Q3 2021 ICU Medical Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by all conference will begin momentarily. Thank you for standing by.
Greetings and welcome to the ICU Medical incorporated third quarter 2021 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder, this conference being recorded.
I would now like to turn the conference over to your host today, Mr. John Mills managing partner. Thank you you May proceed.
Great. Thank you Latanya. Good afternoon, everyone. Thank you for joining us today to discuss the ICU medical financial results for the third quarter 2021.
On the call today, representing ICU medical is Vivek Jain Chief Executive Officer, and Chairman and Brian Bonnell, Chief Financial Officer.
I wanted to let everyone know we have a presentation accompanying today's prepared remarks to view. The presentation. Please go to our investor page and click on events calendar and it will be end of the third quarter 2021 events.
Before we start our prepared remarks I want to touch upon any forward looking statements made during the call, including beliefs and expectations about the company's future results. Please be aware they are based on the best available information to management and assumptions that are reasonable.
Statements are not intended to be a full representation of future results and are subject to risks and uncertainties.
Results may differ materially from management's current expectations.
We refer all of you to the company's SEC filings for more detailed information on the risks and uncertainties that have a direct bearing on operating results and financial position.
Please note that during today's call. We will also discuss non-GAAP financial measures, including results on adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into ICU medical's ongoing results of operations, particularly when comparing underlying results from period to period.
We've also included a reconciliation of these non-GAAP measures in today's release and provided as much detail as possible on any addendums that are added back.
And with that it's my pleasure to turn the call over to Vivek.
Thanks, John Good afternoon, everybody and we hope you and your families are all well.
It's been a busy 90 days for us since the last call with the resolution of our Pfizer dispute the announced acquisition of Smiths medical and a record or near record sales levels in our most differentiated businesses all of which aligns with our comments on our last few calls about it being a fluid environment.
The volatility in the U S supply chain and in hospital census for our customers didn't make it a bit more challenging quarter operationally and the normalcy. We described on our Q2 call.
Q3 for US was really about meaningful increases in U S volumes and good stability or small improvements in the international markets like everyone in our industry. We want to start first by thanking all of our customers and their frontline workers for trusting us to serve you. During these times and it's been a great to see again, our teams face to face.
Around the world and to meet some of our soon to be colleagues from Smiths medical life.
While results were generally in line with our previous comments, we wanted to use the time today on the call to comment on the intra quarter trends and drivers of our business and try to explain some of the growth we had that was slightly above our expectations.
Then relate that to any impacts on near term business and at least our current feelings about next year in each segment.
Try to sketch out how inflation is impacted us at a high level relative to our budget for the year.
Provide an update on the Smiths medical transaction as well as our normal housekeeping items of which there are not many and.
And book in the scenarios, we see post deal and comment on the criteria by which really judging ourselves post the Smiths medical acquisition and given the transaction. We can pass on the capital deployment comments, we have decided for awhile.
The short story on Q3 is as follows as we previewed on the last call. We did see sequential revenue growth in our most differentiated business segments.
And stability in IV solutions on a year over year basis. This resulted in a reported and constant currency sales increase of 8% driven by market share gains and increased utilization and IV systems and IV consumables, but was also likely helped with some pandemic ordering in the context of a difficult supply chain.
We finished the quarter with $328 million and adjusted revenue adjusted EBITDA came in at $72 million and adjusted EPS was $2 seven.
It was a clean quarter again, except for some costs related to the transaction and it highlighted the power mix in our operating improvements as EBITDA improved but it also illustrated some of the additional costs, we are bearing as gross margins could have been higher.
We had an extremely strong quarter of free cash flow generation of $62 million and finished with $545 million of cash on our balance sheet as operational improvements materialized and restructuring and integration costs have dramatically reduced.
When looking deeper at the results it was really a big uptick in the U S business sequentially from Q2 to Q3 that drove the performance more than the international markets, where performance was fine relative to Q2 with either small sequential gains or neutral.
As we previewed on the last call Asia, Europe, and Latam all had good results on a year over year basis, because Q3, 2020 was really low but nothing was dramatic sequentially.
