Filed by
CryoLife, Inc.
Pursuant
to Rule 425
under the
Securities Act of 1933
and
deemed filed pursuant to Rule 14a-12
under the
Securities Exchange Act of 1934
Subject
Company: Medafor, Inc.
Commission
File No. 021-39452
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): February 18,
2010
_______________________
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):
|
x
|
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 February 18, 2010, CryoLife, Inc.
(“CryoLife” or the “Company”) issued a press release announcing its financial
results for the fourth quarter and the fiscal year ended December 31, 2009.
CryoLife hereby incorporates by reference herein the information set forth in
its Press Release dated February 18, 2010, 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 certain supplemental non-GAAP
financial measures:
|
·
|
non-GAAP
preservation service revenue growth, which has been obtained by adjusting
the comparable preservation service GAAP revenue growth number to exclude
revenues related to orthopedic tissue processing
services;
|
|
·
|
non-GAAP
preservation service revenues, which have been obtained by adjusting the
comparable preservation service segment revenue numbers to exclude
revenues related to orthopedic tissue processing
services;
|
|
·
|
non-GAAP
net income for the fourth quarter of 2008 and the fiscal year ended
December 31, 2008, which has been obtained by measuring net income as if
the Company had recorded 2008 income taxes at a normalized 36 and 40
percent effective tax rate for the fourth quarter and 2008 fiscal year,
respectively;
|
|
·
|
non-GAAP
fully diluted earnings per share, which have been obtained by measuring
fully diluted earnings per share as if the Company had recorded 2008
income taxes at a normalized 36 and 40 percent effective tax rate for the
fourth quarter and 2008 fiscal year, respectively;
and
|
|
·
|
non-GAAP
net income for the fourth quarter of 2009 and the fiscal year ended
December 31, 2009, which has been obtained by excluding a pretax charge
for the fourth quarter of 2009 in connection with a reduction in
workforce;
|
Preservation service revenue growth has
been adjusted to obtain non-GAAP preservation service revenue growth, and
preservation service segment revenues have been adjusted to obtain non-GAAP
preservation service revenues, by excluding revenues from orthopedic tissue
processing, because the Company discontinued procuring and processing such
tissue as of January 1, 2007 and ceased distributing its remaining orthopedic
tissue as of June 30, 2008, except on a very limited basis. Because
the Company’s revenues from orthopedic tissue have been effectively reduced to
zero and should remain at that level for the foreseeable future, the Company
believes that the non-GAAP revenue growth numbers presented, as well as the
non-GAAP preservation service revenues presented, provide investors with a more
accurate measure of the relative revenue performance of the Company’s continuing
preservation service business.
Net income for the fourth quarter of
2008 and the fiscal year ended December 31, 2008 and fully diluted earnings per
share have been adjusted to obtain non-GAAP net income and fully diluted
earnings per share by presenting the figures as if the Company had recorded 2008
income taxes at a normalized 36 and 40 percent effective tax rate for the fourth
quarter of 2008 and fiscal 2008 because the Company's effective income tax rate
was lower in 2008 due to the valuation allowance on the Company's deferred tax
assets during 2008. The Company believes that the presentation of
non-GAAP net income and fully diluted earnings per share provides investors with
the ability to better compare the Company’s relative period-to-period
performance with respect to such measurements.
-2-
Net income for the fourth quarter of
2009 and the fiscal year ended December 31, 2009 has been adjusted to obtain
non-GAAP net income for the respective periods by excluding a pretax charge for
the fourth quarter of 2009 in connection with a reduction in workforce because
of the non-recurring nature of such a charge. The Company believes
the exclusion of this non-recurring charge provides investors with the ability
to better compare the Company’s relative period-to-period performance with
respect to such measurements.
Accordingly, CryoLife believes that
these non-GAAP measures, when read in conjunction with the Company’s GAAP
financials, provide useful information to investors by offering:
|
·
|
the
ability to make more meaningful period-to-period comparisons of the
Company’s on-going operating
results;
|
|
·
|
the
ability to better identify trends in the Company’s underlying business and
perform related trend analyses; and
|
|
·
|
a
better understanding of how management plans and measures the Company’s
underlying business.
|
The additional non-GAAP financial
information is not meant to be considered in isolation or as a substitute for
measures calculated in accordance with GAAP.
