Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

CryoLife Inc. (NYSE:CRY)

Q4 2010 Earnings Conference Call

February 17, 2011, 10:00 am ET

Executives

Steve Anderson – President and CEO

Ashley Lee – EVP, COO & CFO

Analysts

Matt Palmer – Roth Capital Partners

Raymond Myers – The Benchmark Company

Joseph Munda – Sidoti & Company

Tim Lee – Piper Jaffray

Operator

Greetings, and welcome to the CryoLife fourth quarter and year end 2010 financial conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instruction) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host Steve Anderson, President and CEO for CryoLife. Thank you Mr. Anderson you may begin.

Steve Anderson

Good morning everyone. This is Steve Anderson, CryoLife’s CEO, and I would like to welcome you to CryoLife’s year end conference call. With me today is Ashley Lee, the company’s Executive Vice President, COO and CFO.

This morning we announced record revenues for CryoLife of $116.6 million and earnings of $0.14 per share. Ashley will discuss the revenues and earnings in more detail in just a few minutes. The fourth quarter of 2010 was a very busy time for CryoLife management. As you will recollect we closed on a manufacturing and distribution agreement with Starch Medical for a powdered hemostat product that they have been marketing in Europe. This assures our participation in a worldwide market estimated to be about $2 billion. This manufacturing and distribution agreement gives us access to all medical specialties in our territory. I will comment more completely on this in a few minutes.

The agenda for the conference call today is as follows

Ashley will discuss today’s press release in detail and will comment on the growth that we have seen in our business in 2010. I will comment on the manufacturing and distribution agreement with Starch Medical and our international and domestic strategies for launches this product throughout the world. I will also comment on the recent approval of BioGlue in Japan. I will comment on the pending Humane Device Exemption approval of the SynerGraft processed Aortic Valve. And I will comment on the BioFoam European post market study and the BioFoam IDE study that is beginning in the U.S.

After my comments have been completed Ashley will return to give you some financial guidance for the rest of 2011. After the guidance comments we will open the call up for questions. At this time Ashley will comment on today’s press release.

Ashley Lee

Thanks Steve. To comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995 I would like to make the following statement. Comments made in this call which look forward in time, involve risk and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements made as to the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future. Including the guidance for 2011 that I will provide in a moment.

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 previously filed Form 10-K for the year ended December 31, 2009 and our previously filed Form 10-Qs for the quarters ended March 31, June 30 and September 30, 2010, and our Form 10-K for the year ended December 31, 2010 which we expect to file shortly and in the press release that went out this morning.

On the call today I will discuss certain non-GAAP financial measures. You can also find the comparable GAAP measures and the reconciliation of these non-GAAP measures to the applicable GAAP measures as scheduled to 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 fourth quarter and full year of 2010 we set all time fourth quarter and full year revenue records of $29.2 million and $116.6 million for the periods ended December 31, 2010.

As of December 31, 2010 we had $40.8 million in cash, cash equivalents and restricted securities which includes $1.7 million received from the DOD and $5.3 million in restricted securities. The $40.8 million reflects the $6.75 million paid in September 2010 in connection with the license of the PerClot technology $5.8 million paid during 2010 for the repurchase of shares of CryoLife common stock and $2.4 million paid earlier this year to invest in medical or common stock.

We generated cash flow from operations of $7 million in the quarter and $20.8 million for the year ended December 31, 2010. We expect to continue to generate significant cash flow from operations going forward which will allow us to continue our efforts on the business development firm. Net income for the fourth quarter of 2010 was $2.1 million or $0.08 per basic and fully diluted common share. We also recorded pretax charges in the fourth quarter of 2010 of approximately $474,000 related to business development activities and $268,000 in cost associated with our litigation with Medafor.

Net income for the full year of 2010 was $3.9 million or $0.14 per basic and fully diluted common share. Excluding pretax charges of $3.5 million for acquired in-process R&D related to the license of the PerClot technology $3.6 million for the impairment of our investment in medical or common stock and $1.6 million related to the write down at HemoStase inventory net income before items for the full year of 2010 was $9.5 million or $0.34 per basic and fully diluted common share.

We recorded pretax charges in the full year of 2010 of approximately $1.4 million in costs associated with our litigation with Medafor $1 million related to business development activities and $729,000 in connection with the write off of capitalized legal expenses associated with our BioGlue intellectual property rights in Germany. Additionally we recorded a $1.3 million gain on valuation of the derivative related to the investment in Medafor common stock.

