ICU Medical(ICUI) - 2025 Q2 - Quarterly Results

Executive Summary 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 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] Fiscal Year 2025 Guidance Update 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 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 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] - The company's products are used in hospital, alternate site, and home care settings[10] - ICU Medical is headquartered in San Clemente, California, and focuses on providing quality, innovation, and value to clinical customers[10] Forward-Looking Statements 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] - 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] - The company undertakes no obligation to update or revise forward-looking statements unless required by law[11] Condensed Consolidated Financial Statements (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 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] - 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] Condensed Consolidated Statements of Operations 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] - Operating expenses remained relatively stable year-over-year for both the three and six-month periods[15] Condensed Consolidated Statements of Cash Flows 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] - 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] Non-GAAP Financial Measures and Reconciliations 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 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] - 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][20][21][22][23][24][25][26][27][28][29][30] - 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][32] Reconciliation of Adjusted EBITDA 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] Reconciliation of Adjusted Diluted EPS (Q2 2025) 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] - 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] Reconciliation of Adjusted Diluted EPS (Q2 2024) 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] Reconciliation of Free Cash Flow 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] Fiscal Year 2025 Outlook 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 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] - 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]