On-X aortic heart valve. Image source: CryoLife

What: CryoLife (NYSE:CRY) is up 14% at 12:30 p.m. EDT after reporting second quarter earnings and increasing its 2016 guidance Tuesday.

So what: Revenue increased 33% year over year, but that was primarily due to CryoLife's acquisition of On-X Life Technologies earlier this year. Subtracting out the recently acquired products, sales were up just 2.9% year over year.

While that internal growth doesn't sound so great, it includes declining sales of its HeRO Graft product line, which was sold to Merit Medical Systems (NASDAQ:MMSI) in February. As part of the sales agreement with Merit Medical, CryoLife agreed to manufacture HeRO Graft products for up to six months, after which Merit Medical will take over.

This quarter also includes an unfavorable year-over-year comparison for ProCol Vascular Bioprosthesis, which CryoLife sold to LeMaitre Vascular (NASDAQ:LMAT) in March, resulting in no ProCol sales in the second quarter.

If you subtract sales of both those sold products and add On-X's revenue generated by its previous owner to CryoLife's second quarter 2015 revenue, sales were up a not-too-shabby 9% year over year.

With improving margins, adjusted earnings looked even better, increasing to $0.13 per share, compared to $0.04 per share in the year-ago quarter.

Now what: Management raised 2016 revenue guidance slightly and now expects sales of $180 million to $182 million, up from previous guidance of $178 million to $180 million. Likewise, the bottom-line guidance was ratcheted upward with adjusted earnings now expected to fall in the $0.32 to $0.34 per share range compared to the previous range of $0.29 to $0.32 per share.

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