ICU Medical, Inc.

Good day and welcome to the ICU Medical, Inc. First Quarter 2025 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be opportunity to ask questions. Please note today's event is being recorded. I'd like to now turn the conference over to John Mills. Please go ahead.

Thank you. Good afternoon, everyone. Thank you for joining us to discuss ICU Medical's financial results for the first quarter of 2025. On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman, and Brian Bunnell, Chief Financial Officer. We wanted to let everyone know that we have a presentation accompanying today's prepared remarks. To view the presentation, please go to our investor page and click on the events calendar, and it will be under the first quarter 2025 events. Before we start our prepared remarks, I want to touch upon any forward-looking statements made during the call, including belief and expectations about the company's future results. Please be aware they are based on the best available information to management and assumptions that are reasonable. Such statements are not intended to be a full representation of future results and are subject to risk and uncertainties. Future results may differ materially from management's current expectations. We refer all of you to the company's SEC filings for more detailed information on the risk and uncertainties that have a direct bearing on operating results and financial position. Please note that during today's call, we will also discuss non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into ICU Medical's ongoing results of operations, particularly when comparing underlying results from period to period. We also included a reconciliation of these non-GAAP measures in today's release and provided as much detail as possible on any addendums that are added back. And with that, it is my pleasure to turn the call over to Vivek.

Thanks, John, and good afternoon, everyone. We know it's the end of a long and complicated earnings season, so we'll try to be as brief as possible. I'll walk through our Q1 revenue and earnings performance and provide some commentary on the businesses and then turn it over to Brian to recap the full Q1 results and implications of the joint venture and our view on the impact of tariffs, at least as of this moment. After that, I'll come back with some color on some items at the intersection of innovation and quality, more detail on tariffs, and just make a few comments about the medium-term activities of the company. Revenue for Q1 was $599 million for total company growth of 10% on a constant currency basis, or 8% reported, and was aided far less than Q4 2024 from IV Solutions as the national shortage ended. All three reporting segments had good year-over-year growth. Adjusted EBITDA was $99 million, and adjusted EPS was $1.72. Gross margins were in line with our expectations, and cash generation was healthy. Between excess cash generated in Q1 and the net proceeds from the creation of the JV last week, we have repaid almost $250 million in principal year-to-date, and Brian will provide more detail on this. The broader demand and utilization environment in Q1 continued to be attractive across almost every geography, with the rate positive but not at the levels we saw last year. The capital environment is status quo, and it does appear investments that customers need to get done do get done. Currency has obviously flipped since the last call with the dollar weakening. Getting into our businesses more specifically, our consumables business in Q1 grew 10% constant currency and 9% reported. All product lines contributed to this growth. This year-over-year growth was driven by new global customer implementations, price improvements, rapid growth in some of our niche markets, and less so by census as it was solid but stable. Just as a reminder, when looking at last year, we had major sequential increases in Q2 over Q1 of 2024, so we don't expect the rate of growth for the next quarter to continue what we had here in Q1, but still feel very comfortable about the year. Our IB systems business grew 8% constant currency and 6% reported. This was driven by good dedicated set utilization in all geographies, and some LVP hardware installs earlier in the year than anticipated. We continue to be engaged in many new RFP processes and are beginning customer discussions around the multi-year refresh of our Plum 360 pumps with Plum Solo now that it's approved. As we described in the last call, we had an excellent 2024 in selling our CAD ambulatory pumps, and we're seeing the benefit of increased disposables utilization, but have a tougher set of year-over-year hardware comps in this length. Just wrapping up the business segments, our vital care segment grew 11% constant currency and 10% reported, with IV solutions being the largest component of segment growth, with the remainder of the segment being up slightly. There is no longer a market shortage for IV solutions. We announced the formation and stand-up of our joint venture with Otsuka Pharmaceutical Factory, and thanks to the many colleagues at both companies that worked tirelessly on this for the last few months. While the manufacturing operations of this JV are straightforward, it has been work from a systems perspective to ensure everything is seamless to customers, and we will monitor this closely as it's another set of long-term service agreements we had to put into place. We continue to be impressed with their commitment, innovation, and fundamental manufacturing experience in this arena, and believe we have aligned with the right partner. We believe this will be a win-win for each of us, and most importantly, customers in the United States. From a value perspective, while creating this JV is a wash to our earnings, we still own 40% of an asset that's hard to replicate that now has better access to technology and eventually will have a more complete product offering, which benefits other parts of our portfolio, and we have a potential earn-out payment in the medium term. That's my brief recap of Q1 at the high level. I'll now turn it over to Brian and then come back with some of the color on the other items I mentioned in the intro.

