ICU Medical, Inc., (Nasdaq:ICUI) ("ICU Medical"),
a leader in innovative medical devices used in vascular therapy,
oncology and critical care applications, today announced financial
results for the fourth quarter and fiscal year ended December 31,
2014.
Fourth Quarter 2014 Results
Fourth quarter 2014 revenue was $79.9 million, compared to $77.9
million in the same period last year. GAAP net income for the
fourth quarter of 2014 was $7.4 million, or $0.46 per diluted
share, as compared to GAAP net income of $13.3 million, or $0.86
per diluted share, for the fourth quarter of 2013. Adjusted diluted
earnings per share for the fourth quarter of 2014 was $0.68 as
compared to $0.94 for the fourth quarter of 2013. Also, adjusted
EBITDA was $21.9 million for the fourth quarter of 2014 as compared
to $20.1 million for the fourth quarter of 2013.
Full Fiscal Year 2014 Results
Fiscal year 2014 revenue was $309.3 million, compared to $313.7
million in the same period last year. GAAP net income for fiscal
year 2014 was $26.3 million, or $1.68 per diluted share, as
compared to GAAP net income of $40.4 million, or $2.65 per diluted
share, for fiscal year 2013. Adjusted diluted earnings per share
for fiscal year 2014 was $2.38 as compared to $3.06 for fiscal year
2013. Also, adjusted EBITDA was $73.9 million for fiscal year 2014
as compared to $79.0 million for fiscal year 2013.
Vivek Jain, ICU Medical's Chief Executive Officer, said, "Fourth
quarter and full year results were slightly above our expectations.
Consistent with our trends during the previous two quarters, fourth
quarter revenue was driven by strength in direct infusion therapy,
oncology and international sales and this was offset by an expected
decline in our OEM business."
Revenues by market segment for the three and twelve months ended
December 31, 2014 and 2013 were as follows:
(dollars in millions) |
|
Fiscal year
ended December 31, |
Three months
ended December 31, |
Market Segment |
2014 |
2013 |
Change |
2014 |
2013 |
Change |
Infusion Therapy |
$216.0 |
$221.0 |
$ (5.0) |
$56.5 |
$54.2 |
$2.3 |
Critical Care |
55.1 |
54.3 |
0.8 |
13.8 |
13.3 |
0.5 |
Oncology |
36.9 |
37.1 |
(0.2) |
9.3 |
9.9 |
(0.6) |
Other |
1.3 |
1.3 |
0.0 |
0.3 |
0.5 |
(0.2) |
|
$309.3 |
$313.7 |
$ (4.4) |
$79.9 |
$77.9 |
$2.0 |
The Company ended the fourth quarter with a strong balance
sheet. As of December 31, 2014, cash, cash equivalents and
investment securities totaled $346.8 million and working capital
was $408.5 million. Additionally, the Company generated operating
cash flow of $60.5 million for the fiscal year of 2014.
Fiscal Year 2015 Guidance
For the year, the Company expects revenue to be in the range of
$312 million to $317 million, GAAP diluted earnings per share to be
in the range of $2.15 to $2.25, adjusted diluted earnings per share
to be in the range of $2.70 to $2.80, and adjusted EBITDA to be in
the range of $84 million to $86 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,
Monday, February 9, 2015. The call can be accessed at 800-936-9761,
international 408-774-4587, conference ID 74256379. 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, strategic transaction expense, restructuring
expense and income tax expense. Adjusted Diluted EPS excludes, net
of tax, intangible asset amortization expense, stock compensation
expense, strategic transaction expense and restructuring
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 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, including, but not limited to,
statements regarding guidance for the first quarter and fiscal year
2015. 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, 2013. 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, |
|
2014 |
2013 |
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$ 275,812 |
$ 226,022 |
Investment securities |
70,952 |
70,869 |
Cash, cash equivalents and
investment securities |
346,764 |
296,891 |
Accounts receivable, net of allowance for
doubtful accounts of $1,127 and $1,208 at December 31,
2014 and 2013, respectively |
39,051 |
45,318 |
Inventories |
36,933 |
34,451 |
Prepaid income taxes |
3,963 |
5,966 |
Prepaid expenses and other current
assets |
5,818 |
7,319 |
Deferred income taxes |
4,683 |
4,351 |
Total current assets |
437,212 |
394,296 |
|
|
|
PROPERTY AND EQUIPMENT, net |
86,091 |
87,861 |
GOODWILL |
1,478 |
1,478 |
INTANGIBLE ASSETS, net |
7,063 |
8,490 |
DEFERRED INCOME TAXES |
9,258 |
7,518 |
|
$ 541,102 |
$ 499,643 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Accounts payable |
$ 11,378 |
$ 11,335 |
Accrued liabilities |
17,350 |
15,551 |
Total current liabilities |
28,728 |
26,886 |
|
|
|
DEFERRED INCOME TAXES |
1,376 |
3,630 |
INCOME TAX LIABILITY |
2,746 |
4,402 |
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 15,595 shares at December 31,
2014 and 15,103 at December 31, 2013, outstanding 15,595 shares at
December 31, 2014 and 15,102 shares at December 31,
2013 |
1,559 |
1,510 |
Additional paid-in capital |
107,336 |
78,495 |
Treasury stock, at cost — 0 shares at
December 31, 2014 and 1 shares at December 31, 2013 |
— |
(49) |
Retained earnings |
408,911 |
382,576 |
Accumulated other comprehensive income
(loss) |
(9,554) |
2,193 |
Total stockholders' equity |
508,252 |
464,725 |
|
$ 541,102 |
$ 499,643 |
|
|
|
|
|
|
ICU MEDICAL, INC.
