GlobeNewswire Inc | Aug 10, 2020 04:06PM EDT

August 10, 2020

SAN CLEMENTE, Calif., Aug. 10, 2020 (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, 2020.

Second Quarter 2020 Results

Second quarter 2020 revenue was $303.4 million, compared to $312.3 million in the same period last year. GAAP gross profit for the second quarter of 2020 was $106.3 million, as compared to $103.9 million in the same period last year. GAAP gross margin for the second quarter of 2020 was 35%, as compared to 33% in the same period last year. GAAP net income for the second quarter of 2020 was $18.9 million, or $0.88 per diluted share, as compared to GAAP net income of $22.8 million, or $1.06 per diluted share, for the second quarter of 2019. Adjusted diluted earnings per share for the second quarter of 2020 were $1.65 as compared to $1.99 for the second quarter of 2019. Also, adjusted EBITDA was $58.1 million for the second quarter of 2020 as compared to $66.7 million for the second 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 Medicals Chief Executive Officer, said, Second quarter results were generally in line with our expectations and reflected strong demand for our infusion pumps due to the COVID-19 pandemic.

Revenues by product line for the three and six months ended June 30, 2020 and 2019 were as follows (in millions):

Three months ended Six months ended June 30, June 30,Product Line 2020 2019 $ Change 2020 2019 $ ChangeInfusion $ 111.0 $ 117.7 $ (6.7 ) $ 234.5 $ 238.2 $ (3.7 )ConsumablesInfusion Systems 91.1 81.3 9.8 179.5 165.6 13.9 IV Solutions* 89.2 102.6 (13.4 ) 193.5 215.8 (22.3 )Critical Care 12.1 10.7 1.4 24.5 23.6 0.9 $ 303.4 $ 312.3 $ (8.9 ) $ 632.0 $ 643.2 $ (11.2 )

*IV Solutions includes $15.5 million and $29.0 million of contract manufacturing to Pfizer for the three and six months ended June 30, 2020, respectively, as compared to $23.0 million and $44.5 million for the same periods in the prior year.

Conference Call

The Company will host a conference call to discuss second 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 4305099. 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 SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands) June 30, December 31, 2020 2019 (Unaudited) (1)ASSETS CURRENT ASSETS: Cash and cash equivalents $ 446,134 $ 268,670 Short-term investment securities 14,564 23,967 TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM 460,698 292,637 INVESTMENT SECURITIESAccounts receivable, net of allowance for 197,775 202,219 doubtful accountsInventories 322,766 337,640 Prepaid income taxes 11,694 15,720 Prepaid expenses and other current assets 43,772 33,981 TOTAL CURRENT ASSETS 1,036,705 882,197 PROPERTY AND EQUIPMENT, net 454,824 456,085 OPERATING LEASE RIGHT-OF-USE ASSETS 49,712 34,465 GOODWILL 32,472 31,245 INTANGIBLE ASSETS, net 203,720 211,408 DEFERRED INCOME TAXES 28,776 27,998 OTHER ASSETS 52,853 48,984 TOTAL ASSETS $ 1,859,062 $ 1,692,382 LIABILITIES AND STOCKHOLDERS? EQUITY CURRENT LIABILITIES: Accounts payable $ 101,127 $ 128,629 Accrued liabilities 107,083 117,776 Short-term debt 150,000 ? Income tax payable 941 2,063 TOTAL CURRENT LIABILITIES 359,151 248,468 CONTINGENT EARN-OUT LIABILITY 20,000 17,300 OTHER LONG-TERM LIABILITIES 49,883 32,820 DEFERRED INCOME TAXES 2,091 2,091 INCOME TAX PAYABLE 16,140 14,459 COMMITMENTS AND CONTINGENCIES ? ? STOCKHOLDERS? EQUITY: Convertible preferred stock, $1.00 par valueAuthorized?500 shares; Issued and outstanding? ? ? noneCommon stock, $0.10 par value ? Authorized,80,000 shares; Issued ? 20,937 shares at June30, 2020 and20,743 shares at December 31, 2019 and 2,094 2,074 outstanding ? 20,936 shares at June 30, 2020and 20,742 shares atDecember 31, 2019Additional paid-in capital 675,497 668,947 Treasury stock, at cost (140 ) (157 )Retained earnings 757,524 721,782 Accumulated other comprehensive loss (23,178 ) (15,402 )TOTAL STOCKHOLDERS' EQUITY 1,411,797 1,377,244 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,859,062 $ 1,692,382

