ICU Medical, Inc. (Nasdaq:ICUI), a leader in the development,
manufacture and sale of innovative medical devices used in infusion
therapy and critical care applications, today announced financial
results for the quarter ended September 30, 2017.
Third Quarter 2017 Results
Third quarter 2017 revenue was $343.2 million, compared to $97.1
million in the same period last year. GAAP gross profit for the
third quarter of 2017 was $111.6 million, as compared to $51.3
million in the same period last year. GAAP gross margin for
the third quarter of 2017 was 33%, as compared to 53% in the same
period last year. GAAP net income for the third quarter of
2017 was $0.1 million, or $0.01 per diluted share, as compared to
GAAP net income of $18.8 million, or $1.09 per diluted share, for
the third quarter of 2016.
Adjusted net sales for the third quarter of 2017 was $334.6
million. Adjusted gross profit for the third quarter of 2017 was
$122.8 million. Adjusted gross margin for the third quarter
of 2017 was 37%. Adjusted diluted earnings per share for the
third quarter of 2017 were $1.12 as compared to $1.35 for the third
quarter of 2016. Also, adjusted EBITDA was $55.4 million for
the third quarter of 2017 as compared to $34.0 million for the
third quarter of 2016.
Adjusted net sales, adjusted gross profit, adjusted gross
margin, adjusted diluted earnings per share and adjusted EBITDA are
measures calculated and presented on the basis of methodologies
other than in accordance with GAAP. Please refer to the Use
of Non-GAAP Financial Information following the financial
statements herein for further discussion and reconciliations of
these measures to GAAP measures.
Vivek Jain, ICU Medical's Chief Executive Officer, said, "Third
quarter revenues were in-line with our expectations and our
adjusted EBITDA and adjusted earnings per share were slightly ahead
of our expectations.”
Revenues by market segment for the three and nine months
ended September 30, 2017 and 2016 were as follows (in
millions):
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Three months endedSeptember
30, |
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Nine months endedSeptember
30, |
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Market Segment |
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2017 |
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2016 |
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$ Change |
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%Change |
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2017 |
|
2016 |
|
$Change |
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%Change |
Infusion
Consumables |
|
$ |
92.7 |
|
|
$ |
82.8 |
|
|
$ |
9.9 |
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|
12.0 |
% |
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$ |
245.9 |
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$ |
242.7 |
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$ |
3.2 |
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1.3 |
% |
IV Solutions |
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143.7 |
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— |
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|
143.7 |
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* |
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375.5 |
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— |
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|
375.5 |
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* |
Infusion Systems |
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82.8 |
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|
— |
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|
82.8 |
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* |
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202.6 |
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|
— |
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202.6 |
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* |
Critical Care |
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12.9 |
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14.0 |
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(1.1 |
) |
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(7.9 |
)% |
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37.2 |
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40.3 |
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(3.1 |
) |
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(7.7 |
)% |
Other |
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11.1 |
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0.3 |
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|
10.8 |
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|
3,600.0 |
% |
|
61.3 |
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0.7 |
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|
60.6 |
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8,657.1 |
% |
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|
$ |
343.2 |
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|
$ |
97.1 |
|
|
$ |
246.1 |
|
|
253.5 |
% |
|
$ |
922.5 |
|
|
$ |
283.7 |
|
|
$ |
638.8 |
|
|
225.2 |
% |
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* Not
Applicable |
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The Company ended the third quarter of 2017 with a strong
balance sheet. As of September 30, 2017, cash, cash equivalents and
short and long-term investment securities totaled $325.3 million,
working capital was $711.6 million and long-term debt obligations
were $75 million.
Fiscal Year 2017 Guidance Update and Initial Fiscal 2018
Guidance
The Company is modifying its full year 2017 guidance of adjusted
EBITDA from a range of $180 million to $190 million to a range of
$195 million to $205 million and adjusted earnings per share from a
range of $3.80 to $4.20 to a range of $4.20 to $4.80. The
Company is also providing initial 2018 adjusted EBITDA guidance in
the range of $240 million to $260 million and initial 2018 adjusted
EPS in the range of $6.05 to $6.65.
