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ICU MEDICAL, INC.
2
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.
3
AGENDA
• Company Overview
• IV Industry Overview
• Products
• Growth Strategy
• Marketing and Distribution
• Manufacturing
• Financial History
• Investment Highlights
4
COMPANY OVERVIEW
• Core competence– Product innovation
• IV disposables
– Manufacturing innovation• Custom IV systems
• Consistent growth
• Superior distribution
• High barriers to entry
5
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
IV SYSTEMSINDUSTRY OVERVIEW
7
MARKET SHARE -IV SOLUTIONS & SETS
Abbott45%
B.Braun10% Baxter
40%
8
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
ICU MEDICAL, INC.PRODUCTS
10
PRODUCT OVERVIEW
• Proprietary disposable
medical connection systems
for use in intravenous therapy
• Custom IV systems
• Blood collection needles
11
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
12
DIVERSIFIED REVENUE MIX(Excludes all non product revenue)
CLAVE 64%Custom
System20%
Punctur- Guard
7%
Other 5%
CLC 20004%
13
The CLAVE way
The old way
The CLAVE way
14
CLAVE® SALES
$19.5
$27.5
$32.1
$39.7
$51.1
$58.5
$32.1 $31.1
$0
$10
$20
$30
$40
$50
$60
1997 1998 1999 2000 2001 2002 H1 '02 H1 '03
Millions
15CLC2000™
16
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
17PUNCTUR-GUARD®
18PUNCTUR-GUARD®
19
PUNCTUR-GUARD®
• Safety needles for blood collection
• Blood Collection Needle
• “Winged Set”
20
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
21
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
22
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
23Custom 1o2™ I.V. Set
24
25
26
27
CUSTOM IV SYSTEM SALES
$1.4
$3.2
$5.3
$6.9
$9.4
$1.2
$15.2
$5.7$6.9
$2.1
$9.5
$4.3
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
1997 1998 1999 2000 2001 2002 H1 '02 H1 '03
All
Setsource
Millions
5% 8% 11% 12% 14% 18% 16% 20% % of Sales
28
GROWTH STRATEGY
• Mass customization
• Capitalize on existing products
• New products
• Strategic alliances and acquisitions
• Low cost production
Marketing and
Distribution
30
SALES CHANNELS
First Half
1999 2000 2001 2002 H1 ‘02 H1
‘03
• OEMs $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 $69.1 $87.8 $43.6 $52.0
31
THE ICU PRODUCT SPECIALIST
• ICU representative in the field
• Driving, motivating & educating distributor
representatives
• Rapid product introduction & feedback
• Intelligence gathering
Manufacturing
33
MANUFACTURING HIGHLIGHTS
• Manufacturing and Assembly:– 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
Financial Overview
35
BALANCE SHEETJune 30, 2003
Cash and
investments $ 69.6
Other current assets 32.0
101.6
Fixed assets and other 55.4
$157.0
Current Liabilities $ 10.0
Debt -0-
Equity 147.0
$157.0
(in millions of dollars)
36
SUMMARY FINANCIAL DATA
1998 1999 2000 2001 2002
Total Revenue $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
Per Share (diluted) $0.57 $0.72 $0.87 $1.06 $1.28
(in millions of dollars, except per share)
37
SUMMARY FINANCIAL DATA
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%
(represented as % of revenue)
38
SUMMARY FINANCIAL DATA
2002 2003 2002 2003
Total Revenue $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%
Pre Tax 15.1 17.8 35% 34%
Net Income 9.5 11.0 22% 21%
Per Share (diluted) $0.62 $0.72
First Half
(in millions of dollars, except per share)
(represented as % of revenue)
39
FINANCING
IPO March 1992
Second Offering June 1995
Stockholders
CEO Lopez and Family 10%
Other Officers/Directors 1%
Others over 5% 44%
40
SEASONALITY -PERCENT OF ANNUAL SALES
20%
22%
24%
26%
28%
30%
32%
Q 1 Q 2 Q 3 Q 4
1994 1995 1996 1997 1998 1999 2000 2001 2002
41
INVESTMENT HIGHLIGHTS
• 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