Greetings, and welcome to the CryoLife’s Second Quarter 2013 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief 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 CEO for CryoLife. Thank you, sir. You may begin.

Hello, good morning, everyone. This is Steve Anderson, CryoLife’s President and CEO, and I would like to welcome you to CryoLife’s Q2 2013 Conference Call. With me today is the Company’s Executive Vice President, COO and CFO; Ashley Lee. This morning, CryoLife reported sales and earnings for the second quarter of $33.5 million, and $0.06 respectively. We set a quarterly sales record for the HeRO Graft of $1.4 million. Sales for the first six months of the year were $69.1 million, a 5% increase over the same period a year ago. The agenda for today is as follows. Ashley will go over this morning’s press release in detail. He will comment on revenue by product line. He will comment on the year-to-year success we are having with the HeRO Graft and the cardiac laser business we bought from Cardiogenesis. He will also comment on the company’s potential decision to open a sales office in Singapore. I will comment on the FDA conditional approval of the PerClot IDE and give some details about the size and scope of the trial. The number of patients and institutions involved, as well as give you some idea of the approval cycle. I will also comment on the clinical trial that we plan for BioGlue in China, and the major join venture distributor with whom we expect to partner. I will also comment on the new tissue distribution initiative that we are contemplating establishing in Germany in the very near future. After my comments are completed, Ashley will come back to discuss our financial guidance for the rest of the year.

To comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995, I would like make the following statement. Comments made in this call that look forward in time involve risk and uncertainties, and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements made as to the company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future, including the guidance for 2013 that I will provide in a moment. 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 Factors section of our previously filed Form 10-K for the year ended December 31, 2012, and our subsequently filed Form 10-Qs for the first and second quarter’s of 2013, and in the press release that went out this morning. This morning we reported our results for the second quarter and first six months of 2013. We achieved record second quarter revenues of $33.5 million driven by year-over-year and sequential quarterly revenue growth from our three newest product lines, PerClot, Revascularization technologies or TMR, and HeRO Graft balanced by lower sales in our Tissue Preservation segment. During the quarter, we also achieved important regulatory milestones, including conditional IDE approval from the FDA to begin our PerClot clinical trial, FDA approval for our improved TMR laser handpiece, FDA clearance of our next generation HeRO device, and CE Mark for the current commercial version of the HeRO Graft. The following factors influenced our revenue performance. Our domestic revenues were up 2% and 4% for the second quarter and first half of the year compared to the prior years. Our international revenues were down 3% for the second quarter, and up 12%…

The big news this quarter was the FDA’s conditional approval of the IDE for PerClot’s clinical trial in the U.S. The PerClot IDE is a prospective multi-center, multi-disciplinary controlled clinical trial. Upon meeting FDA’s conditions for approval, we expect the trial to begin in the late fourth quarter, and to include 320 patients at no more than 15 institutions. There will be a 160 patients who will receive PerClot and 160 will receive the other FDA approved powdered hemostatic agent. The follow-up time for the clinical trial will be one month. The clinical trial will permit us to conduct a head-to-head clinical evaluation of an already approved hemostatic agent against PerClot, which we believe has some compelling advantages. We believe that PerClot is a very superior product, achieves seamless faces twice as fast and absorbs four to five times more fluid than the pleasantly approved product. The primary objective of this investigation is to demonstrate non-inferiority in the achievement of hemostasis at five minutes in subjects receiving PerClot compared to subjects receiving a controlled hemostatic device. In addition, we will assess safety outcomes and our secondary endpoint of hemostasis at two minutes in the patient’s cohort. When approved, we believe PerClot has the potential to have a substantial impact on the sales and operating results of the company. We feel this way primarily, because PerClot will be manufactured in our facility here in Georgia, and we expected to have gross margins north of 80%. Additionally, PerClot addresses markets that are really large in comparison to the markets for CryoLife’s in line products. We estimate that the 2014 U.S. market for a powdered hemostatic agent is $1.1 billion, while the European market is estimated to be $430 million in 2014. For the first half of 2013, we had international sales of…

