Company reports record annual revenues of $94.8 million, increasing
17 percent in 2007 compared to 2006; ATLANTA, Feb. 21
/PRNewswire-FirstCall/ -- CryoLife, Inc. (NYSE:CRY), a
biomaterials, medical device and tissue processing company,
announced today that revenues for the full year of 2007 increased
17 percent to $94.8 million compared to $81.3 million in the full
year of 2006. Net income in the full year of 2007 was $7.2 million
and $0.26 per basic and fully diluted common share, compared to net
income of $365,000 and a net loss of ($0.02) per basic and fully
diluted common share in the full year of 2006. Excluding
orthopaedic revenues of $4.2 million and $7.1 million in the full
year 2007 and 2006, respectively, total revenues increased 22
percent for the full year of 2007. Excluding a $2.0 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 conversions of the Company's preferred stock to
common stock, and a $786,000 charge related to post employment
benefits, non-GAAP net income in the full year of 2007 was $10.8
million and $0.40 per basic and $0.39 per fully diluted common
share. Excluding a non-cash charge of $2.8 million and a net gain
of $2.6 million (comprised of a non-cash gain of $2.9 million
offset by approximately $300,000 in transaction costs) related to
the Company's exit from orthopaedic tissue processing, a net $2.0
million gain related to the settlement of an insurance dispute, a
$1.5 million charge related to stock-based compensation, and a
$448,000 charge related to post employment benefits, non-GAAP net
income in the full year of 2006 was $523,000 and a net loss of
($0.02) per basic and fully diluted common share. Revenues for the
fourth quarter of 2007 increased 19 percent to $25.1 million
compared to $21.1 million in the fourth quarter of 2006. Net income
in the fourth quarter of 2007 was $2.6 million and $0.10 per basic
and fully diluted common share, compared to a net loss of ($50,000)
and ($0.01) per basic and fully diluted common share in the fourth
quarter of 2006. Excluding orthopaedic revenues of $552,000 and
$1.9 million in fourth quarter of 2007 and 2006, respectively,
total revenues increased 28 percent for the fourth quarter of 2007.
Excluding a $516,000 charge related to stock- based compensation,
non-GAAP net income for the fourth quarter of 2007 was $3.2 million
and $0.12 per basic and $0.11 per fully diluted common share.
Excluding a non-cash charge of $2.8 million and a net gain of $2.6
million (comprised of a non-cash gain of $2.9 million offset by
approximately $300,000 in transaction costs) related to the
Company's exit from orthopaedic tissue processing, and a $751,000
charge related to stock-based compensation, non- GAAP net income in
the fourth quarter of 2006 was $860,000 and $0.02 per basic and
fully diluted common share. Tissue processing revenues in the
fourth quarter of 2007 increased 27 percent to $13.0 million
compared to $10.2 million in the fourth quarter of 2006. Tissue
processing revenues in the full year of 2007 increased 22 percent
to $49.0 million compared to $40.1 million in the full year of
2006. Tissue processing revenues increased primarily due to
increased demand for the Company's cardiac and vascular processed
tissues, increased availability of tissues due to improvements in
procurement, and, to a lesser extent, price increases. Combined
cardiac and vascular tissue processing revenues in the fourth
quarter of 2007 increased 49 percent to $12.4 million compared to
$8.3 million in the fourth quarter of 2006. Combined cardiac and
vascular tissue processing revenues in the full year of 2007
increased 36 percent to $44.8 million compared to $32.9 million in
the full year of 2006. Combined cardiac and vascular tissue
processing revenues increased primarily due to increased demand for
the Company's processed tissues and increased availability of
tissues due to improvements in procurement. Orthopaedic tissue
processing revenues in the fourth quarter of 2007 decreased 71
percent to $552,000 compared to $1.9 million in the fourth quarter
of 2006. Orthopaedic tissue processing revenues in the full year of
2007 decreased 41 percent to $4.2 million compared to $7.1 million
in the full year of 2006. Orthopaedic tissue processing revenues
declined during 2007 because the Company discontinued procuring and
processing such tissue in the first quarter of 2007. BioGlue(R)
revenues were $11.5 million for the fourth quarter of 2007 compared
to $10.5 million in the fourth quarter of 2006, an increase of 10
percent. U.S. BioGlue revenues were $8.1 million and $7.7 million
in the fourth quarter of 2007 and 2006, respectively. International
BioGlue revenues were $3.4 million and $2.8 million in the fourth
quarter of 2007 and 2006, respectively. BioGlue revenues were $43.9
million for the full year of 2007 compared to $40.0 million in the
full year of 2006, an increase of 10 percent. U.S. BioGlue revenues
were $31.6 million and $29.8 million in the full year of 2007 and
2006, respectively. International BioGlue revenues were $12.3
million and $10.2 million in the full year of 2007 and 2006,
respectively. Total product and tissue processing gross margins
were 64 percent in the fourth quarter of 2007 compared to 47
percent in the fourth quarter of 2006. Tissue processing gross
margins in the fourth quarter of 2007 were 44 percent compared to
10 percent in the fourth quarter of 2006. Excluding a non-cash
charge of $2.8 million related to the Company's exit from
orthopaedic tissue processing, total non-GAAP product and tissue
processing gross margins were 60 percent and non-GAAP tissue
processing gross margins were 37 percent in the fourth quarter of
2006. Total product and tissue processing gross margins were 62
percent in the full year of 2007 compared to 54 percent in full
year of 2006. Tissue processing gross margins in the full year of
2007 were 42 percent compared to 25 percent in the full year of
2006. Excluding a non-cash charge of $2.8 million related to the
Company's exit from orthopaedic activities, total non- GAAP product
and tissue gross margins were 57 percent and non-GAAP tissue
processing gross margins were 32 percent for the full year of 2006.
