• ICU Medical, Inc. Announces Fourth Quarter 2020 Results and Provides Fiscal Year 2021 Guidance

    Источник: Nasdaq GlobeNewswire / 25 фев 2021 15:05:01   America/Chicago

    SAN CLEMENTE, Calif., Feb. 25, 2021 (GLOBE NEWSWIRE) -- ICU Medical, Inc. (Nasdaq:ICUI), a leader in the development, manufacture and sale of innovative medical products used in infusion therapy and critical care applications, today announced financial results for the quarter ended December 31, 2020.

    Fourth Quarter 2020 Results

    Fourth quarter 2020 revenue was $320.5 million, compared to $315.5 million in the same period last year. GAAP gross profit for the fourth quarter of 2020 was $119.9 million, as compared to $114.1 million in the same period last year. GAAP gross margin for the fourth quarter of 2020 was 37%, as compared to 36% in the same period last year. GAAP net income for the fourth quarter of 2020 was $26.1 million, or $1.21 per diluted share, as compared to GAAP net income of $20.6 million, or $0.96 per diluted share, for the fourth quarter of 2019. Adjusted diluted earnings per share for the fourth quarter of 2020 were $1.77 as compared to $1.94 for the fourth quarter of 2019. Also, adjusted EBITDA was $59.8 million for the fourth quarter of 2020 as compared to $60.7 million for the fourth quarter of 2019.

    Adjusted EBITDA and adjusted diluted earnings per share are measures calculated and presented on the basis of methodologies other than in accordance with GAAP. Please refer to the Use of Non-GAAP Financial Information following the financial statements herein for further discussion and reconciliations of these measures to GAAP measures.

    Vivek Jain, ICU Medical’s Chief Executive Officer, said, “Fourth quarter results were generally in line with our expectations.”

    Revenues by product line for the three and twelve months ended December 31, 2020 and 2019 were as follows (in millions):

      Three months ended
    December 31,    		   Twelve months ended
    December 31,    		  
    Product Line 2020 2019 $ Change 2020 2019 $ Change
    Infusion Consumables $123.1 $119.6 $3.5 $473.7 $477.6 $(3.9)
    Infusion Systems 91.8 83.8 8.0 359.7 328.3 31.4
    IV Solutions* 93.6 101.0 (7.4) 389.0 415.0 (26.0)
    Critical Care 12.0 11.1 0.9 48.6 45.3 3.3
      $320.5 $315.5 $5.0 $1,271.0 $1,266.2 $4.8

    *IV Solutions includes $11.3 million and $56.1 million of contract manufacturing to Pfizer for the three and twelve months ended December 31, 2020, respectively, as compared to $19.7 million and $81.0 million for the same periods in the prior year.

    Fiscal Year 2021 Guidance

    For the Fiscal Year 2021, the Company expects adjusted EBITDA to be in the range of $245 million to $265 million, and adjusted diluted EPS to be in the range of $6.50 to $7.20.

    Conference Call

    The Company will host a conference call to discuss fourth quarter 2020 financial results on the Company, today at 4:30 p.m. EDT (1:30 p.m. PDT). The call can be accessed at (800) 936-9761, international (408) 774-4587, conference ID 8029238. The conference call will be simultaneously available by webcast, which can be accessed by going to the Company's website at icumed.com, clicking on the Investors tab, clicking on Event Calendar and clicking on the Webcast icon and following the prompts. The webcast will also be available by replay.

    About ICU Medical, Inc.

    ICU Medical, Inc. (Nasdaq:ICUI) develops, manufactures and sells innovative medical products used in infusion therapy, and critical care applications. ICU Medical's product portfolio includes IV smart pumps, sets, connectors, closed system transfer devices for hazardous drugs, sterile IV solutions, cardiac monitoring systems, along with pain management and safety software technology designed to help meet clinical, safety and workflow goals. 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 growth or improving efficiencies, unexpected changes in the Company's arrangements with its largest customers and the impact of the ongoing COVID-19 pandemic on the Company and our financial results. 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 Company's most recent Annual Report on Form 10-K and our subsequent filings. 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
    (In thousands)

