CryoLife Acquires On-X Life Technologies

ATLANTA, Jan. 20, 2016 /PRNewswire/ -- CryoLife, Inc. (NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today that it has completed its previously announced acquisition of On-X Life Technologies Holdings, Inc. ("On-X"), an Austin, Texas-based, privately held mechanical heart valve company. About CryoLife Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of implantable living tissues and medical devices used in cardiac and vascular surgical procedures.  CryoLife markets and sells products in more than 75 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com.
Contacts:
CryoLife         D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355 The Ruth Group Nick Laudico / Zack Kubow 646-536-7030 / 7020 nlaudico@theruthgroup.com zkubow@theruthgroup.com
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SOURCE CryoLife, Inc.

CryoLife Announces On-X Aortic Heart Valve PROACT Study Results to be Presented at AATS Centennial Meeting

CryoLife, Inc. (NYSE: CRY), announced today that results from the On-X aortic heart valve PROACT study will be presented in a late-breaking session at the American Association for Thoracic Surgery (AATS) Centennial Meeting, which is being held April 29 to May 3, 2017 at the Hynes Convention Center in Boston, MA.

Study Title: A Prospective Trial of Anticoagulation and Antiplatelet Strategies After Mechanical Aortic Valve Replacement (PROACT)

Presenter: PROACT study principal investigator, John D. Puskas, MD, Professor of Surgery, Icahn School of Medicine at Mount Sinai and Chairman, Department of Cardiovascular Surgery, Mount Sinai Saint Luke's

Session Date/Time: Tuesday, May 2, 2017 from 12:45 – 2:00 PM EDT

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CryoLife Announces Definitive Agreement to Acquire JOTEC

