8-K

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): November 4, 2020
‎___________________________________________

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)

Title of each class	Trading Symbol(s)	Name of each exchange ‎on which registered
Common Stock, $0.01 par value	CRY	NYSE

___________________________________________

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

‎

Section 2	Financial Information.
Item 2.02	Results of Operations and Financial Condition.

On November 4, 2020, CryoLife, Inc. (“CryoLife” or the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2020. CryoLife hereby incorporates by reference herein the information set forth in its press release dated November 4, 2020, 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 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, 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 text portion 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 most recently filed Form 10-K and its subsequent filings with the Securities and Exchange Commission, as well as in the press release attached as Exhibit 99.1 hereto. CryoLife disclaims any obligation or duty to update or modify these forward-looking statements.

Section 9	Financial Statements and Exhibits.
Item 9.01(d)	Exhibits.

(d)Exhibits.

Exhibit Number	Description
99.1*	Press Release dated November 4, 2020

*This exhibit is furnished, not filed.

‎

-2-

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.

Date: November 4, 2020

	CRYOLIFE, INC.
By:	/s/ D. Ashley Lee
Name:	D. Ashley Lee
Title:	Executive Vice President, Chief Operating Officer and Chief Financial Officer

-3-

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contacts:

Phone: 770-419-3355	/ Lynn Lewis
CryoLife D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355	Gilmartin Group LLC Brian Johnston / Lynn Lewis Phone:  631-807-1986 investors@cryolife.com

CryoLifeReports Third Quarter 2020 Financial Results

Third Quarter and Recent Business Highlights:

· Achieved total revenues of $65.1 million in the third quarter 2020 versus $67.9 million in the third quarter of 2019

o Total revenues decreased 4% on a GAAP and non-GAAP constant currency basis versus third quarter 2019

o Excluding TMR, third quarter revenues decreased 2% on a GAAP and non-GAAP constant currency basis versus third quarter 2019

· Achieved net loss of ($2.9) million, or ($0.08) per share

· Achieved non-GAAP net income of $4.9 million, or $0.13 per share

· Completed acquisition of Ascyrus Medical LLC

ATLANTA, GA – (November 4, 2020) – CryoLife, Inc. (NYSE: CRY),  a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the third quarter ended September 30, 2020. 

“Our performance in the third quarter further validated our belief that the majority of products in our portfolio are used in procedures that cannot be postponed or delayed for long.  We believe our business is weathering the pandemic well and we continue to progress on our strategic initiatives,” commented Pat Mackin, Chairman, President, and Chief Executive Officer.  "We saw an improvement in procedure volumes sequentially month to month from July to September with a corresponding increase in revenue growth over those months.  Our manufacturing facilities continue to run at near capacity and our supply chain remains largely intact.  We have continued to fund R&D programs related to products that we believe will deliver revenue in 2021 and 2022, including our regulatory approvals for U.S. PerClot PMA, BioGlue China and PROACT Mitral.  Lastly, we completed the acquisition of Ascyrus Medical LLC, further strengthening our innovative portfolio of products focused on aortic repair and increasing our total addressable market opportunity to over $6 billion, providing us adequate opportunity to drive our financial performance for years to come.  Given these achievements in the third quarter, we remain optimistic that we will deliver on our growth strategy and remain in a position of strength through 2021.”

Page 1 of 7

Third Quarter Financial Results

Total revenues for the third quarter of 2020 were $65.1 million, reflecting a decrease of (4%) on a GAAP and non-GAAP constant currency basis, both compared to the third quarter of 2019.  Revenue performance across all product lines reflected the impact of the COVID-19 pandemic on the number of procedures using our products.

Net loss for the third quarter of 2020 was ($2.9) million, or ($0.08) per fully diluted common share, compared to net loss of ($134,000), or less than $0.01 per fully diluted common share for the third quarter of 2019.  Non-GAAP net income for the third quarter of 2020 was $4.9 million, or $0.13 per fully diluted common share, compared to non-GAAP net income of $2.5 million, or $0.07 per fully diluted common share for the third quarter of 2019. 

