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ICU Medical Announces Second Quarter 2022 Results

·20 min read
ICU Medical, Inc.
ICU Medical, Inc.

Company Updated FY 2022 Guidance

SAN CLEMENTE, Calif., Aug. 08, 2022 (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 quarter ended June 30, 2022.

Second Quarter 2022 Results

Second quarter 2022 revenue was $561.0 million, compared to $321.7 million in the same period last year. GAAP gross profit for the second quarter of 2022 was $167.6 million, as compared to $123.5 million in the same period last year. GAAP gross margin for the second quarter of 2022 was 30%, as compared to 38% in the same period last year. GAAP net loss for the second quarter of 2022 was $(7.5) million, or $(0.31) per diluted share, as compared to GAAP net income of 28.4 million, or $1.31 per diluted share, for the second quarter of 2021. Adjusted diluted earnings per share for the second quarter of 2022 was $1.37 as compared to $1.88 for the second quarter of 2021. Also, adjusted EBITDA was $84.7 million for the second quarter of 2022 as compared to $66.9 million for the second quarter of 2021.

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, “Legacy ICU Medical revenues were in line with expectations and results from the acquired Smiths Medical business reflect improvement over the course of the second quarter."

Revenues by product line for the three and six months ended June 30, 2022 and 2021 were as follows (in millions):

As a result of the acquisition of Smiths Medical on January 6, 2022, the following product lines are presented in addition to our legacy product lines: Infusion Systems-Smiths Medical, Vascular Access -Smiths Medical and Vital Care-Smiths Medical.

 

 

Three months ended
June 30,

 

 

 

Six months ended
June 30,

 

 

Product Line

 

2022

 

2021

 

$ Change

 

2022

 

2021

 

$ Change

Infusion Consumables

 

$

144.5

 

$

136.2

 

$

8.3

 

 

$

285.0

 

$

262.6

 

$

22.4

 

Infusion Systems

 

 

87.3

 

 

84.7

 

 

2.6

 

 

 

174.3

 

 

169.0

 

 

5.3

 

IV Solutions*

 

 

94.1

 

 

88.4

 

 

5.7

 

 

 

182.6

 

 

182.6

 

 

 

Critical Care

 

 

12.3

 

 

12.4

 

 

(0.1

)

 

 

24.5

 

 

25.5

 

 

(1.0

)

Infusion Systems-Smiths Medical

 

 

77.8

 

 

 

 

77.8

 

 

 

144.1

 

 

 

 

144.1

 

Vascular Access-Smiths Medical

 

 

77.1

 

 

 

 

77.1

 

 

 

156.1

 

 

 

 

156.1

 

Vital Care-Smiths Medical

 

 

67.9

 

 

 

 

67.9

 

 

 

137.5

 

 

 

 

137.5

 

 

 

$

561.0

 

$

321.7

 

$

239.3

 

 

$

1,104.1

 

$

639.7

 

$

464.4

 

*IV Solutions includes $14.0 million and $25.1 million of contract manufacturing to Pfizer for the three and six months ended June 30, 2022, respectively. IV Solutions includes $10.4 million and $24.3 million of contract manufacturing to Pfizer for the three and six months ended June 30, 2021, respectively.

Fiscal Year 2022 Guidance Update

The Company is updating its full year 2022 guidance of adjusted EBITDA from a range of $450 million to $500 million to a range of $350 million to $370 million and adjusted diluted earnings per share from a range of $9.00 to $10.50 to a range of $6.20 to $6.80.

Conference Call

The Company will host a conference call to discuss its second quarter 2022 financial results, today at 4:30 p.m. ET (1:30 p.m. PT). The call can be accessed at (877) 300-8521, international (412) 317-6026, conference ID 10169518. 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 or intentions regarding the future. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the Company and assumptions management believes are reasonable, all of which are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to, decreased demand for the Company's products, decreased free cash flow, the inability to recapture conversion delays or part/resource shortages on anticipated timing, or at all, changes in product mix, increased competition from competitors, lack of growth or improving efficiencies, unexpected changes in the Company's arrangements with its largest customers, the impact of the ongoing COVID-19 pandemic on the Company and our financial results and the Company's ability to meet expectations regarding 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, which include those in the Company's most recent Annual Report on Form 10-K, as updated by the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022 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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

