fully diluted common share,
compared to net income of $415,000 and a net loss of ($0.01) per
basic and fully diluted common share in the first nine months of
2006. Excluding a $1.5 million charge related to stock-based
compensation, an $821,000 charge for the change in the valuation of
the derivative related to the Company's preferred stock, and a
$786,000 charge related to post employment benefits, non-GAAP net
income in the first nine months of 2007 was $7.7 million and $0.29
per basic and $0.28 per fully diluted common share. Excluding a net
$2.0 million gain related to the settlement of an insurance
dispute, an $832,000 charge related to stock-based compensation,
and a $448,000 charge related to post employment benefits, non-GAAP
net loss in the first nine months of 2006 was ($298,000) and
($0.04) per basic and fully diluted common share. "Excluding
orthopaedic tissue processing revenues of $566,000 in 2007 and $1.7
million in 2006, non-GAAP revenues for the third quarter of 2007
increased 18 percent compared to 2006," stated Steven G. Anderson,
president and CEO of CryoLife, Inc. "The increase in non-GAAP
earnings in the third quarter reflects our continued growth in our
core cardiac and vascular tissue processing business, as well as
our ability to expand gross margins while keeping general and
administrative expenses relatively flat on an adjusted basis."
Tissue processing revenues in the third quarter of 2007 increased
10 percent to $11.3 million compared to $10.3 million in the third
quarter of 2006. Tissue processing revenues in the first nine
months of 2007 increased 21 percent to $36.0 million compared to
$29.8 million in the first nine months of 2006. Tissue processing
revenues increased primarily due to an increase in demand for the
Company's cardiac and vascular processed tissues and increased
availability of these tissues due to improvements in procurement.
Combined cardiac and vascular tissue processing revenues in the
third quarter of 2007 increased 25 percent to $10.8 million
compared to $8.7 million in the third quarter of 2006. Combined
cardiac and vascular tissue processing revenues in the first nine
months of 2007 increased 31 percent to $32.4 million compared to
$24.6 million in the first nine months of 2006. Combined cardiac
and vascular tissue processing revenues increased primarily due to
an increase in demand for the Company's processed tissues and
increased availability of tissues due to improvements in
procurement. Orthopaedic tissue processing revenues in the third
quarter of 2007 decreased 66 percent to $566,000 compared to $1.7
million in the third quarter of 2006. Orthopaedic tissue processing
revenues in the first nine months of 2007 decreased 30 percent to
$3.7 million compared to $5.2 million in the first nine months of
2006. Orthopaedic tissue processing revenues declined during 2007
because the Company discontinued procuring and processing such
tissues in the first quarter of 2007. BioGlue(R) revenues were
$10.3 million for the third quarter of 2007 compared to $9.4
million in the third quarter of 2006, an increase of 9 percent.
U.S. BioGlue revenues were $7.4 million and $7.1 million in the
third quarter of 2007 and 2006, respectively. International BioGlue
revenues were $2.9 million and $2.3 million in the third quarter of
2007 and 2006, respectively. BioGlue revenues were $32.4 million
for the first nine months of 2007 compared to $29.5 million in the
first nine months of 2006, an increase of 10 percent. U.S. BioGlue
revenues were $23.4 million and $22.0 million in the first nine
months of 2007 and 2006, respectively. International BioGlue
revenues were $9.0 million and $7.5 million in the first nine
months of 2007 and 2006, respectively. Total product and tissue
processing gross margins were 63 percent in the third quarter of
2007 compared to 57 percent in the third quarter of 2006. Total
product and tissue processing gross margins were 61 percent in the
first nine months of 2007 compared to 56 percent in the first nine
months of 2006. Tissue processing gross margins in the third
quarter of 2007 were 42 percent compared to 33 percent in the third
quarter of 2006. Tissue processing gross margins in the first nine
months of 2007 were 41 percent compared to 30 percent in the first
nine months of 2006. The increase in total product and tissue
processing gross margins was primarily the result of price
increases. General, administrative, and marketing expenses in the
third quarter of 2007 were $11.2 million compared to $8.5 million
in the third quarter of 2006. Excluding a $601,000 charge related
to stock-based compensation, non-GAAP general, administrative, and
marketing expenses in the third quarter of 2007 were $10.6 million.
