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ICU Medical, Inc. Announces Fourth Quarter and Fiscal Year 2015 Results

SAN CLEMENTE, Calif., Feb. 03, 2016 (GLOBE NEWSWIRE) -- 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, today announced financial results for the fourth quarter and fiscal year ended December 31, 2015.

Fourth Quarter 2015 Results

Fourth quarter 2015 revenue was $90.4 million, compared to $79.9 million in the same period last year. GAAP net income for the fourth quarter of 2015 was $5.5 million, or $0.33 per diluted share, as compared to GAAP net income of $7.4 million, or $0.46 per diluted share, for the fourth quarter of 2014. Adjusted diluted earnings per share for the fourth quarter of 2015 were $0.96 as compared to $0.68 for the fourth quarter of 2014. Also, adjusted EBITDA was $30.1 million for the fourth quarter of 2015 as compared to $21.9 million for the fourth quarter of 2014.

Full Fiscal Year 2015 Results

Fiscal year 2015 revenue was $341.7 million, compared to $309.3 million in the same period last year. GAAP net income for fiscal year 2015 was $45.0 million, or $2.73 per diluted share, as compared to GAAP net income of $26.3 million, or $1.68 per diluted share, for fiscal year 2014. Adjusted diluted earnings per share for fiscal year 2015 were $3.96 as compared to $2.38 for fiscal year 2014. Also, adjusted EBITDA was $113.9 million for fiscal year 2015 as compared to $73.9 million for fiscal year 2014.

Vivek Jain, ICU Medical's Chief Executive Officer, said, "Our revenue, gross margin and adjusted EBITDA results in the fourth quarter were above our expectations as we achieved growth in both our direct and OEM channels."

Revenue for the three and twelve months ended December 31, 2015 and 2014 were as follows:

(dollars in millions)
Fiscal year ended December 31,Three months ended December 31,
Market Segment 2015 2014 Change 2015 2014 Change
Infusion Therapy$244.8 $216.3 $28.5 $66.1 $56.5 $9.6
Oncology 41.4 36.7 4.7 11.1 9.3 1.8
Critical Care 54.3 55.1 -0.8 13.1 13.8 -0.7
Other 1.2 1.2 - 0.1 0.3 -0.2
$341.7 $309.3 $32.4 $90.4 $79.9 $10.5

The Company ended the fourth quarter with a strong balance sheet. As of December 31, 2015, cash, cash equivalents and investment securities totaled $377.4 million and working capital was $462.4 million. Additionally, the Company generated operating cash flow of $54.9 million for the fiscal year of 2015.

Fiscal Year 2016 Guidance

For the year, the Company expects revenue to be in the range of $355 million to $365 million; adjusted diluted earnings per share to be in the range of $4.34 to $4.46, and adjusted EBITDA to be in the range of $123 million to $127 million.

Conference Call

The Company will be conducting a conference call concerning these announcements at 4:30 p.m. EST (1:30 p.m. PST), today, Wednesday, February 3, 2016. The call can be accessed at 800-936-9761, international 408-774-4587, conference ID 34390619. 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 by dialing (855) 859-2056, (404) 537-3406 international.

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"). 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. 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 intangible asset amortization expense, depreciation expense, stock compensation expense, restructuring and strategic transaction expense, gain on sale of building, legal settlements, impairment of assets held for sale and income tax expense. Adjusted Diluted EPS excludes, net of tax, intangible asset amortization expense, stock compensation expense, restructuring and strategic transaction expense, gain on sale of building, legal settlements and impairment of assets held for sale.

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 limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies.

Reconciliations of our GAAP to non-GAAP financial are included in the financial tables in this press release.

About ICU Medical, Inc.

