• ICU Medical, Inc. Announces Second Quarter 2021 Results

    Source: Nasdaq GlobeNewswire / 04 Aug 2021 15:05:03   America/Chicago

    SAN CLEMENTE, Calif., Aug. 04, 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 June 30, 2021.

    Second Quarter 2021 Results

    Second quarter 2021 revenue was $321.7 million, compared to $303.4 million in the same period last year. GAAP gross profit for the second quarter of 2021 was $123.5 million, as compared to $106.3 million in the same period last year. GAAP gross margin for the second quarter of 2021 was 38%, as compared to 35% in the same period last year. GAAP net income for the second quarter of 2021 was $28.4 million, or $1.31 per diluted share, as compared to GAAP net income of $18.9 million, or $0.88 per diluted share, for the second quarter of 2020. Adjusted diluted earnings per share for the second quarter of 2021 were $1.88 as compared to $1.65 for the second quarter of 2020. Also, adjusted EBITDA was $66.9 million for the second quarter of 2021 as compared to $58.1 million for the second quarter of 2020.

    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, “Second quarter results were generally in line with our expectations.”

    Revenues by product line for the three and six months ended June 30, 2021 and 2020 were as follows (in millions):

      Three months ended
    June 30,    		   Six months ended
    June 30,    		  
    Product Line 2021 2020 $ Change 2021 2020 $ Change
    Infusion Consumables $136.2 $111.0 $25.2  $262.6 $234.5 $28.1 
    Infusion Systems 84.7 91.1 (6.4) 169.0 179.5 (10.5)
    IV Solutions* 88.4 89.2 (0.8) 182.6 193.5 (10.9)
    Critical Care 12.4 12.1 0.3  25.5 24.5 1.0 
      $321.7 $303.4 $18.3  $639.7 $632.0 $7.7 

    *IV Solutions includes $10.4 million and $24.3 million of contract manufacturing to Pfizer for the three and six months ended June 30, 2021, respectively, as compared to $15.5 million and $ 29.0 million for the three and six months ended June 30, 2020, respectively.

    Fiscal Year 2021 Guidance Update

    The Company is updating its full year 2021 guidance of adjusted EBITDA from a range of $245 million to $265 million to a range of $250 million to $260 million and adjusted diluted earnings per share from a range of $6.50 to $7.20 to a range of $6.80 to $7.20.

    Conference Call

    The Company will host a conference call to discuss second quarter 2021 financial results on the Company, today at 4:30 p.m. EDT (1:30 p.m. PDT). The call can be accessed at (866) 248-8441 or international (408) 774-4587. 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)

     June 30,
    2021    		 December 31,
    2020
     (Unaudited) (1) 
    ASSETS   
    CURRENT ASSETS:   
    Cash and cash equivalents$462,037  $396,097 
    Short-term investment securities14,661  14,687 
    TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENT SECURITIES476,698  410,784 
    Accounts receivable, net of allowance for doubtful accounts120,782  124,093 
    Inventories299,610  314,928 
    Prepaid income taxes38,285  29,480 
    Prepaid expenses and other current assets37,979  41,492 
    TOTAL CURRENT ASSETS973,354  920,777 
    PROPERTY AND EQUIPMENT, net458,785  466,628 
    OPERATING LEASE RIGHT-OF-USE ASSETS43,315  46,571 
    LONG-TERM INVESTMENT SECURITIES15,670  12,974 
    GOODWILL32,927  33,001 
    INTANGIBLE ASSETS, net189,620  197,231 
    DEFERRED INCOME TAXES31,120  31,034 
    OTHER ASSETS58,051  55,475 
    TOTAL ASSETS$1,802,842  $1,763,691 
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    CURRENT LIABILITIES:   
    Accounts payable$69,782  $71,864 
    Accrued liabilities85,283  97,021 
    Income tax payable2,299  303 
    Contingent earn-out liability26,300  26,300 
    TOTAL CURRENT LIABILITIES183,664  195,488 
    OTHER LONG-TERM LIABILITIES42,951  47,835 
    DEFERRED INCOME TAXES1,663  1,663 
    INCOME TAX PAYABLE17,299  16,440 
    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 — 21,219 shares at June 30, 2021 and 21,058 at December 31, 2020 and outstanding 21,208 shares at June 30, 2021 and 21,058 shares at December 31, 20202,122  2,106 
    Additional paid-in capital705,582  693,068 
    Treasury stock, at cost(2,269) (39)
    Retained earnings860,781  808,652 
    Accumulated other comprehensive loss(8,951) (1,522)
    TOTAL STOCKHOLDERS' EQUITY1,557,265  1,502,265 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,802,842  $1,763,691 

