ICU Medical, Inc. Reports Strong Third Quarter 2010 Results


Oct 18, 2010
ICU Medical, Inc. Reports Strong Third Quarter 2010 Results

ICU Medical, Inc. Reports Strong Third Quarter 2010 Results

                 Sales Increased 40.3% to $75.7 Million


                  Diluted EPS Increased 54.8% to $0.65


            Company Raises 2010 Revenue and Earnings Guidance


SAN CLEMENTE, Calif., Oct. 18, 2010 (GLOBE NEWSWIRE) -- ICU Medical, Inc., (Nasdaq:ICUI), a leading low cost manufacturer of safe medical connectors, custom medical products and critical care devices, announced results for the third quarter and nine months ended September 30, 2010.

Third quarter of 2010 revenue increased 40.3% to $75.7 million, compared to $54.0 million in the same period last year. Net income for the third quarter of 2010 was $9.0 million, or $0.65 per diluted share, as compared to net income of $6.3 million, or $0.42 per diluted share, for the third quarter of 2009.

For the nine months ended September 30, 2010, revenue increased 29.2% to $209.0 million, compared to $161.7 million in the same period last year. Net income for the nine months ended September 30, 2010, was $20.9 million, or $1.51 per diluted share, compared to net income of $19.1 million, or $1.27 per diluted share, for the same period last year.

Scott Lamb, ICU Medical's Chief Financial Officer, said, "We are pleased with our financial performance during the third quarter which included double-digit improvements in revenue and profitability. Our top-line growth was fueled by positive contributions from all of our product lines, led by CLAVEs, custom products and critical care. Domestic distributor and direct sales increased 38% year over year, while international sales were up 29%."

"During the quarter, we successfully completed the transition of the critical care operations that we purchased last year from Hospira. We also launched operations at our new plant in Slovakia and expect to start shipments of products from this new facility during the fourth quarter. We believe that this new facility will greatly improve our time to market for custom products in Europe. Additionally, we continued to make investments in research and development, quality controls and manufacturing efficiencies, which are essential in maintaining our proven track record of customer satisfaction," concluded Mr. Lamb.

The Company ended the third quarter with a strong balance sheet. As of September 30, 2010, cash, cash equivalents and investment securities totaled $81.9 million and working capital was $168.7 million. Additionally, the Company generated operating cash flow of $18.7 million for the first nine months of 2010.

Fiscal Year 2010 Guidance

Based on the current business trends, management has raised the Company's revenue and earnings per share guidance range for the full fiscal year of 2010. Revenue is now expected to be in the range of $277 million to $282 million, up from the previous guidance of $270 million to $275 million. Diluted earnings are now expected to be in the range of $2.00 to $2.07 per share, compared to the previous guidance of $1.85 to $1.92 per share. Operating cash flow is expected to be in the range of $35 million to $40 million.

Conference Call

The Company will be conducting a conference call concerning its third quarter results today at 4:30 p.m. EDT (1:30 p.m. PDT). The call can be accessed at 866-783-2143, passcode 41883861 or by replay at 888-286-8010, passcode 18772156. 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. Certain information provided as part of that call will be provided on the Company's website at www.icumed.com within 48 hours of the call.

About ICU Medical, Inc.

ICU Medical, Inc. (Nasdaq:ICUI) develops, manufactures and sells innovative medical technologies used in vascular therapy, oncology, and critical care applications. ICU Medical's products improve patient outcomes by helping prevent bloodstream infections, protect healthcare workers and patients from exposure to infectious diseases or hazardous drugs and monitor the hemodynamic status of critical care patients. The Company's complete product line includes custom I.V. 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 web site 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 timing of the commencement of shipments from the new manufacturing plant in Slovakia and the Company's expectations regarding improved time to market for custom products in Europe; the Company's continued investment in research and development, quality controls and manufacturing efficiencies; and the Company's positioning for continued long-term growth and profitability and delivering value to its shareholders. In addition, forward-looking statements also include the statements under the heading "Fiscal Year 2010 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, increased costs for shipping products and unexpected delays or costs associated with the operation of the manufacturing plant in Slovakia. 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, 2009 and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. 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
      (Amounts in thousands, except per share data)


                                  September    December
                                  30, 2010     31, 2009
                                 -----------  ---------
                                 (unaudited)     (1)
  ASSETS
  CURRENT ASSETS:
   Cash and cash equivalents        $ 65,671   $ 51,248

   Investment securities              16,225     56,887
                                 -----------  ---------
    Cash, cash equivalents and
     investment securities            81,896    108,135
   Accounts receivable, net of
    allowance for doubtful
    accounts of $522 at
    September 30, 2010 and $324
    at December 31, 2009              55,796     47,777
   Inventories                        43,625     41,327
   Prepaid income taxes                2,994      1,994
   Prepaid expenses and other
    current assets                     6,748      5,462

   Deferred income taxes               4,307      3,243
                                 -----------  ---------

    Total current assets             195,366    207,938
                                 -----------  ---------

  PROPERTY AND EQUIPMENT, net         83,777     77,449
  PROPERTY HELD FOR SALE                  --        940
  GOODWILL                             1,478      1,478
  INTANGIBLE ASSETS, net              15,256     16,782
  DEFERRED INCOME TAXES                3,690      3,710

  INCOME TAXES RECEIVABLE                856        856
                                 -----------  ---------

                                   $ 300,423  $ 309,153
                                 ===========  =========

  LIABILITIES AND STOCKHOLDERS'
   EQUITY
  CURRENT LIABILITIES:
   Accounts payable                 $ 12,056   $ 18,423
   Accrued liabilities                14,191     12,884

   Deferred revenue                      376      2,389
                                 -----------  ---------

