ICU Medical(US:ICUI)2025-05-08 21:32Financial 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]