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 10, 2004
CRYOLIFE, INC.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation)
1-13165 59-2417093
(Commission File Number) (IRS Employer Identification No.)
1655 Roberts Boulevard N.W., Kennesaw, Georgia 30144
----------------------------------------------------
(Address of principal executive offices, including zip code)
(770) 419-3355
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
Exhibit Number Description
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99.1 Press Release dated May 10, 2004
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information provided pursuant to this Item 12 is to be considered "filed"
under the Securities Exchange Act of 1934 ("Exchange Act") and incorporated by
reference into those filings of CryoLife, Inc. ("CryoLife") that provide for the
incorporation of all reports and documents filed by CryoLife under the Exchange
Act.
On May 10, 2004, CryoLife issued a press release announcing its results for the
quarter ended March 31, 2004. CryoLife hereby incorporates by reference herein
the information set forth in its Press Release dated May 10, 2004, 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 such press release shall not create any implication that the affairs
of CryoLife have continued unchanged since such date.
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. For further information
on other risk factors, please refer to the "Risk Factors" contained in
CryoLife's Form 10-K for the year ended December 31, 2003, CryoLife's Form S-3
(Registration No. 333-112673), 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.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, CryoLife
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
CRYOLIFE, INC.
Date: May 10, 2004 By: /s/ D. Ashley Lee
----------------------------------------
Name: D. Ashley Lee
Title: Vice President, Chief Financial
Officer and Treasurer
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EXHIBIT INDEX
Exhibit Number Description Page
- -------------- ----------- ----
99.1 Press Release dated May 10, 2004 5
4
EXHIBIT 99.1
[CRYOLIFE, INC. LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: JOSEPH T. SCHEPERS
VICE PRESIDENT, CORPORATE COMMUNICATIONS
(770) 419-3355
CRYOLIFE FIRST QUARTER 2004 REVENUES UP 18%
OVER FOURTH QUARTER 2003
CONTINUED STRONG GROWTH OF U.S. AND INTERNATIONAL BIOGLUE(R) SALES.
POSITIVE TREND IN HUMAN TISSUE PROCESSING REVENUES.
ATLANTA...(May 10, 2004)...CryoLife, Inc. (NYSE: CRY), a bio-surgical device and
human tissue processing company, today reported financial results for the first
quarter of 2004.
Revenues for the first quarter of 2004 were $15.1 million, an increase of
18% compared to the fourth quarter of 2003. Revenues for the first quarter of
2003 were $15.9 million. Net loss for the first quarter of 2004 was $7.0 million
compared to a net loss of $7.2 million in the fourth quarter of 2003 and a net
loss of $434,000 in the first quarter of 2003. On a fully diluted basis, the
loss per common share for the first quarter of 2004 was $0.32 compared to a net
loss per share of $0.37 in the fourth quarter of 2003 and a net loss per share
of $0.02 in the first quarter of 2003.
BioGlue sales in the first quarter of 2004 increased 11% to $8.6 million
compared to $7.8 million in the fourth quarter of 2003 and increased 33%
compared to $6.5 million in the first quarter of 2003. BioGlue revenues are
expected to increase by 19-26% to between $33 and $35 million in 2004 from $27.8
million in 2003. Projected BioGlue revenue for the second quarter is $8.5-$9.0
million.
-More-
1655 Roberts Boulevard, NW o Kennesaw, Georgia 30144
(770)419-3355 Phone o (770)426-0031 Fax o e-mail: info@cryolife.com
http://www.cryolife.com
Page 2 of 5
BioGlue can be distributed in 50 countries. Surgeons in the U.S. are
utilizing it as an adjunct to standard methods, such as sutures and staples, to
control bleeding in open surgical repair of large vessels. It is being used in
the European community in the surgical repair of soft tissues, such as vascular,
cardiac, lung, and gastrointestinal as well as dura sealing for use in brain and
spinal surgery. "International BioGlue sales growth of 24% in the first quarter
of 2004 compared to the first quarter of 2003 was driven by the U.K. direct
sales representatives, strong distribution support throughout Europe, increased
usage of BioGlue in the core applications of cardiac and large vascular surgery,
and expanded usage in neurologic, pulmonary, and general surgery," said Steven
G. Anderson, President and CEO.
"Recently, there have been several presentations and publications, both in
the U.S. and abroad, describing the use of BioGlue for various surgical
indications. This positive data has been an important factor driving BioGlue
sales growth," said Mr. Anderson.
