Vascular Solutions (VASC) Buys SMARTNEEDLE and pdACCESS Products; Raises Q2, FY10 Outlook
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Revenue Growth %: +11.7%Financial Fact:
Net earnings per share - diluted (in dollars per shares: 0.12
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Vascular Solutions, Inc. (Nasdaq: VASC) today announced that it has acquired the assets related to the SMARTNEEDLE™ and pdACCESS™ Doppler guided needle access business from Escalon Vascular Access, Inc., a division of Escalon Medical Corporation (Nasdaq: ESMC). The SMARTNEEDLE and pdACCESS products consist of a hand-held monitor and one-time use needles designed to provide auditory ultrasound guided access to arteries and veins during catheterization procedures. The original SMARTNEEDLE product was introduced in 1992, with current annualized sales of the combined products of approximately $3.8 million.
Effective immediately, sales of the SMARTNEEDLE and pdACCESS products will transition to Vascular Solutions’ existing direct U.S. sales force. Manufacturing of the products will be transitioned to Vascular Solutions’ existing facility in Minnesota over the next four months. The acquisition price of $5.75 million consists of $5.0 million paid in cash at closing and $750,000 payable in cash upon successful completion of the transfer of the manufacturing processes.
In addition to the SMARTNEEDLE and pdACCESS products, Vascular Solutions has acquired the assets related to the new VascuView TAP™ visual ultrasound system and will pay Escalon a one-time cash earn-out payment in an amount equal to 25% of the net sales of the VascuView TAP products sold between July 1, 2010 and June 30, 2011.
The acquisition will be accounted for as a purchase of assets and technology in the second quarter of 2010. On a preliminary basis, approximately $750,000 of the acquisition price is expected to be allocated to the assets acquired in the transaction, with $3,250,000 allocated to intangible assets and the remaining $1,750,000 allocated to goodwill. The intangible assets will be amortized at the rate of approximately $90,000 per quarter.
Due to the acquisition, VASC is raising guidance: sees Q2 sales of $19.2-$19.5 million with EPS of $0.09-$0.10. The Street is currently looking for sales of $19.08 million on EPS of $0.11. For FY10, sales guidance moves from $76-$78 million to $78-$80 million, versus the consensus of $76.91 million, and EPS move from $0.53-$0.57 to $0.55-$0.59, which compares to the Street estimate of $0.42.
Effective immediately, sales of the SMARTNEEDLE and pdACCESS products will transition to Vascular Solutions’ existing direct U.S. sales force. Manufacturing of the products will be transitioned to Vascular Solutions’ existing facility in Minnesota over the next four months. The acquisition price of $5.75 million consists of $5.0 million paid in cash at closing and $750,000 payable in cash upon successful completion of the transfer of the manufacturing processes.
In addition to the SMARTNEEDLE and pdACCESS products, Vascular Solutions has acquired the assets related to the new VascuView TAP™ visual ultrasound system and will pay Escalon a one-time cash earn-out payment in an amount equal to 25% of the net sales of the VascuView TAP products sold between July 1, 2010 and June 30, 2011.
The acquisition will be accounted for as a purchase of assets and technology in the second quarter of 2010. On a preliminary basis, approximately $750,000 of the acquisition price is expected to be allocated to the assets acquired in the transaction, with $3,250,000 allocated to intangible assets and the remaining $1,750,000 allocated to goodwill. The intangible assets will be amortized at the rate of approximately $90,000 per quarter.
Due to the acquisition, VASC is raising guidance: sees Q2 sales of $19.2-$19.5 million with EPS of $0.09-$0.10. The Street is currently looking for sales of $19.08 million on EPS of $0.11. For FY10, sales guidance moves from $76-$78 million to $78-$80 million, versus the consensus of $76.91 million, and EPS move from $0.53-$0.57 to $0.55-$0.59, which compares to the Street estimate of $0.42.
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