UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 3, 2016
ICU MEDICAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
 
0-19974
 
33-0022692
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
951 Calle Amanecer, San Clemente, California
 
92673
(Address of principal executive offices)
 
(Zip Code)
(949) 366-2183
Registrant's telephone number, including area code
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02. Results of Operations and Financial Condition
ICU Medical, Inc. announced its earnings for the fourth quarter of 2015.
Item 9.01. Financial Statements and Exhibits.
(c)
 
Exhibits
 
 
99.1
Press release, dated February 3, 2016 announcing ICU Medical, Inc.'s fourth quarter 2015 earnings.






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
ICU Medical, Inc.
Date: February 3, 2016
 
/s/ SCOTT E. LAMB
Scott E. Lamb
Secretary, Treasurer and Chief Financial Officer







Exhibit 99.1
ICU Medical, Inc. Announces Fourth Quarter and Fiscal Year 2015 Results

Fiscal Year 2015 Adjusted EBITDA increased 54% to $114 Million
SAN CLEMENTE, Calif., Feb. 3, 2016 (GLOBE NEWSWIRE) -- ICU Medical, Inc. (Nasdaq:ICUI), 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 fourth quarter and fiscal year ended December 31, 2015.

Fourth Quarter 2015 Results
Fourth quarter 2015 revenue was $90.4 million, compared to $79.9 million in the same period last year. GAAP net income for the fourth quarter of 2015 was $5.5 million, or $0.33 per diluted share, as compared to GAAP net income of $7.4 million, or $0.46 per diluted share, for the fourth quarter of 2014. Adjusted diluted earnings per share for the fourth quarter of 2015 were $0.96 as compared to $0.68 for the fourth quarter of 2014. Also, adjusted EBITDA was $30.1 million for the fourth quarter of 2015 as compared to $21.9 million for the fourth quarter of 2014.

Full Fiscal Year 2015 Results
Fiscal year 2015 revenue was $341.7 million, compared to $309.3 million in the same period last year. GAAP net income for fiscal year 2015 was $45.0 million, or $2.73 per diluted share, as compared to GAAP net income of $26.3 million, or $1.68 per diluted share, for fiscal year 2014. Adjusted diluted earnings per share for fiscal year 2015 were $3.96 as compared to $2.38 for fiscal year 2014. Also, adjusted EBITDA was $113.9 million for fiscal year 2015 as compared to $73.9 million for fiscal year 2014.

Vivek Jain, ICU Medical's Chief Executive Officer, said, "Our revenue, gross margin and adjusted EBITDA results in the fourth quarter were above our expectations as we achieved growth in both our direct and OEM channels."

Revenue for the three and twelve months ended December 31, 2015 and 2014 were as follows:

(dollars in millions)
 
Fiscal year ended December 31,
Three months ended December 31,
Market Segment
2015
2014
Change
2015
2014
Change
Infusion Therapy
$
244.8

$
216.3

$
28.5

$
66.1

$
56.5

$
9.6

Critical Care
54.3

55.1

(0.8
)
13.1

13.8

(0.7
)
Oncology
41.4

36.7

4.7

11.1

9.3

1.8

Other
1.2

1.2

—

0.1

0.3

(0.2
)
 
$
341.7

$
309.3

$
32.4

$
90.4

$
79.9

$
10.5



The Company ended the fourth quarter with a strong balance sheet. As of December 31, 2015, cash, cash equivalents and investment securities totaled $377.4 million and working capital was $462.4 million. Additionally, the Company generated operating cash flow of $54.9 million for the fiscal year of 2015.

Fiscal Year 2016 Guidance

For the year, the Company expects revenue to be in the range of $355 million to $365 million; adjusted diluted earnings per share to be in the range of $4.34 to $4.46, and adjusted EBITDA to be in the range of $123 million to $127 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, Wednesday, February 3, 2016. The call can be accessed at 800-936-9761, international 408-774-4587, conference ID 34390619. 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 by dialing (855) 859-2056, (404) 537-3406 international.






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, impairment of assets held for sale 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, legal settlements and impairment of assets held for sale.

