Operating income increases 26 percent in first quarter of 2009 compared to 2008
ATLANTA, April 30 /PRNewswire-FirstCall/ -- CryoLife, Inc. (NYSE: CRY), an implantable biological medical device and cardiovascular tissue processing company, announced today that revenues for the first quarter of 2009 increased 4 percent to a first quarter record of $26.7 million compared to $25.6 million for the first quarter of 2008.
Operating income for the first quarter of 2009 increased 26 percent to $3.5 million compared to $2.7 million for the first quarter of 2008. Operating margin increased to 13 percent in the first quarter of 2009 compared to 11 percent in 2008.
The Company's net income for 2009 was adversely affected by a normalized effective income tax rate of 41 percent for the first quarter of 2009, compared to 4 percent in the first quarter of 2008. The Company did not record income tax expense at a normalized rate in 2008 due to the valuation allowance on the Company's deferred tax assets during 2008. As a result, net income for the first quarter of 2009 was $1.9 million, or $0.07 per basic and fully diluted common share, compared to $2.8 million, or $0.10 per basic and fully diluted common share for the first quarter of 2008. The Company has net operating loss carryforwards that will largely reduce required cash payments for federal and state income taxes for the 2009 tax year.
Tissue processing revenues for the first quarter of 2009 increased 1 percent to $13.5 million compared to $13.4 million for the first quarter of 2008. Excluding orthopaedic tissue processing revenues of $85,000 and $327,000 in the first quarter of 2009 and 2008, respectively, tissue processing revenues increased 3 percent to $13.5 million for the first quarter of 2009 compared to $13.1 million in the first quarter of 2008. The increase in cardiac and vascular tissue processing revenues was primarily due to increased revenues from vascular tissue in the first quarter of 2009 of $7.9 million as compared to $6.9 million in the first quarter of 2008. This increase was partially offset by reduced revenues from cardiac tissues primarily from the Company's standard processed pulmonary valves. Revenues from the distribution of CryoValve(R) SG pulmonary heart valves increased to $1.2 million in the first quarter of 2009 from $218,000 in the first quarter of 2008, representing 21 percent of the Company's cardiac tissue processing revenues in the first quarter of 2009.
BioGlue(R) Surgical Adhesive revenues were $11.8 million for the first quarter of 2009 compared to $11.9 million for the first quarter of 2008. Although there was a 2 percent increase in the milliliters of BioGlue shipped, revenues decreased 1 percent. Excluding the effects of changes in foreign currency exchange rates quarter over quarter, which reduced BioGlue revenues by $306,000 in the first quarter of 2009, BioGlue revenues would have been $12.1 million, or a 2 percent increase in revenues for the first quarter of 2009 compared to the first quarter of 2008.
U.S. BioGlue revenues were $8.4 million and $8.6 million for the first quarters of 2009 and 2008, respectively. International BioGlue revenues were $3.3 million for each of the first quarters of 2009 and 2008.
Other medical device revenues for the first quarter of 2009 were $1.2 million compared to $93,000 for the first quarter of 2008. Included in this revenue category for the first quarter of 2009 was $1.1 million in sales of HemoStase(TM).
Total tissue processing and product gross margins were 64 percent and 63 percent for the first quarters of 2009 and 2008, respectively. Tissue processing gross margins for each of the first quarters of 2009 and 2008 were 45 percent.
General, administrative, and marketing expenses for the first quarter of 2009 were $12.7 million compared to $12.1 million for the first quarter of 2008. The increase in these 2009 first quarter expenses was primarily due to increased marketing expenses. These expenses included personnel costs, advertising, physician education and training, and promotional materials to support the Company's expanding tissue processing service and product offerings, and revenue growth.
Research and development expenses were $1.0 million for the first quarter of 2009 compared to $1.4 million for the first quarter of 2008. Research and development spending in 2009 is primarily focused on the Company's protein hydrogel technologies and SynerGraft(R) tissues and products.
As of March 31, 2009, the Company had $23.7 million in cash, cash equivalents, and marketable securities, compared to $12.9 million at March 31, 2008. Of this $23.7 million, $2.0 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.
'The Company continues to thrive and expand even in a very adverse world economy, as witnessed by the Company's record revenues and operating income in the first quarter of 2009,' stated Steven G. Anderson, president and chief executive officer. 'We are very encouraged by our continued growth and the trend we are establishing for 2009 and we will continue to look for opportunities to expand our cardiac and vascular surgery portfolios.'
2009 Financial Guidance
The Company is reiterating its guidance for the full year of 2009.
