Q1 2025 ICU Medical Inc Earnings Call

Operator: The program is about to begin. Good day and welcome to the ICU Medical Inc first quarter 2025 earnings conference call. All participants will be in a listen only mode.

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Speaker Change: Good day and welcome to the ICU Medical Inc. First quarter 2025 earnings Conference call all participants will be in a listen only mode.

Operator: After today's presentation, there will be an opportunity to ask questions. Please note, today's event is being recorded.

Speaker Change: After today's presentation there'll be opportunity to ask questions. Please note. Today's event is being recorded I would like to now turn the conference over to John Mills. Please go ahead.

John Mills: I'd like to now turn the conference over to John Mills. Please go ahead. Thank you. Good afternoon, everyone.

John Mills: Thank you good afternoon, everyone. Thank you for joining us to discuss ICU Medical's financial results for the first quarter of 2025.

John Mills: Thank you for joining us to discuss ICU Medical's financial results for the first quarter of 2025.

John Mills: On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman, and Brian Bonnell, Chief Financial Officer. We wanted to let everyone know that 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 under the First Quarter 2025 event.

Vivek Jain: On the call today, representing ICU medical is Vivek Jain Chief Executive Officer, and Chairman and Brian <unk> Chief Financial Officer.

Vivek Jain: We 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 under the first quarter 2025 events.

John Mills: Before we start our prepared remarks, I want to touch upon any forward-looking statements made during the call, including belief 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. Such statements are not intended to be a full representation of future results and are subject to risk and uncertainty. Future results may differ materially from management's current expectations.

Vivek Jain: 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 such statements are not intended to be a full representation of future results and are subject to risks and uncertainties.

Vivek Jain: Future 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 an adjusted.

John Mills: We refer all of you to the company's SEC filings for more detailed information on the risk and uncertainties that have a direct bearing on operating results and financial position.

John Mills: Please note that during today's call, we will also discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency in ICU Medical's ongoing results of operations, particularly when comparing underlying results from period to period. We also included a reconciliation of these non-GAP measures in today's release and provided as much detail as possible on any addendums that are added back.

Vivek Jain: 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.

Vivek Jain: We 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.

Vivek Jain: And with that, it is my pleasure to turn the call over to Vivek. Thanks, John. And good afternoon, everyone.

Speaker Change: Thanks, John and good afternoon, everyone. We know at the end of a long and complicated earnings season. So we will try to be as brief as possible I'll walk through our Q1 revenue and earnings performance and provide some commentary on the businesses and then turn it over to Brian to recap the full Q1 results.

Vivek Jain: We know it's the end of a long and complicated earnings season. So we'll try to be as brief as possible.

Vivek Jain: I'll walk through our Q1 revenue and earnings performance, and provide some commentary on the businesses and then turn it over to Brian to recap the full Q1 results and implications of the joint venture and our view on the impact of tariffs, at least as of this After that, I'll come back with some color on some items at the intersection of innovation and quality, more detail on tariffs, and just make a few comments about the medium-term activities of the Congress. Revenue for Q1 was $599 million for total company growth of 10% on a constant currency basis, or 8% reported, and was aided far less than Q4 2024 from IV Solutions as the national shortage ended.

Speaker Change: And implications of the joint venture and our view on the impact of tariffs at least as of this moment after that I'll come back with some color on the on some items at the intersection of innovation and quality more detail on tariffs and just make a few comments about the medium term activities of the company.

Speaker Change: Revenue for Q1 was $599 million for total company growth of 10% on a constant currency basis, or 8% reported and was aided far less than Q4 2024 from IV solutions as the national shortage.

Vivek Jain: All three reporting segments had good year-over-year Adjusted EBITDA was $99,000,000 and adjusted EPS was $1.75. Gross margins were in line with our expectations and cash generation was Between excess cash generated in Q1 and the net proceeds from the creation of the JV last week, we have repaid almost $250 million in principal year-to-date, and Brian will provide more details.

Speaker Change: All three reporting segments had good year over year growth adjusted EBITDA was $99 million and adjusted EPS was $1 72 gross margins were in line with our expectation and cash generation was healthy between excess cash generated in Q1 and the net proceeds from the creation of the JV last week, we have repaid almost 200.

Speaker Change: The $50 million in principal year to date, and Brian will provide more detail on this.

Vivek Jain: The broader demand and utilization environment in Q1 continued to be attractive across almost every geography with the rate positive, but not at the levels we saw last year. The capital environment is status quo, and it does appear investments that customers need to get done, do get done.

Speaker Change: The broader demand and utilization environment in Q1 continued to be attractive across almost every geography with the right positive, but not at the levels. We saw last year. The capital environment is status quo and it does appear investments that customers need to get done to get done.

Speaker Change: Currency has obviously flipped since the last call with the dollar weakening.

Vivek Jain: Currency has obviously flipped since the last call with the dollar. Getting into our businesses more specifically, our consumables business grew in Q1, grew 10% constant currency and 9% reported. All product lines contributed to this growth.

Speaker Change: Getting into our businesses more specifically our consumables business grew in Q1 grew 10% constant currency and 9% reported all product lines contributed to this growth. This year over year growth was driven by new global customer implementations price improvements rapid growth and some of our niche markets and less so by census.

Vivek Jain: This year-over-year growth was driven by new global customer implementations, price improvements, rapid growth in some of our niche markets, and less so by census as it was solid but Just as a reminder, when looking at last year, we had major sequential increases in Q2 over Q1 of 2024. So we don't expect the rate of growth for the next quarter to continue at what we had here in Q1, but still feel very comfortable about these numbers. Our IV systems business grew 8% constant currency and 6% reported. This was driven by good dedicated set utilization in all geographies and some LVP hardware installs earlier in the year than anticipated.

Speaker Change: As it was solid but stable just as a reminder, when looking at last year. We had major sequential increases in Q2 over Q1 of 2024. So we don't expect the rate of growth for the next quarter to continue at what we had here in Q1, but still feel very comfortable about the year.

Speaker Change: Our IV systems business grew 8% constant currency and 6% reported this was driven by good dedicated set utilization in all geographies and some LDP hardware installed earlier in the year than anticipated. We continue to be engaged in many new RFP processes and are beginning customer discussions around the multiyear refresh of our.

Vivek Jain: We continue to be engaged in many new RFP processes and are beginning customer discussions around the multi-year refresh of our Plum 360 pumps with Plum Solo now that it's approved.

Speaker Change: Plum 360 pumps with plum solo now that it's approved.

Vivek Jain: As we described in the last call, we had an excellent 2024 in selling our CAD ambulatory pumps, and we're seeing the benefit of increased disposables utilization, but have a tougher set of year-over-year hardware comps in this. Just wrapping up the business segments, our vital care segment grew 11% constant currency and 10% reported with IV solutions being the largest component of segment growth with the remainder of the segment being up slightly. There is no longer a market shortage for IV solutions.

Speaker Change: As we described on the last call, we had an excellent 2024 and selling our cat ambulatory pumps and we're seeing the benefit of increased disposables utilization, but have a tougher set up year over year hardware comps in this line.

Speaker Change: Just wrapping up the business segments are vital care segment grew 11% constant currency and 10% reported with IV solutions being the largest component of segment growth with the remainder of the segment being up slightly there.

Speaker Change: Is no longer a market shortage for IV solutions, we announced the formation and standup of our joint venture with Otsuka pharmaceutical factory and thanks to the many colleagues at both companies that worked tirelessly on this for the last few months.

Vivek Jain: We announced the formation and stand-up of our joint venture with Atsuka Pharmaceutical Factory, and thanks to the many colleagues at both companies that worked tirelessly on this for the last few months. While the manufacturing operations of this JV are straightforward, it has been work from a systems perspective to ensure everything is seamless to customers, and we will monitor this closely as it's another set of long-term service agreements we had to put into place. We continue to be impressed with their commitment, innovation, and fundamental manufacturing experience in this arena, and believe we have aligned with the right partner.

