CryoLife Reports 13% Revenue Growth for Third Quarter 2012

          CryoLife Reports 13% Revenue Growth for Third Quarter 2012

Increases Full Year 2012 Revenue and EPS Guidance

Updated dial-in information for the 10 a.m. teleconference is contained in the
press release below

Third Quarter Highlights:

- Total revenues grew 13% year-over-year to $33.4 million

- Product revenues grew 13% year-over-year to $16.9 million

- Tissue processing revenues grew 12% year-over-year to $16.4 million

- EPS of $0.06, or $0.08 on a non-GAAP basis

- Generated $6.1 million in cash flow from operations

- Initiated $0.025 per share quarterly dividend

PR Newswire

ATLANTA, Oct. 30, 2012

ATLANTA, Oct. 30, 2012 /PRNewswire/ --CryoLife, Inc. (NYSE: CRY), a leading
tissue processing and medical device company focused on cardiac and vascular
surgery, announced today its results for the third quarter and first nine
months of 2012. Revenues for the third quarter of 2012 increased 13 percent
to a record $33.4 million compared to $29.7 million for the third quarter of
2011. Revenues for the first nine months of 2012 increased 11 percent to a
record $98.9 million compared to $89.2 million for the first nine months of
2011.

Steven G. Anderson, president and chief executive officer, said, "We achieved
another quarter of double-digit revenue growth which, coupled with our
improving operating structure, contributed to strong cash flow generation and
solid bottom line results. During the quarter we initiated a cash dividend,
demonstrating the consistency of our cash flow and our commitment to
increasing shareholder value. We made good progress in the integration of the
Hemosphere acquisition, and we continue to see a significant opportunity to
grow this business as part of CryoLife. In addition, our tissue processing
segment results came in ahead of our expectations. Accordingly, we have
raised our full year revenue and EPS guidance for the second time this year,
with top line growth now expected to be 10 to 11 percent and EPS expected to
be in the range of $0.25 to $0.27 cents."

Net income for the third quarter of 2012 was $1.5 million, or $0.06 per basic
and fully diluted common share, compared to net income of $2.0 million, or
$0.07 per basic and fully diluted common share, for the third quarter of 2011.
Net income for the third quarter of 2012 included $796,000 in business
development and integration charges primarily related to the acquisition of
Hemosphere and $130,000 related to litigation expense. Excluding these
charges, proforma non-GAAP earnings per share would have been $0.08 in the
third quarter of 2012. Net income for the third quarter of 2011 included $1.1
million in costs related to business development and integration, and $881,000
related to litigation expenses. Excluding these charges, proforma non-GAAP
earnings per share would have been $0.09 in the third quarter of 2011.

Net income for the first nine months of 2012 was $5.9 million, or $0.21 per
basic and fully diluted common share, compared to net income of $5.5 million,
or $0.20 per basic and $0.19 per fully diluted common share, for the first
nine months of 2011. Net income for the first nine months of 2012 included a
pretax benefit of $4.7 million related to the settlement of the litigation
with Medafor, pretax charges of $4.1 million related to the settlement of the
litigation with CardioFocus, $1.9 million in business development and
integration charges primarily related to the acquisition of Hemosphere, and
$3.7 million in litigation expenses offset by $3.4 million in reimbursement of
certain litigation expenses from insurance carriers. Excluding these charges
and benefits, proforma non-GAAP earnings per share would have been $0.25 in
the first nine months of 2012. Net income for the first nine months of 2011
included $4.1 million in costs related to business development and
integration, and $1.0 million for litigation expenses net of insurance
reimbursements. Excluding these charges, proforma non-GAAP earnings per share
would have been $0.30 in the first nine months of 2011.

Product segment revenues were $16.9 million for the third quarter of 2012, up
13 percent from $14.9 million in the third quarter of 2011. Product segment
revenues were $50.0 million for the first nine months of 2012, up 14 percent
from $43.9 million in the first nine months of 2011.