Conference Call
The Company will host a conference call to discuss third quarter
2017 financial results today at 4:30 p.m. EST (1:30 p.m.
PST). The call can be accessed at (800) 936-9761,
international (408) 774-4587, conference ID 99528019. 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 devices used in vascular therapy, and critical
care applications. ICU Medical's product portfolio includes IV
smart pumps, sets, connectors, closed transfer devices for
hazardous drugs, 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, and our recently completed
acquisition of the Hospira infusion systems business. 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 continued growth or improving efficiencies,
unexpected changes in the Company's arrangements with its largest
customers and the Company’s ability to meet expectations regarding
the integration of the Hospira infusion systems business. 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, 2016 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)
|
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|
September
30,2017 |
|
December 31,2016 |
|
(unaudited) |
|
(1) |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and
cash equivalents |
$ |
300,614 |
|
|
$ |
445,082 |
|
Short-term investment securities |
9,591 |
|
|
— |
|
Cash,
cash equivalents and investment securities |
310,205 |
|
|
445,082 |
|
Accounts
receivable, net |
105,090 |
|
|
56,161 |
|
Inventories |
320,341 |
|
|
49,264 |
|
Income
tax receivable |
12,105 |
|
|
11,235 |
|
Prepaid
expenses and other current assets |
146,471 |
|
|
7,355 |
|
Assets
held for sale |
12,489 |
|
|
— |
|
TOTAL
CURRENT ASSETS |
906,701 |
|
|
569,097 |
|
|
|
|
|
PROPERTY AND EQUIPMENT,
net |
390,526 |
|
|
85,696 |
|
LONG-TERM INVESTMENT
SECURITIES |
15,140 |
|
|
— |
|
OTHER ASSETS |
35,192 |
|
|
— |
|
GOODWILL |
6,687 |
|
|
5,577 |
|
INTANGIBLE ASSETS,
net |
152,338 |
|
|
22,383 |
|
DEFERRED INCOME
TAXES |
16,390 |
|
|
21,935 |
|
TOTAL ASSETS |
$ |
1,522,974 |
|
|
$ |
704,688 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT
LIABILITIES: |
|
|
|
Accounts
payable |
$ |
44,685 |
|
|
$ |
14,641 |
|
Accrued
liabilities |
146,147 |
|
|
25,896 |
|
Income
tax liability |
4,263 |
|
|
— |
|
TOTAL
CURRENT LIABILITIES |
195,095 |
|
|
40,537 |
|
|
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|
|
EARN-OUT LIABILITY |
32,000 |
|
|
— |
|
LONG-TERM
OBLIGATIONS |
75,000 |
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|
— |
|
OTHER LONG-TERM
LIABILITIES |
68,034 |
|
|
1,107 |
|
DEFERRED INCOME
TAXES |
9,491 |
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|
1,370 |
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INCOME TAX
LIABILITY |
1,519 |
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|
1,519 |
|
COMMITMENTS AND
CONTINGENCIES |
— |
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|
— |
|
STOCKHOLDERS’
EQUITY: |
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|
Convertible preferred stock |
— |
|
|
— |
|
Common
stock |
2,002 |
|
|
1,633 |
|
Additional paid-in capital |
607,694 |
|
|
162,828 |
|
Treasury
stock |
(2 |
) |
|
(14 |
) |
Retained
earnings |
535,919 |
|
|
516,980 |
|
Accumulated other comprehensive loss |
(3,778 |
) |
|
(21,272 |
) |
TOTAL
STOCKHOLDERS' EQUITY |
1,141,835 |
|
|
660,155 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
1,522,974 |
|
|
$ |
704,688 |
|
|
|
|
|
|
|
|
|
(1) December 31, 2016 balances were derived from audited
consolidated financial statements. |