We are most tilted to the U S market, where we're dependent on admissions in electives and again, we saw procedures is pretty solid in admissions is okay.
I know there's been a wide range of commentary here from all the companies, but the simple message from US is our U S customers are busy managing COVID-19 spikes and the day to day procedures.
So let's go through the businesses quickly and then come back to discuss the current environment.
Starting as usual with infusion consumables, which is our largest business infusion consumables had revenues of $145 million, which was a 25% increase year over year on a reported basis and 24% on a constant currency basis. The U S market grew just a shade under 20% on a year over year basis in the international markets, where even.
Higher due to low volumes last year.
Core IV therapy grew globally over 20% and oncology was over 30% in both had strong sequential growth in the U S market, which is extremely important to us we.
We had talked on the previous call about feeling positive about the U S market and our growth products setting up well for the rest of the year and then the rest of the world opening up.
Now as to the question of why it was this much.
First and most importantly, we've improved our position in the market have implemented new business second we believe there was some pandemic ordering which was really a combination of COVID-19 spikes and part of the country combined with some industry shortages and a general wariness about the supply chain, which probably caused wholesalers and direct customers.
To hit the order button a bit more than normal.
Really difficult to know exactly how much of this contributed but we would rather talk about this now versus coming back to explain distributor customer Destocking later.
This is primarily applies to the U S. IV therapy portion of consumables, we think the actual run rate is somewhere between Q2 and Q3 of this year and we're not exactly sure when any extra inventory in the channel will burn off the 2020 comps are not meaningful as the business was so impacted by the pandemic last year, but going forward into 2022.
We continue to feel optimistic about this segment with it being a bigger business with growth at or above market rates.
Moving to infusion systems, which is primarily our LDP pumps and associated dedicated sets. This segment to $91 million and adjusted revenue, which was an increase of 3% on both reported and constant currency basis on.
On a year over year basis, the increase was due to the implementation of competitive pumps earlier in the year, a little more demand due to COVID-19 spikes in pandemic ordering a dedicated sets and that was.
And that was with the non LBP products declining almost $5 million year over year in the quarter.
On the last call. We said, we had a great quarter of competitive installations in Q2 of 2021 and those pumps are now active in the market.
It's been hard to follow exactly what's been happening in pumps between the loss of installed base in the first two years when we bought the Hospira business the.
The decrease in non LDP products and the growth in LDP.
Let me try to give a few facts that may help to make this clear.
First if you go back to our comments in 2019, we were talking about our installed base of LDP pumps bottoming out in the middle of 2019.
Today as compared to mid 2019, our U S. LBP installed base is about 20% larger and LDP revenues are more than 10% larger reflecting our 50 50 geographic mix.
Second at the business level, we've had a decline of almost $35 million and the non <unk> products since we bought the business we've.
We've had the best year to date of competitive LBP installations. Since we've owned the business and have a strong backlog heading into Q4.
The obvious question is where does this show up on the P&L and it shows up over time as we begin to get the dedicated disposables and software revenue associated with these pumps, we continue to not see capital as a customer constraint rather just the issues in the markets of nursing and labor shortages that our customers and fatigue from Covid, but we still believe relative to our size there.
Solid competitive opportunity and we're focused on commercial execution here. We believe this business has a larger business in 2022, where we do not have to speak about non LBP products declines anymore.
Finishing the segment discussion with infusion solutions, we had $81 million in adjusted revenue or a decrease of 6% year over year on a reported and constant currency basis nothing.
Nothing really unusual during the quarter with sales very balanced and.
Versus Q2, which had a lot more intra quarter volatility.
We continue to believe the quality of our customer book has improved with US holding the best list of sustainable relationships versus the day, we bought the business and the entire industry has moved forward into renewals of long term contracts the volatility in the supply chain and labor shortages transportation costs and raw materials was felt by US here in Q3, So we did not have as.
From a production environment as in Q2.
As a reminder, with Covid spiking in the summer of 2020, we moved our annual plant maintenance shutdown in Q4, and it happened last month, which does have an impact on margins like it does every year and Brian will go through that we continue to believe this business annualized is a plus or minus $80 million a quarter.