2020 Financial Outlook

Due to continued uncertainties resulting from the COVID-19 pandemic, the Company is not issuing 2020 financial guidance at this time.

The Company's financial performance for 2020 is subject to the risks identified below.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures.  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.  The Company's non-GAAP net income and non-GAAP EBITDA results exclude (as applicable) business development,  integration, and severance expense, amortization expense, non-cash interest expense, loss on foreign currency revaluation, stock-based compensation expense, and corporate rebranding expense.  The Company believes that these non-GAAP presentations provide useful information to investors regarding unusual non-operating transactions; the operating expense structure of the Company's existing and recently acquired operations, without regard to its on-going efforts to acquire additional complementary products and businesses and the transaction and integration expenses incurred in connection with recently acquired and divested product lines; and the operating expense structure excluding fluctuations resulting from foreign currency revaluation and stock-based compensation expense.  The Company believes it is useful to exclude certain expenses because such amounts in any specific period may not directly correlate to the underlying performance of its business operations or can vary significantly between periods as a result of factors such as acquisitions, or non-cash expense related to amortization of previously acquired tangible and intangible assets.  The Company has excluded the impact of changes in currency exchange from certain revenues to evaluate growth rates on a constant currency basis.  The Company does, however, expect to incur similar types of expenses and currency exchange impacts in the future, and this non-GAAP financial information should not be viewed as a statement or indication that these types of expenses will not recur.

Webcast and Conference Call Information

The Company will hold a teleconference call and live webcast later today, November 4, 2020 at 4:30 p.m. ET to discuss the results followed by a question and answer session.  To listen to the live teleconference, please dial 201-689-8261.  A replay of the teleconference will be available through November 11, 2020 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13712302.The live webcast and replay can be accessed by going to the Investor Relations section of the CryoLife website at www.cryolife.com and selecting the heading Webcasts & Presentations.

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About CryoLife, Inc.

Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable tissues used in cardiac and vascular surgical procedures focused on aortic repair.  CryoLife markets and sells products in more than 100 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com. 

Forward Looking Statements

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.  Such forward-looking statements reflect the views of management at the time such statements are made.  These statements include our beliefs that the majority of products in our portfolio are used in procedures that cannot be postponed or delayed for long; our business is weathering the pandemic well; we continue to progress on our strategic initiatives; certain of our products will deliver revenue in 2021 and 2022; and, with the  acquisition of Ascyrus Medical LLC, our portfolio of products focused on aortic repair is strengthened, increases our total addressable market opportunity to over $6 billion, and will provide us adequate opportunity to drive our financial performance for years to come. They also include that we remain optimistic that we will deliver on our growth strategy and remain in a position of strength through 2021.  These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations, including that the benefits anticipated from the Ascyrus Medical LLC transaction may not be achieved and the continued effects of COVID-19 and government mandates implemented to address the pandemic.  These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for year ended December 31, 2019.  CryoLife does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.

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CryoLife, Inc. and Subsidiaries

Financial Highlights

(In thousands, except per share data)