Speaker Change: While the manufacturing operations of this JV are straightforward. It has been work from a systems perspective to ensure everything is seamless to customers and we will monitor this closely as it is another set of long term service agreements, we had to put into place.

Speaker Change: We continue to be impressed with their commitment innovation and fundamental manufacturing experience in this arena and believe we are aligned with the right partner. We believe this will be a win win for each of us and most importantly customers in the United States from a value perspective, while creating this JV is a washed our earnings we still have 40% of it.

Vivek Jain: We believe this will be a win-win for each of us, and most importantly, customers in the United States.

Vivek Jain: From a value perspective, while creating this JV has washed our earnings, we still own 40% of an asset that's hard to replicate that now has better access to technology, and eventually will have a more complete product offering which benefits other parts of our portfolio, and we have a potential earn-out payment in the medium term.

Speaker Change: Asset that's hard to replicate that now has better access to technology and eventually we'll have a more complete product offering which benefits other parts of our portfolio and we have a potential earn out payment in the medium term. That's my brief recap of Q1 at a high level I'll now turn it over to Brian and come back with some of the color on the other items I mentioned in the interim.

Vivek Jain: That's my brief recap of Q1 at a high level.

Brian Bonnell: I'll now turn it over to Brian and then come back with some of the color on the other items I mentioned in the interview. Thanks, Vivek, and good afternoon, everyone. Since Vivek covered the Q1 revenue for each of the businesses, I'll focus my remarks on recapping the Q1 performance for the remainder of the P&L, along with the Q1 balance sheet and cash flow, and then provide commentary on the full year, given the formation of the JV and the fluid tariff situation. As you can see from the gap to non-gap reconciliation in the press release, adjusted gross margin for the quarter was 37%, which was in line with our expectations.

Brian: Thanks, Vivek and good afternoon, everyone. Since Vivek covers the Q1 revenue for each of the businesses I'll focus my remarks on recapping. The Q1 performance for the remainder of the P&L along with the Q1 balance sheet and cash flow and then provide commentary on the full year given the formation of the JV and the fluid tariff situation.

Brian: As you can see from the GAAP to non-GAAP reconciliation in the press release adjusted gross margin for the quarter was 37%, which was in line with our expectations.

Brian Bonnell: Adjusted SG&A expense was $116 million in Q1 and adjusted R&D was $23 million. Total adjusted operating expenses were $138 million and represented 23.1% of revenue. The total dollar amount of spend was the same as Q4, and the 23.1% of revenue is a bit below our original full-year guidance of 24%, as we have been measured in making some of the strategic R&D and commercial investments that we mentioned on the last earnings call, as well as exercising general cost controls across the company, given the uncertain and changing environment. Restructuring, integration, and strategic transaction expenses were $17 million in the first quarter and related primarily to continued efforts to integrate our IT systems and consolidate our manufacturing network, along with transaction expenses associated with the IV Solutions joint venture.

Brian: Adjusted SG&A expense was $116 million in Q1, and adjusted R&D was $23 million total adjusted operating expenses were 138 million and represented 23, 1% of revenue.

Brian: The total dollar amount of spend was the same as Q4 and the 23, 1% of revenue is a bit below our original full year guidance of 24% as we have been measured and making some of the strategic R&D and commercial investments that we mentioned on the last earnings call as well as exercising.

Brian: General cost controls across the company, given the uncertain and changing environment.

Brian: Restructuring integration and strategic transaction expenses were $17 million in the first quarter and related primarily to continued efforts to integrate our I T systems and consolidate our manufacturing network along with transaction expenses associated with the IV solutions joint venture.

Brian Bonnell: adjusted diluted earnings per share for the quarter with $1.72 compared to 96 cents last year. The current quarter results reflect net interest expense of 22 million and an adjusted effective tax rate of 25. Diluted shares outstanding for the quarter were 24.7. And finally, adjusted EBITDA for Q1 increased by 26% to $99 million compared to $79 million last year. Of the year-over-year EBITDA improvement of $20 million, we estimate that the one-time higher demand from the IV solutions shortage contributed around $3 million in the quarter.

Brian: Adjusted diluted earnings per share for the quarter was $1 72, compared to 96 cents last year. The current quarter results reflect net interest expense of 22 million and an adjusted effective tax rate of 25% diluted shares outstanding for the quarter were $24 7 million and.

Brian: And finally, adjusted EBITDA for Q1 increased by 26% to $99 million compared to $79 million last year.

The year over year EBITDA improvement of $20 million, we estimate that the one time higher demand from the IV solutions shortage contributed around $3 million in the quarter.

Brian Bonnell: Now, moving on to cash flow and the balance. For the quarter, free cash flow was $37 million, which reflects strong quality of earnings, some timing benefits from working capital, in particular accounts receivable and accounts payable, and our typical lower CapEx spending in the first quarter of the year. It was another solid free cash flow quarter, and our liquidity position continues to improve. During the quarter, we invested $13 million of cash spend for quality system and product-related remediation activities, $13 million on restructuring and integration, and $15 million on CapEx for general maintenance and capacity expansion at our facilities, as well as placement of revenue-generating infusion pumps with customers outside the U.S.

Brian: Moving on to cash flow and the balance sheet for the quarter free cash flow was $37 million, which reflects strong quality of earnings some timing benefits from working capital in particular accounts receivable and accounts payable and our typically lower capex spending in the first quarter of the year.

Brian: Another solid free cash flow quarter, and our liquidity position continues to improve.

Brian: During the quarter, we invested $13 million of cash spend for quality system and product related remediation activities 13 million on restructuring and integration and $15 million on Capex for general maintenance and capacity expansion at our facilities as well as placement of revenue generating infusion pumps.

Brian: Customers outside the U S.

Brian Bonnell: And just to wrap up on the balance sheet, we finished the quarter with $1.55 billion of debt and $290 million of cash. During the first quarter, we paid down a total of $48 million of debt, which consisted of $13 million of scheduled principal payments, plus a prepayment for an additional $35 million.

Brian: And just to wrap up on the balance sheet, we finished the quarter with $1 $5 5 billion of debt and $290 million of cash during.

Brian: During the first quarter, we paid down a total of $48 million of debt, which consisted of $13 million of scheduled principal payments plus a prepayment for an additional $35 million subsequent to quarter end upon closing of the JV transaction on May <unk>, we use the $200 million of proceeds to pay down the term loan.

Brian Bonnell: Subsequent to quarter end, upon closing of the JV transaction on May 1, we used the $200 million of proceeds to pay down the term loan.

Brian: Hey.

Brian: Moving forward to the 2025 outlook during our year end earnings call in February we provided our full year 2025 guidance, reflecting two basis of presentation. The first was excluding the impact from the JV transaction and the second was including the transaction.

Brian Bonnell: Moving forward to the 2025 outlook, during our year-end earnings call in February, we provided a full year 2025 guidance reflecting two bases of presentation. The first was excluding the impact from the JV transaction, and the second was including the transaction, assuming a Q2 closing. As a reminder, we said the JV transaction would reduce FY25 revenue by approximately $235 million and adjusted EBITDA by $15 to $20 million and would be neutral to adjusted EPS. Now that we've closed the transaction as of May 1st, we are confirming that there are no changes to our previously provided guidance as it relates to the impact from the JV transaction.

Brian: Assuming a Q2 closing.

Brian: As a reminder, we said the JV transaction would reduce FY 'twenty five revenue by approximately $235 million and adjusted EBITDA by $15 million to $20 million and would be neutral to adjusted EPS now that we've closed the transaction as of May one we are confirming that there are no changes to our previously.