Cardiac revenues for the fourth quarter of 2010 increased 5% compared with the corresponding period of 2009 and increased 7% for the full year of 2010 compared to the corresponding period of 2009. The increase for the quarter was primarily due to an increase in shipments of cardiac valves. The increase in the full year period was primarily due to a 10% increase in shipments at cardiac valves primarily due to increase in demand for the CryoValve SG Pulmonary Valve in domestic markets partially offset by a decrease in shipments of cardiac patches.

Vascular revenues decreased 1% for the fourth quarter of 2010 and increased 5% for the full year of 2010 compared to the corresponding periods in 2009. The decrease for the fourth quarter resulted primarily from increasing pressure from lower cost competitive products and the increase for the full year resulted primarily from the 2% increase in unit shipments and an increase in average service fees.

Product revenues which consists primarily of BioGlue and HemoStase increased 4% in the fourth quarter and full year of 2010 compared to the corresponding periods in 2009. For the three month and full year periods HemoStase revenue increased partially offset by a slight decrease in BioGlue revenues. Fourth quarter of 2010 also included $264,000 of PerClot revenue as we began to roll out PerClot in international markets.

Total gross margins were 60% for the fourth quarter of 2010 compared to 61% for the fourth quarter of 2009. Total gross margins excluding the write off of $1.6 million for the HemoStase inventory were 60% for the full year of 2010 compared to 62% in the full year of 2009. Preservation services gross margins for the fourth quarters of 2010 and 2009 were 39% for each period and 40% in the full year of 2010 compared to 42% in the full year of 2009.

Product gross margins for the fourth quarter of 2010 were 80% compared to 82% in the corresponding period in 2009. Product gross margins excluding the write down of $1.6 million of HemoStase inventory were 81% in the full year of 2010 compared to 83% in the full year of 2009. General administrative and marketing expenses for the fourth quarter of 2010 were $12.2 million compared to $12.6 million for the fourth quarter of 2009. These expenses for the fourth quarter of 2010 included approximately $474,000 in costs related to business development activities and $268,000 in costs related to our litigation with Medafor.

General administrative and marketing expenses for the full year of 2010 were $49.1 million compared to $50 million for the full year of 2009. The full year of 2010 included a charge of approximately $1.4 million in costs related to our litigation with Medafor $1 million related to business development activities and $729,000 related to the write off of capitalized legal expenses associated with our BioGlue intellectual property rights in Germany.

R&D expenses were $2 million and $1.4 million for the fourth quarters of 2010 and 2009 and $5.9 million and $5.2 million for the full year of 2010 and 2009. R&D spending in 2010 primarily focused on PerClot SynerGraft tissues and products and BioFoam. And $30.5 million of acquired in-process R&D expense was for an intangible asset for PerClot distribution and manufacturing rights in the U.S. and certain other countries where PerClot does not have current regulatory approvals. This amount was therefore expensed upon acquisition.

During the fourth quarter and full year of 2010 we purchased 263,000 and 1 million shares of our common stock at average prices of 570 and 556 per share. This resulted in aggregate purchases of $1.5 million for the fourth quarter and $5.8 million for the full year of 2010. You can refer to our SEC filings for detailed discussions of factors affecting our results of operations including our Form 10-K that we plan to file shortly. Now I will turn it back over to Steve.

Steve Anderson

As I stated earlier in the call the recent license distribution and manufacturing agreement that we signed with Starch Medical for their powdered hemostat PerClot assures CryoLife’s participation in worldwide market estimated to be in excess of $2 billion. The Starch powered hemostat product PerClot appears to be the most effective powdered hemostat in the world. Our scientists estimate that it absorbs two to three times more water than the other powdered hemostat products that are currently available. For the ten weeks last year that we were able to market PerClot internationally we sold $264,000 worth of the product. We shipped about $838,000 in total powdered hemostat sales internationally during the fourth quarter.

PerClot is an extremely complementary product to our BioGlue surgical adhesive as it can be used in wet surgical fields and it will biodegrade in about 48 hours. It initiates hemostats immediately when it is confronted by blood from a wound. So far in the early distribution and introduction phase of the marketing of PerClot we have sold it in 17 separate countries throughout the world. We are actively engaged in securing approval of PerClot in additional countries.