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ICU MEDICAL, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited)(In thousands, except per share
data)
|
|
|
|
|
Three months
endedSeptember 30, |
|
Nine months
endedSeptember 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
REVENUES: |
|
|
|
|
|
|
|
Net
sales |
$ |
343,084 |
|
|
$ |
97,098 |
|
|
$ |
921,544 |
|
|
$ |
283,659 |
|
Other |
152 |
|
|
10 |
|
|
945 |
|
|
25 |
|
TOTAL REVENUE |
343,236 |
|
|
97,108 |
|
|
922,489 |
|
|
283,684 |
|
COST OF GOODS SOLD |
231,638 |
|
|
45,835 |
|
|
633,884 |
|
|
133,046 |
|
GROSS
PROFIT |
111,598 |
|
|
51,273 |
|
|
288,605 |
|
|
150,638 |
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
Selling,
general and administrative |
76,820 |
|
|
22,362 |
|
|
226,812 |
|
|
66,828 |
|
Research
and development |
12,769 |
|
|
3,650 |
|
|
37,377 |
|
|
10,301 |
|
Restructuring, strategic transaction and integration |
18,711 |
|
|
2,806 |
|
|
68,033 |
|
|
4,339 |
|
Change in
fair value of earn-out |
7,000 |
|
|
— |
|
|
13,000 |
|
|
— |
|
TOTAL OPERATING
EXPENSES |
115,300 |
|
|
28,818 |
|
|
345,222 |
|
|
81,468 |
|
(LOSS) INCOME FROM
OPERATIONS |
(3,702 |
) |
|
22,455 |
|
|
(56,617 |
) |
|
69,170 |
|
BARGAIN PURCHASE
GAIN |
8,534 |
|
|
346 |
|
|
71,771 |
|
|
1,456 |
|
INTEREST EXPENSE |
(705 |
) |
|
(58 |
) |
|
(1,743 |
) |
|
(135 |
) |
OTHER INCOME (EXPENSE),
net |
583 |
|
|
283 |
|
|
(2,030 |
) |
|
584 |
|
INCOME BEFORE INCOME
TAXES |
4,710 |
|
|
23,026 |
|
|
11,381 |
|
|
71,075 |
|
(PROVISION) BENEFIT FOR
INCOME TAXES |
(4,574 |
) |
|
(4,220 |
) |
|
7,558 |
|
|
(17,503 |
) |
NET INCOME |
$ |
136 |
|
|
$ |
18,806 |
|
|
$ |
18,939 |
|
|
$ |
53,572 |
|
NET INCOME PER
SHARE |
|
|
|
|
|
|
|
Basic |
$ |
0.01 |
|
|
$ |
1.16 |
|
|
$ |
0.97 |
|
|
$ |
3.32 |
|
Diluted |
$ |
0.01 |
|
|
$ |
1.09 |
|
|
$ |
0.92 |
|
|
$ |
3.13 |
|
WEIGHTED AVERAGE NUMBER
OF SHARES |
|
|
|
|
|
|
|
Basic |
19,984 |
|
|
16,200 |
|
|
19,433 |
|
|
16,113 |
|
Diluted |
21,106 |
|
|
17,286 |
|
|
20,603 |
|
|
17,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ICU MEDICAL, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)(In thousands)
|
|
|
Nine months endedSeptember
30, |
|
2017 |
|
2016 |
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
Net income |
$ |
18,939 |
|
|
$ |
53,572 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
47,512 |
|
|
14,351 |
|
Provision
for doubtful accounts |
1,906 |
|
|
— |
|
Provision
for warranty and returns |
3,639 |
|
|
(22 |
) |
Stock
compensation |
13,387 |
|
|
11,464 |
|
Loss on
disposal of property and equipment |
3,177 |
|
|
40 |
|
Bargain
purchase gain |
(71,771 |
) |
|
(1,456 |
) |
Bond
premium amortization |
12 |
|
|
1,026 |
|
Change in
fair value of earn-out |
13,000 |
|
|
— |
|
Other |
1,690 |
|
|
69 |
|
Changes in operating
assets and liabilities: |
|
|
|
Accounts
receivable |
(51,498 |
) |
|
4,736 |
|
Inventories |
148,482 |
|
|
(6,635 |
) |
Prepaid
expenses and other assets |
(125,403 |
) |
|
(2,228 |
) |
Accounts
payable |
17,551 |
|
|
(1,587 |
) |
Accrued
liabilities |
63,234 |
|
|
(7,314 |
) |
Income
taxes, including excess tax benefits and deferred income taxes |
(13,982 |
) |
|
2,691 |
|
Net cash provided by
operating activities |
69,875 |
|
|
68,707 |
|
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
Purchases
of property and equipment |
(51,702 |
) |
|
(15,018 |
) |
Proceeds
from sale of assets |
2 |
|
|
1 |
|
Business
acquisitions, net of cash acquired |
(157,097 |
) |
|
(2,584 |
) |
Intangible asset additions |