    Total current liabilities         26,623     33,696
                                 -----------  ---------

  DEFERRED INCOME TAXES                7,157      5,698
  INCOME TAX LIABILITY                 4,366      4,754
  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,
    2010 and 14,811 shares at
    December 31, 2009,
    outstanding 13,547 shares
    at September 30, 2010  and
    14,239 shares at December
    31, 2009                           1,485      1,481
   Additional paid-in capital         57,112     54,357
   Treasury stock, at
    cost--1,308 and 572 shares
    at September 30, 2010 and
    December 31, 2009               (45,533)   (19,881)
   Retained earnings                 248,804    227,861
   Accumulated other
    comprehensive income                 409      1,187
                                 -----------  ---------

    Total stockholders' equity       262,277    265,005
                                 -----------  ---------

                                   $ 300,423  $ 309,153
                                 ===========  =========


  (1) December 31, 2009
   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   Nine months ended
                                September 30,        September 30,
                             -------------------  --------------------

                                2010      2009       2010       2009
                             ---------  --------  ---------  ---------

  REVENUES:
   Net sales                  $ 75,589  $ 53,830  $ 208,511  $ 161,307

   Other                           148       135        451        392
                             ---------  --------  ---------  ---------
  TOTAL REVENUE                 75,737    53,965    208,962    161,699


  COST OF GOODS SOLD            41,705    28,916    115,876     84,295
                             ---------  --------  ---------  ---------


    Gross profit                34,032    25,049     93,086     77,404
                             ---------  --------  ---------  ---------

  OPERATING EXPENSES:
   Selling, general and
    administrative              18,341    16,751     57,368     48,366

   Research and development      1,067       661      2,937      2,016
                             ---------  --------  ---------  ---------
    Total operating
     expenses                   19,408    17,412     60,305     50,382
                             ---------  --------  ---------  ---------

    Income from operations      14,624     7,637     32,781     27,022


  OTHER INCOME (EXPENSE)         (215)       419         40      1,042
                             ---------  --------  ---------  ---------

    Income before income
     taxes                      14,409     8,056     32,821     28,064

  PROVISION FOR INCOME
   TAXES                       (5,434)   (1,732)   (11,878)    (8,937)
                             ---------  --------  ---------  ---------


  NET INCOME                   $ 8,975   $ 6,324   $ 20,943   $ 19,127
                             =========  ========  =========  =========

  NET INCOME PER SHARE
    Basic                       $ 0.67    $ 0.43     $ 1.54     $ 1.29
    Diluted                     $ 0.65    $ 0.42     $ 1.51     $ 1.27

  WEIGHTED AVERAGE NUMBER
   OF SHARES
    Basic                       13,489    14,796     13,605     14,771
    Diluted                     13,752    15,146     13,838     15,033

                ICU Medical, Inc. and Subsidiaries
         Condensed Consolidated Statements of Cash Flows
                      (Amounts in thousands)
                           (unaudited)


                                              Nine months ended
                                                September 30,
                                             -------------------

                                                2010      2009
                                             ---------  --------
  CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                  $ 20,943  $ 19,127
  Adjustments to reconcile net income to
   net cash provided by operating
   activities:
   Depreciation and amortization                12,796    11,280
   Provision for doubtful accounts                 154      (25)
   Stock compensation                            2,568     1,963
   Bond premium amortization                     1,145     1,703
   Loss on disposal/impairment of property
    and equipment                                  298        --
   Cash provided (used) by changes in
    operating assets and liabilities, net
    of assets acquired
    Accounts receivable                        (7,763)     6,502
    Inventories                                (2,670)   (1,754)
    Prepaid expenses and other assets          (1,874)   (2,425)
    Accounts payable                           (6,365)     1,655
    Accrued liabilities                          1,381   (3,240)
    Deferred revenue                           (2,013)     1,923

    Prepaid and deferred income taxes               69     3,517
                                             ---------  --------
   Net cash provided by operating
    activities                                  18,669    40,226
                                             ---------  --------

  CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment        (16,978)  (10,164)
   Assets purchased                                 --  (30,533)
   Proceeds from sale of asset                     893        --
   Business acquisition, net of cash
    acquired                                        --   (5,662)
   Change in restricted cash                        --     5,497
   Purchases of investment securities         (20,853)  (89,940)
   Proceeds from sale of investment
    securities                                  60,370    85,554
                                             ---------  --------
   Net cash provided (used) by investing
    activities                                  23,432  (45,248)
                                             ---------  --------

  CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from exercise of stock options         903     1,352
   Proceeds from employee stock purchase
    plan                                         1,576     1,271
   Tax benefits from exercise of stock
    options                                        708        88

   Purchase of treasury stock                 (28,648)     (560)
                                             ---------  --------
   Net cash provided (used) by financing
    activities                                (25,461)     2,151
                                             ---------  --------


  Effect of exchange rate changes on cash      (2,217)       434
                                             ---------  --------

  NET INCREASE (DECREASE) IN CASH AND CASH
   EQUIVALENTS                                  14,423   (2,437)

  CASH AND CASH EQUIVALENTS, beginning of
   period                                       51,248    55,696
                                             ---------  --------

  CASH AND CASH EQUIVALENTS, end of period    $ 65,671  $ 53,259
                                             =========  ========

  NON-CASH INVESTING ACTIVITIES
   Accrued liabilities for property and
    equipment                                     $ 11      $ --

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SOURCE: ICU Medical, Inc.

CONTACT:  ICU Medical, Inc.
Scott Lamb, Chief Financial Officer
(949) 366-2183
ICR, LLC.
John F. Mills, Senior Managing Director
(310) 954-1100