Our updated 2013 financial guidance was included in our press release that went out this morning. In summary, we slightly decreased the top end of our total revenue guidance from $143 million to $141 million, and lowered our range of earnings per share guidance by $0.01. The primary factor behind lowering the top end of the revenue range was the UK HTA’s limitations on our ability to ship tissues into the EU. Although we expect that our tissue processing revenues will be flat in the second half of 2013 as compared to 2012, our third quarter comp will be more difficult than our fourth quarter comp. Note that our EPS guidance can be materially affected by a variety of factors including the magnitude of our R&D, and clinical trial expenses, expenses related to potential future business development, litigation and share repurchases, which came out currently as we estimated. Finally, we believe we are continuing to successfully execute on our strategy of positioning the company for accelerated revenue and earnings growth by expanding our addressable market opportunities through internal R&D, expanding and leveraging our sales and marketing and executing on business development opportunities. Looking forward, we believe that we have several opportunities to expand the company’s market opportunity with higher growth, higher margin products. These include continuing to drive revenue growth in the HeRO Graft through the launch in our broader U.S. direct sales force, the limited market launch in Europe, and the introduction of the next-generation HeRo device in the U.S. near the end of the year. Initiate enrollment in our PerClot IDE clinical trial and pursue additional marketing approvals in new international markets. Continue to expand our European sales and marketing coverage for PerClot to include other surgical specialties in addition to cardiac and vascular surgery, seek expanded indications for BioGlue in Japan and regulatory approval for PerClot in Japan and BioGlue in China, filled on our commitment to the Asia Pacific region by retaining distribution partners for our products in new markets such as China and Southeast Asia, drive our TMR business through our clinical registry and increase laser console evaluations, and finally, continued to evaluate business development opportunities. If we execute on these initiatives, we will be in a good position to drive top line growth on our higher margin medical products and further leverage our operating infrastructure to improve profitability. That concludes my comments and now I will turn it back over to Steve.

At this time we will open up the call for questions.

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Thank you. Our first question comes from the line of Tom Gunderson with Piper Jaffray. Thomas J. Gunderson – Piper Jaffray & Co.: All right, good morning, guys.

Good morning.

Good morning, Tom. Thomas J. Gunderson – Piper Jaffray & Co.: So, just a couple of clarifying questions, conditional approval, I know that’s kind of standard language, I’m talking about the PerClot IDE. Are there any conditions that are unusual or something that you can’t scratch your head, and say why do we left it out?

Not really. We have to provide them with some more data and information, and to some additional and minor animal studies that they wanted to see. But I think that we can get that done and completed no later than the fourth quarter. Thomas J. Gunderson – Piper Jaffray & Co.: Okay, thanks. And then also on PerClot you – thanks for the description of the clinical trial and the primary and secondary endpoints. Do you have to do anything different or new for that for PerClot to be used in the da Vinci robots in the U.S. like it is Europe or is that practice of medicine, and doctors will be free to do that?

That’s practice of medicine. There aren’t any – by the FDA regarding robotic surgery use of it (inaudible). Thomas J. Gunderson – Piper Jaffray & Co.: Thank. And then on BioGlue, just of couple of clarification, and I’ll be done. One is the BioGlue order in – for Saudi Arabia is that brand new to Saudi Arabia or is that a continuation of an increase and continuation of sales that you’ve had before?

Our Saudi distributor has been increasing their business year-over-year and has been doing very well. This tender is incremental to their base business. So this will be totally incremental but even outside the tender, our distributor there continues to be very, very well. Thomas J. Gunderson – Piper Jaffray & Co.: Got it. Thanks. And then last question, TMR handpieces continuing to do well, did you sell any systems in the quarter are you not even trying to?

We sold one system during the quarter and the ASP was less than $100,000 on that particular system. But again, it’s not our focus, it is driving utilization, but with that being said, if the hospital wants to purchase a system, then we’re happy to sell them one. Thomas J. Gunderson – Piper Jaffray & Co.: Got it. Okay, that’s it from me. Thank you.

