CryoLife Reports Second Quarter 2004 Financial Results BioGlue(R)
Sales Increased 31% Over Second Quarter 2003 ATLANTA, Aug. 5
/PRNewswire-FirstCall/ -- CryoLife, Inc. (NYSE:CRY), a biomaterials
and biosurgical device company, today reported financial results
for the second quarter and first six months of 2004. Revenues for
the second quarter 2004 were $15.3 million compared to $15.7
million in the second quarter of 2003. Revenues were $15.1 million
in the first quarter of 2004. Net loss in the second quarter of
2004 was $3.4 million compared to $19.9 million in the second
quarter of 2003. On a fully diluted basis, loss per common share
for the second quarter 2004 was $.14 compared to a loss of $1.01
for the same period in 2003. Revenues for the first half of 2004
were $30.4 million compared to $31.6 million in the first half of
2003. The net loss in the first six months of the year was $10.4
million compared to a net loss of $20.4 million in the same period
last year. On a fully diluted basis, the loss per share was $.46 in
the first half of 2004 compared to a $1.04 loss per share in the
first half of 2003. In the second quarter of 2004, BioGlue(R) sales
increased 31% to $9.0 million compared to $6.8 million in the
second quarter of 2003. BioGlue revenues were $8.6 million in the
first quarter of 2004. U.S. BioGlue sales increased 32% to $7.0
million in the second quarter of 2004 compared to $5.3 million for
the same period in 2003. International BioGlue sales increased 28%
to $2.0 million in the second quarter of 2004 compared to $1.5
million for the same period in 2003. BioGlue revenues are expected
to be between $8.6 million and $9.0 million in the third quarter of
2004. "BioGlue is achieving strong growth because it has become an
important product for surgeons in effectively controlling bleeding
in certain surgical procedures. The BioGlue syringe delivery system
was approved by the FDA and received CE mark approval for
distribution in the EU in May 2004. This innovative, easy-to-use,
disposable delivery device should encourage increased use of
BioGlue and further its revenue growth," said Steven G. Anderson,
CryoLife President and Chief Executive Officer. BioGlue revenues
are expected to increase 22%-29% to $34-$36 million in 2004 from
$27.8 million in 2003. Tissue processing revenues, which include
cardiac, vascular, and orthopaedic tissues, were $6.1 million in
the second quarter of 2004 compared to $8.6 million in the second
quarter of 2003. In the first quarter of 2004, tissue processing
revenues were $6.2 million. Total tissue processing revenues are
expected to be between $28 and $30 million in 2004 compared to
$30.8 million in 2003. Projected tissue processing revenue for the
third quarter is $7.0-$8.5 million. Cardiac tissue processing
revenues were $2.8 million in the second quarter of 2004 compared
to $5.0 million in the second quarter of 2003 and $3.4 million in
the first quarter of 2004. Vascular tissue processing revenues were
$2.6 million in the second quarter of 2004 compared to $3.3 million
in the second quarter of 2003 and $2.5 million in the first quarter
of 2004. Orthopaedic revenues were $574,000 in the second quarter
of 2004 compared to $280,000 in the second quarter of 2003 and
$309,000 the first quarter of 2004. The Company initiated fee
increases for processing its cardiac and vascular tissues in July
2004. Steven Anderson stated, "The tissue processing gross margin
improved to -25% in the second quarter of 2004 from -46% in the
first quarter of 2004. This increase in the tissue processing gross
margin was the result of recently implemented initiatives with
tissue procurement organizations and several tissue processing
improvements. The tissue processing gross margin is expected to
continue to improve in the second half of the year and is expected
to break even by the end of the fourth quarter 2004 and be positive
in 2005." Total tissue processing and product revenues are
projected to be between $16 and $18 million in the third quarter of
2004, up from $15.3 million in the second quarter of 2004. Total
tissue processing and product revenues are expected to increase
8%-13% to $64-$67 million for the full year 2004. In the second
quarter 2004, general, administrative, and marketing expenses were
favorably affected by a reduction in product liability accruals of
$800,000. The net loss in the second quarter of 2004 was favorably
impacted by a $1.4 million tax refund. General, administrative, and