(3,718 |
) |
|
(861 |
) |
Purchases
of investment securities |
(24,743 |
) |
|
(111,575 |
) |
Proceeds
from sale of investment securities |
— |
|
|
45,429 |
|
Net cash used in
investing activities |
(237,258 |
) |
|
(84,608 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
Proceeds
from exercise of stock options |
19,967 |
|
|
15,830 |
|
Proceeds
from employee stock purchase plan |
2,705 |
|
|
2,361 |
|
Purchase
of treasury stock |
(3,951 |
) |
|
(17,155 |
) |
Net cash provided by
financing activities |
18,721 |
|
|
1,036 |
|
Effect of exchange rate
changes on cash |
4,194 |
|
|
1,664 |
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS |
(144,468 |
) |
|
(13,201 |
) |
CASH AND CASH
EQUIVALENTS, beginning of period |
445,082 |
|
|
336,164 |
|
CASH AND CASH
EQUIVALENTS, end of period |
$ |
300,614 |
|
|
$ |
322,963 |
|
|
|
|
|
|
|
|
|
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 net sales,
adjusted gross profit, adjusted gross profit margin, adjusted
EBITDA and adjusted diluted earnings per share ("Adjusted Diluted
EPS").
Adjusted net sales includes/excludes the following items from
net sales:
Excludes contract manufacturing revenue: We manufacture
certain products for Pfizer at cost in accordance with a
manufacturing services agreement. We do not include the
contract manufacturing revenue in our adjusted net sales as the
revenue under this agreement was negotiated contemporaneously with
our acquisition of the Hospira infusion systems (HIS) business from
Pfizer and is not indicative of a normal market transaction.
Includes ICU intercompany sales to the HIS business: We include
intercompany sales to the HIS business for inventory that we
previously sold to Pfizer, which remained on the opening balance
sheet of the HIS business at the time we acquired it from
Pfizer.
Adjusted gross profit excludes the following from gross
profit:
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.
Adjusted gross profit margin is calculated using the adjusted
gross profit as a percentage of the adjusted net sales as
determined above.
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.
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.
Legal settlement: Occasionally, we are involved in legal
proceedings that may result in one-time settlements. We exclude
these settlements as they have no direct correlation to the
operation of our ongoing business.
Bargain purchase gain: We may incur a bargain purchase
gain on certain acquisitions if the fair market value of the
identifiable assets acquired and liabilities assumed, net of
deferred taxes exceeds the total consideration paid. We
exclude such gains as they are related to acquisitions and have no
direct correlation to the operation of our ongoing business.
Change in fair value of 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.
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.
Adjusted Diluted EPS excludes from diluted EPS, net of
tax, interest, net, intangible asset amortization expense, stock
compensation expense, restructuring and strategic transaction,
adjustment to reverse the cost recognition related to the purchase
accounting write-up of inventory to fair market value, legal
settlement, disposition of certain assets, change in fair value of
earn-out and bargain purchase gain, which was tax free. We
apply our GAAP consolidated effective tax rate to our non-GAAP
financial measures, other than when the underlying item has a
materially different tax treatment.