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.

About ICU Medical, Inc. (Nasdaq:ICUI) develops, manufactures and sells innovative medical devices used in vascular 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, catheters and cardiac monitoring 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, our full year 2016 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
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
(unaudited)

 
December 31,
 
2015
 
2014
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
Cash and cash equivalents
$
336,164

 
$
275,812

Investment securities
41,233

 
70,952

Cash, cash equivalents and investment securities
377,397

 
346,764

Accounts receivable, net of allowance for doubtful accounts of $1,101 and $1,127 at December 31, 2015 and 2014, respectively
57,847

 
39,051

Inventories
43,632

 
36,933

Prepaid income taxes
14,366

 
3,963

Prepaid expenses and other current assets
7,631

 
5,818

Assets held for sale
4,134

 
—

Total current assets
505,007


432,529

 
 
 
 
PROPERTY AND EQUIPMENT, net
74,320

 
86,091

GOODWILL
6,463

 
1,478

INTANGIBLE ASSETS, net
23,936

 
7,063

DEFERRED INCOME TAXES
17,099

 
13,941

 
$
626,825

 
$
541,102

LIABILITIES AND STOCKHOLDERS’ EQUITY
 

 
 
CURRENT LIABILITIES:
 

 
 
Accounts payable
$
13,670

 
$
11,378

Accrued liabilities
28,948

 
17,350

Total current liabilities
42,618

 
28,728

 
 
 
 
LONG-TERM LIABILITIES
1,476

 
—

DEFERRED INCOME TAXES
1,372

 
1,376

INCOME TAX LIABILITY
1,488

 
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, 16,086 shares at December 31, 2015 and 15,595 shares at December 31, 2014
1,608

 
1,559

Additional paid-in capital
145,125

 
107,336

Retained earnings
453,896

 
408,911

Accumulated other comprehensive loss
(20,758
)
 
(9,554
)
Total stockholders’ equity
579,871

 
508,252

 
$
626,825

 
$
541,102









ICU MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(unaudited)

 
Year ended December 31,
 
2015
 
2014
 
2013
REVENUES:
 
 
 
 
 
Net sales
$
341,254

 
$
308,770

 
$
313,056

Other
414

 
490

 
660

TOTAL REVENUE
341,668

 
309,260

 
313,716

COST OF GOODS SOLD
160,871

 
157,859

 
158,984

Gross profit
180,797

 
151,401

 
154,732

OPERATING EXPENSES:
 

 
 
 
 
Selling, general and administrative
83,216

 
88,939

 
89,006

Research and development
15,714

 
18,332

 
12,407

Restructuring and strategic transaction
8,451

 
5,093

 
1,370

Gain on sale of building
(1,086
)
 
—

 
—

Legal settlements
1,798

 
—

 
—

Impairment of assets held for sale
4,139

 
—

 
—

Total operating expenses
112,232

 
112,364

 
102,783

Income from operations
68,565

 
39,037

 
51,949

OTHER INCOME
1,134

 
755

 
765

Income before income taxes
69,699

 
39,792

 
52,714

PROVISION FOR INCOME TAXES
(24,714
)
 
(13,457
)
 
(12,296
)
NET INCOME
$
44,985

 
$
26,335

 
$
40,418

NET INCOME PER SHARE
 

 
 
 
 
Basic
$
2.84

 
$
1.72

 
$
2.75

Diluted
$
2.73

 
$
1.68

 
$
2.65

WEIGHTED AVERAGE NUMBER OF SHARES
 

 
 
 
 
Basic
15,848

 
15,282

 
14,688

Diluted
16,496

 
15,647

 
15,274






ICU MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(unaudited)

 
Three months ended December 31,
 
2015
 
2014
REVENUES:
 
 
 
Net sales
$
90,378

 
$
79,773

Other
9

 
123

TOTAL REVENUE
90,387

 
79,896

COST OF GOODS SOLD
42,130

 
40,211

Gross profit
48,257

 
39,685

OPERATING EXPENSES:
 
 
 