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, 2008, as filed with the SEC, and any subsequent
SEC filings, as well as in the press release. CryoLife disclaims any obligation
or duty to update or modify these forward-looking statements.
-3-
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 February 18, 2010
|
|
|
* This
exhibit is furnished, not
filed.
|
-4-
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: February
18, 2010
|
By:
|
/s/ D.A. Lee | |
| Name: | D. Ashley Lee | ||
| Title: | Executive Vice President, Chief | ||
| Operating Officer and Chief | |||
| Financial Officer | |||
-5-
EXHIBIT
99.1
N
E W S R E L E A S E
FOR
IMMEDIATE RELEASE
Media
Contacts:
D. Ashley
Lee
Executive
Vice President, Chief Financial Officer and
Chief
Operating Officer
Phone:
770-419-3355
Nina
Devlin
Edelman
Phone:
212-704-8145
CryoLife
Grows Fourth Quarter Revenues by 12 percent to a Record $28.6
Million
Posts
fully diluted earnings per share of $0.08 for fourth quarter of 2009; $0.09
excluding items
Generates
over $16.5 million in operating cash flow for 2009
ATLANTA, GA…(February 18,
2010)…CryoLife, Inc. (NYSE: CRY), an implantable biological medical
device and cardiovascular tissue processing company, announced today that
revenues for the fourth quarter of 2009 increased 12 percent to a quarterly
record of $28.6 million compared to $25.5 million for the fourth quarter of
2008. This was the 12th
consecutive quarter of profitability for the Company.
“CryoLife
is continuing to thrive in very demanding economic conditions. In
addition to reporting record revenues and continued, consistent profitability,
our ability to significantly increase our cash balances over the past year is a
very encouraging sign of the health of our business. Looking ahead,
we expect to achieve record revenues and operating earnings in 2010 by
continuing to execute on our strategy and invest in our growth,” stated Steven
G. Anderson, president and chief executive officer.
Net
income for the fourth quarter of 2009 was $2.4 million, or $0.08 per basic and
fully diluted common share, compared to $21.7 million, or $0.78 per basic and
$0.76 per fully diluted common share for the fourth quarter of
2008. The Company’s effective income tax rate was 36 percent for the
fourth quarter of 2009, compared to a tax benefit for the fourth quarter of
2008. The Company had a tax benefit in 2008 due to the reversal of
the Company’s valuation allowance on its deferred tax assets during
2008. If the Company had recorded 2008 income taxes at a comparable
36 percent effective tax rate, net income for the fourth quarter of 2008 would
have been $1.7 million and fully diluted earnings per share would have been
$0.06. The Company recorded a pretax charge of approximately $377,000
in the fourth quarter of 2009 in connection with a reduction in workforce, which
resulted from several process improvements and expense control and cost cutting
initiatives that the Company implemented during the fourth quarter of
2009. Excluding these charges, net income for the fourth quarter of
2009 would have been $2.6 million, or $0.09 per fully diluted common
share.
Revenues
for the full year of 2009 increased 6 percent to a record $111.7 million
compared to $105.1 million for the full year of 2008.
Net
income for the full year of 2009 was $8.7 million, or $0.31 per basic and fully
diluted common share, compared to $32.0 million, or $1.15 per basic and $1.13
per fully diluted common share for the full year of 2008. The
Company’s effective income tax rate was 40 percent for the full year of 2009,
compared to a tax benefit for the full year of 2008. If the Company
had recorded 2008 income taxes at a comparable 40 percent effective tax rate,
net income for the full year of 2008 would have been $8.1 million and fully
diluted earnings per share would have been $0.29. Excluding pretax
charges of $377,000 in the fourth quarter of 2009 as mentioned above, net income
for the full year of 2009 would have been $8.9 million, or $0.32 per fully
diluted common share.