Brian: Provided guidance as it relates to the impact from the JV transaction.

Brian Bonnell: Note that due to the timing of the closing, the second quarter results will include IV solutions results for the one month in which we own the whole business. So the sequential trends across Q1, Q2, and Q3 will look a bit strange as the full impact of the IV solutions deconsolidation appears in our consolidated reporting. Since our year-end call, the business has performed consistent with our expectations. However, we are subject to the impacts from the recently implemented tariffs and the evolving global trade landscape, along with the related macroeconomic knock-on effects, including foreign currency fluctuations, inflation, etc.

Note that due to the timing of the closing the second quarter results will include IV solutions results for the one month in which we own the whole business. So the sequential trends across Q1, Q2, and Q3 will look a bit strange as the full impact of the IV solutions deconsolidation appears in our Consol.

Heidi: Heidi to reporting.

Heidi: Since our year end call. The business has performed consistent with our expectations. However, we are subject to the impacts from the recently implemented tariffs and the evolving global trade landscape, along with the related macroeconomic knock on effects, including foreign currency fluctuations inflation et cetera.

Brian Bonnell: Based on the tariff policies in place today and also considering the mitigation strategies we expect to have implemented this year, we would anticipate the direct expense from tariffs in FY25 to be in the range of $25 to $30 million. the vast majority of which would be recognized in the back half of the year as these costs are captured in cost of goods sold and subject to our cap and roll process.

Heidi: Based on the tariff policies in place today.

Heidi: Also considering the mitigation strategies, we expect to have implemented this year.

Heidi: We would anticipate direct expense from tariffs in FY 'twenty five to be in the range of $25 million to $30 million the.

Heidi: The vast majority of which would be recognized in the back half of the year. As these costs are captured in cost of goods sold and subject to our cap enrolled process How's.

Brian Bonnell: However, we have also seen a weakening of the U.S. dollar relative to most global currencies. And based on rates in effect as of April 30th, we would anticipate the favorable EBITDA impact from currency this year to offset almost half of the direct tariff expense. Beyond that, we believe we can further offset a portion of the remaining net exposure through various measures, including lower incentive compensation expense and general cost controls. But based on what we know today, there is probably 5 to 10 million of unmitigated residual impact from tariffs. So while we believe our original FY25 guidance is still we would likely be at the low end of the range for adjusted EBITDA, adjusted EPS, and adjusted gross margin if additional offsets aren't identified and captured.

Heidi: However, we have also seen a weakening of the U S dollar relative to most global currencies and based on rates in effect as of April 30, we.

Heidi: Would anticipate the favorable EBITDA impact from currency this year to offset almost half of the direct tariff expense.

Heidi: Beyond that we believe we can further offset a portion of the remaining net exposure through various measures, including lower incentive compensation expense and general cost controls, but based on what we know today, there is probably $5 million to $10 million of unmitigated residual.

Heidi: From tariffs.

Heidi: While we believe our original FY 'twenty five guidance is still appropriate we would likely be at the low end of the range for adjusted EBITDA adjusted EPS and adjusted gross margin if additional offsets art identified and captured.

Brian Bonnell: A few other points to note. First, our quantification of the tariff expense reflects the direct impact of the tariffs currently in place and does not consider potential future impacts such as additional retaliatory tariffs, lower demand for our products outside the U.S., or the effects from higher inflation. Second, it would not be appropriate to annualize the FY25 tariff expense for purposes of estimating the FY26 impact as we are working through several mitigation strategies to reduce our tariff exposure long-term, and Vivek will further expand on that. So we've done our best to quantify what we know today, but it's obviously an evolving situation, and we expect to provide further updates on our second quarter earnings call as we continue to monitor new developments.

Heidi: A few other points to note first our quantification of the tariff expense reflects the direct impact of the tariffs currently in place and does not consider potential future impacts such as additional retaliatory tariffs lower demand for our products outside the U S or the effects from higher inflation.

Heidi: Second it would not be appropriate to annualize the FY 'twenty five tariff expense.

Vivek Jain: For purposes of estimating the FY 'twenty six impact as we are working through several mitigation strategies to reduce our tariff exposure long term and Vivek will further expand upon that.

Vivek Jain: So we've done our best to quantify what we know today, but it's obviously an evolving situation and we expect to provide further updates on our second quarter earnings call. As we continue to monitor new developments and third the tariffs will have an impact to free cash flow for the year and we would expect the amount to be slightly more.

Brian Bonnell: And third, the tariffs will have an impact to pre-cash flow for the year, and we would expect the amount to be slightly more than the P&L expense given the cash outlay precedes the P&L recognition due to our cap and roll process.

Vivek Jain: Then the P&L expense given the cash outlay precedes the P&L recognition due to our capital process.

Brian Bonnell: To wrap up, we're happy with the performance of the business for the first quarter, including continued top-line momentum, progress on the initiatives that will drive gross margin expansion, and the strong free cash flow generation.

Vivek Jain: To wrap up we're happy with the performance of the business for the first quarter, including continued topline momentum progress on the initiatives that will drive gross margin expansion and strong free cash flow generation and we're excited to commence operations of the IV solutions joint venture with Otsuka now and.

Vivek Jain: And we're excited to commence operations of the IV Solutions Joint Venture with us who Now I'll hand the call back over to Vivek to expand upon some of the initiatives we're currently focused on. Okay, thanks Brian. It's great that we can add another quarter to the last five or six quarters of delivering more predictable revenue. While the footing feels better, sustained revenue growth is about consistent execution combined with meaningful innovation to refresh the portfolio. Our heaviest investments over the last few years have gone into our pump businesses where we now have both Plum Duo and Plum Solo with LifeShield software cleared.

Vivek Jain: The call back over to go back to expand upon some of the initiatives. We are currently focused on.

Brian: Okay. Thanks, Brian.

Brian: Great that we can add another quarter to the last five or six quarters of delivering more predictable revenues, while the footing feels better sustained revenue growth is about consistent execution combined with meaningful innovation to refresh the portfolio.

Brian: Our heaviest investments over the last few years have gone into our pump businesses, where we now have both plum duo and pumps tullow with lifestyle software cleared.

Vivek Jain: These platforms have received five individual 510K clearances with a first pass review over the last 18 months. Plum Duo and Plum Solo together allow us to participate in both competitive situations and upgrade our own install base with state-of-the-art. We've said in these calls that we can expect to have the most modern fleet of infusion devices that can anchor the portfolio for years to come. The final pieces of that puzzle have always been new 510Ks for our MedFusion and CAD pumps and integrating them into the common LifeShield software platform, first for acute care and eventually home care.

Brian: These platforms have received five individuals five 10-K clearances with a first pass review over the last 18 months plus duo and from solo together allow us to participate in both competitive situations and upgrade our own installed base with state of the art technology. We've said on these calls that we can expect to have the most modern.

Brian: Fleet of infusion devices that can anchor the portfolio for years to come the final pieces of that puzzle has always been new 510 case for our med fusion and CAD pumps and integrating them into the common life Shield software platform first for acute care and eventually homecare, we want customers to have the right tool.

Vivek Jain: We want customers to have the right tool for the right job, all connected with a common user interface and software solution that minimizes training, speeds onboarding, supports interoperability, and enables standardization for our enterprise customers.

Brian: Look for the right job all connected with a common user interface and software solution that minimises trading speeds onboarding supports interoperability and enable standardization for enterprise customers.

Brian: We have been diligently working to close out the Smiths medical warning letter from 2021 that was received just prior to closing our acquisition.