  Provides Access into $2 Billion Global Stent Graft Market with Highly Competitive Technologically Advanced Product Portfolio Adds Robust New Product Pipeline and Significantly Enhances R&D Capabilities Accelerates European Direct Strategy and Meaningfully Expands Cross-Selling Opportunities Expected to Drive High Single-Digit Revenue Growth with Gross Margin and Operating Margin Expansion Conference Call and Webcast Tomorrow, October 11, 2017 at 8:30 am ET                                                                                                                    Atlanta, GA – (October 10, 2017) – CryoLife, Inc. (“CryoLife”; NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today that it has entered into a definitive agreement to acquire JOTEC AG (“JOTEC”).  JOTEC is a German-based, privately-held developer of technologically differentiated endovascular stent grafts, and cardiac and vascular surgical grafts, focused on aortic repair.  The combination of CryoLife and JOTEC will create a Company with a broad and highly competitive product portfolio focused on aortic surgery, and will position CryoLife to compete strongly in the important and growing endovascular surgical markets. Pat Mackin, Chairman, President, and Chief Executive Officer of CryoLife, said, “We believe this acquisition will enable CryoLife to deliver sustained, high single-digit revenue growth, while also diversifying our revenues into a significantly larger addressable market.  JOTEC has a technologically differentiated product portfolio addressing the $2 billion global market for stent grafts used in endovascular and open repair of aortic diseases.  Their advanced product portfolio has allowed them to achieve a 17 percent revenue CAGR over the past five years, significantly outpacing the growth in the overall European market.  We expect the acquired portfolio to continue to post double-digit growth outside of the United States for at least the next five years.  In addition, the acquisition will leverage our global infrastructure and accelerate our ability to go direct in Europe, and will foster considerable cross-selling opportunities between the CryoLife and JOTEC product portfolios.  The transaction will also drive gross margin expansion and accelerate our trajectory towards 20 percent or higher operating margins.  We believe this will position CryoLife to deliver growth in non-GAAP EPS at a CAGR of at least 20 percent over the next five years.” Mr. Mackin added, “We also expect the JOTEC new product pipeline and R&D capabilities to drive longer-term growth beyond the five year horizon, particularly as their most innovative products enter the U.S. market.  We plan to utilize CryoLife’s clinical and regulatory expertise to gain FDA approval for these products, which we believe will allow for entry into the U.S. market.” Thomas Bogenschütz, Chief Executive Officer of JOTEC, commented, “CryoLife is ideally positioned to accelerate adoption of our products through its highly complementary and global cardiac and vascular surgery business.  We are looking forward to working with CryoLife’s team to drive growth of our existing business, expand into new geographies, and accelerate our R&D initiatives in key markets such as the U.S.” JOTEC generated revenue of approximately €41 million in 2016, representing compound annual growth of approximately 17 percent over the preceding five years.  JOTEC generated revenues of €43 million, or approximately $51 million at current currency exchange rates, for the twelve months ended June 30, 2017. Strategic Rationale for the Transaction
  • Provides CryoLife with:
    • Technologically advanced and highly competitive product portfolio that is taking market share
    • A strong new product pipeline and outstanding R&D capabilities
    • Near-term and longer-term revenue growth drivers through 2028; and
    • Access to the $1.2 billion U.S. stent graft market, which is expected to grow to approximately $1.5 billion by 2021
  • Increases CryoLife’s addressable market opportunity via access to the current $2.0 billion global stent graft market, which is expected to grow to approximately $2.5 billion by 2021
  • Accelerates CryoLife’s direct sales strategy in key European markets
  • Creates significant cross-selling opportunities by leveraging CryoLife’s and JOTEC’s existing direct sales organizations
  • Drives projected high single-digit revenue growth, expands gross margin, and yields 20 percent plus operating margin over a five-year period
Terms of the Agreement Under terms of the definitive agreement, CryoLife will acquire JOTEC for an upfront payment of $225 million, subject to certain adjustments, consisting of 75 percent in cash and 25 percent in CryoLife common stock issued to JOTEC’s shareholders.  CryoLife expects to finance the transaction and related expenses, as well as refinance its existing $69 million term loan, with new $255 million senior secured credit facilities, consisting of a $225 million institutional term loan B and a $30 million undrawn revolving credit facility, $56.25 million in CryoLife common stock, and available cash on hand.  The senior secured credit facilities are fully underwritten by Deutsche Bank, Capital One and Fifth Third Bank, and are expected to be syndicated to investors prior to closing of the acquisition. The definitive agreement has been approved by both companies’ boards of directors.  The transaction is expected to close later this year, subject to customary closing conditions. Financial Commentary Third quarter revenues were adversely affected due to the impact of the recent hurricanes on our business in Florida and Texas, which we estimate to be approximately $1.0 million, and additionally due to the continued delay in obtaining the re-certification of our AAP.  Including the impact of these factors, third quarter revenue was approximately $45.1 million, compared to our third quarter revenue guidance of between $46.5 and $47.5 million.  In addition, in connection with the transaction, CryoLife notified certain of its distributors that it had elected to terminate its relationship with those distributors based on a decision to distribute product through the to be combined Company’s direct sales channel.  As a result of this decision, at the end of the respective contract terms, CryoLife will be buying back a portion of the inventory that was previously sold to these distributors, which will result in a $1.1 million third quarter reversal of previously recorded revenues.  Considering all of these factors, preliminary third quarter revenues were approximately $44.0 million.  