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): December 15, 2006
_______________________
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
1 Registrant’s
Business and Operations
Item
1.01 Entry
into a Material Definitive agreement.
On
December 15, 2006, CryoLife, Inc. (“CryoLife”) entered into an exchange and
service agreement with Regeneration Technologies, Inc., a Delaware corporation,
RTI Donor Services, Inc., f/k/a U.S. Allograft Network, Inc., a Delaware
not-for-profit corporation, and Regeneration Technologies, Inc. -
Cardiovascular, an Alabama corporation (collectively, “RTI”), respecting
procurement, processing, and distribution activities for cardiovascular and
vascular tissue processed and distributed by RTI and orthopedic tissue for
the
knee processed and distributed by CryoLife. A copy of the press release
announcing the agreement dated December 19, 2006 is attached as Exhibit 99.1
hereto.
According
to the exchange and service agreement, CryoLife will cease accepting for
processing donated human orthopedic tissue for the knee on January 1, 2007
and
will work to transition existing arrangements for recovery of human orthopedic
tissue for the knee to RTI. Likewise on January 1, 2007, RTI will cease
accepting donated human cardiovascular and vascular tissues for processing
and
will work to transition its arrangements for recovery of these tissues to
CryoLife. Certain physical assets relating to the tissues that are the subject
of the agreement will also be transferred between the parties. No cash was
exchanged in the transaction.
CryoLife
will continue to distribute its existing orthopedic tissue for the knee
inventory, and RTI will continue to distribute its existing cardiovascular
and
vascular tissue inventory, through June 30, 2008. After that date, CryoLife
will
become entitled to distribute RTI’s remaining cardiovascular and vascular tissue
inventory, and RTI will become entitled to distribute CryoLife’s remaining
orthopedic tissue for the knee inventory, for a fee. Under the Exchange and
Service Agreement, from July 1, 2008 through December 31, 2016, except as set
forth above, CryoLife has agreed not to market or solicit orders for certain
human orthopedic tissues for the knee and RTI has agreed not to market or
solicit orders for human cardiac and vascular tissues.
The
agreement also provides for a non-exclusive license of technology from CryoLife
to RTI, and contains customary provisions regarding indemnification and
confidentiality.
Section
8 Other
Events
Item
8.01 Other
Events.
On
December 20, 2006, CryoLife issued a press release announcing that it expects,
as a result of the exchange and service agreement, an economic benefit of up
to
$2 million on an annual basis, beginning in calendar year 2007. CryoLife hereby
incorporates by reference herein the information set forth in its Press Release
dated December 20, 2006, a copy of which is attached hereto as Exhibit 99.2.
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.
2
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 releases filed as exhibits
hereto. Please refer to the last paragraph of the press releases for further
discussion about forward-looking statements. For further information on risk
factors, please refer to the “Risk Factors” contained in CryoLife’s Form 10-K
for the year ended December 31, 2005, as filed with the Securities and Exchange
Commission (“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(d) 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 December 19, 2006
|
|
99.2
|
Press
release dated December 20, 2006
|
3
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:
December 20, 2006
|
By:
/s/
D. Ashley Lee
|
|
Name:
D. Ashley Lee
|
|
|
Title: Executive
Vice President, Chief
|
|
|
Operating
Officer and Chief Financial Officer
|
4
EXHIBIT
99.1
FOR
IMMEDIATE RELEASE
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 |
CryoLife and Regeneration Technologies Enter Into Exchange and Service Agreement
CryoLife to sharpen focus on core cardiovascular business
ATLANTA…(December
19, 2006)…CryoLife, Inc., (NYSE: CRY), a biomaterials and biosurgical device
company, and Regeneration Technologies Inc., (RTI) (Nasdaq: RTIX), a
Florida-based processor of biologic implants, today announced that they have
entered into an exchange and service agreement respecting their orthopedic
and
cardiovascular activities.