Vivek Jain: We've been diligently working to close out the Smith Medical warning letter from 2021 that was received just prior to closing our acquisition. while we did have a successful site inspection last summer in Minneapolis with zero observation. We have not received official closure, and last month we received a warning letter from FDA to ICU Medical asking for new 510Ks on the MedFusion and CAD product family. While this was not a specific observation in the original warning letter, we have been pursuing these clearances as fast as possible anyway. It has always been our view that new clearances are essential for the best compliance, ensures modernized software and components, and provides a competitive advantage.

Brian: While we did have a successful site inspection last summer in Minneapolis with zero observations, we have not received official closure and last month, we received a warning letter from FDA to ICU medical asking for new 500, 10-K's on the med fusion and CAD product families.

Brian: While this was not a specific observation in the original warning letter we have been pursuing these clearances as fastest possible anyway. It has always been our view that new clearances are essential for the best compliance ensures modernize software and components and provides a competitive advantage to use the same sentence from two years ago, while undies.

Vivek Jain: To use the same sentence from two years ago, while undesirable, the regulatory agency is trying to move the ball forward, and these regulations give us the right to participate and keep markets valuable. We believe we will have 510Ks for both products filed within 90 days of today. Our goal was on a slightly earlier calendar, but the technical work took longer given the evolving standards and ensuring filings that are on par to our cleared Plum Solo and Plum Duo products.

Brian: <unk> the regulatory agency is trying to move the ball forward and these regulations give us the right to participate in key markets valuable.

Brian: We believe we will have 500 10-K's for both products filed within 90 days of today. Our goal was on a slightly earlier calendar, but the technical work took longer given the evolving standards and ensuring filings that are on par to our cleared plums solo and <unk> products given the recent activity I'll talk at a high.

Vivek Jain: Given the recent activity, I'll talk at a high level on what we've been doing the last two years to ensure safety, compliance, and improve product quality for CAD and MOC. First, we stopped selling and established end-of-support dates for the oldest version of both chronic families, the oldest versions of both chronic families. Second, we reviewed, assessed, and processed thousands of complaints to ensure we knew which field actions and recalls needed to be performed to ensure safety. Third, we competed retrospective analysis of all software anomalies to correct defects proactively. Fourth, we ensured absolutely no new features were added to the device anywhere along, either device anywhere along.

Brian: And what we've been doing the last two years to ensure safety compliance and improve product quality for cat and med fusion.

Brian: First we stopped selling an established end of support dates for the oldest version of both product families. The oldest versions of both product families.

Brian: Second we've reviewed assessed and process thousands of complaints to ensure we knew which field actions and recalls needed to be performed to ensure safety.

Brian: Third we competed retrospective analysis of all software anomalies to correct defects proactive.

Brian: Fourth we insured absolutely no new features were added to the device anywhere along either device anywhere along the way and as of today, we have remediated virtually every med fusion pumps in the field in accordance with the recent recall actions and are making good progress on the remediation of all the CAD products as well.

Vivek Jain: And as of today, we've remediated virtually every Medfusion pump in the field in accordance with the recent recall actions and are making good progress on the remediation of all the CAD products as well. So the scale and commitment of this investment is not lost on anyone. These efforts have been the largest expenditures in the quality remediation costs of the last few years, which has consumed cash. While this discussion mixes quality and innovation, it's fundamentally a proof point of why having modern devices and high compliance is table stakes in our industry, and why we put just as much energy into these upcoming filings as we did into our recent clearances of PlumDuo and PlumSol.

Brian: So the scale and commitment of this investment is not lost in any one these efforts have been the largest expenditures and the quality remediation costs over the last few years, which has consumed cash.

Brian: While this discussion mixes quality and innovation, it's fundamentally a proof point of why having modern devices and high compliance is table stakes in our industry and why we put just as much energy into these upcoming filings as we get into our recent clearances are plumbed duo and pump solo and.

Vivek Jain: And at the same time, we filed a few important new approval applications in the other lines of business, which we hope to talk about later this year, as they'll bring innovation, continue to create new markets, and sustain our revenue growth.

Brian: And at the same time, we filed a few important new approval applications.

Brian: In the other lines of business, which we hope to talk about later this year as they'll bring innovation continue to create new markets and sustain our revenue growth.

Brian: Okay on the <unk>.

Vivek Jain: Okay, on to tariffs. Brian outlined the basic math. We have somewhere between $25 million to $30 million on exposure in 2025, and as he said, please do not annualize that amount. FX offsets maybe half of that. We obviously don't expect shareholders to bear all this cost, so we will assume some offsets will come from employee incentive plans, as well as cost-saving activities, but we do run lean here.

Brian: Brian outlined the basic math, we have somewhere between 25 million to $30 million on exposure in 'twenty five and as he said please do not annualize that amount.

Brian: <unk> offsets maybe half of that we obviously don't expect shareholders to bear all of this costs. So we will assume some offsets will come from employee incentive plans as well as cost saving activities, but we do run lean here.

Vivek Jain: All of this does make it extremely tight relative to our original guidance, and with so many moving pieces, things could change.

Brian: All of this does it does make it extremely tight relative to our original guidance and with so many moving pieces things could change.

Vivek Jain: But what we have been most focused on, based on the assumption that some form of tariffs will be here to stay, is what our most substantial medium-term mitigations are. While many companies are talking about re-evaluating their supply chain, that doesn't really apply to most of our impact.

Brian: Well, we have been most focused on based on the assumption that some form of tariffs will be here to stay is what our most substantial medium term mitigation as are we.

Brian: While many companies are talking about reevaluating their supply chain that doesn't really apply to most of our impacts.

Vivek Jain: We have three primary issues, which can be categorized in order of importance as first, all items from Costa Rica, second, some sourced items from China, and third, non-USMCA-compliant items from Mexico. In Costa Rica, we've invested heavily into pump manufacturing, and having recently consolidated to that location, and we've produced all of our LVP-dedicated sets there, and it's not something we want to reevaluate. For 2025, most of the pumps we plan on implementing were contracted at a pre-tariff price. We would assume for pumps signed today onward to be implemented in the future, that the impact of tariffs would have to be incorporated to price.

Brian: We have three primary issues, which can be categorized in order of importance as first all items from Costa Rica second some sourced items from China and third non U S. MCA compliant items from Mexico.

Brian: In Costa Rica, we've invested heavily into pump manufacturing and having recently consolidated that location and we produce all of our LDP dedicated sets there and it's not something we want to reevaluate.

Brian: Our 2025 most of the pumps, we plan on implementing we're contracted at a pre tariff price we would assume for pumps signed today onward to be implemented in the future that the impact of tariffs would have to be incorporated into price. As we've said before we don't think are pumped decision is made on the last $100 and we believe most vendors have sim.

Vivek Jain: As we've said before, we don't think a pump decision is made on the last $100, and we believe most vendors have similar challenges. Maybe there are a few items that we could shift between Costa Rica and Mexico over time.

Brian: <unk> challenges.

Brian: Maybe there are a few items that we could shift between Costa Rica, and Mexico overtime.

Brian: On the sourced items from China that is where we could reevaluate our supply chain as most products are available from other locations and our low tech, but it does take some time to qualify those items in some cases the immediate mitigation has been to stop importing products that are now unprofitable, which may impact vital care revenues later.

Vivek Jain: On the sourced items from China, that is where we could re-evaluate our supply chain, as most products are available from other locations and are low-tech, but it does take some time to qualify those items. In some cases, the immediate mitigation has been to stop importing products that are now unprofitable, which may impact vital care revenues later in the year as inventory on hand depletes. For non-USMCA compliant products, we're focusing on the changes to drive compliance, optimizing qualifying logistics, and ensuring the products we have that serve chronic therapies are properly recognized as such.

Brian: And the year as inventory on hand to please.