Thanks, Vivek, and good afternoon, everyone. Since Vivek covered the Q1 revenue for each of the businesses, I'll focus my remarks on recapping the Q1 performance for the remainder of the P&L, along with the Q1 balance sheet and cash flow, and then provide commentary on the full year, given the formation of the JV and the fluid tariff situation. As you can see from the GAAP to non-GAAP reconciliation in the press release, adjusted gross margin for the quarter was 37%, which was in line with our expectations. Adjusted SG&A expense was $116 million in Q1, and adjusted R&D was $23 million. Total adjusted operating expenses were $138 million and represented 23.1% of revenue. The total dollar amount of spend was the same as Q4, and the 23.1% of revenue is a bit below our original full-year guidance of 24%. as we have been measured in making some of the strategic R&D and commercial investments that we mentioned on the last earnings call, as well as exercising general cost controls across the company given the uncertain and changing environment. Restructuring integration and strategic transaction expenses were $17 million in the first quarter and related primarily to continued efforts to integrate our IT systems and consolidate our manufacturing network. along with transaction expenses associated with the Ivy Solutions joint venture. Adjusted diluted earnings per share for the quarter was $1.72 compared to 96 cents last year. The current quarter results reflect net interest expense of 22 million and an adjusted effective tax rate of 25%. Diluted shares outstanding for the quarter were 24.7 million. And finally, Adjusted EBITDA for Q1 increased by 26% to $99 million compared to $79 million last year. Of the year-over-year EBITDA improvement of $20 million, we estimate that the one-time higher demand from the IV solutions shortage contributed around $3 million in the quarter. Now, moving on to cash flow and the balance sheet. For the quarter, free cash flow was $37 million, which reflects strong quality of earnings, some timing benefits from working capital, in particular accounts receivable and accounts payable, and our typical lower CapEx spending in the first quarter of the year. It was another solid free cash flow quarter, and our liquidity position continues to improve. During the quarter, we invested $13 million of cash spend for quality system and product-related remediation activities, 13 million on restructuring and integration, and 15 million on CapEx for general maintenance and capacity expansion at our facilities, as well as placement of revenue-generating infusion pumps with customers outside the U.S. And just to wrap up on the balance sheet, we finished the quarter with 1.55 billion of debt and 290 million of cash. During the first quarter, we paid down a total of $48 million of debt, which consisted of $13 million of scheduled principal payments, plus a prepayment for an additional $35 million. Subsequent to quarter end, upon closing of the JV transaction on May 1st, we used the $200 million of proceeds to pay down the term loan A. Moving forward to the 2025 outlook, during our year end earnings call in February, we provided a full year 2025 guidance reflecting two bases of presentation. The first was excluding the impact from the JV transaction, and the second was including the transaction, assuming a Q2 closing. As a reminder, we said the JV transaction would reduce FY25 revenue by approximately $235 million and adjusted EBITDA by $15 to $20 million and would be neutral to adjusted EPS. Now that we've closed the transaction as of May 1st, we are confirming that there are no changes to our previously provided guidance as it relates to the impact from the JV transaction. Note that due to the timing of the closing, the second quarter results will include IB Solutions results for the one month in which we own the whole business. So the sequential trends across Q1, Q2, and Q3 will look a bit strange as the full impact of the IB Solutions deconsolidation appears in our consolidated reporting. Since our year-end call, the business has performed consistent with our expectations. However, we are subject to the impacts from the recently implemented tariffs and the evolving global trade landscape, along with the related macroeconomic knock-on effects, including foreign currency fluctuations, inflation, et cetera. Based on the tariff policies in place today, And also considering the mitigation strategies we expect to have implemented this year, we would anticipate the direct expense from tariffs in FY25 to be in the range of 25 to 30 million, the vast majority of which would be recognized in the back half of the year as these costs are captured in cost of goods sold and subject to our cap and roll process. However, We have also seen a weakening of the US dollar relative to most global currencies. And based on rates in effect as of April 30th, we would anticipate the favorable EBITDA impact from currency this year to