The actual payment was $6.48/share, not the estimated $6.37 as previously announced. Not a big difference, but higher than previously announced never the less. Accordingly, CRY will receive $15.4 million pre-tax, instead of the $15.1 mentioned earlier. They may have already received this payment. If not, they will likely receive it next week. SA should say "thank you" to GS. There are some possible future contingent payments as well that IMO are more likely than not to be paid at some level. Probably a small payment in CY2014 and possibly a more significant payment in CY2015, and perhaps a very small payment in a later year.
Again, SA should publicly say "...THANK YOU GARY SHOPE"!!!
While SA doesn't add much value, at least others do it at some level every once in a while.
I'm think its funny that the shareholders who sold their shares to CRY only got $2/share. They were hoping that CRY would take over Medafor and that they would get the stepped up price. Didn't happen, so they got $2/share without any step-up.
Cardiac Tissue: $ 6,988,000
Vascular Tissue: $ 8,710,000
Revascular Technology $ 2,340,000
HeRO Graft: $ 1,850,000
BioGlue: $ 14,300,000
PerClot: $ 1,000,000
ValveXchange $ 0
Other Products: $ 12,000
Total Q3 Sales ~ $35,200,000
Estimate Q3 EPS ~ $0.07/share
Everything more or less in line with what one would expect.
Since SA is on a par with great Broadway actors, expect a 'good show' during the next conference call. Remember though, it is a 'show' and may, or may not, represent 'reality'.
I expect SA to hype the 'rate of increase' in international sales growth for low volume products such as PerClot and perhaps for BioGlue as well. If you can't grow in the big US market, you have to pretend the fragmented international markets are important.
I expect SA to hype HeRO Graft as well. Personally I like this product line, BUT remember that at the end of the day this is a small market; but, perhaps a material market for CRY at some level. There is some value here though.
BioGlue: This is CRY's most important product line. I'm expecting slow but meaningful growth. This is a very profitable product line, so is vital to CRY's future valuation. Perhaps 80%, or more, of CRY's present valuation is directly related to this product line (IMO anyway).
Just estimates on my part, so who knows how accurate they will prove to be.
Do your own due diligence, because these are just my best guesses.
retiredbill, very much appreciated. Do you have other dividend paying stocks you think highly of? I'm 69 and would like dividend income. Thanks for your reply.
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.
If CRY is not going to make Gary Shope the new CEO/Chairman of the Board, with Steve Anderson and Son BOTH TOTALLY out of the picture, then they should at least get rid of Steve Anderson and Bruce Anderson and let DAL run the show. But...but...but...Gary Shope is definitely the CEO/Chairman CRY really needs to make the company shine. $15/share in 3 years would be a 'walk in the park' for GS...one would think anyway. I would own a lot of shares if this were to happen.
GS is honest and knows how to get along with people and get the most from his employees and how to create value. SA, well why I can't prove it, I suspect he rules with more of the strong hand fear approach.
IMO, SA is an example of an entrepreneur who was great at one point in his life, but someone who just couldn't make the jump to running a public company. There is a HUGE difference between running a private company and successfully running a publicly traded one. For whatever reason though, probably Stevie's basic personality, he never made this transition. Hence, he is still $6 Stevie Wonder. Also IMHO, at 74 Stevie is past him prime. Time for Stevie to play shuffleboard.
These are just my opinions and general thinking. Do your own due diligence, as you are responsible for your own investment decisions.
Retire Steve Anderson from the operating company. Remove him from the board too. Then CRY needs to hire Gary Shope as CEO and Chairman of the Board AND let him remold CRY into a sales driven machine. Gary more than anything has two characteristics: First and foremost is complete corporate and personal honesty. Second, he is a sales driving machine. If this were to happen, I would probably own as many shares as buckeye. Unfortunately though, I doubt that GS wants anything further to do with Stevie Wonder and/or CRY. BUT, completely get SA out of the picture, and I would bet that GS could turn this company around quite quickly. Also, GS knows how to get along with people. Perhaps SA needs to learn something about this.
All just my opinion. Do your own due diligence.
On October 1, 2013, Davol Inc., a wholly-owned subsidiary of C. R. Bard, Inc., completed the previously-announced acquisition of Medafor, Inc.
Medafor is history. It is time for an Arista/Perclot discussion. First, I can't believe that BCR paid this kind of money without first having carefully reviewing the Arista patent. I'm guessing BCR determined that the Arista patent is likely to be one that will prevail in the U.S., and perhaps in other countries too. Plus BCR has a staff of attorneys to work on this kind of thing. Second, SA has made all sorts of superiority claims about Perclot. Some of them may be true, I have no way of knowing. However, he has never released anything supporting these claims. So it is hard to know if there is anything of substance here. So first CRY has to overcome the patent matter. Next is that it is very unlikely that Medafor was sitting on its butt and not doing product development work. As I understand it Medafor had a second generation product that was closing in on FDA submission. I'm guessing that this second generation product blows away the Perclot product. If I'm right on any of this, I would put it together like this. IF CRY every starts selling in the US, they will have a second rate product in a market where BCR already has established themselves in the marketplace. BCR is likely IMO to beat up little old CRY on the patent front, beat up CRY on the product superiority front, and beat up little old CRY in the marketplace. Bottomline: I think SA better start thinking of Perclot in terms of "salvage value". Perhaps it will still be worth a little bit as a commodity product in some international markets. IMO, pretty much Perclot = "SALVAGE VALUE".
On the plus side, after CRY receives their first cash payment from BCR, CRY will be left with about $15.1 million pre-tax/$11 million post-tax. This may be why the share price has moved up by about $0.50/share recently. Just my opinions. SA should thank GS.
