ICU Medical, Inc., (Nasdaq:ICUI) ("ICU Medical"),
a leader in innovative medical devices used in infusion
therapy, oncology and critical care applications, today announced
financial results for the first quarter ended March 31, 2015.
First Quarter 2015 Results
First quarter 2015 revenue was $81.5 million, compared to $73.2
million in the same period last year. GAAP net income for the first
quarter of 2015 was $9.7 million, or $0.60 per diluted share, as
compared to GAAP net income of $6.7 million, or $0.43 per diluted
share, for the first quarter of 2014. Adjusted diluted earnings per
share for the first quarter of 2015 was $1.02 as compared to $0.54
for the first quarter of 2014. Also, adjusted EBITDA was $26.0
million for the first quarter of 2015 as compared to $16.8 million
for the first quarter of 2014.
Vivek Jain, ICU Medical's Chief Executive Officer, said, "Our
first quarter results were slightly above our expectations as we
achieved gains in our direct channel in Oncology and in both our
direct and OEM channels in Infusion Therapy."
Revenues by market segment for the three months ended March 31,
2015 and 2014 were as follows:
|
(dollars in millions) |
|
Three months ended March
31, |
Market Segment |
2015 |
2014 |
Change |
Infusion Therapy |
$58.5 |
$50.0 |
$8.5 |
Oncology |
8.9 |
9.0 |
(0.1) |
Critical Care |
13.7 |
14.0 |
(0.3) |
Other |
0.4 |
0.2 |
0.2 |
|
$81.5 |
$73.2 |
$8.3 |
The Company ended the first quarter with a strong balance sheet.
As of March 31, 2015, cash, cash equivalents and investment
securities totaled $354.8 million and working capital was $421.1
million. Additionally, the Company generated operating cash flow of
$13.3 million for the first quarter of 2015.
Conference Call
The Company will be conducting a conference call concerning
these announcements at 4:30 p.m. EDT (1:30 p.m. PDT), today,
Tuesday, May 5, 2015. The call can be accessed at 800-936-9761,
international 408-774-4587, conference ID 30292682. The conference
call will be simultaneously available by webcast, which can be
accessed by going to the Company's website at www.icumed.com,
clicking on the Investors tab, clicking on the Webcast icon and
following the prompts. The webcast will also be available by
replay.
Use of Non-GAAP Financial Information
This press release contains financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles ("GAAP"). Our management believes that the non-GAAP data
provides useful supplemental information to management and
investors regarding our performance and facilitates a more
meaningful comparison of results of operations between current and
prior periods. The non-GAAP financial measures included in this
press release are adjusted EBITDA and adjusted diluted earnings per
share ("Adjusted Diluted EPS"). Adjusted EBITDA excludes intangible
asset amortization expense, depreciation expense, stock
compensation expense, legal settlement expense and income tax
expense. Adjusted Diluted EPS excludes, net of tax, intangible
asset amortization expense, stock compensation expense and legal
settlement expense.
The non-GAAP financial measures should be considered
supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. There are
limitations in using these non-GAAP financial measures because they
are not prepared in accordance with GAAP and may be different from
non-GAAP financial measures used by other companies.
Reconciliations of our GAAP to non-GAAP financial are included
in the financial tables in this press release.
About ICU Medical, Inc.
ICU Medical, Inc. (Nasdaq:ICUI) develops, manufactures and sells
innovative medical devices used in infusion therapy, oncology and
critical care applications. ICU Medical's products improve patient
outcomes by helping prevent bloodstream infections and protecting
healthcare workers from exposure to infectious diseases or
hazardous drugs. The Company's complete product line includes
custom IV systems, closed delivery systems for hazardous drugs,
needlefree IV connectors, hemodynamic monitoring systems and closed
blood sampling systems. ICU Medical is headquartered in San
Clemente, California. More information about ICU Medical, Inc. can
be found at www.icumed.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements contain words such as ''will,''
''expect,'' ''believe,'' ''could,'' ''would,'' ''estimate,''
''continue,'' ''build,'' ''expand'' or the negative thereof or
comparable terminology, and may include (without limitation)
information regarding the Company's expectations, goals or
intentions regarding the future. These forward-looking statements
are based on Management's current expectations, estimates,
forecasts and projections about the Company and assumptions
Management believes are reasonable, all of which are subject to
risks and uncertainties that could cause actual results and events
to differ materially from those stated in the forward-looking
statements. These risks and uncertainties include, but are not
limited to, decreased demand for the Company's products, decreased
free cash flow, the inability to recapture conversion delays or
part/resource shortages on anticipated timing, or at all, changes
in product mix, increased competition from competitors, lack of
continued growth or improving efficiencies and unexpected changes
in the Company's arrangements with its largest customers. Future
results are subject to risks and uncertainties, including the risk
factors, and other risks and uncertainties, described in the
Company's filings with the Securities and Exchange Commission,
which include those in the Annual Report on Form 10-K for the year
ended December 31, 2014. Forward-looking statements contained in
this press release are made only as of the date hereof, and the
Company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise.
