ICU Medical Inc.
11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:40
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and accompanying notes in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and related notes thereto included in our 2024 Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the caption entitled "Forward-Looking Statements" in this section and Part I, Item 1A. "Risk Factors" in our 2024 Annual Report on Form 10-K as may be further updated from time to time in our other filings with the SEC.
When used in this Quarterly Report on Form 10-Q, the terms "we," "us," and "our" refer to ICU Medical, Inc. ("ICU" or the "Company") and its consolidated subsidiaries included in our condensed consolidated financial statements unless context requires otherwise.
Business Overview and Highlights
We develop, manufacture, and sell innovative medical products used in infusion systems, infusion consumables and high-value critical care products used in hospital, alternate site and home care settings. Our team is focused on providing quality, innovation and value to our clinical customers worldwide. Our product portfolio includes ambulatory, syringe, and large volume IV pumps and safety software; dedicated and non-dedicated IV sets, needlefree IV connectors, peripheral IV catheters, and sterile IV solutions; closed system transfer devices and pharmacy compounding systems; as well as a range of respiratory, anesthesia, patient monitoring, and temperature management products.
Products
Our primary product offerings are described below.
Consumables
Our Consumables business unit includes Infusion Therapy, Oncology, Vascular Access and Tracheostomy products.
Infusion Therapy
Our Infusion Therapy products include non-dedicated infusion sets, extension sets, needle-free connectors, and disinfection caps. Infusion sets used in hospitals and ambulatory clinics consist of flexible sterile tubing running from an IV bag or bottle containing a drug product or solution to a catheter inserted in a patient's vein that may or may not be used with an infusion pump. Disinfection caps are used to actively disinfect access points into the infusion sets and catheters. Our primary Infusion Therapy products are:
•Clave™ needlefree products, including the MicroClave, MicroClave Clear, and NanoClave™ brand of connectors, accessories, extension and administration sets used for the administration of IV fluids and medications;
•Neutron™ catheter patency device, used to help maintain patency of central venous catheters;
•Tego™ needlefree connector utilized to access catheters for hemodialysis and apheresis applications; and
•ClearGuard™, SwabCap™ and SwabTip™ disinfection caps.
Oncology
Closed System Transfer Devices ("CSTD") and hazardous drug compounding systems are used to prepare and deliver hazardous IV medications such as those used in chemotherapy, which, if released, can have harmful effects on the healthcare worker and environment. Our primary Oncology products are:
•ChemoLockTMCSTD ("Chemolock"), which utilizes a proprietary needlefree connection method, is used for the preparation and administration of hazardous drugs. ChemoLock is used to limit the escape of hazardous drug or vapor concentrations, block the transfer of environmental contaminants into the system, and eliminates the risk of needlestick injury;
•ChemoClaveTM("Chemoclave"), an ISO Connection standard and universally compatible CSTD used for the preparation and administration of hazardous drugs. ChemoClave utilizes standard ISO luer locking connections, making it compatible with all brands of needlefree connectors and pump delivery systems. ChemoClave also is used to limit the escape of hazardous drug or vapor concentrations, block the transfer of environmental contaminants into the system, and eliminate the risk of needlestick injury; and
•Deltec® GRIPPER® non-coring needles for portal access.
The preparation of hazardous drugs typically takes place in a pharmacy where drugs are removed from vials and prepared for delivery to a patient. Those prepared drugs are then transferred to a nursing unit where the chemotherapy is administered via an infusion pump set to a patient. Components of the ChemoClave and ChemoLock product lines are used both in pharmacies and on the nursing floors for the preparation and administration of hazardous drugs.
Vascular Access
Our Vascular Access products are used by clinicians to access the patients' bloodstream to deliver fluids and medication or to obtain blood samples. Our primary Vascular Access products are:
•Jelco® safety and conventional peripheral IV catheters and sharps safety devices for hypodermic injection, designed to help prevent accidental needlestick injury;
•Safe-T Wing® venipuncture and blood collection devices;
•Port-A-Cath® implantable ports;
•Portex® arterial blood sampling syringes;
•PowerWand® midline catheters; and
•Cleo® subcutaneous infusion catheters and sets.
Tracheostomy
Our tracheostomy products are used in the placement of a secure airway using both surgical and percutaneous insertion techniques. Our primary Tracheostomy products are:
•Portex BLUselect® PVC tracheostomy tubes, which feature an inner cannula as well as a Suctionaid option for above the cuff suctioning and vocalization capability;
•Portex Bivona® silicone tracheostomy tubes, which offer the added benefits of comfort and mobility and come in a variety of configurations suited to meet the clinical needs of neonatal through adult patients; and
•Portex BLUperc® percutaneous insertion kits, which allow for safe placement of the tracheostomy tube at the bedside.
Infusion Systems
We offer a comprehensive portfolio of infusion pumps, dedicated IV sets, software and professional services to meet the wide range of infusion needs. Our primary Infusion System products are:
Large Volume Pump ("LVP") Hardware:
•Plum Duo™ and Plum Solo™ precision infusion pumps, which recently received FDA 510(k) clearance during April 2025, are a new category of precision pumps that bring unprecedented accuracy and unmatched usability in a flexible, clinician-friendly single or dual channel design, capable of delivering up to four compatible medications through a single pump (dual channel). These pumps provide ±3% delivery accuracy, regardless of the placement of the medication bag or pump, or positioning of the patient. Designed with clinical efficiency in mind, Plum precision pumps simplify workflows with fewer alarm and setup burdens, smarter guidance, and more focused care. The pumps feature vibrant high-definition displays that provide clear, critical information at a glance. Combined with LifeShield™ IV safety software, Plum precision pumps are fully IV-EHR interoperable and provide a future-ready platform to enhance safety and efficiency across all IV touchpoints.
•Plum 360™ infusion pumps feature the unique Plum cassette system that helps to enhance patient safety and workflow efficiency. PlumSet™ dedicated IV sets include an air trap to help minimize interruptions and a direct connection to the secondary line that eliminates the risk of common setup errors and enables concurrent delivery of two compatible medications through a single line. Plum 360 has been named Best in KLAS for eight years in a row (2018, 2019, 2020, 2023 - Best in KLAS Smart Pump Traditional; 2021, 2022, 2023, 2024, 2025 Best in KLAS Smart Pump EMR Integrated) and was the first medical device to be awarded UL Cybersecurity Assurance Program Certification.