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 net sales |
|
|
Nine months endedSeptember
30, 2017 |
|
|
Infusion Consumables |
|
IVSolutions |
|
InfusionSystems |
|
CriticalCare |
|
Other |
|
Total |
GAAP net
sales |
|
$ |
245,885 |
|
|
$ |
375,494 |
|
|
$ |
202,590 |
|
|
$ |
37,221 |
|
|
$ |
61,299 |
|
|
$ |
922,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Contract
manufacturing |
|
— |
|
|
(51,868 |
) |
|
— |
|
|
— |
|
|
|
|
(51,868 |
) |
ICU
intercompany sales to the HIS business |
|
44,903 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
44,903 |
|
Non-GAAP
net sales |
|
$ |
290,788 |
|
|
$ |
323,626 |
|
|
$ |
202,590 |
|
|
$ |
37,221 |
|
|
$ |
61,299 |
|
|
$ |
915,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net sales |
|
|
Nine months endedSeptember
30, 2016 |
|
|
Infusion Consumables |
|
IVSolutions |
|
InfusionSystems |
|
CriticalCare |
|
Other |
|
Total |
GAAP net
sales |
|
$ |
242,732 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
40,291 |
|
|
$ |
661 |
|
|
$ |
283,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Contract
manufacturing |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
ICU
intercompany sales to the HIS business |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Non-GAAP
net sales |
|
$ |
242,732 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
40,291 |
|
|
$ |
661 |
|
|
$ |
283,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net sales |
|
|
Three months endedSeptember
30, 2017 |
|
|
Infusion Consumables |
|
IVSolutions |
|
InfusionSystems |
|
CriticalCare |
|
Other |
|
Total |
GAAP net
sales |
|
$ |
92,612 |
|
|
$ |
143,710 |
|
|
$ |
82,798 |
|
|
$ |
12,950 |
|
|
$ |
11,166 |
|
|
$ |
343,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Contract
manufacturing |
|
— |
|
|
(16,164 |
) |
|
— |
|
|
— |
|
|
|
|
(16,164 |
) |
ICU
intercompany sales to the HIS business |
|
7,484 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
7,484 |
|
Non-GAAP
net sales |
|
$ |
100,096 |
|
|
$ |
127,546 |
|
|
$ |
82,798 |
|
|
$ |
12,950 |
|
|
$ |
11,166 |
|
|
$ |
334,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net sales |
|
|
Three months endedSeptember
30, 2016 |
|
|
Infusion Consumables |
|
IVSolutions |
|
InfusionSystems |
|
CriticalCare |
|
Other |
|
Total |
GAAP net
sales |
|
$ |
82,825 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,047 |
|
|
$ |
236 |
|
|
$ |
97,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Contract
manufacturing |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
ICU
intercompany sales to the HIS business |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Non-GAAP
net sales |
|
$ |
82,825 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,047 |
|
|
$ |
236 |
|
|
$ |
97,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ICU MEDICAL, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP
Financial Measures (Unaudited) (Continued)(In thousands,
except per share data)
|
|
|
|
|
Adjusted gross profit |
|
Adjusted gross profit |
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP gross
profit |
$ |
111,598 |
|
|
$ |
51,273 |
|
|
$ |
288,605 |
|
|
$ |
150,638 |
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Adjustment to reverse the cost recognition related to the purchase