Brian: For non U S. MCA compliant products, we're focusing on the changes to drive compliance optimizing qualifying logistics and ensuring the products. We have that serve chronic therapies are properly recognized as such.

Vivek Jain: Nothing about tariffs changes the available timing on various initiatives and strategic decisions we have described on previous calls to improve our profitability, but it does sharpen the focus to ensure all activities continue to move forward. We continue to be on track with consolidation of our production network, rest of world order to cash conversions, logistics and real estate consolidations. These were important items to drive our step up in profitability in 2025 and beyond. And even if tariff consumes some of the benefit, nothing changes with the program's timing.

Brian: Nothing about tariffs changes the available timing on various initiatives and strategic decisions. We have described on previous calls to improve our profitability, but it does sharpen the focus to ensure all activities continue to move forward.

Brian: We continue to be on track with consolidation of our production network rest of world. The order to cash conversions logistics and real estate consolidations. These are important items to drive our step up in profitability in 2025, and beyond and even if tariff consume some of the benefit nothing changes with the programs timing and I feel we've described this work many times on previous.

Vivek Jain: And I feel we've described this work many times on previous calls. It all needs to happen in concert with increasing revenue.

Brian: Calls it all needs to happen in concert with increasing revenues.

Vivek Jain: To be direct on our goals for the next year or two, we want our consumables and systems businesses to be reliable growers with an industry acceptable profit margin with the tightest and most optimized manufacturing network, and each with a multi-year innovation portfolio. And we want the rest of the portfolio to add up to levels where we deliver an acceptable profit margin that ultimately allows us to transfer value from debt to equity. There's no confusion within the company in the pursuit of these goals, and we don't have a lot of frivolous activities here. We produce essential items that require significant clinical training, hold manufacturing barriers, and in general are items that customers do not want to switch unless they must.

Brian: To be direct on our goals for the next year or two we want our consumables and systems businesses to be reliable growers with an industry acceptable profit margin with the tightest and most optimized manufacturing network and each with a multiyear innovation portfolio and we want the rest of the portfolio to add up to levels, where we deliver an acceptable profit margin that ultimately allows us to transfer.

Brian: Al you from debt to equity there is no confusion with the company and the pursuit of these goals and we don't have a lot of frivolous activities here.

Brian: We produce essential items that require significant clinical training hold manufacturing barriers and in general are items that customers do not want to switch unless they must the market needs ICU medical being the innovative reliable supplier and our company is stronger from all of the events of the last few years. Thanks to all the team members and customers as we improve each day and with that I'll open it up to question.

Vivek Jain: The market needs ICU Medical to be an innovative, reliable supplier, and our company is stronger from all the events of the last few years.

Vivek Jain: Thanks to all the team members and customers as we improve each day.

Operator: And with that, we'll open it up to questions. Thank you.

Brian: Yes.

Speaker Change: Thank you at this time, we will open the floor for questions if you'd like to ask a question you May press star one on your telephone keypad.

Operator: At this time, we will open the floor for questions. If you'd like to ask a question, you may press star 1 on your telephone keypad. If you'd like to remove yourself from the queue, you may press star 2. Again, that is star 1 to ask a question.

Speaker Change: If you'd like to remove yourself from the queue. You May press star two again that is star one to ask a question.

Jayson Bedford: We'll take our first question from Jayson Bedford with Brayman James. Good afternoon and thanks for taking the questions. Maybe just to start on the top line, nice acceleration in consumables. You mentioned rapid growth in niche markets. Can you just kind of flesh out a little bit as to where the reacceleration or the drivers are coming from in consumables?

Speaker Change: Thank you our first question from Jason Bedford with Raymond James.

Jason Bedford: Good afternoon, and thanks, Thanks for taking the questions maybe maybe just to start on the top line.

Jason Bedford: Nice acceleration in consumables, you mentioned rapid growth in niche markets can you just kind of flesh out a little bit.

Jason Bedford: Where the reacceleration or the drivers are coming from consumables.

Jason Bedford: Yeah, I think hi, Jason Thanks for the questions.

Vivek Jain: I think that, hi Jayson, thanks for the questions. In the investor chart, it lays out the different pieces, the main buckets of the consumables stack. And it's a little bit of a thing we've been talking about, I don't know, for two or three quarters now. Oncology growth is back in a very attractive way. That's been an important driver, and that's... maybe is about us, but I think it's also about what's happening in the underlying market. And then I think some of the products that support the renal markets, some of the products that support some of the home infusion or chronic care markets have been accelerating nicely.

Jason Bedford: In the Investor chart, it lays out the different pieces. The main buckets of the consumables stack and it's a little bit of a thing we've been talking about I don't know torturing cortisol oncology growth is back in a very attractive way.

Jason Bedford: It's been an important driver in that.

Jason Bedford: Maybe it's about us, but I think it's also about what's happening in the underlying market.

Jason Bedford: And then I think some of the products that support the renal markets some of the products that support.

Jason Bedford: Some of the home infusion or chronic care markets have been accelerating nicely and obviously the big consumables business. This was the year, where some of the GPO activity kicked in earlier in the year the pricing changes that we were talking about last year.

Vivek Jain: And obviously in the big consumables business, this was the year where some of the GPO activity kicked in earlier in the year, the pricing changes that we were talking about. And can we assume though, you know, you grew 10% in consumables, I assume. price wasn't a huge factor in that growth. No. No, I think a lot of that, Jayson, I think comes from, if you go back to last year, we did have kind of a noticeable step up on the consumables business from Q1 to Q2. And so I think we were also seeing some of the benefit of a lower Q1 last year, and just continued kind of strength.

Speaker Change: And can we assume though you grew 10% and consumables I assume.

Speaker Change: This wasn't a huge factor in that growth.

Speaker Change: No no I think a lot of that Jason I think comes from if you go back to last year, we did have kind of a noticeable.

Speaker Change: <unk> up.

Speaker Change: On the consumables business from Q1 to Q2, and so I think.

Speaker Change: We're also seeing some of the benefit of a lower Q1 last year and just continued kind of strengths.

Vivek Jain: that started in Q2 of last year.

Speaker Change: That started in Q2 of last year.

Vivek Jain: Okay.

Speaker Change: Okay.

Vivek Jain: Infusion systems, are you seeing more contribution from DUO? Is that starting to kind of layer into the revenue stream now? I think there's been very, very few Duo installs. date Jason so I think if you went back to the last call we said we expected it more back half of the year we were contracting but we haven't installed that places. Okay. So it's still second half of the year where you see that flush. that is yes. I'm sorry, I didn't realize. Nothing's different. If no one wants to make a decision on that until the last possible day, they have to, right, so.

Speaker Change: Infusion systems.

Speaker Change: Are you seeing more contribution from duo is that starting to kind of layer into the revenue stream now.

Speaker Change: Yeah.

I think theres been very very few duo installs to.

Jason Bedford: To date, Jason So I think if you went back to the last call. We said, we expected more back half of the year.

Speaker Change: We were contracting, but we havent installed that that many fewer places okay.

Jason Bedford: So it's still second half of the year, where you see that flush.

Jason Bedford: I'll take that as yes.

Jason Bedford: I'm sorry.

Jason Bedford: Yes.

Jason Bedford: That makes a difference.

Jason Bedford: No one wants to make a decision on that until the last possible. They may have to write itself.

Vivek Jain: Okay.

Jason Bedford: Okay.

Vivek Jain: And just lastly for me, and I'll let someone else in the queue, on the tariffs, just to be clear, the $25 to $30 million, that's a 25 hit, that's not an annualized number. And then the second question on that is, is there any way, you kind of walk through some of the geographies there, but is there a way to frame the geographic risk within that $25 to $30 million? Again, I think we at least tried to put them in order of the first thing is please, please do not take that number and annualize it, right?