Ambulatory Infusion Hardware:
•CADD™ ambulatory infusion pumps and disposables, including administration sets and medication cassette reservoirs, serve as a single pain management platform across all types of IV pain management therapies and all clinical care areas from the hospital to outpatient treatment.
Syringe Infusion Hardware:
•Medfusion™ syringe infusion pumps are designed for the administration of fluids and medication to address the needs of the most vulnerable patients requiring precisely controlled infusion rates. Focused on delivery accuracy, the Medfusion 4000 can deliver from a comprehensive portfolio of syringes to meet syringe pump guidance to deliver medication from the smallest syringe size possible.
IV Medication Safety Software:
•LifeShield™ infusion safety software for Plum precision pumps (Plum Solo, Plum Duo) is an enterprise-wide platform designed with the input of pharmacists, nurses and administrators to empower health systems to raise the bar in IV performance. The system's hybrid architecture provides cloud-based functionality to allow access anywhere with on-premise management providing security and control.
•ICU Medical MedNet™ software is an enterprise-class medication management platform that can help reduce medication errors, improve quality of care, streamline workflows and maximize revenue capture. ICU Medical MedNet connects our industry-leading Plum 360 smart pumps to a hospital's electronic health record ("EHR"), asset tracking systems, and alarm notification platforms to further enhance infusion safety and efficiency.
•PharmGuard™ medication safety software for Medfusion 4000 syringe and CADD-Solis™ pumps allows for customized drug libraries to support the standardization of protocols for medication administration throughout the facility.
Professional Services:
•In addition to the products above, our teams of clinical and technical experts work with customers to develop
safe and efficient infusion systems, providing customized and personalized configuration, implementation,
and data analytics services to optimize our infusion hardware and software.
Vital Care
Our Vital Care business unit includes IV Solutions, Hemodynamic Monitoring, General Anesthesia and Respiratory, Temperature Management Solutions and Regional Anesthesia/Pain Management products.
IV Solutions
On May 1, 2025, at the closing of our transaction with OPF (as defined below), we transferred certain interests, including our IV Solutions product line, to OPF. See "Disposition of our IV Solutions Business and Prepayment of a portion of our Long-term Obligations" further below for more information on this transaction. In connection with the formation of the joint venture, we sell and distribute IV Solutions products to customers on behalf of the joint venture.
The IV Solutions products include a broad portfolio of injection, irrigation, nutrition and specialty IV solutions including:
•IV Therapy and Diluents, including Sodium Chloride, Dextrose, Balanced Electrolyte Solutions, Lactated Ringer's, Ringer's, Mannitol, Sodium Chloride/Dextrose and Sterile Water.
•Irrigation, including Sodium Chloride Irrigation, Sterile Water Irrigation, Physiologic Solutions, Ringer's Irrigation, Acetic Acid Irrigation, Glycine Irrigation, Sorbitol-Mannitol Irrigation, Flexible Containers and Pour Bottle Options.
Hemodynamic Monitoring
Our Hemodynamic Monitoring products are designed to help clinicians get accurate real-time access to patients' hemodynamic and cardiac status with an extensive portfolio of monitoring systems and advanced sensors & catheters. Measurements provided by our systems help clinicians determine how well the heart is pumping blood and how efficiently oxygen from the blood is being used by the tissues. Our Hemodynamic Monitoring products include:
•Cogent™ 2-in-1 hemodynamic monitoring system;
•CardioFlo™ hemodynamic monitoring system;
•TDQ™ and OptiQ™ cardiac output monitoring catheters;
•TriOxTMvenous oximetry catheters;
•Transpac™ blood pressure transducers;
•SafeSet™ closed blood sampling and conservation system; and
•MEDEX® LogiCal® Pressure Monitoring System and components.
General Anesthesia & Respiratory
We offer a broad range of anesthesia systems and devices and breathing circuits, ventilation, respiratory and specialty airway products that maintain patients' airways before, during and after surgery. Our primary Anesthesia & Respiratory products are:
•Portex® acapella® bronchial hygiene products used to mobilize pulmonary secretions to facilitate the opening of airways in patients with chronic respiratory diseases such as chronic obstructive pulmonary disease, or COPD, asthma and cystic fibrosis.
Temperature Management Solutions
Temperature Management solutions systems are used in perioperative and critical care settings to help monitor and regulate patient temperature. Our primary Temperature Management products include:
•Level 1® rapid infusion, fluid warming, routine blood and fluid warming, irrigation fluid warming, convective patient warming and temperature probes.
Regional Anesthesia/Pain Management Trays
We offer a comprehensive range of Portex® regional anesthesia/pain management trays and components. Our primary products include:
•Epidural Trays;
•Spinal Trays;
•Combined (CSE) Trays;
•Peripheral Nerve Block Trays; and
•Specialty Trays (Lumbar Puncture, Amniocentesis, Myelogram).
In the U.S. a substantial amount of our products are sold to group purchasing organization member hospitals. We believe that as healthcare providers continue to either consolidate or join major buying organizations, the success of our products will depend, in part, on our ability, either independently or through strategic relationships, to secure long-term contracts with large healthcare providers and major buying organizations.
Global Economic Challenges
In recent years, we have experienced, and may continue to experience, significant impacts to our business as a result of global economic challenges, resulting from, among other events, health pandemics and geopolitical conflicts which have resulted in fluctuating inflation rates, especially with respect to freight costs driven by higher fuel prices, increased cost and shortages of raw materials, supply chain disruptions, higher interest rates and volatility on foreign currency exchange rates.
2025 Events
The U.S. administration has continued to engage in trade discussions and impose tariffs on imports from other countries. Certain of these tariffs have been subsequently paused or modified, and the situation remains highly fluid. For example, most recently, on July 31, 2025, the U.S. announced that the 10% baseline reciprocal tariff on imports from all countries would be raised to 15% for certain countries, including Costa Rica.
