CryoLife Announces Revenues for 2003, Expects Increase in 2004
January 07 2004 - 8:12AM
PR Newswire (US)
CryoLife Announces Revenues for 2003, Expects Increase in 2004
BioGlue(R) sales increased 33% to $27.8 million in 2003 compared to
2002 ATLANTA, Jan. 7 /PRNewswire-FirstCall/ -- CryoLife, Inc. , a
human tissue processing and bio-surgical device company announced
today that revenues for 2003 were approximately $59.6 million and
were approximately $12.8 million for the fourth quarter of 2003.
Revenues are expected to increase by approximately 12-18% to
between $66 and $70 million for full year 2004 and are expected to
be between $14.8 and $15.5 million for the first quarter of 2004.
BioGlue revenues were approximately $27.8 million for the full year
2003 and approximately $7.8 million in the fourth quarter of 2003.
"BioGlue revenues increased 33% over full year 2002. We expect full
year 2004 BioGlue revenues of between $32 and $34 million," said
Steven G. Anderson, CryoLife President and CEO. BioGlue revenues
for the first quarter of 2004 are expected to be between $7.8 and
$8.0 million. Tissue processing revenues were approximately $30.8
million for the full year 2003 and approximately $4.9 million in
the fourth quarter of 2003. The Company expects tissue processing
revenues to increase by 10-15% to between $33 and $35 million in
2004 and expects tissue processing revenues of between $7.0 and
$7.5 million in the first quarter of 2004. The Company is currently
processing and distributing cardiac, vascular, and boned and
non-boned orthopaedic tissue. Cardiac tissue processing revenues
were approximately $17.1 million for the full year 2003 and
approximately $2.8 million in the fourth quarter of 2003. Vascular
tissue processing revenues were approximately $12.6 million for the
full year 2003 and approximately $2.0 million in the fourth quarter
of 2003. Orthopaedic tissue processing revenues were approximately
$1.1 million for the full year 2003 and approximately $166,000 in
the fourth quarter of 2003. CryoLife has an ongoing, comprehensive
program to increase the number of tissues available for
distribution to patients who require reconstructive cardiac,
vascular, and orthopaedic surgeries. This program includes recently
implemented initiatives with tissue procurement organizations,
operating a newly created, in-house pathology department, and
several tissue processing improvements. While the Company expects
to realize the positive impact of these initiatives beginning in
the second quarter of 2004, there will be an increase in tissue
processing costs in the fourth quarter of 2003 and first quarter of
2004. The Company has now submitted responses to the observations
(Form 483) noted by the FDA in October 2003. The submissions
include the completed validation report for its anti-microbial
solution. On November 3, 2003 CryoLife submitted a 510K premarket
notification to the FDA for decellularized, SG processed heart
valves. The initial FDA review period is ninety days from this
submission date. The company has not completed the preparation of
its 2003 financial statements and additional definitive information
with respect to 2003 is not yet available. This press release
should not be read to confirm the accuracy of the company's prior
guidance with respect to 2003. Selling, general, and administrative
expenses are expected to be approximately $42-$46 million in 2004,
while research and development expenses are expected to be
approximately $4 million in 2004. For the first quarter of 2004,
the Company expects selling, general, and administrative expenses
of approximately $10 to $11 million, and expects research and
development expenses to be approximately $1 million. Estimated
selling, general, and administrative expenses are based on
estimated expenses and reserves for product liability and
securities litigation, and actual expenses and reserves may differ
significantly from management's current estimates. As of December
31, 2003, the Company had approximately $11 million in cash, cash
equivalents, and marketable securities. Additionally, the Company
expects to receive tax refunds of approximately $2.4 million during
2004. During 2003, the Company resolved, or reached agreements in
principle to resolve, 20 product liability cases and currently has
5 lawsuits pending related to the 2002-2003 insurance policy year.
Through September 30, 2003, CryoLife recorded pre-tax accruals of
$12.5 million for the uninsured portion of estimated potential
legal fees and settlement costs related to the Company's product
liability lawsuits and potential claims that have been incurred,
but not reported, which includes 9 claims that were made since the
end of the 2002-2003 policy year. The Company is evaluating this
accrual to determine if it should be increased or decreased.
Founded in 1984, CryoLife, Inc. is a leader in the processing and
distribution of implantable living human tissues for use in
cardiovascular 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 and is CE marked
in the European Community and approved in Canada for use in soft
tissue repair and approved in Australia for use in vascular and
pulmonary sealing and repair. The Company also manufactures the
SynerGraft(R) Vascular Graft, 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 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 2004 revenues may not meet its
expectations, that gross margins may not improve in 2004, that
SG&A expenses may be higher than projected, that demand for
CryoLife preserved tissues may not return to prior levels, the
possibility that the FDA could impose additional restrictions on
the Company's processing and distribution of tissues, require a
recall, or prevent the Company from processing and distributing
tissues, that the Company's 510k application for SG processed heart
valves may require significant time and expense and may not be
cleared on a timely basis or at all, that FDA regulation of the
Company's CryoValve SG and CryoVein SG may require significant time
and expense, that the Company may not have sufficient borrowing or
other capital availability to fund its business, that present and
future litigation may be resolved only by substantial payments by
the Company in excess of available insurance coverage and amounts
to be set aside for products liability cases by CryoLife since the
outcomes of products liability securities class action and
derivative cases are inherently uncertain, 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 liabilities in excess of
available insurance, the possibility of severe decreases in the
Company's revenues and working capital, 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, 2002,
and the Company's other SEC filings. The Company does not undertake
to update its forward-looking statements. For additional
information about the company, visit CryoLife's Web site:
http://www.cryolife.com/ Contact: Joseph T. Schepers Vice
President, Corporate Communications (770) 419-3355 DATASOURCE:
CryoLife, Inc. CONTACT: Joseph T. Schepers, Vice President,
Corporate Communications, CryoLife, Inc., +1-770-419-3355 Web site:
http://www.cryolife.com/
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