According
to the agreement, CryoLife will cease accepting donated human orthopedic tissues
for processing on January 1, 2007 and will work to transition existing
arrangements for recovery of human orthopedic tissue to RTI. Likewise on January
1, 2007, RTI will cease accepting donated human cardiovascular tissues for
processing and will work to transition its arrangements for recovery of human
cardiovascular tissue to CryoLife. Certain physical assets will also be
transferred between the parties. No cash was exchanged in the transaction.
“This
agreement will allow each gift of donated cardiac, vascular and orthopedic
tissue to be processed by an organization that has a greater focus on surgeries
utilizing that specific type of donated tissue, thereby improving how these
gifts are processed for their intended purpose,” said Steven G. Anderson,
president and chief executive officer, CryoLife, Inc. Mr. Anderson added,
“CryoLife will now sharpen its corporate focus on its core business of
developing and providing innovative products and preserved tissues to cardiac
and vascular surgeons and their patients.”
“We
are
very enthusiastic about this agreement and the benefits it will bring to our
recovery agencies, surgeons and patients,” said Brian K. Hutchison, RTI
chairman, president and chief executive officer. “These gifts of donated tissue
will be prepared for transplantation with best-in-class technologies and
maximized to help as many patients as possible. RTI will now be better able
to
meet the demand for our sports medicine implants, sterilized through our
proprietary BioCleanse® process. In turn, CryoLife will be better able to meet
the demand for their cardiac and vascular implants.”
RTI
will
continue to distribute its existing cardiovascular tissue inventory and CryoLife
will continue to distribute its existing orthopedic tissue inventory through
June 30, 2008. After that date, CryoLife will become entitled to distribute
RTI’s remaining cardiovascular tissue inventory and RTI will become entitled to
distribute CryoLife’s remaining orthopedic tissue inventory through December 31,
2008. Under the agreement, from July 1, 2008 through December 31, 2016, CryoLife
has agreed not to market or solicit orders for certain human orthopedic tissues
for sports injuries and RTI has agreed not to market or solicit orders for
human
cardiac and vascular tissues.
CryoLife
Investor Conference Call
CryoLife
will hold a teleconference call and live webcast on Wednesday, December 20,
2006, at 11:00 a.m. Eastern Time to discuss this transaction, 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
11:00
a.m. A replay of the teleconference will be available December 20 - 27, 2006
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 224239.
The
live
webcast and replay, as well as a copy of this press release, 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 cardiovascular 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. For additional information about
the
company, visit CryoLife’s Web site: http://www.cryolife.com.
About Regeneration Technologies, Inc.
About Regeneration Technologies, Inc.
RTI
processes allograft and xenograft tissue into shaped implants for use in
orthopedic and other surgeries with a commitment to science, safety and
innovation.
RTI
also
holds the patents on BioCleanse, the only proven tissue sterilization process
validated to eliminate viruses, bacteria, fungi and spores from tissue without
impacting the structural or biomechanical integrity of the tissue. The company
has distributed more than half a million allograft implants sterilized with
the
BioCleanse process with zero incidence of infection. RTI is accredited by the
American Association of Tissue Banks and was named a 2004 Technology Pioneer
by
the World Economic Forum. For more information about RTI, visit the company's
Web site at www.rtix.com.
Statements
made in this press release regarding CryoLife that look forward in time or
that
express beliefs, expectations or hopes, including statements regarding the
expected impact of the exchange and service agreement, 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 CryoLife's business, are subject to various risks and
uncertainties. These risks and uncertainties include that the impact of the
exchange and service agreement may not have 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 CryoLife or may not be
able
to meet CryoLife’s tissue processing standards, that expected cost savings and
synergies may not occur when and as anticipated, that CryoLife's recently
announced strategic directives may not generate anticipated revenue and earnings
growth, CryoLife'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 CryoLife's efforts to develop and introduce new
products outside the U.S. may be unsuccessful, that CryoLife'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
CryoLife's operations, require a recall, or prevent CryoLife from processing
and
distributing tissues or manufacturing and distributing other products, that
products and services under development, including BioDisc, may not be
commercially feasible, CryoLife's SynerGraft products may not receive FDA
approval when anticipated or at all, that CryoLife may not have sufficient
borrowing or other capital availability to fund its business, that pending
litigation cannot be settled on terms acceptable to CryoLife, that CryoLife
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 CryoLife's working capital if cash flow does not
improve, that to the extent CryoLife 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, efforts by existing stockholders or others to gain influence or
control over CryoLife may divert management's attention from CryoLife's
operational recovery or otherwise be detrimental to the interests of the other
stockholders, existing or other potential litigation initiated by stockholders
or others; possible litigation by CryoLife if stockholders or others make
proposals or statements which CryoLife does not believe to be fair or accurate
or in the best interests of its other shareholders 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, 2005, its most
recent Form 10-Q, and CryoLife's other SEC filings. CryoLife does not undertake
to update any forward-looking statements contained in this press
release.
