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Cryolife (CRY) Earnings Miss, Revenues Top Estimates in Q4

Zacks Equity Research

CryoLife, Inc. CRY reported fourth-quarter 2018 adjusted earnings per share (EPS) of 5 cents, down 64.3% year over year. This figure missed the Zacks Consensus Estimate by 58.33%.
 
On a reported basis, the company saw loss of 5 cents a share, narrower than the year-ago loss of 9 cents.
 
For the full year, adjusted EPS came in at 26 cents, down 45.8% from a year ago. This figure missed the Zacks Consensus Estimate by 21.2%.

CryoLife raked in total revenues of $67.8 million in the quarter under review, up 28.4% from the year-ago period. This figure also beat the Zacks Consensus Estimate by 1.2%. The upside was driven by significant increase in sales of some key products like JOTEC, On-X and tissue processing.

For the full year, total revenues came in at $262.8 million, marking an increase of 38.5% from the year-ago period. This figure surpassed the Zacks Consensus Estimate by 0.7%.

Geographic and Segmental Details

The company reported revenues from domestic and international markets. From the domestic market, i.e. the United States, the company earned total revenues of $36.5 million, showing an increase of 5.5% from the year-ago quarter. From international markets, the company earned $31.3 million, a remarkable rise of 71.9% year over year.

 

CryoLife, Inc. Price, Consensus and EPS Surprise

 

CryoLife, Inc. Price, Consensus and EPS Surprise | CryoLife, Inc. Quote



Cryolife’s operations are divided into two major categories, products and preservation services. Within the product category, Bioglue and Biofoam revenues totaled $17.9 million, up a meager 0.6% from the year-ago quarter. JOTEC revenues grossed $16.7 million, a stupendous rise of 307.3% year over year. On-X raked in $11.3 million, up 14.1%. Cardio-Genesis Cardiac Laser Therapy earned $1.7 million, down 1.7%. PerClot revenues were $0.95 million, reflecting an increase of 6.7% from the year-ago quarter. PhotoFix earned $0.69 million, up 35.2%.

In the preservation services category, cardiac tissue revenues totaled $9 million, marking an increase of 4.7% from the year-ago quarter. Revenues for the vascular tissue segment came in at $9.4 million, up 3.3%.

Margin details

In the quarter under review, gross profit grew 24.3% year over year to $45.2 million. However, gross margin contracted 218 basis points to 66.7%.

General, administrative, and marketing expenses rose 17.9% year over year to $35.6 million. Research and development expenses increased 6.6% from the year-ago quarter to $6.8 million. In the fourth quarter of 2018, Cryolife reported an operating profit of $2.8 million against operating loss of $0.20 million in the year-ago quarter.

Guidance for 2019

Cryolife has provided a financial guidance for 2019. Total revenues at the end of 2019 were projected in the range of $280-$284 million. The Zacks Consensus Estimate for full-year revenues is pegged at $282.8 million, within the guidance. Adjusted EPS for 2019 is estimated by Cryolife in the band of 28-32 cents. The Zacks Consensus Estimate for the same is 48 cents, much above the high end of the guided range.
 
Our take

Cryolife exited 2019 on a mixed note. Fourth-quarter EPS figure declined year over year due to increasing expenses from the product pipeline and investment in global expansion. On a positive note, both fourth quarter and year-end revenues surged significantly from the year-ago figures. Revenues from both domestic and international markets rose as well. The company witnessed year-over-year growth in revenues across majority of its operating segments. The company expects to deliver high revenue growth over the next five years banking on its JOTEC and On-X products. Cryolife plans to continue investing in research and development in order to expand its product portfolio.

Zacks Rank & Key Picks

Cryolife has a Zacks Rank #3 (Hold). A few better-ranked medical stocks are Abbott Laboratories ABT, AngioDynamics Inc. ANGO and CONMED, Corp. CNMD. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Abbott reported fourth-quarter 2018 adjusted EPS of 81 cents, in line with the Zacks Consensus Estimate. Revenues of $7.77 billion were below the Zacks Consensus Estimate of $7.79 billion. The stock has a Zacks Rank #2 (Buy).

AngioDynamics’ fiscal second-quarter adjusted EPS of 22 cents exceeded the Zacks Consensus Estimate by a penny. Revenues totaled $91.5 million, beating the consensus estimate by 2.9%. The stock sports a Zacks Rank #1.

CONMED delivered fourth-quarter adjusted EPS of 73 cents, in line with the Zacks Consensus Estimate. Revenues of $242.4 million beat the Zacks Consensus Estimate of $229.2 million. The stock carries a Zacks Rank of 2.

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