 

June 30,
2022

 

December 31,
2021

 

(Unaudited)

 

(1)

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash and cash equivalents

$

255,698

 

 

$

552,827

 

Short-term investment securities

 

13,191

 

 

 

14,420

 

TOTAL CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENT SECURITIES

 

268,889

 

 

 

567,247

 

Accounts receivable, net of allowance for doubtful accounts

 

216,124

 

 

 

105,894

 

Inventories

 

583,050

 

 

 

290,235

 

Prepaid income taxes

 

27,111

 

 

 

19,586

 

Prepaid expenses and other current assets

 

94,663

 

 

 

46,847

 

TOTAL CURRENT ASSETS

 

1,189,837

 

 

 

1,029,809

 

PROPERTY, PLANT AND EQUIPMENT, net

 

667,783

 

 

 

468,365

 

OPERATING LEASE RIGHT-OF-USE ASSETS

 

83,323

 

 

 

39,847

 

LONG-TERM INVESTMENT SECURITIES

 

1,837

 

 

 

4,620

 

GOODWILL

 

1,421,216

 

 

 

43,439

 

INTANGIBLE ASSETS, net

 

1,080,329

 

 

 

188,311

 

DEFERRED INCOME TAXES

 

43,942

 

 

 

42,604

 

OTHER ASSETS

 

101,728

 

 

 

63,743

 

TOTAL ASSETS

$

4,589,995

 

 

$

1,880,738

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

201,874

 

 

$

81,128

 

Accrued liabilities

 

247,656

 

 

 

118,195

 

Current portion of long-term obligations

 

19,063

 

 

 

 

Income tax payable

 

17,102

 

 

 

1,454

 

Contingent earn-out liability

 

290

 

 

 

 

TOTAL CURRENT LIABILITIES

 

485,985

 

 

 

200,777

 

CONTINGENT EARN-OUT LIABILITY

 

30,119

 

 

 

2,589

 

LONG-TERM OBLIGATIONS

 

1,636,029

 

 

 

 

OTHER LONG-TERM LIABILITIES

 

128,200

 

 

 

41,830

 

DEFERRED INCOME TAXES

 

204,992

 

 

 

1,490

 

INCOME TAX LIABILITY

 

18,804

 

 

 

18,021

 

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 — 23,899 and 21,280 shares at June 30, 2022 and December 31, 2021, respectively, and outstanding — 23,898 and 21,280 shares at June 30, 2022 and December 31, 2021, respectively

 

2,390

 

 

 

2,128

 

Additional paid-in capital

 

1,309,598

 

 

 

721,412

 

Treasury stock, at cost

 

(92

)

 

 

(27

)

Retained earnings

 

866,245

 

 

 

911,787

 

Accumulated other comprehensive loss

 

(92,275

)

 

 

(19,269

)

TOTAL STOCKHOLDERS' EQUITY

 

2,085,866

 

 

 

1,616,031

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

4,589,995

 

 

$

1,880,738

 

______________________________________________________
(1) December 31, 2021 balances were derived from audited consolidated financial statements.


ICU MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

 

Three months ended
June 30,

 

Six months ended
June 30,

 

2022

 

2021

 

2022

 

2021

TOTAL REVENUES

$

561,004

 

 

$

321,677

 

 

$

1,104,126

 

 

$

639,723

 

COST OF GOODS SOLD

 

393,411

 

 

 

198,148

 

 

 

767,706

 

 

 

403,514

 

GROSS PROFIT

 

167,593

 

 

 

123,529

 

 

 

336,420

 

 

 

236,209

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

 

158,748

 

 

 

73,921

 

 

 

311,960

 

 

 

146,312

 

Research and development

 

22,562

 

 

 

11,385

 

 

 

46,433

 

 

 

22,094

 

Restructuring, strategic transaction and integration

 

13,525

 

 

 

3,753

 

 

 

47,430

 

 

 

6,636

 

Change in fair value of contingent earn-out

 

(27,194

)

 

 

 

 

 

(27,194

)

 

 

 

Contract settlement

 

 

 

 

 

 

 

 

 

 

127

 

TOTAL OPERATING EXPENSES

 

167,641

 

 

 

89,059

 

 

 

378,629

 

 

 

175,169

 

