-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GvEcQCA/BuwH2+XoNxRs5P77UXk5wQzKkg6iESr7LT0ga8H//J3Pl1xGaNgvej2J 7BG2ey3gViuLzjxmz2Mxsg== 0000914062-03-000355.txt : 20030501 0000914062-03-000355.hdr.sgml : 20030501 20030501105940 ACCESSION NUMBER: 0000914062-03-000355 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030501 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRYOLIFE INC CENTRAL INDEX KEY: 0000784199 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 592417093 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13165 FILM NUMBER: 03675356 BUSINESS ADDRESS: STREET 1: 1655 ROBERTS BOULEVARD N W STREET 2: STE 142 CITY: KENNESAW STATE: GA ZIP: 30144 BUSINESS PHONE: 7704193355 MAIL ADDRESS: STREET 1: 1655 ROBERTS BOULEVARD N W STREET 2: STE 142 CITY: KENNESAW STATE: GA ZIP: 30144 8-K 1 cryolife8k503.txt FORM 8-K 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): May 1, 2003 CRYOLIFE, INC. (Exact name of registrant as specified in its charter) Florida (State or other jurisdiction of incorporation) 1-13165 59-2417093 (Commission File Number) (IRS Employer Identification No.) 1655 Roberts Boulevard N.W., Kennesaw, Georgia 30144 ---------------------------------------------------- (Address of principal executive offices, including zip code) (770) 419-3355 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS. On May 1, 2003, CryoLife, Inc. ("CryoLife") issued a press release announcing its results of operations for the first quarter ended March 31, 2003. CryoLife hereby incorporates by reference herein the information set forth in its Press Release dated May 1, 2003, a copy of which is attached hereto as Exhibit 99.1. The Press Release contains information regarding measurement of "revenues prior to adjustment to estimated tissue recall returns," and pro forma earnings per share, which may be non-GAAP financial measures as defined in Item 10(e) of Regulation S-K. Management believes that presentation of these measurements is useful to investors to provide information comparable to revenues in prior periods, which do not contain any such adjustments. Revenues in prior periods do not include substantial increases resulting from adjustment to estimated recall returns, and costs of tissue preservation services in prior periods do not omit substantial costs which were previously written down. Presentation of revenues and earnings per share without excluding such adjustment and presentation of pro forma earnings per share without including costs associated with written down tissue might mislead investors with respect to the magnitude of the Company's revenues and earnings per share, respectively, since the "adjustment to estimated tissue recall returns" included in "revenues as reported" does not represent revenues earned from actual tissues shipped during the period and the costs of preservation services, as reported, does not include costs associated with tissue that has been written down. This information, filed under Item 5, is also being provided pursuant to Item 12 of Form 8-K. 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. For further information on other risk factors, please refer to the "Risk Factors" contained in CryoLife's Annual Report on Form 10-K for the fiscal year ended December 31, 2002 as filed with the Securities and Exchange Commission. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. Exhibit Number Description -------------- ----------- 99.1 Press Release dated May 1, 2003 2 ITEM 9. REGULATION FD DISCLOSURE (INCLUDING ITEM 12 INFORMATION). Pursuant to the interim guidance contained in SEC Release 34-47583, the information set forth under Item 5 and required by Item 12 of this report is being furnished under this Item 9 and is hereby incorporated herein by reference. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, CryoLife has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CRYOLIFE, INC. Date: May 1, 2003 By: /s/ D. Ashley Lee --------------------------------------- Name: D. Ashley Lee Title: Vice President, Chief Financial Officer and Treasurer 3 EXHIBIT INDEX Exhibit Number Description Page - -------------- ----------- ---- 99.1 Press Release dated May 1, 2003 5 4 EX-99.1 3 cryolife8k503ex99.txt PRESS RELEASE EXHIBIT 99.1 [COMPANY LOGO] FOR IMMEDIATE RELEASE CONTACT: JOSEPH T. SCHEPERS KATIE BRAZEL VICE PRESIDENT, CORPORATE COMMUNICATIONS FLEISHMAN HILLARD (770) 419-3355 (404) 739-0150 CRYOLIFE REPORTS FIRST QUARTER 2003 FINANCIAL RESULTS STRONG PERFORMANCE OF SURGICAL ADHESIVE, BIOGLUE(R) POSITIVE TREND IN HEART VALVE AND VASCULAR REVENUES PROCUREMENT OF TISSUES FROM DONORS INCREASED IN APRIL ATLANTA (May 1, 2003) CryoLife, Inc. (NYSE: CRY), a human tissue processing and medical device company, today reported financial