offset almost half of the direct tariff expense. Beyond that, we believe we can further offset a portion of the remaining net exposure through various measures, including lower incentive compensation expense and general cost controls. But based on what we know today, there is probably 5 to 10 million of unmitigated residual impact from tariffs. So, while we believe our original FY25 guidance is still appropriate, we would likely be at the low end of the range for adjusted EBITDA, adjusted EPS, and adjusted gross margin if additional offsets aren't identified and captured. A few other points to note. First, our quantification of the tariff expense reflects the direct impact of the tariffs currently in place and does not consider potential future impacts such as additional retaliatory tariffs, lower demand for our products outside the US, or the effects from higher inflation. Second, it would not be appropriate to annualize the FY25 tariff expense for purposes of estimating the FY26 impact as we are working through several mitigation strategies to reduce our tariff exposure long-term, and Vivek will further expand upon that. So we've done our best to quantify what we know today, but it's obviously an evolving situation, and we expect to provide further updates on our second quarter earnings call as we continue to monitor new developments. And third, the tariffs will have an impact to pre-cash flow for the year, and we would expect the amount to be slightly more than the P&L expense, given the cash outlay precedes the P&L recognition due to our cap and roll process. To wrap up, we're happy with the performance of the business for the first quarter, including continued top-line momentum, progress on the initiatives that will drive gross margin expansion, and the strong free cash flow generation. and we're excited to commence operations of the Ivy Solutions joint venture with Otsuka. Now, I'll hand the call back over to Vivek to expand upon some of the initiatives we're currently focused on.

Okay. Thanks, Brian. It's great that we can add another quarter to the last five or six quarters of delivering more predictable revenues. While the footing feels better, sustained revenue growth is about consistent execution combined with meaningful innovation to refresh the portfolio. Our heaviest investments over the last few years have gone into our pump businesses, where we now have both Plum Duo and Plum Solo with LifeShield software cleared. These platforms have received five individual 510K clearances with a first pass review over the last 18 months. Plum Duo and Plum Solo together allow us to participate in both competitive situations and upgrade our own installed base with state-of-the-art technology. We've said in these calls that we can expect to have the most modern fleet of infusion devices that can anchor the portfolio for years to come. The final pieces of that puzzle have always been new 510Ks for our MedFusion and CAD pumps and integrating them into the common LifeShield software platform, first for acute care and eventually home care. We want customers to have the right tool for the right job, all connected with a common user interface and software solution that minimizes training, speeds onboarding, supports interoperability, and enables standardization for our enterprise customers. We've been diligently working to close out the Smith Medical Warning Letter from 2021 that was received just prior to closing our acquisition. While we did have a successful site inspection last summer in Minneapolis with zero observations, we have not received official closure And last month, we received a warning letter from FDA to ICU Medical asking for new 510ks on the MedFusion and CAD product families. While this was not a specific observation in the original warning letter, we have been pursuing these clearances as fast as possible anyway. It has always been our view that new clearances are essential for the best compliance, ensures modernized software and components, and provides a competitive advantage. To use the same sentence from two years ago, while undesirable, the regulatory agency is trying to move the ball forward, and these regulations give us the right to participate and keep markets valuable. We believe we will have 510Ks for both products filed within 90 days of today. Our goal was on a slightly earlier calendar, but the technical work took longer given the evolving standards and ensuring filings that are on par to our cleared Plum Solo and Plum Duo products. Given the recent activity, I'll talk at a high level on what we've been doing the last two years to ensure safety, compliance, and improve product quality for CAD and MedFusion. First, we stopped selling and established end of support dates for the oldest versions of both product families. Second, we reviewed, assessed, and processed thousands of complaints to ensure we knew which field actions and recalls needed to be performed to ensure safety. Third, we competed