Okay, obviously, the topic of supply chain and inflation is on everyone's mind.
The facts on the freight backup are all true and even when turning onto <unk> South here in San Clemente, you can see cargo freighters out on the water 40 miles south of long Beach, which we've never seen before.
We wanted to give a bit more color to add to the last call and the economic impact to us in 2021, and how to think about it for the future.
To make the math really simple this year, we will sell somewhere on the order of $70 million more in consumable sales across IV consumables and dedicated sets even with a conservative assumption on contribution margin, we would expect half of that to flow through to the income statement.
But we will only capture about half or so of that contribution in 2021, yes normal cost around <unk> and health care costs did increase a bit over 2020, but the rest of the impact of increases in transportation, particularly around fuel expediting.
And raw materials and labor on the last call. We said labor was permanent and we continue to believe that the harder item to know is what is really permanent on the other categories. We find ourselves asking the question of why some of these raw material and transportation services are inherently materially more valuable over the long term than they were before the pandemic, particularly as a total.
Utilization for health care end markets is still below historical levels in aggregate.
Obviously some of these costs are indexed to CPI, but we believe in the markets and just as we experienced in our own IV solutions business when capacity increases pricing rationalize as and when there is shortage to markets penalized. So for us it's about trying to get price improvement where we can.
Trying to illustrate to customers the need to have some of these cost index and ultimately to just write it out serve customers with a belief that supply and demand will normalize overtime.
Moving on to our normal housekeeping updates commercially.
More of the World is open for live customer conversations at any moment since the pandemic started our commercial teams are out installing new business and helping customers manage the volatility in the supply chain.
Nothing new on quality, we had a light quarter for audits et cetera.
Operationally I think the comments on the supply chain I just covered.
Went through it but our fulfillment rates dipped a bit in Q3 from the very high levels. In Q2, we have been working to ensure that all the high running items are secure and those that customers need daily are prioritized and some of the more unique custom items had to take a back seat in Q3, which is substantial.
Demand increase we saw in consumables.
On the Smiths medical transaction.
Late last month the <unk>.
Scott Rodino or HSR waiting period in the U S expired with no issuance of a second request by the FTC.
While the FTC reserves its right to take further action. This is a key milestone to clear the way for a successful closing.
We're in the process of securing all remaining global regulatory approvals required for closing and the Smith's shareholder meeting to vote on the transaction is currently scheduled for November 17th. In addition, our integration planning management office is now getting up and running with teams from both organizations with the goal of preparing for a swift effective combination once.
The deal closes, which we expect to be as early as practical in the new year.
We're pleased that after a reset in 2019, we have gotten back to strong cash flow generation.
But with the volatility in the supply chain, we have gotten a bit too lean in some areas of working capital in inventory and we probably need to put a little cash back into buffer the system.
Q3, EBITDA margins show the power of more disposables in the mix as we laid out on our last call and the results of our focus on the high hanging fruits from our Hospira integration.
And we're about to start running up that hill again to drive value out of the next integration with Smith.
The income statement will get cloudy next year with a lot of new businesses to be added in integration costs et cetera.
Before that happens we did want to go back and recite the criteria in how we judge ourselves as it will apply to the Newco also post integration.
At the end of the day the score we measure under our ownership is are the business is larger or smaller and more or less profitable. That's the ultimate score score regardless of how hard we've worked on.
On the last call. We said we were getting into a more normal revenue environment and we've said for a while we can grow our valuable items of consumables and dedicated sets on a year over year basis.
From a revenue perspective, our IV consumables segment in 2021 will be the largest it has ever been and we feel good about that continuing into 2022.
We believe the same about our infusion systems segment as our U S and global install base of LDP infusion pumps and related disposals will be the largest under our ownership at the end of 2021.
We have improved profitability in 'twenty, one versus 'twenty and while the new businesses will get integrated quickly operation in the eye and on the P&L. It is certainly our goal to keep improving profitability and this is the case without all the regions, having improved utilization dynamics or new products, which could be additive.
