CryoLife (NYSE: CRY) is up 10.5% at 12:37 p.m. EDT after announcing solid first-quarter earnings.
Revenue increased 5% year over year in the first quarter, which was driven by growth in sales of the On-X aortic heart valve and tissue products. CryoLife has made a strategic decision to focus on certain markets, so revenue was hurt by the absence of sales of its HeRO and ProCol products, which it sold off last year, and a decrease in TMR revenues, but the strategy seems to be paying off.
Adjusted earnings were flat year over year at $3.2 million in the first quarter of this year and last, although there are more shares outstanding now, so on a per-share basis, adjusted earnings fell $0.01 to $0.09 per share. The year-over-year increase in revenue didn't fall to the bottom line because CryoLife spent more on research and development than it did in the year-ago quarter, which is an investment in the future.
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Management reiterated its guidance for the year with expectations for adjusted product revenue and tissue processing revenue to both produce year-over-year grow in the mid-single digits. Adjusted earnings per share are expected to be in the $0.40 to $0.43 range, so management is predicting that earnings will pick up a little as the year progresses.
Investors will get a look at how well On-X might be able to drive CroyLife's sales higher next month at the American Association for Thoracic Surgery meeting, where the company's academic collaborator will present data from the PROACTclinical trial.
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