About ICU Medical, Inc. (Nasdaq:ICUI) develops, manufactures and sells innovative medical devices used in vascular therapy, oncology and critical care applications. ICU Medical’s products improve patient outcomes by helping prevent bloodstream infections and protecting healthcare workers from exposure to infectious diseases or hazardous drugs. The company’s complete product line includes custom IV systems, closed delivery systems for hazardous drugs, needlefree IV connectors, catheters and cardiac monitoring systems. 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, our full year 2016 guidance 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 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, 2014. 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
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value data)
(unaudited)
December 31,
2015 2014
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$336,164 $275,812
Investment securities41,233 70,952
Cash, cash equivalents and investment securities377,397 346,764
Accounts receivable, net of allowance for doubtful accounts of $1,101 and $1,127 at December 31, 2015 and 2014, respectively57,847 39,051
Inventories43,632 36,933
Prepaid income taxes14,366 3,963
Prepaid expenses and other current assets7,631 5,818
Assets held for sale4,134
Total current assets505,007 432,529
PROPERTY AND EQUIPMENT, net74,320 86,091
GOODWILL6,463 1,478
INTANGIBLE ASSETS, net23,936 7,063
DEFERRED INCOME TAXES17,099 13,941
$626,825 $541,102
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$13,670 $11,378
Accrued liabilities28,948 17,350
Total current liabilities42,618 28,728
LONG-TERM LIABILITIES1,476
DEFERRED INCOME TAXES1,372 1,376
INCOME TAX LIABILITY1,488 2,746
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 and outstanding, 16,086 shares at December 31, 2015 and 15,595 shares at December 31, 20141,608 1,559
Additional paid-in capital145,125 107,336
Retained earnings453,896 408,911
Accumulated other comprehensive loss(20,758) (9,554)
Total stockholders’ equity579,871 508,252
$626,825 $541,102


ICU MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(unaudited)
Year ended December 31,
2015 2014 2013
REVENUES:
Net sales$341,254 $308,770 $313,056
Other414 490 660
TOTAL REVENUE341,668 309,260 313,716
COST OF GOODS SOLD160,871 157,859 158,984
Gross profit180,797 151,401 154,732
OPERATING EXPENSES:
Selling, general and administrative83,216 88,939 89,006
Research and development15,714 18,332 12,407
Restructuring and strategic transaction8,451 5,093 1,370
Gain on sale of building(1,086)
Legal settlements1,798
Impairment of assets held for sale4,139
Total operating expenses112,232 112,364 102,783
Income from operations68,565 39,037 51,949
OTHER INCOME1,134 755 765
Income before income taxes69,699 39,792 52,714
PROVISION FOR INCOME TAXES(24,714) (13,457) (12,296)
NET INCOME$44,985 $26,335 $40,418
NET INCOME PER SHARE
Basic$2.84 $1.72 $2.75
Diluted$2.73 $1.68 $2.65
WEIGHTED AVERAGE NUMBER OF SHARES
Basic15,848 15,282 14,688
Diluted16,496 15,647 15,274


ICU MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(unaudited)
Three months ended December 31,
2015 2014
REVENUES:
Net sales$90,378 $79,773
Other9 123
TOTAL REVENUE90,387 79,896
COST OF GOODS SOLD42,130 40,211
Gross profit48,257 39,685
OPERATING EXPENSES:
Selling, general and administrative22,519 20,299
Research and development4,057 5,080
Restructuring and strategic transaction5,040 2,253
Impairment of assets held for sale4,139
Total operating expenses35,755 27,632
Income from operations12,502 12,053
OTHER INCOME139 183
Income before income taxes12,641 12,236
PROVISION FOR INCOME TAXES(7,178) (4,864)
NET INCOME$5,463 $7,372
NET INCOME PER SHARE
Basic$0.34 $0.48
Diluted$0.33 $0.46
WEIGHTED AVERAGE NUMBER OF SHARES
Basic16,020 15,469
Diluted16,697 15,934