(LOSS) INCOME FROM OPERATIONS

 

(48

)

 

 

34,470

 

 

 

(42,209

)

 

 

61,040

 

INTEREST EXPENSE

 

(16,273

)

 

 

(163

)

 

 

(29,917

)

 

 

(324

)

OTHER (EXPENSE) INCOME, net

 

(533

)

 

 

525

 

 

 

471

 

 

 

1,208

 

(LOSS) INCOME BEFORE INCOME TAXES

 

(16,854

)

 

 

34,832

 

 

 

(71,655

)

 

 

61,924

 

BENEFIT (PROVISION) FOR INCOME TAXES

 

9,380

 

 

 

(6,434

)

 

 

26,113

 

 

 

(9,795

)

NET (LOSS) INCOME

$

(7,474

)

 

$

28,398

 

 

$

(45,542

)

 

$

52,129

 

NET (LOSS) INCOME PER SHARE

 

 

 

 

 

 

 

Basic

$

(0.31

)

 

$

1.34

 

 

$

(1.91

)

 

$

2.46

 

Diluted

$

(0.31

)

 

$

1.31

 

 

$

(1.91

)

 

$

2.40

 

WEIGHTED AVERAGE NUMBER OF SHARES

 

 

 

 

 

 

 

Basic

 

23,897

 

 

 

21,200

 

 

 

23,787

 

 

 

21,176

 

Diluted

 

23,897

 

 

 

21,703

 

 

 

23,787

 

 

 

21,718

 


ICU MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

 

Six months ended
June 30,

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net (loss) income

$

(45,542

)

 

$

52,129

 

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

119,697

 

 

 

44,319

 

Amortization of inventory step-up

 

22,676

 

 

 

 

Noncash lease expense

 

10,888

 

 

 

4,780

 

Provision for doubtful accounts

 

(99

)

 

 

342

 

Provision for warranty and returns

 

1,483

 

 

 

(345

)

Stock compensation

 

19,854

 

 

 

12,703

 

Loss on disposal of property, plant and equipment and other assets

 

267

 

 

 

829

 

Bond premium amortization

 

211

 

 

 

364

 

Debt issuance costs amortization

 

3,495

 

 

 

144

 

Change in fair value of contingent earn-out

 

(27,194

)

 

 

 

Usage of spare parts

 

5,229

 

 

 

5,356

 

Other

 

(2,807

)

 

 

1,574

 

Changes in operating assets and liabilities, net of amounts acquired:

 

 

 

Accounts receivable

 

(1,090

)

 

 

2,078

 

Inventories

 

(100,024

)

 

 

13,368

 

Prepaid expenses and other current assets

 

4,710

 

 

 

759

 

Other assets

 

(17,323

)

 

 

(7,632

)

Accounts payable

 

22,149

 

 

 

(1,648

)

Accrued liabilities

 

(33,509

)

 

 

(17,068

)

Income taxes, including excess tax benefits and deferred income taxes

 

(45,798

)

 

 

(5,970

)

Net cash (used in) provided by operating activities

 

(62,727

)

 

 

106,082

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property, plant and equipment

 

(48,039

)

 

 

(29,693

)

Proceeds from sale of assets

 

900

 

 

 

203

 

Business acquisitions, net of cash acquired

 

(1,844,164

)

 

 

 

Intangible asset additions

 

(4,440

)

 

 

(4,136

)

Purchases of investment securities

 

(3,397

)

 

 

(10,034

)

Proceeds from sale and maturities of investment securities

 

26,198

 

 

 

7,000

 

Net cash used in investing activities

 

(1,872,942

)

 

 

(36,660

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from issuance of long-term debt, net of lender debt issuance costs

 

1,672,631

 

 

 

 

Principal repayments of long-term debt

 

(18,125

)

 

 

 

Payment of third-party debt issuance costs

 

(1,852

)

 

 

 

Proceeds from exercise of stock options

 

2,992

 

 

 

5,416

 

Payments on finance leases

 

(321

)

 

 

(296

)

Tax withholding payments related to net share settlement of equity awards

 

(10,438

)

 

 

(7,819

)

Net cash provided by (used in) financing activities

 

1,644,887

 

 

 

(2,699

)

Effect of exchange rate changes on cash

 

(6,347

)

 

 

(783

)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

(297,129

)

 

 

65,940

 

CASH AND CASH EQUIVALENTS, beginning of period

 

552,827

 

 

 

396,097

 

CASH AND CASH EQUIVALENTS, end of period

$

255,698

 

 

$

462,037

 

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 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 June 30, 2022 and 2021, 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.