Surgical sealant and hemostat revenues, which consisted primarily of sales of
BioGlue^® and PerClot^® in 2012, were $13.5 million for the third quarter of
2012 compared to $12.8 million for the third quarter of 2011, an increase of 5
percent. The increase in surgical sealant and hemostat revenues was primarily
due to an increase in BioGlue shipments into international markets, largely
Japan.

Surgical sealant and hemostat revenues were $41.9 million for the first nine
months of 2012 compared to $40.6 million for the first nine months of 2011, an
increase of 3 percent. The increase in surgical sealant and hemostat revenues
was primarily due to an increase in BioGlue shipments into international
markets, largely Japan, partially offset by the lack of HemoStase revenues in
the first nine months of 2012. The Company discontinued U.S. and
international sales of HemoStase at the end of the first quarter of 2011.

Revascularization technologies revenues were $2.1 million for the third
quarters of 2012 and 2011. Revascularization technologies revenues were $6.1
million for the first nine months of 2012 compared to $3.3 million in the
first nine months of 2011. The increase in revascularization technologies is
a result of the Company's acquisition of Cardiogenesis in May 2011.

HeRO^® Graft revenues were $1.4 million for the third quarter of 2012 and $2.0
million for the first nine months of 2012 as a result of the Company's
acquisition of Hemosphere in May 2012.

Preservation services revenues were $16.4 million for the third quarter of
2012 compared to $14.7 million for the third quarter of 2011, an increase of
12 percent. Cardiac preservation services revenues increased 22 percent for
the third quarter of 2012 primarily due to an increase in shipments of cardiac
tissues. Vascular preservation service revenues increased 3 percent for the
third quarter of 2012 due to an increase in shipments of vascular tissues.

Preservation services revenues were $48.4 million for the first nine months of
2012 compared to $45.0 million in the first nine months of 2011, an increase
of 7 percent. Cardiac preservation services revenues increased 13 percent for
the first nine months of 2012 primarily due to an increase in shipments of
cardiac tissues. Vascular preservation service revenues increased 3 percent
for the first nine months of 2012 due to an increase in shipments of vascular
tissues.

Total gross margins were 64 percent in the third quarters of 2012 and 2011.
Preservation services gross margins were 45 percent in the third quarter of
2012 and 43 percent in the third quarter of 2011. Product gross margins were
82 percent and 84 percent for the third quarters of 2012 and 2011,
respectively. 

Total gross margins increased to 64 percent in the first nine months of 2012,
up from 63 percent in the first nine months of 2011, driven by higher gross
margins from the Company's existing tissues business, an increase in the mix
of higher margin products partially resulting from the acquisition of the
Cardiogenesis and Hemosphere product lines. Preservation services gross
margins were 45 percent and 43 percent for the first nine months of 2012 and
2011, respectively. Product gross margins were 83 percent and 84 percent for
the first nine months of 2012 and 2011, respectively.

General, administrative, and marketing expenses for the third quarter of 2012
were $16.5 million compared to $14.7 million for the third quarter of 2011.
General, administrative, and marketing expenses for the third quarter of 2012
increased compared to 2011 primarily due to an increase in marketing expenses,
including costs of the Company's expanded sales staff and increases in
spending on advertising, partially offset by a decrease in litigation
expense. General, administrative, and marketing expenses for the third
quarter of 2012 and 2011 included approximately $796,000 and $1.1 million,
respectively, in business development and integration expenses.

General, administrative, and marketing expenses for the first nine months of
2012 were $48.4 million compared to $42.7 million for the first nine months of
2011. General, administrative, and marketing expenses for the first nine
months of 2012 increased compared to 2011 due to the cumulative effect of the
following: the settlement of the litigation with CardioFocus, an increase in
marketing expenses, including costs of the Company's expanded sales staff,
increases in spending on advertising, and an increase in litigation expenses,
partially offset by a benefit from the settlement of the litigation with
Medafor and the reimbursement of certain litigation expenses from insurance
carriers. General, administrative, and marketing expenses for the first nine
months of 2012 and 2011 included approximately $1.9 million and $4.1 million,
respectively, in business development and integration expenses.

