ICU Medical's Management Presents at 2013 Annual Meeting of Stockholders Conference (Transcript)

| About: ICU Medical, (ICUI)

ICU Medical, Inc. (NASDAQ:ICUI)

2013 Annual Meeting of Stockholders Conference Call

May 10, 2013 12:00 pm ET

Executives

Scott E. Lamb – Chief Financial Officer

Robert M. Mattson Jr. – Senior Counsel at Morrison and Foerster LLP

Operator

Good morning and welcome to the 2013 Annual Meeting of Stockholders of ICU Medical, Inc. At this time, I would like to inform you that this conference is being recorded for rebroadcast and then all participants are in a listen-only mode. As a request of the company, we will open up the meeting for questions-and-answers after all four proposals have been introduced, and again after the presentation.

I will now turn the meeting over to Mr. Lamb, who will preside over this meeting.

Scott E. Lamb

Ladies and gentlemen, the annual meeting of stockholders of ICU Medical, Inc. will come to order. I am Scott Lamb, Chief Financial Officer, Treasurer and Secretary of ICU Medical. I welcome you to this annual meeting of stockholders. I would like to introduce the Directors of ICU Medical, Inc., Dr. George A. Lopez, Chairman, President and Chief Executive Officer of ICU Medical; Jack W Brown, former Chairman of the Board and President of Gish Biomedical, Inc.; John J. Connors, Patent Attorney; Dr. Michael T. Kovalchik, physician and Director of the DaVita Healthcare Kidney Center, Torrington, Connecticut and Chairman of the Ethics Committee, Charlotte Hungerford Hospital, Torrington, Connecticut; Joseph R. Saucedo, Chairman and President of Bolsa Resources; Dr. Richard H. Sherman, physician Internal Medicine and Cardiology Bayhealth Medical Center, Milford Memorial Hospital, Milford, Delaware; and Dr. Robert S. Swinney, Intensive Care Unit Physician Specialist and member of the faculty of the LAC-USC Medical Center. In addition (inaudible), partner of the Deloitte & Touche LLP, the company’s auditors for 2012 is on the line with us and will be available to receive and answer your questions. Also on the line are Mr. Robert Mattson of Morrison Foerster LLP, the company’s Counsel and Audrey Foote from Broadridge, our tabulation agent. Ms. Foote has been appointed as the Inspector of Elections for this meeting.

As we have done for the past 11 years, this meeting is been entirely conducted by conference telephone call and on the Internet. We adopted this format to make it possible for more of our stockholders to participate in the meeting. The operator will now explain how shareholders can participate and ask questions.

Operator

At the request of the company, we will open the meeting for discussion after the proposal and again for question-and-answers after the presentation. (Operator Instructions)

Scott E. Lamb

At this point I will turn the meeting over to Robert Mattson.

Robert M. Mattson

Thank you, Scott. This meeting is being held pursuant to written notice mailed on April 3, 2013 to our stockholders of record at the close of business on March 18, 2013, which is the record date determined by the board of directors. All stockholders of record on that date are entitled to notice out and to vote after this meeting. We will be voting on the four matters identified in the proxy statement, which are; first, selection of two members of the Board of Directors to serve until the 2016 annual meeting of stockholders and until their successors are duly elected and qualified; second, re-approval of the 2008 performance-based incentive plan as amended; third, ratification of the appointment of Deloitte & Touche LLP, as our independent registered public accounting firm for the year ending December 31, 2013; and last, to hold an advisory vote to approve the compensation of the company’s named executive officers.

If you are a stockholder of record and wish to vote your shares directly as opposed by proxy, you must mark your votes on the prescribed form of ballot, making sure your control number that you received with your proxy card is on your ballot and then fax the ballot to the company at 949-366-4264, again that’s 949-366-4264. If you need a ballot, you can access the company’s website at www.icumed.com, then click on investors and finally click on the icon that says proxy voting ballot. It is now 9:07 AM and the polls are now open. The polls will close at 9:20 AM Pacific Daylight Time.

Mr. Lamb will now present the record as to the giving of notice for this meeting.

Scott E. Lamb

The company’s tabulation agent, Broadridge Financial Solutions has provided a certificate of mailings dated April 8, 2013, certifying that on April 3, 2013, at New York a notice of Annual Meeting Proxy Statement, annual report and proxy card were properly mailed to each stockholder of record as of March 18, 2013.

