Greetings, and welcome to CryoLife Third Quarter 2014 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. I would now like to turn the conference call over to management. Thank you, you may begin.

Good morning, this is Ashley Lee. Welcome to our third quarter conference call. Before we begin, I’d like to make the following statements to comply with the Safe Harbor requirements of the Private Securities Litigation Reform Act of 1995. 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 2014 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 Factor section of our Form 10-K for the year ended December 31, 2013 and our Form 10-Qs for the first and second quarters of 2014, the Form 10-Q for the third quarter of 2014, which we expect to file shortly and in the press release that was issued this morning. Now I’ll turn the call over to Pat Mackin.

Thanks, Ashley, and good morning and thanks for joining the call today. On the call this morning we’ll cover four topics. First, I will provide a brief review of my background and the reasons that I joined CryoLife. Second, I’ll provide a high level summary of our Q3 results. Third, I’ll provide an update on the top priorities for the company. And fourth, be followed by Ashley Lee, our CFO, who will take you through Q3 financial results and provide an update to our guidance. Finally we’ll then open up the lines for Q&A. So let’s get started. I’d like to take a few minutes to introduce myself and give you some background as to why I’m excited about leading CryoLife. As you know, I joined CryoLife on September 2nd as President & CEO, and I was recently elected to the Board of Directors. CryoLife is a natural fit to my over 20 years of leadership experience in cardiac and vascular medical companies. I spent the last 12 years in Medtronic. During my time there I lead their global in the vascular business for two years, I let their European vascular intervention business for three years, and I ran their CRM division for seven year’s. In the five years before joining Medtronic, I led Genzyme’s cardiac surgery business. So in total, I’ve spent more than 20 years running and working in businesses that are focused on cardiac surgeons, vascular surgeons, interventional cardiology, and electrophysiology, which ideally suits me for the role here in CryoLife. Given my strong cardiac and vascular background, there were several things that attracted me to the company. First, the company has existing novel and innovative products like BioGlue, the HeRO Graft and SynerGraft Technology. Second, they have a seasoned professional sales team that are focused on…

Thanks, Pat. This morning we reported our results for the third quarter of 2014. We continue to make progress on executing our strategy to leverage our established salesforce to drive growth from an expanding portfolio of high margin medical device products. The following factors influenced our third quarter performance. Total company revenues increased to $37.1 million for the third quarter driven by 8% year-over-year revenue growth from our higher margin product segment. Our international revenues were up 4% for the third quarter of 2014 compared to the prior year period, primarily driven by growth outside of Europe. Our domestic revenues increased 2% for the third quarter of 2014 compared to the prior year period, primarily driven by 35% increase in HeRO Graft revenues. I have more on that later in my comments. Worldwide BioGlue revenues in the third quarter were up 6% year-over-year. International BioGlue revenues were up 11%, on an 11% increase in volume. Domestic BioGlue revenues were up 3%, on a 1% increase in volume. This was the fifth straight quarter that we’ve seen an increase in domestic volume year-over-year. Total company HeRO Graft revenues increased 45% to $2 million in the third quarter of 2014 compared to $1.4 million in the third quarter of 2013. This came on a 45% increase in volume. This increase reflects the growing interest in the HeRO Graft as a long term solution for hemodialysis patients who are out of excess options. Internationally we continue with our launch into European markets where we recorded $167,000 in revenue during the quarter. Overall we remain very optimistic about the prospects of the HeRO Graft. PerClot sales increased 13% for the third quarter of 2014 compared to the third quarter of 2013. The increase is due to growth in both new geographies and new indications…

So at this point we’re going to go ahead and open up the lines for the Q&A session. Operator, could you come back on.

(Operator Instructions) And our first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your question. Jeffrey Cohen – Ladenburg Thalmann: Hi, Ashley and Pat, thanks for taking our questions.

Hello, Jeff. Jeffrey Cohen – Ladenburg Thalmann: How are you? I saw you jump around but I’m – for PhotoFix, did you make an upfront payment, and what was the amount, and was that made in the third quarter?

No. We made an upfront payment to Genesee back in late first quarter, early second quarter of this year and that was approximately $0.25 million. Jeffrey Cohen – Ladenburg Thalmann: Got it. Can you talk about ProCol, number of SKUs that you expect sizes, diameters and lengths?

We’re going to have four. We’re going to have a – and they are all going to be 6 millimeters in diameter, in various lengths, 10, 25, 30, and 40 centimeter grafts. Jeffrey Cohen – Ladenburg Thalmann: 10, 25, 30 and 40?