See attached schedule for a reconciliation of these numbers. Tissue
processing gross margins improved in 2007 compared to 2006
primarily as a result of price increases and a favorable product
mix in 2007. General, administrative, and marketing expenses in the
fourth quarter of 2007 were $12.1 million compared to $11.4 million
in the fourth quarter of 2006. Excluding a $516,000 charge related
to stock-based compensation, non- GAAP general, administrative, and
marketing expenses in the fourth quarter of 2007 were $11.5
million. Excluding a $751,000 charge related to stock-based
compensation, non-GAAP general, administrative, and marketing
expenses in the fourth quarter of 2006 were $10.7 million. General,
administrative, and marketing expenses in the full year of 2007
were $46.5 million compared to $41.5 million in the full year of
2006. Excluding a $2.0 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 full year of 2007 were $43.6 million. Excluding a net $2.0
million gain related to the settlement of an insurance dispute, a
$1.5 million 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 full year of
2006 were $41.5 million. Research and development expenses were
$1.3 million and $975,000 in the fourth quarters of 2007 and 2006,
respectively. Research and development expenses were $4.5 million
and $3.5 million in the full year of 2007 and 2006, respectively.
As of December 31, 2007, the Company had $17.4 million in cash,
cash equivalents and marketable securities (at market), of which
$1.2 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. The Company used $4.5 million of cash
on hand to pay off its prior credit facility, which expired on
February 8, 2008. The Company is currently exploring alternatives
to replace its expired credit facility. "We are extremely pleased
with our performance during the fourth quarter and full year of
2007," stated Steven G. Anderson, president and chief executive
officer. "We believe that the FDA's recent clearance of the
SynerGraft(R) pulmonary heart valve, coupled with our improving
business fundamentals, positions us for a very strong performance
in 2008." Financial Guidance The Company's GAAP revenues are
composed of product and tissue processing revenues plus other
revenues. With the recent clearance of CryoValve(R) SG pulmonary
heart valve, the Company now expects product and tissue processing
revenues for the full year of 2008 to be between $101.0 million and
$106.0 million. Other revenues for 2008 are estimated to be up to
$1.8 million, primarily related to funding received from the
Department of Defense in connection with the development of
BioFoam(R). The Company expects tissue processing revenues to be
between $53.0 million and $56.0 million and BioGlue revenues to be
between $47.0 million and $49.0 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
$6.5 million and $8.5 million for the full year of 2008. The
research and development expectations include an estimate of up to
$1.7 million to be funded by the 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 February 21 through February 28,
2008 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 271923. 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
recently received FDA clearance for its CryoValve(R) SG pulmonary
human heart valve, processed using CryoLife's proprietary
SynerGraft(R) Technology. 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 2008 performance. 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, competitive pressures and tissue availability
may adversely affect the Company's ability to grow revenues, the
Company's efforts to develop and introduce new products outside the
U.S. may be unsuccessful, 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, FDA and other
approvals for products in development may not be obtained, and if
obtained, may be costly and require lengthy review periods,
products and services under development may not be commercially
feasible, CryoValve SG may not perform as well as expected or
provide all the benefits anticipated, demand for CryoValve SG may
not reach anticipated levels, and accordingly, the Company may
choose not to process the majority of its pulmonary valves with the
Company's SynerGraft technology, the SynerGraft post-clearance
study requested by the FDA may not provide the expected positive
results, pending or future litigation cannot be settled on terms
acceptable to the Company, 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 Company may be unable to obtain sufficient financing to fully
pursue its strategic plan and future healthcare policies,
healthcare reimbursement methods and healthcare reimbursement
policies may affect the availability, amount and timing of the
Company's revenues. 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 Twelve Months Ended December 31, December 31, 2007
2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Audited)
Revenues: Preservation services $12,983 $10,239 $49,002 $40,078
