[Forward-Looking Statements](index=3&type=section&id=Forward%20Looking%20Statements) This section outlines forward-looking statements, covered by safe harbor provisions, and identifies various risks and uncertainties that could cause actual results to differ materially from projections - Forward-looking statements are covered by **safe harbor provisions** and are subject to known and unknown risks and uncertainties[8](index=8&type=chunk)[9](index=9&type=chunk) - Key risks include **competition**, **declining demand**, inability to fund product development, **macroeconomic factors** (inflation, interest rates, foreign exchange), changes in trade/tax policies (tariffs on Mexico/Costa Rica), **healthcare cost pressures**, **FDA disruptions**, **cybersecurity**, **supply chain issues**, dependence on third-party suppliers, and challenges from the **Smiths Medical acquisition**[11](index=11&type=chunk)[12](index=12&type=chunk) - A **2025 FDA Warning Letter** regarding MedFusion™ Model 4000 Syringe Infusion Pump and CADD™ Solis VIP Ambulatory Infusion Pump modifications could impact continued commercial activity[12](index=12&type=chunk) [PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) This section provides the company's unaudited condensed consolidated financial information and management's analysis [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents ICU Medical's unaudited condensed consolidated financial statements and detailed explanatory notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | **Assets:** | | | | | Cash and cash equivalents | $300,025 | $308,566 | $(8,541) | | Accounts receivable, net | $179,495 | $182,828 | $(3,333) | | Inventories | $616,474 | $584,676 | $31,798 | | Assets held for sale | — | $284,382 | $(284,382) | | TOTAL CURRENT ASSETS | $1,180,115 | $1,441,983 | $(261,868) | | TOTAL ASSETS | $4,107,389 | $4,203,931 | $(96,542) | | **Liabilities & Equity:** | | | | | TOTAL CURRENT LIABILITIES | $482,777 | $556,182 | $(73,405) | | LONG-TERM DEBT | $1,337,731 | $1,531,858 | $(194,127) | | TOTAL STOCKHOLDERS' EQUITY | $2,115,776 | $1,965,235 | $150,541 | | TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $4,107,389 | $4,203,931 | $(96,542) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric (in thousands, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | TOTAL REVENUES | $548,866 | $596,455 | $1,153,568 | $1,163,110 | | GROSS PROFIT | $208,064 | $207,428 | $418,173 | $392,672 | | INCOME (LOSS) FROM OPERATIONS | $10,587 | $7,692 | $23,475 | $(2,963) | | NET INCOME (LOSS) | $35,338 | $(21,406) | $19,862 | $(60,877) | | Basic EPS | $1.43 | $(0.88) | $0.81 | $(2.51) | | Diluted EPS | $1.43 | $(0.88) | $0.80 | $(2.51) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents the company's unaudited condensed consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | NET INCOME (LOSS) | $35,338 | $(21,406) | $19,862 | $(60,877) | | Other comprehensive income (loss), net of tax | $72,753 | $(22,247) | $106,759 | $(38,704) | | COMPREHENSIVE INCOME (LOSS) | $108,091 | $(43,653) | $126,621 | $(99,581) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents the company's unaudited condensed consolidated statements of stockholders' equity for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Stockholders' Equity (in thousands) | Metric (in thousands) | Balance, January 1, 2025 | Balance, June 30, 2025 | Balance, January 1, 2024 | Balance, June 30, 2024 | | :-------------------- | :----------------------- | :--------------------- | :----------------------- | :--------------------- | | Common Stock (Amount) | $2,452 | $2,469 | $2,414 | $2,443 | | Additional Paid-in Capital | $1,412,118 | $1,435,935 | $1,366,493 | $1,380,703 | | Treasury Stock | $(92) | $(6) | $(262) | $(518) | | Retained Earnings | $690,158 | $710,020 | $807,846 | $746,969 | | Accumulated Other Comprehensive Loss | $(139,401) | $(32,642) | $(53,081) | $(91,785) | | Total Stockholders' Equity | $1,965,235 | $2,115,776 | $2,123,410 | $2,037,812 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $62,538 | $127,744 | | Net cash provided by (used in) investing activities | $170,648 | $(39,554) | | Net cash used in financing activities | $(251,351) | $(37,229) | | NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $(8,541) | $48,426 | | CASH AND CASH EQUIVALENTS, end of period | $300,025 | $302,648 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, new pronouncements, and specific financial line items [Note 1: Basis of Presentation](index=11&type=section&id=Note%201%3A%20Basis%20of%20Presentation) The unaudited interim condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, reflecting normal recurring adjustments - Financial statements are **unaudited** and prepared under **U.S. GAAP** and **SEC rules**, including normal recurring adjustments[31](index=31&type=chunk) - ICU Medical develops, manufactures, and sells **innovative medical products** for infusion therapy, vascular access, and vital care, including IV pumps, sets, connectors, catheters, and respiratory/anesthesia products[32](index=32&type=chunk) - Certain prior-year financial statement **reclassifications** were made for presentation consistency, with **no impact** on reported results[33](index=33&type=chunk) [Note 2: New Accounting Pronouncements](index=11&type=section&id=Note%202%3A%20New%20Accounting%20Pronouncements) This note details recently issued accounting standards not yet adopted by the company, with effective dates ranging from 2025 to 2027 - The company is assessing the **impact** of **ASU 2023-06** (Disclosure Improvements), **ASU 2023-09** (Income Taxes), and **ASU 2024-03** (Disaggregation of Income Statement Expenses)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - ASU **2023-09** (Income Taxes) will be effective for annual periods beginning after **December 15, 2024**, and **ASU 2024-03** (Disaggregation of Income Statement Expenses) will be effective for annual periods beginning after **December 15, 2026**[35](index=35&type=chunk)[36](index=36&type=chunk) [Note 3: Restructuring, Strategic Transaction and Integration](index=12&type=section&id=Note%203%3A%20Restructuring%2C%20Strategic%20Transaction%20and%20Integration) Restructuring, strategic transaction, and integration expenses slightly decreased for the three and six months ended June 30, 2025, compared to 2024 Restructuring, Strategic Transaction and Integration Expenses (in millions) | Expense Category (in millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Restructuring, Strategic Transaction and Integration Expenses | $16.2 | $17.1 | $32.9 | $33.2 | | Restructuring Charges | $8.2 | $7.7 | $15.0 | $13.0 | | Strategic Transaction and Integration Expenses | $8.0 | $9.4 | $17.9 | $20.2 | - Restructuring charges for **2025** were primarily related to **facility closure costs** and **severance costs**[39](index=39&type=chunk) - Strategic transaction and integration expenses in **2025** were primarily related to ongoing consulting and employee costs for **Smiths Medical integration**, and transaction costs for the **sale of a 60% ownership** in the IV Solutions business[41](index=41&type=chunk) [Note 4: Assets Held For Sale and Disposal of Business](index=12&type=section&id=Note%204%3A%20Assets%20Held%20For%20Sale%20and%20Disposal%20of%20Business) ICU Medical divested a controlling interest in its IV Solutions business to OPF, recognizing a total gain of $41.8 million and retaining a 40% equity method investment - On **November 12, 2024**, ICU Medical entered an agreement to **divest a controlling interest** in its IV Solutions business to Otsuka Pharmaceutical Factory America, Inc. (OPF)[42](index=42&type=chunk) - On **May 1, 2025**, ICU Medical **sold a 60% ownership interest** in the Otsuka ICU Medical LLC joint venture for preliminary cash proceeds of **$209.5 million**[45](index=45&type=chunk)[46](index=46&type=chunk) - The transaction resulted in a **total gain of $41.8 million**, comprising a **$45.6 million gain** from the disposal, a **$16.4 million gain** from the retained **40% interest**, and a **$20.2 million unfavorable contract liability**[50](index=50&type=chunk) - ICU Medical retains a **40% ownership interest** in the joint venture, accounted for as an **equity method investment**, and provides commercial, logistics, manufacturing, and administrative services for up to **five years**[45](index=45&type=chunk)[46](index=46&type=chunk)[52](index=52&type=chunk) [Note 5: Revenue](index=14&type=section&id=Note%205%3A%20Revenue) Revenue is primarily recognized upon product shipment for consumables, infusion systems, and vital care products, and at the start of the license term for software - Revenue is generally recognized upon **transfer of control** at shipment for products and at the start of the license term for software[56](index=56&type=chunk) - Variable consideration, primarily **distributor chargebacks and rebates**, is estimated using historical data and inventory levels, and recorded as a **reduction of accounts receivable**[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) Revenue by Product Line (in thousands) | Product Line (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Consumables | $273,133 | $261,816 | $539,359 | $505,855 | | Infusion Systems | $167,696 | $163,638 | $333,996 | $320,976 | | Vital Care | $108,037 | $171,001 | $280,213 | $336,279 | | Total Revenues | $548,866 | $596,455 | $1,153,568 | $1,163,110 | Revenue by Geography (in thousands) | Geography (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $335,432 | $383,140 | $723,676 | $749,295 | | Europe, the Middle East and Africa | $99,059 | $95,310 | $194,747 | $193,699 | | APAC | $58,404 | $61,224 | $117,816 | $113,077 | | Other Foreign | $55,971 | $56,781 | $117,329 | $107,039 | | Total Revenues | $548,866 | $596,455 | $1,153,568 | $1,163,110 | [Note 6: Segment Data](index=17&type=section&id=Note%206%3A%20Segment%20Data) The company operates as a single operating and reportable segment, as discrete financial information is not provided to the chief operating decision maker at the product-line level - The company has a **single operating and reportable segment** because discrete financial information (beyond revenue and standard cost) is not allocated to individual product lines for the **CODM**[71](index=71&type=chunk)[73](index=73&type=chunk) - The chief executive officer, as **CODM**, uses **consolidated net profit (loss)** to manage business activities and allocate capital resources[75](index=75&type=chunk) - A single distributor accounted for **19%** of consolidated worldwide net sales for the three months ended **June 30, 2025**, and **18%** for the six months ended **June 30, 2025**[77](index=77&type=chunk) Geographic Long-Lived Assets (in thousands) | Geographic Long-Lived Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Costa Rica | $160,676 | $156,149 | | Mexico | $117,835 | $111,043 | | Other LATAM | $64,060 | $55,451 | | Total Foreign | $454,101 | $425,096 | | United States | $628,671 | $610,547 | | Worldwide Total | $1,082,772 | $1,035,643 | [Note 7: Leases](index=19&type=section&id=Note%207%3A%20Leases) The company recognizes operating lease ROU assets and liabilities based on the present value of future minimum lease payments, using its incremental borrowing rate - Lease **ROU assets and liabilities** are recognized based on the **present value of future minimum lease payments**, using the **incremental borrowing rate**[81](index=81&type=chunk) - Lease terms range from **one to fifteen years**, with options to extend for up to **five additional years**, though these are not included in current lease terms unless reasonably certain[82](index=82&type=chunk) Lease Cost (in thousands) | Lease Cost (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $5,103 | $5,638 | $10,129 | $11,452 | | Finance lease cost — interest | $107 | $47 | $161 | $80 | | Finance lease cost — reduction of ROU asset | $623 | $301 | $812 | $555 | | Short-term lease cost | $5 | — | $7 | — | | Total lease cost | $5,838 | $5,986 | $11,109 | $12,087 | Lease Liabilities (in thousands) | Lease Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Total operating lease liabilities | $62,632 | $56,472 | | Total finance lease liabilities | $4,588 | $3,398 | [Note 8: Net Income (Loss) Per Share](index=21&type=section&id=Note%208%3A%20Net%20Income%20(Loss)%20Per%20Share) Basic EPS is calculated by dividing net income (loss) by weighted-average common shares outstanding, with diluted EPS including dilutive securities unless anti-dilutive - **Basic EPS** is calculated by dividing net income (loss) by weighted-average common shares outstanding[88](index=88&type=chunk) - **Diluted EPS** includes dilutive securities (common stock options and unvested restricted stock units) using the **treasury stock method**, unless a net loss makes them **anti-dilutive**[88](index=88&type=chunk) EPS (per share data) | EPS (per share data) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $35,338 | $(21,406) | $19,862 | $(60,877) | | Basic EPS | $1.43 | $(0.88) | $0.81 | $(2.51) | | Diluted EPS | $1.43 | $(0.88) | $0.80 | $(2.51) | [Note 9: Derivatives and Hedging Activities](index=22&type=section&id=Note%209%3A%20Derivatives%20and%20Hedging%20Activities) ICU Medical uses cash flow hedging programs to manage foreign currency exchange rate risk and floating interest rate risk on variable-rate term loans - The company uses **cash flow hedging programs** to manage **foreign currency exchange rate risk** and **floating interest rate risk** on variable-rate term loans[91](index=91&type=chunk) - Foreign exchange forward contracts, with a total notional amount of **$137.6 million** as of **June 30, 2025**, hedge exposures in various currencies with an average term of **nine months**[93](index=93&type=chunk) - **Interest rate swaps** are used to convert floating-rate term loans to fixed rates, with notional amounts of approximately **$197.4 million** (Term Loan A swap), **$140.6 million** (Term Loan B swap), and an additional **$300.0 million** swap hedging both term loans[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) Derivative Fair Values (in thousands) | Derivative Fair Values (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Total Assets (Derivatives) | $3,434 | $23,478 | | Total Liabilities (Derivatives) | $5,055 | $7,391 | [Note 10: Fair Value Measurements](index=24&type=section&id=Note%2010%3A%20Fair%20Value%20Measurements) Fair value measurements are categorized into Level 1, 2, or 3 inputs, with recurring measurements including contingent earn-out liabilities and derivative financial instruments - **Fair value measurements** are categorized into **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than Level 1), and **Level 3** (unobservable inputs)[101](index=101&type=chunk) - The **contingent earn-out liability** for the Smiths Medical acquisition was reduced to **zero** in **2024** because Smiths no longer met the required minimum beneficial ownership percentage[100](index=100&type=chunk) - Foreign exchange contracts and interest rate swaps are classified as **Level 2 fair value measurements**, relying on **observable market inputs**[104](index=104&type=chunk)[105](index=105&type=chunk) - A **nonrecurring Level 3 fair value measurement** was made for the retained **equity method investment** in Otsuka ICU Medical LLC following the partial sale of the IV Solutions business[107](index=107&type=chunk) [Note 11: Investment Securities](index=26&type=section&id=Note%2011%3A%20Investment%20Securities) ICU Medical holds equity method investments in unconsolidated affiliates, including a 40% ownership interest in Otsuka ICU Medical LLC - ICU Medical applies the **equity method** for investments in unconsolidated affiliates where it has **significant influence** but not a controlling interest[108](index=108&type=chunk) - On **April 24, 2025**, the company formed Otsuka ICU Medical LLC (joint venture) and retained a **40% ownership interest**, with an initial investment of **$125.8 million**[109](index=109&type=chunk) - **Equity in earnings** of unconsolidated affiliates was **$2.8 million** for both the three and six months ended **June 30, 2025**, with no such balances in **2024**[111](index=111&type=chunk) Investment Securities (in thousands) | Investment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Otsuka ICU Medical LLC | $128,662 | — | | Other equity method investment | $2,963 | $3,038 | | Total | $131,625 | $3,038 | [Note 12: Prepaid Expenses and Other Current Assets](index=27&type=section&id=Note%2012%3A%20Prepaid%20Expenses%20and%20Other%20Current%20Assets) Prepaid expenses and other current assets totaled $84.1 million as of June 30, 2025, an increase from $81.5 million at December 31, 2024 Prepaid Expenses and Other Current Assets (in thousands) | Prepaid Expenses and Other Current Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------------- | :------------ | :---------------- | | Other prepaid expenses and receivables | $29,645 | $17,312 | | Prepaid insurance and property taxes | $6,358 | $10,284 | | VAT/GST receivable | $10,031 | $4,445 | | Interest rate contracts | — | $11,038 | | Prepaid income taxes | $14,810 | $11,244 | | Other | $23,277 | $27,208 | | Total | $84,121 | $81,531 | [Note 13: Inventories](index=27&type=section&id=Note%2013%3A%20Inventories) Inventories are valued at the lower of cost or net realizable value using the FIFO method, and increased to $616.5 million at June 30, 2025 - Inventories are stated at the **lower of cost or net realizable value**, with cost determined using the **FIFO method**, including material, labor, and overhead[113](index=113&type=chunk) Inventories (in thousands) | Inventories (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Raw materials | $283,874 | $265,275 | | Work in process | $48,317 | $37,528 | | Finished goods | $284,283 | $281,873 | | Total inventories | $616,474 | $584,676 | [Note 14: Property, Plant and Equipment](index=28&type=section&id=Note%2014%3A%20Property%2C%20Plant%20and%20Equipment) Net property, plant and equipment increased to $452.4 million at June 30, 2025, with depreciation expense decreasing due to asset disposals Property, Plant and Equipment (in thousands) | Property, Plant and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :---------------- | | Machinery and equipment | $421,294 | $400,861 | | Land, building and building improvements | $178,951 | $177,089 | | Instruments placed with customers | $142,010 | $124,290 | | Total property, plant and equipment, net | $452,442 | $442,746 | - Depreciation expense for the three months ended **June 30, 2025**, was **$16.9 million** (down