After a stellar 2014, Edwards Lifesciences (NYSE:EW) has enough cash to be a player in the M&A market, but company officials told analysts today that Edwards isn’t likely to jump into the hot acquisitions market anytime soon.
Scott Ullem, the Irvine, Calif.-based heart valve maker’s
CFO, said Edwards is more likely to initiate a share buyback program than spend its cash on companies.
"We’re active in the area of M&A, but it’s all small investments," Ullem said during a conference call discussing Edwards’ 2014 results.
"It could be intellectual property investments, it could be joint-venture, minority investments," Ullem said. "We have been accumulating cash and we’ve got that cash available for all kinds of purposes, but I expect that we’ll spend more of that on share repurchase than we will on M&A."
Earlier today Edwards said its profits rose 45.4% to $109.2 million, or $1.00 per share, during the 3 months ended Dec. 31, 2014, from $75.1 million, or 68¢ per share, a year earlier. Revenue for the quarter rose 15.3% to $618 million, edging past Wall Street estimates of $611 million.
For the full year, Edwards reported profit growth of 108.5% to $811.1 million, or $7.48 per share, on sales growth of 13.6% to $2.32 billion. Adjusted EPS were $3.50 in 2014, 12¢ ahead of The Street.
Edwards also boosted its cash position by about $230 million and is now carrying more than $650 million in cash and current assetts on its balance sheet, more than enough to pull off a substantial deal.
The company has been relatively quiet on the M&A front over the past year, chosing to do smaller investment deals like its participation in a $50 million funding round for CardioKinetix, which gives Edwards a right to purchase the company based on regulatory milestones. CardioKinetix is currently pursuing U.S. regulatory approval for its Parachute ventricular partitioning device, a treatment for heart failure.