marketing expenses are expected to be approximately $40-42 million
in 2004, while research and development expenses are expected to be
approximately $4 million in 2004. For the third quarter of 2004,
the Company expects general, administrative, and marketing expenses
of approximately $10-11 million and expects research and
development expenses of approximately $1 million. As of June 30,
2004, the Company had approximately $23.7 million in aggregate
cash, cash equivalents, and marketable securities. The Company will
hold a teleconference call and live web cast at 11:15 a.m. Eastern
Daylight Time, August 5, 2004, to discuss second quarter 2004
results, followed by a question and answer session hosted by Steven
G. Anderson, CryoLife President and Chief Executive Officer. To
listen to the live teleconference, please dial 973-582-2749 a few
minutes prior to 11:15 a.m. No identification number is required. A
replay of the teleconference will be available August 5 through
August 10 and can be accessed by calling (toll free) 877-519-4471
or 973-341-3080. The identification number for the replay is
4973918. The live webcast can be accessed by going to the Investor
Relations section of the CryoLife website at
http://www.cryolife.com/ . 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 and expenses may not meet its
expectations, that the Company's 2004 BioGlue revenues may not meet
its expectations, that the demand for CryoLife preserved tissues
may not return to prior levels, that the new BioGlue syringe
delivery system may not encourage increased use of BioGlue, that
the Company's general administrative and marketing expenses may not
meet expectations due to higher than expected costs of resolving
existing and future litigation, 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 FDA
regulation of the Company's CryoValve SG and CryoVein SG may
require significant time and expense, that the protein hydrogel
products under development may not be commercially feasible, 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 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, 2003,
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 website:
http://www.cryolife.com/ CRYOLIFE, INC. Unaudited Financial
Highlights (In thousands, except share data) Three Months Ended Six
Months Ended June 30, June 30, 2004 2003 2004 2003 Revenues:
Products $9,203 $6,932 $18,062 $13,531 Human tissue preservation
services 6,054 8,615 12,279 17,745 Distribution and grant 57 166 59
357 Total revenues 15,314 15,713 30,400 31,633 Costs and expenses:
Products 1,894 2,006 3,841 3,647 Human tissue preservation services
7,543 5,160 16,646 7,603 General, administrative, and marketing
9,693 23,539 19,841 35,131 Research and development 891 1,088 1,812
2,005 Interest expense 59 147 102 279 Interest income (64) (116)
(130) (247) Other expense, net 21 166 37 140 Total costs and
expenses 20,037 31,990 42,149 48,558 Loss before income taxes
(4,723) (16,277) (11,749) (16,925) Income tax (benefit) expense
(1,371) 3,644 (1,371) 3,430 Net loss $(3,352) $(19,921) $(10,378)
$(20,355) Net loss per share: Basic $(0.14) $(1.01) $(0.46) $(1.04)
Diluted $(0.14) $(1.01) $(0.46) $(1.04) Weighted average shares
outstanding: Basic 23,252 19,675 22,747 19,654 Diluted 23,252
19,675 22,747 19,654 Revenues from: Cardiovascular $2,831 $5,036
$6,261 $9,761 Vascular 2,649 3,299 5,135 7,554 Orthopaedic 574 280
883 430 Total cryopreservation 6,054 8,615 12,279 17,745 BioGlue
8,962 6,839 17,605 13,333 Implantable medical devices 241 93 457
198 Distribution and grant 57 166 59 357 Total revenues $15,314
$15,713 $30,400 $31,633 International revenues $2,327 $1,845 $4,419
$3,556 Domestic revenues 12,987 13,868 25,981 28,077 Total revenues
$15,314 $15,713 $30,400 $31,633 CRYOLIFE, INC. Financial Highlights
(In thousands) Unaudited Audited June 30, Dec. 31, 2004 2003 Cash
and cash equivalents $23,741 $11,916 and marketable securities, at
market Trade receivables, net 7,625 6,377 Other receivables, net
2,231 1,865 Deferred preservation costs, net 7,382 8,811
Inventories 4,572 4,450 Total assets 87,751 75,027 Shareholders'
equity 57,500 48,338 Contact: Joseph T. Schepers Vice President,
Corporate Communications (770) 419-3355 DATASOURCE: CryoLife, Inc.
CONTACT: Joseph T. Schepers, Vice President, Corporate
Communications of CryoLife, Inc., +1-770-419-3355 Web site:
http://www.cryolife.com/
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