Yes. Jeffrey Cohen – Ladenburg Thalmann: Okay. You don’t expect longer than 40?

No. Jeffrey Cohen – Ladenburg Thalmann: Okay. So could you talk a little bit about the ProCol idea, it looks like you had a slight delay, could you talk about the protocol changes or the study design changes or reconsiderations that have been made?

This is Pat. So clearly the clinical trials and making sure you get your protocol, whether the FDA is happy with what you’ve got, we’ve actually had an IDE approval for quite a period of time, however there has been some items that they’ve wanted to kind of refine to make sure that when this is all said and done we’ve meet the requirements and we’ve got a trial that we feel good about, take it through the panel or through the PMA process. So it’s really some final refinements around statistical plan, and this is a – the fact we’ve got multiple indications inside of one trial creates a little bit of complexity, so this trial is 324 patients, they are going to be cardiac patients, there is going to be urology patients and general surgery patients. So I mean that’s really where this is all around, the statistical plan, and really making sure that we have buying from the FDA on what we’re going to perform with. Jeffrey Cohen – Ladenburg Thalmann: Okay. Same number of centers expected?

Yes. Jeffrey Cohen – Ladenburg Thalmann: Okay. Could you talk about the CryoValve SG, if there is a transition for a Class III and PMA? What’s the current sales revenue now of the product on an annual basis or quarterly basis that you could talk about?

It’s about $10 million to $11 million on an annual basis. Jeffrey Cohen – Ladenburg Thalmann: Okay. So theoretically you may have an R&D done in roles over 20 or 30 months which should not affect the sales as it’s going on?

Well that’s correct. This is actually a pretty complicated, I’ve been to 10 FDA panels, I’ve never been to a classification panel. I think the last classification panels were in the 70s. So this is a fairly unique panel because typically you bring a product to a panel and they evaluate the merits of that product and decide to approve or not approve. This is very unique in a fact that they were there – the panel was there to discuss a whole class of products which is more than minimally manipulated tissue valves and/or homograft’s and we just happen to have the only product that’s approved. So it’s a little bit confusing I think. Many of the panel members that voted said that they agreed that this category should move to a Class III but CryoLife, you guys should work to get this product approved, probably because we’ve got such great data. So the steps of the process on this reclassification are threefold. Number one, the panel has made a recommendation of the FDA; they are purdue to decide what to do with that. My sense was that they will move this to a Class III recommendation, there will be a period of time for public comment, and once that’s done that will be in the next, probably, six to nine months. We will then go and meet with the FDA and see what they are looking forward from us to go through the PMA process. As I commented in my comments, CryoLife has undergone a pretty extensive clinical program as a post market requirement to the original 510-K that they got back in the 2003-2004 timeframe. That included 800 patients years follow up, that data is just being wrapped up, we showed the preliminary results at the panel meeting, and that will be finalized here by the end of the year. So our hope is that we’ve actually shown that this product is safe and effective, we’ve got 800 years of patient follow up. My hope is that we can work with the agency to use our existing data to go forward with the PMA but we still have to have that conversation. But no matter what happens, this is going to be a three to four year process as we work through, kind of working with the agency. Jeffrey Cohen – Ladenburg Thalmann: Got it. Just a couple of more if I may, any notable pricing changes for Q3 or Q4 expected?

No, we had our last increase right at the very beginning of Q3 and there are none that are currently contemplated for the balance of the year. Jeffrey Cohen – Ladenburg Thalmann: Okay, one more. Could you talk about the appetite for acquisitions pipeline out there that you’re seeing for acquisitions on the BD front? And thanks, again.

Obviously one of the attractions to the company for me was, as I commented earlier, I’ve got a lot of experience in the cardiac and vascular space, I know the customers, I know the markets, I think at some degree that CryoLife has got an abundance of opportunities in directions we could go. So part of what I’m going to be doing, I’m spending a lot of time in the field with customers, with our cardiac customers, our vascular customers. But we also have unique technologies that are coming out in other spaces, so that’s going to be a process that I’ll be going through with the management team over the next three to six months on what is our strategic direction and where do we want to kind of double down on the M&A side because that’s one of the real appeals of the company is that we could really strong cardiac and vascular brand, good sales forces, and we’ve got cash flow and the opportunity with no debt to make acquisitions and there is a number of different things that I’m interested, I’m obviously not going to comment on what they are but I think there is a lot of different opportunities and we just have to figure out given the market dynamics, the competitive dynamics, what’s available, what’s in our price range, what fits, there is lots of things we have to go through and I’ve got a lot of experience, I’ve done 50-60 deals in my career. So we’ll be looking at that but I’m obviously not going to share much more than that because – I’m not going to show my cards. Jeffrey Cohen – Ladenburg Thalmann: Okay. Guys, thanks very much for taking the questions.

