- $7.2 million purchase to be followed by $4.5 million in capital improvements in 2015, all funded from company's existing cash with no debt
- Facility renovation to boost company's R&D and manufacturing capacity and support significant expansion in employment
- Facility acquisition lowers company's annual cost of occupancy, resulting in $0.02 per share in earnings accretion beginning in 2015
MINNEAPOLIS, Dec. 2, 2014 (GLOBE NEWSWIRE) -- Vascular Solutions, Inc. (Nasdaq:VASC) today announced that it has completed the acquisition of its manufacturing facility, a 79,300-square-foot building located at 6464 Sycamore Court North in Maple Grove, Minnesota. The purchase price was $7.2 million and was paid with existing cash and no debt.
In February 2014, Vascular Solutions announced that it had entered into a purchase agreement for the facility, which the company has occupied under a lease agreement since 2003. The building currently houses Vascular Solutions' principal manufacturing, quality, regulatory, and research & development operations.
During 2015, the company intends to invest approximately $4.5 million in capital improvements to renovate the manufacturing facility to meet the company's continued manufacturing requirements. All of the expenditures are expected to be funded from the company's cash on hand and will not be supported by any debt or government grant.
The acquisition and renovations are part of Vascular Solutions' continued growth strategy, which includes over ten consecutive years of double digit sales growth from new product development. The company anticipates hiring an additional 60 skilled employees for its Minnesota operations over the next two years, and the new hires will expand the company's workforce in Minnesota to over 500.
Vascular Solutions expects the acquisition of the 6464 manufacturing facility to reduce its annual cost of occupancy by approximately $350,000 on an annual after-tax basis beginning immediately, resulting in approximately $0.02 per share of earnings accretion.
"Vascular Solutions has launched more than 80 products since 2003, and in recent years we have averaged 10 new medical devices developed and launched each year to serve the needs of interventional physicians and their patients," said Howard Root, Chief Executive Officer of Vascular Solutions. "The purchase of our manufacturing facility, the expansion of our R&D resources, and the creation of more well-paying jobs are part of our strategy to sustain our pace of new product flow and the momentum in our business. We are especially proud that we have been able to fund all of our expansion initiatives with our own cash balance without the need to borrow money or rely on any outside sources of funding. Our strong cash flows and working capital position give us the flexibility we need to continue to invest toward our future growth."
In addition to its Minnesota facilities, Vascular Solutions maintains an R&D and production facility for its hemostatic valve product line in Galway, Ireland.
At September 30, Vascular Solutions had cash and equivalents of $41.6 million and no long-term debt. The company expects to generate approximately $19 million in cash from operations during 2014.
About Vascular Solutions
Vascular Solutions, Inc. is an innovative medical device company that focuses on developing unique clinical solutions for coronary and peripheral vascular procedures. The company's product line consists of more than 80 products in three categories: catheter products, hemostat products and vein products. Vascular Solutions delivers its products to interventional cardiologists, interventional radiologists, electrophysiologists, and vein specialists through its direct U.S. sales force and international independent distributor network.
The information in this press release contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements. Important factors that may cause such differences include those discussed in our Annual Report on Form 10-K for the year ended December 31, 2013 and other recent filings with the Securities and Exchange Commission. The risks and uncertainties include, without limitation, risks associated with the need for adoption of our new products, lack of sustained profitability, exposure to intellectual property claims, significant variability in quarterly results, exposure to possible product liability claims, the development of new products by others, doing business in international markets, the availability of third party reimbursement, and actions by the FDA.
For further information, connect to www.vasc.com.
CONTACT: Phil Nalbone, VP Vascular Solutions, Inc. email@example.com (763) 656-4371Source:Vascular Solutions, Inc.