from **$22.3 million** in **2024**), and for the six months was **$33.8 million** (down from **$44.7 million** in **2024**)[117](index=117&type=chunk) - The **decrease in depreciation expense** was partly due to the **disposal of certain assets** related to the sale of a **60% interest** of the IV Solutions business[117](index=117&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk) [Note 15: Goodwill and Intangible Assets, Net](index=28&type=section&id=Note%2015%3A%20Goodwill%20and%20Intangible%20Assets%2C%20Net) Goodwill increased to $1,501.9 million due to currency translation, while net intangible assets decreased to $698.0 million Goodwill (in thousands) | Goodwill (in thousands) | Amount | | :---------------------- | :----- | | Balance as of January 1, 2025 | $1,432,772 | | Currency translation | $69,148 | | Balance as of June 30, 2025 | $1,501,920 | Intangible Assets, Net (in thousands) | Intangible Assets, Net (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Developed technology | $365,588 | $391,671 | | Non-contractual customer relationships | $290,660 | $310,137 | | Total intangible assets | $698,009 | $740,789 | - Intangible asset amortization expense was **$32.7 million** for the three months ended **June 30, 2025** (vs. **$33.1 million** in **2024**) and **$65.3 million** for the six months ended **June 30, 2025** (vs. **$66.2 million** in **2024**)[120](index=120&type=chunk) [Note 16: Accrued Liabilities](index=30&type=section&id=Note%2016%3A%20Accrued%20Liabilities) Accrued liabilities increased to $313.8 million at June 30, 2025, with the field service corrective action accrual related to the 2021 FDA Warning Letter Accrued Liabilities (in thousands) | Accrued Liabilities (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Salaries and benefits | $83,464 | $60,815 | | Incentive compensation | $42,796 | $59,445 | | Deferred revenue | $21,919 | $30,358 | | Italy medical device payback provision | $29,287 | $23,937 | | Field service corrective action | $25,488 | $32,844 | | Other | $110,844 | $99,524 | | Total | $313,798 | $306,923 | - The **field service corrective action accrual** is primarily associated with the **2021 FDA Warning Letter** received by Smiths Medical[123](index=123&type=chunk) [Note 17: Income Taxes](index=30&type=section&id=Note%2017%3A%20Income%20Taxes) The effective tax rate for the three and six months ended June 30, 2025, was 3% and 25% respectively, influenced by the IV Solutions business sale and valuation allowances Effective Tax Rate | Effective Tax Rate | Three months ended June 30, 2025 | Six months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2024 | | :----------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Effective Tax Rate | 3% | 25% | (10)% | (8)% | - The **2025 effective tax rate** includes a **$6.1 million tax expense** from the IV Solutions business sale and a **$5.0 million release** of unrecognized tax benefits due to statute of limitations expiration[125](index=125&type=chunk) - The company recorded a **$2.7 million tax benefit** and **$3.7 million tax expense** from changes to the **valuation allowance** against U.S. federal and state deferred tax assets in the three and six months ended **June 30, 2025**, respectively, due to recent U.S. cumulative losses[128](index=128&type=chunk) - The U.S. enacted the **"One Big Beautiful Bill Act" (OBBBA)** on **July 4, 2025**, and the company is currently assessing its impact on consolidated financial statements[130](index=130&type=chunk) [Note 18: Long-Term Debt](index=31&type=section&id=Note%2018%3A%20Long-Term%20Debt) ICU Medical's $2.2 billion Credit Agreement includes Term Loan A and B, with $1.3 billion outstanding as of June 30, 2025, and significant prepayments made - The **2022 Credit Agreement** includes a **$850.0 million Term Loan A** (maturing **Jan 2027**), a **$850.0 million Term Loan B** (maturing **Jan 2029**), and a **$500.0 million Revolving Credit Facility**[133](index=133&type=chunk)[137](index=137&type=chunk)[241](index=241&type=chunk) - As of **June 30, 2025**, the outstanding aggregate principal amount of the term loans is **$1.3 billion**[242](index=242&type=chunk) - Total principal payments on Term Loans for the six months ended **June 30, 2025**, were **$247.8 million**, including a **$200 million prepayment** on Term Loan A (from IV Solutions sale proceeds) and a **$35 million prepayment** on Term Loan B[148](index=148&type=chunk)[240](index=240&type=chunk)[249](index=249&type=chunk) - The company was in **compliance** with all financial covenants (**Senior Secured Leverage Ratio** and **Interest Coverage Ratio**) as of **June 30, 2025**[155](index=155&type=chunk)[242](index=242&type=chunk) Long-Term Debt (in thousands) | Long-Term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Term Loan A — principal | $559,688 | $770,000 | | Term Loan B — principal | $789,500 | $820,000 | | Total carrying value of long-term debt | $1,337,731 | $1,531,858 | [Note 19: Stockholders' Equity](index=35&type=section&id=Note%2019%3A%20Stockholders%27%20Equity) The Board approved a $100.0 million share purchase plan, with no shares purchased in Q2 2025, and AOCI significantly improved due to foreign currency translation adjustments - A **$100.0 million share purchase plan** was approved in **August 2019**, with **no purchases** made in **Q2 2025** or **Q2 2024**, and the **full amount remains available**, subject to **Credit Agreement limitations**[160](index=160&type=chunk)[259](index=259&type=chunk) - For the six months ended **June 30, 2025**, **61,066 shares** were withheld for **$8.7 million** in tax withholding payments related to employee vested restricted stock units[161](index=161&type=chunk)[263](index=263&type=chunk) Accumulated Other Comprehensive (Loss) Income (in thousands) | Accumulated Other Comprehensive (Loss) Income (in thousands) | January 1, 2025 | June 30, 2025 | | :--------------------------------------------------------- | :-------------- | :------------ | | Foreign Currency Translation Adjustments | $(146,942) | $(25,483) | | Unrealized Losses on Cash Flow Hedges | $5,722 | $(8,978) | | Other Adjustments | $1,819 | $1,819 | | Total AOCI | $(139,401) | $(32,642) | [Note 20: Commitments and Contingencies](index=36&type=section&id=Note%2020%3A%20Commitments%20and%20Contingencies) The company is involved in routine legal proceedings and faces contingencies including FDA Warning Letters and the Italy Medical Device Payback legislation - The company is involved in **routine legal proceedings**, but management does not believe they will have a **material adverse impact**[164](index=164&type=chunk) - As of **June 30, 2025**, approximately **$25.8 million** of the **$32.6 million** accrued for field service corrective actions is related to the **2021 FDA Warning Letter** for Smiths Medical's Oakdale facility[167](index=167&type=chunk) - A **2025 FDA Warning Letter** cited changes to MedFusion™ Model 4000 Syringe Infusion Pump and CADD™ Solis VIP Ambulatory Infusion Pump requiring new **510(k) clearance**; **no loss contingency** is recorded due to uncertain outcome[169](index=169&type=chunk) - The company has accrued **$29.3 million** for potential payments related to the **Italy Medical Device Payback (IMDP) legislation**, but potential amendments could lead to settlement for less than the original assessed value[168](index=168&type=chunk)[252](index=252&type=chunk) [Note 21: Collaborative and Other Arrangements](index=37&type=section&id=Note%2021%3A%20Collaborative%20and%20Other%20Arrangements) ICU Medical's Manufacturing and Supply Agreement with Pfizer was amended to extend terms through 2027, with Solutions product rights assigned to the joint venture - The **Manufacturing and Supply Agreement (MSA)** with Pfizer was amended on **December 31, 2024**, extending terms through **2027** for certain Solutions and Abboject products[172](index=172&type=chunk) - ICU's rights and obligations related to Solutions products under the **MSA** were assigned to the **joint venture** as of **January 24, 2025**[172](index=172&type=chunk) [Note 22: Accounts Receivable Purchase Program](index=37&type=section&id=Note%2022%3A%20Accounts%20Receivable%20Purchase%20Program) ICU Medical has a revolving $150 million uncommitted receivables purchase agreement with BMO Bank, selling $10.0 million in trade receivables for the six months ended June 30, 2025 - The company has a revolving **$150 million uncommitted receivables purchase agreement** with BMO Bank, N.A., entered in **January 2023**, to accelerate capital access[173](index=173&type=chunk) - The transfer of receivables is intended as a **true sale**, isolating them from the company and its creditors[173](index=173&type=chunk) Accounts Receivable Purchase Program (in thousands) | Accounts Receivable Purchase Program (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Trade receivables sold | $10,009 | $172,755 | $10,009 | $348,447 | | Cash received in exchange for trade receivables sold | $9,978 | $171,682 | $9,978 | $346,282 | | Loss on sale of receivables | $32 | $1,073 | $32 | $2,165 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses ICU Medical's financial condition and results of operations, covering business overview, product offerings, global economic challenges, the IV Solutions business disposition, consolidated