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CryoLife Inc. Message Board

  • dlhild Oct 7, 2013 11:58 AM Flag

    Accounting Integrity Question:

    Steven said, "We are pleased that our modest investment in Medafor has yielded such a positive return for our shareholders. The proceeds from the transaction and the resulting gain of $12.5 million will be recorded in the fourth quarter 2013, and will contribute to the continued execution of our growth strategy and shareholder dividend."
    "The Medafor acquisition by Bard also provides strong validation of the significant market opportunity for our powdered hemostat, PerClot®, which we believe has significant clinical advantages over the Medafor product. In the U.S. and Japan, we are moving forward on the regulatory pathway, with FDA approval to initiate the PerClot U.S. clinical trial expected before the end of 2013."

    Steve certainly is great at histrionics. When he gets run over by the GS and/or BCR bulldozer(s), he makes it sound like it was a pleasant experience. CRY did vote in favor of the Medafor sale though, because over 97% of the Medafor shares were voted and almost all were voted in favor, so by simple math one can tell CRY voted in favor.

    Why was CRY only carrying Medafor shares on its books at $1.09/share, given that CRY obviously knew that Medafor was advancing the ball and worth significantly more than $1.09/share? Also, I suspect that CRY may have received offers to buy CRY's Medafor stock at prices well in excess of $1.09/share. Where were CRY's accountants, at the 19th hole with Steve? Who controls CRY's accounting anyway. Steve? The outside accountants? Is this part of the reason CRY changed accounts?

    Weren't shareholders who sold stock over the past couple years negatively affected on each share sold, because they would not have been aware of the 'Medafor stock hidden asset' on CRY's balance sheet. SA would talk down Medafor on his conference calls. Yet Steve knew all the time things were improving at Medafor.

    Draw your own conclusions. Do your own due diligence.

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    • I thought you had some expertise in accounting? There is no accounting integrity question. The accounting rule on passive investments for companies is you can only write them down and never write them up unless there is a sale.
      In addition the Medafor investment has only been discussed once in the last two years worth of conference calls. That occurred about a year ago when one analyst questioned the value of the Medafor stock on the books. The CFO answered the question and said the Medafor stock on the books was valued at approximately two million and he was sure that it was worth at least that much.

      • 2 Replies to thebuckeye777
      • dlhild Oct 11, 2013 1:10 PM Flag

        Two problems with what you said; First, SA never should have marked down the value in the first place!!!! IMO he did it because he wanted to tell an egocentric SA aren't I wonderful story. A SA is kicking GS butt story. So IMO he should not have ever marked it down in the first place. That's my view. Second, the accountants (as far as I know) could have been more forthcoming in terms of footnote disclosure. So I think effectively SA did not provide full disclosure to shareholders that may have sold stock over the past couple years. So IMO SA still has an integrity problem with this issue. That how I view it anyway.

        Do your own due diligence.

      • buckeye, thanks for clearing that up. I'm not even sure they would have been allowed to show the Medafor gain in the comprehensive income/loss supplement to the income statement under GAAP or FASB.

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