A meaningful portion of our global revenues are from products manufactured in our Costa Rica and Mexico manufacturing facilities and imported into the U.S. Currently the majority of products manufactured in our Mexico facilities are exempted from tariffs under the United States-Mexico-Canada Agreement ("USMCA"). If, however, the USMCA exemptions were eliminated in the future, our tariff expense for products manufactured in Mexico would increase substantially. The tariffs as currently implemented are likely to have a material impact on our business, financial condition and results of operations through the incurrence of additional costs; however, the extent to which the imposition of tariffs, possible delays and exemptions may have a material impact remains fluid. During the third quarter of 2025, we incurred $10.9 million in incremental reciprocal tariffs as a result of the tariffs imposed by the U.S. Administration in 2025, of which $1.6 million was capitalized and $9.3 million was expensed.
In September 2025, the U.S. Commerce Department (the "Department") initiated a national security investigation into imports of medical consumables and equipment under Section 232 of the Trade Expansion Act (the "Act"). The Act allows the President to negotiate tariffs to promote international trade. Section 232 of the Act specifically grants the President the authority to impose tariffs if the Department determines imports threaten U.S. national security. The Department has 270 days to deliver its policy recommendations to the President, who then has up to 90 days to decide on potential action and 15 days to implement it. If the probes conducted determine these imports, which comprise the vast majority of our product portfolio, pose a national security risk, it could result in potential tariffs imposed in addition to the country-based tariffs and/or could reduce the benefits we receive from currently available exemptions such as the USMCA.
Based on current geopolitical conditions we expect foreign currency rates, freight costs, oil prices, interest rates, and general inflation to remain subject to volatility in the market.
While we continually monitor the ongoing and evolving impact of the above events on our operations the overall impact remains uncertain and may not be fully reflected in our results of operations until future periods. The overall impact to our results of operations will depend on a number of factors, many of which are out of our control, none of which can be fully predicted at this time. See "Part I. Item 1A. Risk Factors" in our 2024 Annual Report on Form 10-K as updated in this Quarterly Report on Form 10-Q for a discussion of risks and uncertainties.
Disposition of our IV Solutions Business and Prepayment of a portion of our Long-term Obligations
On April 24, 2025, pursuant to a purchase agreement (the "Agreement") with Otsuka Pharmaceutical Factory America, Inc. a Delaware corporation ("OPF") (described in Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements), we completed the formation of Otsuka ICU Medical LLC (the "joint venture") and transferred the assets, liabilities and operations that comprise our IV Solutions product line to the joint venture. At the
closing of the transaction on May 1, 2025, under the Agreement, we sold a 60% interest in the joint venture to OPF. The total sales price, inclusive of our final purchase price adjustments, was $211.2 million, of which we used $200.0 million of the proceeds from the sale to pay down a portion of our outstanding Term Loan A (as defined below) long-term debt during the second quarter of 2025.
Consolidated Results of Operations
We present income statement data in Part I, Item 1. "Financial Statements." The following table shows, for the three and nine months ended September 30, 2025 and 2024, the percentages of each income statement caption in relation to total revenue:
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Total revenues | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
| Gross profit | 37 | % | 35 | % | 37 | % | 34 | % | |||||||||||||||
| Selling, general and administrative expenses | 28 | % | 28 | % | 28 | % | 27 | % | |||||||||||||||
| Research and development expenses | 4 | % | 4 | % | 4 | % | 4 | % | |||||||||||||||
| Restructuring, strategic transaction and integration expenses | 2 | % | 3 | % | 3 | % | 3 | % | |||||||||||||||
| Change in fair value of contingent earn-out | - | % | (1) | % | - | % | - | % | |||||||||||||||
| Total operating expenses | 34 | % | 34 | % | 35 | % | 34 | % | |||||||||||||||
| Income from operations | 3 | % | 1 | % | 2 | % | - | % | |||||||||||||||
| Interest expense, net | (4) | % | (4) | % | (4) | % | (4) | % | |||||||||||||||
| Other income (expense), net | - | % | - | % | - | % | - | % | |||||||||||||||
| Gain on sale of business | 1 | % | - | % | 3 | % | - | % | |||||||||||||||
| Income (Loss) before income taxes and equity in (losses) earnings of unconsolidated affiliates | - | % | (3) | % | 1 | % | (4) | % | |||||||||||||||
| Benefit (Provision) for income taxes | - | % | (3) | % | - | % | (1) | % | |||||||||||||||
| Net (loss) income from consolidated companies | - | % | (6) | % | 1 | % | (5) | % | |||||||||||||||
Seasonality/Quarterly Results
There are no significant seasonal aspects to our business. We can experience fluctuations in net sales as a result of variations in the ordering patterns of our largest customers, which may be driven more by production scheduling and customer inventory levels, and less by seasonality. Our expenses often do not fluctuate in the same manner as net sales, which may cause fluctuations in operating income that are disproportionate to fluctuations in our revenue.
Non-GAAP Financial Measures
In addition to comparing changes in revenue on a U.S. GAAP basis, we also compare the changes in revenue from one period to another using constant currency. The presentation of revenues on a constant currency basis is a non-GAAP financial measure that excludes the impact of fluctuations in foreign currency exchange rates that occurred between the comparative periods. We provide constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. We believe this information is useful to investors to facilitate comparisons and better identify trends in our business. Our constant currency revenues reflect current period local currency revenues at prior period's average exchange rates. We consistently apply this approach to revenues for all currencies where the functional currency is not the U.S. dollar. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Revenues on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.
Consumables
The following table summarizes our total Consumables revenue (in millions, except percentages):
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Consumables revenue (GAAP) | $ | 285.1 | $ | 264.9 | $ | 20.2 | 7.6 | % | $ | 824.4 | $ | 770.7 | $ | 53.7 | 7.0 | % | |||||||||||||||||||||||||||||||
| Impact of foreign currency exchange rate changes | (2.8) | (2.4) | |||||||||||||||||||||||||||||||||||||||||||||
| Consumables revenue on a constant currency basis (non-GAAP) | $ | 282.3 | $ | 822.0 | |||||||||||||||||||||||||||||||||||||||||||
| $ Change in constant currency | $ | 17.4 | $ | 51.3 | |||||||||||||||||||||||||||||||||||||||||||
| % Change in constant currency | 6.6 | % | 6.7 | % | |||||||||||||||||||||||||||||||||||||||||||
Consumables revenue increased for the three and nine months ended September 30, 2025, as compared to the same periods in the prior year, primarily due to new customer installations and increased demand for our Infusion Consumables and Oncology product lines.
