ICU Medical, Inc., (Nasdaq:ICUI) ("ICU Medical"),
a leader in the development, manufacture and sale of innovative
medical devices used in infusion therapy, oncology and critical
care applications, today announced financial results for the third
quarter ended September 30, 2015.
Third Quarter 2015 Results
Third quarter 2015 revenue was $86.0 million, compared to $77.5
million in the same period last year. GAAP net income for the third
quarter of 2015 was $16.3 million, or $0.98 per diluted share, as
compared to GAAP net income of $6.4 million, or $0.42 per diluted
share, for the third quarter of 2014. Adjusted diluted earnings per
share for the third quarter of 2015 was $1.00 as compared to $0.66
for the third quarter of 2014. Also, adjusted EBITDA was $29.7
million for the third quarter of 2015 as compared to $18.9 million
for the third quarter of 2014.
Vivek Jain, ICU Medical's Chief Executive Officer, said, "Our
revenue, gross margin, adjusted EBITDA and net income results in
the third quarter were above our expectations as we achieved growth
in both our direct and OEM channels. Based on our results
year-to-date in 2015 and expectations for the remainder of the
year, we are adjusting our full year 2015 guidance."
Revenues by market segment for the three months ended September
30, 2015 and 2014 were as follows:
|
(dollars in millions) |
|
Three months ended September
30, |
Market Segment |
2015 |
2014 |
Change |
Infusion Therapy |
$62.1 |
$55.0 |
$7.1 |
Oncology |
11.2 |
9.4 |
1.8 |
Critical Care |
12.5 |
12.8 |
(0.3) |
Other |
0.2 |
0.3 |
(0.1) |
|
$86.0 |
$77.5 |
$8.5 |
The Company ended the third quarter with a strong balance sheet.
As of September 30, 2015, cash, cash equivalents and investment
securities totaled $394.1 million and working capital was $476.5
million. Additionally, the Company generated operating cash flow of
$16.7 million for the third quarter of 2015.
Updated Fiscal Year 2015 Guidance
For the year, the Company now expects revenue to be in the range
of $335 million to $340 million, compared to the previous range of
$325 million to $330 million; GAAP diluted earnings per share to be
in the range of $3.13 to $3.21, compared to the previous range of
$2.63 to $2.83; adjusted diluted earnings per share to be in the
range of $3.88 to $3.96, compared to the previous range of $3.49 to
$3.69; and adjusted EBITDA to be in the range of $110 million to
$112 million, compared to the previous range of $100 million to
$105 million.
Conference Call
The Company will be conducting a conference call concerning
these announcements at 4:30 p.m. EST (1:30 p.m. PST), today,
Thursday, November 5, 2015. The call can be accessed at
800-936-9761, international 408-774-4587, conference ID 6382989.
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, restructuring and strategic transaction
expense, gain on sale of building, legal settlements and income tax
expense. Adjusted Diluted EPS excludes, net of tax, intangible
asset amortization expense, stock compensation expense,
restructuring and strategic transaction expense, gain on sale of
building and legal settlements.
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 technologies used in infusion therapy, oncology,
and critical care applications. ICU Medical's products improve
patient outcomes by helping prevent bloodstream infections and
protect 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, closed blood sampling systems, and
hemodynamic monitoring systems. ICU Medical is headquartered in San
Clemente, California. For more information, visit the Company's
website 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, our full year 2015
guidance 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) |
|
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
|
(unaudited) |
(1) |
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$ 355,368 |
$ 275,812 |
Investment securities |
38,695 |
70,952 |
Cash, cash equivalents and investment
securities |
394,063 |
346,764 |
Accounts receivable, net of allowance for
doubtful accounts of $1,123 at September 30, 2015 and $1,127 at
December 31, 2014 |
49,242 |
39,051 |
Inventories |
40,681 |
36,933 |
Prepaid income taxes |
8,798 |
3,963 |
Prepaid expenses and other current
assets |
14,379 |
5,818 |
Deferred income taxes |
6,534 |
4,683 |
