CryoLife, Inc. (NYSE:CRY), a leading medical device and tissue processing company focused on cardiac surgery, announced today its results for the third quarter and first nine months of 2016.
Pat Mackin, Chairman, President and Chief Executive Officer, said, “We posted strong financial and operating results in the third quarter by executing on our core goals and objectives. These results demonstrate that our decision to expand the sales team through the acquisition of On-X and focus on the cardiac surgery market is facilitating cross-selling opportunities and broadening awareness of our On-X valves, as anticipated. Our results were strengthened by our initiative to transition to a direct sales model in several key markets in Europe. We also made solid progress advancing our other 2016 key initiatives. The enhancements to our tissue processing operations are improving our ability to meet the strong demand for our tissue products, particularly for vascular tissue, which represents a near-term growth opportunity. In addition, we expect to resume enrollment in the PerClot IDE trial during the fourth quarter of 2016, keeping us on track for potential FDA approval for this product in the first half of 2019. Looking forward, we expect to finish the year with a solid fourth quarter and deliver meaningful revenue growth and additional margin expansion in 2017.”
Revenues for the third quarter of 2016 increased 23 percent to $45.3 million, compared to $36.7 million for the third quarter of 2015. The increase was primarily driven by the acquisition of On-X Life Technologies (On-X) in January 2016, along with revenue increases in BioGlue and cardiac tissues. Non-GAAP revenues for the third quarter of 2016 increased six percent compared
to the third quarter of 2015. A reconciliation of GAAP financial metrics to non-GAAP financial metrics is included as part of this press release.
Revenues for the first nine months of 2016 increased 28 percent to $135.4 million, compared to $106.1 million for the first nine months of 2015. The increase was primarily driven by the acquisition of On-X, along with revenue increases in BioGlue and in cardiac and vascular tissues. Non-GAAP revenues for the first nine months of 2016 increased eight percent compared to the first nine months of 2015.
GAAP net income for the third quarter of 2016 was $3.0 million, or $0.09 per basic and fully diluted common share, compared to net income of $2.1 million, or $0.08 per basic and $0.07 per fully diluted common share, for the third quarter of 2015. Non-GAAP net income for the third quarter of 2016 was $4.4 million, or $0.13 per fully diluted common share, compared to non-GAAP net income of $3.3 million, or $0.11 per fully diluted common share for the third quarter of 2015.
GAAP net income for the first nine months of 2016 was $7.9 million, or $0.24 per basic and fully diluted common share, compared to net income of $1.4 million, or $0.05 per basic and fully diluted common share, for the first nine months of 2015. Non-GAAP net income for the first nine months of 2016 was $12.0 million, or $0.36 per fully diluted common share, compared to non-GAAP net income of $4.7 million, or $0.16 per fully diluted common share for the first nine months of 2015.
Based on its financial results through the first nine months of 2016 and the current business outlook, the Company is raising its 2016 financial guidance as summarized below.
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2016 Financial Guidance Summary |
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| Previous | Revised | |
| Total revenues | $180 million – $182 million
Year-over-year mid to upper single digit % non-GAAP revenue increase |
$181 million – $182.5 million
Year-over-year mid to upper single digit % non-GAAP revenue increase |
| Product revenues | Year-over-year mid to upper single digit % non-GAAP revenue increase | Same |
| Tissue processing revenues | Year-over-year mid-single digit % revenue increase | Same |
| Gross margins | Approximately 64% | Approximately 65% |
| R&D expenses | $13 million – $15 million | $14 million – $15 million |
| Non-GAAP income per common share | $0.32 – $0.34 | $0.43 – $0.45 |
All numbers 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 the full year of 2016 is subject to the risks identified below in the last paragraph of this press release before the financial tables.
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 27 through November 2 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The conference number for the replay is 13647654.
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 surgical procedures. CryoLife markets and sells products in more than 80 countries worldwide. For additional information about CryoLife, visit our website,www.cryolife.com.
