• ICU Medical Announces First Quarter 2024 Results

    المصدر: Nasdaq GlobeNewswire / 07 مايو 2024 16:05:01   America/New_York

    SAN CLEMENTE, Calif., May 07, 2024 (GLOBE NEWSWIRE) -- ICU Medical, Inc. (Nasdaq:ICUI), a leader in the development, manufacture and sale of innovative medical products, today announced financial results for the quarterly period ended March 31, 2024.

    First Quarter 2024 Results

    First quarter 2024 revenue was $566.7 million, compared to $568.6 million in the same period in the prior year. GAAP gross profit for the first quarter of 2024 was $185.2 million, as compared to $192.0 million in the same period in the prior year. GAAP gross margin for the first quarter of 2024 was 33%, as compared to 34% in the same period in the prior year. GAAP net loss for the first quarter of 2024 was $(39.5) million, or $(1.63) per diluted share, as compared to GAAP net loss of $(9.8) million, or $(0.41) per diluted share, for the first quarter of 2023. Adjusted diluted earnings per share for the first quarter of 2024 was $0.96 as compared to $1.74 for the first quarter of 2023. Adjusted EBITDA was $78.8 million for the first quarter of 2024 as compared to $102.0 million for the first quarter of 2023.

    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, “First quarter results were generally in line with our expectations."

    Revenues by product line for the three months ended March 31, 2024 and 2023 were as follows (in millions):

      Three months ended
    March 31,
      
    Product Line 2024 2023 $ Change
    Consumables $244.1 $236.1 $8.0 
    Infusion Systems  157.3  161.7  (4.4)
    Vital Care*  165.3  170.8  (5.5)
    Total** $566.7 $568.6 $(1.9)

    *Vital Care includes Pfizer contract manufacturing revenue of $14.1 million and $12.7 million for the three months ended March 31, 2024, and 2023 respectively.

    ** Totals may differ from the income statement due to the rounding of product lines.

    Conference Call

    The Company will host a conference call to discuss its first quarter 2024 financial results, today at 4:30 p.m. ET (1:30 p.m. PT). The call can be accessed at (800) 717-1738, conference ID 1112534. 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 Event Calendar and clicking on the Webcast icon and following the prompts. The webcast will also be available by replay.

    About ICU Medical

    ICU Medical (Nasdaq: ICUI) is a global leader in infusion systems, infusion consumables and high-value critical care products used in hospital, alternate site and home care settings. Our team is focused on providing quality, innovation and value to our clinical customers worldwide. ICU Medical is headquartered in San Clemente, California. More information about ICU Medical 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 and 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, 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, the impact from fluctuations in foreign currency exchange rates, the impact of inflation on raw materials, freight charges and labor, rising interest rates, and the Company's ability to meet expectations regarding the ongoing integration of the Smiths Medical 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 ("SEC"), which include those in the Company's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and our subsequent filings with the SEC. 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 unless required by law.



    ICU MEDICAL, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
    (In thousands)
     March 31,
    2024
     December 31,
    2023
        
    ASSETS   
    CURRENT ASSETS:   
    Cash and cash equivalents$251,423  $254,222 
    Short-term investment securities    501 
    TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENT SECURITIES 251,423   254,723 
    Accounts receivable, net of allowance for doubtful accounts 145,186   161,566 
    Inventories 693,006   709,360 
    Prepaid income taxes 15,476   21,983 
    Prepaid expenses and other current assets 82,636   73,640 
    TOTAL CURRENT ASSETS 1,187,727   1,221,272 
        
    PROPERTY, PLANT AND EQUIPMENT, net 602,617   612,909 
    OPERATING LEASE RIGHT-OF-USE ASSETS 64,928   69,909 
    GOODWILL 1,459,368   1,472,446 
    INTANGIBLE ASSETS, net 836,904   870,588 
    DEFERRED INCOME TAXES 40,203   37,295 
    OTHER ASSETS 96,651   94,020 
    TOTAL ASSETS$4,288,398  $4,378,439 
        
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
    CURRENT LIABILITIES:   
    Accounts payable$152,480  $150,030 
    Accrued liabilities 247,896   268,215 
    Current portion of long-term debt 51,000   51,000 
    Income tax payable 2,484   7,714 
    Contingent earn-out liability 1,500   4,879 
    TOTAL CURRENT LIABILITIES 455,360   481,838 
        
