SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K/A
CURRENT REPORT
AMENDMENT NO. 1
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 30, 1998
CRYOLIFE, INC.
(Exact name of registrant as specified in charter)
Florida 0-21104 59-2417093
(State or other (Commission File Number) (IRS Employer Identification No.)
jurisdiction of
incorporation)
1655 Roberts Boulevard, N.W.
Kennesaw, Georgia 30144
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (770) 419-3355
(Former name or former address, if changed since last report) Not Applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
Not Applicable.
(b) Unaudited Pro Forma Condensed Consolidated Financial Information.
Set forth below are the following unaudited pro forma
condensed consolidated financial statements:
1. Introduction to Condensed Consolidated Pro
Forma Financial Statements.
2. Pro Forma Condensed Consolidated Statements of Income
for the Year Ended December 31, 1997 and the Six
Months Ended June 30, 1998.
3. Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1998.
Unaudited Pro Forma Condensed Consolidated
Financial Information
Introductory Note: The following unaudited pro forma condensed consolidated
balance sheet and statements of income reflect the financial position at June
30, 1998 and results of operations for the year ended December 31, 1997 and the
six months ended June 30, 1998 of CryoLife, Inc. (the "Registrant") as if the
disposition of the IFM Product Line on September 30, 1998 had occurred on June
30, 1998 for balance sheet purposes and January 1, 1997 for statement of income
purposes.
The unaudited pro forma condensed consolidated balance sheet and statements of
income do not purport to represent the Registrant's financial position or
results of operations had the transactions actually occurred on June 30, 1998 or
January 1, 1997, respectively, or to project the Registrant's consolidated
results of operations for any future periods.
The pro forma adjustments are based upon available information. These
adjustments are directly attributable to the transaction referred to above, and
are expected to have a continuing impact on the Registrant's business, results
of operations and financial position. The following unaudited pro forma
condensed consolidated financial statements should be read in conjunction with
the historical financial statements of the Registrant, which are included in its
Form 10-K for the year ended December 31, 1997 and its Form 10-Q for the six
months ended June 30, 1998.
CryoLife, Inc.
Proforma Condensed Consolidated Statement of Income
Year Ended December 31, 1997
(Unaudited)
Proforma
CryoLife, Inc. Consolidated
Year Ended Proforma Year ended
12/31/97 Adjustments 12/31/97
REVENUES:
Cryopreservation and products $50,409,000 ($5,591,000)(A) $50,818,000
6,000,000 (B)
Other 460,000 460,000
--------------- ----------------- --------------------
Total revenues 50,869,000 409,000 51,278,000
COSTS AND EXPENSES:
Cryopreservation and products 17,764,000 (2,411,000)(A) 20,283,000
4,930,000 (B)
General, administrative and marketing 20,548,000 (349,000)(C) 19,746,000
(453,000)(D)
Research and development 3,946,000 3,946,000
Interest expense 978,000 (587,000)(E) 391,000
--------------- ----------------- --------------------
Total costs and expenses 43,236,000 1,130,000 44,366,000
--------------- ----------------- --------------------
Income before income taxes 7,633,000 (721,000) 6,912,000
Income tax expense 2,908,000 (273,980)(F) 2,634,020
=============== ================= ====================
Net income $4,725,000 ($447,020) $4,277,980
=============== ================= ====================
Earnings per share:
Basic $ 0.49 $ 0.44
Diluted $ 0.48 $ 0.43
Weighted average shares outstanding:
Basic 9,642,000 9,642,000
Diluted 9,942,000 9,942,000
(A) Reverse historical IFM sales and cost of sales
(B) Reflect the terms of the manufacturing agreement between Ideas for Medicine
and Horizon based on the minimum required sales to Horizon and the related
costs, and assuming the realization of a pro-rata portion of the deferred
revenue
(C) Eliminate goodwill amortization
(D) Eliminate selling and marketing expenses associated with the IFM product
line
(E) Eliminate interest expense to reflect the paydown of bank borrowings with
the proceeds from the sale of the IFM product line
(F) Income tax benefit related to additional expenses at the Company's
effective income tax rate (38%)
CryoLife, Inc.