results for the first quarter of 2003. Revenues for the first quarter of 2003 were $15.9 million, compared to $25.5 million in the first quarter of 2002. Net loss for the first quarter of 2003 was $434,000, compared to net income of $3.1 million in the first quarter of 2002. On a fully diluted basis, loss per common share for the first quarter of 2003 was $0.02, as compared to net income per share of $0.16 for the same period in 2002. Total revenues were $15.1 million, excluding a favorable adjustment to estimated tissue recall returns of $848,000. In the first quarter of 2003, there was an estimated $2.3 million that was not included in the cost of tissue preservation services because it related to tissues shipped during the quarter that were written-down in prior periods. If not for these two items, the fully diluted loss per share would have been $0.121. BioGlue sales in the first quarter of 2003 increased 33% to $6.5 million compared to $4.9 million in the first quarter 2002 and increased 16% compared to the fourth quarter 2002. BioGlue is approved in the United States for use in adult patients as an adjunct method for open surgical repair of large vessels. It is approved in the European Community and Canada as an adjunct method for surgical repair of vascular and additional soft tissues, including cardiac, dura mater, vascular, pulmonary, abdominal, and gastrointestinal. ____________________________________ (1) The effect of these two items of $0.10 per share is calculated as follows: $848,000 (adjustment to estimated tissue recalls) plus $2.3 million (amount that would have included in cost of preservation services had tissue shipped not previously been written-down) less tax effect of $1.1 million divided by diluted weighted average shares outstanding of 19,634,000. This information is included to provide information comparable to prior periods. 5 "We are pleased with the strong performance of BioGlue in the US and Europe. We are on track to achieve full year 2003 sales of $26-27 million, a 25% increase over last year," said Steven G. Anderson, CryoLife President and CEO. Tissue processing revenues were $9.1 million, as reported, and $8.3 million, excluding a favorable adjustment to estimated tissue recall returns of $848,000, as compared to $6.3 million in the fourth quarter 2002. Tissue processing revenues, as reported, increased 45%. Excluding the adjustment to recall returns the increase was 31% in the first quarter of 2003 compared to the fourth quarter of 2002. This improvement resulted from a 41% increase in cardiovascular revenue and a 22% increase in vascular revenue excluding the adjustment to recall returns. Including the adjustment to recall returns, cardiovascular revenue increased 44% and vascular revenue increased 46% as compared to fourth quarter of 2002. We expect revenues in the second quarter to be between $16.2 and $16.8 million. We expect allograft tissue revenue to be between $9.0 and $9.6 million and BioGlue revenues to be between $6.8 and $7.0 million. We are currently in discussions with the FDA regarding the reclassification of certain SynerGraft processed human valves and vascular grafts. The FDA has advised the Company that its SynerGraft heart valves and CryoVein used for AV access will be regulated as medical devices. The Company is in discussions with the FDA about the type of clearances necessary for these products. The Company is not processing tissues using the SynerGraft process at this time. Human heart procurement in April increased to more than 300 donors as compared to the first quarter monthly average of 275. Vascular procurement in April was over 325 donors as compared to the first quarterly monthly average of 268. As of April 24, 2003 CryoLife had approximately $20.2 million in the aggregate of cash and cash equivalents and marketable securities, and the Company anticipates receiving approximately $8.7 million in tax refunds in early May. "The positive trends we are experiencing in tissue procurement and processing revenues, along with continued strong growth of BioGlue revenues, lead us to believe that we will meet our full-year 2003 revenue projection of approximately $70 million. We are confident in the Company's outlook and its ability to maintain its leadership position in processing human tissues implanted for cardiac, vascular, and orthopaedic surgeries," said Steven G. Anderson. Mr. Anderson will host a teleconference and live web cast at 11:15 a.m. (EST) this morning, May 1. To listen to the live teleconference please dial 973-339-3086 a few minutes prior to 11:15 a.m. No identification number is required. Those interested in listening to a replay of the teleconference may do so by calling (toll free) 877-519-4471 or 