4
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): August 5, 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
99.1 Press Release dated August 5, 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 August 5, 2004, CryoLife issued a press release announcing its results for
the quarter ended June 30, 2004. CryoLife hereby incorporates by reference
herein the information set forth in its Press Release dated August 5, 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.
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: August 5, 2004 By: /s/ D. Ashley Lee
---------------------------------
Name: D. Ashley Lee
Title: Vice President, Chief Financial
Officer and Treasurer
EXHIBIT INDEX
Exhibit Number Description Page
99.1 Press Release dated August 5, 2004 5
EXHIBIT 99.1
[COMPANY LOGO]
FOR IMMEDIATE RELEASE
CONTACT: JOSEPH T. SCHEPERS
VICE PRESIDENT, CORPORATE COMMUNICATIONS
(770) 419-3355
CRYOLIFE REPORTS SECOND QUARTER 2004 FINANCIAL RESULTS
BIOGLUE(R) SALES INCREASED 31% OVER SECOND QUARTER 2003
BIOGLUE SYRINGE DELIVERY SYSTEM LAUNCHED IN THE SECOND QUARTER
ORTHOPAEDIC TISSUE REVENUES INCREASING
ATLANTA...(August 5, 2004)...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.
-more-
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 Standard 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 WWW.CRYOLIFE.COM.
-more-
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
-more-
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
=========== =========== =========== ===========
-more-
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
END