CryoLife, Inc. posted a robust 50% rise in adjusted earnings to 12 cents per share in the third quarter of the year from 8 cents in the year-ago quarter. With this, earnings per share significantly outdid the Zacks Consensus Estimate of 4 cents. Adjusted net earnings soared 43.8% to $3.2 million from $2.3 million in the third quarter of 2012.
Reported net income was $3.2 million, or 11 cents per share in the quarter compared with $1.5 million or 6 cents per share in the third quarter of 2012.
Revenues were a quarterly record of $36.3 million, up 8% from $33.4 million in the third quarter of 2012. Thanks to the strong growth in Products segment, including positive trends in our BioGlue and Revascularization Technologies businesses.
Total gross margins were flat at 64% in the quarter compared with the year-ago quarter. Adjusted pre-tax income for the quarter surged 43.7% to $5.1 million from $3.6 million a year ago.
Revenues from the Product segment grew 11.2% to $18.8 million from $16.9 million in the third quarter of 2012. Product gross margins rose to 81% from 82% in the third quarters of 2012.
Under the segment, Surgical sealant and hemostat (consisting of BioGlue and PerClot) revenues went up 12% to $15.1 million due to increases in BioGlue revenues in both international and domestic markets as well as a rise in PerClot revenues.
Revascularization technologies revenues scaled up 14.3% to $2.4 million in the quarter driven by the sale of laser consoles, partially offset by a fall in handpiece shipments. Meanwhile, HeRO Graft revenues were flat at $1.4 million for the third quarter compared with the year-ago level.
Revenues from Preservation services segment rose 6.1% to $17.4 million in the quarter. Gross margins in the segment increased to 46% from 45% in the third quarter of 2012.
Under the segment, Vascular preservation services revenues went up 8%, driven by an increase in average service fees, partially offset by a decrease in unit shipments of vascular grafts. Cardiac preservation service revenues rose 4% from the third quarter of 2012, primarily due to an increase in average service fees.
During the quarter, CRY purchased 24,000 shares of its stock for $146,000, reflecting an average price of $6.20. During the first nine months of 2013, Cryolife repurchased 253,000 shares at an average price of $6.03, implying aggregate purchases of $1.5 million.
As of Sep 30, 2013, Cryolife had cash, cash equivalents, and restricted cash and securities of $23.0 million compared with $18.3 million as of Dec 31, 2012. Of the total amount, $5.3 million was designated as restricted cash and securities, primarily due to a financial covenant requirement under the Company's credit agreement.
For the first nine months of 2013, Cryolife’s net cash flows from operations increased marginally to $11.3 million from $11.0 million for the same period of 2012.
CRY reiterated its revenue guidance of $139–$141 million for 2013. However, the company narrowed its Product revenue growth guidance to 10–12% from 9–13%.
Cryolife has upgraded its earnings per share guidance to 58–60 cents from 24–27 cents due to strong performance in the third quarter and the receipt of $15.4 million for its Medafor shares due to its acquisition by C.R. Bard Inc. in Oct 2013.
The upgraded EPS is much higher than the current Zacks Consensus Estimate of 36 cents. The forecasted EPS included 29 cents for the sale of the company's investment in Medafor, and excludes expenses related to potential future business development and litigation, and the effect of share repurchases.
Kennesaw, GA-based Cryolife is a leading medical device company that focuses on cardiac and vascular surgery. Currently, it retains a Zacks Rank #1 (Strong Buy).
Other stocks that are also performing well in the medical instruments industry include Mindray Medical International Ltd and Natus Medical Inc. . Both of them carry a Zacks Rank #1 (Strong Buy).