Infusion Systems
The following table summarizes our total Infusion Systems revenue (in millions, except percentages):
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Infusion Systems (GAAP) | $ | 173.9 | $ | 159.8 | $ | 14.1 | 8.8 | % | $ | 507.9 | $ | 480.7 | $ | 27.2 | 5.7 | % | |||||||||||||||||||||||||||||||
| Impact of foreign currency exchange rate changes | (1.3) | 1.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Infusion Systems on a constant currency basis (non-GAAP) | $ | 172.6 | $ | 509.1 | |||||||||||||||||||||||||||||||||||||||||||
| $ Change in constant currency | $ | 12.8 | $ | 28.4 | |||||||||||||||||||||||||||||||||||||||||||
| % Change in constant currency | 8.0 | % | 5.9 | % | |||||||||||||||||||||||||||||||||||||||||||
Infusion Systems revenue increased for the three and nine months ended September 30, 2025, as compared to the same periods in the prior year, primarily due to increased sales of LVP hardware and dedicated sets.
Vital Care
The following table summarizes our total Vital Care revenue (in millions, except percentages):
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| Vital Care (GAAP) | $ | 78.0 | $ | 164.5 | $ | (86.5) | (52.6) | % | $ | 358.2 | $ | 500.8 | $ | (142.6) | (28.5) | % | |||||||||||||||||||||||||||||||
| Impact of foreign currency exchange rate changes | (0.9) | (0.8) | |||||||||||||||||||||||||||||||||||||||||||||
| Vital Care on a constant currency basis (non-GAAP) | $ | 77.1 | $ | 357.4 | |||||||||||||||||||||||||||||||||||||||||||
| $ Change in constant currency | $ | (87.4) | $ | (143.4) | |||||||||||||||||||||||||||||||||||||||||||
| % Change in constant currency | (53.1) | % | (28.6) | % | |||||||||||||||||||||||||||||||||||||||||||
Vital Care revenue decreased for the three and nine months ended September 30, 2025, as compared to the same periods in the prior year, primarily due to lower IV Solutions sales resulting from the sale of a controlling ownership interest in our IV Solutions business on May 1, 2025 (see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements).
Gross Margins
For the three and nine months ended September 30, 2025, gross margins were 37.4% and 36.6%, respectively, as compared to 34.8% and 34.1% for the three and nine months ended September 30, 2024, respectively. The increases in gross margin for the three and nine months ended September 30, 2025, as compared to the same periods in the prior year, were primarily driven by the impact of the sale of a 60% interest of our IV Solutions business on May 1, 2025, a lower margin business. Gross margin also increased as a result of price increases, the impact of foreign exchange rates, lower supply chain costs and the realization of integration synergies. These improvements were partially offset by an increase in tariff costs of $9.3 million and $14.3 million for the three and nine months ended September 30, 2025.
Selling, General and Administrative ("SG&A") Expenses
The following table summarizes our total SG&A Expenses (in millions, except percentages):
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| SG&A | $ | 152.8 | $ | 162.7 | $ | (9.9) | (6.1) | % | $ | 469.4 | $ | 479.9 | $ | (10.5) | (2.2) | % | |||||||||||||||||||||||||||||||
SG&A expenses decreased for the three months ended September 30, 2025, as compared to the same period in the prior year, primarily due to a decrease of $6.7 million in dealer fees and $2.8 million in depreciation and amortization, which when combined with other smaller category decreases, were mostly offset by an increase of $3.6 million in stock based compensation. Dealer fees and depreciation and amortization expenses decreased primarily due to the disposal of certain assets related to the sale of a 60% interest of our IV Solutions business (see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements). Stock based compensation increased due to a change in the probability of meeting certain financial targets related to a performance equity award.
SG&A expenses decreased for the nine months ended September 30, 2025, as compared to the same period in the prior year, primarily due to a decrease of $7.8 million in depreciation and amortization, $6.6 million in dealer fees, $2.9 million in compensation costs, and $2.4 million in bad debt and warranty expense, which when combined with other smaller category decreases, were partially offset by an increase of $6.8 million in stock based compensation, $3.6 million in legal fees, and $3.0 million in professional services. Depreciation and amortization expense and dealer fees decreased primarily due to the disposal of certain assets related to the sale of a 60% interest of our IV Solutions business (see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements). Compensation costs decreased primarily due to service fee income recorded in the same line as the related personnel expenses for services provided to the joint venture (see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements). Warranty expense decreased due to the release of reserves related to certain products and lower warranty estimated reserve due to lower warranty claims expected. Stock based compensation increased due to a change in the probability of meeting certain financial targets related to a performance equity award. Legal fees increased due to services performed during the current year related to various legal matters. Professional services increased due to increase in audit and consulting fees.
Research and Development ("R&D") Expenses
The following table summarizes our total R&D Expenses (in millions, except percentages):
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||
| R&D | $ | 21.3 | $ | 21.0 | $ | 0.3 | 1.4 | % | $ | 66.4 | $ | 66.3 | $ | 0.1 | 0.2 | % | |||||||||||||||||||||||||||||||
R&D expenses slightly increased for the three and nine months ended September 30, 2025, as compared to the same period in the prior year, primarily related to higher headcount and employment expense in support of ongoing R&D projects. R&D expenses for both periods presented generally included increased compensation and benefit expenses, consulting fees, production supplies, samples, travel costs, utilities and other miscellaneous administrative costs incurred in our ongoing R&D projects.
Restructuring, Strategic Transaction and Integration Expenses
Restructuring, strategic transaction and integration expenses were $13.1 million and $46.1 million for the three and nine months ended September 30, 2025, respectively, as compared to $16.8 million and $50.1 million for the three and nine months ended September 30, 2024, respectively.
Restructuring charges
Restructuring charges were $6.2 million and $21.2 million for the three and nine months ended September 30, 2025, respectively, as compared to $3.6 million and $16.6 million for the three and nine months ended September 30, 2024. The restructuring costs for the three and nine months ended September 30, 2025 were primarily related to facility closure costs and severance costs. The restructuring costs for the three and nine months ended September 30, 2024 were primarily related to severance costs. As of September 30, 2025, we expect to pay the majority of our outstanding restructuring charges during the next twelve months.