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME |
(Amounts in thousands, except
per share data) |
(unaudited) |
|
|
|
|
|
Year
ended December 31, |
|
2014 |
2013 |
2012 |
REVENUES: |
|
|
|
Net sales |
$ 308,770 |
$ 313,056 |
$ 316,322 |
Other |
490 |
660 |
547 |
TOTAL REVENUE |
309,260 |
313,716 |
316,869 |
COST OF GOODS SOLD |
157,859 |
158,984 |
160,359 |
Gross profit |
151,401 |
154,732 |
156,510 |
OPERATING EXPENSES: |
|
|
|
Selling, general and
administrative |
88,939 |
89,006 |
84,604 |
Research and development |
18,332 |
12,407 |
10,630 |
Restructuring and strategic
transaction |
5,093 |
1,370 |
— |
Total operating expenses |
112,364 |
102,783 |
95,234 |
Income from operations |
39,037 |
51,949 |
61,276 |
OTHER INCOME |
755 |
765 |
563 |
Income before income taxes |
39,792 |
52,714 |
61,839 |
PROVISION FOR INCOME TAXES |
(13,457) |
(12,296) |
(20,558) |
NET INCOME |
$ 26,335 |
$ 40,418 |
$ 41,281 |
NET INCOME PER SHARE |
|
|
|
Basic |
$ 1.72 |
$ 2.75 |
$ 2.90 |
Diluted |
$ 1.68 |
$ 2.65 |
$ 2.80 |
WEIGHTED AVERAGE NUMBER OF SHARES |
|
|
|
Basic |
15,282 |
14,688 |
14,223 |
Diluted |
15,647 |
15,274 |
14,725 |
|
|
|
|
|
|
|
|
ICU MEDICAL, INC.
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF INCOME |
(Amounts in thousands, except
per share data) |
(unaudited) |
|
|
|
Three
months ended December 31, |
|
2014 |
2013 |
REVENUES: |
|
|
Net sales |
$ 79,773 |
$ 77,637 |
Other |
123 |
304 |
TOTAL REVENUE |
79,896 |
77,941 |
COST OF GOODS SOLD |
40,211 |
38,996 |
Gross profit |
39,685 |
38,945 |
OPERATING EXPENSES: |
|
|
Selling, general and
administrative |
20,299 |
21,900 |
Research and development |
5,080 |
3,458 |
Restructuring and strategic
transaction |
2,253 |
29 |
Total operating expenses |
27,632 |
25,387 |
Income from operations |
12,053 |
13,558 |
OTHER INCOME |
183 |
195 |
Income before income taxes |
12,236 |
13,753 |
PROVISION FOR INCOME TAXES |
(4,864) |
(421) |
NET INCOME |
$ 7,372 |
$ 13,332 |
NET INCOME PER SHARE |
|
|
Basic |
$ 0.48 |
$ 0.89 |
Diluted |
$ 0.46 |
$ 0.86 |
WEIGHTED AVERAGE NUMBER OF SHARES |
|
|
Basic |
15,469 |
14,491 |
Diluted |
15,934 |
15,416 |
|
|
|
|
|
|
ICU MEDICAL, INC.
