Operating Income Increases 65% to $13.7 Million for FY 2008.
CryoLife, Inc., an implantable biological medical device and tissue processing company, announced today that revenues for the year ended December 31, 2008 increased 11 percent to $105.1 million compared to $94.8 million for the year ended December 31, 2007. Excluding orthopaedic tissue processing revenues of $725,000 and $4.2 million in the years ended December 31, 2008 and December 31, 2007, respectively, total revenues increased 15 percent for the year ended 2008.
Net income for the year ended December 31, 2008 was $32.9 million, or $1.18 per basic and $1.16 per fully diluted common share, compared to $7.2 million, or $0.26 per basic and fully diluted common share for the year ended December 31, 2007. Net income for the year ended December 31, 2008 includes a tax benefit of $20.1 million, or $0.71 per fully diluted common share, related to the reversal of the Company’s valuation allowance on its deferred tax assets.
Revenues for the fourth quarter of 2008 increased 2 percent to $25.5 million compared to $25.1 million for the fourth quarter of 2007. Excluding orthopaedic tissue processing revenues of $63,000 and $552,000 for the fourth quarters of 2008 and 2007, respectively, total revenues increased 4 percent for the fourth quarter of 2008.
Net income for the fourth quarter of 2008 was $22.7 million, or $0.81 per basic and $0.80 per fully diluted common share, compared to $2.6 million, or $0.10 per basic and fully diluted common share for the fourth quarter of 2007. Net income for the fourth quarter of 2008 included a tax benefit of $20.1 million, or $0.71 per fully diluted common share, related to the reversal of the Company’s valuation allowance on its deferred tax assets.
Tissue processing revenues for the fourth quarter of 2008 decreased 5 percent to $12.3 million compared to $13.0 million for the fourth quarter of 2007. Tissue processing revenues for the year ended December 31, 2008 increased 9 percent to $53.7 million compared to $49.0 million for the year ended December 31, 2007.
Combined cardiac and vascular tissue processing revenues for the fourth quarter of 2008 decreased 1 percent to $12.3 million compared to $12.4 million for the fourth quarter of 2007. The decrease in revenues was primarily due to a decrease in shipments of cardiac tissues, which management believes is due to the current economic conditions and its constraining effect on hospital budgets.
Combined cardiac and vascular tissue processing revenues for the year ended December 31, 2008 increased 18 percent to $52.9 million compared to $44.8 million for the year ended December 31, 2007. The increase in tissue processing revenues was due primarily to increased demand for the Company’s cardiac and vascular processed tissues, the introduction of the CryoValve® SG pulmonary human heart valve processed with the SynerGraft® technology and, to a lesser extent, fee increases.
Revenues from the distribution of CryoValve SG pulmonary human heart valves were $1.7 million and $5.1 million for the fourth quarter and year ended December 31, 2008, respectively.
BioGlue® Surgical Adhesive revenues were $12.1 million for the fourth quarter of 2008 compared to $11.5 million for the fourth quarter of 2007, an increase of 5 percent. BioGlue revenues were $48.6 million for the year ended December 31, 2008 compared to $43.9 million for the year ended December 31, 2007, an increase of 11 percent.
U.S. BioGlue revenues were $8.6 million and $8.1 million for the fourth quarters of 2008 and 2007, respectively. U.S. BioGlue revenues were $34.4 million and $31.6 million for the years ended December 31, 2008 and December 31, 2007, respectively. International BioGlue revenues were $3.5 million and $3.4 million for the fourth quarters of 2008 and 2007, respectively. International BioGlue revenues were $14.2 million and $12.3 million for the years ended December 31, 2008 and 2007, respectively.
Other medical device revenues for the fourth quarter of 2008 were $906,000 compared to $105,000 for the fourth quarter of 2007. Other medical device revenues for the year ended December 31, 2008 were $1.9 million compared to $828,000 for the year ended December 31, 2007. Other medical device revenues for the fourth quarter and year ended December 31, 2008 included $806,000 and $1.5 million, respectively, in sales of Hemostase, which was added to the CryoLife product portfolio in the second quarter of 2008.
Total tissue processing and product gross margins were 64 percent for the fourth quarters of 2008 and 2007. Total tissue processing and product gross margins were 64 percent for the year ended December 31, 2008 compared to 62 percent for the year ended December 31, 2007.
Tissue processing gross margins for the fourth quarter of 2008 were 45 percent compared to 44 percent for the fourth quarter of 2007. Tissue processing gross margins for the year ended December 31, 2008 were 46 percent compared to 42 percent for the year ended 2007. Tissue processing gross margins improved in 2008 compared to 2007 primarily as a result of fee increases and a favorable tissue mix in 2008.
General, administrative, and marketing expenses for the fourth quarter of 2008 were $12.3 million compared to $12.1 million for the fourth quarter of 2007. General, administrative, and marketing expenses for the year ended December 31, 2008 were $48.8 million compared to $46.5 million for the year ended December 31, 2007.
The increase in general, administrative, and marketing expenses for the fourth quarter and year ended December 31, 2008 was primarily due to increased marketing expenses. These expenses included personnel costs, corporate advertising, physician education and training, and promotional materials to support the Company’s expanding tissue processing service and product offerings, and revenue growth. Additionally, there were increases in stock compensation expense over the same periods in the prior year.
Research and development expenses were $1.4 million for the fourth quarter of 2008 compared to $1.3 million for the fourth quarter of 2007. Research and development expenses were $5.3 million and $4.5 million for the years ended December 31, 2008 and December 31, 2007, respectively. Research and development spending in 2008 primarily focused on the Company’s SynerGraft tissues and products and protein hydrogel technologies.
As of December 31, 2008, the Company had $22.8 million in cash, cash equivalents, and marketable securities, compared to $17.4 million at December 31, 2007. Of the $22.8 million in cash, cash equivalents, and marketable securities on hand at December 31, 2008, $1.6 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. During 2008, the Company used $4.5 million of cash to pay off its previous line of credit facility.
“In spite of challenging economic conditions, 2008 represents our third consecutive year of profitability, with increased margins and operating results,” stated Steven G. Anderson, president and chief executive officer. “We believe that we are well positioned to set records in both revenue and operating income in 2009.”
Source: Cyrolife
published: February 19, 2009 in: Companies, Financial, Products