Jason Bedford: And just lastly from me and then I'll, let someone.

Jason Bedford: And then also in the Q on the tariffs just to be clear the $25 million to $30 million.

Jason Bedford: $25 here, that's not an annualized number and then the second question on that is there any way you kind of go.

Jason Bedford: You kind of walk through some of the geographies there, but is there a way to frame the geographic risk within that $25 million to $30 million.

Jason Bedford: Again, I think we at least had to put them in order.

Jason Bedford: First please please do not take that number and annualize. It right. There are a bunch of things that are happening to improve our situation.

Vivek Jain: There are a bunch of things that are happening to improve our, our situation. We tried to lay them out in order of priority with the... new tariff that was placed on Costa Rica is the single biggest item. We have that change for us in early April. That is the item of most consequence and a very large proportion of the annual impact. We as we've all all companies have been digging through every single thing they sell a few items have popped up that are sourced from From China, those we will address over time. That's the second biggest item.

Jason Bedford: We tried to lay them out in order of priority wind.

Jason Bedford: New tariff that was placed on post to Rica is the single biggest item we have that changed for us in early April.

Jason Bedford: Is that the item up most consequence.

Jason Bedford: Very large proportion of the annual impact.

Jason Bedford: <unk>.

Jason Bedford: We as we've all companies have been digging through every single thing they sell a few items that popped up that are sourced from.

Jason Bedford: From China. It does we will address over time, that's the second biggest item and then the third.

Vivek Jain: And then the third, as we were early in kind of describing what our USMCA compliance was, our compliance continues to be at the levels we thought are better, and that becomes the smallest issue of compliance.

Jason Bedford: <unk>.

Jason Bedford: As we as we are early in kind of describing what our U S. MCA compliance was our compliance continues to.

Jason Bedford: <unk> be at the levels, we saw at or better than that becomes the smallest issue up to three.

Jason Bedford: Yes. Thank you.

Jayson Bedford: Thank you.

Jason Bedford: <unk>.

Speaker Change: Thank you. Our next question will come from Brett <unk> with Keybanc capital markets.

Brett Fishbin: Our next question will come from Brett Fishbin with KeyBank Capital Markets. Hey guys. Thank you very much for taking the questions. Just starting off maybe with a follow-up on the tariff point from just a second ago. So it sounds like the Mexico issue may actually be getting a little bit better. I think you might have framed like the non-USMCA potential unmitigated impact at like less than $20 million. So maybe just like update us on what you're seeing there, if there are certain products that have like become compliant. And then if there's like any other, I guess like pathways for products not currently compliant under USMCA to then become compliant that could further reduce the impact in that bucket.

Speaker Change: Hey, guys. Thank you very much for taking the questions just starting off maybe with a follow up on the tariff point from just a second ago. So it sounds like the Mexico, If you may actually be getting a little bit better.

Speaker Change: I think you might've framed like the non U S MCA potential unmitigated impact at like less than $20 million. So maybe just.

Speaker Change: Update us on what Youre seeing there if there are certain products that have like become compliant and then if there is like any other I guess like pathways for our product is not currently compliant under U S. MCA to then become compliant that could further reduce the impact in that bucket.

Speaker Change: Yes, Brett I mean I think.

Brett Fishbin: Yeah, Brett, I mean, I think When the tariffs, the Mexico tariffs in particular, were put into effect, there was no USMCA exemption. And so that resulted in a meaningful exposure to us. But with the USMCA exemption, obviously, that mitigates a significant percentage of the tariff exposure coming from Mexico. And I think as we are working through our mitigation action... we've seen even a little bit of improvement in kind of that percentage. And in addition to that, there are some other things beyond just USMCA we can do to further mitigate it. And so, yes, I think now Mexico for us.

Speaker Change: When the tariffs the Mexico tariffs in particular.

Speaker Change: Were put into effect there was no U S MCA exemption and so that resulted in a meaningful exposure to us.

Speaker Change: But with the U S MCA exemption obviously.

Speaker Change: It mitigates a significant.

Speaker Change: <unk> percentage.

Speaker Change: Of the tariff exposure coming from Mexico, and I think as we are working through our mitigation actions.

Speaker Change: We have seen even a little bit of improvement in kind of that percentage.

Speaker Change: And in addition to that there are some other things beyond just U S. MCA, we can do to to further mitigate it. So yes, I think now in Mexico for us.

Brett Fishbin: clearly falls into the third tier of areas of exposure with Costa Rica and then China being one of two. The actions are similar to the ones that were described in the original slide, right? Focusing on logistics and. where the product is consumed in the world, et cetera. I don't think the strategies have changed that much. And that's, again, all of that is the current, there's obviously a rate differential, right? All right, yes, for sure, and definitely appreciate the, you know, dynamic backdrop and, you know, changing exposures here.

Speaker Change: Clearly falls into.

Speaker Change: The third tier of areas of exposure.

Speaker Change: With Costa Rica, and then I think the last time that being what it taught me that Brian the actions are similar to the ones that we're describing the original slight rate focusing on logistics.

Speaker Change: Where the product is consumed in the world et cetera, I don't think our strategy has changed that much.

Speaker Change: And that's again all of that.

Speaker Change: There is obviously a rate differential right.

Speaker Change: On all of these numbers so.

Speaker Change: Alright, yes for sure I can definitely appreciate the.

Speaker Change: Dynamic backdrop.

Speaker Change: Exposures here and just also just for my follow up wanted to just clarify the comments around guidance.

Brett Fishbin: And just also, you know, for my follow-up, wanted to just clarify the comments around, like, guidance. You know, you've updated the slide, and most of the numbers are, you know, intact. So it's the right way to think about it. Like, you still think that there's opportunity to hold the low end of the ranges for items like gross margin, 39 to 40 percent, and adjusted EBITDA 380 to 405, and the tariff plus currency plus mitigation just makes it, like, more challenging. Is that kind of, like, the message? Thank you very much. Yeah, I think when you kind of net all that together, it is our goal to hold at least the low end of the range, and I think we did talk about sort of what's assumed as we think about the rest of the year, and there are some things that would be difficult to predict, including the impact of tariffs on inflation.

Speaker Change: You've updated this slide in most of the numbers are intact.

Speaker Change: The way to think about it that you still think that there is opportunity to hold the low end of the ranges for items like gross margin, 39% to 40% and adjusted EBITDA reached <unk> hundred five and does the tariff plus currency plus mitigation just makes it more challenging is that kind of like the message then thank you very much.

Speaker Change: Yes, I think.

Speaker Change: All that together, it is our goal to hold at least the low end of the range. And I think we did talk about sort of what's assumed.

Speaker Change: as we think about the rest of the year, and there are some things that...

Speaker Change: It would be difficult to predict, including the impact of tariffs on inflation, so we haven't tried to quantify some of that exposure, but yeah, I think you've characterized it correctly.

Brett Fishbin: So we haven't tried to quantify some of that exposure. But yeah, I think you've you've characterized it correctly. I mean, it's not really fair, Brett, to talk just about the... caretaker for the year not talk about affects what else the company is doing offset that right we get very transparent got what we what are the knowns and what are the little bit of gaps we have that we still got Thank you.

Speaker Change: Thank you very much. It's not really fair, but I'd like to talk just about the-

Speaker Change: Carrafix, Lager for the Year, not talk about FX or what else the company is doing now. I'll set that right. We get very transparent about what we, what are the knowns and what are the, what are the little bit of gaps we have that we slow that up.

for sure.

Larry Solo: Our next question will come from Larry Solo with CJS Security.

Speaker Change: Thank you. Our next question will come from Larry Solow with C.J.S. Securities.