Preservation
service revenues for the fourth quarter of 2009 increased 12 percent to $13.8
million compared to $12.3 million for the fourth quarter of 2008. The
increase in preservation service revenues was primarily due to increased
shipments of cardiac and vascular tissues for the fourth quarter of 2009
compared to the fourth quarter of 2008.
Preservation
service revenues for the full year of 2009 increased 5 percent to $56.5 million
compared to $53.7 million for the full year of 2008. Excluding
orthopaedic tissue processing revenues of $181,000 and $725,000 for the full
year of 2009 and 2008, respectively, preservation service revenues increased 6
percent to $56.3 million for the full year of 2009 compared to $52.9 million for
the full year of 2008. The increase in preservation service revenues
was primarily due to increased revenues from vascular tissue for the full year
of 2009 compared to the full year of 2008.
Revenues
from the distribution of CryoValve® SG
pulmonary heart valves (“CryoValve SGPV”) and CryoPatch® SG
pulmonary cardiac patches (“CryoPatch SG”) increased to $2.2 million for the
fourth quarter of 2009 from $1.7 million for the fourth quarter of 2008,
representing 33 percent of the Company’s cardiac tissue processing revenues for
the fourth quarter of 2009. Revenues from the distribution of
CryoValve SGPV and CryoPatch SG increased to $6.8 million for the full year of
2009 from $5.1 million for the full year of 2008, representing 26 percent of the
Company’s cardiac tissue processing revenues for the full year of
2009.
Product
revenues, which consist primarily of sales of BioGlue®
Surgical Adhesive and HemoStase®, were
$14.5 million for the fourth quarter of 2009 compared to $13.0 million for the
fourth quarter of 2008, an increase of 12 percent. Product revenues
were $54.2 million for the full year of 2009 compared to $50.5 million for the
full year of 2008, an increase of 7 percent. The increase year over
year primarily reflects the growing usage of HemoStase in cardiac and vascular
surgical indications in the U.S., and cardiac, vascular and general surgery
indications in many markets outside of the U.S.
Page 2 of
8
Total
preservation services and product gross margins were 61 percent and 64 percent
for the fourth quarters of 2009 and 2008, respectively. Total
preservation services and product gross margins were 62 percent and 64 percent
for the full year of 2009 and 2008, respectively.
Preservation
services gross margins were 39 percent and 45 percent for the fourth quarters of
2009 and 2008, respectively. Preservation services gross margins were
42 percent and 46 percent for the full year of 2009 and 2008,
respectively.
Product
gross margins were 82 percent for each of the fourth quarters of 2009 and
2008. Product gross margins were 83 percent and 84 percent for the
full year of 2009 and 2008, respectively.
General,
administrative, and marketing expenses for the fourth quarter of 2009 were $12.6
million compared to $12.3 million for the fourth quarter of
2008. General, administrative, and marketing expenses for the full
year of 2009 were $50.0 million compared to $48.8 million for the full year of
2008. These expenses included personnel costs, advertising, physician
education and training, and promotional materials to support current revenue
growth and the Company’s efforts to increase its preservation service and
product offerings.
General,
administrative, and marketing expenses for the fourth quarters of 2009 and 2008
included benefits of $165,000 and $530,000, respectively, related to the
adjustment of reserves for product liability losses. General,
administrative, and marketing expenses for the full year of 2009 and 2008
included benefits of $570,000 and $980,000, respectively, related to the
adjustment of reserves for product liability losses. The fourth
quarter of 2009 also includes a charge of approximately $377,000 related to a
reduction in workforce.
Research
and development expenses were $1.4 million for each of the fourth quarters of
2009 and 2008. Research and development expenses were $5.2 million
and $5.3 million for the full years of 2009 and 2008,
respectively. Research and development spending in 2009 was primarily
focused on the Company’s BioGlue and related products and SynerGraft®
tissues and products.