Research and development expenses were $1.8 million and $1.7 million for the
third quarters of 2012 and 2011, respectively. Research and development
expenses were $5.2 million and $5.1 million for the first nine months of 2012
and 2011, respectively. Research and development spending in the third
quarter and first nine months of 2012 was focused on PerClot, HeRO graft,
SynerGraft^® tissues and products, BioFoam^™ Surgical Matrix, and
revascularization technologies.

During the third quarter of 2012, the Company purchased 14,000 shares of the
Company's common stock at an average price of $5.44, resulting in aggregate
purchases of $74,000. During the first nine months of 2012, the Company
purchased 639,000 shares of the Company's common stock at an average price of
$5.15, resulting in aggregate purchases of $3.3 million.

As of September 30, 2012, the Company had $13.1 million in cash, cash
equivalents, and restricted cash and securities, compared to $27.0 million at
December 31, 2011. Of this $13.1 million in cash, cash equivalents, and
restricted cash and securities, $740,000 was received from the U.S. Department
of Defense as advance funding for the development of BioFoam protein hydrogel
technology, and $5.0 million was designated as restricted cash and securities
primarily due to a financial covenant requirement under the Company's credit
agreement. The Company's net cash flows provided by operations were $6.1
million for the third quarter of 2012 and $5.8 million for the third quarter
of 2011.

2012 Financial Guidance

The Company is updating its guidance for the full year of 2012. The Company
expects total revenues for the full year of 2012 to be between $131.0 million
and $133.0 million, which include revenues of approximately $500,000 related
to the use of funds received from the U.S. Department of Defense in connection
with the development of BioFoam. This represents annual total revenue growth
of 10 percent to 11 percent. This compares with prior full year 2012 revenue
guidance of $129.0 million to $133.0 million, which represented growth of 8
percent to 11 percent.

The Company expects tissue processing revenues to increase in mid-single
digits on a percentage basis for the full year of 2012 compared to 2011.
Revenues from the Company's higher margin product segment are expected to
grow between 12 percent and 15 percent for the full year of 2012. This
includes expectations for BioGlue and BioFoam revenues to increase in the
mid-single digits on a percentage basis in 2012 compared to 2011, and PerClot
revenues to be between $2.7 million and $3.0 million. The Company expects
revenues from revascularization technologies to be between $8.0 million and
$8.5 million in 2012. The Company expects HeRO Graft revenues to be between
$3.2 million and $3.6 million in 2012.

The Company expects general, administrative and marketing expenses for the
full year of 2012 to be between $65.0 million and $66.0 million, which
includes $2.5 million of integration costs resulting from the acquisition of
Hemosphere in May 2012. Research and development expenses are expected to be
between $7.0 million and $8.0 million in 2012 as a result of the Company's
investments in its U.S. clinical trial for PerClot, and other research and
development activities.

The Company expects earnings per share of between $0.25 and $0.27 in 2012.
This compares with prior full year 2012 GAAP earnings per share guidance of
$0.20 to $0.23. The Company expects to incur an additional $600,000 in
transaction and integration charges in the fourth quarter of 2012. The
Company's earnings per share guidance excludes expenses related to additional
business development which cannot currently be estimated.

The Company expects the effective income tax rate for the full year of 2012 to
be in the upper thirty to forty percent range.

The Company's financial guidance for the full year of fiscal 2012 is subject
to the risks described below in the last paragraph of this press release,
prior to the financial tables.

Webcast and Conference Call Information

The Company will hold a teleconference call and live webcast today at 10:00
a.m. Eastern Time to discuss the results followed by a question and answer
session hosted by Mr. Anderson.

To listen to the live teleconference, please dial 412-902-6510 a few minutes
prior to 10:00 a.m. A replay of the teleconference will be available October
30 through November 6 and can be accessed by calling (toll free) 877-344-7529
or 412-317-0088. The conference number for the replay is 401868.

The live webcast and replay can be accessed by going to the Investor Relations
section of the CryoLife Web site at www.cryolife.com and selecting the heading
Webcasts & Presentations.