Strategic transaction and integration expenses
Strategic transaction and integration expenses were $6.9 million and $24.9 million for the three and nine months ended September 30, 2025, respectively, as compared to $13.2 million and $33.5 million for the three and nine months ended September 30, 2024. The strategic transaction and integration expenses during the three and nine months ended September 30, 2025 and 2024 were primarily related to ongoing consulting expenses and employee costs incurred to integrate our Smiths Medical business acquired in 2022. The nine months ended September 30, 2025 also included transaction costs related to the sale of a 60% interest of our IV Solutions business in the second quarter of 2025.
Change in Fair Value of Contingent Earn-out
For the three and nine months ended September 30, 2024, we recorded a gain of $3.9 million and $4.0 million primarily related to adjusting the contingent earn-out related to the Smiths Medical acquisition. As of December 31, 2024, Smiths Medical had sold all of its ownership interest in ICU Medical shares. Smiths Medical no longer holds the shares necessary to meet the minimum beneficial ownership percentage required to earn the contingent earn-out. Accordingly, the Smiths Medical contingent earn-out was adjusted to zero during 2024.
Interest Expense, net
The following table presents interest expense, net (in thousands):
|
Three months ended September 30, |
Nine months ended September 30, |
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| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Interest expense | $ | (22,229) | $ | (27,287) | $ | (70,557) | $ | (80,353) | |||||||||||||||
| Interest income | 2,421 | 2,604 | 8,169 | 8,057 | |||||||||||||||||||
| Interest expense, net | $ | (19,808) | $ | (24,683) | $ | (62,388) | $ | (72,296) | |||||||||||||||
Interest expense, net for the three and nine months ended September 30, 2025 and 2024 primarily included the contractual interest incurred on borrowings under the Credit Agreement, as defined below, the per annum commitment fee charged on the available amount of the revolving credit facility contained in the Credit Agreement, the amortization of debt issuance costs incurred in connection with entering into the Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements), the impact of the interest rate swaps, and interest income. Additionally, interest expense for the three and nine months ended September 30, 2025, includes the interest accretion on an unfavorable contract loss provision. The interest expense component decreased for the three and nine months ended September 30, 2025, as compared to the respective prior year periods, primarily due to decreases in the applicable SOFR reference rate and due to lower obligation principal balances after the prepayment of $35 million on our Term Loan B in March 2025 and the prepayment of $200 million on our Term Loan A in May 2025 using the proceeds from the sale of a 60% interest of our IV Solutions business.
Other Income (Expense), net
The following table presents other income (expense), net (in thousands):
|
Three months ended September 30, |
Nine months ended September 30, |
||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Foreign exchange gain (loss), net | $ | 1,827 | $ | (1,059) | 1,967 | (5,202) | |||||||||||||||||
| Loss on disposition of assets | (1,458) | $ | (100) | (1,685) | (23) | ||||||||||||||||||
| Other miscellaneous income (expense), net | 238 | (322) | 380 | (1,981) | |||||||||||||||||||
| Other income (expense), net | $ | 607 | $ | (1,481) | $ | 662 | $ | (7,206) | |||||||||||||||
For the three and nine months ended, September 30, 2025, the foreign exchange gains were primarily related to the weakening of the U.S. dollar relative to certain foreign currencies, including the Euro and British Pound, partially offset by the strengthening of the U.S. dollar relative to the Mexico Peso.
For the three and nine months ended September 30, 2024, the foreign exchange losses were primarily related to the strengthening of the U.S. dollar relative to certain foreign currencies, including the Mexican Peso and Argentine Peso.
Gain on Sale of Business
For the three months ended September 30, 2025, we recorded a gain on the sale of business of $3.0 million related to the difference between the fair value of our retained 40% ownership interest in the joint venture and our carrying value of that same proportionate ownership interest. For the nine months ended September 30, 2025, the gain on the sale of business of $44.8 million comprised of the sum of a $45.6 million gain from the disposal of a 60% ownership interest in the joint venture, a $19.4 million gain from the difference between the fair value of our retained 40% ownership interest in the joint venture and our carrying value of that same proportionate ownership interest, and a $20.2 million unfavorable contract loss (see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements).
Income Taxes
For the three and nine months ended September 30, 2025 and 2024, income taxes were accrued at an estimated effective tax rate of 26% and 25%, respectively, as compared to (84)% and (26)% for the three and nine months ended September 30, 2024, respectively.
The effective tax rate for the three and nine months ended September 30, 2025 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, section 162(m) excess compensation, federal and state valuation allowance, and tax credits. The effective tax rate during the three and nine months ended September 30, 2025 included a discrete tax expense of $0.0 million and $6.1 million, respectively, related to the sale of a 60% interest of our IV solutions business. Additionally, there were unrecognized tax benefits released as a result of the expiration of statute of limitations during the three and nine months ended September 30, 2025 of $0.0 million and $5.0 million, respectively. Furthermore, U.S. return-to-provision adjustments net of related tax reserves for the year ended December 31, 2024 resulted in a tax benefit of $12.0 million for both the three and nine months ended September 30, 2025. The adjustments related primarily to a decrease to the U.S. valuation allowance.
The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Due to the weight of objectively verifiable negative evidence, the Company recorded a change to the valuation allowance against certain U.S. federal and state deferred tax assets, resulting in a $1.4 million tax benefit and $2.3 million tax expense during the three and nine months ended September 30, 2025, respectively. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses. The Company's ability to use our deferred tax assets depends on the amount of taxable income in future periods. Based on current earnings and anticipated future earnings along with expected changes in our deferred tax asset and liability balances, it is likely that the current valuation allowance position will be adjusted during the year. An additional valuation allowance may be required beyond the current year if future earnings are not sufficient to support the realization of deferred tax assets.
In December 2022, the European Union (EU) agreed to implement Pillar Two, the OECD's global minimum tax rate of 15% for multinationals that meet a global revenue threshold. All of the EU countries and some of the non-EU countries in which we operate have enacted or have announced plans to enact legislation to adopt Pillar Two. The Pillar Two legislation has been effective for our fiscal year beginning January 1, 2024. For fiscal year 2025, we have considered the impact of Pillar Two on our tax provision and effective tax rate. However, the Pillar Two rules continue to evolve and their application may alter our tax obligations in certain countries in which we operate for fiscal periods beyond 2025 as we continue to assess the impact of tax legislation in these jurisdictions.