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.

Contract settlement: Occasionally, we are involved in contract renegotiations that may result in one-time settlements. We exclude these settlements as they have no direct correlation to the operation of our ongoing business.

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

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.

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 (used in) provided by 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 GAAP and non-GAAP financial measures:


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
June 30,

 

2022

 

2021

GAAP net (loss) income

$

(7,474

)

 

$

28,398

 

 

 

 

 

Non-GAAP adjustments:

 

 

 

Interest, net

 

15,440

 

 

 

(545

)

Stock compensation expense

 

7,762

 

 

 

6,681

 

Depreciation and amortization expense

 

66,559

 

 

 

22,164

 

Restructuring, strategic transaction and integration

 

13,525

 

 

 

3,753

 

Change in fair value of contingent earn-out

 

(27,194

)

 

 

 

Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair value

 

8,306

 

 

 

 

Quality system and product-related remediation

 

17,195

 

 

 

 

(Benefit) provision for income taxes

 

(9,380

)

 

 

6,434

 

Total non-GAAP adjustments

 

92,213

 

 

 

38,487

 

 

 

 

 

Adjusted EBITDA

$

84,739

 

 

$

66,885

 


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 June 30, 2022 included special items which impacted the U.S. GAAP measures as follows:

 

Total revenues

Gross profit

Selling, general and administrative

Research and development

Restructuring, strategic transaction and integration

Change in fair value of contingent earn-out

(Loss) income from operations

(Loss) income before income taxes

Benefit (provision) for income taxes

Net (loss) income

Diluted (loss) earnings per share

Reported (GAAP)

$

561,004

 

$

167,593

 

$

158,748

 

$

22,562

 

$

13,525

 

$

(27,194

)

$

(48

)

$

(16,854

)

$

9,380

 

$

(7,474

)

$

(0.31

)

Reported percent of total revenues (or percent of (loss) income before income taxes for benefit (provision) for income taxes)

 

 

30

%

 

28

%

 

4

%

 

2

%

 

(5

)%

 

%

 

(3

)%

 

55.7

%

 

(1

)%

 

Contract manufacturing

 

(14,043

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense

 

 

 

1,408

 

 

(5,945

)

 

(409

)

 

 

 

 

7,762

 

 

7,762

 

 

(1,863

)

 

5,899

 

 

0.24

 

Amortization expense

 

 

 

2,943

 

 

(38,673

)

 

 

 

 

 

 

41,616

 

 

41,616

 

 

(9,905

)

 

31,711

 

 

1.33

 

Restructuring, strategic transaction and integration

 

 

 

 

 

 

 

 

 

(13,525

)

 

 

13,525

 

 

13,525

 

 

(2,610

)

 

10,915

 

 

0.46

 

Change in fair value of contingent earn-out

 

 

 

 

 

 

27,194

 

 

(27,194

)

 

(27,194

)

 

 

 

(27,194

)

 

(1.14

)

Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair value

 

 

 

8,306

 

 

 

 

 

 

 

 

 

8,306

 

 

8,306

 

 

(1,952

)

 

6,354

 

 

0.27

 

Quality system and product-related remediation

 

 

 

17,195

 

 

 

 

 

 

 

 

 

17,195

 

 

17,195

 

 

(4,247

)

 

12,948

 

 

0.54

 

Earnings per share impact on net loss due to basic versus diluted weighted average shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.02

)

Adjusted (Non-GAAP)

$

546,961

 

$

197,445

 

$

114,130

 

$

22,153

 

$

 

$

 

$

61,162

 

$

44,356

 

$

(11,197

)

$

33,159

 

$

1.37

 

Adjusted percent of total revenues (or percent of (loss) income before income taxes for benefit (provision) for income taxes)

 

 

36

%

 

21

%

 

4

%

 

%

 

%

 

11

%

 

8

%

 

25.2

%

 

6

%

 


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 June 30, 2021 included special items which impacted the U.S. GAAP measures as follows:

 