Robert M. Mattson

If there are no objections, the certificate of mailing will stand approved and the secretary will attach it to the minutes of this meeting. Inspector of Elections will now report as to proxies that have been received and the number of shares represented by proxy.

Unidentified Company Representative

All reports that are represented at this meeting by stockholders voting by proxies that have been received and due in proper form an aggregate of 14,098,173 shares of common stock out of a total of 14,569,656 shares of common stock outstanding on March 18, 2013. These constitute approximately 96.76% of the shares outstanding and entitled to vote at this meeting.

Scott E. Lamb

Having heard the report of the Inspector of Elections, I declare that a quorum is present and that the meeting is now regularly convened. We will now proceed to the transaction of business. The first side of the business is the election of directors. The board of directors nominated George A. Lopez, M.D. and Robert S. Swinney, M.D., to serve as Directors of ICU Medical until the 2016 annual meeting of stockholders and until their successors have been duly elected and qualified. No other nominations have been received in accordance with the terms of the company's dialog and I therefore declare that the nominees or Director are George A. Lopez, M.D. and Robert S. Swinney, M.D.

The second item of business is to reapprove the 2008 performance-based incentive plan as amended all as stated in your proxy statement. The third item of business is to ratify the selection of Deloitte & Touche LLP, as the independent registered public accounting firm for the company for the year ending December 31, 2013. A representative of Deloitte & Touche is present and is available to answer your questions.

The final item of business is to holding advisory vote to approve named executed officer compensation. This vote is required under SEC rules and is commonly known as, say on pay. The vote is advisory in nature and is not binding on the company. If there are any questions or comments regarding the election of directors, the re-approval of the 2008 performance-based incentive plan as amended, the ratification of the selection of Deloitte & Touche as the independent registered public accounting firm for the company or the advisory vote on named executive officer compensation. Now is the appropriate time to present them.

Operator

(Operator Instructions) And I'm showing no questions or comments.

Robert M. Mattson

Thank you. Since there are no questions, we will now vote on. The election of directors, the re-approval of the 2008 performance-based incentive plan as amended, the proposal to ratify the selection of Deloitte & Touche as the independent registered public accounting firm for the company and finally the advisory vote on named executive officer compensation. Each stockholder may vote the number of shares that he or she held of record on March 18, 2013. Any stockholder of record who wishes to vote by ballot should do so now. While we are waiting for the polls to close at 9:20 AM Pacific daylight time and the Inspector of Elections tabulate the vote, Mr. Lamb will present a short report on the company's cooperation.

Scott E. Lamb

Thank you, Bob. Before I begin, I would like to bring to your attention that during this presentation we will make forward-looking statements regarding the beliefs, expectations and hopes regarding the future of ICU Medical and its potential direction and prospects. Any statements related to ICU Medical's future performance, such as that we believe or expect something to occur are considered forward-looking, meaning that they are based on current expectations, estimates and projections about our industry, our beliefs and our assumptions. While we always do our best to give accurate and balanced presentations of future prospects, the information contained in these forward-looking statements may differ materially from actual events or results in the future. Information concerning the factors that could cause our actual results to differ is contained under the heading Risk Factors in our annual report on Form 10-K for the fiscal year 2012 and in our other reports filed with the SEC. All forward-looking statements are made as of today and we assume no obligation to update any such statements.

Fiscal year 2012 was another successful year for ICU Medical highlighted by strong financial performance and significant operating achievements. In 2012, our revenue increased to a record $316 million compared to $302 million in 2011. Net income for the fiscal year of 2012 totaled $41 million or $2.80 per diluted share. This includes a net $10.6 million pretax gain associated with the sale of the assets related to our Orbit product lines excluding the gain from the Orbit sale and the related tax expense our net income for the fiscal year ended December 31, 2011 was $36.7 million or $2.59 per diluted share. This compares to net income of $44 million or $3.15 per diluted share for the fiscal year ended December 31, 2011.

Focused on innovation in all of our target market remained a key strategic initiative during 2012. Resulting in successful launches of new products, they included but were not limited to Diana, an automated sterile compounding system for the oncology market and now replace a needlefree connector for infusion therapy market designed for use on new needle and pediatric patients.

At the end of 2012, we officially launched in the United States, Diana a user controlled automated sterile compounding system for the accurate, safe and efficient preparation of hazardous drug.

Unlike automated technologies that requires huge investments and do not fit within existing work flows, the Diana system cost effectively keeps pharmacists and technicians in control of the compounding process from beginning to end. The system fits under the herd of the pharmacy’s existing biological safety cabinet to protect clinicians from exposure to hazardous drugs and accidental needle pricks, while protecting the patient preparation from exposure to environmental contaminants.

