CryoLife Inc. (NYSE:CRY) Q4 2015 Earnings Conference Call - Final Transcript
Feb 16, 2016 • 08:00 am ET
Greetings. Welcome to the CryoLife Fourth Quarter and Year-End 2015 Financial Results Conference Call. [Operator Instructions]
I would now like to turn the conference over to your host, Pat Mackin, President and CEO for CryoLife. Thank you, Mr. Mackin. You may now begin.
Good morning, everyone. This is Ashley Lee. Before we begin, I'd like to make the following statements to comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995. Comments made in this call that look forward in time, involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements made as to the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future.
These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. Additional information concerning risks and uncertainties that may impact these forward-looking statements is contained from time-to-time in the Company's SEC filings and in the press release that was issued last night.
Now, I'll turn it over to Pat.
Thanks, Ashley, and good morning everyone. We're very pleased to report record revenue in the fourth quarter of 2015 capping off what we think was a very productive year for the Company. I will begin today's call with a brief review of our fourth quarter results followed by a recap of our significant accomplishments over the course of 2015, which have positioned the Company for improved growth and margin expansion in 2016 and beyond. Following my initial comments, Ashley Lee, our CFO, will provide a detailed review of our fourth quarter financial results and our 2016 financial guidance. I will conclude with a review of our key strategic initiatives for 2016 and then we'll open the line for questions.
This morning we reported record revenue of $39.8 million for the fourth quarter, a 7% increase year-over-year. This includes our third consecutive quarter of year-over-year growth in tissue processing revenues, which were up 3% year-over-year. Product revenues were up 10% year-over-year, driven by continued growth of ProCol and PhotoFix and good results from CardioGenesis.
Gross margin for the quarter was 67%, which is several hundred basis points better than our historical results in recent years. The main drivers of gross margin of fourth quarter are product mix, and the efficiency and throughput initiatives we've implemented over the course of 2015 in our tissue processing businesses, much of which we expect to continue into 2016 and support improved overall gross margin. In addition to these positive financial results, we also announced the acquisition of On-X Life Technologies in late December and the divestiture of the HeRo product line to Merit Medical in early February. I will cover these developments in more detail in my later remarks.
Turning now to an operational update, 2015 was a year of significant progress for the Company. When I joined CryoLife in September 2014, I spent my first