CONTACT
CryoLife Inc.
Vascular and Vascular Allografts, Mitral Valve Repair CORD-X
1655 Roberts Blvd., NW
Kennesaw, GA 30144
U.S.A
Main Phone:
770.419.3355
1.800.438.8285
Fax:
770.426.0031
Customer Service:
Phone:
1.888.427.9654
Domestic Fax:
770.590.3753
International Fax:
770.590.3797
FINANCE
2nd Quarter 2016 Highlights:
Revenue Increased 33 Percent Year-over-Year to $47.1 Million; Non-GAAP Revenues Increased Nine Percent Year-over-Year
Gross Margins Increased to 64 Percent; Non-GAAP Gross Margins Increased to 66 Percent
GAAP Net Income was $2.3 Million, or $0.07 Per Fully Diluted Common Share; Non-GAAP Net Income was $4.3 Million, or $0.13 Per Fully Diluted Common share
I’m pleased to report the second quarter was an outstanding success on several fronts, with record revenues and growth for the Company. The company posted exceptionally strong financial results and is tracking significantly ahead of schedule on several key operational initiatives, due in large part to the acquisition and speedy integration of On-X Life Technologies (On-X). Our expanded U.S. cardiac surgery sales force is increasing the awareness and availability of the On-X product portfolio to a broader customer base while also driving sales of BioGlue® and our tissue preservation services. Outside of the U.S., we are now selling On-X through our direct sales force, rather than through distributors, in all of the markets in which we sell through direct sales. Our decision to streamline our focus and product portfolio on the cardiac surgery market, combined with selling direct in more markets than ever before, is driving significantly improved performance and strengthening our competitive position globally. We also continue to benefit from the enhancements to our tissue processing operations that we began implementing last year. These enhancements combined with our revenue performance contributed to strong gross margin and profitability in the second quarter. On the clinical front, we recently received FDA approval for the updated protocol for our PerClot® IDE trial and expect to restart patient enrollment later this year, keeping us on track for potential FDA approval in the first half of 2019. Given our strong overall performance and momentum through the first half of the year, we increased on guidance for 2016 on revenue, gross margin, and EPS guidance and remain very confident in our ability to capitalize on the large opportunity our markets offer.
Regarding the specifics of our financial performance, our revenues for the second quarter of 2016 increased 33 percent to $47.1 million, compared to $35.5 million for the second quarter of 2015. The increase was primarily driven by the acquisition of On-X in January 2016, along with revenue increases in cardiac and vascular tissues and BioGlue. Non-GAAP revenues for the second quarter of 2016 increased nine percent compared to the second quarter of 2015.
Revenues for the first half of 2016 increased 30 percent to $90.1 million, compared to $69.4 million for the first half of 2015. The increase was primarily driven by the acquisition of On-X, along with revenue increases in vascular tissues and BioGlue. Non-GAAP revenues for the first half of 2016 increased nine percent compared to the first half of 2015.
GAAP net income for the second quarter of 2016 was $2.3 million, or $0.07 per basic and fully diluted common share, compared to net loss of ($502,000), or ($0.02) per basic and fully diluted common share, for the second quarter of 2015. Non-GAAP net income for the second quarter of 2016 was $4.3 million, or $0.13 per fully diluted common share, compared to non-GAAP net income of $1.3 million, or $0.04 per fully diluted common share for the second quarter of 2015.
GAAP net income for the first half of 2016 was $4.9 million, or $0.15 per basic and fully diluted common share, compared to net loss of ($776,000), or ($0.03) per basic and fully diluted common share, for the first half of 2015. Non-GAAP net income for the first half of 2016 was $7.6 million, or $0.23 per fully diluted common share, compared to non-GAAP net income of $1.5 million, or $0.05 per fully diluted common share for the first half of 2015.
Based on our financial results through the first half of 2016, as I indicated above, the Company raised its 2016 financial guidance as summarized below.
2016 Financial Guidance Summary
Previous Revised
Total revenues $178 million – $180 million
Year-over-year mid-single digit % non-GAAP revenue increase $180 million – $182 million
Year-over-year mid to upper single digit % non-GAAP revenue increase
Product revenues Year-over-year mid-single digit % non-GAAP revenue increase Year-over-year mid to upper single digit % non-GAAP revenue increase
Tissue processing revenues Year-over-year mid-single digit % non-GAAP revenue increase Year-over-year mid-single digit % non-GAAP revenue increase
Gross margins Approximately 63% Approximately 64%
R&D expenses $13.0 million – $15.0 million $13.0 million – $15.0 million
Non-GAAP adjusted income per common share $0.29 – $0.32 $0.32 – $0.34
We continue to see the significant benefits of the initiatives that we have implemented in the last two years, none of which would have been successful without the dedication, commitment and hard work of our employees. Thank you once again for all you do in helping to improve patients’ lives and for making this quarter another successful one.