About CryoLife

Founded in 1984, CryoLife, Inc. is a leader in the processing and distribution
of implantable living human tissues for use in cardiac and vascular surgeries
throughout the U.S., certain countries in Europe, and Canada. CryoLife's
CryoValve^® SG pulmonary heart valve, processed using CryoLife's proprietary
SynerGraft^® technology, has FDA 510(k) clearance for the replacement of
diseased, damaged, malformed, or malfunctioning native or prosthetic pulmonary
valves. CryoLife's CryoPatch^® SG pulmonary cardiac patch has FDA 510(k)
clearance for the repair or reconstruction of congenital heart defects.
CryoLife's BioGlue^® Surgical Adhesive is FDA approved as an adjunct to
sutures and staples for use in adult patients in open surgical repair of large
vessels. BioGlue is also CE marked in the European Community for use in soft
tissue repair and is approved in Japan for use in the repair of aortic
dissections. Additional marketing approvals for BioGlue have been granted in
several other countries throughout the world. CryoLife, through its
subsidiary Cardiogenesis Corporation, specializes in the treatment of coronary
artery disease for severe angina using a laser console system and single use,
fiber-optic handpieces to perform a surgical procedure known as
Transmyocardial Revascularization (TMR). In addition, CryoLife's subsidiary
Hemosphere, Inc. markets the HeRO^® Graft, which is a solution for end-stage
renal disease in certain hemodialysis patients. CryoLife distributes
PerClot^®, an absorbable powder hemostat, in the European Community and other
select international countries. CryoLife's BioFoam^™ Surgical Matrix is CE
marked in the European Community for use as an adjunct in the sealing of
abdominal parenchymal tissues (liver and spleen) when cessation of bleeding by
ligature or other conventional methods is ineffective or impractical.

For additional information about CryoLife, visit CryoLife's website,
www.cryolife.com.

