Company posts fully diluted earnings per share of $0.09 for second quarter of 2009; Revenues increased 6 percent sequentially for second quarter of 2009 compared to first quarter of 2009
ATLANTA, July 30 /PRNewswire-FirstCall/ -- CryoLife, Inc. (NYSE: CRY), an implantable biological medical device and cardiovascular tissue processing company, announced today that revenues for the second quarter of 2009 increased 4 percent to a quarterly record of $28.2 million compared to $27.2 million for the second quarter of 2008. Excluding orthopaedic tissue processing revenues of $44,000 and $297,000 for the second quarters of 2009 and 2008, respectively, revenues increased 5 percent for the second quarter of 2009.
Operating income for each of the second quarters of 2009 and 2008 was $4.2 million. Operating margin was 15 percent for each of the second quarters of 2009 and 2008.
Net income for the second quarter of 2009 was $2.5 million, or $0.09 per basic and fully diluted common share, compared to $3.9 million, or $0.14 per basic and fully diluted common share for the second quarter of 2008. The Company's effective income tax rate was 41 percent for the second quarter of 2009, compared to 6 percent for the second quarter of 2008. The Company's effective income tax rate was lower in 2008 due to the valuation allowance on the Company's deferred tax assets during 2008. If the Company had recorded 2008 income taxes at a normalized 41 percent effective tax rate, net income for the second quarter of 2008 would have been $2.4 million and fully diluted earnings per share would have been $0.09.
Revenues for the first six months of 2009 increased 4 percent to $54.9 million compared to $52.7 million for the first six months of 2008. Excluding orthopaedic tissue processing revenues of $129,000 and $624,000 for the first six months of 2009 and 2008, respectively, revenues increased 5 percent for the first six months of 2009.
Operating income increased 11 percent for the first six months of 2009 to $7.7 million compared to $6.9 million for the first six months of 2008. Operating margin increased to 14 percent for the first six months of 2009 compared to 13 percent for 2008.
Net income for the first six months of 2009 was $4.5 million, or $0.16 per basic and fully diluted common share, compared to $6.7 million, or $0.24 per basic and fully diluted common share for the first six months of 2008. If the Company had recorded 2008 income taxes at a normalized 41 percent effective tax rate, net income for the first six months of 2008 would have been $4.1 million and fully diluted earnings per share would have been $0.15. 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 second quarter of 2009 increased 3 percent to $14.1 million compared to $13.7 million for the second quarter of 2008. Excluding orthopaedic tissue processing revenues of $44,000 and $297,000 for the second quarter of 2009 and 2008, respectively, tissue processing revenues increased 5 percent to $14.0 million for the second quarter of 2009 compared to $13.4 million for the second quarter of 2008. The increase in tissue processing revenues was primarily due to increased revenues from vascular tissue for the second quarter of 2009 of $7.6 million as compared to $7.1 million for the second quarter of 2008.
Tissue processing revenues for the first six months of 2009 increased 2 percent to $27.6 million compared to $27.1 million for the first six months of 2008. Excluding orthopaedic tissue processing revenues of $129,000 and $624,000 for the first six months of 2009 and 2008, respectively, tissue processing revenues increased 4 percent to $27.5 million for the first six months of 2009 compared to $26.5 million for the first six months of 2008. The increase in tissue processing revenues was primarily due to increased revenues from vascular tissue for the first six months of 2009 of $15.4 million as compared to $13.9 million for the first six months of 2008.
Revenues from the distribution of CryoValve((R)) SG pulmonary heart valves increased to $1.5 million for the second quarter of 2009 from $1.4 million for the second quarter of 2008, representing 24 percent of the Company's cardiac tissue processing revenues for the second quarter of 2009. Revenues from the distribution of CryoValve SG pulmonary heart valves increased to $2.7 million for the first six months 2009 from $1.6 million for the first six months of 2008, representing 22 percent of the Company's cardiac tissue processing revenues for the first six months of 2009.
BioGlue((R)) Surgical Adhesive revenues were $12.4 million for the second quarter of 2009 compared to $13.0 million for the second quarter of 2008, a decrease of 5 percent. Excluding the effects of changes in foreign currency exchange rates for the second quarter of 2009 compared to those in effect during the second quarter of 2008, which reduced BioGlue revenues by $331,000 for the second quarter of 2009, BioGlue revenues would have been $12.7 million. BioGlue revenues were $24.1 million for the first six months of 2009 compared to $24.9 million for the first six months of 2008, a decrease of 3 percent. Excluding the effects of changes in foreign currency exchange rates for the first six months of 2009 compared to those in effect during the first six months of 2008, which reduced BioGlue revenues by $639,000 for the first six months of 2009, BioGlue revenues would have been $24.8 million.
U.S. BioGlue revenues were $8.5 million and $9.1 million for the second quarters of 2009 and 2008, respectively. U.S. BioGlue revenues were $16.9 million and $17.7 million for the first six months of 2009 and 2008, respectively. International BioGlue revenues were $3.9 million for each of the second quarters of 2009 and 2008. International BioGlue revenues were $7.3 million and $7.2 million for the first six months of 2009 and 2008, respectively.
Other medical device revenues for the second quarter of 2009 were $1.5 million compared to $308,000 for the second quarter of 2008. Other medical device revenues for the first six months of 2009 were $2.7 million compared to $401,000 for the first six months of 2008. Included in this revenue category for the second quarter and the first six months of 2009 were $1.5 million and $2.6 million, respectively, in sales of HemoStase((TM)).
Total tissue processing and product gross margins were 63 percent and 66 percent for the second quarters of 2009 and 2008, respectively. Total tissue processing and product gross margins were 64 percent and 65 percent for the first six months of 2009 and 2008, respectively.
Tissue processing gross margins were 43 percent and 46 percent for the second quarters of 2009 and 2008, respectively. Tissue processing gross margins were 44 percent and 46 percent for the first six months of 2009 and 2008, respectively.
General, administrative, and marketing expenses for the second quarter of 2009 were $12.3 million compared to $12.4 million for the second quarter of 2008. General, administrative, and marketing expenses for the first six months of 2009 were $25.1 million compared to $24.4 million for the first six months of 2008. These expenses included personnel costs, advertising, physician education and training, and promotional materials to support the Company's efforts to increase its tissue processing service and product offerings, and current revenue growth.
General, administrative, and marketing expenses for the second quarters of 2009 and 2008 included benefits of $495,000 and $610,000, respectively, related to the adjustment of reserves for product liability losses. General, administrative, and marketing expenses for the first six months of 2009 and 2008 included benefits of $460,000 and $530,000, respectively, related to the adjustment of reserves for product liability losses.
Research and development expenses were $1.4 million and $1.3 million for the second quarters of 2009 and 2008, respectively. Research and development expenses were $2.4 million and $2.8 million for the first six months of 2009 and 2008, respectively. Research and development spending in 2009 is primarily focused on the Company's protein hydrogel technologies and SynerGraft((R)) tissues and products.
As of June 30, 2009, the Company had $26.7 million in cash, cash equivalents, and marketable securities, compared to $22.8 million at December 31, 2008. Of this $26.7 million, $2.5 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.
"CryoLife continues to thrive and expand as witnessed by the record revenues in the second quarter of 2009, even in a very adverse world economy," stated Steven G. Anderson, president and chief executive officer.