Total revenues

Gross profit

Selling, general and administrative

Research and development

Restructuring, strategic transaction and integration

Income from operations

Income before income taxes

Provision for income taxes

Net income

Diluted earnings per share

Reported (GAAP)

$

321,677

 

$

123,529

 

$

73,921

 

$

11,385

 

$

3,753

 

$

34,470

 

$

34,832

 

$

(6,434

)

$

28,398

 

$

1.31

Reported percent of total revenues (or percent of income before income taxes for benefit provision for income taxes)

 

 

38

%

 

23

%

 

4

%

 

1

%

 

10

%

 

10

%

 

18.5

%

 

8

%

 

Contract manufacturing

 

(10,377

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation expense

 

 

 

958

 

 

(5,401

)

 

(322

)

 

 

 

6,681

 

 

6,681

 

 

(1,603

)

 

5,078

 

 

0.24

Amortization expense

 

 

 

45

 

 

(5,769

)

 

 

 

 

 

5,814

 

 

5,814

 

 

(1,371

)

 

4,443

 

 

0.20

Restructuring, strategic transaction and integration

 

 

 

 

 

 

 

 

 

(3,753

)

 

3,753

 

 

3,753

 

 

(901

)

 

2,852

 

 

0.13

Adjusted (Non-GAAP)

$

311,300

 

$

124,532

 

$

62,751

 

$

11,063

 

$

 

$

50,718

 

$

51,080

 

$

(10,309

)

$

40,771

 

$

1.88

Adjusted percent of total revenues (or percent of income before income taxes for provision for income taxes)

 

 

40

%

 

20

%

 

4

%

 

%

 

16

%

 

16

%

 

(20.2

)%

 

13

%

 


ICU MEDICAL, INC. AND SUBSIDIARIES
Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow (Unaudited)
(In thousands)

 

Three months ended
June 30

 

Six months ended
June 30

 

2022

 

2021

 

2022

 

2021

Net cash (used in) provided by operating activities

$

(61,385

)

 

$

54,762

 

 

$

(62,727

)

 

$

106,082

 

Purchase of property, plant and equipment

 

(24,433

)

 

 

(15,665

)

 

 

(48,039

)

 

 

(29,693

)

Proceeds from sale of assets

 

 

 

 

148

 

 

 

900

 

 

 

203

 

Free cash flow

$

(85,818

)

 

$

39,245

 

 

$

(109,866

)

 

$

76,592

 


ICU MEDICAL, INC. AND SUBSIDIARIES
Fiscal Year 2022 Outlook (Unaudited)
(In millions, except per share data)

 

Low End of Guidance

 

High End of Guidance

GAAP net income

$

(109

)

 

$

(94

)

 

 

 

 

Non-GAAP adjustments:

 

 

 

Interest, net

 

67

 

 

 

67

 

Stock compensation expense

 

37

 

 

 

37

 

Depreciation and amortization expense

 

238

 

 

 

238

 

Restructuring, strategic transaction and integration

 

81

 

 

 

81

 

Quality and regulatory initiatives and remediation

 

80

 

 

 

80

 

Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair market value

 

23

 

 

 

23

 

Change in fair value of contingent earn-out

 

(27

)

 

 

(27

)

Provision for income taxes

 

(40

)

 

 

(35

)

Total non-GAAP adjustments

$

459

 

 

$

464

 

 

 

 

 

Adjusted EBITDA

$

350

 

 

$

370

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted earnings per share

$

(4.50

)

 

$

(3.88

)

 

 

 

 

Non-GAAP adjustments:

 

 

 

Stock compensation expense

 

1.53

 

 

 

1.53

 

Amortization expense

 

5.95

 

 

 

5.95

 

Restructuring, strategic transaction and integration

 

3.35

 

 

 

3.35

 

Quality and regulatory initiatives and remediation

 

3.31

 

 

 

3.31

 

Adjustment to reverse the cost recognition related to the purchase accounting write-up of inventory to fair market value

 

0.95

 

 

 

0.95

 

Change in fair value of contingent earn-out

 

(1.12

)

 

 

(1.12

)

Estimated income tax impact from adjustments

 

(3.27

)

 

 

(3.29

)

Adjusted diluted earnings per share

$

6.20

 

 

$

6.80

 


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