Larry Solo: Hi, good afternoon. First question, Vivek, I know you've spoken about the Plum Duo, Plum Solo, and the heavy investment you guys have done over the last several years on that. I'm just curious, early, maybe anecdotally, just the reception from customers, just how people are viewing it, and as you look out the next few years, do you expect an upgrade on the install base? Is that something? MedicalCityHospital.com Will customers eventually switch in some cases? I'm just kind of seeing how you view that versus the opportunity to grab new business. Yeah, it's a great question, Larry. And maybe I'll take them in reverse.

Larry Zolo: Hi, good afternoon. First question, Vivek, and you've spoken about the plum duo, Plum Solo, and the heavy investment you guys have done over the last several years on that. I'm just curious

Larry Zolo: Early, maybe anecdotally, just the reception from customers, just how people are viewing it, and as you look at it in a few years, do you expect an upgrade on the install base?

Is that something...

that you expect to happen over time, I suppose, but- [inaudible]

Larry Zolo: We'll customers eventually switch, in some cases, I'm just kind of seeing how you view that versus the opportunity to grab new business. It's a great question, Larry.

Vivek Jain: You know, the nature of the pump business is huge incumbency advantage, as we've talked about, right, and that that that makes competitive situations very desirable, but it also accrues to the advantage of the incumbent and we have hundreds of thousands of pumps in our own install base, which entered service in 2016 as Hospiro was coming back onto the market. And the average shelf life of those devices is normally eight, nine, 10 years. And so most of our portfolio of those devices are reaching the right time where a upgrade discussion is tensible. And we have the opportunity with Plum Solo to have a very meaningful upgrade discussion with the features that that customer appreciated in the device have been enhanced all the things that are today's conversations on cybersecurity workflow, EHR integration, etc, etc.

and mail-tick them in reverse.

Larry Zolo: The nature of this pump is this huge incumbency advantage, as we've talked about, and that makes competitive situations very desirable, but it also accrues to the advantage of the incumbency.

Larry Zolo: We have hundreds of thousands of pumps in our own install base which entered service in 2016 as how Spiro was coming back onto the market and the average shelf life of those devices is normally 8, 9, 10 years.

Larry Zolo: Ansible, and we have the opportunity with Plum Solow to have a very meaningful upgrade discussion with the features that that customer appreciated and the device have been enhanced, all the things that are today's conversations on cybersecurity workflow, EHR integration, etc. So certainly the upgrade cycle starts and it starts in earnest.

Vivek Jain: So certainly the upgrade cycle starts, it starts in earnest. end of this year, next year, and then continues for a while. So that's why Solow was so important to us. In addition to some competitive accounts prefer a mixed house. They want a higher complexity device in the most critical care environments and a less complicated device in the normal med-surg floors. And the combination of both products, we believe, positions us best for the competitive situations. I think people's, it's not a device that, people are rushing to change unless they really have a deep, sincere interest in changing their clinical practice.

Larry Zolo: End of this year, next year, and then continues for a while, so that's why Solow was so important to us.

Larry Zolo: In addition to some competitive accounts, prefer a mixed house, they want a higher complexity of the device and the most critical care environments and a less complicated device in the normal med-serge floors, and the combination of both products, we believe, positions are best for the competitive situations.

I think people, it's not a device that...

Larry Zolo: People are rushing to change, let's say, really have a deep...

Vivek Jain: And so when we've had situations where people are deeply interested in learning, the reaction to the product is phenomenal. If it's just a discussion to keep everything the same, people sometimes aren't willing to invest the time to understand the power of the new device. And so we need to find the situations where there's a real willingness to move. And again, there's some portion of the market that certainly wants to do that, that will get over the incumbent advantage. That's what we've talked about on these calls for a while.

since your interest in changing their-

Larry Zolo: Clinical Practice, and so when we've had situation where people are deeply interested in learning through action to the product is phenomenal.

Tom.

If it's just a discussion of keeping everything the same...

Larry Zolo: People sometimes are willing to invest in time to understand the power and the new device and so we need to find the situations where there's a real willingness to move and again there's some portion of the market that certainly wants to do that that will get over the incumbent advantage that's what we've talked about on these calls for a while now.

Vivek Jain: That's very helpful. And just in terms of, you know, pretty rapid strong growth in consumables, I know it's continued for several quarters now. You spoke about some of the newer products. What about just on the price? I think you mentioned that as one of the higher on your list of growth drivers. I don't know if that was meant in order of priority or not. It wasn't necessarily an order of priority. I'm just saying, we've been working on that as we got healthier the last couple of years. Gotcha, but what just price outlook prices have been improving, I guess, I know you had some a bunch of new contracts kind of reset in the last year, right?

Speaker Change: God knows, that's very helpful. Just in terms of pretty rapid strong growth and consumables, I know it's continuing for several quarters now.

Speaker Change: You spoke about some of the newer products. What about just on the price? I think you mentioned that as one of the higher on your list of growth drivers. I don't know if it was meant in order or priority and not, but it wasn't necessarily in order priority. We've been working on that as we got healthy the last couple of years.

Speaker Change: Gotcha, but what just price outlook, price has been improving, I guess I know you had a bunch of new contracts kind of reset in the last year, right? So, I'm on the vital care and infusion side, but I guess...

Vivek Jain: So, some on the on the vital care and infusion side, but I guess, I think the words Brian used on the last call still apply, which was one, one. hundred bits of price for the year, right? I mean, the statement we made last time, I wouldn't want to say something different than that. Gotcha.

Speaker Change: I think the words I used in the last call still apply, which is one, one, uh...

Speaker Change: 100 bits of the price for the year, right? I mean, the statement was last time I want to run out, say something different, eh?

Vivek Jain: Perfect.

Vivek Jain: Last question. I think you mentioned census, hospital, mutilation volumes. Sounds like they're steady, still relatively strong. Anything noteworthy there? I mean, increasing over the prior period felt okay, not as good as the step-ups were last year, nothing to complain about.

Speaker Change: Gotcha. All right. Perfect. Last question. Just, I think you mentioned, census, hospital, mutilation volumes, sounds like there. There's studies still relatively strong, anything, anything, anything noteworthy there.

Speaker Change: I mean, increasing over the prior period felt okay, not as good as the step-ups were last year. Nothing to complain about.

Okay.

Thanks. I appreciate it.

Vivek Jain: Thank you.

Michael Toomey: Our next question will come from Michael Toomey with Jefferies. Hey guys, congrats on the quarter. Thanks for taking my question.

Speaker Change: Thank you. Our next question will come from Michael Toomey with Jeffries

Michael Toomey: Hey guys, congrats on the quarter. Thanks for taking my question. So a strong Q1 on the infusion system, do you think that was just market growth or any share gains there as well?

Vivek Jain: So strong Q1 on the infusion systems. Do you think that was just market growth or any share gains there as well? I think it was the, hi Michael, it was the um... Points I tried to go from the script, it was a combination of both good utilization on dedicated sets and maybe a little bit on the LVP side that came in earlier in the year than we expected.

[inaudible] it was the, it was the,

Michael Toomey: Points I tried to go from the script, it was a combination of both good utilization, undeadicated sets and maybe a little bit on the LVP side that came in earlier in the year than we expected.

Vivek Jain: And then I guess following on from the prior question, just are you seeing from the tariffs any signs of CAPEX slowing? I know you said it's kind of status quo in the capital environment, everything remains attractive, but any signs since the end of last quarter, spending being delayed or any impact from tariffs? I don't think we've, again, I don't think we said the capital environment is going to pursue things that need to get done, get done. And so some of these these choices are are thrust upon the customer. I don't think we've seen a meaningful change and people are saying I don't have funding right now.

Okay.

Michael Toomey: And then I guess following on from the prior question, just are you seeing from the tariffs any signs of capsic slowing? I know you said it kind of.