Additional revenue reversals and revisions to the third quarter estimates are possible in subsequent quarters. Management expects to update its 2017 financial guidance in its third quarter financial conference call and to issue initial financial guidance for the combined Company in its year-end conference call. Moving forward, the Company expects pro forma compound annual revenue growth in the high single-digits on a percentage basis over the next five years.  Non-GAAP earnings per share is expected to be dilutive in 2018 and accretive in 2019.  Over the next five year period, the Company expects 20 plus percent compound growth in non-GAAP earnings per share. Advisors In connection with the transaction, Vinson and Elkins is acting as lead legal counsel to CryoLife.  Walder Wyss Ltd is acting as lead legal counsel to JOTEC. Webcast and Conference Call Information CryoLife will hold a teleconference call and live webcast tomorrow at 8:30 a.m. Eastern Time to discuss the proposed transaction, followed by a question and answer session hosted by Mr. Mackin. To listen to the live teleconference, please dial 201-689-8261 a few minutes prior to 8:30 a.m.  A replay of the teleconference will be available October 11 through October 18 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The conference number for the replay is 13671595. 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.   About CryoLife Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable living tissues used in cardiac and vascular surgical procedures.  CryoLife markets and sells products in more than 80 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com. About JOTEC Headquartered in Hechingen, Germany, JOTEC develops, produces, and markets medical devices for aortic and peripheral vascular disease.  JOTEC’s product portfolio encompasses conventional vascular grafts and interventional implants for vascular and cardiac surgery and radiology and cardiology.  JOTEC was founded in 2000.  For additional information about JOTEC, visit the website, www.jotec.com/en/.     Contacts: 
CryoLife         D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer                                                                                  Phone: 770-419-3355 The Ruth Group Zack Kubow 646-536-7020 zkubow@theruthgroup.com
    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 belief that  this acquisition will position CryoLife to deliver sustained high single-digit revenue growth, while also significantly expanding our total addressable market and diversifying our revenue, that JOTEC has a technologically differentiated portfolio addressing the $2 billion global market for stent grafts used in endovascular and open repair of aortic diseases that is taking market share, our expectation that this global market is expected to grow to approximately $2.5 billion by 2021; our expectation that  the acquired portfolio will continue to post double-digit growth outside of the United States for at least the next five years, will leverage our global infrastructure and accelerate our ability to go direct in Europe, and will foster considerable cross-selling opportunities between the CryoLife and JOTEC product portfolios; our belief that this transaction will drive gross margin expansion and accelerate our trajectory towards 20 percent or higher operating margins and will position CryoLife to deliver growth in non-GAAP EPS at a CAGR of at least 20 percent over the next five years; our expectation that the JOTEC new product pipeline and R&D capabilities will drive long-term growth beyond the five year horizon, particularly as JOTEC’s most innovative products enter the U.S. market; our expectation that the U.S. stent market is expected to grow to approximately $1.5 billion by 2021; our belief that CryoLife’s clinical and regulatory expertise to gain FDA approval for these products will allow for entry of JOTEC products into the U.S. market; our belief that CryoLife is ideally positioned to accelerate adoption of JOTEC products through its highly complementary and global cardiac and vascular surgery business; and our estimates of revenue reversals in the third quarter 2017 or subsequent quarters associated with distributor buybacks and estimates of the revenue impacts for the third quarter 2017 of the recent hurricanes in Florida and Texas.  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.  These risks and uncertainties include that the expected benefits of the acquisition may be incorrect or may not be achieved, our expected assumptions regarding the growth in the global and US stent graft markets may be incorrect; the acquired portfolio may not continue to post double digit growth for the next five years; we may be unable to sufficiently leverage our global infrastructure or accelerate our ability to go direct in Europe or to foster cross-selling opportunities, between CryoLife and JOTEC product portfolios, we may be unable to drive margin expansion or unable to deliver non-GAAP EPS at a 20 percent or higher CAGR over the next five years; JOTEC’s new product pipeline and R&D capabilities may be unable to drive long term growth, even if CryoLife is able to successfully introduce JOTEC products to the U.S. market; CryoLife may be unable to successfully introduce JOTEC products to the U.S. market; CryoLife may be unable to accelerate adoption of JOTEC products in its current or future markets.  As with most acquisitions, the successful integration of JOTEC’s business with ours may take longer and prove more costly than expected, and we may experience currently unforeseen difficulties related to the JOTEC products and our and JOTEC’s combined sales forces’ ability to successfully market them.  If we experience problems that slow the integration of JOTEC’s business with CryoLife’s business, we may not be able to secure the anticipated financial and operational benefits of the acquisition as soon as anticipated, or at all.  We may also inherit unforeseen risks and uncertainties related to JOTEC's business, particularly if the information received by CryoLife during the due diligence phase of this transaction is incomplete or inaccurate.  Our plans with respect to the transaction’s financing could change based on currently unforeseen circumstances.  Also, certain factors, such as those relating to transaction closing conditions, could delay or prevent the closing of the transaction.  Any of these risks could cause the financial impact of the acquisition to be less beneficial than currently anticipated.  Our estimates of the revenue impacts related to distributor buybacks and recent hurricanes may be incorrect.  These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2016, and our subsequent filings with the SEC. CryoLife does not undertake to update its forward-looking statements.  