Statements made in this press release and during the accompanying earnings
webcast that look forward in time or that express management's beliefs,
expectations, or hopes are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements reflect the views of management at the time such statements are
made and are subject to a number of risks, uncertainties, estimates, and
assumptions that may cause actual results to differ materially from current
expectations. These statements include those regarding the opportunity to
grow the aspects of our business related to the Hemosphere acquisition. These
statements also include our anticipated performance and expected effective
income tax rate for the full year of fiscal 2012. The risks and uncertainties
impacting these statements include that market opportunities and potential
growth related to any of our products, including HeRO Graft and business
related to our Hemosphere acquisition, are subject to factors beyond our
control, including general economic conditions, physician and patient
acceptance of our products, our potential inability to maintain reimbursement
approvals and maintain and expand reimbursement rates, and regulatory
approval. Competing products may be introduced into the market that may
materially impact sales growth for our products. We may be unsuccessful in
our efforts to leverage our existing sales force and cross-sell our products,
and integration efforts may be more costly and take longer than currently
anticipated. Third-party intellectual property rights may limit the
development and protection of intellectual property acquired from Hemosphere,
which could adversely affect its value to us. Hemosphere may have liability
for actions that occurred prior to our acquisition of Hemosphere, which could
adversely affect us, and Hemosphere may have had undisclosed weaknesses in its
internal controls, which could impact our internal control over financial
reporting or adversely impact the value of the Hemosphere acquisition to us,
which could have a material and adverse effect on us. Our anticipated
performance and expected effective income tax rate for the full year of fiscal
2012 is subject to the general risks associated with our business, including
that we are significantly dependent on our revenues from BioGlue and are
subject to a variety of risks affecting this product, including that the
continued introduction into the market of products that compete with BioGlue
could have an irreversible adverse impact on our sales of BioGlue, our BioGlue
patent has expired in the U.S., and will expire in the rest of the world in
mid-2013, our tissues and products allegedly have caused, and may in the
future cause, injury to patients, and we have been, and may in the future be,
exposed to tissue processing and product liability claims, including one
currently outstanding product liability lawsuit, and additional regulatory
scrutiny as a result, our investment in Medafor has been impaired due to
Medafor's termination of our exclusive distribution agreement with Medafor and
our investment could be further impaired by risks associated with Medafor's
business or by Medafor's actions, which could have a material adverse impact
on our financial condition and profitability, we will not fully realize the
benefit of our investment in our distribution and license and manufacturing
agreements with Starch Medical, Inc. unless we are able to obtain FDA approval
for PerClot in the U.S., which will require an additional commitment of funds,
the FDA rejected our initial IDE application for PerClot and we are working to
address its concerns, but there is no guarantee that we can do so on a timely
or cost efficient basis, if at all, Medafor sent us a letter stating that
PerClot, when introduced in the U.S., will infringe their U.S. patent when
used in accordance with the method published in our literature and with the
instructions for use, and we may be unable to profitably market and sell
PerClot in the U.S. if we are found to infringe the patent rights of Medafor
or another third party or are unable to cost effectively defend a patent
infringement lawsuit, the receipt of impaired materials or supplies that do
not meet our standards or the recall of materials or supplies by our vendors
or suppliers could have a material adverse impact on our revenues, financial
condition, profitability, and cash flows, our sales are impacted by
challenging domestic and international economic conditions and their
constraining effect on hospital budgets and demand for our tissues and
products could decrease in the future, which could have a material adverse
impact on our business, healthcare policy changes, including recent federal
legislation to reform the U.S. healthcare system, may have a material adverse
impact on us, the loss of any of our sole-source suppliers could have a
material adverse impact on our revenues, financial condition, profitability,
and cash flows, we may be unsuccessful in our efforts to market and sell
PerClot in the U.S. and internationally, factors that have negatively impacted
revascularization technologies revenues in the first nine months of 2012 may
continue for the remainder of 2012, we have inherited risks and uncertainties
related to Cardiogenesis' business, we may expand through acquisitions, or
licenses of, or investments in, other companies or technologies, which may
result in additional dilution to our stockholders and consume resources that
may be necessary to sustain our business, we may not realize the anticipated
benefits from acquisitions and we may find it difficult to integrate recent or
potential future acquisitions of technology or business combinations, which
could disrupt our business, dilute stockholder value, and adversely impact our
operating results, we are subject to stringent domestic and foreign regulation
which may impede the approval process of our tissues and products, hinder our
development activities and manufacturing processes, and, in some cases, result
in the recall or seizure of previously cleared or approved tissues and
products, our tissues and products are subject to regulatory scrutiny and the
FDA or other regulatory body could revoke our registration, require us to
recall our tissues and products, change our processes or procedures, or take
other enforcement actions, we received a Form 483 Notice of Observations from
the FDA related to our processing, preservation, and distribution of human
tissue and the manufacture of our medical devices, and it is possible that we
may not be able to address the observations in a manner satisfactory to the
FDA, we may not be successful in obtaining necessary clinical results and
regulatory approvals for services and products in development, and our new
services and products may not achieve market acceptance, uncertainties related
to patents and other proprietary technology rights may adversely impact the
value of our intellectual property or may result in our payment of significant
monetary damages and/or royalty payments, negatively impact our ability to
sell current or future products, or prohibit us from enforcing our patent and
other proprietary technology rights against others, intense competition may
impact our ability to operate profitably, if we are not successful in
expanding our business activities in international markets, we may be unable
to increase our revenues, we are dependent on the availability of sufficient
quantities of tissue from human donors, key growth strategies may not generate
the anticipated benefits, investments in new technologies and acquisitions of
products or distribution rights may not be successful, regulatory action
outside of the U.S. has affected our business in the past and may affect our
business in the future, consolidation in the healthcare industry could
continue to result in demands for price concessions, limits on the use of our
tissues and products, and limitations on our ability to sell to certain of our
significant market segments, extensive government regulations may adversely
impact our ability to develop and market services and products, the success of
many of our tissues and products depends upon strong relationships with
physicians, our existing insurance policies may not be sufficient to cover our
actual claims liability, we may be unable to obtain adequate insurance at a
reasonable cost, if at all, we are not insured against all potential losses,
and natural disasters or other catastrophes could adversely impact our
business, financial condition, and profitability, our credit facility, which
expires in October of 2014, limits our ability to pursue significant
acquisitions, our ability to borrow under our credit facility may be limited,
continued fluctuation of foreign currencies relative to the U.S. dollar could
materially adversely impact our business, rapid technological change could
cause our services and products to become obsolete, our CryoValve SGPV
post-clearance study may not provide expected results, our investment in
ValveXchange, Inc. has been impaired and may, in the future, become further
impaired, which could have a material adverse impact on our earnings, and we
are dependent on our key personnel. These risks and uncertainties include the
risk factors detailed in our Securities and Exchange Commission filings,
including our Form 10-K for the year ended December 31, 2011, our Form 10-Q
for the quarter ended June 30, 2012 and our Form 10-Q to be filed for the
quarter ended September 30, 2012. CryoLife does not undertake to update its
forward-looking statements.