In preparation for our U.S. FDA Investigational Device Exemption submission animal efficacy studies in the bio compatibility tests are ongoing for PerClot and will be completed in early March of this year. A key opinion leader meeting will be held at CryoLife at first week of March of this year to finalize the investigational plan. We expect to file the company’s IDE at the end of this quarter. Our proposed investigational study is designed to enroll a total of approximately 300 subjects across 10 investigational sites in the clinical trial.

It is our expectation that we will begin manufacturing PerClot in our corporate headquarter facilities in late 2011. Management believes that the U.S. market for the powdered hemostat is about $730 million. Late last year we announced that our Japanese distribution partner Century Medical had received product approval of BioGlue in Japan. Japanese regulatory authorities are completing their required quality system review and we anticipate shipping our first order of BioGlue to Century Medical before the end of this quarter. Their initial stocking order is for 40 boxes for $105,000. We estimate the market for a product like BioGlue in Japan is about $10 million a year. Management estimates that the first 12 month sales in Japan will be close to $600,000.

We have completed a European post market study of BioFoam in liver resection surgery and the results have met our expectations. The results of the 55 patient study has been accepted for poster presentation at the May 2011 Association of Surgeons of Great Britain and Ireland meeting that will be held in the UK. BioFoam has been shipped to accounts in 13 countries in Europe. During 2010, we sold $130,000 worth of BioFoam internationally. United States IDE pilot study has begun and we have consented the first of 20 patients in its initial U.S. study.

Our present European surgical adhesive and hemostatic agent product platform will enable us to effectively compete to get across all aspects of the surgical adhesive market. We have a fast acting hemostatic agent PerClot that works well in wet surgical fields. And we have a choice of a surgical foam BioFoam for parenchymal organ sealing as well as a very strong long acting surgical adhesive BioGlue that is the market leader in its field. These three hemostatic adhesive products will be the basis of a product platform that will enable us to compete effectively for a hospital buying groups tender offers and should give us an excellent opportunity to expand our market share.

This type of complementary product offering should also provide the analysts who follow the company with a good idea of our marketing strategy when all three of these products are approved in the United States. As you know we have been working on a humanitarian device exemption submission for the SynerGraft processed decellularized aortic human heart valve. As required by FDA we have completed implantation of 12 Ovarian holograph 8 of them were processed with the SynerGraft process and 4 were processed with standard processing technology. They all have a 150 day evaluations completed and 11 of the 12 animals that had surgery the last animal will complete the follow up period in April of 2011.

The echocardiographic results indicate the SynerGraft processed valves remain confident with low pressure radiant which are key indicators of valve performance. Our bench testing of the valves will be completed on March 11 with the valves having completed 80 million cycles. So far there are no signs of valve deterioration. We anticipate submitting our data for the HDE for the FDA by the end of June. FDA review of an HDE is usually required for 75 days from the date of the submission. This could lead to the approval of the SynerGraft processed Aortic Valve HDE sometime in late September of this year. That concludes my comments and now I will turn the call over to Ashley for the purpose of giving you some guidance for the rest of the year.

Ashley Lee

We expect total revenues for the full year of 2011 to be between $120 million and $126 million, which includes between $0.5 million and $1 million related to BioFoam funding, received from the DOD. We expect tissue processing revenues to increase between mid single and low double digits on a percentage basis in 2011 compared to 2010. BioGlue and BioFoam revenues to increase by mid single digits on a percentage basis in 2011 compared to 2010. With revenues from powdered hemostats including HemoStase and PerClot to be between $4 million and $6 million. R&D expenses are expected to be between $10 million and $12 million in 2011. We expect earnings per share of between $0.26 and $0.30 in 2011.

We expect our effective income tax rate for 2011 to be around 40%. We continue to evaluate opportunities on the business development fronts at it means to accelerate the growth of the company and we continue to invest in our R&D pipeline which reflected in our guidance. Given our strong financial performance and cash position we are well positioned front to identify complementary products or companies that we can acquire to leverage our existing infrastructure and sales force. We continue to believe business development efforts are prudent use of our cash reserves in the strategy that will create value for our shareholder. That concludes my comments and now I will turn it back over to Steve.

Steve Anderson

Thank you Ashley and now we are going to open up the call for questions.

