ICU MEDICAL INC/DE - FORM 8-K - EX-99.1 - PRESS RELEASE - October 15, 2012

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8-K - 8-K - ICU MEDICAL INC/DEa2012q3earningsrelease.htm


Exhibit 99.1


 
ICU Medical, Inc. Reports Third Quarter 2012 Results
Revenues grew 6.5% to a record $81.4 million
Diluted EPS increased 26% to $0.82
The Company Raises Full Year 2012 EPS Guidance Range and Lowers Full Year Revenue Guidance Range

SAN CLEMENTE, Calif-October 15, 2012-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, announced today results for the third quarter and nine months ended September 30, 2012.
Third quarter of 2012 revenue increased 6.5% to a record $81.4 million, compared to $76.5 million in the same period last year. Net income for the third quarter of 2012 was $12.2 million, or $0.82 per diluted share, as compared to net income of $9.3 million, or $0.65 per diluted share, for the third quarter of 2011.
For the nine months ended September 30, 2012, revenue increased 3.8% to $234.2 million, compared to $225.7 million in the same period last year. Net income for the nine months ended September 30, 2012, was $28.9 million, or $1.98 per diluted share, compared to net income of $26.8 million, or $1.89 per diluted share, for the same period last year.
Scott Lamb, ICU Medical's Chief Financial Officer, said, “Our top line growth during the quarter was driven by increases in our infusion therapy, and oncology markets, which was partially offset by a decrease in critical care revenue and impact of the Euro currency translation during the quarter. Domestic sales were up 8.0%, while international sales grew 1.7%, compared to the same quarter a year ago. Our gross margins expanded 346 basis points year over year, reflecting positive product mix and more favorable peso exchange rates. As we continued to focus on cost efficiencies, we achieved solid operating margins of 21.5%, compared to 17.4% a year ago.”
“We are confident our strong financial position and positive cash flow position us well for further investments in our product portfolio and expansion of our market presence,” concluded Mr. Lamb.
Revenue by market segment for the nine months ended September 30, 2012 was as follows:

(dollars in millions)
Market Segment
 
2,012
 
2,011
 
Change
Infusion Therapy
 
$
159.6

 
$
146.4

 
9.1
 %
Critical Care
 
$
42.4

 
$
47.2

 
(10.2
)%
Oncology
 
$
21.0

 
$
19.0

 
10.5
 %
Other
 
$
11.2

 
$
13.1

 
(14.6
)%
 
 
$
234.2

 
$
225.7

 
3.8
 %




The Company ended the third quarter with a very healthy balance sheet. As of September 30, 2012, cash, cash equivalents and investment securities totaled $204.3 million and working capital was $283.7 million. Additionally, the Company generated operating cash flow of $9.5 million for the third quarter of 2012.

Fiscal Year 2012 Guidance
Based on the current business trends, management is lowering its previously announced revenue guidance range for the full fiscal year of 2012. The new range is $315 million to $318 million, compared to the previous range of $318 million to $325 million. Management is raising its previously announced diluted earnings guidance range. The new range is $2.75 to $2.80 per share, compared to the previous range of $2.55 to $2.70 per share. Operating cash flow is expected to be in the range of $45 million to $50 million.
Conference Call
The Company will be conducting a conference call concerning its second quarter results today at 4:30 p.m. EDT (1:30 p.m. PDT). The call can be accessed at 877-303-6235, international 631-291-4837, conference ID 28589433. 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.
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, protecting healthcare workers from exposure to infectious diseases or hazardous drugs and monitor continuous cardiac output of critical care patients. The Company's complete product line includes custom infusion and monitoring systems, closed delivery systems for hazardous drugs, needleless I.V. connectors, catheters and cardiac 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, including, but not limited to, statements regarding the Company's being positioned for further investments in its product portfolio and expansion of its market presence and delivering value to shareholders and the statements under the heading ''Fiscal Year 2012 Guidance.'' 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, 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, 2011. 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.

Contact:

ICU Medical, Inc.
Scott Lamb, Chief Financial Officer
(949) 366-2183

ICR, LLC
John F. Mills, Senior Managing Director
(310) 954-1105






ICU Medical, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share data)
 
 
September 30,
2012
 
December 31,
2011
 
(unaudited)
 
(1)
ASSETS
 
 
 
CURRENT ASSETS:
 

 
 

Cash and cash equivalents
$
127,524

 
$
99,590

Investment securities
76,768

 
60,395

Cash, cash equivalents and investment securities
204,292

 
159,985

Accounts receivable, net of allowance for doubtful accounts of $1,146 at September 30, 2012 and $1,293 at December 31, 2011
53,010

 
43,571

Inventories
37,587

 
40,423

Prepaid income taxes
7,568

 
5,589

Prepaid expenses and other current assets
5,931

 
6,759

Deferred income taxes
4,220

 
4,081

Total current assets
312,608

 
260,408

 
 
 
 
PROPERTY AND EQUIPMENT, net
83,641

 
83,048

GOODWILL
1,478

 
1,478

INTANGIBLE ASSETS, net
10,423

 
11,419

DEFERRED INCOME TAXES
4,757

 
4,759

 
$
412,907

 
$
361,112

LIABILITIES AND STOCKHOLDERS’ EQUITY
 

 
 