accountingwrite-up of inventory to fair market value |
11,180 |
|
|
— |
|
|
66,313 |
|
|
— |
|
Non-GAAP
gross profit |
$ |
122,778 |
|
|
$ |
51,273 |
|
|
$ |
354,918 |
|
|
$ |
150,638 |
|
GAAP
gross profit % GAAP net sales |
33 |
% |
|
53 |
% |
|
31 |
% |
|
53 |
% |
Non-GAAP
gross profit % Non-GAAP net sales |
37 |
% |
|
53 |
% |
|
39 |
% |
|
53 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
ICU MEDICAL, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP
Financial Measures (Unaudited) (Continued)(In thousands,
except per share data)
|
|
|
|
|
Adjusted EBITDA |
|
Adjusted EBITDA |
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP net
income |
$ |
136 |
|
|
$ |
18,806 |
|
|
$ |
18,939 |
|
|
$ |
53,572 |
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Interest,
net |
123 |
|
|
— |
|
|
858 |
|
|
— |
|
Stock
compensation expense |
4,582 |
|
|
3,790 |
|
|
13,387 |
|
|
11,464 |
|
Depreciation and amortization expense |
17,606 |
|
|
4,703 |
|
|
47,512 |
|
|
14,351 |
|
Restructuring, strategic transaction and integration |
18,711 |
|
|
2,806 |
|
|
68,033 |
|
|
4,339 |
|
Adjustment to reverse the cost recognition related to the purchase
accountingwrite-up of inventory to fair market value |
11,180 |
|
|
— |
|
|
66,313 |
|
|
— |
|
Legal
settlement |
— |
|
|
— |
|
|
809 |
|
|
— |
|
Bargain
purchase gain |
(8,534 |
) |
|
(346 |
) |
|
(71,771 |
) |
|
(1,456 |
) |
Change in
fair value of earn-out |
7,000 |
|
|
— |
|
|
13,000 |
|
|
— |
|
Disposition of certain assets |
— |
|
|
— |
|
|
2,880 |
|
|
— |
|
Provision
for income taxes |
4,574 |
|
|
4,220 |
|
|
(7,558 |
) |
|
17,503 |
|
Total non-GAAP
adjustments |
55,242 |
|
|
15,173 |
|
|
133,463 |
|
|
46,201 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
55,378 |
|
|
$ |
33,979 |
|
|
$ |
152,402 |
|
|
$ |
99,773 |
|
|
|
|
|
|
|
|
|
|
Adjusted diluted earnings per
share |
|
Adjusted diluted earnings per
share |
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
GAAP diluted
earnings per share |
$ |
0.01 |
|
|
$ |
1.09 |
|
|
$ |
0.92 |
|
|
$ |
3.13 |
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
|
|
Interest,
net |
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
0.04 |
|
|
$ |
— |
|
Stock
compensation expense |
$ |
0.22 |
|
|
$ |
0.22 |
|
|
$ |
0.65 |
|
|
$ |
0.67 |
|
Amortization expense |
$ |
0.17 |
|
|
$ |
0.04 |
|
|
$ |
0.53 |
|
|
$ |
0.12 |
|
Restructuring, strategic transaction and integration |
$ |
0.89 |
|
|
$ |
0.16 |
|
|
$ |
3.30 |
|
|
$ |
0.25 |
|
Adjustment to reverse the cost recognition related to the purchase
accountingwrite-up of inventory to fair market value |
$ |
0.53 |
|
|
$ |
— |
|
|
$ |
3.22 |
|
|
$ |
— |
|
Legal
settlement |
$ |
— |
|
|
|
|
$ |
0.04 |
|
|
$ |
— |
|
Bargain
purchase gain |
$ |
(0.40 |
) |
|
$ |
(0.02 |
) |
|
$ |
(3.48 |
) |
|
$ |
(0.09 |
) |
Change in
fair value of earn-out |
$ |
0.33 |
|
|
$ |
— |
|
|
$ |
0.63 |
|
|
$ |
— |
|
Disposition of certain assets |
$ |
— |
|
|
$ |
— |
|
|
$ |
0.14 |
|
|
$ |
— |
|
Estimated
income tax impact from adjustments |
$ |
(0.64 |
) |
|
$ |
(0.14 |
) |
|
$ |
(2.52 |
) |
|
$ |
(0.36 |
) |
Adjusted diluted earnings per share |
$ |
1.12 |
|
|
$ |
1.35 |
|
|
$ |
3.47 |
|
|
$ |
