CryoLife, Inc.(" CryoLife," the "Company," "we," or "us"), incorporated in 1984 in Florida, develops, manufactures, and commercializes medical devices for cardiac and vascular applications and preserves and distributes human tissues for transplantation. CryoLife'ssurgical sealants and hemostats include BioGlue® Surgical Adhesive ("BioGlue"), BioFoam® Surgical Matrix ("BioFoam"), and PerClot®, an absorbable powdered hemostat, which the Company distributes for Starch Medical, Inc.("SMI") in the European Community and other select international markets. CryoLife'ssubsidiary, Cardiogenesis Corporation("Cardiogenesis"), specializes in the treatment of coronary artery disease using a laser console system and single use, fiber-optic handpieces to treat patients with severe angina. CryoLifeand its subsidiary, Hemosphere, Inc.("Hemosphere"), market the Hemodialysis Reliable Outflow Graft ("HeRO® Graft"), which is a solution for end-stage renal disease in certain hemodialysis patients. The cardiac and vascular human tissues distributed by CryoLifeinclude the CryoValve® SG pulmonary heart valve ("CryoValve SGPV") and the CryoPatch® SG pulmonary cardiac patch tissue ("CryoPatch SG"), both processed using CryoLife'sproprietary SynerGraft® technology. For the quarter ended September 30, 2013 CryoLifereported all-time record quarterly revenues of $36.3 million, largely driven by strong sales of BioGlue, in what is typically a slower sales period for the Company's surgical sealants. The Company's BioGlue, PerClot, and revascularization technologies product lines and vascular preservation services all had the highest revenues recorded by the Company during a third quarter. The Company's cardiac preservation services reported a quarterly all-time record, reaching $8.6 millionfor the first time. The Company's HeRO Graft product line showed a small decrease in revenues during the quarter both in comparison to the third quarter of 2012 and the second quarter of 2013. The Company generated $7.3 millionin operating cash during the quarter for a total of $11.3 millionin operating cash generated in the first nine months of 2013. In September 2013the Company hosted its first Aortic Valve and Root "Boot Camp" training session. This training was attended by residents from official cardiothoracic surgery training programs and focused on aortic root anatomy, aortic valve and root, annulus enlargement, and myectomy; aortic repair and valve-sparing; aortic root replacement; and pulmonary autograft replacement, commonly known as the Ross Procedure.
See the "Results of Operations" section below for additional analysis of the nine months ended
C.R. Bard's Acquisition of Medafor
October 1, 2013C.R. Bard, Inc. completed its previously announced acquisition of the outstanding shares of Medafor, Inc.("Medafor") common stock. The Company received an initial payment of approximately $15.4 millionfor its 2.4 million shares of Medafor common stock and will record an initial gain of approximately $12.7 millionon the sale in the fourth quarter of 2013. The Company could receive additional payments totaling up to an additional $8.4 millionupon the release of funds held in escrow and the satisfaction of certain contingent milestones, measurable through June 2015. The first of these additional payments, which the Company believes could be up to approximately $575,000, if released, would be received in late 2014, although this amount is subject to possible offsets. These payments will be recorded as an additional gain when and if received by the Company.