Greetings and welcome to the CryoLife Second Quarter 2010 Financial Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Anderson, President and Chief Executive Officer for CryoLife. Thank you, Mr. Anderson, you may begin.

Good morning, everyone. This is Steve Anderson, CryoLife's CEO, and I would like to welcome you to CryoLife's Q2 2010 conference call. With me today is Ashley Lee, the company's Executive Vice President, COO, and CFO. We were very pleased to announce record revenues for the second quarter, as well as record revenues for the first six months of 2010. Revenues for Q2 were $29.3 million, up from $28.2 million a year-ago, and revenues for the first six months of 2010 were $59 million, up from $54.9 million in the first six months of 2009, an 8% increase. Diluted earnings per share for Q2 2010 were $0.10, up $0.09 for Q2 2009, and $0.01 above analyst estimates. Diluted earnings per share for the first six months of 2010 were $0.17, up from $0.16 in 2009. This is the 14th consecutive quarter of profitability for the company. And we continue to be very pleased with our operating results in this difficult economic situation. The agenda for today's call is as follow: Ashley will discuss today’s press release in detail and by line of business. He will also focus on the company’s successful buyback of our common stock. He will also discuss the company’s cash position. Ashley will complete his remarks with a discussion on the status of the Medafor litigation. I will discuss the recent FDA clearance for the five-year shelf life for the CryoValve SG Human Pulmonary Heart Valve. I will discuss the significance of Medafor resuming its shipments of HemoStase to us that was announced on June 30th. I will also discuss the continuing rollout of BioFoam sales in Europe and the beginning of the BioFoam clinical trial in the US. I will update you on the status of several SynerGraft tissue projects that are ongoing. At the end of my comments, Ashley will return to review our financial guidance for the rest of the year. At this time, Ashley will discuss this morning’s press release.

Thank you, Steve. To comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995, I'd like to make the following statement. Comments made in this call, which look forward in time involve risk and uncertainties in our forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements includes statements made as to the company's or management’s intentions, hopes, beliefs, expectations or predications of the future. Additional information concerning risk and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings including the Risk Factor section of our Form 10-K for the year ended December 31, 2009, our Form 10-Q for the quarter ended March 31, 2010, and our Form 10-Q for the quarter ended June 30, 2010, which we expect to file by the end of this week and in the press release that went out this morning a copy of which is contained on the Investor Relations portion of our website. This morning we reported our results for the second quarter and first half of 2010. We set all time second quarter and first half revenue records of $29.3 million and $59 million for the periods ended June 30, 2010, and reported our 14th consecutive quarter of profitability. These revenue amounts represent increases of 4% and 8% compared to the corresponding periods in 2009. As of June 30, 2010 we had $41.4 million in cash, cash equivalents and restricted securities compared to $35.1 million at December 31, 2009. Of this $41.4 million, $2.4 million was received from the US Department of Defense as advance funding for the development of BioFoam Protein Hydrogel Technology and $5.3 million was designated as restricted primarily due to our financial covenant requirement under our…

On June 8th, we announced that the FDA had cleared our 510(k) submission to extend the shelf life on our CryoValve SG Pulmonary Valve from one year to five years. These valves are commonly used in infants and pediatric patients in cardiac reconstruction procedures. The extension of the shelf life to five years simplifies the purchasing decisions and tissue inventory management issue presented to hospitals by the previous one-year shelf life. The increased shelf life also gives us more flexibility in planning our manufacturing cycle. Since the change in the shelf life was announced, our shipments of SynerGraft-processed pulmonary valves have more than doubled from the average monthly shipments through May of 2010. In late June, Medafor filled most of an approximately $2.5 million order for HemoStase, the hemostatic agents that we distribute for them. We were surprised that this order was filled since they had refused to fill three previous orders, totaling approximately $1.8 million that we had placed in March and April of this year. As a result of Medafor not shipping the March and April orders, we were enable to fill some requests for the 1 gram size product. We believe this adversely affected our quarter two HemoStase revenues over what we believe they would have been along with the confusion in the marketplace caused by Medafor’s announcement that it was terminating the agreement and what we believe are continued sales by Medafor into our exclusive field. We expect to pursue reimbursement of our damages from those lost sales in our lawsuit against Medafor. Another thing that we found disturbing about Medafor’s order filling process is that we believe a portion of the product they delivered to us in late June did not meet our incoming acceptance standard. We do not believe this portion of their shipment…