3.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ICU MEDICAL, INC. AND
SUBSIDIARIESReconciliation of GAAP to Non-GAAP
Financial Measures - Fiscal Year 2017 Outlook
(Unaudited)(In millions, except per share data)
|
|
|
|
|
Low End of Guidance |
|
High End of Guidance |
GAAP net
income |
$ |
9 |
|
|
$ |
21 |
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
Interest,
net |
2 |
|
|
2 |
|
Stock
compensation expense |
18 |
|
|
18 |
|
Depreciation and amortization expense |
65 |
|
|
65 |
|
Restructuring, strategic transaction and integration |
95 |
|
|
95 |
|
Adjustment to reverse the cost recognition related to the purchase
accountingwrite-up of inventory to fair market value |
66 |
|
|
66 |
|
Legal
settlement |
1 |
|
|
1 |
|
Bargain
purchase gain |
(72 |
) |
|
(72 |
) |
Disposition of certain assets |
3 |
|
|
3 |
|
Change in
fair value of earn-out |
13 |
|
|
13 |
|
Provision
for income taxes |
(5 |
) |
|
(7 |
) |
Total non-GAAP
adjustments |
186 |
|
|
184 |
|
|
|
|
|
Adjusted
EBITDA |
$ |
195 |
|
|
$ |
205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
earnings per share |
$ |
0.41 |
|
|
$ |
1.01 |
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
Interest,
net |
$ |
0.10 |
|
|
$ |
0.10 |
|
Stock
compensation expense |
$ |
0.87 |
|
|
$ |
0.87 |
|
Amortization expense |
$ |
0.72 |
|
|
$ |
0.72 |
|
Restructuring, strategic transaction and integration |
$ |
4.61 |
|
|
$ |
4.61 |
|
Adjustment to reverse the cost recognition related to the purchase
accountingwrite-up of inventory to fair market value |
$ |
3.22 |
|
|
$ |
3.22 |
|
Legal
settlement |
$ |
0.04 |
|
|
$ |
0.04 |
|
Bargain
purchase gain |
$ |
(3.49 |
) |
|
$ |
(3.49 |
) |
Change in
value of earn-out |
$ |
0.63 |
|
|
$ |
0.63 |
|
Disposition of certain assets |
$ |
0.14 |
|
|
$ |
0.14 |
|
Estimated
income tax impact from adjustments |
$ |
(3.05 |
) |
|
$ |
(3.05 |
) |
Adjusted diluted
earnings per share |
$ |
4.20 |
|
|
$ |
4.80 |
|
|
|
|
|
|
|
|
|
ICU Medical, Inc. and
SubsidiariesReconciliation of GAAP to Non-GAAP
Financial Measures - Fiscal Year 2018 Outlook
(Unaudited)(In millions, except per share data)
|
|
|
|
|
Low End of Guidance |
|
High End of Guidance |
GAAP net
income |
$ |
70 |
|
|
$ |
83 |
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
Stock
compensation expense |
17 |
|
|
17 |
|
Depreciation and
amortization expense |
76 |
|
|
76 |
|
Restructuring, strategic transaction and integration |
50 |
|
|
50 |
|
Provision for
income taxes |
27 |
|
|
34 |
|
Total non-GAAP
adjustments |
170 |
|
|
177 |
|
|
|
|
|
Adjusted
EBITDA |
$ |
240 |
|
|
$ |
260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted
earnings per share |
$ |
3.27 |
|
|
$ |
3.87 |
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
Stock
compensation expense |
$ |
0.80 |
|
|
$ |
0.80 |
|
Amortization
expense |
$ |
0.75 |
|
|
$ |
0.75 |
|
Restructuring, strategic transaction and integration |
$ |
2.34 |
|
|
$ |
2.34 |
|
Estimated income
tax impact from adjustments |
$ |
(1.11 |
) |
|
$ |
(1.11 |
) |
Adjusted diluted
earnings per share |
$ |
6.05 |
|
|
$ |
6.65 |
|
|
|
|
|
|
|
|
|
CONTACT:ICU Medical, Inc.Scott Lamb, Chief Financial
Officer(949) 366-2183
ICR, Inc.John Mills, Partner(646) 277-1254
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