On July 4, 2025, the U.S. enacted H.R. 1 "A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14", commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements as additional guidance becomes available and uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions. The impacts are included in our operating results for the three and nine months ended September 30, 2025, however, we do not expect the OBBBA to have a material impact on our estimated annual effective tax rate in 2025.
The effective tax rate for the three and nine months ended September 30, 2024 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, state income taxes, section 162(m) excess compensation, federal and state valuation allowance, and tax credits. Additionally, there were unrecognized tax benefits released as a result of the expiration of statute of limitations during the three and nine months ended September 30, 2024 of $0.0 million and $4.0 million, respectively. Furthermore, U.S. return-to-provision adjustments net of related tax reserves for the year ended December 31, 2023 resulted in a tax expense of $1.6 million for both the three and nine months ended September 30, 2024. The adjustments related primarily to changes in estimate for the research and development credit and an increase to the U.S. valuation allowance.
The Company recorded an increase in valuation allowance of $22.4 million and $42.9 million against certain U.S. federal and state deferred tax assets during the three and nine months ended September 30, 2024, respectively. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses.
Equity in (Losses) Earnings of Unconsolidated Affiliates
For the three and nine months ended September 30, 2025, we recorded equity in (losses) earnings of unconsolidated affiliates of $(1.5) million and $1.3 million, respectively, related to our 40% proportionate share of the earnings of the joint venture (see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements).
Liquidity and Capital Resources
We regularly evaluate our liquidity and capital resources, including our access to external capital, to assess our ability to meet our principal cash requirements, which include working capital requirements, planned capital investments in our business, commitments, acquisition restructuring and integration expenses, investments in quality systems and quality compliance objectives, payment of interest expense, repayment of outstanding borrowings, income tax obligations and acquisition opportunities in accordance with our growth strategy.
Sources of Liquidity
Our current primary sources of liquidity are cash and cash equivalents, cash flows from our operations including access to borrowing arrangements and cash flows from our accounts receivable purchase program.
Funds generated from operations are held in cash and cash equivalents. During the nine months ended September 30, 2025, our cash and cash equivalents decreased by $8.8 million from $308.6 million at December 31, 2024 to $299.7 million at September 30, 2025. This decrease was primarily due to principal payments made during 2025 consisting of (i) $47.8 million payment on our Term Loan B during the first quarter of 2025 (ii) $200.0 million of the $209.5 million received in cash consideration for the sale of a 60% interest in our IV Solutions business used to pay down a portion of our Term Loan A during the second quarter of 2025 and (iii) $25.0 million payment on Term Loan B during the third quarter of 2025.
2022 Credit Agreement and Access to Capital
As discussed in Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements, we entered into the Credit Agreement with various lenders on January 6, 2022 in connection with the closing of the Smiths Medical acquisition. The Credit Agreement provides for a five-year term loan A facility of $850.0 million (the "Term Loan A"), a seven-year term loan B facility of $850.0 million (the "Term Loan B") and a five-year revolving credit facility of $500.0 million (the "Revolving Credit Facility") (collectively, the "Senior Secured Credit Facilities"). The proceeds from the term loans were used to finance a portion of the cash consideration for the Smiths Medical acquisition. The outstanding aggregate principal amount of the term loans is $1.3 billion as of September 30, 2025, which includes the Term Loan A that will mature in January 2027 and the Term Loan B that will mature in January 2029. The proceeds of future borrowings under the Revolving Credit Facility, which expires in January 2027, may be used as a source of liquidity to support our ongoing working capital requirements and other general corporate purposes. There are no outstanding borrowings under the Revolving Credit Facility as of September 30, 2025. As part of entering into the Senior Secured Credit Facilities, we were assigned issuer and Term Loan B credit ratings. At the date of issuance of this report, our issuer and Term Loan B credit ratings assigned and outlook were as follows:
|
Issuer/Term Loan B Credit Ratings |
Outlook | ||||||||||
| Moody's | B1/B1 | Stable | |||||||||
| Fitch | BB/BB+ | Negative | |||||||||
| Standard & Poor's | BB-/BB- | Positive | |||||||||
These credit ratings are not a recommendation by the rating agency to buy, sell, or hold our securities, are subject to revision or withdrawal at any time by the rating agency and should be evaluated independently of any other credit rating we may receive. In addition, credit rating agencies review their ratings periodically, and there is no guarantee our current credit rating will remain the same as described above. If our credit rating were to be lowered, our ability to access the debt markets, our cost of funds, and other terms for new incurrence of debt could be adversely impacted.
The Credit Agreement contains financial covenants that pertain to the Term Loan A and the Revolving Credit Facility. Specifically, we were required to maintain a Senior Secured Leverage Ratio of no more than 4.00 to 1.00 and an Interest Coverage Ratio of no less than 3.00 to 1.00 (defined and discussed in greater detail in Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements). We were in compliance with these financial covenants as of September 30, 2025.
In January 2023, we entered into a receivables purchase agreement with Bank of the West, which was subsequently acquired by BMO Bank, N.A. ("BMO") in February 2023. This agreement accelerates our access to capital, which we utilize on an as needed basis (see Note 22: Accounts Receivable Purchase Program).
We believe that our existing cash and cash equivalents along with cash flows expected to be generated from future operations, the funds received and accessible under the Senior Secured Credit Facilities and funds received under the accounts receivable program will provide us with sufficient liquidity to finance our cash requirements for the next twelve months and the foreseeable future. In the event that we experience downturns, cyclical fluctuations in our business that are more severe or longer than anticipated, fail to achieve anticipated revenue and expense levels, or have significant unplanned cash expenditures, we may need to obtain or seek alternative sources of capital or financing, and we can provide no assurances that the terms of such capital or financing will be available to us on favorable terms, if at all. Our ability to generate cash flows from operations, issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or in the solvency of our customers or suppliers, deterioration in our key financial ratios or credit ratings or other significantly unfavorable changes in economic conditions. See Part I. Item 1A. "Risk Factors" in our 2024 Annual Report on Form 10-K for discussion of the risks and uncertainties associated with our debt financing.
