Cryolife edited - Q4

BioGlue surgical adhesive revenues were $12.1 million for the fourth quarter of ’08 compared to $11.5 million for the fourth quarter of ’07, an increase of 5%. This increase was primarily due to an increase in average selling prices, which increased revenues by 5% and a 3% increase in the number of BioGlue milliliters that shipped which increased revenues by 2%, offset by the unfavorable impact of foreign exchange which reduced revenues by 2%.

BioGlue revenues were a record $48.6 million for the full year of ’08, compared to $43.9 million for the full year of ’07, an increase of 11%. This increase was due to an increase in average selling prices, which increased revenues by 6% and a 5% increase in the number of BioGlue milliliters shipped, which increased revenues by 5%.

Also during the fourth quarter, we saw little push back on pricing for customers, again, due to current economic conditions and the resulting budgetary pressures of hospitals. Additionally, we saw a continuing strengthening of the dollar versus the British pound and the euro. For the full year of 2008 we generated $3.2 million in revenues, denominated in euros and $1.4 million in revenues denominated in British pounds. If the dollar continues to strengthen against the euro and pound we would expect this to have an adverse affect on our 2009 forecast revenues and gross margin. Additionally, it will be more expensive for our foreign customers who purchase product from us in US dollars. We expect that these factors, along, along with the growing contribution of Hemostase, which has a gross margin in the upper 50% range, will cause margins to decrease slightly during 2009.

We expect total revenues for the full year of ’09 to be between $113 and $119 million. We expect tissue processing revenues to be between $58 and $60.5 million and BioGlue revenues to be between $50 and $52 million for the full year of ‘09. Other medical device revenues, which consist primarily of sales of Hemostase, are expected to be between $4.5 and $4.5 million in ’09.

Other revenues for ’09 may reach between $0.5 and $1 million related to funding received from the Department of Defense in connection with the development of BioFoam. The amount of other revenues is largely dependant upon actual expenses incurred related to the development of BioFoam.