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.
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 PROACT clinical trial.