Uses of Liquidity
Capital Expenditures
As of September 30, 2025, our range for estimated 2025 planned capital expenditures is $85 million to $95 million, which has been reduced from the previously disclosed $90 million to $110 million range in our 2024 Annual Report on Form 10-K due to the impact of the IV Solutions business disposal.
Contractual Obligations
Our principal commitments at September 30, 2025 include both short and long-term future obligations.
Operating Leases
We have non-cancelable operating lease agreements where we are contractually obligated for certain lease payment amounts. For more information regarding our operating lease obligations, (see Note 7: Leases to our accompanying condensed consolidated financial statements).
Long-term Debt
Existing Credit Facility
In January 2022, we incurred borrowings under Senior Secured Credit Facilities. Interest payments on the term loans were estimated using an Adjusted Term SOFR rate and an applicable margin of 1.75% for Term Loan A and 2.25% for Term Loan B and the revolver commitment fees were estimated using the rate of 0.25%. The applicable margin rate and commitment fee rate will change from time to time in accordance with a preset pricing grid based on the leverage ratio (see Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements for pricing grids related to the Senior Secured Credit Facilities).
Fiscal 2025 Principal Pre-Payments
During the third quarter of 2025, we made a prepayment of $25.0 million on our Term Loan B. During the second quarter of 2025 we used $200.0 million of the $209.5 million in proceeds received during the quarter from the sale of a 60% interest of our IV Solutions business to prepay Term Loan A principal payments. In the first quarter of 2025, we prepaid $35.0 million in Term Loan B principal payments. Due to these prepayments, there are no principal payments due on Term Loan A until 2027 or on Term Loan B until 2029.
New October 2025 Credit Facility
On October 31, 2025 (the "Closing Date"), we entered into an Amendment No. 2 to our Credit Agreement (the "Amendment"), whereby we refinanced our Term Loan A and our Revolving Credit Facility under our existing Credit Agreement dated as of January 6, 2022 (as amended by Amendment No. 1, dated as of October 5, 2022, the "Existing Credit Agreement" and as further amended by the Amendment, the "Amended Credit Agreement"). The Amended Credit Agreement includes new credit facilities (the "New Credit Facilities") that consists of a $750.0 million senior secured term loan A and a new $500.0 million revolving credit facility (the "New Revolving Facility"). The proceeds from and commitments under the New Credit Facilities were used to (i) repay the outstanding principal amount of the Term Loan A and refinance the existing Revolving Credit Facility (collectively, the "Refinancing") under the Existing Credit Agreement (ii) repay $190.0 million of the outstanding balance of the Term Loan B under the Existing Credit Agreement and (iii) to finance the payment of fees and expenses incurred in connection with the Refinancing. The New Credit Facilities mature five years from the Closing Date, subject to a springing maturity provision under which the New Credit Facilities will mature 91 days prior to the maturity date of the Term Loan B if the maturity date of the Term Loan B is less than 91 days after the scheduled maturity of the New Credit Facilities at that time. This provision could accelerate the maturity of the Term Loan A and New Revolving Facility, requiring earlier repayment. We are monitoring our liquidity position to ensure we can address this potential earlier repayment obligation. See Note 23: Subsequent Event to our accompanying condensed consolidated financial statements for additional details.
The principal repayment obligations, estimated interest payments and revolver commitment fee payments updated to reflect the New Credit Facilities are estimated in the below table*:
| (in millions) | ||||||||||||||||||||
| Remainder of 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | |||||||||||||||
| Term Loan A Principal Payments | $ | - | $ | 18.7 | $ | 18.7 | $ | 37.5 | $ | 37.5 | $ | 637.5 | ||||||||
| Term Loan A Interest Payments | 10.1 | 36.8 | 33.7 | 32.6 | 30.7 | 24.0 | ||||||||||||||
| Term Loan B Principal Payments | - | - | - | - | 764.5 | - | ||||||||||||||
| Term Loan B Interest Payments | 12.6 | 44.4 | 42.5 | 42.7 | 0.6 | - | ||||||||||||||
| Revolver Commitment Fee | 0.3 | 1.1 | 1.0 | 1.0 | 1.0 | 0.8 | ||||||||||||||
| $ | 23.0 | $ | 101.0 | $ | 95.9 | $ | 113.8 | $ | 834.3 | $ | 662.3 | |||||||||
*The Term Loan A principal and interest payments in the above table are subject to the springing maturity clause described in Exhibit 10.1 as filed as an exhibit to this Quarterly Report on Form 10-Q.
Other Future Capital Investments
Other future capital investments include restructuring and integration expenses along with spending to support quality systems and quality compliance objectives, which includes acquired field action liabilities. As of September 30, 2025, there have been no material changes to our range of $90 million to $110 million for estimated 2025 other future capital investments previously disclosed in our 2024 Annual Report on Form 10-K.
Contingent Payments
In 2015, legislation was enacted in Italy, which requires medical device companies to make payments to the Italian government if Italy's medical device expenditures for certain years exceeded annual regional expenditure ceilings. Since its enactment, the legislation has been subject to appeals in the Italian court system. In the third quarter of 2024, Italy's Constitutional Court issued two judgments, one of which confirmed the legitimacy of the legislation on the Italy Medical Device Payback ("IMDP"). In September 2025, the Italian government enacted a law that allows medical device companies to settle certain historical periods (2015-2018) for 25% of the original assessed value. During the third quarter of 2025, we settled the liability related to the 2015-2018 historical periods and paid $2.5 million. Additionally, we recorded a release of $3.8 million in previously established reserves. The release is included in total revenues in our condensed consolidated statements of operations. See Note 16: Accrued Liabilities to our accompanying condensed consolidated financial statements for details on amounts accrued for potential payments related to the IMDP.
We expect to fund our capital expenditures and contractual obligations with our existing cash and cash equivalents and cash generated from our future operations.
Indemnifications
In the normal course of business, we have agreed to indemnify our officers and directors to the maximum extent permitted under Delaware law and to indemnify customers as to certain intellectual property matters related to sales of our products. There is no maximum limit on the indemnification that may be required under these agreements. Although we can provide no assurances, we have never incurred, nor do we expect to incur, any liability for indemnification.