Excluding a net $2.0 million gain related to the settlement of an
insurance dispute, and a $185,000 charge related to stock- based
compensation, non-GAAP general, administrative, and marketing
expenses in the third quarter of 2006 were $10.4 million. General,
administrative, and marketing expenses in the first nine months of
2007 were $34.4 million compared to $30.1 million in the first nine
months of 2006. Excluding a $1.5 million charge related to
stock-based compensation, and a $786,000 charge related to post
employment benefits, non-GAAP general, administrative, and
marketing expenses in the first nine months of 2007 were $32.1
million. Excluding a net $2.0 million gain related to the
settlement of an insurance dispute, an $832,000 charge related to
stock-based compensation, and a $448,000 charge related to post
employment benefits, non-GAAP general, administrative, and
marketing expenses in the first nine months of 2006 were $30.8
million. Research and development expenses were $1.1 million and
$826,000 in the third quarters of 2007 and 2006, respectively.
Research and development expenses were $3.1 million and $2.6
million in the first nine months of 2007 and 2006, respectively. As
of September 30, 2007, the Company had $14.2 million in cash, cash
equivalents and marketable securities (at market), of which $1.5
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. Financial Guidance The Company now expects
product and tissue processing revenues for the full year of 2007 to
be near or slightly below the lower end of its previously announced
range of revenue guidance, which is $93.0 million. The Company
expects general, administrative, and marketing expenses of between
$45.5 million and $47.0 million, and research and development
expenses of between $4.0 million and $5.0 million for the full year
of 2007. The Company expects product and tissue processing revenues
for the full year of 2008 to be between $100.0 million and $104.0
million. The Company expects BioGlue revenues to be between $47.0
million and $49.0 million, and tissue processing revenues to be
between $52.0 million and $54.0 million for the full year of 2008.
Other implantable medical device revenues are expected to be
approximately $1.0 million in 2008. The Company expects general,
administrative, and marketing expenses of between $48.0 million and
$51.0 million, and research and development expenses of between
$6.0 million and $8.0 million for the full year of 2008. The
research and development expectations include an estimate of up to
$1.6 million to be funded by the U.S. Department of Defense in
connection with the development of BioFoam. 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
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 November 1 - November 8, 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 257727. 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 which is 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 2007
and 2008 revenues, general and administrative expenses, and
research and development expenses. 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 strategic
directives may not generate anticipated revenue and earnings
growth, 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, that 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 or future
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, and that the Company may be
unable to obtain sufficient financing to fully pursue its strategic
plan. These risks and uncertainties include the 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. CRYOLIFE, INC. AND SUBSIDIARIES
Financial Highlights (In thousands, except per share data) Three
Months Ended Nine Months Ended September 30, September 30, 2007
2006 2007 2006 (Unaudited) (Unaudited) Revenues: Preservation
services $11,347 $10,319 $36,019 $29,839 Products 10,545 9,687
33,096 30,308 Other 268 12 580 74 Total revenues 22,160 20,018
69,695 60,221 Costs and expenses: Preservation services 6,575 6,954
21,183 20,751 Products 1,615 1,576 5,444 5,581 General,
administrative, and marketing 11,240 8,549 34,417 30,106 Research
and development 1,098 826 3,134 2,572 Interest expense 178 169 518