In the short to medium term with Swiss medical just like Hospira, we see two basic bookend scenarios for the acquisition.
And the best case, we'll have better execution to improve Smith topline performance drive operational improvements and focus on cash conversions and returns.
And the worst case, we continue to fight headwinds on Smiths Medical's top line, but we can drive operational improvement and generate solid cash returns over time, either one of those cases is value, creating relative to the transaction math and once the integration actions have been taken returns could be generated quickly but.
But over the long term the same compounding criteria implies or the business is bigger or smaller and more profitable and our team understands that point.
While the pandemic introduced substantial volatility.
Into the markets strategically, we do think the weaknesses it exposed in the health care supply chain add to the argument for all participants to be healthy and stable, which has been our commentary since we became a full line supplier.
Smiths medical also produces essential items that require significant clinical training capital expenditures and in general are items that customers do not want to switch unless they have to the.
The combination allows us to become a broader U S based manufacturer and bring our focus on vertical integration and redundancy to our collective network.
We do believe the market broadly defined does not want a winner take all set up in these essential items categories and the combination positions us better.
For now we focus on what we can control in these moments having the best list of supportive healthy customers win new important customers, while we wait for volumes normalize around the globe.
Keeping our employees safe, while delivering the best operational stability for our customers.
Making sure we drive differentiation in our most valuable categories.
Using our liquidity and taking risk to make the company more relevant to customers and focusing on our own execution.
Our company has emerged stronger from all the events of the last few years.
You to our shareholders through a patient on the time it took to deploy capital and use our liquidity. Thank you to all the employees customers suppliers and frontline health care workers, our company appreciates the role each of US has had to play.
And with that I'll turn it over to Brian.
Thanks, Vivek and good afternoon, everyone to begin I'll first walk down the P&L and discuss our results for the third quarter, and then talk a little about cash flow and the balance sheet.
So starting with the revenue line, our third quarter 2021, GAAP revenue was $336 million compared to $319 million last year, which is up 5% on both a reported and constant currency basis.
For your reference the 2020 in 2021 adjusted revenue figures, which exclude contract manufacturing sales to Pfizer can be found on slide number three of the presentation.
Our adjusted revenue for the quarter was $328 million compared to $303 million last year, which is up 8% on both a reported and constant currency basis.
Fusion consumables was up 25% or 24% on a constant currency basis infusion systems was up 3% on both a reported and constant currency basis IV solutions was down 6% on both a reported and constant currency basis and critical care was down 8% on both a rich.
<unk> and constant currency basis.
As you can see from slide number four of the presentation for the third quarter. Our adjusted gross margin was 40%. This was in line with our expectations and represents an improvement of two percentage points to last year's third quarter gross margin.
And sequentially.
It was the same as this years second quarter.
Compared to last year, the higher gross margin reflects the benefits of favorable product mix coming from faster growth in our consumables business as well as higher dedicated disposable volumes within infusion systems offset somewhat by inflationary cost increases.
At the time, we provided our original guidance. We said we expected adjusted gross margin for full year 2021 to be in the range of 38% to 39% and we now expect the full year to be at the high end of that range.
But as we've previously mentioned the specific adjusted gross margin rate for any given quarter will fluctuate based on the level and mix of infusion systems hardware installations, and the timing of our annual plant shutdowns in the fourth quarter gross margin rate will reflect the costs related to the scheduled maintenance shutdown of our Austin.
Plant.
Moving further down the P&L SG&A expense of $75 million in Q3 was in line with our expectations and represents a year over year increase of 6% as last year's third quarter spending was below normal levels due to COVID-19 restrictions.
The year over year increase reflects higher selling expenses from increased sales along with increased travel promotional and incentive compensation expenses.
R&D expense was $12 million for the quarter up 21% year over year.
The increased spending was in line with our expectations and reflected timing of spending on a few larger projects.
Restructuring integration and strategic transaction expenses were $2 million in the quarter versus $4 million last year.
The third quarter 2021 spending mostly consisted of expenses related to the Smiths medical acquisition, along with onetime regulatory initiatives, we expect full year spend to be around $15 million.