ICU Medical, Inc.
and Subsidiaries |
Condensed Consolidated Balance
Sheets |
(Amounts in thousands, except
per share data) |
|
|
|
|
March 31, 2015 |
December 31,
2014 |
|
(unaudited) |
(1) |
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$ 308,533 |
$ 275,812 |
Investment securities |
46,254 |
70,952 |
Cash, cash equivalents and
investment securities |
354,787 |
346,764 |
Accounts receivable, net of
allowance for doubtful accounts of $1,046 at March 31, 2015 and
$1,127 at December 31, 2014 |
42,595 |
39,051 |
Inventories |
37,660 |
36,933 |
Prepaid income taxes |
4,941 |
3,963 |
Prepaid expenses and other
current assets |
6,634 |
5,818 |
Deferred income taxes |
7,393 |
4,683 |
Total current assets |
454,010 |
437,212 |
|
|
|
PROPERTY AND EQUIPMENT, net |
82,288 |
86,091 |
GOODWILL |
1,478 |
1,478 |
INTANGIBLE ASSETS, net |
6,657 |
7,063 |
DEFERRED INCOME TAXES |
9,911 |
9,258 |
|
$ 554,344 |
$ 541,102 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Accounts payable |
$ 12,548 |
$ 11,378 |
Accrued liabilities |
20,349 |
17,350 |
Total current liabilities |
32,897 |
28,728 |
|
|
|
DEFERRED INCOME TAXES |
2,123 |
1,376 |
INCOME TAX LIABILITY |
1,222 |
2,746 |
COMMITMENTS AND CONTINGENCIES |
— |
— |
STOCKHOLDERS' EQUITY: |
|
|
Convertible preferred stock,
$1.00 par value Authorized—500 shares; Issued and outstanding—
none |
— |
— |
Common stock, $0.10 par value —
Authorized, 80,000 shares; Issued, 15,778 shares at March 31,
2015 and 15,595 shares at December 31, 2014; Outstanding,
15,769 shares March 31, 2015 and 15,595 shares at
December 31, 2014 |
1,578 |
1,559 |
Additional paid-in capital |
118,367 |
107,336 |
Treasury stock, at cost — 9
shares at March 31, 2015 and 0 shares at December 31,
2014 |
(795) |
— |
Retained earnings |
418,597 |
408,911 |
Accumulated other comprehensive
loss |
(19,645) |
(9,554) |
Total stockholders' equity |
518,102 |
508,252 |
|
$ 554,344 |
$ 541,102 |
______________________________________________________ |
|
|
(1) December 31, 2014 balances were derived from audited
consolidated financial statements. |
|
|
ICU Medical, Inc.
and Subsidiaries |
Condensed Consolidated
Statements of Income |
(Amounts in thousands, except
per share data) |
(unaudited) |
|
|
|
|
Three months
ended March 31, |
|
2015 |
2014 |
REVENUES: |
|
|
Net sales |
$ 81,323 |
$ 73,113 |
Other |
161 |
117 |
TOTAL REVENUE |
81,484 |
73,230 |
COST OF GOODS SOLD |
38,970 |
37,203 |
Gross profit |
42,514 |
36,027 |
OPERATING EXPENSES: |
|
|
Selling, general and
administrative |
20,174 |
22,519 |
Research and development |
4,308 |
3,631 |
Legal settlement |
7,059 |
— |
Total operating expenses |
31,541 |
26,150 |
Income from operations |
10,973 |
9,877 |
OTHER INCOME |
526 |
210 |
Income before income taxes |
11,499 |
10,087 |
PROVISION FOR INCOME TAXES |
(1,813) |
(3,430) |
NET INCOME |
$ 9,686 |
$ 6,657 |
NET INCOME PER SHARE |
|
|
Basic |
$ 0.62 |
$ 0.44 |
Diluted |
$ 0.60 |
$ 0.43 |
WEIGHTED AVERAGE NUMBER OF SHARES |
|
|
Basic |
15,693 |
15,097 |
Diluted |
16,234 |
15,395 |
|
ICU Medical, Inc.