Selling, general and administrative
22,519

 
20,299

Research and development
4,057

 
5,080

Restructuring and strategic transaction
5,040

 
2,253

Impairment of assets held for sale
4,139

 
—

Total operating expenses
35,755

 
27,632

Income from operations
12,502

 
12,053

OTHER INCOME
139

 
183

Income before income taxes
12,641

 
12,236

PROVISION FOR INCOME TAXES
(7,178
)
 
(4,864
)
NET INCOME
$
5,463

 
$
7,372

NET INCOME PER SHARE
 
 
 
Basic
$
0.34

 
$
0.48

Diluted
$
0.33

 
$
0.46

WEIGHTED AVERAGE NUMBER OF SHARES
 
 
 
Basic
16,020

 
15,469

Diluted
16,697

 
15,934





ICU MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
 
Year ended December 31,
 
2015
 
2014
 
2013
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
Net income
$
44,985

 
$
26,335

 
$
40,418

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 
 
 
Depreciation and amortization
18,073

 
19,447

 
19,506

Provision for doubtful accounts
54

 
34

 
185

Provision for warranty and returns
52

 
(360
)
 
671

Stock compensation
12,827

 
9,592

 
5,434

(Gain) loss on disposal of property and equipment
(1,106
)
 
8

 
(36
)
Bond premium amortization
1,670

 
2,188

 
2,715

Impairment of assets held for sale
4,139

 
—

 
—

Changes in operating assets and liabilities:
 

 
 
 
 
Accounts receivable
(20,515
)
 
4,912

 
3,556

Inventories
(8,337
)
 
(3,836
)
 
2,319

Prepaid expenses and other assets
(1,832
)
 
1,970

 
(383
)
Accounts payable
3,118

 
(621
)
 
(31
)
Accrued liabilities
9,454

 
2,344

 
(2,215
)
Income taxes, including excess tax benefits and deferred income taxes
(7,717
)
 
(1,373
)
 
(6,413
)
Net cash provided by operating activities
54,865

 
60,640

 
65,726

CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 
 
 
Purchases of property and equipment
(12,984
)
 
(16,604
)
 
(18,415
)
Proceeds from sale of assets
3,592

 
5

 
49

Intangible asset additions
(951
)
 
(989
)
 
(1,080
)
Business acquisitions, net of cash acquired
(56,786
)
 
—

 
—

Proceeds from sale of business
28,970

 
—

 
—

Purchases of investment securities
(56,137
)
 
(93,588
)
 
(86,022
)
Proceeds from sale of investment securities
83,054

 
89,426

 
92,348

Net cash used by investing activities
(11,242
)
 
(21,750
)
 
(13,120
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 

 
 
 
 
Proceeds from exercise of stock options
15,042

 
16,998

 
18,004

Proceeds from employee stock purchase plan
2,162

 
2,485

 
2,457

Tax benefits from exercise of stock options
9,330

 
5,700

 
6,966

Purchase of treasury stock
(1,523
)
 
(5,836
)
 
(3,033
)
Net cash provided by financing activities
25,011

 
19,347

 
24,394

Effect of exchange rate changes on cash
(8,282
)
 
(8,447
)
 
2,122

NET INCREASE IN CASH AND CASH EQUIVALENTS
60,352

 
49,790

 
79,122

CASH AND CASH EQUIVALENTS, beginning of period
275,812

 
226,022

 
146,900

CASH AND CASH EQUIVALENTS, end of period
$
336,164

 
$
275,812

 
$
226,022

 
 
 
 
 
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
 
 
 
 
 
  Cash paid during the year for income taxes
$
22,998

 
$
8,668

 
$
12,172

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
 
 
 
 
 
  Accrued liabilities for property and equipment
$
182

 
$
789

 
$
212






ICU Medical, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(unaudited)

 
 Adjusted EBITDA
 
 Q4
 
 Year Ended
 
2015
 
2014
 
2015
 
2014
 GAAP net income
$
5,463

 
$
7,372

 
$
44,985

 
$
26,335

 
 
 
 
 
 