As of
December 31, 2009, the Company had $35.1 million in cash, cash equivalents, and
restricted securities, compared to $22.8 million at December 31,
2008. Of this $35.1 million, $2.6 million was received from the U.S.
Department of Defense as advance funding for the development of BioFoamÒ
protein hydrogel technology, and $5.0 million was designated as long-term
restricted money market funds due to a financial covenant requirement under the
Company’s credit agreement. The Company has net operating loss
carryforwards that will reduce required cash payments for federal and state
income taxes for the 2010 tax year.
2010
Financial Guidance
The
Company expects total revenues for the full year of 2010 to be between $118.0
million and $123.0 million, which includes between $1.5 million and $2.5 million
related to funding received from the Department of Defense in connection with
the development of BioFoam. The Company expects tissue processing
revenues and BioGlue revenues to each increase between mid-single and low-double
digits on a percentage basis in 2010 compared to 2009, with HemoStase revenues
increasing significantly more than that on a percentage basis.
Page 3 of
8
The
Company expects earnings per share of between $0.36 and $0.40 for
2010. Our earnings guidance contains general expenses associated with
business development opportunities, but does not include significant expenses
associated with specific targets, such as Medafor or potential changes in the
value of the Medafor-related derivative. Depending upon our course of
action and the ultimate result of those actions, such as a proxy contest or the
completion of an acquisition, we could incur expenses or changes in the value of
the derivative that could materially affect our guidance.
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 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 from
February 18 through February 28 and can be accessed by calling 877-660-6853
(toll free) or 201-612-7415. The account number for the replay is 244
and the conference number is 343662.
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 U.S. and Canada. The Company's CryoValve® SG
pulmonary heart valve, processed using CryoLife's proprietary SynerGraft®
technology, has FDA 510(k) clearance for the replacement of diseased, damaged,
malformed, or malfunctioning native or prosthetic pulmonary
valves. The Company’s CryoPatch® SG
pulmonary cardiac patch has FDA 510(k) clearance for the repair or
reconstruction of the right ventricular outflow tract (RVOT), which is a surgery
commonly performed in children with congenital heart defects, such as tetralogy
of Fallot, truncus arteriosus, and pulmonary atresia. CryoPatch SG is
distributed in three anatomic configurations: pulmonary hemi-artery, pulmonary
trunk, and pulmonary branch. 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's BioFoam®
Surgical Matrix is CE Marked in the European Community for use as an adjunct in
the sealing of abdominal parenchymal tissues (liver and spleen) when cessation
of bleeding by ligature or other conventional methods is ineffective or
impractical. BIOGLUE Aesthetic® Medical Adhesive is CE
marked in the European Community for periosteal fixation following endoscopic
browplasty (brow lift) in reconstructive plastic surgery and is distributed by a
third party for this indication. CryoLife distributes HemoStase® a
hemostatic agent, in much of the U.S. for use in cardiac and vascular surgery
and in many international markets for cardiac, vascular, and general surgery,
subject to certain exclusions.