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF CASH FLOWS |
(Amounts in thousands) |
(unaudited) |
|
|
|
|
|
Year
ended December 31, |
|
2014 |
2013 |
2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
Net income |
$ 26,335 |
$ 40,418 |
$ 41,281 |
Adjustments to reconcile net income to net
cash provided by operating activities: |
|
|
|
Depreciation and
amortization |
19,447 |
19,506 |
19,001 |
Provision for doubtful
accounts |
34 |
185 |
(237) |
Provision for warranty and
returns |
(360) |
671 |
220 |
Stock compensation |
9,592 |
5,434 |
5,563 |
Loss (gain) on disposal of
property and equipment |
8 |
(36) |
212 |
Bond premium amortization |
2,188 |
2,715 |
2,585 |
Changes in operating assets and
liabilities: |
|
|
|
Accounts
receivable |
4,912 |
3,556 |
(5,395) |
Inventories |
(3,836) |
2,319 |
4,573 |
Prepaid expenses
and other assets |
1,970 |
(383) |
(415) |
Accounts
payable |
(621) |
(31) |
(1,536) |
Accrued
liabilities |
2,344 |
(2,215) |
1,199 |
Income taxes,
including excess tax benefits and deferred income taxes |
(1,373) |
(6,413) |
(780) |
Net cash provided by operating
activities |
60,640 |
65,726 |
66,271 |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Purchases of property and
equipment |
(16,604) |
(18,415) |
(19,160) |
Proceeds from sale of
assets |
5 |
49 |
10 |
Intangible asset additions |
(989) |
(1,080) |
(1,145) |
Purchases of investment
securities |
(93,588) |
(86,022) |
(98,876) |
Proceeds from sale of
investment securities |
89,426 |
92,348 |
77,798 |
Net cash used by investing
activities |
(21,750) |
(13,120) |
(41,373) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Proceeds from exercise of stock
options |
16,998 |
18,004 |
14,844 |
Proceeds from employee stock
purchase plan |
2,485 |
2,457 |
2,220 |
Tax benefits from exercise of
stock options |
5,700 |
6,966 |
4,567 |
Purchase of treasury stock |
(5,836) |
(3,033) |
— |
Net cash provided by financing
activities |
19,347 |
24,394 |
21,631 |
Effect of exchange rate changes on cash |
(8,447) |
2,122 |
781 |
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
49,790 |
79,122 |
47,310 |
CASH AND CASH EQUIVALENTS, beginning of
period |
226,022 |
146,900 |
99,590 |
CASH AND CASH EQUIVALENTS, end of period |
$ 275,812 |
$ 226,022 |
$ 146,900 |
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION |
|
|
|
Cash paid during the year for
income taxes |
$ 8,668 |
$ 12,172 |
$ 16,741 |
NON-CASH INVESTING ACTIVITIES |
|
|
|
Accrued liabilities for
property and equipment |
$ 789 |
$ 212 |
$ 427 |
|
|
|
|
|
|
|
|
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 |
|
2014 |
2013 |
2014 |
2013 |
GAAP net income |
$7,372 |
$13,332 |
$26,335 |
$40,418 |
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
Stock compensation expense
(a) |
2,602 |
1,301 |
9,592 |
5,434 |
Depreciation and amortization
expense (b) |
4,805 |
5,055 |
19,447 |
19,506 |
Restructuring and strategic
transaction expense (c) |
2,253 |
29 |
5,093 |
1,370 |
Provision for income taxes
(d) |
4,864 |
421 |
13,457 |
12,296 |
Total non-GAAP
adjustments |
14,524 |
6,806 |
47,589 |
38,606 |
|
|
|
|
|
Adjusted EBITDA |
$21,896 |
$20,138 |
$73,924 |
$79,024 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted
diluted earnings per share |
|
Q4 |
Year
Ended |
|
2014 |
2013 |
2014 |
2013 |
GAAP diluted earnings per share |
$0.46 |
$0.86 |
$1.68 |
$2.65 |
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
Stock compensation expense
(a) |
$0.16 |
$0.08 |
$0.61 |
$0.36 |
Amortization expense (e) |
$0.04 |
$0.04 |
$0.15 |
$0.17 |
Restructuring and strategic
transaction expense (c) |
$0.14 |
$ -- |
$0.33 |
$0.09 |
Estimated income tax impact
from adjustments (f) |
$ (0.12) |
$ (0.04) |
$ (0.39) |
$ (0.21) |
Adjusted diluted earnings per share |
$0.68 |
$0.94 |
$2.38 |
$3.06 |
|
|
|
|
|
(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) Income tax expense
recognized during the period. |
(e) Amortization
expense |
(f) Estimated income tax
effect on adjustments for stock compensation expense, amortization
expense and restructuring and strategic transaction expense. |
|
|
|
|
|
|
|
|
|
|
ICU Medical, Inc. and
Subsidiaries |
Reconciliation of GAAP to
Non-GAAP Financial Measures - Fiscal Year 2015 Outlook |
(Amounts in millions, except
per share data) |
(unaudited) |
|
|
|
|
|
|
GAAP net income |
$35 |
$36 |
|
|
|
Non-GAAP adjustments: |
|
|
Stock compensation expense
(a) |
12 |
12 |
Depreciation and amortization
expense (b) |
19 |
19 |
Provision for income taxes
(c) |
18 |
19 |
Total non-GAAP
adjustments |
49 |
50 |
|
|
|
Adjusted EBITDA |
$84 |
$86 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings per share |
$2.15 |
$2.25 |
|
|
|
Non-GAAP adjustments: |
|
|
Stock compensation expense
(a) |
$0.73 |
$0.73 |
Amortization expense (d) |
$0.11 |
$0.11 |
Estimated income tax impact
from adjustments (e) |
$ (0.29) |
$ (0.29) |
Adjusted diluted earnings per share |
$2.70 |
$2.80 |
|
|
|
(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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