ICU MEDICAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
Year ended December 31,
2015 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$44,985 $26,335 $40,418
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization18,073 19,447 19,506
Provision for doubtful accounts54 34 185
Provision for warranty and returns52 (360) 671
Stock compensation12,827 9,592 5,434
(Gain) loss on disposal of property and equipment(1,106) 8 (36)
Bond premium amortization1,670 2,188 2,715
Impairment of assets held for sale4,139
Changes in operating assets and liabilities:
Accounts receivable(20,515) 4,912 3,556
Inventories(8,337) (3,836) 2,319
Prepaid expenses and other assets(1,832) 1,970 (383)
Accounts payable3,118 (621) (31)
Accrued liabilities9,454 2,344 (2,215)
Income taxes, including excess tax benefits and deferred income taxes(7,717) (1,373) (6,413)
Net cash provided by operating activities54,865 60,640 65,726
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment(12,984) (16,604) (18,415)
Proceeds from sale of assets3,592 5 49
Intangible asset additions(951) (989) (1,080)
Business acquisitions, net of cash acquired(56,786)
Proceeds from sale of business28,970
Purchases of investment securities(56,137) (93,588) (86,022)
Proceeds from sale of investment securities83,054 89,426 92,348
Net cash used by investing activities(11,242) (21,750) (13,120)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options15,042 16,998 18,004
Proceeds from employee stock purchase plan2,162 2,485 2,457
Tax benefits from exercise of stock options9,330 5,700 6,966
Purchase of treasury stock(1,523) (5,836) (3,033)
Net cash provided by financing activities25,011 19,347 24,394
Effect of exchange rate changes on cash(8,282) (8,447) 2,122
NET INCREASE IN CASH AND CASH EQUIVALENTS60,352 49,790 79,122
CASH AND CASH EQUIVALENTS, beginning of period275,812 226,022 146,900
CASH AND CASH EQUIVALENTS, end of period$336,164 $275,812 $226,022
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for income taxes$22,998 $8,668 $12,172
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Accrued liabilities for property and equipment$182 $789 $212


ICU Medical, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Amounts in thousands, except per share data)
(unaudited)
Adjusted EBITDA
Q4 Year Ended
2015 2014 2015 2014
GAAP net income$5,463 $7,372 $44,985 $26,335
Non-GAAP adjustments:
Stock compensation expense (a)3,522 2,602 12,827 9,592
Depreciation and amortization expense (b)4,807 4,805 18,073 19,447
Restructuring and strategic transaction expense (c)5,040 2,253 8,451 5,093
Gain on sale of building (d) (1,086)
Legal settlements (e) 1,798
Impairment of assets held for sale (f)4,139 4,139
Provision for income taxes (g)7,178 4,864 24,714 13,457
Total non-GAAP adjustments24,686 14,524 68,916 47,589
Adjusted EBITDA$30,149 $21,896 $113,901 $73,924
Adjusted diluted earnings per share
Q4 Year Ended
2015 2014 2015 2014
GAAP diluted earnings per share$0.33 $0.46 $2.73 $1.68
Non-GAAP adjustments:
Stock compensation expense (a)$0.21 $0.16 $0.78 $0.61
Amortization expense (h)$0.04 $0.04 $0.13 $0.15
Restructuring and strategic transaction expense (c)$0.30 $0.14 $0.51 $0.33
Gain on sale of building (d)$ $ $(0.07) $
Legal settlements (e)$ $ $0.11 $
Impairment of assets held for sale (f)$0.25 $ $0.25 $
Estimated income tax impact from adjustments (i)$(0.17) $(0.12) $(0.48) $(0.39)
Adjusted diluted earnings per share$0.96 $0.68 $3.96 $2.38
(a) Stock-based compensation expense in accordance with ASC 718.
(b) Depreciation of fixed assets and amortization of intangible assets.
(c) Restructuring and strategic transaction expense.
(d) Gain on sale of building.
(e) Legal settlements.
(f) Impairment of assets held for sale.
(g) Income tax expense recognized during the period.
(h) Amortization expense
(i) Estimated income tax effect on adjustments for stock compensation expense, amortization expense, restructuring and strategic transaction expense, gain on sale of building, legal settlements and impairment of assets held for sale, a permanent loss of a tax benefit related to the acquisition of Excelsior.


ICU Medical, Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures - Fiscal Year 2016 Outlook
(Amounts in millions, except per share data)
(unaudited)
GAAP net income$61 $63
Non-GAAP adjustments:
Stock compensation expense (a)15 15
Depreciation and amortization expense (b)19 19
Provision for income taxes (c)28 30
Total non-GAAP adjustments62 64
Adjusted EBITDA$123 $127
GAAP diluted earnings per share$3.62 $3.74
Non-GAAP adjustments:
Stock compensation expense (a)$0.89 $0.89
Amortization expense (d)$0.17 $0.17
Estimated income tax impact from adjustments (e)$(0.34) $(0.34)
Adjusted diluted earnings per share$4.34 $4.46
(a) Stock-based compensation expense in accordance with ASC 718.
(b) Depreciation of fixed assets and amortization of intangible assets.
(c) Income tax expense recognized during the period.
(d) Amortization expense
(e) Estimated income tax effect on adjustments for stock compensation expense and amortization expense.

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

Source:ICU Medical, Inc.