results, and liquidity and capital resources [Business Overview and Highlights](index=39&type=section&id=Business%20Overview%20and%20Highlights) ICU Medical develops and sells innovative medical products across infusion systems, consumables, and critical care, facing global economic challenges and recently divesting its IV Solutions business - Product offerings include **Consumables** (Infusion Therapy, Oncology, Vascular Access, Tracheostomy), **Infusion Systems** (LVP, Ambulatory, Syringe pumps, IV Medication Safety Software, Professional Services), and **Vital Care** (IV Solutions, Hemodynamic Monitoring, General Anesthesia & Respiratory, Temperature Management, Regional Anesthesia/Pain Management)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - The company experiences **significant impacts** from **global economic challenges**, including fluctuating inflation, increased raw material costs, supply chain disruptions, higher interest rates, and foreign currency volatility[202](index=202&type=chunk)[206](index=206&type=chunk) - On **July 31, 2025**, the U.S. announced a **tariff increase to 15%** for certain countries, including Costa Rica, which could **materially impact** the business, though tariffs did not significantly impact Q2 2025 results[203](index=203&type=chunk)[204](index=204&type=chunk) - On **May 1, 2025**, the company **sold a 60% interest** in its IV Solutions business for **$209.5 million**, using **$200.0 million** of the proceeds to pay down Term Loan A long-term debt[208](index=208&type=chunk) [Consolidated Results of Operations](index=44&type=section&id=Consolidated%20Results%20of%20Operations) Total revenues decreased due to the IV Solutions divestiture, while gross margins improved significantly, and net income improved substantially from a prior-year loss Consolidated Results of Operations (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $548,866 | $596,455 | $1,153,568 | $1,163,110 | | Gross Profit | $208,064 | $207,428 | $418,173 | $392,672 | | Gross Margin | 37.9% | 34.8% | 36.3% | 33.8% | | Income (Loss) from Operations | $10,587 | $7,692 | $23,475 | $(2,963) | | Net Income (Loss) | $35,338 | $(21,406) | $19,862 | $(60,877) | | Gain on Sale of Business | $41,823 | — | $41,823 | — | - **Consumables revenue increased by 4.3%** (3 months) and **6.6%** (6 months) YoY, driven by new customer installations and increased demand[214](index=214&type=chunk) - **Infusion Systems revenue increased by 2.4%** (3 months) and **4.0%** (6 months) YoY, primarily due to increased sales of LVP pump hardware and dedicated sets[215](index=215&type=chunk) - **Vital Care revenue decreased significantly by 36.8%** (3 months) and **16.7%** (6 months) YoY, primarily due to lower IV Solutions sales following the divestiture of a controlling ownership interest[216](index=216&type=chunk) - **Gross margins increased primarily** due to the impact of the IV Solutions business sale (a lower-margin business), price increases, higher production levels, foreign exchange impact, lower supply chain costs, and integration synergies, partially offset by increased tariff costs[217](index=217&type=chunk) - **SG&A expenses slightly decreased** due to lower depreciation/amortization, compensation costs (offset by service fee income from joint venture), and dealer fees, partially offset by increased stock-based compensation and legal fees[218](index=218&type=chunk)[219](index=219&type=chunk) - **Interest expense, net, decreased** due to lower SOFR rates and reduced long-term debt principal balances following prepayments[227](index=227&type=chunk) - **Other income (expense), net, improved significantly**, primarily due to foreign exchange gains from the weakening U.S. dollar[228](index=228&type=chunk) - The **effective tax rate** for the six months ended **June 30, 2025**, was **25%**, compared to **(8)%** in **2024**, influenced by the IV Solutions business sale tax expense and valuation allowance changes[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - **Equity in earnings of unconsolidated affiliates** was **$2.8 million** for the three and six months ended **June 30, 2025**, related to the **40% share** of the joint venture's earnings[237](index=237&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) ICU Medical's liquidity sources include cash, operating cash flows, and borrowing arrangements, with cash decreasing due to debt prepayments and planned capital expenditures reduced - **Primary liquidity sources** include cash and cash equivalents, cash flows from operations, and access to borrowing arrangements (**Senior Secured Credit Facilities** and **accounts receivable purchase program**)[239](index=239&type=chunk) - Cash and cash equivalents **decreased by $8.5 million** from **$308.6 million** (Dec 31, 2024) to **$300.0 million** (June 30, 2025), primarily due to **$247.8 million in debt prepayments**[240](index=240&type=chunk)[258](index=258&type=chunk) - The **Senior Secured Credit Facilities** include **$1.3 billion** in outstanding term loans as of **June 30, 2025**, and a **$500.0 million Revolving Credit Facility** with **no outstanding borrowings**[242](index=242&type=chunk) - Estimated **2025 planned capital expenditures** are **$75 million to $95 million**, reduced from **$90 million to $110 million** due to the IV Solutions business disposal[245](index=245&type=chunk) - **Net cash provided by operating activities** for the six months ended **June 30, 2025**, was **$62.5 million**, a **decrease** from **$127.7 million** in **2024**, influenced by changes in accounts receivable, inventories, and accrued liabilities[255](index=255&type=chunk)[256](index=256&type=chunk) - **Net cash provided by investing activities** for the six months ended **June 30, 2025**, was **$170.6 million**, a **significant increase** from **$(39.6) million** in **2024**, primarily due to **$209.5 million** in proceeds from the sale of the IV Solutions business[257](index=257&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) ICU Medical is exposed to interest rate risk from variable-rate term loans, partially mitigated by interest rate swaps, and foreign currency exchange rate risk on international revenues and expenses - The company is exposed to **interest rate risk** from its **variable-rate Term Loan A and Term Loan B facilities**[262](index=262&type=chunk)[264](index=264&type=chunk) - A hypothetical **1% increase or decrease** in the **SOFR rate** would result in approximately **$13.5 million** in additional annual interest expense or savings related to the term loans[264](index=264&type=chunk) - **Interest rate swaps** are used to **mitigate interest rate risk**, effectively converting portions of floating-rate term loans to fixed rates[265](index=265&type=chunk) - **Foreign currency exchange rate risk** arises from international revenues and expenses denominated in multiple currencies, managed through foreign exchange forward contracts, though **not all exposure is hedged**[267](index=267&type=chunk)[268](index=268&type=chunk) - A hypothetical **10% weakening** in foreign currency exchange rates would result in an estimated **$2.5 million increase** in the fair value of outstanding foreign exchange derivative contracts[268](index=268&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they were effective at a reasonable assurance level - **Disclosure controls and procedures** were evaluated as **effective** at the **reasonable assurance level** as of **June 30, 2025**[271](index=271&type=chunk) - **No material changes** in **internal control over financial reporting** occurred during the quarter ended **June 30, 2025**[272](index=272&type=chunk) - Management acknowledges that controls and procedures provide only **reasonable assurance** due to inherent limitations and resource constraints[269](index=269&type=chunk) [PART II. Other Information](index=55&type=section&id=PART%20II.%20Other%20Information) This section provides other information, including legal proceedings, updated risk factors, unregistered sales of equity securities, and exhibit listings [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the discussion of legal proceedings in Note 20, which states that routine legal proceedings are not expected to have a material adverse impact - **Legal proceedings** are discussed in **Note 20: Commitments and Contingencies**[273](index=273&type=chunk) - Management does not believe that the resolution of unsettled legal proceedings will have a **material adverse impact** on financial position or results of operations[164](index=164&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors from the 2024 Annual Report, highlighting risks related to non-U.S. sales and manufacturing, particularly concerning tariffs on imports from Costa Rica and Mexico - **No material changes** to risk factors from the **2024 Annual Report on Form 10-K**, except as updated in this report[274](index=274&type=chunk) - **Significant portion of revenues** derived from non-U.S. sales and products manufactured at non-U.S. facilities (Costa Rica, Mexico) and imported into the U.S., exposing the company to **tariff risks**[275](index=275&type=chunk)[277](index=277&type=chunk) - On **July 31, 2025**, the U.S. announced an **increase to a 15% baseline reciprocal tariff** for certain countries, including Costa