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CryoLife Inc. Message Board

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  • dlhild@ymail.com dlhild Nov 5, 2012 1:52 PM Flag

    Does the TISSUE COST CENTER Operate at a Loss?

    Let's check the numbers for Q3 2012, just to see what might have happened at this cost center during Q3 2012. After all, we want to determine whether anything may have changed. So here we go. Q3 2012 tissue sales were $16,399,000 ($8,239,000 cardiac tissue plus $8,160,000 vascular tissue). Hence, the tissue cost center represented 49% of total sales (total tissue sales of $16,399,000 divided by total sales $33,429,000). So total tissue sales were $16,399,000 less tissue COGS of $9,005,000 resulting in a gross margin for the tissue cost center (a/k/a/ preservation services) of $7,394,000. Total operating expenses were $18,362,000. If we allocate 49% of total operating expenses (prorate allocation method) to the tissue cost center, we end up subtracting $8,997,000 in operating expenses from the $7,394,000 in tissue gross margin, which results in a net operating loss of -$1,603,000.

 
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