Question-and-Answer Session

Operator

Thank you. We will now be conducting the question and answer session. (Operator Instructions) Thank you. Our first question today is from the line of Matt Palmer with Roth Capital Partners. Please proceed with you question.

Matt Palmer – Roth Capital Partners

Hi good morning Steve and Ashley how are you?

Steve Anderson

Good morning.

Ashley Lee

Hey Matt.

Matt Palmer – Roth Capital Partners

First question actually on the guidance side just a couple of moving parts first on the revenue can you help us understand how as HemoStase comes out I believe at the end of March how should we expect kind of the revenue progression this year to differ from prior years and then secondly where are you with respect to R&D in terms of PerClot and is that ramping or have we seen a pretty quick level to base up here in Q4.

Ashley Lee

Okay, I will try to answer your first question regarding PerClot and HemoStase revenues in 2011. To give you a maybe kind of a basis for you know what we are projecting in 2011 if you look at 2010 we generated about $2.4 million in international revenues from powdered hemostats that’s the base of business that we are working off as we go into 2011. Has been documented we will seize to distribute HemoStase in the March of this year. So from the same point of powdered hemostats in general we expect the first quarter to be pretty good we will obviously drop off a little bit in the second quarter because we are going to be distributing fairly in international markets and we expect the ramp you know the revenues to ramp up throughout the remainder of the year as we move forward.

So that was on the revenue side on the R&D side in the fourth quarter of 2010 we’ve spent roughly $0.5 million maybe a little bit more than that on PerClot R&D and that was predominantly related to the large animal studies necessary to submit for the IDE which we Steve mentioned earlier we hope to get in at the end of this quarter of very early in the second quarter. Our anticipation is that we will be enrolling patients later this year. So you know there might be a little bit of a low in expenses in the near term but once we begin enrollment we expect it to be ramping and we will be spending you know a significant amount of money and a lot of the increase that we are seeing year over year in R&D expenses is related to PerClot.

Matt Palmer – Roth Capital Partners

Okay, great on the business development side it appears to be one of your priorities this year I guess again a two part question the opportunities that you called out in terms of expenses in the fourth quarter are those still ongoing and available to you and then maybe you could just generalize and help us understand what you are looking forward perspective to stage of regulatory or commercial status or anything you might acquire in license.

Ashley Lee

Okay, as evidenced in our press release and what we said on the call a little bit earlier. We spent significant amount of money in the fourth quarter evaluating more than one opportunity on the business development front and those options remain very viable at this time. So that’s all I will say about you know the opportunities that we are looking at but we are looking at more than one and we are finding some interesting things out there.

Your second question was more focused on maybe it would generally we might be looking at an what stage you know our preference is obviously to find things that are related to the markets that we are currently distributing into so cardiac and vascular surgery so those are obviously curious that we’ve remained very focused on we also would preferably like to acquire revenues you know so we are focused on acquiring revenues and if not immediate opportunities where they are very near term pathway revenues. So that’s kind of what we are focusing on.

Matt Palmer – Roth Capital Partners

Okay, I will let someone else get on. Thanks guys.

Operator

Our next question is from the line of Joe Munda Sidoti and Company. Please state your questions.

Steve Anderson

Hello Joe. How are you?

Operator

Mr. Munda your line is open for your question. Okay. We will move on to Raymond Myers with The Benchmark Company. Please go ahead with your question sir.

Raymond Myers – The Benchmark Company

Yeah, thank you I’m here. Ashley and Steve could you maybe start with reminding us how many sales people do you have now and what are your plans to expand that.

Steve Anderson

In round numbers we have about 50 in the field in United States and we are direct in the UK, Germany and Austria with approximately 10 people in the field over there.

Raymond Myers – The Benchmark Company

Great and in the past we’ve, you’ve mentioned a porcine dermis product for Hernia repair that you are expecting to launch early in 2011 where does that stand.

Steve Anderson

We continue to remain in discussions with some potential partners to try and get that product commercialized if all goes according to plan we could be I’m referring actually to ProPatch right now Ray and with ProPatch we could potentially be first in human implants late this quarter or early in the second quarter. The porcine dermis product that we are working on remains in the R&D shop at this point we are getting very close to a design lock on that particular product and obviously the thought would be to take both of these products ProPatch to build on pure cardio product as well as the porcine dermis product and hopefully work with the same partner for those two products in the general surgery area.