Total current assets |
513,697 |
437,212 |
|
|
|
PROPERTY AND EQUIPMENT, net |
78,768 |
86,091 |
GOODWILL |
1,478 |
1,478 |
INTANGIBLE ASSETS, net |
6,365 |
7,063 |
DEFERRED INCOME TAXES |
9,920 |
9,258 |
|
$ 610,228 |
$ 541,102 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Accounts payable |
$ 14,732 |
$ 11,378 |
Accrued liabilities |
22,471 |
17,350 |
Total current liabilities |
37,203 |
28,728 |
|
|
|
LONG-TERM LIABILITIES |
1,566 |
— |
DEFERRED INCOME TAXES |
3,069 |
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 and outstanding, 15,951 shares at
September 30, 2015 and 15,595 shares at December 31, 2014 |
1,595 |
1,559 |
Additional paid-in capital |
134,413 |
107,336 |
Retained earnings |
448,433 |
408,911 |
Accumulated other comprehensive loss |
(17,273) |
(9,554) |
Total stockholders' equity |
567,168 |
508,252 |
|
$ 610,228 |
$ 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 September 30, |
Nine months ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
REVENUES: |
|
|
|
|
Net sales |
$ 85,891 |
$ 77,329 |
$ 250,876 |
$ 228,997 |
Other |
125 |
128 |
405 |
367 |
TOTAL REVENUE |
86,016 |
77,457 |
251,281 |
229,364 |
COST OF GOODS SOLD |
39,751 |
39,310 |
118,741 |
117,648 |
Gross profit |
46,265 |
38,147 |
132,540 |
111,716 |
OPERATING EXPENSES: |
|
|
|
|
Selling, general and administrative |
20,206 |
21,843 |
60,698 |
68,640 |
Research and development |
4,227 |
5,055 |
11,657 |
13,252 |
Restructuring and strategic
transaction |
3,411 |
2,840 |
3,411 |
2,840 |
Gain on sale of building |
(1,086) |
— |
(1,086) |
— |
Legal settlements |
(5,261) |
— |
1,798 |
— |
Total operating expenses |
21,497 |
29,738 |
76,478 |
84,732 |
Income from operations |
24,768 |
8,409 |
56,062 |
26,984 |
OTHER INCOME |
230 |
155 |
996 |
572 |
Income before income taxes |
24,998 |
8,564 |
57,058 |
27,556 |
PROVISION FOR INCOME TAXES |
(8,732) |
(2,136) |
(17,536) |
(8,593) |
NET INCOME |
$ 16,266 |
$ 6,428 |
$ 39,522 |
$ 18,963 |
NET INCOME PER SHARE |
|
|
|
|
Basic |
$ 1.02 |
$ 0.42 |
$ 2.50 |
$ 1.25 |
Diluted |
$ 0.98 |
$ 0.42 |
$ 2.41 |
$ 1.22 |
WEIGHTED AVERAGE NUMBER OF SHARES |
|
|
|
|
Basic |
15,894 |
15,319 |
15,790 |
15,220 |
Diluted |
16,575 |
15,488 |
16,409 |
15,497 |
|
ICU Medical, Inc.
and Subsidiaries |
Condensed Consolidated
Statements of Cash Flows |
(Amounts in thousands) |
(unaudited) |
|
Nine months ended
September 30, |
|
2015 |
2014 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
Net income |
$ 39,522 |
$ 18,963 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
Depreciation and amortization |
13,266 |
14,642 |
Provision for doubtful accounts |
53 |
3 |
Provision for warranty and returns |
38 |
(488) |
Stock compensation |
9,305 |
6,990 |
Loss (gain) on disposal of property and
equipment |
(1,102) |
8 |
Bond premium amortization |
1,451 |
1,599 |
Cash provided (used) by changes in
operating assets and liabilities |
|
|
Accounts receivable |
(11,390) |
9,433 |
Inventories |
(4,867) |
(4,655) |
Prepaid expenses and other assets |
(8,824) |
2,146 |
Accounts payable |
3,246 |
681 |
Accrued liabilities |
6,915 |
2,123 |
Income taxes, including excess tax
benefits and deferred income taxes |
(5,177) |
(3,098) |
Net cash provided by operating
activities |
42,436 |
48,347 |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
Purchases of property and equipment |
(7,729) |
(14,924) |
Proceeds from sale of asset |
3,592 |
5 |
Intangible asset additions |
(778) |
(709) |
Purchases of investment securities |
(40,217) |
(78,993) |
Proceeds from sale of investment
securities |
70,293 |
69,470 |
Net cash provided (used) by investing
activities |
25,161 |
(25,151) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
Proceeds from exercise of stock
options |
10,974 |
9,105 |
Proceeds from employee stock purchase
plan |
2,162 |
2,485 |
Tax benefits from exercise of stock
options |
6,194 |
2,734 |
Purchase of treasury stock |
(1,523) |
(5,836) |
Net cash provided by financing
activities |
17,807 |
8,488 |
Effect of exchange rate changes on cash |
(5,848) |
(5,465) |
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
79,556 |
26,219 |
CASH AND CASH EQUIVALENTS, beginning of
period |
275,812 |
226,022 |
CASH AND CASH EQUIVALENTS, end of period |
$ 355,368 |
$ 252,241 |
|
|
|
NON-CASH INVESTING ACTIVITIES |
|