Rica, which is likely to have a **material impact** on costs[278](index=278&type=chunk) - **Elimination of USMCA exemptions** for products manufactured in Mexico would **substantially increase tariff expenses**[278](index=278&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a $100.0 million common stock purchase plan, with no shares purchased in Q2 2025, and the full amount remains available subject to Credit Agreement limitations - A **$100.0 million common stock purchase plan** was approved in **August 2019**, with **no expiration date**[280](index=280&type=chunk) - **No shares were purchased** under the plan during the **second quarter of 2025**, and the **full $100.0 million remains available**[280](index=280&type=chunk) - Share purchases are **limited** by the terms and conditions of the **Credit Agreement**[280](index=280&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) This section confirms no other information to report under sub-items (a) and (b), and no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or officers - **No other information** to report under sub-items (a) and (b)[281](index=281&type=chunk) - **No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during the three months ended **June 30, 2025**[281](index=281&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, corporate documents, stock incentive plan amendments, and certifications - The exhibits include various agreements such as the **Share Sale and Purchase Agreement**, **Put Option Deed**, and **Purchase Agreement** related to the IV Solutions business[285](index=285&type=chunk) - Corporate governance documents like the **Certificate of Incorporation** and **Bylaws**, along with amendments to the **stock incentive plan**, are filed as exhibits[285](index=285&type=chunk) - **Certifications** from the Chief Executive Officer and Chief Financial Officer (pursuant to Sections **302** and **906** of Sarbanes-Oxley Act) and **XBRL documents** are also included[285](index=285&type=chunk) [Signature](index=58&type=section&id=Signature) This section contains the signature of Brian M. Bonnell, Chief Financial Officer of ICU Medical, Inc., certifying the filing of the report on August 7, 2025 - The report is signed by **Brian M. Bonnell**, **Chief Financial Officer**, on behalf of ICU Medical, Inc.[289](index=289&type=chunk) - The **filing date** of the report is **August 7, 2025**[289](index=289&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) ICU Medical reported mixed Q2 2025 results with decreased revenue but improved profitability, and updated its fiscal year 2025 guidance [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Results) ICU Medical reported mixed results for Q2 2025, with a decrease in total revenue but significant improvements in GAAP net income and adjusted profitability metrics compared to the prior year | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change ($) | Change (%) | | :--------------------- | :----------------- | :----------------- | :--------- | :--------- | | **Total Revenue** | $548.9 | $596.5 | $(47.6) | -7.98% | | **GAAP Gross Profit** | $208.1 | $207.4 | $0.7 | 0.34% | | **GAAP Gross Margin** | 38% | 35% | 3 ppts | | | **GAAP Net Income (Loss)** | $35.3 | $(21.4) | $56.7 | N/A | | **GAAP Diluted EPS** | $1.43 | $(0.88) | $2.31 | N/A | | **Adjusted Diluted EPS** | $2.10 | $1.56 | $0.54 | 34.62% | | **Adjusted EBITDA** | $100.3 | $91.3 | $9.0 | 9.86% | | Product Line | Q2 2025 (Millions) | Q2 2024 (Millions) | Change ($) | | :--------------- | :----------------- | :----------------- | :--------- | | **Consumables** | $273.1 | $261.8 | $11.3 | | **Infusion Systems** | $167.7 | $163.7 | $4.0 | | **Vital Care*** | $108.0 | $171.0 | $(63.0) | - ICU Medical's CEO, Vivek Jain, stated that "Second quarter results were generally in line with our expectations"[5](index=5&type=chunk) [Fiscal Year 2025 Guidance Update](index=1&type=section&id=Fiscal%20Year%202025%20Guidance) The company updated its fiscal year 2025 guidance, narrowing the GAAP net loss and diluted loss per share ranges, and adjusting the adjusted EBITDA and diluted earnings per share ranges | Metric | Previous Range (Millions) | Updated Range (Millions) | | :------------------------- | :------------------------ | :----------------------- | | **GAAP Net Loss** | $(45) to $(28) | $(43) to $(35) | | **GAAP Diluted Loss Per Share** | $(1.81) to $(1.11) | $(1.68) to $(1.38) | | **Adjusted EBITDA** | $380 to $405 | $380 to $390 | | **Adjusted Diluted EPS** | $6.55 to $7.25 | $6.85 to $7.15 | [Company Information](index=1&type=section&id=Company%20Information) This section provides an overview of ICU Medical as a global leader in medical infusion products and details the nature and risks associated with forward-looking statements [About ICU Medical](index=1&type=section&id=About%20ICU%20Medical) ICU Medical, Inc. is a global leader in infusion systems, infusion consumables, and high-value critical care products, serving hospital, alternate site, and home care settings worldwide - ICU Medical is a global leader in infusion systems, infusion consumables, and high-value critical care products[10](index=10&type=chunk) - The company's products are used in hospital, alternate site, and home care settings[10](index=10&type=chunk) - ICU Medical is headquartered in San Clemente, California, and focuses on providing quality, innovation, and value to clinical customers[10](index=10&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking nature of certain statements in the press release, emphasizing that they are based on management's current expectations and are subject to various risks and uncertainties - Forward-looking statements are based on management's current expectations, estimates, forecasts, and projections, subject to risks and uncertainties[11](index=11&type=chunk) - Key risks include doing business in foreign countries, competition, decreased demand, raw material costs, operating efficiencies, inflation, geopolitical conditions, healthcare costs, regulatory disruptions, and risks related to acquisitions and intellectual property[11](index=11&type=chunk) - The company undertakes no obligation to update or revise forward-looking statements unless required by law[11](index=11&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated balance sheets, statements of operations, and cash flows, highlighting key financial movements including asset reclassification, revenue changes, and cash flow dynamics [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) The balance sheet shows a decrease in total assets primarily due to the reclassification of assets held for sale in the prior period, and a reduction in cash and cash equivalents | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------- | :------------ | :---------------- | | **TOTAL CURRENT ASSETS** | $1,180,115 | $1,441,983 | | **TOTAL ASSETS** | $4,107,389 | $4,203,931 | | **TOTAL CURRENT LIABILITIES** | $482,777 | $556,182 | | **LONG-TERM DEBT** | $1,337,731 | $1,531,858 | | **TOTAL STOCKHOLDERS' EQUITY** | $2,115,776 | $1,965,235 | - Cash and cash equivalents decreased from **$308.6 million** at December 31, 2024, to **$300.0 million** at June 30, 2025[13](index=13&type=chunk) - Assets held for sale, which were **$284.4 million** at December 31, 2024, were no longer present at June 30, 2025, indicating a completed sale or reclassification[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, total revenues decreased year-over-year, but gross profit remained stable, leading to an improved gross margin, with the company swinging from a net loss to a net income | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **TOTAL REVENUES** | $548,866 | $596,455 | $1,153,568 | $1,163,110 | | **GROSS PROFIT** | $208,064 | $207,428 | $418,173 | $392,672 | | **INCOME (LOSS) FROM OPERATIONS** | $10,587 | $7,692 | $23,475 | $(2,963) | | **GAIN ON SALE OF BUSINESS** | $41,823 | — | $41,823 | — | | **NET INCOME (LOSS)** | $35,338 | $(21,406) | $19,862 | $(60,877) | | **Diluted EPS** | $1.43 | $(0.88) | $0.80 | $(2.51) | - The gain on sale of business contributed **$41.8 million** to income before income taxes in Q2 2025[15](index=15&type=chunk) - Operating expenses remained relatively stable year-over-year for both the three and six-month periods[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities decreased significantly, while investing activities generated a substantial net cash inflow, offsetting a large net cash outflow from financing activities | Cash Flow Activity (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | **Net cash provided by operating activities** | $62,538 | $127,744 | | **Net cash provided by (used in) investing activities** | $170,648 | $(39,554) | | **Net cash used in financing activities** | $(251,351) | $(37,229) | | **NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS** | $(8,541) | $48,426 | - Proceeds from the sale of business amounted to **$209.5 million** for the six months ended June 30, 2025[17](index=17&type=chunk) - Principal repayments of long-term debt were **$247.8 million** for the six months ended June 30, 2025, a significant increase from **$25.5 million** in the prior year period[17](index=17&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section details the company's non-GAAP financial measures, including reconciliations for Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow, explaining adjustments made to GAAP figures [Use of Non-GAAP Financial Information](index=6&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) This section explains the company's use of non-GAAP financial measures, which are considered supplemental to GAAP and provide useful information for evaluating performance by excluding highly variable or unusual special items - Non-GAAP financial measures are supplemental to GAAP and are used by management and investors to assess performance and facilitate period-over-period comparisons[18](index=18&type=chunk) - Special items excluded from non-GAAP measures include contract manufacturing, stock compensation expense, intangible asset amortization, depreciation expense reduction for assets held for sale, restructuring and strategic transaction charges, contract settlements, changes in fair value of contingent earn-outs, quality system and product-related remediation, noncash release of loss on contract provision, asset write-offs, and gain on sale of business[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - Adjusted EBITDA further excludes depreciation expense, interest (net), and taxes, as these can vary significantly among companies and are deemed non-core to the business[31](index=31&type=chunk)[32](index=32&type=chunk) [Reconciliation of Adjusted EBITDA](index=8&type=section&id=Adjusted%20EBITDA) The reconciliation shows an increase in Adjusted EBITDA for Q2 2025 compared to Q2 2024, driven by various non-GAAP adjustments, notably the exclusion of the gain on sale of business in 2025 | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | | **GAAP net income (loss)** | $35,338 | $(21,406) | | **Total non-GAAP adjustments** | $64,971 | $112,743 | | **Adjusted EBITDA** | $100,309 | $91,337 | - Key adjustments for Q2 2025 included adding back interest (net) (**$20.5M**), stock compensation (**$14.5M**), depreciation and amortization (**$49.7M**), and restructuring charges (**$16.2M**), while subtracting the gain on sale of business (**$41.8M**)[37](index=37&type=chunk) [Reconciliation of Adjusted Diluted EPS (Q2 2025)](index=9&type=section&id=Adjusted%20Diluted%20EPS%20(Q2%202025)) For Q2 2025, Adjusted Diluted EPS was **$2.10**, significantly higher than GAAP diluted EPS of **$1.43**, after accounting for various non-GAAP adjustments | Metric (in thousands, except per share) | Q2 2025 | | :-------------------------------------- | :------ | | **Reported (GAAP) Net income** | $35,338 | | **Reported (GAAP) Diluted EPS** | $1.43 | | **Adjusted (Non-GAAP) Net income** | $51,988 | | **Adjusted (Non-GAAP) Diluted EPS** | $2.10 | - Significant adjustments increasing EPS included stock compensation expense (**$0.44**), amortization expense (**$1.00**), restructuring, strategic transaction and integration (**$0.50**), and quality system and product related remediation (**$0.18**)[38](index=38&type=chunk) - The gain on sale of business had a negative impact on adjusted EPS of **$(1.28)** as it was excluded from non-GAAP measures[38](index=38&type=chunk) [Reconciliation of Adjusted Diluted EPS (Q2 2024)](index=10&type=section&id=Adjusted%20Diluted%20EPS%20(Q2%202024)) For Q2 2024, Adjusted Diluted EPS was **$1.56**, a positive figure compared to the GAAP diluted loss per share of **$(0.88)**, primarily due to the exclusion of various charges and a tax expense | Metric (in thousands, except per share) | Q2 2024 | | :-------------------------------------- | :------ | | **Reported (GAAP) Net (loss)** | $(21,406) | | **Reported (GAAP) Diluted (loss) per share** | $(0.88) | | **Adjusted (Non-GAAP) Net income** | $38,067 | | **Adjusted (Non-GAAP) Diluted EPS** | $1.56 | - Key adjustments increasing EPS included stock compensation expense (**$0.34**), amortization expense (**$1.02**), restructuring, strategic transaction and integration (**$0.53**), quality system and product-related remediation (**$0.12**), and tax expense from valuation allowance (**$0.42**)[40](index=40&type=chunk) [Reconciliation of Free Cash Flow](index=11&type=section&id=Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) Free cash flow for the three months ended June 30, 2025, was negative, a significant decrease from the prior year, while the six-month period remained positive but also decreased year-over-year | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | **Net cash provided by operating activities** | $11,211 | $81,953 | $62,538 | $127,744 | | **Purchase of property, plant and equipment** | $(19,696) | $(19,467) | $(34,317) | $(35,382) | | **Free cash flow** | $(8,485) | $62,671 | $28,263 | $93,054 | - The decrease in free cash flow for both periods was primarily driven by a reduction in net cash provided by operating activities[43](index=43&type=chunk) [Fiscal Year 2025 Outlook](index=12&type=section&id=Fiscal%20Year%202025%20Outlook) This section provides the updated fiscal year 2025 guidance, including both GAAP and non-GAAP projections for net loss, adjusted EBITDA, and earnings per share [Updated Fiscal Year 2025 Guidance](index=12&type=section&id=Fiscal%20Year%202025%20Outlook%20(Unaudited)) ICU Medical provided updated guidance for fiscal year 2025, including both GAAP and non-GAAP projections, anticipating a GAAP net loss but projecting positive adjusted EBITDA and adjusted earnings per share | Metric | Low End of Guidance (Millions) | High End of Guidance (Millions) | | :------------------------- | :----------------------------- | :------------------------------ | | **GAAP net loss** | $(43) | $(35) | | **Adjusted EBITDA** | $380 | $390 | | **GAAP loss per share** | $(1.68) | $(1.38) | | **Adjusted earnings per share** | $6.85 | $7.15 | - Non-GAAP adjustments for the full year 2025 are estimated to total between **$423 million** and **$425 million**, significantly impacting the difference between GAAP net loss and Adjusted EBITDA[45](index=45&type=chunk) - Key non-GAAP adjustments for EPS include stock compensation expense (**$2.11**), amortization expense (**$5.47**), restructuring, strategic transaction and integration (**$2.36**), and quality and regulatory initiatives and remediation (**$1.73**)[45](index=45&type=chunk)

Core Insights - The chest drainage catheters market is projected to grow at a CAGR of 4.78% from 2025 to 2032, driven by the increasing prevalence of chronic conditions such as cancer and cardiovascular diseases, along with advancements in catheter technology and improved healthcare access [2][6]. Market Dynamics - In 2022, there were 2,480,675 reported cases of lung-related cancers, predominantly in Asia, which significantly boosts the demand for thoracic drainage interventions using chest drainage catheters [3]. - Approximately 620 million people globally are living with heart and circulatory diseases, further driving the need for interventions like pericardial effusions management through chest drainage catheters [4]. Technological Advancements - The adoption of minimally invasive procedures is enhancing the chest drainage catheter market by improving procedural precision and patient outcomes, with innovations such as image-guided catheter placements and smart catheters enabling real-time monitoring [5]. Challenges - The market faces challenges including catheter complexity and stringent regulatory requirements, which may limit growth; however, the demand for safe and effective thoracic drainage solutions continues to rise due to the increasing global burden of cancer and cardiovascular diseases [6]. Segment Analysis - Pleural drainage catheters are expected to lead the market in 2024, driven by the rise in pleural diseases associated with lung cancer and heart failure, with features like tunneled indwelling pleural catheters offering less invasive alternatives [7]. Manufacturer Innovations - Manufacturers are advancing catheter designs by incorporating features such as smaller diameters, anti-microbial coatings, and integration with digital drainage systems, enhancing safety and clinical outcomes [8]. Regional Outlook - North America is anticipated to dominate the chest drainage catheters market in 2024, supported by an increasing number of cancer patients, advanced healthcare infrastructure, and the presence of key market players like BD, Teleflex Incorporated, and Cook [9][10]. Key Players - Leading companies in the chest drainage catheters market include BD, Teleflex Incorporated, Cook, ICU Medical, and Redax S.p.A., among others [10][12]. Recent Developments - In June 2021, BD received FDA 510(k) clearance for its PeritXT Peritoneal Catheter System, intended for symptomatic, non-malignant ascites drainage [11]. Conclusion - The chest drainage catheters market is poised for substantial growth from 2025 to 2032, with North America being a significant contributor to this expansion [11].

Core Viewpoint - ICU Medical, Inc. is set to release its second quarter 2025 earnings results on August 7, 2025, followed by a conference call to discuss these results [1][2]. Company Information - ICU Medical is a global leader in infusion systems, infusion consumables, and high-value critical care products used in various healthcare settings [3]. - The company is headquartered in San Clemente, California, and focuses on providing quality, innovation, and value to clinical customers worldwide [3].

