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CryoLife Inc. Message Board

  • dlhild Jun 18, 2010 10:54 PM Flag

    CRY's BIG problem...lack of earnings visibility!!!

    OCF = Pre-Tax "Operating Cash Flow"

    EPS = HemoStase contribution only. Tax rate = 40%. 28M shares O/S.

    This was entirely created in my own head. These WAGS could be way off. Honest try though, but based upon very limited information.

    CY 2010: Est. HemoStase Sales = $11.3M (range $9.5M to $12.0M)
    CY 2010: Est. HemoStase OCF = $3.4M (range $2.5M to $3.5M)

    CY 2010 Est. HemoStase EPS = range $0.05 to $0.08 (40% tax rate)

    CY 2011: Est. HemoStase Sales = $16.0M (range $14M to $18M)
    CY 2011: Est. HemoStase OCF = $4.8 million (range $4M to $6M)

    CY 2011 Est. HemoStase EPS = range $0.08 to $0.13 (40% tax rate)

    CY 2012: Est. HemoStase Sales = $22.0M (range $20M to $28M)
    CY 2012: Est. HemoStase OCF = $6.6M (range $6M to $10M)

    CY 2012 Est. HemoStase EPS = range $0.13 to $0.21 (40% tax rate)

    CY 2013: Est. HemoStase Sales = $32.0M (range $28M to $36M)
    CY 2013: Est. HemoStase OCF = $9.6M (range $10M to $13M)

    CY 2013 Est. HemoStase EPS = range $0.21 to $0.28 (40% tax rate)

    CY 2014: Est. HemoStase Sales = $8.0M (range $6M to $12M)
    CY 2014: Est. HemoStase OCF = $2.4M (range $2M to $4M)

    CY 2014 Est. HemoStase EPS = range $0.04 to $0.09 (40% tax rate)

    EPS Est. 2012: $0.54

    EPS Est. 2011: $0.42

    EPS Est. 2010: $0.35

    Actual EPS 2009: $0.32

    Actual EPS 2008: $0.45

    Actual EPS 2007: $0.28

    I’m guessing that about 80% of the estimated EPS growth, for years 2011 thru 2012, is based upon CryoLife increasing their HemoStase sales. This relationship could reasonably be expected to continue for 2013 too, assuming that the contract continues that long.

    CryoLife’s BIG Problem: CRY does not have any long term earning visibility!!! HemoStase sales could end entirely in 2014, and believe me Medafor shareholders are not in the mood to kiss and make up. BioGlue sales may fall sharply as we approach patent expiration. Then what is left? Also, BioGlue sales may be increased above expected levels because BioGlue sales are helped somewhat by HemoStase sales. Also, if sales appear to be headed south in these out years, key people in their sales force may decide to leave for greener pastures.

    EPS Est. 2014: Down to perhaps $0.30? This is the BIG open ended question folks. There is just no earning visibility after 2012. I'm not bashing, just stating a fact.

    Question: Why is SGA continuing to destroy his relationship with Medafor, when the present value of future OCF might as high as $200M (assuming he instead re-built his relationship with Medafor? I really don't understand this destructive logic.

    Also, at the June Medafor annual meeting, shares were voted massively in support of current management...GS and GT. Medafor is not a company that is going to rollover and kiss SGA's butt.

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