    ______________________________________________________
    (1) December 31, 2020 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
    June 30,    		 Six months ended
    June 30,
     2021  2020  2021  2020 
    TOTAL REVENUES$321,677  $303,379  $639,723  $631,986 
    COST OF GOODS SOLD198,148  197,095  403,514  404,287 
    GROSS PROFIT123,529  106,284  236,209  227,699 
    OPERATING EXPENSES:       
    Selling, general and administrative73,921  67,242  146,312  139,547 
    Research and development11,385  10,279  22,094  21,025 
    Restructuring, strategic transaction and integration3,753  6,482  6,636  18,789 
    Change in fair value of contingent earn-out—  2,700  —  2,700 
    Contract settlement—  25  127  25 
    TOTAL OPERATING EXPENSES89,059  86,728  175,169  182,086 
    INCOME FROM OPERATIONS34,470  19,556  61,040  45,613 
    INTEREST EXPENSE(163) (771) (324) (967)
    OTHER INCOME (EXPENSE), net525  2,053  1,208  (3,427)
    INCOME BEFORE INCOME TAXES34,832  20,838  61,924  41,219 
    PROVISION FOR INCOME TAXES(6,434) (1,930) (9,795) (5,477)
    NET INCOME$28,398  $18,908  $52,129  $35,742 
    NET INCOME PER SHARE       
    Basic$1.34  $0.91  $2.46  $1.72 
    Diluted$1.31  $0.88  $2.40  $1.66 
    WEIGHTED AVERAGE NUMBER OF SHARES       
    Basic21,200  20,880  21,176  20,831 
    Diluted21,703  21,506  21,718  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.

    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.

    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 and contract settlement. 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
    June 30,
     2021  2020 
    GAAP net income$28,398  $18,908 
        
    Non-GAAP adjustments:   
    Interest, net(545) (161)
    Stock compensation expense6,681  5,410 
    Depreciation and amortization expense22,164  21,618 
    Restructuring, strategic transaction and integration3,753  6,482 
    Change in fair value of contingent earn-out—  2,700 
    Contract settlement—  1,210 
    Provision for income taxes6,434  1,930 
    Total non-GAAP adjustments38,487  39,189 
        
    Adjusted EBITDA$66,885  $58,097 


        
      Adjusted diluted earnings per share
     Three months ended
    June 30,
     2021  2020 
    GAAP diluted earnings per share$1.31  $0.88 
        
    Non-GAAP adjustments:   
    Stock compensation expense$0.31  $0.25 
    Amortization expense$0.27  $0.27 
    Restructuring, strategic transaction and integration$0.17  $0.30 
    Change in fair value of contingent earn-out$—  $0.13 
    Contract settlement$—  $0.06 
    Estimated income tax impact from adjustments$(0.18) $(0.24)
    Adjusted diluted earnings per share$1.88  $1.65 
     
     

    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$97  $106 
        
    Non-GAAP adjustments:   
    Interest, net(2) (2)
    Stock compensation expense26  26 
    Depreciation and amortization expense90  90 
    Restructuring, strategic transaction and integration15  15 
    Change in fair value of contingent earn-out—  — 
    Provision for income taxes24  25 
         Total non-GAAP adjustments$153  $154 
        
    Adjusted EBITDA$250  $260 
        
        
        
    GAAP diluted earnings per share$4.48  $4.88 
        
    Non-GAAP adjustments:   
    Stock compensation expense$1.17  $1.17 
    Amortization expense$1.07  $1.07 
    Restructuring, strategic transaction and integration$0.69  $0.69 
    Change in fair value of contingent earn-out$0.01  $0.01 
    Estimated income tax impact from adjustments$(0.62) $(0.62)
    Adjusted diluted earnings per share$6.80  $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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