) revealed that it has completed acquisition of privately-held
Vidacare Corporation, based in San Antonio, Texas. Vidacare is a
leading provider of intraosseous (IO), or inside the bone access
devices. However, the announcement failed to impress investors,
may be due to the lack of any material impact of the acquisition
on the 2013 earnings. Shares fell 0.4% to $97.09 yesterday.
Vidacare's products include EZ-IO Intraosseous Vascular Access
System, the OnControl Bone Marrow System, and the OnControl Bone
Access System. They are used in a wide array of applications such
as vascular access, emergency medicine, oncology and spinal
Teleflex financed the transaction using borrowings under its
revolving credit facility. The transaction is valued at $262.5
million. However, according to Vidacare, total proceeds to be
distributed to Vidacare shareholders and vested option holders
are expected to be $285 million.
The acquisition is not expected to considerably impact Teleflex's
2013 revenues and adjusted earnings per share. However, it is
expected to contribute roughly $68-$72 million in revenues and
10-15 cents in adjusted earnings per share in fiscal year 2014,
excluding non-recurring purchase accounting items and other
acquisition and integration related costs.
Teleflex, a Zacks Rank #3 (Hold) stock, posted a 26.7% rise in
adjusted earnings to $1.33 per share for the third quarter of
2013 from $1.05 in the same quarter of 2012. With this, earnings
significantly beat the Zacks Consensus Estimate of $1.14. Net
earnings surged 29.3% to $55.6 million from $43.0 million in the
Net revenues went up 12.4% to $413.8 million, exceeding the Zacks
Consensus Estimate of $410 million. Excluding foreign exchange
fluctuations, net revenues rose 11.6% from the prior-year
The increase in revenues was attributable to continued strength
in Critical Care, owing to the contribution from the acquisition
of LMA International in October 2012, higher average selling
price of products, and the non-stop introduction of new products.
For 2013, TFX anticipates constant currency revenue growth
between 8.5% and 10%, down from the earlier guidance of 10% to
12%. The lower revenue guidance was driven by weaknesses with
respect to sales of its OEM and respiratory therapy products.
Teleflex expects weaknesses in those product lines to continue in
the fourth quarter as well. In the fourth quarter, TFX also
expects lower revenue in Asia due to the timing of certain
distributor negotiations which are progressing slower than
However, Teleflex upgraded its adjusted earnings per share
guidance due to its continued cost reduction efforts. The company
expects adjusted earnings per share in the range of $4.85 to
$5.00 compared with the prior outlook of $4.70-$4.90. The current
Zacks Consensus Estimate of $4.94 lies within the guided range.
While TFX remain on the sidelines, some better-ranked stocks in
the medical instruments industry include
Natus Medical Inc.
). All of them carry a Zacks Rank #1 (Strong Buy).
NATUS MEDICAL (BABY): Free Stock Analysis
CRYOLIFE INC (CRY): Free Stock Analysis
CYNOSURE INC-A (CYNO): Free Stock Analysis
TELEFLEX INC (TFX): Free Stock Analysis
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