Case Study: Cryolife, Inc. Cyrolife
The company that I chose was Cryolife, Inc. Cyrolife was founded in 1984 as a processor of the preservation of human heart valves for adults and children that needed heart valve reconstruction (Cryolife, 2015). The company has expanded to provide biomedical products for cardiac and vascular products, surgical adhesives, and processed human cardiac and vascular transplants (Cryolife, 2015). Cyrolife is one of the few publically traded tissue processors within the transplant industry and operates the business as a for-profit entity. According to the MD&A, the company had annual revenues of $144.6 million and produced $8.1 million in cash flows during the 2014 fiscal year. This was a 3% increase from the previous fiscal year. Since it is against
the federal law to buy and sell human tissues, the company utilizes deferred preservation costs to account for the human tissues held in quarantine or processing within the organization. In 2014, the deferred preservation costs totaled $540,000 in write-downs. Write-downs for deferred preservation costs are calculated by the costs related to acquiring the transplantable tissue, including direct materials and labor utilized as well as indirect cost, at lower than market value.
In the past, Cryolife had been cited by the FDA because of quality, validation, environmental monitoring, handling, processing, and employee training issues. Revenues from the preservation area of the company suffered an overall 4% decline in revenues in order to address the issues that the FDA referred to in the warning letters from 2012, 2013, and 2014. Management decided to conduct additional internal employee training the second quarter of 2014 by halting preservation services in order to meet the requirements of the observations of the FDA. Cryolife continues to improve areas cited in the FDA warning letters in order to remain compliant with the regulations.
the federal law to buy and sell human tissues, the company utilizes deferred preservation costs to account for the human tissues held in quarantine or processing within the organization. In 2014, the deferred preservation costs totaled $540,000 in write-downs. Write-downs for deferred preservation costs are calculated by the costs related to acquiring the transplantable tissue, including direct materials and labor utilized as well as indirect cost, at lower than market value.
In the past, Cryolife had been cited by the FDA because of quality, validation, environmental monitoring, handling, processing, and employee training issues. Revenues from the preservation area of the company suffered an overall 4% decline in revenues in order to address the issues that the FDA referred to in the warning letters from 2012, 2013, and 2014. Management decided to conduct additional internal employee training the second quarter of 2014 by halting preservation services in order to meet the requirements of the observations of the FDA. Cryolife continues to improve areas cited in the FDA warning letters in order to remain compliant with the regulations.