    CONTINGENT EARN-OUT LIABILITY 4,286   3,991 
    LONG-TERM DEBT 1,566,298   1,577,770 
    OTHER LONG-TERM LIABILITIES 102,594   100,497 
    DEFERRED INCOME TAXES 55,585   55,873 
    INCOME TAX LIABILITY 36,445   35,060 
    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 —24,412 and 24,144 shares at March 31, 2024 and December 31, 2023, respectively, and outstanding — 24,365 and 24,141 shares at March 31, 2024 and December 31, 2023, respectively 2,441   2,414 
    Additional paid-in capital 1,371,244   1,366,493 
    Treasury stock, at cost (4,692)  (262)
    Retained earnings 768,375   807,846 
    Accumulated other comprehensive loss (69,538)  (53,081)
    TOTAL STOCKHOLDERS' EQUITY 2,067,830   2,123,410 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$4,288,398  $4,378,439 



    ICU MEDICAL, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
    (In thousands, except per share data)
     Three months ended
    March 31,
      2024   2023 
    TOTAL REVENUES$566,655  $568,649 
    COST OF GOODS SOLD 381,411   376,608 
    GROSS PROFIT 185,244   192,041 
    OPERATING EXPENSES:   
    Selling, general and administrative 157,657   152,572 
    Research and development 21,842   19,761 
    Restructuring, strategic transaction and integration 16,105   11,013 
    Change in fair value of contingent earn-out 295   (700)
    TOTAL OPERATING EXPENSES 195,899   182,646 
    (LOSS) INCOME FROM OPERATIONS (10,655)  9,395 
    INTEREST EXPENSE, net (23,772)  (22,515)
    OTHER EXPENSE, net (2,341)  (269)
    LOSS BEFORE INCOME TAXES (36,768)  (13,389)
    (PROVISION) BENEFIT FOR INCOME TAXES (2,703)  3,577 
    NET LOSS$(39,471) $(9,812)
    NET LOSS PER SHARE   
    Basic$(1.63) $(0.41)
    Diluted$(1.63) $(0.41)
    WEIGHTED AVERAGE NUMBER OF SHARES   
    Basic 24,222   24,014 
    Diluted 24,222   24,014 



    ICU MEDICAL, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
    (In thousands)
     Three months ended
    March 31,
      2024   2023 
    CASH FLOWS FROM OPERATING ACTIVITIES:   
    Net loss$(39,471) $(9,812)
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   
    Depreciation and amortization 55,526   55,744 
    Noncash lease expense 5,341   5,656 
    Provision for doubtful accounts 549   666 
    Provision for warranty, returns and field action (618)  3,951 
    Stock compensation 11,598   9,158 
    (Gain) loss on disposal of property, plant and equipment and other assets (65)  367 
    Debt issuance costs amortization 1,708   1,701 
    Change in fair value of contingent earn-out liability 295   (700)
    Usage of spare parts 4,201   4,384 
    Other 2,627   (35)
    Changes in operating assets and liabilities, net of amounts acquired:   
    Accounts receivable 13,967   82,028 
    Inventories 14,164   (49,370)
    Prepaid expenses and other current assets (5,735)  1,907 
    Other assets (5,160)  (6,448)
    Accounts payable 5,313   (27,525)
    Accrued liabilities (16,503)  (21,099)
    Income taxes, including excess tax benefits and deferred income taxes (1,946)  (9,328)
    Net cash provided by operating activities 45,791   41,245 
    CASH FLOWS FROM INVESTING ACTIVITIES:   
    Purchases of property, plant and equipment (15,915)  (14,205)
    Proceeds from sale of assets 507   54 
    Intangible asset additions (2,954)  (2,532)
    Proceeds from sale and maturities of investment securities 500   1,500 
    Net cash used in investing activities (17,862)  (15,183)
    CASH FLOWS FROM FINANCING ACTIVITIES:   
    Principal repayments of long-term debt (12,750)  (7,375)
    Proceeds from exercise of stock options 150   171 
    Payments on finance leases (245)  (208)
    Payment of contingent earn-out liability (2,600)   
    Tax withholding payments related to net share settlement of equity awards (11,400)  (8,425)
    Net cash used in financing activities (26,845)  (15,837)
    Effect of exchange rate changes on cash (3,883)  1,938 
    NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (2,799)  12,163 
    CASH AND CASH EQUIVALENTS, beginning of period 254,222   208,784 
    CASH AND CASH EQUIVALENTS, end of period$251,423  $220,947 


    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 include adjusted EBITDA, adjusted revenue, adjusted gross profit, adjusted selling, general and administrative, adjusted research and development, adjusted restructuring, strategic transaction and integration, adjusted change in fair value of contingent earn-out, adjusted (loss) income from operations, net, adjusted (loss) income before income taxes, adjusted benefit (provision) for income taxes, adjusted net (loss) income and adjusted diluted (loss) earnings per share, all of which exclude special items because they are highly variable or unusual and impact year-over-year comparisons.