______________________________________________________(1)December31, 2019 balances were derived from audited consolidated financial statements.



ICU MEDICAL,INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(In thousands, except per share data) Three months ended Six months ended June 30, June 30, 2020 2019 2020 2019TOTAL REVENUES $ 303,379 $ 312,282 $ 631,986 $ 643,214 COST OF GOODS 197,095 208,413 404,287 404,042 SOLDGROSS PROFIT 106,284 103,869 227,699 239,172 OPERATING EXPENSES:Selling,general and 67,242 67,824 139,547 140,457 administrativeResearch and 10,279 11,199 21,025 24,022 developmentRestructuring,strategictransaction 6,482 37,041 18,789 61,433 andintegrationChange in fairvalue of 2,700 (39,500 ) 2,700 (47,200 )contingentearn-outContract 25 1,039 25 3,822 settlementTOTALOPERATING 86,728 77,603 182,086 182,534 EXPENSESINCOME FROM 19,556 26,266 45,613 56,638 OPERATIONSINTEREST (771 ) (139 ) (967 ) (272 )EXPENSEOTHER INCOME 2,053 1,479 (3,427 ) 4,670 (EXPENSE), netINCOME BEFORE 20,838 27,606 41,219 61,036 INCOME TAXESPROVISION FOR (1,930 ) (4,773 ) (5,477 ) (7,205 )INCOME TAXESNET INCOME $ 18,908 $ 22,833 $ 35,742 $ 53,831 NET INCOME PER SHAREBasic $ 0.91 $ 1.11 $ 1.72 $ 2.62 Diluted $ 0.88 $ 1.06 $ 1.66 $ 2.50 WEIGHTEDAVERAGE NUMBER OF SHARESBasic 20,880 20,622 20,831 20,577 Diluted 21,506 21,520 21,545 21,546

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.

Supply chain restructuring: Occasionally, we incur 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.

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, intangible asset amortization expense, stock compensation expense, restructuring, strategic transaction and integration, change in fair value of contingent earn-out, contract settlement, and supply chain restructuring. 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 SUBSIDIARIESReconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)(In thousands)

Adjusted EBITDA Three months Ended June 30, 2020 2019GAAP net income $ 18,908 $ 22,833 Non-GAAP adjustments: Interest, net (161 ) (1,565 )Stock compensation expense 5,410 6,229 Depreciation and amortization expense 21,618 18,764 Restructuring, strategic transaction and 6,482 37,041 integrationChange in fair value of contingent earn-out 2,700 (39,500 )Contract settlement 1,210 1,808 Supply chain restructuring ? 16,349 Provision for income taxes 1,930 4,773 Total non-GAAP adjustments 39,189 43,899 Adjusted EBITDA $ 58,097 $ 66,732 Adjusted diluted earnings per share Three months ended June 30, 2020 2019GAAP diluted earnings per share $ 0.88 $ 1.06 Non-GAAP adjustments: Stock compensation expense $ 0.25 $ 0.29 Amortization expense $ 0.27 $ 0.19 Restructuring, strategic transaction and $ 0.30 $ 1.72 integrationChange in fair value of contingent earn-out $ 0.13 $ (1.84 )Contract settlement $ 0.06 $ 0.08 Supply chain restructuring $ ? $ 0.76 Estimated income tax impact from adjustments $ (0.24 ) $ (0.27 )Adjusted diluted earnings per share $ 1.65 $ 1.99

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