and Subsidiaries |
Condensed Consolidated
Statements of Cash Flows |
(Amounts in thousands) |
(unaudited) |
|
|
|
|
Three months
ended March 31, |
|
2015 |
2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
Net income |
$ 9,686 |
$ 6,657 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
Depreciation and
amortization |
4,629 |
4,765 |
Provision for doubtful
accounts |
— |
3 |
Provision for warranty and
returns |
31 |
(410) |
Stock compensation |
2,813 |
1,973 |
Loss (gain) on disposal of
property and equipment |
2 |
(5) |
Bond premium amortization |
943 |
601 |
Cash provided (used) by changes
in operating assets and liabilities |
|
|
Accounts receivable |
(4,947) |
2,416 |
Inventories |
(1,785) |
(2,267) |
Prepaid expenses and other
assets |
(980) |
(800) |
Accounts payable |
1,951 |
382 |
Accrued liabilities |
3,300 |
(2,557) |
Income taxes, including excess
tax benefits and deferred income taxes |
(2,392) |
1,956 |
Net cash provided by operating
activities |
13,251 |
12,714 |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
Purchases of property and
equipment |
(2,357) |
(5,908) |
Proceeds from sale of
asset |
— |
5 |
Intangible asset additions |
(208) |
(120) |
Purchases of investment
securities |
(9,205) |
(36,908) |
Proceeds from sale of
investment securities |
31,785 |
30,936 |
Net cash provided (used) by
investing activities |
20,015 |
(11,995) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
Proceeds from exercise of stock
options |
4,777 |
4,202 |
Proceeds from employee stock
purchase plan |
1,041 |
1,384 |
Tax benefits from exercise of
stock options |
3,059 |
1,178 |
Purchase of treasury stock |
(1,435) |
(5,835) |
Net cash provided by financing
activities |
7,442 |
929 |
Effect of exchange rate changes on cash |
(7,987) |
(47) |
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
32,721 |
1,601 |
CASH AND CASH EQUIVALENTS, beginning of
period |
275,812 |
226,022 |
CASH AND CASH EQUIVALENTS, end of period |
$ 308,533 |
$ 227,623 |
|
|
|
NON-CASH INVESTING ACTIVITIES |
|
|
Accrued liabilities for property
and equipment |
$ 144 |
$ 1,008 |
|
ICU Medical, Inc. and
Subsidiaries |
Reconciliation of GAAP to
Non-GAAP Financial Measures |
(Amounts in thousands, except
per share data) |
(unaudited) |
|
|
|
|
Adjusted
EBITDA |
|
Q1 |
|
2015 |
2014 |
GAAP net income |
$ 9,686 |
$ 6,657 |
|
|
|
Non-GAAP adjustments: |
|
|
Stock compensation
expense (a) |
2,813 |
1,973 |
Depreciation and
amortization expense (b) |
4,629 |
4,765 |
Legal settlement
(c) |
7,059 |
-- |
Provision for income
taxes (d) |
1,813 |
3,430 |
Total non-GAAP
adjustments |
16,314 |
10,168 |
|
|
|
Adjusted EBITDA |
$ 26,000 |
$ 16,825 |
|
|
|
|
|
|
|
Adjusted diluted
earnings per share |
|
Q1 |
|
2015 |
2014 |
GAAP diluted earnings per
share |
$ 0.60 |
$ 0.43 |
|
|
|
Non-GAAP adjustments: |
|
|
Stock compensation
expense (a) |
$ 0.17 |
$ 0.13 |
Amortization expense
(e) |
$ 0.04 |
$ 0.04 |
Legal settlement
(c) |
$ 0.43 |
$ -- |
Estimated income tax
impact from adjustments (f) |
$ (0.22) |
$ (0.06) |
Adjusted diluted earnings per
share |
$ 1.02 |
$ 0.54 |
|
|
|
|
|
|
(a) Stock-based
compensation expense in accordance with ASC 718. |
|
|
(b) Depreciation
of fixed assets and amortization of intangible assets. |
|
|
(c) Legal
settlement. |
|
|
(d) Income tax
expense recognized during the period. |
|
|
(e) Amortization
expense |
|
|
(f) Estimated
income tax effect on adjustments for stock compensation expense,
amortization expense and legal settlement. |
CONTACT: ICU Medical, Inc.
Scott Lamb, Chief Financial Officer
(949) 366-2183
ICR, Inc.
John Mills, Partner
(646) 277-1254
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