Thanks.

Our next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Oh, hi. Thanks for taking my questions. If you’d go over in a couple already addressed, so could you talk about the TMR handpiece write down, are those pretty much garbage, the previous generation, are they going to be discarded and not used?

That is correct. They’ll be discarded and not used. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay. And could you clarify a little bit if you can in detail on the other $344,000 for BD and integration charges, what’s that related to, is that handpieces?

No. That’s predominantly related to just ongoing business development initiatives where we continue to evaluate opportunities, and the other thing that it relates to is some G&A expenses that were incurred in closing the Hemosphere facility in Minnesota and transferring that process down to our Atlanta operations. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay. (Inaudible) Your commentary about the UK HTA limitations, is that specific, that’s for all of Europe, not just for the UK, correct?

That is correct. Our subsidiary outside of London is our importer of record for all tissues that are exported into the EU, so any shipment of tissue that we make into the EU set us down in the UK first and then travels on to its final destination in Europe. That is one of the reasons why we are potentially looking at establishing a GmbH in Germany that – if we do that, that will become our importer of record assuming that we’re not able to get the issues with the HTA result. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: I got it, okay. Thanks. Steve on the PerClot IDE, what’s your current anticipated timeline, do you think you’ll begin enrollment by the end of the year?

Yes, I do. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay. And will you specify the institutions or we’ll have to wait to see that on the FDA certainly?

I don’t think I’m going to specify the institutions, but it won’t be more than 15. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Got it, okay. And will you specify or will we know the clinical or other powdered hemostatic agent which is being used as a competitor?

Yes, we will, when we start the trial, I will do that at the next call. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay, got it. Okay, when you say you’re bundling PerClot with BioGlue, are you selling those, are you permitted to sell those together or are there bundled packages that you’re actually selling?

That’s what we will plan, that’s what we’re planning to do. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay.

We’re planning to add, which is to purchase both products then we will arrange a discounted price format for them based upon their volumes.

We aren’t doing that…

Once it gets approved, that’s what we will be doing. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay. You are talking about in the U.S. is everything going pleasantly in Europe?

No, it’s not. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay. I got it. And the re-inspection is very good news, congratulations on your verbal communication with the FDA. Any idea – they’ll have to schedule re-inspection could that be weeks or months?

It could months, but they will not schedule it. It will be – they will come in here some morning, and put their badges in at the front desk, and tell us that we’re being inspected. We have no way of knowing when they will come here or how long it will last. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay.

The last time they inspected the CryoLife per se has lasted about a month. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Okay, I got it. Okay. And will you file your Q today or tomorrow?

We are attempting to file it today. It might slip to tomorrow, but it will be this week. Jeffrey S. Cohen – Ladenburg Thalmann & Co., Inc.: Perfect. Okay. Guys thanks, nice quarter. Thank for taking the questions.

Thank you.

Our next question comes from the line of Joe Munda with Sidoti & Company. Please proceed with your question. Joseph Munda – Sidoti & Company LLC: Good morning, guys. Thanks for taking the questions.

Good morning, Joseph. Joseph Munda – Sidoti & Company LLC: Lot of information here, but – and a lot of questions had been answered already. Actually, I was just looking for some clarification on the tissue issue in the UK and EU. Can you fill us in a little bit on the background of what they’re saying or the reason as to why they’re not letting you bring into the country and the possibility of a Germany GmbH?