	(Unaudited)				(Unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2020		2019		2020		2019
	(Unaudited)				(Unaudited)
Revenues:
Products	$	45,109	$	47,484	$	128,797	$	147,053
Preservation services		20,022		20,397		56,534		59,472
Total revenues		65,131		67,881		185,331		206,525
Cost of products and preservation services:
Products		12,998		12,706		36,078		41,021
Preservation services		9,001		9,953		26,060		29,043
Total cost of products and preservation services		21,999		22,659		62,138		70,064
Gross margin		43,132		45,222		123,193		136,461
Operating expenses:
General, administrative, and marketing		33,743		34,259		105,033		105,402
Research and development		5,755		6,259		17,633		17,648
Total operating expenses		39,498		40,518		122,666		123,050
Operating income		3,634		4,704		527		13,411
Interest expense		4,940		3,555		11,980		11,260
Interest income		(13)		(259)		(181)		(608)
Other expense, net		2,888		2,400		5,810		2,662
(Loss) income before income taxes		(4,181)		(992)		(17,082)		97
Income tax benefit		(1,311)		(858)		(3,858)		(2,304)
Net (loss) income	$	(2,870)	$	(134)	$	(13,224)	$	2,401
(Loss) income per common share:
Basic	$	(0.08)	$	(0.00)	$	(0.35)	$	0.06
Diluted	$	(0.08)	$	(0.00)	$	(0.35)	$	0.06
Weighted-average common shares outstanding:
Basic		37,912		37,255		37,608		37,065
Diluted		37,912		37,255		37,608		37,850
Net (loss) income	$	(2,870)	$	(134)	$	(13,224)	$	2,401
Other comprehensive income (loss):
Foreign currency translation adjustments		8,698		(8,017)		8,669		(8,803)
Comprehensive income (loss)	$	5,828	$	(8,151)	$	(4,555)	$	(6,402)

Page4 of 7

CryoLife, Inc. and Subsidiaries

Financial Highlights

(In thousands)

	(Unaudited)				(Unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Products:
BioGlue	$	15,811	$	15,679	$	44,985	$	50,834
JOTEC		15,290		15,774		43,932		48,936
On-X		12,067		12,610		34,385		36,751
PhotoFix		1,134		1,087		3,056		2,752
PerClot		724		980		2,081		2,814
CardioGenesis cardiac laser therapy		83		1,354		358		4,966
Total products		45,109		47,484		128,797		147,053
Preservation services:
Cardiac tissue	$	10,679	$	11,304		28,758		30,734
Vascular tissue		9,285		9,093		27,657		28,738
NeoPatch		58		--		119		--
Total preservation services		20,022		20,397		56,534		59,472
Total revenues	$	65,131	$	67,881	$	185,331	$	206,525
Revenues:
U.S.	$	36,332	$	37,981	$	103,171	$	113,548
International		28,799		29,900		82,160		92,977
Total revenues	$	65,131	$	67,881	$	185,331	$	206,525

	(Unaudited)
	September 30,		December 31,
	2020		2019
Cash, cash equivalents, and restricted securities	$	64,635	$	34,294
Total current assets		233,699		187,390
Total assets		782,200		605,654
Total current liabilities		53,667		45,195
Total liabilities		456,434		319,958
Shareholders’ equity		325,766		285,696

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CryoLife, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Net (Loss) Income and Diluted (Loss) Income Per Common Share

(In thousands, except per share data)

	(Unaudited)				(Unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2020		2019		2020		2019
GAAP:
(Loss) income before income taxes	$	(4,181)	$	(992)	$	(17,082)	$	97
Income tax benefit		(1,311)		(858)		(3,858)		(2,304)
Net (loss) income	$	(2,870)	$	(134)	$	(13,224)	$	2,401
Diluted (loss) income per common share	$	(0.08)	$	(0.00)	$	(0.35)	$	0.06
Diluted weighted-average common
shares outstanding		37,912		37,255		37,608		37,850
Reconciliation of (loss) income before income taxes,
GAAP to adjusted net  income, non-GAAP
(Loss) income before income taxes, GAAP:	$	(4,181)	$	(992)	$	(17,082)	$	97
Adjustments:
Amortization expense		3,397		2,660		9,430		7,796
Business development, integration, and severance expense		6,005		1,250		7,481		2,562
Non-cash interest expense		1,371		407		2,261		1,225
Corporate rebranding expense		--		--		321		--
Adjusted income before income taxes,
non-GAAP		6,592		3,325		2,411		11,680
Income tax benefit calculated at a
pro forma tax rate of 25%		1,648		831		603		2,920
Adjusted net  income, non-GAAP	$	4,944	$	2,494	$	1,808	$	8,760
Reconciliation of diluted (loss) income per common share, GAAP
to adjusted diluted  income per common share, non-GAAP:
Diluted (loss) income per common share, GAAP:	$	(0.08)	$	(0.00)	$	(0.35)	$	0.06
Adjustments:
Amortization expense		0.09		0.07		0.25		0.20
Business development, integration, and severance expense		0.16		0.03		0.20		0.06
Non-cash interest expense		0.04		0.01		0.06		0.03
Corporate rebranding expense		--		--		0.01		--
Tax effect of non-GAAP adjustments		(0.07)		(0.02)		(0.13)		(0.06)
Effect of 25% pro forma tax rate		(0.01)		(0.02)		0.01		(0.06)
Adjusted diluted income per common share,
non-GAAP	$	0.13	$	0.07	$	0.05	$	0.23
Diluted weighted-average common
shares outstanding		38,357		37,940		38,151		37,850

