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CryoLife Inc. Message Board

  • dlhild@ymail.com dlhild Feb 19, 2013 12:22 PM Flag

    Management Metric Analysis:

    In early June 2012 CRY stock was in the ball park range of $4.50. Today, February 19, 2013 CRY stock is around $6.10. Back during the June 2012 period CRY settled their litigation issues with various parties. Clearly someone, Salverson perhaps, strongly suggested to Steve he should get his act together and out of the litigation business. Apparently Steve did listen, and more importantly did act to get out of the litigation businesses.
    Per my estimates, the pre-tax cost of litigation had been roughly $3.5 million annualized. Apply a 37% tax rate and getting out of the litigation business by itself generated roughly $2.2 million in net operating income all by itself. Divide this by 27.7 shares O/S and the direct effect on earnings would be roughly $0.08. Apply a 20X P/E to the $0.08, and the stock should have appreciated about $1.50-$1.60, simply by getting out of the litigation business.
    CRY stock was about $4.50 in early June 2012. Today CRY stock around $6.10. Hence, by late Sept. CRY stock finally reflected the full effect of getting out of the litigation business. Since the beginning of Oct. 2012 to the present, CRY stock has jumped around some, but it is essentially still where it was in late Sept. of 2012. So boil it down, we have recently had 4.5 months of sideways action.
    The S&P was roughly 1,280 in early June 2012. Presently the S&P is around 1,525. This means the S&P has moved up 20% since early June of 2012. It does not appear to me that CRY stock has participated in any of this 20% move. Hence, it does not appear that CRY shareholders received any benefit from market correlation.
    To me this means the market place is taking a “wait and see” approach toward CRY’s stock price. It appears to me that had CRY benefited in line with market correlation, that the CRY stock price would be roughly $0.90 higher. Let's round it off and call it another $1 in value that has not yet pasted thru to CRY shareholders.
    I really don't get it. The most obvious reason for CRY's 17 years of “under performance” seems to be that CRY’s EXECUTIVE MANAGEMENT IS NOT EFFECTIVE. Since SA rules with an "iron fist", witness Gerald Seery (GS) getting kicked out the door, it appears that the best way to generate future shareholder value is to kick SA out the door right behind GS. After all SA is 74, he’s not getting any younger, and more importantly he is “NOT GETTING THE JOB DONE”, not if share appreciation is the relevant metric. If SA retired, he would have more time to play shuffleboard. Perhaps SA and GS could mend their differences and become shuffleboard partners.
    I'm surprised CRY has not yet announced Bruce Anderson’s (BA) sales promotion to Senior Executive V.P of Inter-Glactic Sales. I bet his pay check already reflects the promotion. IMO, nepotism is not a good thing for a public company, and BA is all about nepotism. “Anderson” DNA seems to be controlling everything. Don’t you see? BA is SA’s vehicle for continuing to control CRY after he superficially retires. For the next management team after SA, having BA around as a “Daddy Spy” is an unmitigated disaster. So time for BA to leave the nest and fly on his own. Time for SA to retire, he has already done his gig. IMO, SA = 666 = GREED = POWER.
    In spite of 17 years of management under performance, I bet there will be free stock option grants awarded before the end of February 2013, stay tuned.
    If you think for a second CRY's management has performed well, go to Google Finance, type in CRY, and look at the "maximum" chart going back to 1993 (view 19 years of CRY stock history). You’ll see that CRY’s stock price is about where it was during the 1995-96 period. What better way is there for evaluating the effectiveness of senior management (over time) than looking back and seeing how much they have benefited shareholders? Are all of you shareholders out there feeling good?
    The above was just my opinion at this time. You are responsible for doing your own due diligence.

 
CRY
10.18+0.05(+0.49%)Apr 24 4:02 PMEDT