Proforma Condensed Consolidated Statement of Income
Six Months Ended June 30, 1998
(Unaudited)
Proforma
CryoLife, Inc. Consolidated
Six Months Proforma Six Months
Ended 6/30/98 Adjustments Ended 6/30/98
REVENUES:
Cryopreservation and products $29,978,000 ($3,196,000)(A) $29,782,000
3,000,000 (B)
Other 909,000 909,000
------------------ ----------------- ---------------------
Total revenues 30,887,000 (196,000) 30,691,000
COSTS AND EXPENSES:
Cryopreservation and products 11,826,000 (1,600,000)(A) 12,691,000
2,465,000 (B)
General, administrative and marketing 11,707,000 (246,000)(C) 11,115,000
(346,000)(D)
Research and development 2,267,000 2,267,000
Interest (income) expense 110,000 (237,000)(E) (127,000)
------------------ ----------------- ---------------------
Total costs and expenses 25,910,000 36,000 25,946,000
------------------ ----------------- ---------------------
Income before income taxes 4,977,000 (232,000) 4,745,000
Income tax expense 1,757,000 (81,200)(F) 1,675,800
================== ================= =====================
Net income $3,220,000 ($150,800) $3,069,200
================== ================= =====================
Earnings per share:
Basic $ 0.29 $ 0.27
Diluted $ 0.28 $ 0.27
Weighted average shares outstanding:
Basic 11,219,000 11,219,000
Diluted 11,577,000 11,577,000
(A) Reverse historical IFM sales and cost of sales
(B) Reflect the terms of the manufacturing agreement between Ideas for Medicine
and Horizon based on the minimum required sales to Horizon and the related
costs, and assuming the realization of a pro-rata portion of the deferred
revenue
(C) Eliminate goodwill amortization
(D) Eliminate selling and marketing expenses associated with the IFM product
line
(E) Adjustment of interest expense to reflect the paydown of bank borrowings
with the proceeds from the sale of the IFM product line
(F) Income tax benefit related to additional expenses at the Company's
effective income tax rate (35%)
CryoLife, Inc.
Pro Forma Condensed Consolidated Balance Sheet
June 30, 1998
Consolidated
CryoLife, Inc. Pro Forma
June 30, Pro Forma June 30,
1998 Adjustments 1998
----------------- ----------------- ------------------
ASSETS:
Cash and cash equivalents $32,106,000 $14,850,000 (A) $ 46,956,000
Receivables, net 10,320,000 10,320,000
Deferred preservation costs, net 13,295,000 13,295,000
Inventories 3,477,000 (1,474,000)(B) 2,003,000
Prepaid expenses 2,103,000 (21,000)(C) 2,082,000
----------------- ----------------- ------------------
Total current assets 61,301,000 13,355,000 74,656,000
Property and equipment, net 18,458,000 (19,000)(D) 18,439,000
Goodwill, net 9,502,000 (7,782,000)(E) 1,720,000
Patents, net 2,253,000 (69,000)(D) 2,184,000
Other, net 1,529,000 1,529,000
Deferred income taxes - 712,000 (H) 712,000
================= ================= ==================
Total assets $93,043,000 $ 6,197,000 $ 99,240,000
================= ================= ==================
LIABILITIES:
Accounts payable $ 1,142,000 $ - $ 1,142,000
Accrued expenses 2,342,000 2,100,000 (F) 4,442,000
Accrued compensation 1,081,000 500,000 (G) 1,581,000
Current maturities - capital lease 215,000 215,000
Current maturities - long-term debt 496,000 496,000
Deferred income - 721,000 (I) 721,000
Income taxes payable 381,000 1,096,000 (H) 1,477,000
----------------- ----------------- ------------------
Total current liabilities 5,657,000 4,417,000 10,074,000
Deferred income - 2,164,000 (I) 2,164,000
Deferred income taxes 384,000 (384,000)(H) 0
Capital lease obligations 1,829,000 1,829,000
Long-term debt 5,207,000 5,207,000
Shareholders' equity:
Common stock 133,000 133,000
Additional paid-in capital 64,166,000 64,166,000
Retained earnings 15,847,000 15,847,000
Treasury stock (180,000) (180,000)
================= ================= ==================
Total liabilities and shareholders' equity $93,043,000 $ 6,197,000 $ 99,240,000
================= ================= ==================
(A) Receipt of the $15,000,000 in proceeds (net of $150,000 in transaction
costs) from the sale of the IFM product line (there were no outstanding
bank borrowings at June 30, 1998)
(B) Sale of finished goods inventories to Horizon
(C) Sale of IFM marketing materials to Horizon
(D) Sale of manufacturing equipment and patents to Horizon
(E) Write-off of unamortized goodwill recorded in connection with CryoLife,
Inc.'s acquisition of IFM
(F) Accrual of estimated earnout liability to former owner of IFM, insurance
expenses and other transaction-related costs
(G) Accrual for bonuses related to the sale of the IFM product line
(H) Record income tax related to the sale of the IFM product line
(I) Deferred revenue balance established at transaction date for realization of
gain associated with the transaction over the four-year manufacturing agreement
(c) Exhibits.
Exhibit
Number Description
2.1 Asset Purchase Agreement dated as of September 30, 1998 by and between
Ideas For Medicine, Inc. ("IFM") and Horizon Medical Products, Inc.
(incorporated herein by reference to Exhibit 2 to the Current Report on
Form 8-K of Horizon Medical Products, Inc. (File No. 000-24029), filed on
October 14, 1998).
99.1* Press Release
* Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CRYOLIFE, INC.
Date: November 3, 1998 By: /s/ Edwin B. Cordell, Jr.
----------------------------------
Edwin B. Cordell, Jr., Vice
President and Chief Financial Officer