CryoLife Announces Release Date and Teleconference Call Details for 2017 Third Quarter Financial Results

October 17, 2017 at 5:04 PM EDT
ATLANTA, Oct. 17, 2017 /PRNewswire/ -- CryoLife, Inc. (NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today that 2017 third quarter financial results will be released on Monday, October 30, 2017 after the market closes.  On Tuesday, October 31, 2017, the Company will hold a teleconference call and live webcast at 8:00 a.m. ET to discuss the results, followed by a question and answer session hosted by Pat Mackin, Chairman, President and Chief Executive Officer of CryoLife, Inc.
Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)
To listen to the live teleconference, please dial 201-689-8261 a few minutes prior to 8:00 a.m.  A replay of the teleconference will be available October 31 through November 7 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The conference number for the replay is 13672507. 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.  In addition, a copy of the earnings press release, which will contain financial and statistical information for the completed quarter, can be accessed on the Investor Relations section of the CryoLife website. About CryoLife, Inc. Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable living tissues used in cardiac and vascular surgical procedures.  CryoLife markets and sells products in more than 80 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com.
Contacts:
CryoLife        D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355 The Ruth Group Zack Kubow 646-536-7020 zkubow@theruthgroup.com
 

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SOURCE CryoLife, Inc.

CryoLife Reports Third Quarter 2017 Results

October 30, 2017 at 5:30 PM EDT
ATLANTA, Oct. 30, 2017 /PRNewswire/ -- Third Quarter and Recent Highlights:
  • Announced Definitive Agreement to Acquire JOTEC
  • Accelerated Enrollment in PerClot Clinical Trial
  • Achieved Third Quarter Revenues of $44.0 Million
  • Achieved GAAP Net Income of  $1.3 million, or $0.04 Per Fully Diluted Common Share; Non-GAAP Net Income of $2.6 Million, or $0.08 Per Fully Diluted Common Share
 
Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)
CryoLife, Inc. (NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today its results for the third quarter and first nine months of 2017. Pat Mackin, Chairman, President, and Chief Executive Officer, said, "We had a very successful third quarter highlighted by the definitive agreement to acquire JOTEC.  The acquisition of JOTEC represents a significant opportunity for us to accelerate our revenue growth, improve our gross and operating margin, diversify our business, and bolster our long-term new product pipeline and R&D capabilities.  When we complete the acquisition of JOTEC, we will have a highly competitive product portfolio focused on treating aortic disease from the aortic root to the iliac arteries with a combined worldwide market opportunity of approximately $2.0 billion." Mr. Mackin added, "During the third quarter we reached a number of key milestones and our On-X products continued to generate strong results.  We posted double digit top line growth for On-X in our direct markets, including being up 28 percent in Europe, despite not having the AAP available to us.  We also accelerated enrollment in the PerClot U.S. FDA clinical trial and anticipate beginning enrollment in the BioGlue China clinical trial in the near future, with both product trials currently on track for potential regulatory approval sometime in 2019.  Last, we began selling direct to hospitals in Benelux and Canada.  As previously discussed, our results were negatively impacted by the impact of distributor terminations we initiated in anticipation of the JOTEC acquisition, recent weather events and the continued absence of AAP revenue." "This quarter shows that our strategy is working well and as we anticipated.  We will soon have all the pieces in place to grow CryoLife into a significantly larger company - proven leadership, exceptional products, experienced global direct sales organization and an exciting new product pipeline with a much stronger R&D capability.  As a result, we expect to enter 2018 with excellent momentum." Revenues for the third quarter of 2017 decreased three percent to $44.0 million, compared to $45.3 million for the third quarter of 2016.  The decrease was primarily driven by a $1.1 million reversal of previously recorded revenues resulting from the Company's decision to terminate certain European distributors in connection with the proposed acquisition of JOTEC, an estimated $1.0 million impact due to recent weather events, and the lack of re-certification of the On-X AAP device. Revenues for the first nine months of 2017 increased one percent to $136.9 million, compared to $135.4 million for the first nine months of 2016.  The increase was primarily driven by increases in On-X, tissue processing and BioGlue revenues, partially offset by the absence of HeRO and ProCol revenues, and a decrease in TMR revenues.  Non-GAAP revenues for the first nine months of 2017 increased two percent compared to the first nine months of 2016.  A reconciliation of GAAP to non-GAAP financial metrics is included as part of this press release. Net income for the third quarter of 2017 was $1.3 million, or $0.04 per fully diluted common share, compared to net income of $3.0 million, or $0.09 per fully diluted common share, for the third quarter of 2016.  Non-GAAP net income for the third quarter of 2017 was $2.6 million, or $0.08 per fully diluted common share, compared to non-GAAP net income of $4.4 million, or $0.13 per fully diluted common share for the third quarter of 2016.  Net income for the first nine months of 2017 was $6.7 million, or $0.19 per fully diluted common share, compared to net income of $7.9 million, or $0.24 per fully diluted common share, for the first nine months of 2016.  Non-GAAP net income for the first nine months of 2017 was $9.8 million, or $0.29 per fully diluted common share, compared to non-GAAP net income of $12.0 million, or $0.36per fully diluted common share for the first nine months of 2016.  The Company is revising its full year 2017 financial guidance, as summarized below.  The revised guidance excludes up to $1.5 million in revenue that the Company anticipates would have been ordered during the fourth quarter from distributors recently notified of their termination, the delay in gaining recertification of our AAP, and does not include any contribution from the operations of JOTEC subsequent to the acquisition closing, which is expected to occur later during the fourth quarter of 2017.  The updated revenue guidance also reflects a temporary disruption in the European sales channel during the fourth quarter due to the commencement of sales force integration and territory realignment, and reduced selling days by the combined sales force resulting from off-site training.  The Company anticipates issuing its initial 2018 financial guidance in early March 2018 during its year-end financial conference call.
2017 Financial Guidance Summary
Previous Revised
Total revenues $188 Million - $192 Million $184 Million - $185 Million
Product revenues Year-over-year mid-single digits % non-GAAP revenue increase Year-over-year low-single digits % non-GAAP revenue increase
Tissue processing revenues Year-over-year mid-single digits % revenue increase Year-over-year mid-single digits % revenue increase
Gross margins Between 68% - 69% Between 68% - 69%
R&D expenses $17.0 Million - $19.0 Million $18.0 Million - $19.0 Million
Income tax rate Mid – 10% Mid – single digit%
Non-GAAP income per common share $0.40 - $0.43 $0.40 - $0.43
  All numbers in the table above are GAAP except where expressly referenced as non-GAAP.  The Company does not provide GAAP income per common share on a forward-looking basis because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any unusual gains and losses without unreasonable effort.  These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP. The Company's financial guidance for 2017 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 revenues include (as applicable) On-X revenues for the period in 2016 prior to the closing of the acquisition and excludes revenues for the HeRO Graft and ProCol product lines for 2016.  The Company's other non-GAAP results exclude (as applicable) business development expenses; gain on sale of business components; amortization expenses; and inventory basis step-up expense.  The Company believes that these non-GAAP presentations provide useful information to investors regarding unusual non-operating transactions and 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.  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 does, however, expect to incur similar types of expenses 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 tomorrow at 8:00 a.m. Eastern Time to discuss the results followed by a question and answer session hosted by Mr. Mackin. To listen to the live teleconference, please dial 201-689-8261 a few minutes prior to 8:00 a.m.  A replay of the teleconference will be available October 31 through November 7, and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The conference number for the replay is 13672507. 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. About CryoLife, Inc. Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable living tissues used in cardiac and vascular surgical procedures.  CryoLife markets and sells products in more than 80 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com. 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 those regarding our revised financial guidance for 2017, our assumptions underlying that guidance, and our ability to keep on track to achieve our 2017 revised financial guidance and to continue to build CryoLife into a higher growth, higher margin company; our belief that the JOTEC acquisition will close during the fourth quarter of 2017 and prove to be the most significant development in CryoLife's history, represents a significant opportunity to accelerate our revenue growth, improve our gross and operating margin, diversify our business and bolster our long term new product pipeline and R&D capabilities; and when we complete the acquisition of JOTEC, CryoLife will have a highly competitive product portfolio focused on treating aortic disease throughout the entire aortic anatomy with a worldwide market opportunity of approximately $2.0 billion; we anticipate beginning enrollment in the BioGlue China clinical trial in the near future and our belief that we are on track for regulatory approval of both PerClot (in the US) and BioGlue (in China) in 2019; our belief that we will soon have all the pieces in place to grow CryoLife into a significantly larger company; and our expectation that will enter 2018 with excellent momentum. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from these forward-looking statements.  These risks and uncertainties include that we may be unable to achieve our revised 2017 financial guidance, that the JOTEC acquisition may not be consummated in the fourth quarter of 2017 or at all or will not be one of the most significant developments in CryoLife's history; we may be unable to achieve the anticipated or expected benefits from our anticipated acquisition of JOTEC, including the acceleration of our revenue growth, improvement in our gross and operating margins, the diversification of our business and the strengthening of our long term new product pipeline and R&D capabilities; the estimates of the worldwide market opportunity for JOTEC's current and anticipated aortic products are incorrect; and we may not be able to secure regulatory approval of both PerClot (in the US) and BioGlue (in China) by 2019 or ever.  These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2016, and our subsequent filings with the SEC. CryoLife does not undertake to update its forward-looking statements.  
CRYOLIFE, INC. AND SUBSIDIARIES Financial Highlights (In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Revenues:
Products $ 27,029 $ 28,004 $ 84,519 $ 85,067
Preservation services 16,970 17,248 52,357 50,284
Total revenues 43,999 45,252 136,876 135,351
Cost of products and preservation services:
Products 6,220 6,598 21,196 21,299
Preservation services 7,917 8,872 23,401 26,348
Total cost of products and
preservation services 14,137 15,470 44,597 47,647
Gross margin 29,862 29,782 92,279 87,704
Operating expenses:
General, administrative, and marketing 24,756 20,592 71,016 69,302
Research and development 4,277 3,714 13,098 9,602
Total operating expenses 29,033 24,306 84,114 78,904
  Gain from sale of business components -- -- -- (7,915)
Operating income 829 5,476 8,165 16,715
Interest expense 851 742 2,486 2,256
Interest income (64) (18) (159) (48)
Other expense (income), net 21 21 (70) (146)
Income before income taxes 21 4,731 5,908 14,653
Income tax (benefit) expense (1,304) 1,738 (803) 6,772
Net income $ 1,325 $ 2,993 $ 6,711 $ 7,881
Income per common share:
Basic $ 0.04 $ 0.09 $ 0.20 $ 0.24
Diluted $ 0.04 $ 0.09 $ 0.19 $ 0.24
Weighted-average common shares outstanding:
Basic 32,887 32,151 32,665 31,731
Diluted 34,057 33,165 33,851 32,568
   