    For the three months ended March 31, 2024 and 2023, special items include the following:

    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.

    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.

    Quality system and product-related remediation: We exclude certain quality system and product-related remediation charges 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.

    Asset write-offs and similar charges: Occasionally, we may write-off certain assets or we may sell certain assets. We exclude the non-cash gain/loss on the write-off/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.

    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.

    In addition to the above special items, Adjusted EBITDA additionally excludes the following items from net income:

    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.

    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.

    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, the special items listed above. The tax effect on the special items 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. Additionally, adjusted diluted EPS may exclude the income tax impact of certain non-recurring discrete tax items that are not reflective of income tax expense/benefit incurred as a result of current period earnings/ loss, as well as the impact of certain deferred tax valuation allowances when assessed against non-GAAP profitability.

    We also present Free cash flow as a non-GAAP financial measure as management believes that this is an important measure for use in evaluating overall company financial performance as it measures our ability to generate additional cash flow from business operations. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance or net cash provided by (used in) operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Therefore, we believe it is important to view free cash flow as supplemental to our entire statement of cash flows.

    The following tables reconcile our non-GAAP financial measures for the periods presented:


    ICU MEDICAL, INC. AND SUBSIDIARIES
    Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
    (In thousands, except per share data)
      Adjusted EBITDA
     Three months ended
    March 31,
      2024   2023 
    GAAP net loss$(39,471) $(9,812)
        
    Non-GAAP adjustments:   
    Interest, net 23,772   22,515 
    Stock compensation expense 11,598   9,158 
    Depreciation and amortization expense 55,526   55,744 
    Restructuring, strategic transaction and integration 16,105   11,013 
    Change in fair value of contingent earn-out 295   (700)
    Quality system and product-related charges 7,498   17,090 
    Asset write-offs and similar charges 781   550 
    Provision (Benefit) for income taxes 2,703   (3,577)
    Total non-GAAP adjustments 118,278   111,793 
        
    Adjusted EBITDA$78,807  $101,981 



    ICU MEDICAL, INC. AND SUBSIDIARIES
    Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
    (In thousands, except percentages and per share)

    The Company’s U.S. GAAP results for the three months ended March 31, 2024 included special items which impacted the U.S. GAAP measures as follows:

     Total revenuesGross profitSelling, general and administrativeResearch and developmentRestructuring, strategic transaction and integrationChange in fair value of contingent earn-out (Loss) income from operations(Loss) income before income taxesProvision for income taxesNet (loss) incomeDiluted (loss) earnings per share
    Reported (GAAP)$566,655 $185,244 $157,657 $21,842 $16,105 $295 $(10,655)$(36,768)$(2,703)$(39,471)$(1.63)
    Reported percent of total revenues (or percent of (loss) income before income taxes for benefit (provision) for income taxes)  33% 28% 4% 3% %(2)%(6)%(7.4)%(7)% 
    Contract manufacturing (14,073)                   
    Stock compensation expense   1,582  (9,563) (453)     11,598  11,598  (2,784) 8,814  0.36 
    Amortization expense     (33,130)       33,130  33,130  (8,046) 25,084  1.03 
    Restructuring, strategic transaction and integration         (16,105)   16,105  16,105  (3,873) 12,232  0.50 
    Change in fair value of contingent earn-out           (295) 295  295    295  0.01 
    Quality system and product-related remediation   7,498          7,498  7,498  (1,803) 5,695  0.23 
    Asset write-offs and similar charges   781          781  781  (187) 594  0.02 
    Tax expense from valuation allowance*                 10,143  10,143  0.42 
    Earnings per share impact on net loss due to basic versus diluted weighted average shares                     0.01 
    Adjusted (Non-GAAP)**$552,582 $195,105 $114,964 $21,389 $ $ $58,752 $32,639 $(9,253)$23,386 $0.96 
    Adjusted percent of total revenues (or percent of (loss) income before income taxes for benefit (provision) for income taxes)  35% 21% 4% % % 11% 6% 28.3% 4% 