This is off the top of my head. Flashback 2005. Medafor's earlier management was terrible (my opinion). They raised a lot of money and spent it foolishly. Medafor was totally without money or direction. Gary Shope (GS) moved from sales to CEO. For 2005 Medafor sales were roughly $3,000,000. No money, no sales growth, no company direction, that was Medafor 2005. Medafor's value then was $0, like in ZERO. GS raised money, dilution as Stevie Wonder liked to call it. Yes, GS issued some share, quite a few in fact, but what alternative did he have? Answer: None. Medafor badly needed money to survive. It took GS about 1 year to obtain FDA approved. Amazingly fast IMO. Stevie Wonder has probably never moved anything through the FDA this quickly. GS first obtained FDA approval for Arista and then drove a sales driven machine. I think that Medafor was probably at roughly a $42,000,000 sales run rate when acquired. GS used Stevie Wonder money to bridge through the early 2008 to mid-2009 time period. Thank you for the help Stevie. Then Medafor sales started to kick in.
Had Stevie played ball with Gary, CRY would likely have had EPS of roughly $0.60 for CY 2013. CRY's valuation would perhaps now be around $15/share. But nope, Stevie's ego got in the way. He tried to take over Medafor. GS was a Division 1 quarterback. He called 'the terminate the CRY contract play'. Perfect execution. Done. He called the 'buy the patent play" Perfect execution. Done. He called the 'sell like crazy play'. Perfect execution. Done. In a mere 8 years, GS took Medafor from 2005 sales of roughly $3,000,000 to a company selling product at roughly a $45,000,000 run rate. Perfect execution. Done. The he called the 'cout de ta' play. A/K/A the 'sell the company.for $280,000,000 play'. Perfect execution. Done. Today CRY's market cap is $192,000,000, roughly $90,000,000 less than the Medafor sales price. Draw you own conclusion about management.
JC Answer: In mid-August Medafor Inc., a small, privately held company selling $45M worth of hemostatic agents annually, agreed to be purchased by C.R. Bard Inc. (BCR) for more than $200M, plus up to $80M based upon sales milestones. Cryolife owns more than 8% of Medafor, dating back to a 2010 selling arrangement, which should bring in a gain of $14.2M to Cryolife. Plus, Cryolife will be eligible for $6.71M for future sales milestones.
Response: Assuming BCR acquires Medafor, CRY would receive a material amount of cash, as stated above by Jeff. IMO, if CRY were to use a substantial amount of this newly found cash to buy back CRY stock, I would guess that CRY should be able to support the CRY share price at the $6/share, or higher, price level. Hence, IMO at the present time I find CRY to be 'reasonably valued'. Not under priced, not over priced, but probably priced about right, at least until more is know about the future of PerClot.
I'm sure that SA will have an interesting spin on all of this during the October 2013 conference call.
Do your own due diligence.
JC Answer: CryoLife Inc. (CRY) was founded more than 30 years ago to sell vascular and cardiac tissue, which it still sells, although it has expanded into a number of medical products, including hemostatic agents. We like Cryolife due to its potential growth trajectory. Its PerClot product is really well positioned. It is a hemostatic agent used during surgical interventions to absorb blood. The product is currently approved and bringing in around $5M annually in a few geographies outside the U.S. PerClot is approved to begin a U.S. clinical trial, which is anticipated to be completed in 2015. We are very excited about it: The size of the U.S. market for hemostatic agents is about $900M, and worldwide the market is about $1.4B.
Response: To cut to the chase, it sounds like CRY is hanging their hat on most of their future growth coming from PerClot. This is a maybe, maybe not, story. In order for this to work, CRY must accomplish three things: First, they must obtain FDA approval for PerClot. Second, they must prevail on the patent front. If they lose the US patent litigation, then CRY's market for PerClot will never amount to much, that's my opinion anyway. Third, they must prevail in the market place against a much larger company that will be well established in the market place before CRY ever starts to sell into the US market. Fourth, it is unlikely that this is a static market place, so what the market will look like by the time CRY even can sell in the US is uncertain.
Do your own due diligence.
My thoughts regarding the Seeking Alpha Interview with Jeff Cohen, an analyst with Ladenburg Thalmann & Co.
I'm wondering whether DAL and Jeff may have been college friends. I'm not sure they were mind you, but I have wondered about this in the past. Can someone bring clarification on this subject? Buckeye, perhaps you could ask someone at CRY about this and bring clarification to this point. Also, if Jeff was not DAL's college friend, ask whether DAL was a friend with any other analyst too.
JC Quote: I favor senior management teams that develop a strategic five-year vision for each product in their pipelines. I like management teams who are less focused on telling the Street what is possible and what they can do, and are more focused on actually doing. Don't tell me, show me!
Response: CRY stock has more or less been a $6/share stock forever, pretty much this situation for 18 years. To find the long term chart go to Goggle Finance. Why Yahoo Finance dropped 16 years of chart history, that Yahoo used to reflect, is a mystery to me. My guess though is somehow SA was involved in getting this stock history erased. Read "Stevie Wonder and the Magic Eraser" post for more on this. So, "Don't tell me, show me!" has been historically reflected in the long term stock price chart hasn't it? One would think anyway. IMO, instead of SA being a focused senior manager, I'm guessing that perhaps he may be an egocentric control personality. I think he may rule with an 'iron fist'. Cross SA's path, and out the door you go. Perhaps Gerald Seery could tell us more on this. Also, SA's nepotism issue with son Bruce being fast tracked into senior sales management raises questions too. Something to reflect on anyway.
Do your own due diligence.