Products 11,616 10,729 44,712 41,037 Other 469 122 1,049 196 Total
revenues 25,068 21,090 94,763 81,311 Costs and expenses:
Preservation services 7,250 9,207 28,433 29,958 Products 1,664
1,882 7,108 7,463 General, administrative, and marketing 12,053
11,439 46,470 41,545 Gain on exit activities -- (2,620) -- (2,620)
Research and development 1,319 975 4,453 3,547 Interest expense 159
153 677 657 Interest income (167) (105) (527) (409) Change in
valuation of derivative -- 10 821 121 Other expense (income), net 7
51 (241) 399 Total costs and expenses 22,285 20,992 87,194 80,661
Earnings before income taxes 2,783 98 7,569 650 Income tax expense
134 148 368 285 Net income (loss) $2,649 $(50) $7,201 $365 Effect
of preferred stock dividends -- (243) (243) (973) Net income (loss)
applicable to common shares $2,649 $(293) $6,958 $(608) Income
(loss) per common share: Basic $0.10 $ (0.01) $0.26 $(0.02) Diluted
$0.10 $(0.01) $0.26 $(0.02) Weighted average common shares
outstanding: Basic 27,474 24,904 26,331 24,829 Diluted 27,873
24,904 26,974 24,829 Revenues from: Cardiac tissue $6,511 $4,438
$22,098 $15,988 Vascular tissue 5,920 3,890 22,702 16,956
Orthopaedic tissue 552 1,911 4,202 7,134 Total preservation
services 12,983 10,239 49,002 40,078 BioGlue 11,511 10,491 43,884
40,025 Other implantable medical devices 105 238 828 1,012 Total
products 11,616 10,729 44,712 41,037 Other 469 122 1,049 196 Total
revenues $25,068 $21,090 $94,763 $81,311 Domestic revenues $21,364
$17,970 $81,023 $69,467 International revenues 3,704 3,120 13,740
11,844 Total revenues $25,068 $21,090 $94,763 $81,311 CRYOLIFE,
INC. AND SUBSIDIARIES Financial Highlights (In thousands) December
31, December 31, 2007 2006 (Unaudited) (Audited) Cash and cash
equivalents, marketable securities, $17,447 $8,669 at market, and
restricted securities Trade receivables, net 12,311 12,553 Other
receivables 1,373 1,403 Deferred preservation costs, net 26,903
19,278 Inventories 5,607 5,153 Total assets 92,684 79,865
Shareholders' equity 62,627 52,088 CRYOLIFE, INC. Unaudited
Reconciliation of Non-GAAP Net Income (Loss) (In thousands, except
share data) Three Months Ended Twelve Months Ended December 31,
December 31, 2007 2006 2007 2006 Net income (loss) - as reported
$2,649 $(50) $7,201 $365 Adjustments to net income (loss): Charge
related to the exit from orthopaedic tissue processing -- 2,779 --
2,779 Gain related to the exit from orthopaedic tissue processing
-- (2,620) -- (2,620) Insurance coverage settlement -- -- --
(1,993) Stock-based compensation 516 751 2,040 1,544 Post
employment benefits -- -- 786 448 Change in valuation of derivative
-- -- 821 -- Non-GAAP net income $3,165 $860 $10,848 $523 Effect of
preferred stock dividends -- (243) (243) (973) Non-GAAP net income
(loss) applicable to common shares $3,165 $617 $10,605 $(450)
Weighted average common shares outstanding - Basic 27,474 24,904
26,331 24,829 Non-GAAP income (loss) per common share - Basic $0.12
$0.02 $0.40 $(0.02) Numerator for non-GAAP diluted income (loss)
per common share: Non-GAAP net income $3,165 860 $10,848 523 Less
effect of preferred stock dividends -- (243) (243) (973) Non-GAAP
net income (loss) applicable to common stock $3,165 617 $10,605
(450) Denominator for non-GAAP diluted income (loss) per common
share: Basic weighted-average common shares 27,474 24,904 26,331
24,829 Effect of dilutive stock options 288 311 582 -- Effect of
contingently returnable shares 12 -- 10 -- Effect of contingent
stock awards 99 -- 51 -- Weighted average common shares outstanding
- Diluted 27,873 25,215 26,974 24,829 Non-GAAP income (loss) per
common share - Diluted $0.11 $0.02 $0.39 $(0.02) CRYOLIFE, INC.
Unaudited Reconciliation of Adjusted Gross Margin (In thousands,
except percent data) Three Months Ended Twelve Months Ended
December 31, 2006 December 31, 2006 Amount Percentage Amount
Percentage in Dollars of Revenue in Dollars of Revenue Total
preservation services and product: Revenue $20,968 $81,115 Cost
(11,089) (37,421) Gross margin $9,879 47% $43,694 54% Adjustments
to gross margin: Loss on exit activities 2,779 13% 2,779 3%
Adjusted gross margin $12,658 60% $46,473 57% Preservation
services: Revenue $10,239 $40,078 Cost (9,207) (29,958) Gross
margin $1,032 10% $10,120 25% Adjustments to gross margin: Loss on
exit activities 2,779 27% 2,779 7% Adjusted gross margin $3,811 37%
$12,899 32% For additional information about the company, visit
CryoLife's Web site: http://www.cryolife.com/ Media Contacts: D.
Ashley Lee Katie Brazel Executive Vice President, Fleishman Hillard
Chief Financial Officer and Phone: 770-419-3355 Chief Operating
Officer Phone: 404-739-0150 DATASOURCE: CryoLife, Inc. CONTACT: D.
Ashley Lee, Executive Vice President, Chief Financial Officer and
Chief Operating Officer, 770-419-3355; or Katie Brazel, Fleishman
Hillard, +1-404-739-0150 Web site: http://www.cryolife.com/
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