Page 4 of
8
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 2010
performance and statements regarding the expected impact of our net operating
loss carryforwards on our cash outlays for tax obligations. These
future events may not occur as and when expected, if at all, and, together with
our business, are subject to various risks and uncertainties. These
risks and uncertainties include that we are significantly dependent on our
revenues from BioGlue and are subject to a variety of risks affecting this
product, we are subject to stringent domestic and foreign regulation which may
impede the approval process of our tissues and products, hinder our development
activities and manufacturing processes and, in some cases, result in the recall
or seizure of previously cleared or approved tissues and products, our proposed
acquisition of Medafor poses a number of risks, Medafor’s management has
rejected our acquisition offer and refused to negotiate with us, and if we
attempt to launch a hostile offer to acquire Medafor we will incur significant
expense and may not succeed; in the event such a hostile offer does succeed, we
will not have the benefit of due diligence and may incur unanticipated costs or
liabilities, the lawsuit we filed against Medafor regarding our distribution
agreement with Medafor may adversely impact our relationship with Medafor and
could hinder our distribution of HemoStase or prevent us from distributing
HemoStase, healthcare policy changes, including pending proposals to reform the
U.S. healthcare system, may have a material adverse effect on us, uncertainties
related to patents and protection of proprietary technology may adversely affect
the value of our intellectual property, uncertainties related to patents and
protection of proprietary technology for products distributed by CryoLife may
adversely affect our ability to distribute those products, the tissues we
process and our products allegedly have caused and may in the future cause
injury to patients, and we have been and may be exposed to product liability
claims and additional regulatory scrutiny as a result, we are dependent on the
availability of sufficient quantities of tissue from human donors, our CryoValve
SGPV post-clearance study may not provide expected results, demand for our
tissues and products could decrease in the future, which could have a material
adverse effect on our business, the success of many of our tissues and products
depends upon strong relationships with physicians, consolidation in the health
care industry could lead to demands for price concessions or limits or eliminate
our ability to sell to certain of our significant market segments, our existing
insurance policies may not be sufficient to cover our actual claims liability,
we may be unable to obtain adequate insurance at a reasonable cost, if at all,
the loss of any of our sole-source suppliers could have an adverse effect on our
revenues, financial condition, profitability, and cash flows, intense
competition may affect our ability to operate profitably, regulatory action
outside of the U.S. has affected our business in the past and may affect our
business in the future, rapid technological change could cause our services and
products to become obsolete, continued fluctuation of foreign currencies
relative to the U.S. dollar could materially and adversely impact our business,
our credit facility limits our ability to pursue significant acquisitions, key
growth strategies may not generate the anticipated benefits, there are
limitations on the use of our net operating loss carryforwards, our ability to
borrow under our credit facility may be limited, we may not be successful in
obtaining necessary clinical results and regulatory approvals for services and
products in development, and our new services and products may not achieve
market acceptance, extensive government regulation may adversely affect our
ability to develop and market services and products, investments in new