Contacts:
                                                  The Ruth Group
CryoLife
                                                  Nick Laudico / Zack Kubow
D. Ashley Lee
                                                  646-536-7030 / 7020
Executive Vice President, Chief Financial Officer
and Chief Operating Officer                       nlaudico@theruthgroup.com
Phone: 770-419-3355
                                                  zkubow@theruthgroup.com



CRYOLIFE, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data)
                                         Three Months Ended  Nine Months Ended
                                         September 30,       September 30,
                                         2012      2011      2012     2011
                                         (Unaudited)         (Unaudited)
Revenues:
Preservation services                   $        $        $       $ 
                                         16,399   14,656   48,371  45,018
Products             16,893    14,923    50,043   43,932
Other                             137       75        504      279
Total revenues                         33,429    29,654    98,918   89,229
Cost of preservation services and
products:
Preservation services                 9,005     8,349     26,645   25,709
Products                             3,114     2,393     8,300    7,051
Total cost of preservation services
 and products              12,119    10,742    34,945   32,760
Gross margin                          21,310    18,912    63,973   56,469
Operating expenses:
General, administrative, and             16,533    14,726    48,374   42,676
marketing
Research and development               1,829     1,690     5,192    5,099
Total operating expenses            18,362    16,416    53,566   47,775
Operating income                     2,948     2,496     10,407   8,694
Interest expense                42        49        159      116
Interest income              (1)       (1)       (4)      (13)
Other expense (income), net     283       159       442      (12)
Income before income taxes            2,624     2,289     9,810    8,603
Income tax expense             1,086     270       3,947    3,098
Net income                         $       $       $      $  
                                         1,538     2,019     5,863    5,505
Income per common share:
Basic                        $      $      $     $   
                                         0.06      0.07      0.21     0.20
Diluted                      $      $      $     $   
                                         0.06      0.07      0.21     0.19
Dividends declared per share      $       $      $      $   
                                         0.025       --    0.025      --
Weighted-average common shares
outstanding:
Basic    26,810    27,523    26,951   27,431
Diluted             27,210    27,850    27,329   27,765



CRYOLIFE, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands)
                                                                                        Three Months     Nine Months Ended
                                                                                        Ended
                                                                                        September 30,    September 30,
                                                                                        2012    2011     2012        2011
                                                                                        (Unaudited)      (Unaudited)
Preservation Services:
Cardiac tissue                                                                    $     $      $  22,662 $ 
                                                                                        8,239   6,764                19,989
Vascular tissue                                                                        8,160   7,892    25,709      25,029
Total preservation services                                                             16,399  14,656   48,371      45,018
Products:
BioGlue and BioFoam                                                                 12,725  12,190   39,858      36,936
PerClot                                                                               734     620      2,069       1,911
HemoStase                                                                             --      --       --          1,795
Revascularization technologies                                                    2,060   2,113    6,107       3,290
HeRO Graft                                                                         1,374   --       2,009       --
Total products                                                                         16,893  14,923   50,043      43,932
Other                                                                             137     75       504         279
Total revenues                                                                  $      $       $  98,918 $ 
                                                                                        33,429 29,654              89,229
Revenues:
U.S.                                                                            $      $       $  78,033 $ 
                                                                                        26,659 23,834              71,500
International                                                                         6,770   5,820    20,885      17,729
Total revenues                                                                          $      $       $  98,918 $ 
                                                                                        33,429 29,654              89,229
                                                                                                         September   December
                                                                                                         30,         31,
                                                                                                         2012        2011
                                                                                                         (Unaudited) (Audited)
Cash, cash equivalents, and restricted cash and securities                                            $         $ 
                                                                                                         13,114      27,017
Total current assets                            72,229      83,870
Total                                                                                                    153,490     147,864
assets
Total current liabilities                                                                                19,864      21,457
Total                                                                                                    27,574      26,326
liabilities
Shareholders' equity                     125,916     121,538



