UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
|
FORM
8-K
|
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): May 1, 2007
_______________________
CRYOLIFE,
INC.
(Exact
name of registrant as specified in its charter)
_________________________
|
Florida
|
1-13165
|
59-2417093
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
1655
Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address
of principal executive office) (zip code)
Registrant's
telephone number, including area code: (770) 419-3355
_____________________________________________________________
(Former
name or former address, if changed since last report)
_________________________
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
Section
2 Financial
Information
Item
2.02 Results
of Operations and Financial Condition.
On
May 1,
2007, CryoLife, Inc. (“CryoLife” or the “Company”) issued a press release
announcing its financial results for the first quarter ended March 31, 2007.
CryoLife hereby incorporates by reference herein the information set forth
in
its Press Release dated May 1, 2007, a copy of which is attached hereto as
Exhibit 99.1. Except as otherwise provided in the press release, the press
release speaks only as of the date of such press release and it shall not create
any implication that the affairs of CryoLife have continued unchanged since
such
date.
The
press
release includes non-GAAP financial measures, including adjusted non-GAAP
net
income and earnings per share, and management believes that these non-GAAP
financial measures provide a better period-to-period comparison of operational
performance.
The
information provided pursuant to this Item 2.02 is to be considered “furnished”
pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or
otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2)
of the Securities Act of 1933, as amended, nor shall it be deemed incorporated
by reference into any of CryoLife’s reports or filings with the Securities and
Exchange Commission (“SEC”), whether made before or after the date hereof,
except as expressly set forth by specific reference in such report or
filing.
Except
for the historical information contained in this report, the statements made
by
CryoLife are forward-looking statements that involve risks and uncertainties.
All such statements are subject to the safe harbor created by the Private
Securities Litigation Reform Act of 1995. CryoLife’s future financial
performance could differ significantly from the expectations of management
and
from results expressed or implied in the press release. Please refer to
the last paragraph of the press release for further discussion about
forward-looking statements. For further information on risk factors, please
refer to “Risk Factors” contained in CryoLife’s Form 10-K for the year ended
December 31, 2006, as filed with the SEC, and any subsequent SEC filings.
CryoLife disclaims any obligation or duty to update or modify these
forward-looking statements.
Section
9 Financial
Statements and Exhibits.
Item
9.01(c) Exhibits.
(a)
Financial Statements.
Not
applicable.
(b)
Pro
Forma Financial Information.
Not
applicable.
(c)
Shell
Company Transactions.
Not
applicable.
(d)
Exhibits.
|
Exhibit
Number
|
Description
|
|
|
99.1*
|
Press
release dated May 1, 2007
|
|
|
*
This exhibit is furnished, not filed.
|
||
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, CryoLife, Inc.
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
CRYOLIFE,
INC.
|
|
|
Date:
May 1, 2007
|
By:
/s/
D. Ashley Lee
|
|
Name: D.
Ashley Lee
|
|
|
Title:
Executive
Vice President, Chief Operating Officer and Chief Financial
Officer
|
|
3
Exhibit
99.1
FOR
IMMEDIATE RELEASE
Media
Contacts:
|
D.
Ashley Lee
|
Katie
Brazel
|
|
Executive
Vice President, Chief Financial Officer and
|
Fleishman
Hillard
|
|
Chief
Operating Officer
|
Phone:
404-739-0150
|
|
Phone:
770-419-3355
|
CryoLife’s
First Quarter 2007 Revenues up 26 Percent
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,
GA… (May 1, 2007)… 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.”
--more--
4
BioGlue®
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.
5
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 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®
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®
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.
-
more -
6
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
|
|||
7
CRYOLIFE,
INC.
Financial
Highlights
(In
thousands)
|
March
31,
|
December
31,
|
||||||
|
2007
|
2006
|
||||||
|
(Unaudited)
|
|||||||
|
Cash
and cash equivalents, marketable securities,
|
$
|
9,530
|
$
|
8,669
|
|||
|
at
market, and restricted securities
|
|||||||
|
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
|
|||||
8
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
END
9