technologies and acquisitions of products or distribution rights may not be
successful, if we are not successful in expanding our business activities in
international markets, we may be unable to increase our revenues, we are not
insured against all potential losses, and natural disasters or other
catastrophes could adversely affect our business, financial condition, and
profitability, and we are dependent on key personnel. These risks and
uncertainties include the risk factors detailed in our Securities and Exchange
Commission filings, including our Form 10-Q filing for the quarter ended March
31, 2009, our Form 10-Q filing for the quarter ended June 30, 2009, our Form
10-Q filing for the quarter ended September 30, 2009, our Form 10-K to be filed
for the year ended December 31, 2009 and the Company's other SEC filings. The
Company does not undertake to update its forward-looking
statements.
Page 5 of
8
CRYOLIFE,
INC. AND SUBSIDIARIES
Financial
Highlights
(In
thousands, except per share data)
|
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Unaudited)
|
(Audited)
|
|||||||||||||||
|
Revenues:
|
||||||||||||||||
|
Preservation
services
|
$ | 13,784 | $ | 12,319 | $ | 56,456 | $ | 53,656 | ||||||||
|
Products
|
14,493 | 12,994 | 54,162 | 50,493 | ||||||||||||
|
Other
|
338 | 219 | 1,067 | 910 | ||||||||||||
|
Total
revenues
|
28,615 | 25,532 | 111,685 | 105,059 | ||||||||||||
|
Cost
of preservation services and products:
|
||||||||||||||||
|
Preservation
services
|
8,346 | 6,730 | 32,767 | 29,112 | ||||||||||||
|
Products
|
2,672 | 2,293 | 9,150 | 8,153 | ||||||||||||
|
Total
cost of preservation services
|
||||||||||||||||
|
and
products
|
11,018 | 9,023 | 41,917 | 37,265 | ||||||||||||
|
Gross
margin
|
17,597 | 16,509 | 69,798 | 67,794 | ||||||||||||
|
Operating
expenses:
|
||||||||||||||||
|
General,
administrative, and marketing
|
12,585 | 12,334 | 50,025 | 48,831 | ||||||||||||
|
Research
and development
|
1,393 | 1,371 | 5,247 | 5,309 | ||||||||||||
|
Total
operating expenses
|
13,978 | 13,705 | 55,272 | 54,140 | ||||||||||||
|
Operating
income
|
3,619 | 2,804 | 14,496 | 13,654 | ||||||||||||
|
Interest
expense
|
(85 | ) | 62 | 83 | 263 | |||||||||||
|
Interest
income
|
(3 | ) | (96 | ) | (76 | ) | (381 | ) | ||||||||
|
Change
in valuation of derivative
|
(24 | ) | -- | (24 | ) | -- | ||||||||||
|
Other
expense, net
|
59 | 121 | 159 | 236 | ||||||||||||
|
Income
before income taxes
|
3,672 | 2,717 | 14,354 | 13,536 | ||||||||||||
|
Income
tax expense (benefit)
|
1,306 | (19,024 | ) | 5,675 | (18,414 | ) | ||||||||||
|
Net
income
|
$ | 2,366 | 21,741 | 8,679 | $ | 31,950 | ||||||||||
|
Income
per common share:
|
||||||||||||||||
|
Basic
|
$ | 0.08 | $ | 0.78 | $ | 0.31 | $ | 1.15 | ||||||||
|
Diluted
|
$ | 0.08 | $ | 0.76 | $ | 0.31 | $ | 1.13 | ||||||||
|
Weighted
average common shares outstanding:
|
||||||||||||||||
|
Basic
|
28,202 | 27,983 | 28,106 | 27,800 | ||||||||||||
|
Diluted
|
28,473 | 28,478 | 28,310 | 28,351 | ||||||||||||
Page 6 of
8
CRYOLIFE,
INC. AND SUBSIDIARIES
Financial
Highlights
(In
thousands)
|
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(Unaudited)
|
(Audited)
|
|||||||||||||||
|
Preservation
services:
|
||||||||||||||||
|
Cardiac
tissue
|
$ | 6,697 | $ | 5,894 | $ | 26,074 | $ | 25,514 | ||||||||
|
Vascular
tissue
|
7,054 | 6,362 | 30,201 | 27,417 | ||||||||||||
|
Orthopaedic
tissue
|
33 | 63 | 181 | 725 | ||||||||||||
|
Total
preservation services
|
13,784 | 12,319 | 56,456 | 53,656 | ||||||||||||
|
Products:
|
||||||||||||||||
|
BioGlue
and related products
|
12,583 | 12,088 | 47,906 | 48,570 | ||||||||||||
|
HemoStase
|
1,869 | 806 | 6,008 | 1,532 | ||||||||||||
|
Other
medical devices
|
41 | 100 | 248 | 391 | ||||||||||||
|
Total
products
|
14,493 | 12,994 | 54,162 | 50,493 | ||||||||||||
|
Other
|
338 | 219 | 1,067 | 910 | ||||||||||||
|
Total
revenues
|
$ | 28,615 | $ | 25,532 | $ | 111,685 | $ | 105,059 | ||||||||
|
Revenues:
|
||||||||||||||||
|
U.S.