CURRENT LIABILITIES:
 

 
 

Accounts payable
$
12,165

 
$
13,251

Accrued liabilities
16,745

 
16,059

Total current liabilities
28,910

 
29,310

 
 
 
 
DEFERRED INCOME TAXES
7,148

 
7,144

INCOME TAX LIABILITY
3,816

 
4,081

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 14,855 shares at September 30, 2012 and December 31, 2011, outstanding 14,404 shares September 30, 2012 and 13,871 shares at December 31, 2011
1,486

 
1,486

Additional paid-in capital
62,255

 
56,796

Treasury stock, at cost — 451 shares at September 30, 2012 and 984 shares at December 31, 2011
(17,009
)
 
(35,348
)
Retained earnings
329,815

 
300,877

Accumulated other comprehensive loss
(3,514
)
 
(3,234
)
Total stockholders’ equity
373,033

 
320,577

 
$
412,907

 
$
361,112

______________________________________________________
(1) December 31, 2011 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,
 
2012
 
2011
 
2012
 
2011
REVENUES:
 

 
 

 
 

 
 

Net sales
$
81,266

 
$
76,317

 
$
233,788

 
$
225,316

Other
139

 
141

 
409

 
409

TOTAL REVENUE
81,405

 
76,458

 
234,197

 
225,725

COST OF GOODS SOLD
40,710

 
40,884

 
119,455

 
119,324

Gross profit
40,695

 
35,574

 
114,742

 
106,401

OPERATING EXPENSES:
 

 
 

 
—

 
—

Selling, general and administrative
20,177

 
20,411

 
63,873

 
63,004

Research and development
2,988

 
1,877

 
8,410

 
6,420

Legal settlement
—

 
—

 
—

 
(2,500
)
Total operating expenses
23,165

 
22,288

 
72,283

 
66,924

Income from operations
17,530

 
13,286

 
42,459

 
39,477

OTHER INCOME
158

 
132

 
438

 
966

Income before income taxes
17,688

 
13,418

 
42,897

 
40,443

PROVISION FOR INCOME TAXES
(5,500
)
 
(4,157
)
 
(13,959
)
 
(13,616
)
NET INCOME
$
12,188

 
$
9,261

 
$
28,938

 
$
26,827

NET INCOME PER SHARE
 

 
 

 
 

 
 

Basic
$
0.85

 
$
0.66

 
$
2.04

 
$
1.94

Diluted
$
0.82

 
$
0.65

 
$
1.98

 
$
1.89

WEIGHTED AVERAGE NUMBER OF SHARES
 

 
 

 
 

 
 

Basic
14,321

 
13,932

 
14,153

 
13,826

Diluted
14,826

 
14,184

 
14,613

 
14,169







ICU Medical, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(unaudited)
 
 
Nine months ended September 30,
 
2012
 
2011
CASH FLOWS FROM OPERATING ACTIVITIES:
 

 
 

Net income
$
28,938

 
$
26,827

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

 
 
Depreciation and amortization
14,262

 
13,687

Provision for doubtful accounts
(143
)
 
509

Provision for warranty and returns
291

 
—

Stock compensation
4,361

 
2,998

Loss (gain) on disposal of property and equipment
41

 
(57
)
Bond premium amortization
1,660

 
801

Cash provided (used) by changes in operating assets and liabilities
 

 
 
Accounts receivable
(9,790
)
 
1,575

Inventories
2,974

 
1,143

Prepaid expenses and other assets
792

 
(2,406
)
Accounts payable
(943
)
 
(272
)
Accrued liabilities
682

 
(1,698
)
Deferred revenue
—

 
(254
)
Prepaid and deferred income taxes
(2,194
)
 
(6,802
)
Net cash provided by operating activities
40,931

 
36,051

CASH FLOWS FROM INVESTING ACTIVITIES:
 

 
 

Purchases of property and equipment
(13,208
)
 
(13,761
)
Proceeds from sale of asset
10

 
—

Intangible asset additions
(951
)
 
—

Proceeds from insurance
—

 
2,781

Purchases of investment securities
(78,534
)
 
(66,330
)
Proceeds from sale of investment securities
60,452

 
26,935

Net cash used by investing activities
(32,231
)
 
(50,375
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 

 
 

Proceeds from exercise of stock options
13,214

 
7,021

Proceeds from employee stock purchase plan
2,220

 
909

Tax benefits from exercise of stock options
4,002

 
3,682

Purchase of treasury stock
—

 
(9,992
)
Net cash provided by financing activities
19,436

 
1,620

Effect of exchange rate changes on cash
(202
)
 
793

NET INCREASE IN CASH AND CASH EQUIVALENTS
27,934

 
(11,911
)
CASH AND CASH EQUIVALENTS, beginning of period
99,590

 
78,850

CASH AND CASH EQUIVALENTS, end of period
$
127,524

 
$
66,939




ICU MEDICAL INC/DE Reports