     December 31,
    2020    		 December 31,
    2019
     (Unaudited) (1) 
    ASSETS   
    CURRENT ASSETS:   
    Cash and cash equivalents$396,097  $268,670 
    Short-term investment securities14,687  23,967 
    TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENT SECURITIES410,784  292,637 
    Accounts receivable, net of allowance for doubtful accounts124,093  202,219 
    Inventories314,928  337,640 
    Prepaid income taxes29,480  15,720 
    Prepaid expenses and other current assets41,492  33,981 
    TOTAL CURRENT ASSETS920,777  882,197 
    PROPERTY AND EQUIPMENT, net466,628  456,085 
    OPERATING LEASE RIGHT-OF-USE ASSETS46,571  34,465 
    LONG-TERM INVESTMENT SECURITIES12,974  — 
    GOODWILL33,001  31,245 
    INTANGIBLE ASSETS, net197,231  211,408 
    DEFERRED INCOME TAXES31,034  27,998 
    OTHER ASSETS55,475  48,984 
    TOTAL ASSETS$1,763,691  $1,692,382 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    CURRENT LIABILITIES:   
    Accounts payable$71,864  $128,629 
    Accrued liabilities97,021  117,776 
    Income tax payable303  2,063 
    Contingent earn-out liability26,300  — 
    TOTAL CURRENT LIABILITIES195,488  248,468 
    CONTINGENT EARN-OUT LIABILITY—  17,300 
    OTHER LONG-TERM LIABILITIES47,835  32,820 
    DEFERRED INCOME TAXES1,663  2,091 
    INCOME TAX PAYABLE16,440  14,459 
    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 — 21,058 shares at December 31, 2020 and issued 20,743 shares at December 31, 2019 and outstanding — 20,742 shares at December 31, 20192,106  2,074 
    Additional paid-in capital693,068  668,947 
    Treasury stock, at cost(39)  (157) 
    Retained earnings808,652  721,782 
    Accumulated other comprehensive loss(1,522)  (15,402) 
    TOTAL STOCKHOLDERS' EQUITY1,502,265  1,377,244 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,763,691  $1,692,382 

    ______________________________________________________
    (1) December 31, 2019 balances were derived from audited consolidated financial statements.


    ICU MEDICAL, INC. AND SUBSIDIARIES

    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
    (In thousands, except per share data)

     Three months ended
    December 31,    		 Twelve months ended
    December 31,
     2020  2019  2020  2019 
    TOTAL REVENUES$320,451  $315,523  $1,271,004  $1,266,208 
    COST OF GOODS SOLD200,577  201,383  809,507  794,344 
    GROSS PROFIT119,874  114,140  461,497  471,864 
    OPERATING EXPENSES:       
    Selling, general and administrative73,552  70,649  283,953  276,982 
    Research and development11,797  12,587  42,948  48,611 
    Restructuring, strategic transaction and integration5,506  11,166  28,409  80,574 
    Change in fair value of contingent earn-out2,000  —  9,000  (47,400) 
    Contract settlement—  1,915  (975)  5,737 
    TOTAL OPERATING EXPENSES92,855  96,317  363,335  364,504 
    INCOME FROM OPERATIONS27,019  17,823  98,162  107,360 
    INTEREST EXPENSE(170)  (138)  (1,753)  (549) 
    OTHER INCOME, net3,260  3,236  1,085  7,896 
    INCOME BEFORE INCOME TAXES30,109  20,921  97,494  114,707 
    PROVISION FOR INCOME TAXES(3,967)  (280)  (10,624)  (13,672) 
    NET INCOME$26,142  $20,641  $86,870  $101,035 
    NET INCOME PER SHARE       
    Basic$1.24  $1.00  $4.16  $4.90 
    Diluted$1.21  $0.96  $4.02  $4.69 
    WEIGHTED AVERAGE NUMBER OF SHARES       
    Basic21,016  20,693  20,907  20,629 
    Diluted21,614  21,393  21,591  21,545 

    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"). 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 material limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled non-GAAP financial measures used by other companies, including peer companies. 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. We use non-GAAP financial measures in addition to and in conjunction with GAAP financial measures to analyze and assess the overall performance of our business, in making financial, operating and planning decisions, and in determining executive incentive compensation. 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 the following items from net income:

    Interest, net: We exclude interest in deriving adjusted EBITDA as interest can vary significantly among companies depending on a company's level of income generating instruments and/or level of debt.

    Stock compensation expense: Stock-based compensation is generally fixed at the time the stock-based instrument is granted and amortized over a period of several years. The value of stock options is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. The value of our restricted stock awards is determined using the grant date stock price, which may not be indicative of our operational performance over the expense period. Additionally, in order to establish the fair value of performance-based stock awards, which are currently an element of our ongoing stock-based compensation, we are required to apply judgment to estimate the probability of the extent to which performance objectives will be achieved. Based on the above factors, we believe it is useful to exclude stock-based compensation in order to better understand our operating performance.

    Intangible asset amortization expense: We do not acquire businesses or capitalize certain patent costs on a predictable cycle. The amount of purchase price allocated to intangible assets and the term of amortization can vary significantly and are unique to each acquisition. Capitalized patent costs can vary significantly based on our current level of development activities. We believe that excluding amortization of intangible assets provides the users of our financial statements with a consistent basis for comparison across accounting periods.

    Depreciation expense: We exclude depreciation expense in deriving adjusted EBITDA because companies utilize productive assets of different ages and the depreciable lives can vary significantly resulting in considerable variability in depreciation expense among companies.