Raymond Myers – The Benchmark Company

And would those require flat 10-K.

Ashley Lee

ProPatch already has a flat 10-K but porcine dermis product would require a flat 10-K.

Raymond Myers – The Benchmark Company

Okay. Good. When were you targeting PerClot approval and launch?

Steve Anderson

I think that PerClot’s approval will be sometime towards the end of 2012 or early 2013 the clinical study that we are going to run is includes about 300 patients and will be across a number of different specialties for a number of different indications. But I would say the soonest we could get it done at the end of 2012 probably a more timely expectation is early 2013.

Raymond Myers – The Benchmark Company

And that’s for approval or for finishing this study.

Steve Anderson

That’s approval.

Raymond Myers – The Benchmark Company

And so well let’s start with the study through this to finish the 300 patient study if you would follow your IDE at the end of March when do you think you can finish the study.

Steve Anderson

It will go pretty quickly but I don’t think that we would be finished with the 300 patient enrollment until fourth quarter of 2011.

Raymond Myers – The Benchmark Company

And that leaves about a year for FDA is that your thought?

Steve Anderson

Yeah.

Raymond Myers – The Benchmark Company

Great, your HemoStase revenue was quite strong in the fourth quarter is that related to winding down the sales and a desirable push out the last of your inventory before you can’t sell it anymore or does that more represent underlying strength in the market.

Ashley Lee

I think it represents both you know I mean you know this full area of powdered hemostatic agents is rolling and that’s why we’ve made the commitment to be in it long-term with the acquisition of the PerClot distribution rights and at the same time you know as you mentioned we do have some inventory that we are trying to sell prior to our discontinuing distributing HemoStase which is going to be in late March so it’s a combination of both.

Raymond Myers – The Benchmark Company

So should we expect similar sales on Q1 as if we saw in Q4.

Ashley Lee

For HemoStase.

Raymond Myers – The Benchmark Company

Yeah.

Ashley Lee

No.

Raymond Myers – The Benchmark Company

Lower, higher?

Ashley Lee

That would be lower than the fourth quarter of 2010 and I think that our guidance for again for the full year for all powdered hemostats is between $4 million and $6 million.

Raymond Myers – The Benchmark Company

Okay, and is some of the HemoStase that you might be selling in Q1 product that is already written off?

Ashley Lee

Potentially.

Raymond Myers – The Benchmark Company

So there could be a potential of a reversal of the prior charges?

Ashley Lee

I wouldn’t say a reversal of the prior charges we could be recognizing some revenue for which there is no associated – costs associated with the revenues so not by that finish in reversal but we could have some revenue with very high gross margin on it.

Raymond Myers – The Benchmark Company

Do you expect that to be potentially meaningful to earnings in the quarter.

Ashley Lee

I wouldn’t expect it to be meaningful to earnings in the quarter.

Raymond Myers – The Benchmark Company

Okay well.

Ashley Lee

It might be meaningful to cash flow though.

Raymond Myers – The Benchmark Company

Nice your cash flow is already very good. You’ve had a share buyback consistently through 2010 do you intend to continue that in 2011?

Ashley Lee

The buyback has continued into the first couple of months of 2011 and just to give you an idea of where we are we have purchased roughly about 1.3 million to 1.4 million stock in the first two months 2011 at an average price of you know somewhere around 5.25 [ph] that’s a guess.

Raymond Myers – The Benchmark Company

So you’ve purchased $1.3 million or shares?

Ashley Lee

Dollars.

Raymond Myers – The Benchmark Company

Dollars.

Ashley Lee

An average price of somewhere around 5.25 [ph] you know give or take.

Raymond Myers – The Benchmark Company

25 in Q1 great. Good. And what was the fourth quarter capital expense.

Ashley Lee

Capital expenditures?

Raymond Myers – The Benchmark Company

Yeah CapEx.

Ashley Lee

You know I don’t have that number right at my finger tips Ray you know for the entire year of 2010 it was a little over $2 million and for 2011 you know we would anticipate CapEx to be somewhere between $1.5 million to $2 million. And it’s predominantly maintenance CapEx and then there is some CapEx probably $100,000 to $200,000 to the most associated with setting up the PerClot manufacturing process.

Raymond Myers – The Benchmark Company

Okay, excellent.

Steve Anderson

Great.

Raymond Myers – The Benchmark Company

Thank you.