Adjusted diluted earnings per share for the third quarter of 2021 were $2 seven compared to $1 90 last year, an increase of 9%.
Diluted shares outstanding for the quarter were $21 7 million.
And finally, adjusted EBITDA for Q3 increased 16% to $72 million compared.
Compared to $62 million last year.
Now moving onto cash flow and the balance sheet for the quarter free cash flow was $62 million in Q3 was another strong quarter of cash flow generation driven by a combination of solid earnings.
Declining restructuring and integration spending and continued strong working capital management with both accounts receivable and inventory at their lowest level in several years.
Going forward for <unk>, we expect DSO to generally remain around current levels.
But we may see a slight ramp up in inventory over the next several quarters to ensure we can successfully onboard and support new business and carry even more safety stock to buffer any supply chain disruptions.
The strong Q3 cash flow allowed us to end the quarter with $545 million in cash and investments on the balance sheet. Additionally, it is worth noting that the $26 million earn out payment for pursuit vascular was made subsequent to the end of the quarter in the month of October.
In the third quarter, we spent $17 million on Capex for general maintenance and capacity expansion at our facilities as well as the placement of revenue generating infusion pumps with customers outside of the U S. We expect our capex spending in Q4 to increase relative to the Q3 level as a result.
The annual scheduled maintenance shutdown in Austin and for the full year, we continue to expect to spend around $75 million.
Now onto the topic of guidance last quarter, we narrowed our full year adjusted EBITDA guidance to a range of $250 million to $260 million and raised our full year adjusted EPS guidance range to $6 80.
$207 20 per share given the strong third quarter performance, we now expect to finish the year at the high end of these ranges for both adjusted EBITDA and adjusted EPS.
As it relates specifically to the fourth quarter of this year, we expect the P&L to look different from the third quarter due to two specific items. The first is the higher than anticipated demand that we experienced in the third quarter, which we don't expect to recur in the fourth quarter.
The second is approximately $5 million of additional costs related to the annual scheduled maintenance shutdown of our Austin plant.
For modeling purposes, the adjusted EPS guidance continues to assume a tax rate of 21% in the fourth quarter.
So to summarize our results for the third quarter were very much in line with expectations plus some benefit from pandemic ordering we saw continued sequential topline growth in our most valuable business unit of consumables saw the highest level of plum dedicated sets since the hospira.
Acquisition.
Recorded the highest adjusted adjusted gross margin since the third quarter of 2019.
And generated strong free cash flow overall, we're pleased with the business performance in the third quarter and feel good about our opportunity to drive growth in our most differentiated businesses going forward.
And with that I'd like to turn the call over for any questions.
Thank you at this time, we will conduct a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Information tone will indicate your line is in the question queue.
Q3 and Q4.
Right.
So we can't tell you exactly when that's going to be I'm, sorry between Q2 and Q3, we can't tell you exactly when that's going to come out because of how weird. It is out there, but that that is sitting there and maybe just a little bit in the other businesses.
But then also the plant shutdown right. So.
And that's.
That's why we're we're kind of thing.
Thank you for.
Oh that makes sense and then just sounds every year semiannual to meander numbers aren't we talking right I didn't know you guys have talked about it a lot.
During the last shut down too.
That makes a lot of sense. So just you mentioned, 20% you're base.
Basis grown 20% of U S based on the on the LBP pumps.
Could you sort of help us that has that number like they started the muscle growing pretty significantly this year than two I imagine right. That's sort of a two year period right two and a half year period, where bottom. That's that's right I mean, I think again.
Again, everybody is if you listen every all the competitors like we everybody has a little bit different way of how they count market share, but I think at some point, we thought we got.
Until low teens and we.
Improved on that by 20% alright.
That would be right.
And just to clarify the the the supply chain.
The example, you gave them so 70 million consumables, a normal you get 30 35, a that would fall on the bottom line now it's only.
Maybe 15 24 at the bottom once you're actually on consumables alone are losing.
<unk> if you got it is showing had just said.
You ballpark right exactly a little bit more than 30, right should be contribution, but plus 20, almost 20 or something on the bottom line, but usually get all of that and the difference is exactly the inflation stuff now the inflation may not actually be in the consumables business because it weighs the least disease to move around et cetera.