    Restructuring, strategic transaction and integration: We incur restructuring and strategic transaction charges that result from events, which arise from unforeseen circumstances and/or often occur outside of the ordinary course of our ongoing business. Although these events are reflected in our GAAP financial statements, these unique transactions may limit the comparability of our ongoing operations with prior and future periods.

    Change in fair value of contingent earn-out: We exclude the impact of certain amounts recorded in connection with business combinations. We exclude items that are either non-cash or not normal, recurring operating expenses due to their nature, variability of amounts, and lack of predictability as to occurrence and/or timing.

    Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair market value: The inventory step-up represents the expense recognition of fair value adjustments in excess of the historical cost basis of inventory obtained through acquisition, these charges are outside of our normal operations and are excluded.

    Contract settlement: Occasionally, we are involved in contract renegotiations that may result in one-time settlements. We exclude these settlements as they have no direct correlation to the operation of our ongoing business.

    Disposition of certain assets: Occasionally, we may dispose of certain assets if no longer needed for current operations. We exclude any gains or losses recognized on the sale of these assets in determining our non-GAAP financial measures as they may limit the comparability of our ongoing operations with prior and future periods and distort the evaluation of our normal operating performance.

    Taxes: We exclude taxes in deriving adjusted EBITDA as taxes are deemed to be non-core to the business and may limit the comparability of our ongoing operations with prior and future periods and distort the evaluation of our normal operating performance.

    Adjusted Diluted EPS excludes from diluted EPS, net of tax, stock compensation expense, intangible asset amortization expense, restructuring, strategic transaction and integration, change in fair value of contingent earn-out, adjustment to reverse the cost recognition related to the purchase write-up of inventory to fair value, contract settlement and disposition of certain assets. The tax effect on the above adjustments is calculated using the specific tax rate applied to each adjustment based on the nature of the item/or the tax jurisdiction in which the item has been recorded.

    From time to time in the future, there may be other items that we may exclude if we believe that doing so is consistent with the goal of providing useful information to investors and management.

    The following tables reconcile our GAAP and non-GAAP financial measures:


    ICU MEDICAL, INC. AND SUBSIDIARIES

    Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
    (In thousands)

      Adjusted EBITDA
     Three months Ended
    December 31,
     2020  2019 
    GAAP net income$26,142  $20,641 
        
    Non-GAAP adjustments:   
    Interest, net(519)  (1,563) 
    Stock compensation expense5,340  5,757 
    Depreciation and amortization expense21,594  19,891 
    Restructuring, strategic transaction and integration5,506  11,166 
    Change in fair value of contingent earn-out2,000  — 
    Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair value—  1,512 
    Contract settlement—  3,019 
    Disposition of certain assets(4,237)  — 
    Provision for income taxes3,967  280 
    Total non-GAAP adjustments33,651  40,062 
        
    Adjusted EBITDA$59,793  $60,703 


        
      Adjusted diluted earnings per share
     Three months ended
    December 31,
     2020  2019 
    GAAP diluted earnings per share$1.21  $0.96 
        
    Non-GAAP adjustments:   
    Stock compensation expense$0.25  $0.27 
    Amortization expense$0.27  $0.24 
    Restructuring, strategic transaction and integration$0.25  $0.52 
    Change in fair value of contingent earn-out$0.09  $— 
    Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair value$—  $0.07 
    Contract settlement$—  $0.14 
    Disposition of certain assets$(0.20)  $— 
    Estimated income tax impact from adjustments$(0.10)  $(0.26) 
    Adjusted diluted earnings per share$1.77  $1.94 


    ICU Medical, Inc. and Subsidiaries

    Reconciliation of GAAP to Non-GAAP Financial Measures - Fiscal Year 2021 Outlook (Unaudited)
    (In millions, except per share data)

     Low End of Guidance High End of Guidance
    GAAP net income$85  $100 
        
    Non-GAAP adjustments:   
    Interest, net(2)  (2) 
    Stock compensation expense24  24 
    Depreciation and amortization expense91  91 
    Restructuring, strategic transaction and integration22  22 
    Change in fair value of contingent earn-out4  4 
    Provision for income taxes21  26 
    Total non-GAAP adjustments$160  $165 
        
    Adjusted EBITDA$245  $265 
        
        
        
    GAAP diluted earnings per share$3.91  $4.61 
        
    Non-GAAP adjustments:   
    Stock compensation expense$1.08  $1.08 
    Amortization expense$1.07  $1.07 
    Restructuring, strategic transaction and integration$1.00  $1.00 
    Change in fair value of contingent earn-out$0.17  $0.17 
    Estimated income tax impact from adjustments$(0.73)  $(0.73) 
    Adjusted diluted earnings per share$6.50  $7.20 

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


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