ICU Medical, Inc. Q2 FY2025 earnings call

• Revenue for Q2 was $544 million, in line with expectations, with total company growth 2% organic or - 6% reported due to JV impact. Adjusted EBITDA was $100 million and EPS was $2.10. - Gross margins were ahead of expectations because of the IV Solutions joint venture. - Consumables business grew 4% organic and 3% reported, with a record quarter in absolute sales levels driven by new global customer implementations, price improvements, etc. and received an additional 510(k) clearance for Clave neutral displacement connectors. - IV Systems business grew 2% organic and reported, driven by LVP growth. Submitted 510(k)s for Medfusion 5000 syringe pump, CADD ambulatory pumps and related LifeShield safety software, aiming for a single software solution across pump modalities. - Vital Care segment was down due to deconsolidation of IV Solutions revenues, with non - IV Solutions product lines down sequentially.

Consumables and IV Systems: Q2 revenue had good year - over - year growth. Organic growth was 4% and reported growth was 3%. It was a record quarter in absolute sales levels. Vital Care: Down 4% organic and 34% reported as IV Solutions revenues were deconsolidated. The non - IV Solutions product lines in the segment were basically down $4 million sequentially. For the year, these products were expected to be flattish, either up or down marginally.

• Adjusted EBITDA guidance for full year narrowed from $380 million - $405 million to $380 million - $390 million. - Adjusted EPS guidance narrowed from $6.55 - $7.25 per share to $6.85 - $7.15 per share. - Anticipated direct expense from tariffs in FY '25 to be in the range of $25 million - $30 million, and the latest estimate shows an additional $5 million increase due to the tariff rate increase in Costa Rica. - Revenue expectations for the full year remained unchanged. - Expected full year adjusted gross margin in the range of 39% - 40%, with the impact from tariffs being offset by gross margin expansion from the IV Solutions joint venture. - Net interest expense expected to be approximately $83 million for the full year.

• Tariff risk, specifically the increase in tariffs levied on the core production environment of Costa Rica, which impacts the gross margin and cash flow. - Risks related to product compliance and market competition in the infusion therapy business.

Q: Jayson Bedford asked about tariffs, specifically what was assumed for China.

A: Brian Michael Bonnell responded that the current guidance assumes China at the current rates in effect today and they did get a bit of benefit due to the pause.

Q: Mike Matson asked about the tariff impact and sequential growth.

A: Brian Michael Bonnell said the rough math was that the net impact related to tariffs was about $10 million. Vivek Jain said Consumables quarter was the largest in history and Systems business could be a record in Q3, but was less precise on Vital Care's Q3 sequential growth.

Q: Will Korner asked about updated thoughts on tariffs and annualization.

A: Vivek Jain said to stay with the high level not to annualize what's there and they continue to work on mitigations.

Q: Charles S. Strauzer asked about plant consolidation and its benefit.

A: Vivek Jain said the move of infusion pumps from Minnesota into Costa Rica was fully completed, and other North American and European consolidations were very close to completion, with little benefit built in for 2025.

Q: Charles S. Strauzer asked about the opportunity for sales via upgrades from existing customers versus market share gains for Plum.

A: Vivek Jain said both were valuable, with Plum Solo having new value streams from existing installed base through enhanced software offering.