 
 
 Non-GAAP adjustments:
 
 
 
 
 
 
 
   Stock compensation expense (a)
3,522

 
2,602

 
12,827

 
9,592

   Depreciation and amortization expense (b)
4,807

 
4,805

 
18,073

 
19,447

   Restructuring and strategic transaction expense (c)
5,040

 
2,253

 
8,451

 
5,093

   Gain on sale of building (d)
—

 
—

 
(1,086
)
 
—

   Legal settlements (e)
—

 
—

 
1,798

 
—

   Impairment of assets held for sale (f)
4,139

 
—

 
4,139

 
—

   Provision for income taxes (g)
7,178

 
4,864

 
24,714

 
13,457

     Total non-GAAP adjustments
24,686

 
14,524

 
68,916

 
47,589

 
 
 
 
 
 
 
 
 Adjusted EBITDA
$
30,149

 
$
21,896

 
$
113,901

 
$
73,924

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Adjusted diluted earnings per share
 
 Q4
 
 Year Ended
 
2015
 
2014
 
2015
 
2014
 GAAP diluted earnings per share
$
0.33

 
$
0.46

 
$
2.73

 
$
1.68

 
 
 
 
 
 
 
 
 Non-GAAP adjustments:
 
 
 
 
 
 
 
   Stock compensation expense (a)
$
0.21

 
$
0.16

 
$
0.78

 
$
0.61

   Amortization expense (h)
$
0.04

 
$
0.04

 
$
0.13

 
$
0.15

   Restructuring and strategic transaction expense (c)
$
0.30

 
$
0.14

 
$
0.51

 
$
0.33

   Gain on sale of building (d)
$
—

 
$
—

 
$
(0.07
)
 
$
—

   Legal settlements (e)
$
—

 
$
—

 
$
0.11

 
$
—

   Impairment of assets held for sale (f)
$
0.25

 
$
—

 
$
0.25

 
$
—

   Estimated income tax impact from adjustments (i)
$
(0.17
)
 
$
(0.12
)
 
$
(0.48
)
 
$
(0.39
)
 Adjusted diluted earnings per share
$
0.96

 
$
0.68

 
$
3.96

 
$
2.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (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) Impairment of assets held for sale.
 
 
 
 
 
 (g) Income tax expense recognized during the period.
 
 
 
 
 
 (h) Amortization expense
 
 
 
 
 
 
 
 (i) Estimated income tax effect on adjustments for stock compensation expense, amortization expense, restructuring and strategic transaction expense, gain on sale of building, legal settlements and impairment of assets held for sale.







ICU Medical, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures - Fiscal Year 2016 Outlook
(Amounts in millions, except per share data)
(unaudited)

 GAAP net income
$
61

 
$
63

 
 
 
 
 Non-GAAP adjustments:
 
 
 
   Stock compensation expense (a)
15

 
15

   Depreciation and amortization expense (b)
19

 
19

   Provision for income taxes (c)
28

 
30

     Total non-GAAP adjustments
62

 
64

 
 
 
 
 Adjusted EBITDA
$
123

 
$
127

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 GAAP diluted earnings per share
$
3.62

 
$
3.74

 
 
 
 
 Non-GAAP adjustments:
 
 
 
   Stock compensation expense (a)
$
0.89

 
$
0.89

   Amortization expense (d)
$
0.17

 
$
0.17

   Estimated income tax impact from adjustments (e)
$
(0.34
)
 
$
(0.34
)
 Adjusted diluted earnings per share
$
4.34

 
$
4.46

 
 
 
 
 (a) Stock-based compensation expense in accordance with ASC 718.
 (b) Depreciation of fixed assets and amortization of intangible assets.
 (c) Income tax expense recognized during the period.
 
 
 (d) Amortization expense
 
 
 
 (e) Estimated income tax effect on adjustments for stock compensation expense and amortization expense.




CONTACT:
ICU Medical, Inc.
Scott Lamb, Chief Financial Officer
(949) 366-2183
     
ICR, Inc.
John Mills, Partner
(646) 277-1254



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