Subject to the assumptions and qualifications discussed I’ll discuss in a moment, we expect total revenues for the full year of 2010 to be between a $118 million and a $122 million, which includes between $1 million and $2 million related to funding received from the Department of Defense in connection with the development of BioFoam. We expect tissue processing revenues to increase between mid-single and low-double digits on a percentage basis in 2010 compared to 2009, BioGlue revenues to increase by low single digits on a percentage basis, and HemoStase revenues to increase more than tissue or BioGlue revenues on a percentage basis. R&D spending should increase for the remainder of the year as we anticipate beginning enrolment in our BioFoam IDE in the third quarter and expect increased cost associated with the SynerGraft Aortic and Pulmonary Valve studies. We expect our effective income tax rate for the remainder of this year to be approximately 42%. We expect EPS to be between $0.34 and $0.38 for 2010. The assumptions upon which this guidance is based include HemoStase revenues of between $4 million and $4.5 million in the second half of the year, levels of Medafor related litigation expenses in the second half of the year consistent with the first half of the year, and that the EDA with Medafor will not be terminated. Additionally, our guidance includes general expenses associated with business development opportunities, but does not include significant expenses associated with specific targets. We have withdrawn our proposal to acquire Medafor and we not currently anticipate a transaction with them occurring during 2010; however, should we renew our proposal or take other actions to acquire Medafor, such as a proxy contest or tender offer, we could incur expenses or changes in the value of the Medafor derivative that could materially affect our guidance. There are several motions and matters resulting from our litigation with Medafor before the courts. We are waiting rulings on those matters and they are more fully discussed in our press release this morning, in our Form 10-Q which we expect to file by the end of the week. That concludes my comments and now I’ll turn it back to Steve.

And, at this time, I’ll open up the call for question. Matt Dolan – Roth Capital Partners: Hi guys, good morning. Thanks for taking my call.

Hi Matt. Matt Dolan – Roth Capital Partners: Maybe a couple of question on the guidance, and the changes we saw there, just to be clear. So on the revenue line, Ashley, can you just walk us through why the top end is coming down? Is that specifically related to HemoStase or something more in the base CryoLife book of business?

There are a couple of things of note there. A good portion of the top line – at least the top end of the range coming down relates to grant revenue associated with the BioFoam IDE a little delayed in getting that started. And it looks like that we will in fact begin enrollment in that trial during the third quarter. So, again, as you recall too, those revenue – any revenues that we record there, there are some corresponding expenses. So any reduction in revenue for BioFoam is really neutral to the bottom line of the guidance there. The other thing is as we mentioned a little bit earlier, the HemoStase revenues were adversely affected in the second quarter of this year, due to the variety of issues that we previously mentioned. As we moved into the third quarter, it looks like things are starting to normalize, again for the HemoStase revenue. So there’s a little bit of an effect there. And, BioGlue, saw a trialing of a new product in the Northeast called ProGel. We don't think the product works as well as BioGlue. However, we did see some trial and errors, so we’re bringing it down a little bit for that. Matt Dolan – Roth Capital Partners: Okay, that's very helpful, thanks. And then on the EPS side of things, it still looks like – I mean, even with those pressures on revenue it still looks like revenue per quarter should be slightly up, at least in Q3 and Q4. So what factors – same question on the EPS side of things – what factors are making that come down by $0.02? I know you talked about some operating spend, but maybe a little more detail there would help.

It’s primarily the litigation. We certainly spent a little bit more than we had anticipated in the first of the year and we’ve adjusted our budgets and assumed that we’re going to be spending similar amounts in the second half of the year. So, hopefully, if the litigation proceeds as it has been, we’ve provided for that in the second half of the year in our guidance. Matt Dolan – Roth Capital Partners: So you're talking about close to $1 million in litigation in the second half of the year?

Yes, and that’s roughly what we spent in the first half of the year. Matt Dolan – Roth Capital Partners: Okay. And then just two more. So, on the Medafor situation, I mean, what sort of timeframe do you feel like you can find some type of appropriate substitute or replacement for HemoStase? At this point, obviously the relationship doesn't sound like it's overly healthy.

We’ve stated in the past that we would prefer to remain in the agreement and continue to distribute HemoStase. We just want to move forward with the agreement. With that being said, we continued to look at a business development opportunities in a wide variety of areas and we are not going to get specific on any of our business development activities. And then when if there is an announcement to make in that area, then we’ll announce it. Matt Dolan – Roth Capital Partners: Okay, fair enough. And then finally, with that as kind of a backdrop, as you guys think longer term about just sales growth in general. Can you maybe just give us an update on your strategy there? Are there anything – anything you could do to kind of pick up the growth within the base business beyond these business development activities, adding reps or adding new geographies or what have you? Thanks.

Rather than adding reps or geographies, I think that the key thing to keep in mind is that the HDE, the Humane Device Exemption that we are going to apply for the aortic SynerGraft is a key strategy of the company. And a SynerGraft proceed aortic valve in our opinion is a big deal. And we are expecting that to be approved sometime next year when we get all of our data together. The other thing that you should focus in on is that BioFoam is a very fine product. And during the last conference call, I mentioned that we had found that it was able to withstand cardiovascular pressures. That’s really significant. And I’m looking forward to BioFoam making a big contribution to the company down the road, both in Europe, where it’s getting started now and then as the IDE approval moves forward here in the states. So BioFoam, it has the potential to be a very, very significant product for this company and a SynerGraft-processed aortic valve is also a very significant product. Matt Dolan – Roth Capital Partners: Thank you.