504 Interest income (158) (94) (360) (304) Change in valuation of
derivative - 44 821 111 Other (income) expense, net (350) 4 (248)
348 Total costs and expenses 20,198 18,028 64,909 59,669 Earnings
before income taxes 1,962 1,990 4,786 552 Income tax expense 55 12
234 137 Net income $1,907 $1,978 $4,552 $415 Effect of preferred
stock dividends - (243) (243) (730) Net income (loss) applicable to
common shares $1,907 $1,735 $4,309 $(315) Income (loss) per common
share: Basic $0.07 $0.07 $0.17 $(0.01) Diluted $0.07 $0.07 $0.16
$(0.01) Weighted average common shares outstanding: Basic 27,501
24,847 25,998 24,804 Diluted 28,056 25,118 26,673 24,804 Revenues
from: Cardiovascular tissue $5,566 $4,189 $15,587 $11,550 Vascular
tissue 5,215 4,468 16,782 13,066 Orthopaedic tissue 566 1,662 3,650
5,223 Total preservation services 11,347 10,319 36,019 29,839
BioGlue 10,280 9,444 32,373 29,534 Other implantable medical
devices 265 243 723 774 Total products 10,545 9,687 33,096 30,308
Other 268 12 580 74 Total revenues $22,160 $20,018 $69,695 $60,221
Domestic revenues $18,847 $17,297 $59,659 $51,497 International
revenues 3,313 2,721 10,036 8,724 Total revenues $22,160 $20,018
$69,695 $60,221 CRYOLIFE, INC. AND SUBSIDIARIES Financial
Highlights (In thousands) September 30, December 31, 2007 2006
(Unaudited) Cash and cash equivalents, marketable securities, at
market, and restricted securities $ 14,168 $ 8,669 Trade
receivables, net 12,931 12,553 Other receivables 1,439 1,403
Deferred preservation costs, net 25,267 19,278 Inventories 5,571
5,153 Total assets 90,892 79,865 Shareholders' equity 59,256 52,088
CRYOLIFE, INC. AND SUBSIDIARIES Unaudited Reconciliation of
Non-GAAP Net Income (Loss) (In thousands, except per share data)
Three Months Ended Nine Months Ended September 30, September 30,
2007 2006 2007 2006 Net income - as reported $ 1,907 $ 1,978 $
4,552 $ 415 Adjustments to net income: Insurance settlement -
(1,993) - (1,993) Stock-based compensation 601 185 1,524 832 Post
employment benefits - - 786 448 Change in valuation of derivative -
- 821 - Non-GAAP net income (loss) $ 2,508 $ 170 $ 7,683 $ (298)
Effect of preferred stock dividends - (243) (243) (730) Non-GAAP
net income (loss) applicable to common shares $ 2,508 $ (73) $
7,440 $ (1,028) Weighted average common shares outstanding - Basic
27,501 24,847 25,998 24,804 Non-GAAP income (loss) per common share
- Basic $ 0.09 $ (0.00) $ 0.29 $ (0.04) Numerator for non-GAAP
diluted income (loss) per common share: Non-GAAP net income (loss)
$ 2,508 170 $ 7,683 (298) Less effect of preferred stock dividends
- (243) (243) (730) Non-GAAP net income (loss) applicable to common
stock $ 2,508 (73) $ 7,440 (1,028) Denominator for non-GAAP diluted
income (loss) per common share: Basic weighted-average common
shares 27,501 24,847 25,998 24,804 Effect of dilutive stock options
555 - 675 - Weighted average common shares outstanding - Diluted
28,056 24,847 26,673 24,804 Non-GAAP income (loss) per common share
- Diluted $ 0.09 $ (0.00) $ 0.28 $ (0.04) CRYOLIFE, INC. Unaudited
Reconciliation of Non-GAAP General, Administrative, and Marketing
Expenses (In thousands) Three Months Ended Nine Months Ended
September 30, September 30, 2007 2006 2007 2006 General,
administrative, and marketing expense - as reported $ 11,240 $
8,549 $ 34,417 $ 30,106 Adjustments to G&A expense: Insurance
settlement - 1,993 - 1,993 Stock-based compensation (601) (185)
(1,524) (832) Post employment benefits - - (786) (448) Non-GAAP
general, administrative, and marketing expense $ 10,639 $ 10,357 $
32,107 $ 30,819 For additional information about the company, visit
CryoLife's Web site: http://www.cryolife.com/ Media Contacts: D.
Ashley Lee Executive Vice President, Chief Financial Officer and
Chief Operating Officer Phone: 770-419-3355 Katie Brazel Fleishman
Hillard Phone: 404-739-0150 DATASOURCE: CryoLife, Inc. CONTACT: D.
Ashley Lee, Executive Vice President, Chief Financial Officer and
Chief Operating Officer of CryoLife, Inc., +1-770-419-3355; or
Katie Brazel of Fleishman Hillard, +1-404-739-0150 Web site:
http://www.cryolife.com/
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