Transcript 1998 Road Show

ICU MEDICAL, INC.
FORWARD LOOKING
INFORMATION
Any statement concerning Management’s expectation
with respect to future results is a forward looking
statement based upon the best information currently
available to management and assumptions
Management believes are reasonable, but Management
does not intend the statement to be a representation as
to future results. Future results are subject to risks and
uncertainties, including the risk factors described in the
Company’s filings with the Securities and Exchange
Commission, which include those in the Form 8-K dated
February 15, 2002. Actual results in the future may
differ materially from Management’s current
expectations.
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AGENDA
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Company Overview
IV Industry Overview
Products
Growth Strategy
Marketing and Distribution
Manufacturing
Financial History
Investment Highlights
2
COMPANY OVERVIEW
• Core competence
– Product innovation
• IV disposables
– Manufacturing innovation
• Custom IV systems
• Consistent growth
• Superior distribution
• High barriers to entry
3
ICU MEDICAL FACTS
• Compound 5 Year Growth Rates - 12/02
– Sales
24%
– Net Income
28%
– EPS
22%
• Revenue 2002
$ 87.8 million
• Return on equity,
excluding investments
41%
• Cash and investments - 6/03
$ 69.6 million
• Debt
-0• Equity - 6/03
$147.0 million
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IV SYSTEMS
INDUSTRY OVERVIEW
MARKET SHARE IV SOLUTIONS & SETS
Abbott
45%
B.Braun
10%
Baxter
40%
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PROTECTIVE IV CONNECTOR
MARKET SIZE and CATALYSTS
• IV Market $4 billion
• Potential U.S. safe connector market over $1.0 billion
• HIV / Hepatitis B transmission - healthcare workers
• High cost of accidental needlesticks
• IV connections are the largest source of needle usage
• Court Cases
• OSHA regulations / CAL OSHA / States
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ICU MEDICAL, INC.
PRODUCTS
PRODUCT OVERVIEW
• Proprietary disposable
medical connection systems
for use in intravenous therapy
• Custom IV systems
• Blood collection needles
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REPUTATION FOR INNOVATION
• Create the market for safe medical connectors
– 1984: Click Lock
• Always first with new technology
– 1993: first swabable, needleless system, CLAVE
• CLC 2000 in 1997
• 1O2 Valve in 1998
• Custom IV Systems
• Blood Collection Devices
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DIVERSIFIED REVENUE MIX
(Excludes all non product revenue)
CLC 2000
4%
Other
5%
PuncturGuard
7%
Custom
System
20%
CLAVE
64%
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The CLAVE way
The CLAVE way
The old way
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CLAVE® SALES
$58.5
$60
$51.1
$50
$39.7
$40
Millions
$30
$32.1
$32.1
$31.1
$27.5
$19.5
$20
$10
$0
1997
1998
1999
2000
2001
2002
H1 '02 H1 '03
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™
CLC200014
CLC 2000™
• “Clotting” of catheters requires expensive
procedures to “flush” clots, or replacement of
catheter
• CLC 2000 developed to eliminate clotting of
catheters
• No back flow
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PUNCTUR-GUARD®
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PUNCTUR-GUARD®
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PUNCTUR-GUARD®
• Safety needles for blood collection
• Blood Collection Needle
• “Winged Set”
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1O2 VALVE™
• Only One-Way or Two-Way drug delivery
system: both infusion and aspiration
• Initial Markets: Anesthesia, NICU
• High flow rate, low dead space
• Sell in custom sets
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CUSTOM IV SYSTEMS
• Business Strategy
– Lower cost to customer
– Short delivery time: 3 to 21 days maximum
– No minimum order quantity
– Sell entire system, not just a component
• Method: Innovative proprietary systems
