ATLANTA, Oct. 29 /PRNewswire-FirstCall/ -- CryoLife, Inc. , an implantable biological medical device and cardiovascular tissue processing company, announced today that revenues for the third quarter of 2009 increased 5 percent to a quarterly record of $28.2 million compared to $26.8 million for the third quarter of 2008.
Revenues for the first nine months of 2009 increased 4 percent to a record $83.1 million compared to $79.5 million for the first nine months of 2008.
Preservation service revenues for the third quarter of 2009 increased 6 percent to $15.0 million compared to $14.2 million for the third quarter of 2008. The increase in preservation service revenues was primarily due to increased shipments of cardiac and vascular tissues for the third quarter of 2009 compared to the third quarter of 2008.
Revenues from the distribution of CryoValve(R) SG pulmonary heart valves and CryoPatch(R) SG pulmonary cardiac patches increased to $1.9 million for the third quarter of 2009 from $1.7 million for the third quarter of 2008, representing 26 percent of the Company’s cardiac tissue processing revenues for the third quarter of 2009. Revenues from the distribution of CryoValve SG and CryoPatch SG increased to $4.6 million for the first nine months of 2009 from $3.4 million for the first nine months of 2008, representing 24 percent of the Company’s cardiac tissue processing revenues for the first nine months of 2009.
Product revenues were $39.7 million for the first nine months of 2009 compared to $37.5 million for the first nine months of 2008, an increase of 6 percent. Excluding the effects of changes in foreign currency exchange rates for the first nine months of 2009 compared to those in effect during the third quarter of 2008, which reduced revenues by $804,000 for the first nine months of 2009, product revenues would have been $40.5 million.
Preservation services gross margins were 41 percent and 46 percent for the third quarters of 2009 and 2008, respectively. Preservation services gross margins were 43 percent and 46 percent for the first nine months of 2009 and 2008, respectively.
General, administrative, and marketing expenses for the first nine months of 2009 and 2008 included benefits of $405,000 and $449,000, respectively, related to the adjustment of reserves for product liability losses.
As of September 30, 2009, the Company had $32.0 million in cash, cash equivalents, and restricted securities, compared to $22.8 million at December 31, 2008. Of this $32.0 million, $2.6 million was received from the U.S. Department of Defense as advance funding for the development of BioFoam 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.
2009 Financial Guidance
The Company expects general, administrative, and marketing expenses to be near the lower end of its previous range of guidance of between $50.0 million and $52.0 million, and research and development expenses of between $5.0 million and $6.0 million for the full year of 2009. The research and development expectations include approximately $1.0 million to be funded by the Department of Defense in connection with the development of BioFoam.
2010 Financial Guidance
Webcast and Conference Call Information
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 October 29 through November 5 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 333891.
About CryoLife, Inc.
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 2009 performance and our development of our SynerGraft and BioGlue and related product platforms 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 revenues from BioGlue and there are a variety of risks affecting BioGlue, CryoValve SG pulmonary heart valves and other SynerGraft processed tissues and products may not be accepted by the marketplace, the CryoValve SG pulmonary heart valve has a one year shelf life, the CryoPatch SG has a one year shelf life, we are dependent on the availability of sufficient quantities of tissue from human donors, the CryoValve SG pulmonary heart valve post-clearance study requested by the FDA may not provide the expected positive results, our products and tissues we process and preserve have allegedly caused and may in the future cause injury to patients, and we have been and may be exposed to tissue processing and product liability claims and additional regulatory scrutiny as a result, the possibility that the FDA could impose additional restrictions on the Company’s operations, issue a 483, or warning letter, or require a recall, or prevent the Company from processing and distributing tissues or manufacturing and distributing other products, our failure to adequately comply with government regulations could result in loss of revenues and customers as well as additional compliance expense, our ability to borrow under our credit facility may be limited, the credit facility limits our ability to pursue significant acquisitions, the financial and credit liquidity crisis may adversely affect our ability to borrow money or raise capital, the current economic crisis and future economic crises may adversely affect our business and financial condition, there are limitations on our use of net operating loss carry-forwards that could result in our inability to use them fully or at all, adverse regulatory action outside of the U.S. could affect our business, physicians have been and may be reluctant to implant or use our preserved tissues or products, our existing insurance policies may not be sufficient to cover our actual claims liability, current economic conditions may impact demand for our tissues and products, intense competition may affect our ability to operate profitably, we may be unable to obtain adequate insurance at a reasonable cost or at all, 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 us may adversely affect our ability to distribute those products, we are dependent on key personnel, we may not be successful in obtaining necessary clinical results and regulatory approvals for products and services in development, and our new products and services may not achieve market acceptance, we may be unable to effectively leverage our existing sales force to sell HemoStase, the lawsuit we filed against Medafor regarding our distribution agreement with Medafor may adversely impact our relationship with Medafor and could hamper or prevent us from distributing HemoStase, Medafor may in the future attempt to terminate our distribution agreement, rapid technological change could cause our services and products to become obsolete, extensive government regulation may adversely affect our ability to develop and sell products and services, we have experienced operating losses and negative cash flows in the past, and we must continue to address the underlying causes in order to continue to operate profitably and generate positive cash flows, 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 will be unable to pursue one of our strategies for increasing our revenues, continued deflation of foreign currencies relative to the U.S. dollar could materially and adversely impact our foreign revenues, and future healthcare policies, healthcare reimbursement methods, and healthcare reimbursement policies may affect the availability, amount, and timing of our revenues, financial condition, and profitability. These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K filing for the year ended December 31, 2008, our Form 10Q filing for the quarter ended March 31, 2009, our Form 10Q filing for the quarter ended June 30, 2009, our Form 10-Q to be filed for the quarter ended September 30, 2009, and the Company’s other SEC filings. The Company does not undertake to update its forward-looking statements.
CONTACT: D. Ashley Lee, Executive Vice President, Chief Financial Officer
and Chief Operating Officer, +1-770-419-3355
Web site: http://www.cryolife.com/