Company of the Week - November 9, 2008 - ICU Medical

The company’s niche is single-use medical and surgical products.
Its line includes:
• Caterers and disposable connectors that cut the chances of catheter-related infections
• Safe needles to prevent accidental harm to practitioners
• Heart-monitoring systems
• Devices for administering intravenous cancer drugs without the risk of contamination to the drug or exposure of health workers to dangerous spray or vapor.
• Customized intravenous sets built to order for the health professionals who use them to administer infused drugs to patients.

The company focuses on niches where there’s no competition. That’s an interesting concept. Instead of going after markets already dominated by health industry giants, their philosophy has been to attack the empty markets. The company has competition – bummer!- from Baxter International, Cardinal Health, Becton Dickinson, Fresenius, Edwards Lifesciences, Merit Medical and Hospira, but none of them competes across all of ICU’s product lines.It’s quite a recession proof company, as they are not affected by consumer consumption. On Oct. 16, the company raised guidance for fiscal 2008 revenue to $199 million to $203 million. Its previous target was $190 million to $200 million. Earnings expectations are of $1.48 to $1.53, up from $1.35 to $1.45. It also reported a 68% third-quarter earnings increase, pushing the stock from 27 to 35. The company sits on $100 million in cash, but the investors are more excited about a deal ICU Medical has made with Premier, a distributor of health and surgical products to hospitals. Premier is a bulk buyer, giving hospitals, clinics and group practices extra purchasing power. Starting in 2009, Premier will market and distribute products from ICU. The deal will give ICU access to 2,000 hospitals and 50,000 other sites it could not previously reach. The deal was signed on August 7, and it runs for five years. Dr. George Lopez, the company CEO, is focusing attention to expanding its European sales, where he sees a lot of opportunity. It’s building a plant in Slovakia, to be able to deliver anywhere in Europe within 48-72 hours.