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CryoLife, Inc. and Subsidiaries

Reconciliation of GAAP to Non-GAAP

Revenues and Adjusted EBITDA

(In thousands, except per share data)

	(Unaudited)					(Unaudited)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2020		2019		Growth Rate	2020		2019		Growth Rate
Reconciliation of total revenues, GAAP to
total revenues, non-GAAP:
Total revenues, GAAP	$	65,131	$	67,881	-4%	$	185,331	$	206,525	-10%
Impact of changes in currency exchange		--		4			--		(1,719)
Total constant currency revenues, non-GAAP	$	65,131	$	67,885	-4%	$	185,331	$	204,806	-10%
Reconciliation of total revenues, GAAP to
total revenues, non-GAAP:
Total revenues, GAAP	$	65,131	$	67,881	-4%	$	185,331	$	206,525	-10%
Less CardioGenesis cardiac laser therapy		(83)		(1,354)			(358)		(4,966)
Total GAAP revenues excluding CardioGenesis		65,048		66,527	-2%		184,973		201,559	-8%
Impact of changes in currency exchange		--		4			--		(1,719)
Total constant currency revenues excluding CardioGenesis, non-GAAP	$	65,048	$	66,531	-2%	$	184,973	$	199,840	-7%

	(Unaudited)				(Unaudited)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Reconciliation of net (loss) income, GAAP to
adjusted EBITDA, non-GAAP:
Net (loss) income, GAAP	$	(2,870)	$	(134)	$	(13,224)	$	2,401
Adjustments:
Depreciation and amortization expense		5,176		4,526		14,818		13,257
Interest expense		4,940		3,555		11,980		11,260
Business development, integration, and severance expense		6,005		1,250		7,481		2,562
Stock-based compensation expense		2,358		2,462		7,432		6,581
(Income) loss on foreign currency revaluation		(2,073)		2,419		846		2,669
Corporate rebranding expense		--		--		321		--
Income tax benefit		(1,311)		(858)		(3,858)		(2,304)
Interest income		(13)		(259)		(181)		(608)
Adjusted EBITDA, non-GAAP	$	12,212	$	12,961	$	25,615	$	35,818

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XML

Document And Entity Information	Nov. 04, 2020	Jul. 31, 2020
Document And Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Nov. 04, 2020
Entity Registrant Name	CRYOLIFE, INC.
Entity Incorporation, State or Country Code	FL
Entity File Number	1-13165
Entity Tax Identification Number	59-2417093
Entity Address, Address Line One	1655 Roberts Boulevard, N.W.
Entity Address, City or Town	Kennesaw
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30144
City Area Code	770
Local Phone Number	419-3355
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	CRY
Security Exchange Name	NYSE
Written Communications		false
Soliciting Material		false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer		false
Entity Emerging Growth Company	false
Entity Central Index Key	0000784199
Amendment Flag	false