Core Viewpoint - ICU Medical, Inc. is under investigation for potential securities fraud and unlawful business practices following a warning from the FDA regarding its infusion pump products [1][3]. Group 1: FDA Warning and Impact - On April 22, 2025, ICU received a warning letter from the FDA, citing unauthorized changes to two of its infusion pump products, labeling them as "adulterated" and "misbranded" [3]. - The FDA indicated that the modifications could significantly affect the functionality of the devices, particularly concerning the infusion delivery profile and alarm functionality, raising safety and efficacy concerns [3]. - Following the FDA's announcement, ICU's stock price dropped by $6.04 per share, or 4.42%, closing at $130.68 per share on the same day [4]. Group 2: Legal Investigation - Pomerantz LLP is investigating claims on behalf of ICU investors regarding potential securities fraud or other unlawful business practices by the company and its officers or directors [1]. - Investors are encouraged to contact Pomerantz LLP for more information about the class action [2]. Group 3: Pomerantz LLP Background - Pomerantz LLP is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of recovering significant damages for victims of securities fraud and corporate misconduct [5].

Company Performance - ICU Medical reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.23 per share, and up from $0.96 per share a year ago, representing an earnings surprise of 39.84% [1] - The company posted revenues of $599.49 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.54%, compared to $566.66 million in the same quarter last year [2] - Over the last four quarters, ICU Medical has consistently surpassed consensus EPS and revenue estimates [2] Stock Performance - ICU Medical shares have declined approximately 13.3% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The current Zacks Rank for ICU Medical is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $569.35 million, and for the current fiscal year, it is $6.90 on revenues of $2.28 billion [7] - The outlook for the medical products industry is currently in the bottom 32% of over 250 Zacks industries, which may impact the stock's performance [8]

Financial Data and Key Metrics Changes - Revenue for Q1 was $599 million, representing a total company growth of 10% on a constant currency basis or 8% reported, aided by the end of the national shortage in IV Solutions [6][7] - Adjusted EBITDA increased by 26% to $99 million compared to $79 million last year [14] - Adjusted diluted earnings per share for the quarter was $1.72 compared to $0.96 last year [14] - Adjusted gross margin for the quarter was 37%, in line with expectations [13] Business Segment Data and Key Metrics Changes - Consumables business grew 10% constant currency and 9% reported, driven by new global customer implementations and price improvements [9] - IV Systems business grew 8% constant currency and 6% reported, supported by good dedicated set utilization and earlier-than-expected hardware installations [10] - Vital Care segment grew 11% constant currency and 10% reported, with IV Solutions being the largest component of segment growth [11] Market Data and Key Metrics Changes - The broader demand and utilization environment in Q1 remained attractive across almost every geography, although not at the levels seen last year [8] - The capital environment is status quo, with necessary investments being completed [8] Company Strategy and Development Direction - The company is focused on consistent execution combined with meaningful innovation to refresh its portfolio, particularly in its pump businesses [22] - The formation of a joint venture with Otsuka Pharmaceutical Factory is expected to enhance product offerings and access to technology [12] - The company aims to ensure all activities continue to move forward in concert with increasing revenues, focusing on optimizing its manufacturing network and driving profitability [32] Management's Comments on Operating Environment and Future Outlook - Management anticipates direct tariff expenses in FY 2025 to be in the range of $25 million to $30 million, with most recognized in the latter half of the year [18] - The weakening of the U.S. dollar is expected to offset almost half of the direct tariff expense [19] - Management remains optimistic about maintaining the low end of the guidance range for adjusted EBITDA and gross margin despite tariff impacts [50][51] Other Important Information - The company has been actively working on quality remediation and compliance, particularly regarding its MedFusion and CAD product families [24][26] - The company is committed to ensuring safety and compliance, which has involved significant investments in quality system and product-related remediation activities [15][26] Q&A Session Summary Question: Can you elaborate on the growth drivers in consumables? - Management noted that oncology growth has returned strongly, and products supporting renal and home infusion markets have also seen acceleration [36] Question: Is the growth in consumables primarily driven by price? - Management clarified that the growth is largely due to a lower Q1 last year and continued strength from the previous year [38] Question: Are you seeing more contribution from Duo in Infusion Systems? - Management indicated that there have been very few Duo installations to date, with expectations for more in the second half of the year [39] Question: Can you clarify the tariff impact? - Management emphasized that the $25 million to $30 million figure should not be annualized and highlighted the significant impact from tariffs on Costa Rica [41][42] Question: What is the outlook for guidance amidst tariff and currency impacts? - Management confirmed the goal to hold at least the low end of the guidance range, acknowledging the challenges posed by tariffs and currency fluctuations [50][51]

Financial Data and Key Metrics Changes - Revenue for Q1 was $599 million, representing a total company growth of 10% on a constant currency basis or 8% reported, aided by the end of the national shortage in IV Solutions [5][6] - Adjusted EBITDA increased by 26% to $99 million compared to $79 million last year, with adjusted EPS at $1.72 compared to $0.96 last year [12][13] - Adjusted gross margin for the quarter was 37%, in line with expectations, while total adjusted operating expenses represented 23.1% of revenue, slightly below the original full-year guidance of 24% [12][13] Business Segment Data and Key Metrics Changes - Consumables business grew 10% constant currency and 9% reported, driven by new global customer implementations and price improvements [7][10] - IV Systems business grew 8% constant currency and 6% reported, supported by good dedicated set utilization and earlier-than-expected hardware installations [8][9] - Vital Care segment grew 11% constant currency and 10% reported, with IV Solutions being the largest component of segment growth [10] Market Data and Key Metrics Changes - The broader demand and utilization environment in Q1 remained attractive across almost every geography, although not at the levels seen last year [6] - The capital environment is stable, with necessary investments being completed [6] Company Strategy and Development Direction - The company is focused on consistent execution and meaningful innovation to refresh its portfolio, particularly in its pump businesses [22][24] - The formation of a joint venture with Otsuka Pharmaceutical Factory is expected to enhance product offerings and access to technology [10][11] - The company aims to optimize its manufacturing network and drive profitability through strategic initiatives [33][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of recently implemented tariffs and the evolving global trade landscape, estimating direct tariff expenses for FY 2025 to be in the range of $25 million to $30 million [18][19] - The company remains committed to mitigating tariff impacts through various strategies, including cost controls and adjustments in incentive compensation [19][20] - Management expressed confidence in maintaining the low end of the guidance range for adjusted EBITDA and gross margin despite challenges [52][53] Other Important Information - The company has been actively working on quality remediation and compliance efforts, particularly related to its MedFusion and CAD product families [24][27] - The company is focused on ensuring safety and compliance while enhancing product quality, which has involved significant investments [27][28] Q&A Session Summary Question: What are the drivers behind the growth in consumables? - Management highlighted oncology growth and products supporting renal and home infusion markets as key drivers, with GPO activity and pricing changes contributing as well [37][38] Question: Is the growth in infusion systems attributed to Duo? - Management indicated that there have been very few Duo installations to date, with expectations for more in the second half of the year [41][42] Question: Can you clarify the tariff impact? - Management emphasized that the $25 million to $30 million tariff impact should not be annualized and detailed the geographic risks associated with it [43][44] Question: What is the outlook for gross margin and adjusted EBITDA? - Management confirmed the goal to hold at least the low end of the guidance range for gross margin and adjusted EBITDA, acknowledging the challenges posed by tariffs and currency fluctuations [52][53] Question: How is the reception of Plum Duo and Plum Solo from customers? - Management noted that while there is a strong incumbency advantage, there is potential for meaningful upgrade discussions as the installed base reaches the right time for upgrades [56][58]

Q1 2025 Performance - ICU Medical's total revenue for Q1 2025 was $599 million[7] - Consumables revenue in Q1 2025 reached $266 million, with a year-over-year growth of 9% (10% FXN)[7] - Systems revenue for Q1 2025 was $166 million, showing a year-over-year growth of 6% (8% FXN)[7] - Vital Care revenue in Q1 2025 amounted to $167 million, reflecting a year-over-year growth of 10% (11% FXN)[7] 2025 Guidance (Post JV Transaction) - Adjusted EBITDA is projected to be between $380 million and $405 million[8] - Adjusted EPS is expected to be in the range of $655 to $725[8] - Vital Care revenue is expected to decline by approximately 35% FXN, but remain flat organically[8] - Capital Expenditures are estimated to be between $75 million and $95 million[8] 2025 Guidance Assumptions - Gross Margin percentage is projected to be between 39% and 40%[8] - SG&A and R&D expenses are expected to be approximately 26% of revenue[8] - Net interest expense is estimated to be around $87 million[8]