CRYOLIFE, INC. AND SUBSIDIARIES Financial Highlights (In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Products:
BioGlue and BioFoam $ 15,730 $ 15,976 $ 48,094 $ 47,479
On-X 8,326 8,890 27,048 25,159
CardioGenesis cardiac laser therapy 1,489 1,653 5,130 5,497
PerClot 886 950 2,641 2,983
PhotoFix 598 535 1,606 1,406
HeRO Graft -- -- -- 2,325
ProCol -- -- -- 218
          Total products 27,029 28,004 84,519 85,067
Preservation services:
Cardiac tissue 7,932 8,279 23,911 22,255
Vascular tissue 9,038 8,969 28,446 28,029
Total preservation services 16,970 17,248 52,357 50,284
Total revenues $ 43,999 $ 45,252 $ 136,876 $ 135,351
Revenues:
   U.S. $ 32,208 $ 32,406 $ 100,454 $ 98,842
International 11,791 12,846 36,422 36,509
Total revenues $ 43,999 $ 45,252 $ 136,876 $ 135,351
September 30, December 31,
2017 2016
Cash, cash equivalents, and restricted securities $ 55,013 $ 57,341
Total current assets 155,585 147,233
Total assets 326,140 316,140
Total current liabilities 26,113 30,102
Total liabilities 102,784 107,157
Shareholders' equity 223,356 208,983
   