Tissue processing revenues including cardiac, vascular, and orthopaedic
tissue, increased 26% to $6.2 million in the first quarter of 2004 compared to
$4.9 million in the fourth quarter of 2003. Total tissue processing revenues are
expected to increase by 4-10% to between $32 and $34 million in 2004 from $30.8
million in 2003. Projected tissue processing revenue for the second quarter is
$6.7-$7.5 million.
Cardiac tissue processing revenues were $3.4 million in the first quarter
of 2004, compared to $2.8 million in the fourth quarter of 2003. Vascular tissue
processing revenues were $2.5 million in the first quarter of 2004 compared to
$2.0 million in the fourth quarter of 2003. Orthopaedic revenues were $309,000
in the first quarter of 2004 compared to $166,000 in the fourth quarter of 2003.
Total tissue processing and product revenues are projected to be between
$15.3 and $16.6 million in the second quarter of 2004, up from $15.1 million for
the first quarter of 2004. Total tissue processing and product revenues are
expected to increase 12-19% to $66-$70 million for the full year 2004.
General, administrative, and marketing 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 second quarter of
2004, the Company expects general, administrative, and marketing expenses of
approximately $10-$11 million, and expects research and development expenses to
be approximately $1 million.
Page 3 of 5
Separately, the Company noted that, in connection with its Form S-3 Filing,
the Securities and Exchange Commission ("SEC") has conducted a review of the
Company's 10-K and 10-Q's. As a result of this review, the Company is addressing
with the SEC the accounting treatment for its product liability cases. The
Company believes that the results of the review will not change its previously
reported operating results. The Company's Form 10-Q will be delayed in order to
allow the Company time to complete its communications with the SEC regarding its
review.
Since the beginning of 2003 the Company has settled approximately 30
product liability claims, which has reduced the number of product liability
cases pending against the Company to 10, four of which are covered by insurance.
As of March 31, 2004, the Company had approximately $25.4 million in aggregate
cash, cash equivalents, and marketable securities. Additionally, the Company
expects to receive tax refunds of approximately $2.4 million in the second half
of 2004.
The Company will hold a teleconference call and live web cast today at
11:15 a.m. Eastern Time, to discuss first 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 973-935-8505 a few
minutes prior to 11:15 a.m. No identification number is required. A replay of
the teleconference will be available May 10 through May 14 and can be accessed
by calling (toll free) 877-519-4471 or 973-341-3080. The identification number
for the replay is 4701009.
The live web cast can be accessed by going to the Investor Relations
section of the CryoLife web site at 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 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 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,
Page 4 of 5
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 Company's 10-Q may be
delayed, 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 regulations 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 Web site:
http://www.cryolife.com
Page 5 of 5
CRYOLIFE, INC.
Unaudited Financial Highlights
(In thousands, except per share data)
Three Months Ended
March 31,
------------------------------
2004 2003
------------- -------------
Revenues:
Human tissue preservation services $ 6,225 $ 9,130
Products 8,859 6,599
Grant 2 191
------------ ------------
Total revenues 15,086 15,920
Costs and expenses:
Human tissue preservation services 9,103 2,443
Products 1,947 1,641
General, administrative, and marketing 10,148 11,592
Research and development 921 917
Interest expense 43 132
Interest income (66) (131)
Other expense (income), net 16 (26)
------------ ------------
Total costs and expenses 22,112 16,568
Loss before income taxes (7,026) (648)
Income tax expense (benefit) -- (214)
------------ ------------
Net loss $ (7,026) $ (434)
============ ============
Loss per share:
Basic $ (0.32) $ (0.02)
============ ============
Diluted $ (0.32) $ (0.02)
============ ============
Weighted average shares outstanding:
Basic 22,241 19,634
============ ============
Diluted 22,241 19,634
============ ============
Revenues from:
Cardiovascular $ 3,430 $ 4,725
Vascular 2,486 4,255
Orthopaedic 309 150
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Total cryopreservation 6,225 9,130
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BioGlue 8,643 6,494
Implantable medical devices 216 105
Grant 2 191
------------ ------------
Total revenues $ 15,086 $ 15,920
============ ============
International revenues $ 2,092 $ 1,710
Domestic revenues 12,994 14,210
------------ ------------
Total revenues $ 15,086 $ 15,920
============ ============