AngioDynamics (NSDQ:ANGO) shares took a dive as the company released its 1st quarter earnings report, announced an acquisition worth at least $55 million over the next 5 years and disclosed a shareholder class action lawsuit filed late last month.
The Albany, N.Y.-based company entered a definitive agreement to acquire all outstanding capital stock of privately held Vortex Medical, a company which develops medical devices for the removal of blood clots from blocked blood vessels.
AngioDynamics will pay $15 million in up-front cash for Vortex and make performance-based payments, guaranteed for at least $8 million per year, for 5 years following the close of the deal. Future payouts will depend on sales of Vortex’s AngioVac Cannula, according to a company statement.
AngioDynamics predicted that the acquisition, expected to close by the end of this month, would dilute 2013 earning by about 9¢ per share. The deal will add about $1 million in sales and reduce operating income by about $5 million for fiscal 2013, but should become accretive to the company’s net income in 2014, AngioDynamics reported.
In a separate release, the device maker issued its 1st quarter 2013 earnings report, increasing its revenue guidance for 2013 from its previous estimate of $360-$363 million to between $361-$364 million.
Nevertheless, ANGO shares dove 13% today, trading at $11.14 as of about 2:10 p.m.
The device maker touted a strong 1st quarter, with sales increasing 53% compared with the same time last year. Revenues for the 3 months ended August 31 came to $83.4 million, compared with sales of $54.4 million in Q1 2012.
The company swung to the black for the quarter, due mostly to the $372 million buyout of Boston Scientific’s (NYSE:BSX) vascular device spin-out Navilyst Medical. AngioDynamics reported a net loss of $721,000, or 2¢ per share, a hard swing from earnings of $1.4 million, or 5¢ per diluted share, during the same quarter last year.
Excluding the costs of the Navilyst merger and other 1-time expenses, however, AngioDynamics beat Wall Street’s expectations by a penny. The device maker reported adjusted earnings of 10¢ per diluted share, compared with 8¢ per diluted share in Q1 2012.
In a separate regulatory filing, AngioDynamics disclosed a class action shareholder lawsuit, filed last last month, which accuses the company and its directors of breaching their duties in regard to certain proxy statements released ahead of this month’s shareholder meeting, which will take place October 22.
The dispute appears to relate to a proposed amendment to the company’s stock incentive and award plan and voting practices for executive compensation. Last week the plaintiffs filed a motion for expedited discovery and requested an order temporarily enjoining a shareholder vote, according to SEC filings.
"AngioDynamics believes that the Complaint is without merit and intends to vigorously defend against the claims asserted," the company reported.