CRYOLIFE, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Net Income and Diluted Income per Common Share (In thousands, except per share data)
    Three Months Ended     Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
GAAP:
Income before income taxes $ 21 $ 4,731 $ 5,908 $ 14,653
Income tax (benefit) expense (1,304) 1,738 (803) 6,772
Net income $ 1,325 $ 2,993 $ 6,711 $ 7,881
Diluted income per common share: $ 0.04 $ 0.09 $ 0.19 $ 0.24
Diluted weighted-average common
shares outstanding 34,057 33,165 33,851 32,568
Reconciliation of income before income
taxes, GAAP to net income, non-GAAP:
Income before income taxes, GAAP $ 21 $ 4,731 $ 5,908 $ 14,653
Adjustments:
Business development expenses 2,998 413 4,380 7,048
Gain on sale of business components -- -- -- (7,915)
Amortization expense 1,140 1,155 3,423 3,273
Acquisition inventory basis step-up expense 32 750 2,144 2,217
Income before income taxes, non-GAAP 4,191 7,049 15,855 19,276
Income tax expense calculated at 38% normalized
tax rate 1,593 2,679 6,025 7,325
Net income, non-GAAP $ 2,598 $ 4,370 $ 9,830 $ 11,951
Reconciliation of diluted income per
common share, GAAP to diluted income per
common share, non-GAAP:
Diluted income per common share, GAAP: $ 0.04 $ 0.09 $ 0.19 $ 0.24
Adjustments:
Business development expenses 0.09 0.01 0.13 0.21
Gain on sale of business components -- -- -- (0.24)
Amortization expense 0.04 0.03 0.10 0.10
Acquisition inventory basis step-up expense -- 0.02 0.06 0.07
Tax effect of non-GAAP adjustments (0.05) (0.02) (0.11) (0.06)
Effect of 38% normalized tax rate (0.04) -- (0.08) 0.04
Diluted income per common share,
 non-GAAP: $ 0.08 $ 0.13 $ 0.29 $ 0.36
Diluted weighted-average common
shares outstanding 34,057 33,165 33,851 32,568
   
CRYOLIFE, INC. AND SUBSIDIARIES Reconciliation of GAAP to Non-GAAP Revenues; Gross Margin; General, Administrative, and Marketing (In thousands, except per share data)
    Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 Growth Rate 2017 2016 Growth Rate
Reconciliation of total revenues, GAAP
to total revenues, non-GAAP:
Total revenues, GAAP $ 43,999 $ 45,252 -3% $ 136,876 $ 135,351 1%
Plus: On-X pre acquisition revenues -- -- -- 1,627
Less: HeRO revenues -- -- -- (2,325)
Less: ProCol revenues -- -- -- (218)
Total revenues, non-GAAP $ 43,999 $ 45,252 -3% $ 136,876 $ 134,435 2%
Three Months Ended       Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Reconciliation of gross margin %,
GAAP to gross margin %,
non-GAAP:
Total revenues, GAAP $ 43,999 $ 45,252 $ 136,876 $ 135,351
Gross margin, GAAP $ 29,862 $ 29,782 $ 92,279 $ 87,704
Gross margin %, GAAP 68% 66% 67% 65%
Gross margin, GAAP $ 29,862 $ 29,782 $ 92,279 $ 87,704
Plus: Acquisition inventory basis step-
up expense 32 750 2,144 2,217
Gross margin, non-GAAP $ 29,894 $ 30,532 $ 94,423 $ 89,921
Gross margin %, non-GAAP 68% 67% 69% 66%
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Reconciliation of general,
administrative, and marketing,
expense, GAAP to general,
administrative, and marketing,
expense, non-GAAP
General, administrative, and marketing
expense, GAAP $ 24,756 $ 20,592 $ 71,016 $ 69,302
Less: Business development
Expenses (2,998) (413) (4,380) (7,048)
General, administrative, and
marketing expense,
non-GAAP $ 21,758 $ 20,179 $ 66,636 $ 62,254
   
Contacts:
CryoLife        D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355 The Ruth Group Zack Kubow 646-536-7020 zkubow@theruthgroup.com
 

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CryoLife Announces Enrollment of First Patients in BioGlue® Clinical Trial in China