###
EXHIBIT
99.2
FOR
IMMEDIATE RELEASE
Media Contacts:
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
|
CryoLife Provides Additional Comments on Exchange and Service Agreement with Regeneration Technologies
CryoLife
expects transaction to be accretive to 2007
earnings
ATLANTA…(December
20, 2006)…CryoLife, Inc., (NYSE: CRY), a biomaterials and biosurgical device
company, is providing additional information regarding the exchange and service
agreement with Regeneration Technologies (RTI) (Nasdaq: RTIX) announced
yesterday.
As
a
result of this transaction, the Company expects an initial economic benefit
of
up to $2 million on an annual basis, a portion of which will be reinvested
into
the execution of its recently announced strategy. Management expects higher
gross margins and an accretive impact on 2007 earnings resulting from more
efficient tissue recovery and processing, and from a sharpened focus on its
cardiovascular business, including the leveraging of the Company’s direct
cardiovascular distribution network.
“This
agreement is another step in the implementation of our recently completed
strategic review and further strengthens our financial position as we head
into
2007,” said Steven G. Anderson, president and chief executive officer, CryoLife,
Inc. Mr. Anderson added, “We will continue to execute on our strategic plan and
look for opportunities to create value for our shareholders.”
The
Company expects to record non-recurring, non-cash charges and benefits during
the fourth quarter of 2006 related to inventory impairments and the exchange
of
intangible assets, including non-competition agreements and customer lists.
These charges and benefits may be significant. The Company is in the process
of
finalizing the accounting for the transaction. The Company currently plans
to
release its 2006 fourth quarter and year-end financial results in late-February
of 2007, and expects to provide more financial guidance regarding this agreement
at that time.
Webcast
and Conference Call Information
The Company will hold a teleconference call and live webcast today at 11:00 a.m. Eastern Time, December 20, 2006, to discuss this transaction, followed by a question and answer session hosted by Mr. Anderson.
The Company will hold a teleconference call and live webcast today at 11:00 a.m. Eastern Time, December 20, 2006, to discuss this transaction, 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
11:00
a.m. A replay of the teleconference will be available December 20-27, 2006
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 224239.
The
live
webcast and replay, as well as a copy of this press release, 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 cardiovascular 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. For additional information about the company, visit CryoLife’s Web site: http://www.cryolife.com.
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® 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. For additional information about the company, visit CryoLife’s Web site: http://www.cryolife.com.
Statements
made in this press release that look forward in time or that express
management's beliefs, expectations or hopes, including statements regarding
the
expected impact of the exchange and service agreement, 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 impact of the
exchange and service agreement may not have 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, that expected cost
savings and synergies may not occur when and as anticipated, that the
anticipated impact of the agreement on the company’s financial statements and
the significance of any charges or benefits are still under review, are subject
to the Company’s year end audit, and could change materially, that the Company's
recently announced 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, 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, efforts by existing stockholders
or
others to gain influence or control over CryoLife may divert management's
attention from the Company's operational recovery or otherwise be detrimental
to
the interests of the other stockholders, existing or other potential litigation
initiated by stockholders or others; possible litigation by CryoLife if
stockholders or others make proposals or statements which CryoLife does not
believe to be fair or accurate or in the best interests of its other
shareholders 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, 2005, its most recent Form 10-Q, and the Company's other
SEC
filings. The Company does not undertake to update its forward-looking
statements.
###