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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): OCTOBER 25, 2004
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CRYOLIFE, INC.
(Exact name of registrant as specified in its charter)
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FLORIDA 1-13165 59-2417093
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
1655 ROBERTS BOULEVARD N.W., KENNESAW, GA 30144
(Address of principal executive office) (zip code)
Registrant's telephone number, including area code: (770) 419-3355
N/A
(Former name or former address, if changed since last report)
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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):
__ Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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SECTION 1. REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On Monday, October 25, 2004, CryoLife, Inc. (the "Company") agreed to a binding
settlement of three lawsuits (two of which were consolidated) pending in the
Multnomah Circuit Court in Oregon. All of the plaintiffs, Donald Payne, Candace
Payne, L.L.R., W.C.R and Anthony F. Spadaro, are party to the settlement
agreement, which addresses the claims between the Company and the plaintiffs.
The other defendants named in the lawsuits have also settled with the
plaintiffs, and when the settlement agreement is closed, all of the claims
currently pending in the lawsuits are to be dismissed. This settlement agreement
does not purport to settle any claims among the Company and the other
defendants. Neither the Company nor any of its affiliates have any other
material relationship with the plaintiffs.
Under the agreement, CryoLife is obligated to pay $3.0 million on or before
November 5, 2004. The agreement provides for the court to automatically dismiss
the plaintiffs' claims against the Company 91 days following payment of the
settlement amount.
Exhibit 99.1 to this Form 8-K is incorporated herein by reference.
SECTION 2. FINANCIAL INFORMATION
ITEM 2.02 RESULTS OF OPERATIONS OR FINANCIAL CONDITION
On October 29, 2004, the Company announced that it had settled the lawsuits
described in Item 1.01 above as well as one other lawsuit and two claims, and
discussed the impact of the settlement on its general, administrative and
marketing expenses for the three month period ended September 30, 2004, and its
liquidity. A copy of the press release is included as an exhibit to this Form
8-K.
SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
2
Exhibit Number Description
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99.1* Press Release dated October 29, 2004
*This exhibit is filed, not furnished.
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: October 29, 2004 By: /s/ D. Ashley Lee
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D. Ashley Lee
Vice President, Chief Financial Officer
and Treasurer
3
EXHIBIT 99.1
[CRYOLIFE LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: JOSEPH T. SCHEPERS
VICE PRESIDENT, CORPORATE COMMUNICATIONS
(770) 419-3355
CRYOLIFE REPORTS SETTLEMENT OF CASES
ATLANTA...(OCTOBER 29, 2004)... CryoLife, Inc. (NYSE: CRY), a biomaterials and
biosurgical device company, today reported that on Monday, October 25, 2004, it
agreed to a binding settlement of three general liability lawsuits pending in
the Multnomah Circuit Court in Oregon. Additionally, the Company settled one
product liability case and two product liability claims since June 30, 2004. As
a result of these settlements and the evaluation of all other outstanding
litigation and claims at September 30, 2004, the Company has recorded a net
increase of $2.4 million to its legal liability reserves for asserted product
liability and similar claims. This amount will be reflected in the Company's
general, administrative and marketing expenses for the three months ended
September 30, 2004.
The Company had cash and cash equivalents of $11.4 million and marketable
securities of $3.8 million at September 30, 2004. The settlements discussed
above require the Company to pay approximately $3.3 million in the fourth
quarter of 2004. These claims were uninsured.
The Company will hold a teleconference call and live web cast at 11:15 a.m.
Eastern Standard Time, Thursday, November 4, 2004, to discuss third 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 November 4 through November 10, and can be
accessed by calling (toll free) 877-519-4471 or 973-341-3080. The identification
number for the replay is 5284237. The live webcast can be accessed by going to
the Investor Relations section of the CryoLife website at WWW.CRYOLIFE.COM.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Statements made in this report 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,
including those regarding the payment of the settlement amount and its effect on
the Company and its financial statements. 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 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 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.