973-341-3080. The identification number for the replay is 3868830. The replay will be available May 1 through May 8, 2003. A live webcast can be accessed by going to the Investor Relations section of the CryoLife web site at www.cryolife.com. A replay of the webcast will be available on the CryoLife web site until May 8. Founded in 1984, CryoLife, Inc. is a leader in the processing and distribution of implantable living human tissues for use in cardiovascular and vascular surgeries throughout the United States and Canada. The Company's BioGlue(R) Surgical Adhesive is FDA approved as an adjunct to sutures and staples for use in adult patients in open surgical repair of large vessels and is CE marked in the European Community and approved in Canada for use in soft tissue repair and approved in Australia for use in vascular and pulmonary sealing and repair. The Company also manufactures the SynerGraft(R) Vascular Graft, which is CE marked for distribution within the European Community. 6 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 future events may not occur as and when expected, if at all, and, together with the Company business, are subject to various risks and uncertainties. Such risks and uncertainties include that revenues may not meet expectations, that the Company may not commence distribution of orthopaedic tissue this quarter, that demand for CryoLife preserved tissues, particularly orthopaedic tissues, may never return to prior levels and physicians and hospital risk managers may be unwilling to approve the use of Company-processed tissues, the possibility that the FDA could impose additional restrictions on the Company's distribution of orthopaedic tissues, FDA regulation of the Company's CryoValve SG and CryoVein SG or other tissues and products may require premarketing approvals that the Company does not have and may not be able to obtain without great time and expense, if at all, the Company may not have sufficient borrowing or other capital availability to fund its business over the long-term, current and future litigation may not be resolved within the limits of the Company's insurance policies or may otherwise be resolved in a matter that is materially adverse to the Company, the possibility that current severe decreases in the Company's revenues and working capital will continue, the possibility that CryoLife will not satisfactorily address the observations contained in the most recent Form 483 issued by the FDA, changes in laws and governmental 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, 2002, and the Company's other SEC filings. 7 CRYOLIFE, INC. Unaudited Financial Highlights (In thousands, except share data)
Three Months Ended March 31, ----------------------------- 2003 2002 ------------ ------------- Revenues: Human tissue preservation services $ 9,130 $ 20,238 Products 6,599 5,065 Distribution and grant 191 168 ------------ ------------- Total revenues 15,920 25,471 Costs and expenses: Human tissue preservation services 2,443 8,063 Products 1,641 2,235 General, administrative, and marketing 11,592 9,478 Research and development 917 1,153 Interest expense 132 192 Interest income (131) (298) Other expense, net (26) (56) ------------ ------------- Total costs and expenses 16,568 20,767 (Loss) earnings before income taxes (648) 4,704 Income tax (benefit) expense (214) 1,600 ------------ ------------- Net (Loss) income $ (434) $ 3,104 ============ ============= (Loss) earnings per share: Basic $ (0.02) $ 0.16 ============ ============= Diluted $ (0.02) $ 0.16 ============ ============= Weighted average shares outstanding: Basic 19,634 19,096 ============ ============= Diluted 19,634 19,796 ============ ============= Revenues from: Cardiovascular $ 4,725 $ 7,307 Vascular 4,255 7,017 Orthopaedic 150 5,914 ------------ ------------- Total cryopreservation 9,130 20,238 ------------ ------------- BioGlue 6,494 4,873 Implantable medical devices 105 192 Distribution and grant 191 168 ------------ ------------- Total revenues $ 15,920 $ 25,471 ============ ============= International revenues $ 1,710 $ 1,662 Domestic revenues 14,210 23,809 ------------ ------------- Total revenues $ 15,920 $ 25,471 ============ =============
CRYOLIFE, INC. Financial Highlights (In thousands) Unaudited Audited March 31 Dec. 31 2003 2002 ----------- ----------- Cash and cash equivalents and marketable securities, at market $ 20,225 $ 24,860 Trade receivables, net 7,769 6,930 Other receivables, net 9,090 11,824 Deferred preservation costs, net 7,564 4,332 Inventories 4,703 4,585 Total assets 100,548 106,414 Shareholders' equity 79,326 79,800 For additional information about the company, visit CryoLife's web site: http://www.cryolife.com END -----END PRIVACY-ENHANCED MESSAGE-----