Right, but but that's just about the good example, and that's it and I'm sure. There's more inflationary pressures other areas begin pay that just right I mean, that's not the only piece here.
Right using that as an example, but I'm sure there's no.
Oh Wow I was using the examples of the cost is coming in three primary buckets. The costs came in and a bunch of this is it already.
Alright, but it is fluid out there.
Is the three buckets as Labour trends, particularly if you have to expedite trends it's.
It's brutal right now and.
Raw materials and the unknown is there's supply imbalance on both capacity on the train side and on some of these raw material production and.
Why why are those inherently more valuable today, if there's less global debate, yes, there's been production interruptions, yes things there is a.
Core inflation, but excess and some of these categories seems a bit much to US right. Okay. And then just less thing like just on the on the timing of the Smiths potential closure.
Mentioned he got the Hearts covered Daniel is Passow P. C approval the shareholder votes on the 17th.
Think I originally when you did the axis and you said by the middle of 2022. So it seems like that's running ahead of schedule maybe early in the year, maybe some time early in Q1 is that a better.
Guesstimate for timing.
Yeah, I mean, I think one one we're happy and pleased that.
Think.
Things are being considered.
Constructive way and Ah.
Soon as possible.
As soon as possible.
Okay, great. Thanks, I appreciate it.
<unk>.
Our next question comes from Matthew Michelle with Keybanc. Please proceed.
Good afternoon, guys and congratulations on one of the better relatively inline colors.
I've seen.
We've been we've been so busy man.
We have an ex even look that closely with everybody has done so.
I'll do the broader market not just us, but I was referring to you relatively in line with expectations.
Not like online you are above by it you are above my expectations.
500, everybody gets a 15 minutes.
So you guys have a lot of competitive momentum over the last couple of years and I think this has been building towards a moment, where you're you're implementing I'm finding a lot of new pumps.
Winning uhm.
Consumables and.
And really kind of executing on a lot of what's been going on over the last couple of years.
How much of this would you say is catch up over some stuff that may have been delayed.
From implementation of Covid and how do you kind of think about like your pipeline, Unlike new business activity going into the next year.
Sure.
I don't know if I would call it catch up a little bit on some of the.
Full line implementations that were delayed certainly in the back half of last year that got pushed to this year. That's why the competitive insoles. There. So there's there's some portion of that but.
In the other areas in oncology in.
Some of the regular core IV therapy areas, they're just been a regular day to day wins and market expansions that have been happening those haven't been pent up I think it's.
Just finally, we got we had to get through all the solution stuff two years ago get contracts resigned I think we did a lot of that and that finally, let our teams have time to go out there and call now it's a different challenges.
We have a little bit of.
Run on the store and some of these items and we've got to make sure. We can deliver from the supply chain standpoints. So it puts a lot of stress we budget for a certain amount of growth and when you're well exceed that with all the stuff about our that puts a lot of strain on the system and somewhere feeling that a little bit in terms of the.
The pipeline I think we tried to preview a little bit when we felt that each of the big.
Profit driving businesses and consumables and palms, we felt we feel like we're in pretty good shape.
Bigger and more relevant next year than they are this year.
Excellent.
And then I guess the important question around.
The combination of.
Yourself and Smith, I think you had indicated pro forma EPS approaching $11.
You have now reported your third quarters.
At least at least your numbers are moving up a little bit they've reported there half year numbers.
It's only been a couple of months of how comfortable are you still with the <unk>.
$7 of pro forma EPS approaching 11.
Yes.
I would say, we don't have a whole lot more information as of today than we did in.
Early September we had the call right because of the way the process worked with an alternative transaction.
We didn't see a lot of information.
[noise] at the depth, we would want so I would say our point of view is the same not because we are more confident or less confident just because we haven't really seen anything materially new in the interim right. We haven't seen monthly performance since then or anything right. So we're relying on what we thought then.
Okay. Thank.
Thank you very much.
Excellent.
We will take our last question from Jason Beckford with Raymond James. Please proceed.
