CRY
$29.23
Cryolife
$.41
1.42%
Earnings Details
3rd Quarter September 2018
Wednesday, October 31, 2018 5:04:00 PM
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Summary

Cryolife Reports In-line

Cryolife (CRY) reported 3rd Quarter September 2018 earnings of $0.08 per share on revenue of $64.6 million. The consensus earnings estimate was $0.06 per share on revenue of $62.5 million. The Earnings Whisper number was $0.08 per share. Revenue grew 46.8% on a year-over-year basis.

The company said it expects 2018 earnings of $0.30 to $0.32 per share on revenue of $261.5 million to $262.5 million. The company's previous guidance was earnings of $0.29 to $0.32 per share on revenue of $256.0 million to $260.0 million and the current consensus earnings estimate is $0.31 per share on revenue of $259.9 million for the year ending December 31, 2018.

Cryolife Inc is engaged in medical device manufacturing & distribution and in the processing & distribution of implantable human tissues for use in cardiac and vascular surgeries. The Company has two segments: Medical Devices and Preservation Services.

Results
Reported Earnings
$0.08
Earnings Whisper
$0.08
Consensus Estimate
$0.06
Reported Revenue
$64.6 Mil
Revenue Estimate
$62.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

CryoLife Reports Third Quarter 2018 Results

ATLANTA, Oct. 31, 2018 /PRNewswire/ -- 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, 2018.

Cryolife logo. (PRNewsFoto/CryoLife, Inc.) (PRNewsFoto/CRYOLIFE_ INC_) (PRNewsFoto/CRYOLIFE, INC.)

Third Quarter and Recent Business Highlights:

  • Total revenues increased 47 percent to $64.6 million in the third quarter of 2018 compared to the third quarter of 2017
  • Non-GAAP total revenues increased 17 percent in the third quarter of 2018 compared to the third quarter of 2017; Non-GAAP total revenues increased 17 percent on a constant currency basis
  • On-X® revenues increased 36 percent in the third quarter of 2018 compared to the third quarter of 2017
  • JOTEC® revenues were $15.0 million in the third quarter of 2018, a 32 percent increase on a Non-GAAP basis compared to the third quarter of 2017
  • Net income was $1.6 million or $0.04 per fully diluted common share; Non-GAAP net income was $3.1 million, or $0.08 per fully diluted common share

"We had a very successful third quarter which included strong revenue growth, market share gains, new account growth and progress on our clinical and R&D programs," said Pat Mackin, Chairman, President, and Chief Executive Officer.  "Our On-X and JOTEC products continue to gain momentum as our direct salesforce is effectively conveying the differentiating attributes of these products.  We expect our business momentum to continue and we are therefore updating our full year guidance.  Looking ahead, we have many internal initiatives that we believe can drive substantial future growth.  Given our highly experienced leadership team, we are confident we can deliver on our goals and objectives for 2018."

Third Quarter 2018 Financial Results
Total revenues for the third quarter of 2018 increased 47 percent to $64.6 million, compared to $44.0 million for the third quarter of 2017.  The increase was primarily driven by $15.0 million in revenues from JOTEC and strong revenue growth from On-X and tissue processing.  Non-GAAP total revenues for the third quarter of 2018 increased 17 percent, compared to the third quarter of 2017, a 17 percent increase on a constant currency basis. 

Net income for the third quarter of 2018 was $1.6 million, or $0.04 per fully diluted common share, compared to net income of $1.3 million, or $0.04 per fully diluted common share for the third quarter of 2017.  Non-GAAP net income for the third quarter of 2018 was $3.1 million, or $0.08 per fully diluted common share, compared to non-GAAP net income of $3.1 million, or $0.09 per fully diluted common share for the third quarter of 2017. 

2018 Financial Outlook
The Company is updating its full-year 2018 financial guidance, as summarized below, and expects total revenues in the fourth quarter of 2018 to be between $66.5 million and $67.5 million


Previous

Revised

Total Revenues

$256.0 million - $260.0 million

$261.5 million - $262.5 million

Gross Margins

65.5% - 66.5%

(includes $3.5 million non-cash charges related to acquired JOTEC inventory and distributor inventory buy backs)

65.5% - 66.5%

(includes $2.8 million non-cash charges related to acquired JOTEC inventory and distributor inventory buy backs)

R&D Expenses

$23.0 million - $25.0 million

$22.0 million - $23.0 million

Non-GAAP Tax
Rate

Mid 20%

(excludes effect of nondeductible transaction costs and the tax effect of stock compensation expenses)

same

Non-GAAP EPS

$0.29 - $0.32

(assumes approximately 37.5 million fully diluted shares outstanding and 25% effective tax rate)

 

$0.30 - $0.33

(assumes approximately 37.5 million fully diluted shares outstanding and 25% effective tax rate)

All numbers are presented on a GAAP basis 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 2018 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 JOTEC revenues for the same nine-month period in 2017 prior to the closing of the acquisition of JOTEC on December 1, 2017.  The Company did not own JOTEC during the nine-month period ended September 30, 2017, so the Company is unable to report its GAAP revenue growth for the nine-month period ended September 30, 2018 compared to the same period in 2017.  The Company's other non-GAAP results exclude (as applicable) business development and integration expenses, amortization expense, 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, November 1, 2018 at 8:30 a.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 8, 2018 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415.  The Conference ID for the replay is 13684106.