Our next question comes from Raymond Myers with The Benchmark Company. Please state your question. Raymond Myers – The Benchmark Company: Thank you and good morning.

Good morning.

Good morning, Ray. Raymond Myers – The Benchmark Company: Steve, I had some questions, but you just intrigued me with what you just said; that the SynerGraft Aortic Valve would be "a big deal". Can you compare the opportunity for a SynerGraft Aortic Valve with the SynerGraft Pulmonary Valve, which you already have cleared?

Well, that addresses a much bigger market for adult aortic disease, because the pulmonary valve is really focused primarily on pediatric and children, neonates to maybe 20 years old. So the aortic valve opens up the whole adult reconstruction market for us. I don’t have any published data at the moment regarding that. But I do know in the collection of the data for the HDE that we have some outstanding results from SynerGraft valves that are been implanted for 10 years or better. And it’s definitely a better valve than SynerGraft-processed valve in general are better valves and are more durable and long life than a standard-processed cryo preserved valve and the rival, the performance characteristics of any other valve out there. The data will probably be published in sometime here in the next year, year-and-a-half, but it is included in what we are submitting to the FDA regarding that application for the aortic valve. So, for instance, I was just told this week by one of the physicians that has a series of aortic valves that go out over a 10 years that there are no signs of deterioration, that they have normal hemodynamics and they are functioning perfectly. And so those things are really big considerations and of course you don't have to use anticoagulants with them. And I’m looking forward to that product being approved by the FDA. I’m very positive about the fact that the HDE will be granted for that. But, as I said earlier today, that submission, all of the data and everything won’t be submitted until sometime early next year. Raymond Myers – The Benchmark Company: Right. And in the past we had seen supply constraints for appropriate valves, do you still have those? And if there were a large opportunity, could you fill it with pulmonary valves?

The answer to that is yes. Over the last four or five years we have lost five competitors that have left the homograft valve business. And we ourselves have modified the amount of tissue that we’re bringing into the laboratory so that it corresponds more closely with what we think our quarterly revenues are going to be. So I’m optimistic about the possibility that we can double or triple our incoming tissues at the appropriate time. As a result of losing the competitors, there just isn’t the demand for the human valve tissues from the procurement groups that they’re used to be. Raymond Myers – The Benchmark Company: Okay, great. And my next area of questions is regarding the HemoStase. Given though the lack of cooperation from Medafor that you received to date and particularly recently with them not sending the correct product and packaging, do you think that under the current circumstances you will be able to grow your HemoStase sales in the second half of this year or is it permanently impaired?

I don’t think it’s permanently impaired. I think it has a lot to do with their ability to get their product packaged on a routine basis, they do that with contract packaging firms, they don’t do it themselves. And I think it’s a matter of their coordinating those processes better in their company. I know that they have enough powder in storage to significantly increase their production. But I – from a far, I guess it has to do more with getting that raw material to the people that package their product for them and get the throughput coming out on a more regular basis. Raymond Myers – The Benchmark Company: Do you have the supply currently to supply all the different sizes that you require?

We do. Raymond Myers – The Benchmark Company: Okay. So there's no impediment in that regard currently?

Currently, there is not. Raymond Myers – The Benchmark Company: Okay, great. Let me just go back to the ProPatch, because that's something we've been talking about on and off for several years. With a 510(k) product that potentially could go into the larger hernia repair and other markets, what are you doing with that and where do you see that going over the next few years?

We’re in negotiations with a couple of potential partners that address the general surgery markets and we are anticipating doing some type of license agreement, manufacturing agreement perhaps with a partner that will handle that product in the marketplace. And the reason that we’re seeking a partner for that product is that our present distribution network doesn’t focus on general surgery, it’s focused on cardiac and vascular surgery. Raymond Myers – The Benchmark Company: Right, that's certainly understandable. You mentioned a fourth quarter pilot study beginning in hernia, which is the thought that the partner would be funding the pilot study, would you have a partnership?

Yes, we are going – we are going to fund that study. And the reason that we mentioned it was the fact that it will provide further evidence to a potential partner of the efficacy as a product and it’s on a comparative basis with other products that are already out there. Raymond Myers – The Benchmark Company: Can you give us a sense of the magnitude of increased R&D expense that we should expect in the second half of this year?

A lot of that Ray is just due to timing of getting these studies completed and sometimes that’s out of our control. But if everything goes according to plan, we could see some significant increases in R&D expenses in the second half of the year, a portion of which or a large portion of which would be offset by grant revenues associated with the BioFoam IDE program. Raymond Myers – The Benchmark Company: Okay. Thank you.

There are no further questions at this time. I’ll turn the conference back over to management for closing remarks. Thank you.

If there are no further questions, thank you for joining us, and we look forward to seeing you next quarter.

This concludes today’s conference. All parties may now disconnect. Thank you.