Operator

Thank you. Our question is going to be coming from the line of Joseph Munda of Sidoti & Company. Please go ahead with your question sir.

Joseph Munda – Sidoti & Company

Good morning guys.

Ashley Lee

Hello Joseph.

Steve Anderson

Good morning.

Joseph Munda – Sidoti & Company

Died out there from technical difficulties had to switch phones. A lot of the questions I had were already answered but I was wondering if you guys shed a little bit more light on the government agreement with BioFoam and is that something that you guys are aggressively pursuing more government contracts.

Tim Lee – Piper Jaffray:

Well Department of Defense has been funding that for the last few years and that has to come through an appropriation committee in the house of representatives and we are anticipating that that will continue throughout 2011 I don’t know if it will continue after that.

Joseph Munda – Sidoti & Company

Okay and is it was it a open bidding process were you competing with other companies or did the government contact you.

Steve Anderson

Government contacted us and as far as I know there wasn’t any kind of a bidding contest or anything.

Joseph Munda – Sidoti & Company

Okay, thank you and that’s all I had.

Operator

Thank you. Our next question is from the line of Tim Lee with Piper Jaffray. Please state your question sir.

Tim Lee – Piper Jaffray

Yes good morning and thanks for taking the question. Just in terms of PerClot what’s been kind of the early feedback from customers are you starting to see reorders or are you seeing but definitely seeing customers move away from this.

Steve Anderson

The early response to the product has been excellent. And when you compare it to other powdered hemostats the chemical reaction of PerClot is visibly striking. It immediately absorbs large quantities of fluid. It forms a very strong a much stronger clot than competitive products. It’s a stickier clot and more effective clot I believe I could say that and generally the physicians are impressed with the chemical reaction of how it works. Next time we see you I will try to remember to put some in my pocket and show you.

Tim Lee – Piper Jaffray

Excuse me but given some of those characteristics that you are talking about the fact that you do it is visually more effective and the like are you giving a premium for this relative to HemoStase or you is it being priced comparably or is it being priced.

Steve Anderson

Priced comparably.

Tim Lee – Piper Jaffray

Right okay, okay. And then just kind of certainly back on the earlier question in terms of the HemoStase inventory write off that was taken last quarter in terms of you working through your HemoStase inventory is it kind of in line with what you are thinking or is it reducing quicker than you thought any color you could provide on that front please.

Ashley Lee

It was pretty much in line with what we were thinking I think as of the end of the year we had about $550,000 of cost to HemoStase inventory still in inventory so you know our goal was obviously to distribute all that and do more but you know as it stands right now it’s pretty much in line with what we had anticipated.

Tim Lee – Piper Jaffray

Got it and then just lastly in terms of your cash you are sitting on a good in a good chunk of cash you are generating giving around so that if you have to prioritize your use of cash how would business development rank relative to share buybacks I mean in, on a business development side how big are the assets that you are looking at should we think of a large portion of this cash should be used for business development or should we think of that a large portion would be used for share buyback.

Ashley Lee

If we had to prioritize I think that business development is first and ahead of share buybacks. You know when we initiated our share buyback last year or were in the past you know we did that recognizing the fact that there were some business development assets out there that we wanted to pursue and we thought that we could do both and that’s what we have been doing and then so going forward we will continue to balance you know the assets that we are pursuing as well and balance that with our ability to continue share buyback but business development is definitely taken the priority at this particular time.

As far as I think the size of the assets that we are looking at we are not going to limit ourselves to size I mean obviously we’ve got $41 million in cash as of the end of the year we have credit facilities that are available to us. We have the ability to take on some leverage if we need to you know depending on what opportunity presents itself. So you know we are not going to limit ourselves to an acquisition being too small or too large we are going to pursue things that make sense for our organization going forward and make sure that they did in strategically with you know where Steve wants to take the company and we will leave it at that.

Tim Lee – Piper Jaffray

Great, thank you I will jump back in queue.

Operator

Ladies and gentlemen we have reached the end of our allotted time for question and answer session today. I will now turn the call back over to management for closing comments.

Steve Anderson

Thank you very much for joining us today and we look forward to talking with you at the end of the first quarter.

Operator

This concludes today’s teleconference. You may disconnect your line at this time. Thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: CryoLife CEO Discusses Q4 2010 Results - Earnings Call Transcript
This Transcript
All Transcripts