    _______________________

    * The Company’s non-GAAP annual effective tax rate is calculated without the tax expense related to the valuation allowance against certain U.S. Federal and State deferred tax assets. The valuation allowance was recorded based on an assessment of available positive and negative evidence, including, predominantly, an estimate that we will be in a three-year cumulative U.S. loss position on a GAAP basis as of March 31, 2024. However, based on the same assessment, including, predominantly, our being, and expectation of remaining for 2024, in a three-year cumulative U.S. income position on a non-GAAP basis, which excludes the impact of our non-GAAP adjustments, we concluded that recording a valuation allowance would not have been appropriate for non-GAAP reporting. As a result, the tax expense for the valuation allowance was added back to our calculation of non-GAAP annual effective tax rate.
    ** Amounts may not foot due to rounding.


    ICU MEDICAL, INC. AND SUBSIDIARIES
    Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)(continued)
    (In thousands, except percentages and per share)

    The Company’s U.S. GAAP results for the three months ended March 31, 2023 included special items which impacted the U.S. GAAP measures as follows:

     Total revenuesGross profitSelling, general and administrativeResearch and developmentRestructuring, strategic transaction and integrationChange in fair value of contingent earn-out(Loss) income from operations(Loss) income before income taxesBenefit (provision) for income taxesNet (loss) incomeDiluted (loss) earnings per share
    Reported (GAAP)$568,649 $192,041 $152,572 $19,761 $11,013 $(700)$9,395 $(13,389)$3,577 $(9,812)$(0.41)
    Reported percent of total revenues (or percent of (loss) income before income taxes for benefit (provision) for income taxes)  34% 27% 3% 2% % 2%(2)% 26.7%(2)% 
    Contract manufacturing (12,703)                   
    Stock compensation expense   1,444  (7,362) (352)     9,158  9,158  (2,198) 6,960  0.29 
    Amortization expense     (32,299)       32,299  32,299  (7,913) 24,386  1.01 
    Restructuring, strategic transaction and integration         (11,013)   11,013  11,013  (2,654) 8,359  0.34 
    Change in fair value of contingent earn-out           700  (700) (700)   (700) (0.03)
    Quality system and product-related remediation   17,090          17,090  17,090  (4,204) 12,886  0.53 
    Asset write-offs and similar charges   550          550  550  (136) 414  0.01 
    Adjusted (Non-GAAP)$555,946 $211,125 $112,911 $19,409 $ $ $78,805 $56,021 $(13,528)$42,493 $1.74 
    Adjusted percent of total revenues (or percent of (loss) income before income taxes for benefit (provision) for income taxes)  38% 20% 3% % % 14% 10% 24.1% 8% 



    ICU MEDICAL, INC. AND SUBSIDIARIES
    Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)
    (In thousands)
     Three months ended
    March 31,
      2024   2023 
    Net cash provided by operating activities$45,791   41,245 
    Purchase of property, plant and equipment (15,915)  (14,205)
    Proceeds from sale of assets 507   54 
    Free cash flow$30,383  $27,094 



    ICU MEDICAL, INC. AND SUBSIDIARIES
    Fiscal Year 2024
    Outlook (Unaudited)
    (In millions, except per share data)
     Low End of Guidance High End of Guidance
    GAAP net loss(1)$(127) $(110)
        
    Non-GAAP adjustments:   
    Interest, net 105   105 
    Stock compensation expense(1) 40   40 
    Depreciation and amortization expense 229   229 
    Restructuring, strategic transaction and integration 40   40 
    Quality and regulatory initiatives and remediation 45   45 
    (Benefit) Provision for income taxes(1) (2)  21 
    Total non-GAAP adjustments$457  $480 
        
    Adjusted EBITDA$330  $370 
        
        
        
    GAAP diluted loss per share(1)$(5.16) $(4.46)
        
    Non-GAAP adjustments:   
    Stock compensation expense(1) 1.63   1.63 
    Amortization expense 5.53   5.53 
    Restructuring, strategic transaction and integration 1.63   1.63 
    Quality and regulatory initiatives and remediation 1.83   1.83 
    Tax expense from valuation allowance(1) 1.49   1.49 
    Estimated income tax impact from adjustments (2.55)  (2.55)
    Adjusted diluted earnings per share$4.40  $5.10 
        
    (1) Reflects updates from the full year outlook published on February 27, 2024.

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

     


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