– Automate product design and validation
– Core manufacturing competence
– Low inventory carrying costs
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CUSTOM IV SYSTEMS
•Set Design — Online from offices worldwide
•Central computer in California
•Job order to Baja plant
•Assemble, sterilize (2003) and ship from Baja
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Custom 1o2™ I.V. Set
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CUSTOM IV SYSTEM SALES
Millions
$18
$15.2
$16
$14
$12
$10
$6.9
$8
All
$6.9
$5.7
$5.3
$6
Setsource
$4.3
$3.2
$4
$2
$9.5
$9.4
$2.1
$1.2
$1.4
$0
1997
5%
1998
1999
2000
2001
8%
11%
12%
14%
2002 H1 '02 H1 '03
18%
16%
20%
% of Sales
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GROWTH STRATEGY
• Mass customization
• Capitalize on existing products
• New products
• Strategic alliances and acquisitions
• Low cost production
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Marketing
and
Distribution
SALES CHANNELS
1999
2000
2001
2002
First Half
H1 ‘02 H1 ‘03
$33.3
$41.7
$50.3
$63.7
$32.8
$38.9
• Specialty
Distributors
11.8
12.1
13.4
17.0
7 .7
11.4
• International
1.9
2.4
5.4
7.1
3.1
1.8
$47.0
$56.2
$87.8
$43.6
$52.0
• OEMs
$69.1
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THE ICU PRODUCT SPECIALIST
• ICU representative in the field
• Driving, motivating & educating distributor
representatives
• Rapid product introduction & feedback
• Intelligence gathering
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Manufacturing
MANUFACTURING HIGHLIGHTS
• Manufacturing and Assembly:
–
–
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3 modern facilities in San Clemente
1 recently expanded facility in Ensenada
1 facility in Connecticut
1 facility in Italy
42 plastic or silicon molding machines
21 automated assembly machines
Manual assembly
Adequate capacity for growth
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Financial Overview
BALANCE SHEET
June 30, 2003
(in millions of dollars)
Cash and
investments
Other current assets
Fixed assets and other
Current Liabilities
$ 69.6
32.0
101.6
55.4
$157.0
Debt
Equity
$
10.0
-0147.0
$157.0
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SUMMARY FINANCIAL DATA
(in millions of dollars, except per share)
1998
1999
2000
2001
2002
$39.8
$47.0
$56.2
$69.1
$87.8
Gross Profit
23.2
27.1
42.4
40.1
51.3
Operating Income
10.0
13.4
16.6
22.1
30.0
Investment Income
1.4
1.4
2.1
2.0
1.4
Pre Tax
11.4
14.8
18.7
8.7
31.4
Net Income
$7.2
$9.4
$11.8
$15.4
$19.7
$0.57
$0.72
$0.87
$1.06
$1.28
Total Revenue
Per Share (diluted)
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SUMMARY FINANCIAL DATA
(represented as % of revenue)
1998 1999 2000 2001 2002
Total Revenue
100% 100% 100% 100% 100%
Gross Profit
58%
58%
58%
58%
57%
Operating Income
25%
28%
30%
32%
34%
Investment Income
4%
3%
4%
3%
2%
Pre Tax
29%
32%
33%
35%
36%
Net Income
18%
20%
21%
22%
22%
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SUMMARY FINANCIAL DATA
(in millions of dollars, except per share)
(represented as % of revenue)
First Half
2002
Total Revenue
2003
2002
2003
$42.4 $52.1 100% 100%
Gross Profit
25.7
29.9
59%
54%
Operating Income
14.4
17.2
33%
33%
Investment Income
0.7
0.6
2%
1%
15.1
17.8
35%
34%
9.5
11.0
22%
21%
Pre Tax
Net Income
Per Share (diluted)
$0.62 $0.72
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FINANCING
IPO
Second Offering
Stockholders
CEO Lopez and Family
Other Officers/Directors
Others over 5%
March 1992
June 1995
10%
1%
44%
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SEASONALITY PERCENT OF ANNUAL SALES
32%
30%
28%
26%
24%
22%
20%
Q1
1994
1995
Q2
1996
1997
Q3
1998
1999
Q4
2000
2001
2002
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INVESTMENT HIGHLIGHTS
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The leader in proprietary IV connectors
Establishing a new custom IV systems market
Strong balance sheet
Comprehensive growth strategy
Seasoned management team
World class manufacturing
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