Flow General Inc. announced Friday that it has secured a $30 million line of credit from Philadelphia National Bank and West Germany's Deutsche Bank as the company's chief executive told stockholders that the company is poised to expand by acquisition.
Flow General President Joseph E. Hall, speaking at the McLean technology company's annual stockholders meeting and later to a stock analysts' session, suggested that the company would like to expand, particularly in the biomedical area, which makes up more than half of the company's sales.
"The company's financial position is strong, with a lot of cash, favorable financial ratios and good credit facilities," Hall said. "This means, not only are we postured to expand internally, but also by acquisition.
"One comment that I should make is that acquisitions in the biomedical area would be desirable and, indeed, hopefully, there will be some. However, in today's market the biomedical companies worth having--and some which are not--are very 'pricey.'
"Therefore, without turning our backs in any sense on the biomedical business, it is probable that we will continue to acquire situations which fit our criteria but which are not 'biomedical'," Hall concluded.
Hall did not directly link the line of credit to the firm's acquisition plans, although the credit would enable the company to meet expansion objectives.
Hall was asked during the meeting why the company chose to sign the pact with an overseas bank. He said that with one-third of the company's activity now in Europe, the German bank's credit line would "assist us hedging against currency fluctuations. We don't want to be in the currency speculation business," he added.
The company, which has grown very rapidly, with sales for fiscal 1981 ended June 30 rising 45 percent to $111.97 million and profits up 111 percent to $7.96 million ($1.07 a share), also reported increases in first-quarter results.
Profits rose to $2.5 million (30 cents) for the quarter ended Sept. 30 from 1981 first-quarter profits of $1.39 million (22 cents). Sales rose from $22.67 million to $30.25 million.
In other business, company stockholders approved a management proposal to increase by 380,000 shares Flow General's common stock for use in an employe stock-option plan.