Thank you.

Thank you. And our next question comes from the line of Joe Munda with Sidoti & Company. Please proceed with your question. Joe Munda – Sidoti & Company: Good morning Pat and Ashley, thanks for taking my questions.

Hey Joe, good morning. Joe Munda – Sidoti & Company: As far as the – the last caller touched on the PerClot IDE, I’m just wondering how should we look at the cost going forward, is there any material change from your outlook, prior to when we actually thought the trial would take place, how should we look at it?

I think Ashley can comment further but I think the biggest difference is going to be, you see that our R&D spend has been light primarily because of the PerClot IDE has been delayed, again because of the working through the FDA. So as soon as we get that trial, the protocol agreed to with the FDA and we started enrolling those expenses are going to go back up to what we anticipated them being this year.

Yes, I still think that we’re probably $5 million plus from fully completing the trial if we start enrolment in the first quarter, as anticipated there is a good chance that a significant portion of that is going to be spend or incurred during 2015 in regards to our full R&D spend for 2015 we’re going to have more to say about that and our year-end earnings conference call, that’s typically when we get our first look on what the guidance is going to be for 2015. Joe Munda – Sidoti & Company: Okay. And then, I guess on BioGlue, Japan, you touched on it a little bit here with the indication, the hopes for approval, can you give us some sense of what the actual market opportunity would be like in Japan. I’m not sure if I caught that.

Yes, I will give you some specifics. The current indication gets a little bit technical but the current indication for BioGlue in Japan is for aortic dissections which is a very narrow application. That is about $5 million opportunity and our partners there, the distributors there have actually done a nice job penetrating that because it’s a real need, it’s kind of life and death type product. The other big applications for BioGlue in cardiac surgery in most of the markets around the world, we also have – that product can be used in complex aortic surgery, in cardiac surgery, as well as great vessel surgery. So it doubles the opportunity. So the current $5 million market probably goes then to $10 million range. Joe Munda – Sidoti & Company: Okay. And then in terms of – I’m jumping around as well, in terms of the case with C.R. Bard, when would you hope that this would be fully resolved? I know you can’t go into specific details but I know you said that January case date, are we assuming some resolution in January or is this thing going to be pushed out a couple of months?

Yes, there is a date set for January – in the comments I made, Bard is going for preliminary injunctioning in the U.S. and that trial date is set for January. So we will get obviously an early read. My own opinion is that this is – I think we’ve got a very strong case but I think when you look at the financials of the cost of a patent battle, for us and for them, from a business standpoint I just don’t think it makes sense to take this thing to trial. Their patent runs out in February of 2019, we’re not going to commercialize PerClot surgical until 2017. So you can do the math, it just doesn’t make a lot of sense, so even if they won flat out and got a royalty, it doesn’t pay for their legal bill. So I’m not sure why they would want to take this thing forward but we feel like we have a good case and we’ll take it forward but I just think it makes a lot more sense to settle this thing than it does to fight it out. Joe Munda – Sidoti & Company: Okay. And then I guess my last question, on the tissue processing side of the business, I know you guys talked about that you had stopped shipments in EU earlier this year. Any plans to reengage EU or is that segment you’re staying away from?

Well we’ve had – I let Ashley comment because obviously just given my limited time here. We had looked at turning tissues back on if you will in Germany and Austria, and are going through the process to look at what that would entail. So we’re kind of in the middle of that raid now but we’re not prepared to commit whether we’re going to do it or not, we’re just in the planning stage. I don’t know if Ashley you want to add anything?

No, I think that’s fair. We’re just going through the analysis right now and when we make a determination, we’ll let you know. Joe Munda – Sidoti & Company: Okay. Thank you.

Thanks.

Thank you. And we have no further questions at this time. I would now like to turn the floor back to management for closing comments.

I appreciate everybody joining the call this morning. As I commented, I’m very excited about what I see here from – we’ve got three nice product launches coming out of the gates, we’ve got some mid-term things coming, we’ve got some long term opportunities in the PerClot IDE trial, we’ve got a good sales force, and I think the ability to acquire into unique spaces that we can make a difference. I’ve been here for two months and again, I’m very excited about what I see here and I look forward to working with our team here to take the business forward. So we look forward to giving you guys an update on the next call. Thanks for joining.