CryoLife, Inc. (CRY)
Q2 2010 Earnings Call
July 29, 2010 10:00 AM EST
Steve Anderson – President and CEO
Ashley Lee – EVP, COO and CFO
Matt Dolan – Roth Capital Partners
Raymond Myers – The Benchmark Company
Previous Statements by CRY
» CryoLife, Inc. Q1 2010 Earnings Call Transcript
» CryoLife, Inc. F4Q09 (Qtr End 12/31/09) Earnings Call Transcript
» CryoLife Inc. Q3 2009 Earnings Conference Call
Greetings and welcome to the CryoLife Second Quarter 2010 Financial Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions).
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Steve Anderson, President and Chief Executive Officer for CryoLife. Thank you, Mr. Anderson, you may begin.
Good morning, everyone. This is Steve Anderson, CryoLife's CEO, and I would like to welcome you to CryoLife's Q2 2010 conference call. With me today is Ashley Lee, the company's Executive Vice President, COO, and CFO.
We were very pleased to announce record revenues for the second quarter, as well as record revenues for the first six months of 2010. Revenues for Q2 were $29.3 million, up from $28.2 million a year-ago, and revenues for the first six months of 2010 were $59 million, up from $54.9 million in the first six months of 2009, an 8% increase.
Diluted earnings per share for Q2 2010 were $0.10, up $0.09 for Q2 2009, and $0.01 above analyst estimates. Diluted earnings per share for the first six months of 2010 were $0.17, up from $0.16 in 2009. This is the 14
consecutive quarter of profitability for the company. And we continue to be very pleased with our operating results in this difficult economic situation.
The agenda for today's call is as follow: Ashley will discuss today’s press release in detail and by line of business. He will also focus on the company’s successful buyback of our common stock. He will also discuss the company’s cash position. Ashley will complete his remarks with a discussion on the status of the Medafor litigation.
I will discuss the recent FDA clearance for the five-year shelf life for the CryoValve SG Human Pulmonary Heart Valve. I will discuss the significance of Medafor resuming its shipments of HemoStase to us that was announced on June 30
. I will also discuss the continuing rollout of BioFoam sales in Europe and the beginning of the BioFoam clinical trial in the US. I will update you on the status of several SynerGraft tissue projects that are ongoing.
At the end of my comments, Ashley will return to review our financial guidance for the rest of the year.
At this time, Ashley will discuss this morning’s press release.
Thank you, Steve. To comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995, I'd like to make the following statement. Comments made in this call, which look forward in time involve risk and uncertainties in our forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements includes statements made as to the company's or management’s intentions, hopes, beliefs, expectations or predications of the future.
Additional information concerning risk and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings including the Risk Factor section of our Form 10-K for the year ended December 31, 2009, our Form 10-Q for the quarter ended March 31, 2010, and our Form 10-Q for the quarter ended June 30, 2010, which we expect to file by the end of this week and in the press release that went out this morning a copy of which is contained on the Investor Relations portion of our website.
This morning we reported our results for the second quarter and first half of 2010. We set all time second quarter and first half revenue records of $29.3 million and $59 million for the periods ended June 30, 2010, and reported our 14
consecutive quarter of profitability. These revenue amounts represent increases of 4% and 8% compared to the corresponding periods in 2009.
As of June 30, 2010 we had $41.4 million in cash, cash equivalents and restricted securities compared to $35.1 million at December 31, 2009. Of this $41.4 million, $2.4 million was received from the US Department of Defense as advance funding for the development of BioFoam Protein Hydrogel Technology and $5.3 million was designated as restricted primarily due to our financial covenant requirement under our credit agreement.
Net income for the second quarter of 2010 was $2.9 million or $0.10 per basic and fully diluted common share compared to $2.5 million or $0.09 per basic and fully diluted common share for the second quarter of ‘09. We recorded pretax charges in the second quarter of 2010 of approximately $420,000 in cost associated with our litigation with Medafor and recorded a $385,000 gain on evaluation of the derivative related to the investment in Medafor common stock.
Net income for the first half of 2010 was $4.9 million or $0.17 per basic and fully diluted common share compared to $4.5 million or $0.16 per basic and fully diluted common share for the first half of ’09.
We recorded pretax charges in the first half of 2010 of $729,000 in connection with the write-off of capitalized and legal expenses associated with our BioGlue intellectual property rights in Germany and approximately $834,000 in cost associated with our litigation with Medafor. Additionally, we recorded a $1.2 million gain on evaluation of the derivative related to the investment in Medafor common stock.