November 6, 2017 at 5:04 PM EST
ATLANTA, Nov. 6, 2017 /PRNewswire/ -- CryoLife, Inc. (NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today that enrollment has started in the Company's BioGlue clinical trial in China.  The results from the trial will serve as the basis of the Company's regulatory submission to the Chinese Food and Drug Administration (CFDA) to gain approval to commercialize BioGlue in China.  Patients are currently being enrolled at multiple heart centers in China.
Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)
"The initiation of patient enrollment in our BioGlue China clinical trial is a positive milestone that supports our effort to expand our global presence in key markets," stated Pat Mackin, CryoLifeChairman, President, and Chief Executive Officer.  "We estimate there are more than 40,000 aortic surgeries in China each year, which represents a significant growth opportunity for BioGlue.  We anticipate trial enrollment and follow up will take about one year, which would put us on track for potential CFDA approval of BioGlue by the end of 2019." Li-Zhong Sun, MD, Cardiac Surgeon at Anzhen Hospital in Beijing and primary investigator for the BioGlue clinical trial in China, said, "BioGlue has been used for many years in the U.S., Europe and other Asian countries to successfully treat patients with aortic dissections and in other cardiac surgery procedures.  We are pleased to begin the BioGlue clinical trial in China in order to bring this important product to Chinese patients." The BioGlue clinical trial in China is a prospective, multicenter, randomized, controlled clinical investigation.  The study will enroll 195 patients across seven sites.  The trial will assess treatment of Chinese patients with acute type A aortic dissections with standard-of-care procedures with and without BioGlue as an adjunct for structural repair and hemostasis.  The primary efficacy endpoint of the study will be successful closure of the false lumen as determined by intraoperative transesophageal echocardiography (TEE).  The closure will also be measured at the time of patient discharge by computed tomography angiography (CTA). About BioGlue BioGlue is a two-component adhesive that creates a flexible, mechanical seal, independent of the body's clotting mechanism, within 20 to 30 seconds, and reaches its maximum bonding strength in two to three minutes. 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, and is CE-marked in the European Community.  In addition, BioGlue is approved in Canada for use in soft tissue repair and in Australiafor use in vascular and pulmonary sealing and repair. About CryoLife, Inc. Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable living tissues used in cardiac and vascular surgical procedures.  CryoLife markets and sells products in more than 80 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com. 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 and are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations.  These statements include our estimates of the number of aortic surgeries in China each year, that such surgeries represent a significant growth opportunity for BioGlue, the anticipated pace of and timing for enrollment and follow up in our China BioGlue clinical trial, and the timing of potential approval by CFDA of BioGlue.  These risks and uncertainties affecting these statements include that: our estimates of the number of aortic surgeries in China each year and our belief that they represent a significant growth opportunity for BioGlue may be incorrect, CFDA clinical trials are subject to a number of risks and uncertainties, including unanticipated reactions or results, delays, including in enrollment and follow up, and cost overages, we may be unsuccessful in our clinical trial and there is no guarantee that the CFDA will approve BioGlue for distribution in China in our expected timeframe or at all.  These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for the year ended December 31, 2016, and our subsequent filings with the SEC. CryoLife does not undertake to update its forward-looking statements.  
Contacts:
CryoLife        D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355 The Ruth Group Zack Kubow 646-536-7020 zkubow@theruthgroup.com  
 

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CryoLife Completes Acquisition of JOTEC

December 1, 2017 at 5:04 PM EST
ATLANTA, Dec. 1, 2017 /PRNewswire/ -- CryoLife, Inc. (NYSE: CRY), a leading medical device and tissue processing company focused on cardiac and vascular surgery, announced today that it has completed its previously announced acquisition of JOTEC AG, a German-based, privately-held developer of technologically differentiated endovascular stent grafts, and cardiac and vascular surgical grafts, focused on aortic repair.
Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)
About CryoLife Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable living tissues used in cardiac and vascular surgical procedures.  CryoLife markets and sells a highly competitive product portfolio focused on treating aortic disease in more than 80 countries worldwide.  For additional information about CryoLife, visit our website, www.cryolife.com.
Contacts:
CryoLife         D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355 The Ruth Group Zack Kubow 646-536-7020 zkubow@theruthgroup.com

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