|
$ | 23,830 | $ | 21,547 | $ | 94,094 | $ | 89,297 | ||||||||
|
International
|
4,785 | 3,985 | 17,591 | 15,762 | ||||||||||||
|
Total
revenues
|
$ | 28,615 | $ | 25,532 | $ | 111,685 | $ | 105,059 | ||||||||
|
December
31,
|
December
31,
|
|||||||
|
2009
|
2008
|
|||||||
|
(Audited)
|
(Audited)
|
|||||||
|
Cash
and cash equivalents and restricted securities
|
$ | 30,121 | $ | 17,763 | ||||
|
Receivables,
net
|
14,636 | 13,999 | ||||||
|
Deferred
preservation costs
|
36,445 | 34,913 | ||||||
|
Inventories
|
6,446 | 7,077 | ||||||
|
Investment
in equity securities
|
3,221 | -- | ||||||
|
Restricted
money market funds, long-term
|
5,000 | 5,000 | ||||||
|
Total
assets
|
133,859 | 125,037 | ||||||
|
Shareholders’
equity
|
110,446 | 98,368 | ||||||
Page 7 of
8
CRYOLIFE,
INC. AND SUBSIDIARIES
Unaudited
Reconciliation of Non-GAAP Net Income
and
Diluted Income per Common Share
(In
thousands, except per share data)
|
Three
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
|
December 31,
|
December 31,
|
|||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
GAAP:
|
||||||||||||||||
|
Income
before income taxes
|
$ | 3,672 | $ | 2,717 | $ | 14,354 | $ | 13,536 | ||||||||
|
Income
tax expense
|
1,306 | (19,024 | ) | 5,675 | (18,414 | ) | ||||||||||
|
Net
income
|
$ | 2,366 | $ | 21,741 | $ | 8,679 | $ | 31,950 | ||||||||
|
Diluted
Income per common share
|
$ | 0.08 | $ | 0.76 | $ | 0.31 | $ | 1.13 | ||||||||
|
Weighted
average common shares
|
||||||||||||||||
|
outstanding,
diluted
|
28,473 | 28,478 | 28,310 | 28,351 | ||||||||||||
|
Reconciliation
excluding items:
|
||||||||||||||||
|
Net
Income, GAAP
|
$ | 2,366 | $ | 21,741 | $ | 8,679 | $ | 31,950 | ||||||||
|
Non-GAAP
adjustments to net income:
|
||||||||||||||||
|
Charge
for reduction in workforce a
|
377 | -- | 377 | -- | ||||||||||||
|
Adjustment
to income taxes b
|
(136 | ) | (20,002 | ) | (151 | ) | (23,828 | ) | ||||||||
|
Net
adjustment to net income
|
241 | (20,002 | ) | 226 | (23,828 | ) | ||||||||||
|
Net
income, non-GAAP
|
$ | 2,607 | $ | 1,739 | $ | 8,905 | $ | 8,122 | ||||||||
|
Diluted
Income per common share, GAAP
|
$ | 0.08 | $ | 0.76 | $ | 0.31 | $ | 1.13 | ||||||||
|
Non-GAAP
adjustments to Diluted Income
|
||||||||||||||||
|
per
common share:
|
||||||||||||||||
|
Charge
for reduction in workforce a
|
0.01 | -- | 0.01 | -- | ||||||||||||
|
Adjustment
to income taxes b
|
0.00 | (0.70 | ) | 0.00 | (0.84 | ) | ||||||||||
|
Net
adjustment to net income
|
0.01 | (0.70 | ) | 0.01 | (0.84 | ) | ||||||||||
|
Diluted
Income per common share, non-GAAP
|
$ | 0.09 | $ | 0.06 | $ | 0.32 | $ | 0.29 | ||||||||
|
Investors
should consider this non-GAAP information in addition to, and not as a
substitute for, financial measures prepared in accordance with U.S.
GAAP. In addition, this non-GAAP financial information may not
be the same as similar measures presented by other
companies.
|
|
|
a
-
|
Charge
for reduction in force reflects expense recorded in the 2009 periods
related to the Company’s reduction in force. There was no
corresponding charge in the 2008 periods. The Company believes
that this disclosure provides useful information for investors to evaluate
the Company’s results excluding these charges.
|
|
b
-
|
For
the three and twelve months ended December 31, 2009 the adjustment for
income tax is the tax benefit on the charge for reduction in workforce at
a rate of 36% for the three months and 40% for the twelve
months.
|
For the
three and twelve months ended December 31, 2008 the adjustment for income tax
includes the reversal of the tax benefit recorded of $19.0 million and $18.4
million, respectively, and tax expense on income before taxes of $2.7 million
and $13.5 million, respectively, at a rate of 36% for the three months and 40%
for the twelve months.
The Company believes that this
disclosure provides useful information for investors to evaluate the Company’s
results excluding changes due to fluctuations in the Company’s income tax
rate.
For additional information about the
company, visit CryoLife’s Web site: www.cryolife.com
Page 8 of
8