|
Accrued liabilities for property
and equipment |
$ 1,106 |
$ 100 |
|
|
ICU Medical, Inc. and
Subsidiaries |
Reconciliation of GAAP to
Non-GAAP Financial Measures |
(Amounts in thousands, except
per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
Adjusted EBITDA |
|
Three months ended
September 30, |
Nine months ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
GAAP net income |
$16,266 |
$6,428 |
$39,522 |
$18,963 |
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
Stock compensation expense (a) |
3,358 |
2,531 |
9,305 |
6,990 |
Depreciation and amortization
expense (b) |
4,240 |
4,976 |
13,266 |
14,642 |
Restructuring and strategic
transaction expense (c) |
3,411 |
2,840 |
3,411 |
2,840 |
Gain on sale of building (d) |
(1,086) |
-- |
(1,086) |
-- |
Legal settlements (e) |
(5,261) |
-- |
1,798 |
-- |
Provision for income taxes (f) |
8,732 |
2,136 |
17,536 |
8,593 |
Total non-GAAP adjustments |
13,394 |
12,483 |
44,230 |
33,065 |
|
|
|
|
|
Adjusted EBITDA |
$29,660 |
$18,911 |
$83,752 |
$52,028 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings
per share |
Adjusted diluted earnings
per share |
|
Three months ended
September 30, |
Nine months ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
GAAP diluted earnings per share |
$0.98 |
$0.42 |
$2.41 |
$1.22 |
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
Stock compensation expense (a) |
$0.20 |
$0.16 |
$0.57 |
$0.45 |
Amortization expense (g) |
$0.02 |
$0.04 |
$0.09 |
$0.12 |
Restructuring and strategic
transaction expense (c) |
$0.21 |
$0.18 |
$0.21 |
$0.18 |
Gain on sale of building (d) |
$ (0.07) |
$ -- |
$ (0.07) |
$ -- |
Legal settlements (e) |
$ (0.32) |
$ -- |
$0.11 |
$ -- |
Estimated income tax impact from
adjustments (h) |
$ (0.02) |
$ (0.14) |
$ (0.31) |
$ (0.26) |
|
|
|
|
|
Adjusted diluted earnings per share |
$1.00 |
$0.66 |
$3.01 |
$1.71 |
|
|
|
|
|
|
|
|
|
|
(a) Stock-based compensation
expense in accordance with ASC 718. |
(b) Depreciation of fixed assets
and amortization of intangible assets. |
(c) Restructuring and strategic
transaction expense. |
(d) Gain on sale of
building. |
(e) Legal settlements. |
(f) Income tax expense recognized
during the period. |
(g) Amortization
expense. |
(h) Estimated income tax effect
on adjustments for stock compensation expense, amortization
expense, restructuring and strategic transaction expense, gain on
sale of building and legal settlements. |
|
ICU Medical, Inc. and
Subsidiaries |
Reconciliation of GAAP to
Non-GAAP Financial Measures – Fiscal Year 2015 Outlook |
(Amounts in thousands, except
per share data) |
(unaudited) |
|
|
|
|
|
|
GAAP net income |
$51,555 |
$52,879 |
|
|
|
Non-GAAP adjustments: |
|
|
Stock compensation expense (a) |
12,695 |
12,695 |
Depreciation and amortization
expense (b) |
17,936 |
17,936 |
Restructuring and strategic
transaction expense (c) |
3,411 |
3,411 |
Gain on sale of building (d) |
(1,086) |
(1,086) |
Legal settlements (e) |
1,798 |
1,798 |
Provision for income taxes (f) |
23,734 |
24,416 |
Total non-GAAP adjustments |
58,488 |
59,170 |
|
|
|
Adjusted EBITDA |
$110,043 |
$112,049 |
|
|
|
|
|
|
GAAP diluted earnings per share |
$3.13 |
$3.21 |
|
|
|
Non-GAAP adjustments: |
|
|
Stock compensation expense (a) |
$0.77 |
$0.77 |
Amortization expense (g) |
$0.11 |
$0.11 |
Restructuring and strategic
transaction expense (c) |
$0.21 |
$0.21 |
Gain on sale of building (d) |
$ (0.07) |
$ (0.07) |
Legal settlements (e) |
$0.11 |
$0.11 |
Estimated income tax impact from
adjustments (h) |
$ (0.38) |
$ (0.38) |
|
|
|
Adjusted diluted earnings per share |
$3.88 |
$3.96 |
|
|
|
(a) Stock-based compensation
expense in accordance with ASC 718. |
(b) Depreciation of fixed assets
and amortization of intangible assets. |
(c) Restructuring and strategic
transaction expense. |
(d) Gain on sale of
building. |
(e) Legal settlements. |
(f) Income tax expense recognized
during the period. |
(g) Amortization
expense. |
(h) Estimated income tax effect
on adjustments for stock compensation expense, amortization
expense, restructuring and strategic transaction expense, gain on
sale of building and legal settlements. |
CONTACT: ICU Medical, Inc.
Scott Lamb, Chief Financial Officer
(949) 366-2183
ICR, Inc.
John Mills, Partner
(646) 277-1254
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