Hi, good afternoon.
So I have a couple fourthquarter questions and then a couple of questions I'm 22. So.
Brian.
Just the fourth quarter implied that.
My back of the envelope is or how it applies about 63 million.
Relative to three two down about 9 million 5 million do too.
Kind of the manufacturing in Austin, what are the other weights if I just look at sequentially EBITA.
During the biggest second one there Jason is if there was a little bit access that stocked up by distributors in the quarter because of shortages in the industry right. If we had more sales and we frankly expected or we could itemize what customers they made sense too.
If that came out in queue for.
That would penalize those businesses right in the corner. So that's that's really the biggest are a little bit of some of the inflation is and it's a little bit more on that covenant Q4, but the biggest driver is exactly the plant shutdown and.
If there was any it.
Right and nobody nobody wants to talk about it when it's happening everybody loves saying on a great sales, Florida and then like all of those Destocking. When you don't have goods, rather just say, there's some of it now.
Debate about it.
Okay.
Just on that I guess.
The three to 4 million of overage and consumables I think you mentioned, it's related to supply chain issue. So.
This over ordering on the sake of your customers or as one of your competitors had issue that steered more business your way.
I think it might be a little bit of both.
Okay, a little bit about I mean, obviously, we're heavy in some regions of the country that really had covered spike and so there was a lot of get what you can get your hands on in some spots and.
Other people may have been down on a few items.
Shifted our way and I'm not sure I'd call that necessarily permanent permanent business or the industry was just short and we were the beneficiaries of that so obviously, we tried to make it a permanent business but.
We remember what facility.
Yes.
Okay.
And then on 22 I think for consumables, you mentioned that you would.
You hope to grow at or above market, just remind us what is market growth inconsolable.
I mean, clearly this year is not market close because of what the silliness of last year.
Mid single digits, something like that is if you if you add in the higher growth pieces from oncology and some of the other specialty items in the regular Ivy and like that but it's getting to be a big business now that's good yeah. Okay.
Okay and then just also.
With respect to the commentary for for infusion systems on 22. It. Thank you said it would grow.
Is the expectation that your non LBP businesses is flat and 22.
No I think we just don't have to talk about anymore. It's gotten small enough and we think we have enough growth now with a large installed base and the wins, we think they're going to implemented we never have to say those words again.
Okay.
Okay and just on the survey that's really not sorry, that's just very muddied up the waters of some two things money up the weather and Lbp's one when we bought Hospira there were there were wins.
They're wins by the competitor out of the hospital installed base. It hadn't happened yet so we actually went down the first two years right now we're at the bottom out and go back confidence that we built back up off that off that based that's made it hard to tell because it was shrinkage and then.
And then the non LBP stuff right really urgent so that's all kind of behind us now.
Okay.
Okay, and just lastly on on pumps.
Covered historically or at least the last year and a half has been a source of hesitation from a pump deployment standpoint.
Do you think we're past that now and kind of a new headwind here is just kind of.
Sure.
Labor shortage issues at the hospital level, you think again do you think kind of Covid I hate to say it is behind us, but is that still a source of hesitation from a from a deployment standpoint yeah.
I mean, I don't know if you'd call. It just coven I'd say, it's like it's a hangover Covenanters fatigued right. It just exhaustion, if you're short staffed and.
Having to make a bunch of changes right now if you ever need to do it in your apartment or did you do it people are doing we're installing everyday out there but.
It is a factor.
Victor.
So the.
The more normal the world's can get the better off we'll be on this topic I don't know if oncology COVID-19 I'd call. It like the aftermath right the labour knock on effects and the exhaustion knock on effects et cetera.
Okay Alright.
Alright, thank you.
Thanks, guys appreciate it and I got a lot of a lot of companies are reporting today. Thank you for making time for US we appreciate it very much.
Thank you. This does conclude today's teleconference. You may disconnect. Your mind at this time and thank you for your participation.
Okay. Thanks, everybody. We we appreciate it from the ICU side, we look for in a one last call is.
Regular ico and from there and it'll be a different different script in the future. Thanks Bye.