[PART I. Financial Information](index=5&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents ICU Medical, Inc.'s unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, income, equity, and cash flow statements, with detailed notes on accounting policies and financial activities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,423,915 | $1,441,983 | | **Total Assets** | $4,184,581 | $4,203,931 | | **Total Current Liabilities** | $549,024 | $556,182 | | **Long-Term Debt** | $1,488,565 | $1,531,858 | | **Total Liabilities** | $2,196,892 | $2,238,696 | | **Total Stockholders' Equity** | $1,987,689 | $1,965,235 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $604,702 | $566,655 | | **Gross Profit** | $210,109 | $185,244 | | **Income (Loss) from Operations** | $12,888 | $(10,655) | | **Net Loss** | $(15,476) | $(39,471) | | **Net Loss Per Share (Basic & Diluted)** | $(0.63) | $(1.63) | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $51,327 | $45,791 | | **Net cash used in investing activities** | $(16,811) | $(17,862) | | **Net cash used in financing activities** | $(56,336) | $(26,845) | | **Net Decrease in Cash and Cash Equivalents** | $(18,862) | $(2,799) | | **Cash and Cash Equivalents, end of period** | $289,704 | $251,423 | [Note 4: Assets Held For Sale](index=13&type=section&id=Note%204%3A%20Assets%20Held%20For%20Sale) The company agreed to sell a 60% equity interest in its IV Solutions product line to OPF for approximately $209.5 million in cash, with the transaction closing on April 24, 2025, and net assets held for sale valued at $256.5 million as of March 31, 2025 - The company agreed to sell a 60% stake in its IV Solutions business to OPF for approximately **$209.5 million** in cash plus potential milestone payments. The transaction closed subsequent to the quarter end, on April 24, 2025[44](index=44&type=chunk)[160](index=160&type=chunk) Assets and Liabilities Held for Sale (in thousands) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total assets held for sale** | $286,122 | $284,382 | | **Total liabilities held for sale** | $29,664 | $32,911 | | **Net assets held for sale** | $256,458 | $251,471 | [Note 5: Revenue](index=14&type=section&id=Note%205%3A%20Revenue) Total revenues for the three months ended March 31, 2025, increased to $604.7 million from $566.7 million in the prior-year period, with growth across all product lines and the United States remaining the largest market Revenues by Product Line (in thousands) | Product line | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Consumables | $266,226 | $244,039 | | Infusion Systems | $166,300 | $157,338 | | Vital Care | $172,176 | $165,278 | | **Total Revenues** | **$604,702** | **$566,655** | Revenues by Geography (in thousands) | Geography | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | United States | $388,245 | $366,155 | | Europe, the Middle East and Africa | $95,688 | $98,389 | | APAC | $59,411 | $51,853 | | Other Foreign | $61,358 | $50,258 | | **Total Revenues** | **$604,702** | **$566,655** | [Note 18: Long-Term Debt](index=32&type=section&id=Note%2018%3A%20Long-Term%20Debt) The company's long-term debt totaled $1.54 billion as of March 31, 2025, primarily consisting of Term Loan A and Term Loan B, with $47.8 million in principal repayments made during Q1 2025, and the company remaining in compliance with all financial covenants Carrying Value of Long-Term Debt (in thousands) | Debt Component | March 31, 2025 | | :--- | :--- | | Term Loan A — principal | $759,688 | | Term Loan B — principal | $789,500 | | Less unamortized debt issuance costs | $(12,810) | | **Total carrying value of long-term debt** | **$1,536,378** | - Total principal payments on term loans were **$47.8 million** for Q1 2025, which included an additional prepayment of **$35.0 million** on Term Loan B[131](index=131&type=chunk) - The company was in compliance with all financial covenants, including the Senior Secured Leverage Ratio and the Interest Coverage Ratio, as of March 31, 2025[140](index=140&type=chunk) [Note 20: Commitments and Contingencies](index=36&type=section&id=Note%2020%3A%20Commitments%20and%20Contingencies) The company faces FDA Warning Letters, including a new one in April 2025 regarding infusion pumps, and has accrued liabilities for corrective actions and Italy's Medical Device Payback legislation - In April 2025, the company received a new warning letter from the FDA regarding changes to its MedFusion™ Model 4000 and CADD™ Solis VIP infusion pumps that may require new 510(k) clearance. The financial impact is not yet predictable[154](index=154&type=chunk) - As of March 31, 2025, the accrued liability for field service corrective actions, primarily related to the 2021 FDA Warning Letter, was **$37.6 million**[152](index=152&type=chunk) - The company has accrued **$25.5 million** for potential payments related to the Italy Medical Device Payback (IMDP) legislation, though the ultimate resolution remains unknown[153](index=153&type=chunk)[110](index=110&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 6.7% increase in total revenue to $604.7 million for Q1 2025, driven by growth across all product segments and improved gross margin, while highlighting risks from new U.S. tariffs and strong liquidity supported by cash from operations and debt paydown from the IV Solutions business sale Revenue Change by Segment (in millions) | Segment | Q1 2025 Revenue (GAAP) | YoY % Change (GAAP) | YoY % Change (Constant Currency) | | :--- | :--- | :--- | :--- | | Consumables | $266.2 | 9.1% | 10.3% | | Infusion Systems | $166.3 | 5.7% | 7.6% | | Vital Care | $172.2 | 4.2% | 5.1% | - Gross margin increased to **34.8%** in Q1 2025 from **32.7%** in Q1 2024, primarily due to price increases, higher production levels, favorable foreign exchange impact, lower supply chain costs, and integration synergies[199](index=199&type=chunk) - The company highlights risks from new U.S. tariffs imposed in early 2025, which could materially impact business due to a significant portion of products being manufactured in Mexico and Costa Rica and imported into the U.S[188](index=188&type=chunk)[249](index=249&type=chunk) - Cash and cash equivalents decreased by **$18.9 million** during the quarter to **$289.7 million**, primarily due to debt principal payments of **$47.8 million**[215](index=215&type=chunk) - Subsequent to the quarter, the company received **$209.5 million** from the sale of 60% of its IV Solutions business and used approximately **$200.0 million** to prepay a portion of its Term Loan A debt[160](index=160&type=chunk)[224](index=224&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk on its $2.2 billion variable-rate debt through swaps, with a 1% SOFR change impacting annual interest expense by $15.5 million, and mitigates foreign currency risk, where a 10% weakening would decrease derivative fair value by $4.3 million - The company is exposed to interest rate risk on its variable-rate term loans. A **1%** increase or decrease in the SOFR rate would result in an approximate **$15.5 million** change in annual interest expense[239](index=239&type=chunk) - To manage interest rate risk, the company has entered into three interest rate swaps, effectively converting portions of its floating-rate term loans to fixed rates[240](index=240&type=chunk) - The company is exposed to foreign currency risk. A sensitivity analysis showed that a hypothetical **10%** weakening in foreign currency exchange rates would result in an estimated **$4.3 million** decrease in the fair value of its outstanding derivative contracts[243](index=243&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the principal executive and financial officers, concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[245](index=245&type=chunk) - There were no material changes to the company's internal control over financial reporting during the first quarter of 2025[246](index=246&type=chunk) [PART II. Other Information](index=53&type=section&id=PART%20II.%20Other%20Information) [Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially impact its financial position or results of operations, with further details referenced in Note 20 of the financial statements - The company is involved in routine legal proceedings which are not expected to have a material adverse impact on its financial position or operations[148](index=148&type=chunk)[247](index=247&type=chunk) [Risk Factors](index=54&type=section&id=Item1A.%20Risk%20Factors) The company highlights new U.S. tariffs as a material risk, potentially increasing costs and impacting financial results, given a significant portion of revenue comes from products manufactured in Costa Rica and Mexico and imported into the U.S - A key risk is the imposition of U.S. tariffs and foreign retaliatory measures, as a significant portion of revenues are from products manufactured in Costa Rica and Mexico and imported to the U.S[249](index=249&type=chunk)[251](index=251&type=chunk) - Tariffs imposed in January and April 2025 are likely to have a material impact on the business, financial condition, and results of operations by increasing costs[249](index=249&type=chunk)[252](index=252&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, ICU Medical did not repurchase any common stock, with its $100.0 million share purchase plan remaining fully available but currently limited by Credit Agreement terms Stock Repurchase Activity - Q1 2025 | Period | Total number of shares purchased | Average price paid per share | Approximate dollar value that may yet be purchased under the program | | :--- | :--- | :--- | :--- | | Q1 2025 Total | 0 | $0 | $100,000,000 | - The company's ability to repurchase shares is limited by the terms and conditions of its Credit Agreement[255](index=255&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) During the three months ended March 31, 2025, no directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement in Q1 2025[256](index=256&type=chunk) [Exhibits](index=55&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Purchase Agreement with Otsuka, CEO and CFO certifications, and XBRL data files - The report includes a list of all exhibits filed, such as various agreements and required CEO/CFO certifications[259](index=259&type=chunk)