Yeah. Back in the – I guess first quarter of this year, the HTA became aware of the FDA warning letter, and they placed their importation limitations on our tissues solely based on the fact that we had received a warning letter without conducting an inspection of our facility or really even having a conversation. So the FDA warning letter was really the basis for the fact that they imposed these limitations. Since that time, we have been working and going back and forth with the HTA, more as an educational process to inform them as to exactly about our process and so forth, and they’ve had some questions. And there’s been a lot of back and forth over the last three to four months, and we’ve been able to answer the majority of those questions. There is still one or two that are open, that we are attempting to resolve with them. And as it stands right now, we’re waiting to hear back from them as to whether or not they are satisfied with our responses. So we continue to wait and we really have no idea as to when or that particular issue can be resolved. If it is not resolved successfully, then we very well could establish a GmbH in Germany that would become the importer of record for our tissues going into Europe. That would be a process that we would have to go through, but that is one of the reasons why we are contemplating, establishing that particular organization. Joseph Munda – Sidoti & Company LLC: Now Ashley I mean from what I understand. Would they have to send over an inspector for the facility to give the go ahead, is that the next step in the process?

We don’t think so. We don’t know for sure, but we don’t make that and inspection about HTA would be necessary. Everything that has been done so far has just been back and forth with documentation and answering questions. And again, we don’t believe that an inspection would be necessary. Joseph Munda – Sidoti & Company LLC: Okay. And then as far as you guys did make any interesting point with Medafor closing their office in Germany and moving to Sweden, now you still retain the ownership stake in Medafor, correct?

Yes. Joseph Munda – Sidoti & Company LLC: Okay. Now, how does that affect, I mean the relationship with Medafor with you guys moving into that area. I’m just trying to get a sense of, a) what the possibilities are with that Medafor stake? And b) what the possibilities are in Germany, i.e., just a little bit more clarity on this situation would be great, if you can?

Well, our business continues to do very well in Germany, and all of our direct markets as it relates to PerClot as well as several of our distributor markets in Europe. So our business continues to do very well there. The fact that they no longer have a presence in that particular market, I think it will only be a positive for us, I think it remains to be seen as to exactly the full impact that it will have in our business, but it certainly can only be viewed as a positive for us going forward. In regards to what was the stake in Medafor. We currently have no plans right now. I think eventually in order to realize the value of that stake, we’ll have to sell it either to another interested investor or if Medafor is ultimately acquired, but this as a reminder the carrying value of that particular investment is about $2.5 million dollars, and it’s roughly about a 10% stake in the company. So it’s not a huge amount that we’re carrying that particular investment at, and as it stands right now, we think that, that stake is worth at least that much. Joseph Munda – Sidoti & Company LLC: Okay. And just one quick question on the trial. I guess Steve, I know you touched on it a little bit, but as far as the cost for the trial, and the length of the trial. I mean, I know on pervious calls you guys had mentioned 2015 as a possible launch date. I want to know if that is still a feasible launch date as well as possible clinical trial cost related to the PerClot, thank you?

I think 2015 is still a good number – I mean a good year, good opportunity. We’re going to start the clinical trial probably towards the end of the fourth quarter of this year. And it will be a across numerous specialties, so the trial should be, we should be able to enroll people quickly, I would think.

As far cost to do, we think it’s going be somewhere in the $6 million plus range to complete the trial going forward with the majority of that cost being incurred in 2014. Joseph Munda – Sidoti & Company LLC: Do you think it spread evenly over the four quarters or is that weighted any different?

Hopefully, I would weight it more towards the first three quarters of the year. I mean, I would hope that enrollment would be by and large completed by that time. So I would weight it little bit more towards the first few quarters. Joseph Munda – Sidoti & Company LLC: Okay. And Ashley, just one last question, as far as operating cash flow and CapEx, could we get a clean number for the quarter?

Operating cash flow came in at $5.2 million; CapEx I believe was $2.3 million to $2.5 million range, right about $2.3 million. Joseph Munda – Sidoti & Company LLC: And that was for the – that’s for nine months or for the quarter?

.: Joseph Munda – Sidoti & Company LLC: Okay year-to-date, okay.

.: Joseph Munda – Sidoti & Company LLC: Okay. Thank, guys.

Mr. Anderson, it appears we have no further questions at this time. I’d now like to turn the floor back over to you for closing comments.

Thank you. We have enjoyed to having you visitors during the conference call. And we look forward to speaking with you next quarter.

Ladies and gentlemen this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.