Historical Cash Flows
Cash Flows from Operating Activities
Our net cash provided by operations for the nine months ended September 30, 2025 was $119.2 million. The changes in operating assets and liabilities included a $3.9 million decrease in accounts receivable and a $23.3 million increase in accounts payable. Offsetting these amounts was a $36.2 million increase in inventories, a $4.7 million increase in prepaid expenses and other current assets, a $7.1 million increase in other assets, $28.9 million decrease in accrued liabilities, and $33.5 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The decrease in accounts receivable was primarily due to the amount and timing of revenues. The increase in accounts payable was due to the timing of payments. The increase in inventory was primarily to build inventory safety stock levels and the impact of the capitalization of
tariffs in our accounting. The increase in prepaid expenses and other current assets was primarily due to an increase in the payment of miscellaneous prepaid invoices. The increase in other assets was due to the purchase of spare parts. The decrease in accrued liabilities was primarily due to payout of annual bonuses and decrease in deferred revenue. The net changes in income taxes was a result of the timing of payments.
Our net cash provided by operations for the nine months ended September 30, 2024 was $163.8 million. The changes in operating assets and liabilities included a $17.5 million increase in other assets, a $11.2 million increase in prepaid expenses and other current assets, a $11.5 million increase in accounts receivable and $4.4 million in net changes in income taxes, including excess tax benefits and deferred income taxes. Offsetting these amounts was a $21.1 million increase in accounts payable, a $20.5 million increase in accrued liabilities and a $9.4 million decrease in inventories. The increase in other assets was due to the purchase of spare parts. The increase in prepaid expenses and other current assets was primarily due to an increase in deferred costs related to infusion pumps sold and the payment of other miscellaneous prepaid invoices. The increase in accounts receivable was primarily due to the amount and timing of revenues and we sold less receivables under our account receivable purchase program (see Note 22: Accounts Receivable Purchase Program). The net changes in income taxes was a result of recording the current deferred provision, the timing of payments, and valuation allowance. The increase in accounts payable was due to the timing of payments. The increase in accrued liabilities was primarily due to employee costs. The decrease in inventory was primarily due to our focus on reducing inventory levels.
Cash Flows from Investing Activities
The following table summarizes the changes in our investing cash flows (in thousands):
|
Nine months ended September 30, |
||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| Investing Cash Flows: | ||||||||||||||||||||
| Purchases of property, plant and equipment | $ | (63,397) | $ | (55,292) | $ | (8,105) | (1) | |||||||||||||
| Proceeds from sale of business | 211,185 | - | $ | 211,185 | (2) | |||||||||||||||
| Proceeds from sale of assets | 42 | 695 | (653) | |||||||||||||||||
| Intangible asset additions | (7,210) | (8,317) | 1,107 | |||||||||||||||||
| Proceeds from sale of investment securities | - | 500 | (500) | (3) | ||||||||||||||||
| Net cash provided by (used in) investing activities | $ | 140,620 | $ | (62,414) | $ | 203,034 | ||||||||||||||
_______________________________
(1)Our purchases of property, plant and equipment may vary from period to period based on additional investments needed to support new and existing products and expansion of our manufacturing facilities.
(2)In 2025, we sold a 60% ownership interest in our IV Solutions business to OPF, see Note 4: Assets Held For Sale and Disposal of Business to our accompanying condensed consolidated financial statements.
(3)Proceeds from the sale of our investment securities may vary from period to period based on the maturity dates of the investments.
Cash Flows from Financing Activities
The following table summarizes the changes in our financing cash flows (in thousands):
|
Nine months ended September 30, |
||||||||||||||||||||
| 2025 | 2024 | Change | ||||||||||||||||||
| Financing Cash Flows: | ||||||||||||||||||||
| Principal payments on long-term debt | $ | (272,750) | $ | (38,250) | $ | (234,500) | (1) | |||||||||||||
| Proceeds from exercise of stock options | 5,972 | 5,883 | 89 | (2) | ||||||||||||||||
| Payments on finance leases | (1,543) | (775) | (768) | |||||||||||||||||
| Payment of contingent earn-out liability | - | (2,600) | 2,600 | (3) | ||||||||||||||||
| Tax withholding payments related to net share settlement of equity awards | (8,719) | (11,867) | 3,148 | (4) | ||||||||||||||||
| Net cash used in financing activities | $ | (277,040) | $ | (47,609) | $ | (229,431) | ||||||||||||||
_______________________________
(1) Relates to scheduled principal payments and prepayments on the Senior Secured Credit Facilities. In March 2025, we prepaid $35.0 million on our Term Loan B. In May 2025, we used $200.0 million received from the sale of a 60% interest in our IV Solutions business to pay down a portion of our Term Loan A. In September 2025, we prepaid $25.0 million on our Term Loan B.
(2)Proceeds from the exercise of stock options will vary from period to period based on the volume of options exercised and the exercise price of the specific options exercised.
(3)During the first quarter of 2024, we paid $3.4 million in cash related to the settlement of a contingent earn-out to one of our international distributors. Of the $3.4 million, the amount recorded as the acquisition date fair value, which is considered financing cash flows, was $2.6 million (see Note 10: Fair Value Measurements).
(4)During the nine months ended September 30, 2025, our employees surrendered 61,304 shares of our common stock from vested restricted stock unit awards as consideration for approximately $8.7 million in minimum statutory withholding obligations paid on their behalf. During the nine months ended September 30, 2024, our employees surrendered 114,023 shares of our common stock from vested restricted stock unit awards as consideration for approximately $11.9 million in minimum statutory withholding obligations paid on their behalf.
Our common stock purchase plan, which authorized the repurchase of up to $100.0 million of our common stock, was approved by our Board of Directors in August 2019. This plan has no expiration date. As of September 30, 2025, all of the $100.0 million available for purchase was remaining under the plan. We are limited on share purchases in accordance with the terms and conditions of our Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements).
Critical Accounting Policies
In our 2024 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our consolidated financial statements. There have been no material changes to our critical accounting policies from those previously disclosed in our 2024 Annual Report on Form 10-K.
New Accounting Pronouncements
See Note 2: New Accounting Pronouncements Not Yet Adopted to the accompanying condensed consolidated financial statements.
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