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 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 forecasted revenues, gross margins, R&D expenses, non-GAAP income tax rate and non-GAAP earnings per share; and our beliefs that our On-X and JOTEC products continue to gain momentum as our direct salesforce is effectively conveying the differentiating attributes of these products, that we expect our business momentum to continue, that we have many internal initiatives that we believe can drive substantial future growth and that we are confident we can deliver on our goals and objectives for 2018.  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 the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for year ended December 31, 2017.  CryoLife does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.


CRYOLIFE, INC. AND SUBSIDIARIES

Financial Highlights

(In thousands, except per share data)







(Unaudited)


(Unaudited)



Three Months Ended


Nine Months Ended



September 30,


September 30,



2018


2017


2018


2017

Revenues:












Products

$

45,152


$

27,029


$

138,063


$

84,519

Preservation services


19,446



16,970



56,979



52,357

Total revenues


64,598



43,999



195,042



136,876













Cost of products and preservation
services:












Products


12,459



6,220



40,166



21,196

Preservation services


9,425



7,917



27,083



23,401

Total cost of products and












preservation services


21,884



14,137



67,249



44,597













Gross margin


42,714



29,862



127,793



92,279













Operating expenses:












General, administrative, and marketing


32,871



24,756



104,946



71,016

Research and development


5,225



4,277



16,314



13,098

Total operating expenses


38,096



29,033



121,260



84,114

Operating income


4,618



829



6,533



8,165













 

Interest expense


4,104



851



11,863



2,486

Interest income


(52)



(64)



(141)



(159)

Other (income) expense, net


(1,542)



21



(257)



(70)













Income (loss) before income taxes


2,108



21



(4,932)



5,908

Income tax expense (benefit)


543



(1,304)



(2,868)



(803)













Net income (loss)

$

1,565


$

1,325


$

(2,064)


$

6,711













Income (loss) per common share:












Basic

$

0.04


$

0.04


$

(0.06)


$

0.20

Diluted

$

0.04


$

0.04


$

(0.06)


$

0.19













Weighted-average common shares
outstanding:












Basic


36,526



32,887



36,331



32,665

Diluted


37,610



34,057



36,331



33,851














 

CRYOLIFE, INC. AND SUBSIDIARIES

Financial Highlights

(In thousands)



(Unaudited)


(Unaudited)


Three Months Ended


Nine Months Ended


September 30,


September 30,


2018


2017


2018


2017

Products:












BioGlue and BioFoam

$

15,646


$

15,730


$

48,685


$

48,094

JOTEC


15,004



--



46,669



--

On-X


11,298



8,326



33,495



27,048

CardioGenesis cardiac laser therapy


1,590



1,489



4,514



5,130

    PerClot


882



886



2,822



2,641

PhotoFix


732



598



1,878



1,606

          Total products


45,152



27,029



138,063



84,519













Preservation services:












Cardiac tissue


9,502



7,932



26,660



23,911

Vascular tissue


9,944



9,038



30,319



28,446

Total preservation services


19,446



16,970



56,979



52,357













Total revenues

$

64,598


$

43,999


$

195,042


$

136,876













Revenues:












   U.S.

$

36,516


$

32,208


$

108,123


$

100,454

International


28,082



11,791



86,919



36,422

Total revenues

$

64,598


$

43,999


$

195,042


$

136,876


























(Unaudited)

September 30,


December 31,



2018


2017









Cash, cash equivalents, and restricted securities

$

35,311


$

40,753


Total current assets


173,952



179,280


Total assets


569,695



589,693


Total current liabilities


30,749



42,940


Total liabilities


292,888



312,635


Shareholders' equity


276,807



277,058




















 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

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

(In thousands, except per share data)



(Unaudited)


(Unaudited)


Three Months Ended


Nine Months Ended


September 30,


September 30,


2018


2017


2018


2017

GAAP:












Income (loss) before income taxes

$

2,108


$

21


$

(4,932)


$

5,908

Income tax expense (benefit)


543



(1,304)



(2,868)



(803)

Net income (loss)

$

1,565


$

1,325


$

(2,064)


$

6,711













Diluted income (loss) per common share:

$

0.04


$

0.04


$

(0.06)


$

0.19













Diluted weighted-average common












shares outstanding


37,610



34,057



36,331



33,851

























Reconciliation of income (loss) before income












taxes, GAAP to adjusted net income,
non-GAAP:
























Income (loss) before income taxes, GAAP

$

2,108


$

21


$

(4,932)


$

5,908

Adjustments:












Business development and integration expenses


1,917



2,998



6,933



4,380

Amortization expense


2,707



1,140



8,195



3,423

Gain on On-X escrow settlement


(2,675)