Michael Toomey: I don't think we've, again, I don't think we've said the capital of our business, the things that need to get done, and so some of these choices are thrust upon the customer. I don't think we've seen a meaningful change if people are saying I don't have funding right now. A lot of this customer base is always, says they don't have funding, a lot of this customer base always.

Vivek Jain: A lot of this customer base is always says they don't have funding a lot of customer base always Looks 2, looks 2. delay, etc. But in certain cases, no choice. And there are ways we can help on funding and there are intermediaries that make these things available. So I don't think we've seen a big big change.

Dr. Smith, Dr. Smith, Dr. Smith

Looks 2, looks 2.

Michael Toomey: Delay, etc., but in certain cases there's no choice and there are ways we can help on finding in our intermediaries that make these things available. So I don't think we've seen a big change in them.

Vivek Jain: for Our Size Matters. Yeah. Okay. Thanks very much. Thank you.

and the capital environment for our size device.

Yeah, okay. Thanks very much.

Operator: And again, as a quick reminder, if you'd like to ask a question, you may press star 1.

Speaker Change: Thank you. And again, as a quick reminder, if you like to ask a question, you may press star one. Our next question comes from Mike Matson with Needham.

Mike Matson: Our next question comes from Mike Matson with Needham. Hey, guys. How's it going?

Joseph: This is Joseph on for Mike today. Maybe just to start off, Plum Solo, Plum Duo, I just want to note, maybe you guys can give a little bit more detail on how you guys are going about marketing this. What maybe contrasts are you drawing from your competitors, or maybe what advantages with the systems are kind of sticking the most with the customers that you guys are talking to? And then just maybe for the pumps that need that refresh, do you see customers opting for both, or do you think it's going to be an either-or or more of a mix in terms of Plum Solo, Plum Duo?

Speaker Change: Hey guys, how's it going? This is Joseph, on from Mike today.

Speaker Change: Maybe just to start off, Plum Solo, Plum Duo, I just want to note maybe you guys can give a little bit more detail.

Speaker Change: on how you guys are going about marketing this. What may be contrast to you?

Speaker Change: Drawing from your competitors or maybe what advantages with the systems of kind of sticking the most with the customers that you guys are talking to and then just maybe for the you know the pumps that need that refresh.

Speaker Change: Do you see customers opting for both or do you think it's going to be an either or or or more of a mix in terms of Plum Solow Plum Duo? Just kind of want to get you thinking around there.

Vivek Jain: Just kind of want to get your thinking around there.

Vivek Jain: Nice to meet you. I I think you should be more than welcome to take a look at some of the features that are outlined on the devices on our website. I mean, the core value prop of Plum going way back in history has been conserved into this device, and those core value props were around safety, fundamentally around safety and air and line management and a cassette-based delivery and a volumetric pump and a whole litany of things that go on beyond that. All of those things have been conserved both into Duo and Solo and address some of the innovation shortfalls over the years, which were the ability to multiplex the display, etc.

Nice to meet you. I...

I think you should.

Speaker Change: Be more than welcome to take a look at some of the features that are outlined on the devices on our

Speaker Change: website. I mean, the core value prop of plum going way back in history has been conserved into this device and those core value props were around safety.

Speaker Change: Fundamentally Run Safety and Air and Line Management, and a cassette-based delivery to volumetric pump, and a whole litany of things that go on beyond that. All of those things have been conserved both into duo and solo, and address some of the...

Speaker Change: Innovation Shortfalls over the years, which were a multi-ability, multi-plex, the displaying, etc. And so there's a lot of sort of bringing the device to a standardable and one should expect for any electronic device, certainly medical device in 2025, but keeping the things

Vivek Jain: And so there's a lot of sort of bringing the device to a standard of what one should expect for any electronic device and certainly medical device in 2025, but keeping the things, not having differentiation on the things that made the product great originally. And so take a look at that, but I would say most of the conversation is around. In terms of what people will use... I think there are there are multiple scenarios where Some folks may not need a multiplex device whole house and some people may have a split house. Again, we're happy we have both approvals and we can offer either scenario to a customer.

Speaker Change: It's not having differentiation on the things that made the product great originally and so take a look at that but I would say most of the conversation is around

of those features in terms of what people will use.

I think there are there are multiple scenarios where

Speaker Change: Some folks may not need a multiplexed device, a whole house, and some people may have a split house and

Speaker Change: We're happy we have both approvals and we can offer either scenario to a customer.

Vivek Jain: Okay, um, yeah, that's helpful.

Vivek Jain: And then maybe... In terms of the, I guess, timeline from submission to clearance, I was wondering if you guys can maybe tell us what you saw there for Solow and Duo. Maybe if we can, you know, extrapolate that to, you know, a time to clearance for the CAD and MedFusion once those are submitted. I think it's sometimes dangerous in the regulatory environment to extrapolate things, right? We don't want to get burned in that. We thought we've made progress on things, and we're still not out of the woods necessarily, so I wouldn't want to make any.

Okay, yeah, let's talk for then. Maybe...

Speaker Change: In terms of the, I guess, timeline from submission to clearance, I was wondering if you guys can maybe tell us what you saw there for Solow and Duo, maybe if we could, you know, extrapolate that to, you know, a time to clearance for the CAD and Med Shenzhen once those are submitted.

Speaker Change: I think it's sometimes dangerous in the regulatory environment to extrapolate things.

Speaker Change: We don't want to get burned in that. We thought we've made progress on things and we're still not out of the woods necessarily.

Vivek Jain: Assumptions, those products took, I don't know Brian, plus or minus a year from filing to approval. However, that was a device we had a high degree of familiarity with that we developed from the ground up and while we we think we've Done the same with these filings. These weren't devices that were originally ours, so we feel very confident about them, but I wouldn't necessarily draw a conclusion from one device. Okay, fair enough. Thanks for taking our questions. Appreciate it. Thank you.

Brian: Assumptions, those products took, I don't know, probably a plus or minus a year from filing

Speaker Change: However, that was a device we had a high degree of familiarity with that we developed from the ground up and while we think we've

Speaker Change: done the same with these filings. These weren't devices that were originally ours, so we feel very confident about them, but I wouldn't necessarily draw a conclusion from one device to the next.

Okay, fair enough. Thanks for taking our questions. Appreciate it.

Operator: There are no additional questions at this time.

Operator: I'd like to now turn it back to our presenters for any closing remarks. Thanks, everyone. We know we're late in the quarter. We know it's been a long earning season. Appreciate the interest, and it's a challenging environment out there. Look forward to updating everybody in our Q2 results shortly in August. Thanks very much.

Speaker Change: Thank you. There are no additional questions at this time. I'd like to now turn it back to our presenters for any closing remarks.

Speaker Change: Thanks, everyone. We know we're late in the quarter. We know it's been a long-earning season. I appreciate the interest. It's a child's environment out there. Look forward to updating everybody in our Q2 results shortly in August . Thanks very much.

Operator: Thank you, ladies and gentlemen.

Operator: This does conclude today's ICU Medical Inc. first quarter 2025 earnings call. You may now disconnect.

Speaker Change: Thank you, ladies and gentlemen. This does conclude today's ICU Medical Inc's first quarter of 2025 Arnie's call. You may now disconnect.

END

Operator: [music] Danielle Antalffy, Jayson Bedford, Brian Bonnell, John Mills, Vivek Jain, Michael Toomey, John For more information visit www.ICU.edu www.ICU.edu and all and many more.

Speaker Change: www.MossựC relieved Mr.Move makers gradually lost 15 claims, Mr.Move don't wanna play anymore you need to come back.

Willie Nelson, Bill Ratner, and Caroline LaGardia

Nero and Hamlet

Operator: This is the last one, so much for the fun.

Speaker Change: Okay.