Looking ahead in the remainder of 2013, we believe that our pipeline of new products and development, our enhanced product portfolio and our solid balance sheet position us well for profitable growth in 2013 and beyond.

Now, is there anyone has not had an opportunity to vote?

Robert M. Mattson

We will wait a few more minutes to make sure that people have the opportunity to submit their votes. All right, there has been no ballot submitted by fax and as a result at 9:17 AM, I am going to call the polls closed. And at this point Scott, I think it is appropriate to throw the meeting open for any questions from any stockholders.

Scott E. Lamb

Okay.

Question-and-Answer Session

Operator

Okay. The question-and-answer session will begin now. (Operator Instructions) and we do have a question from the line of [Philip Putnam]. Please state your question. (Operator Instructions)

Scott E. Lamb

Sorry, go ahead.

Operator

I apologize we do have a technical difficulty. (Operator Instructions) I apologize, thank you again for your patience. We do have a question from the line of [Philip Putnam]. Your line is open, please go ahead.

Unidentified Analyst

Yes, this is [Putnam]. I am a 90 year old stockholder who has a wife and a restaurant and I have a little garage. I have been a stockholder since the early, early days in fact I met with Dr. George Lopez and his home in Huntington Bay, Huntington Harbor at the very beginning of the company and I am actually trying to get my house in order and the days that the stock went up some $7, I turned on the computer and was advised that the company had contacted a financial outfit to look into the same of company and some four, five months earlier than that I was listening to the computer and I believe it was (inaudible) they talked this was an excellent company and that was a buyout situation and I thought it was somewhere around of $100. I know you can't comment on prices or anything, but I wonder if this is true so I can make plans accordingly. Thank you very much.

Scott E. Lamb

Thank you, [Mr. Putnam] I appreciate the question. It's our company's policy to not comment on market rumors or speculation.

Robert M. Mattson

Are there any other questions?

Operator

I'm showing no further questions at this time.

Scott E. Lamb

All right. Since there are no further questions I will turn the meeting over to the inspector of elections who has now prepared a report on the results of the election of directors.

Unidentified Company Representative

I have tabulated the votes cast on the election of directors and report that George A. Lopez, M.D. received 12,336,577 votes or 94.78% of the shares present or represented by proxy entitled to vote on the proposal for his appointment. Robert S. Swinney, M.D. received 12.332,781 votes or 94.75% of the shares present or represented by proxy and entitled to be voted on the proposal for his appointment.

Robert M. Mattson

I therefore declare George A. Lopez, M.D. and Robert S. Swinney, M.D. has been elected duly as Directors of ICU Medical to serve until the year 2016 annual meeting and until their successors have been duly elected and qualified.

Unidentified Company Representative

I have calculated the votes cast in the proposal for re-approval of the 2008 performance based incentive plan as amended. The proposal received the affirmative vote of 12,676,102 shares or 97.53% of the shares present or represented by proxy and entitled to be voted on the proposal.

Robert M. Mattson

I therefore declare that the proposal to re-approve the 2008 performance based incentive plan as amended has been approved.

Unidentified Company Representative

Tabulate the votes cast in the proposal to ratify the selection of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the year ended December 31, 2013. The proposal received the affirmative vote of 14,082,813 or 99.98% of the shares present or represented by proxy and entitled to be voted on the proposal.

Robert M. Mattson

I therefore declare that the proposal to ratify the selections of Deloitte & Touche LLP as the company’s independent registered public accounting firm for the year ending December 31, 2013 has been approved.

Unidentified Company Representative

I tabulated the votes cast on the non-binding approval on advisory basis of the compensation of the company’s named executive officers. The proposal received the affirmative vote of 12,241,889 shares or 94.69% of the shares present or represented by proxy and entitled to be voted on the proposal.

Robert M. Mattson

I therefore declare that the non-binding proposal to approve on an advisory basis the compensation of the company’s named executive officers has been approved. Is there any further business to come before the meeting? If not, I will turn the meeting back over to Mr. Lamb.

Scott E. Lamb

Before adjourning the meeting, I would like to tell you that management is committed to continuing the progress we have made and that we thank you for your continued support. The meeting is now adjourned.

Operator

Ladies and gentlemen, that concludes our meeting. Thank you for participating and have a nice day. All parties may now disconnect.

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