--



(2,675)



--

Inventory basis step-up expense


62



32



2,805



2,144

Adjusted income before income taxes,












non-GAAP


4,119



4,191



10,326



15,855













Income tax expense calculated at 25% pro forma












tax rate


1,030



1,048



2,582



3,964

Adjusted net income, non-GAAP

$

3,089


$

3,143


$

7,744


$

11,891













Reconciliation of diluted income (loss) per












common share, GAAP to adjusted diluted
income per common share, non-GAAP:
























Diluted income (loss) per common share, GAAP:

$

0.04


$

0.04


$

(0.06)


$

0.19

Adjustments:












Amortization expense


0.08



0.04



0.22



0.10

Business development and integration expenses


0.05



0.09



0.19



0.13

Gain on On-X escrow settlement


(0.07)



--



(0.07)



--

Inventory basis step-up expense


--



--



0.07



0.06

Tax effect of non-GAAP adjustments


(0.02)



(0.04)



(0.10)



(0.07)

Effect of 25% pro forma tax rate


--



(0.04)



(0.04)



(0.07)

Adjusted diluted income per common share,












 non-GAAP:

$

0.08


$

0.09


$

0.21


$

0.34













Diluted weighted-average common












shares outstanding


37,610



34,057



37,351



33,851













 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

Revenues; Gross Margin; General, Administrative, and Marketing

(In thousands, except per share data)



(Unaudited)


(Unaudited)


Three Months Ended


Nine Months Ended


September 30,


September 30,


2018


2017

Growth
Rate


2018


2017

Growth
Rate

Reconciliation of total revenues, GAAP














to total revenues, non-GAAP:














Total revenues, GAAP

$

64,598


$

43,999

47%


$

195,042


$

136,876

42%

Plus: JOTEC pre-acquisition revenues


--



11,339




--



36,439


Total revenues, non-GAAP

$

64,598


$

55,338

17%


$

195,042


$

173,315

13%

Impact of changes in currency exchange


--



(203)




--



3,625


Total constant currency
revenues, non-GAAP

$

64,598


$

55,135

17%


$

195,042


$

176,940

10%
















(Unaudited)



(Unaudited)



Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017



2018


2017


Reconciliation of gross margin %,














GAAP to gross margin %,














non-GAAP:














Total revenues, GAAP

$

64,598


$

43,999



$

195,042


$

136,876


Gross margin, GAAP

$

42,714


$

29,862



$

127,793


$

92,279


Gross margin %, GAAP


66%



68%




66%



67%
















Gross margin, GAAP

$

42,714


$

29,862



$

127,793


$

92,279


Plus: Inventory basis step- up














expense


62



32




2,805



2,144


Gross margin, non-GAAP

$

42,776


$

29,894



$

130,598


$

94,423


Gross margin %, non-GAAP


66%



68%




67%



69%

















(Unaudited)



(Unaudited)



Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017



2018


2017


Reconciliation of general,














administrative, and marketing,














GAAP to general, administrative, 














and marketing, non-GAAP:














General, administrative, and marketing,














       GAAP

$

32,871


$

24,756



$

104,946


$

71,016


Less: Business development and














integration expenses


(1,917)



(2,998)




(6,933)



(4,380)


General, administrative, and














marketing, non-GAAP

$

30,954


$

21,758



$

98,013


$

66,636


 

CRYOLIFE, INC. AND SUBSIDIARIES

Reconciliation of GAAP to Non-GAAP

Net Income (Loss) to Adjusted EBITDA

(In thousands)

















(Unaudited)



(Unaudited)



Three Months Ended



Nine Months Ended



September 30,



September 30,



2018


2017



2018


2017


Reconciliation of net income (loss),














GAAP to adjusted EBITDA, 
     non-GAAP:














Net income (loss), GAAP

$

1,565


$

1,325



$

(2,064)


$

6,711


Adjustments:














Interest income


(52)



(64)




(141)



(159)


Interest expense


4,104



851




11,863



2,486


Income tax expense (benefit)


543



(1,304)




(2,868)



(803)


Depreciation and amortization expense


4,530



2,331




13,636



6,683


Loss (gain) on foreign currency 
     
revaluation


683



21




2,141



(78)


Business development and integration 
     expenses


1,917



2,998




6,933



4,380


Gain on On-X escrow settlement


(2,675)



--




(2,675)



--


Inventory basis step-up expense


62



32




2,805



2,144


Stock-based compensation expense


1,565



1,856




4,685



5,652


Adjusted EBITDA, non-GAAP

$

12,242


$

8,046



$

34,315


$

27,016


 

Contacts:




CryoLife

Gilmartin Group LLC

D. Ashley Lee

Greg Chodaczek / Lynn Lewis

Executive Vice President, Chief Financial Officer

Phone:  646-924-1769

and Chief Operating Officer

investors@cryolife.com

Phone: 770-419-3355


 

 

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SOURCE CryoLife, Inc.