CRYOLIFE, INC. AND SUBSIDIARIES
Unaudited Reconciliation of
Non-GAAP Adjusted Net Income and Adjusted Income per Common Share – Diluted
(In thousands, except per share data)
                                            Three Months     Nine Months Ended
                                            Ended
                                            September 30,    September 30,
                                            2012    2011     2012     2011
GAAP:
Income before income taxes            $     $      $      $  
                                            2,624   2,289    9,810    8,603
 Income tax expense                 1,086   270      3,947    3,098
 Net income                 $     $      $      $  
                                            1,538   2,019    5,863    5,505
Diluted income per common share:       $    $     $     $   
                                            0.06    0.07     0.21     0.19
Diluted weighted-average common
 shares                                27,210  27,850   27,329   27,765
outstanding:
Reconciliation excluding items:
Income before income taxes, GAAP         $     $      $      $  
                                            2,624   2,289    9,810    8,603
 Excluding:
 Benefit related to settlement
of the
 litigation with              --      --       (4,672)  --
Medafor
 Charge related to settlement of
the
 litigation with              --      --       4,050    --
CardioFocus
 Litigation expenses   117     975      3,724    1,793
 Reimbursement of certain
litigation
 expenses from insurance      13      (94)     (3,396)  (757)
carriers
 Charges for business
development and
 integration        796     1,125    1,899    4,066
 Adjusted income before income taxes,
 non-GAAP             3,550   4,295    11,415   13,705
 Income tax expense calculated at 2012
 effective tax rate of 38% for
the three
 and nine months      1,349   1,632    4,338    5,208
 Adjusted net income, non-GAAP   $     $      $      $  
                                            2,201   2,663    7,077    8,497
 Adjusted net income, non-GAAP
allocated to
 participating securities –      51      57       158      167
diluted
 Adjusted net income, non-GAAP
applicable
 to common shareholders –        $     $      $      $  
diluted                                  2,150   2,606    6,919    8,330
Diluted adjusted income per common share,
 non-GAAP:           $    $     $     $   
                                            0.08    0.09     0.25     0.30
Diluted-weighted average common
 shares                                27,210  27,850   27,329   27,765
outstanding:

Investors should consider this non-GAAP information in addition to, and not as
a substitute for, financial measures prepared in accordance with U.S. GAAP.
In addition, this non-GAAP financial information may not be the same as
similar measures presented by other companies. Non-GAAP adjusted net income
and adjusted income per common share exclude litigation expenses and benefits,
insurance reimbursements for litigation, and expenses for business development
activities, including the Company's transaction and integration costs
primarily associated with the acquisitions of Hemosphere and Cardiogenesis.
The Company believes that this non-GAAP presentation provides useful
information to investors regarding the operating expense structure of the
Company's existing and recently acquired operations without regard to recently
settled litigation, its ongoing efforts to acquire additional complementary
products and businesses, and the transaction costs incurred in connection with
recently acquired businesses. The Company does, however, expect to incur
similar types of business development expenses and may incur significant
litigation expenses in the future, and this non-GAAP financial information
should not be viewed as a promise or indication that these types of expenses
will not recur.

SOURCE CryoLife, Inc.

Website: http://www.cryolife.com
 
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