retrospective analysis of all software anomalies to correct defects proactively. Fourth, we ensured absolutely no new features were added to the device anywhere along, either device anywhere along the way. And as of today, we've remediated virtually every MedFusion pump in the field in accordance with the recent recall actions and are making good progress on the remediation of all the CAD products as well. So the scale and commitment of this investment is not lost on anyone. These efforts have been the largest expenditures in the quality remediation costs of the last few years, which has consumed cash. While this discussion mixes quality and innovation, it's fundamentally a proof point of why having modern devices and high compliance is table stakes in our industry and why we put just as much energy into these upcoming filings as we did into our recent clearances of PlumDuo and PlumSolo. And at the same time, we filed a few important new approval applications in the other lines of business, which we hope to talk about later this year, as they'll bring innovation, continue to create new markets and sustain our revenue growth. Okay. On the tariffs, Brian outlined the basic math. We have somewhere between 25 million to 30 million on exposure in 25. And as he said, please do not annualize that amount. FX offsets maybe half of that. We obviously don't expect shareholders to bear all this cost, so we will assume some offsets will come from employee incentive plans, as well as cost saving activities, but we do run lean here. All of this does make it extremely tight relative to our original guidance, and with so many moving pieces, things could change. But what we have been most focused on, based on the assumption that some form of tariffs will be here to stay, is what our most substantial medium term mitigations are. While many companies are talking about re-evaluating their supply chain, that doesn't really apply to most of our impacts. We have three primary issues which can be categorized in order of importance as first, all items from Costa Rica, second, some sourced items from China, and third, non-USMCA compliant items from Mexico. In Costa Rica, we've invested heavily into pump manufacturing And having recently consolidated to that location, and we've produced all of our LVP dedicated sets there, and it's not something we want to reevaluate. For 2025, most of the pumps we plan on implementing were contracted at a pre-tariff price. We would assume for pumps signed today onward to be implemented in the future that the impact of tariffs would have to be incorporated into price. As we've said before, we don't think a pump decision is made on the last $100. and we believe most vendors have similar challenges. Maybe there are a few items that we could shift between Costa Rica and Mexico over time. On the sourced items from China, that is where we could reevaluate our supply chain, as most products are available from other locations and are low tech, but it does take some time to qualify those items. In some cases, the immediate mitigation has been to stop importing products that are now unprofitable, which may impact vital care revenues later in the year as inventory on hand depletes. For non-USMCA compliant products, we're focusing on the changes to drive compliance, optimizing qualifying logistics, and ensuring the products we have that serve chronic therapies are properly recognized as such. Nothing about tariffs changes the available timing on various initiatives and strategic decisions we have described on previous calls, to improve our profitability, but it does sharpen the focus to ensure all activities continue to move forward. We continue to be on track with consolidation of our production network, rest of world order to cash conversions, logistics, and real estate consolidations. These were important items to drive our step up in profitability in 2025 and beyond. And even if tariff consumes some of the benefit, nothing changes with the program's timing. And I feel we've described this work many times on previous calls. It all needs to happen in concert with increasing revenues. To be direct on our goals for the next year or two, we want our consumables and systems businesses to be reliable growers with an industry acceptable profit margin with the tightest and most optimized manufacturing network, and each with a multi-year innovation portfolio. And we want the rest of the portfolio to add up to levels where we deliver an acceptable profit margin that ultimately allows us to transfer value from debt to equity. There's no confusion within the company in the pursuit of these goals, and we don't have a lot of frivolous activities here. We produce essential items that require significant clinical training, hold manufacturing barriers, and in general are items that customers do not want to switch unless they must. The market needs ICU Medical to be an innovative, reliable supplier, and our company is stronger from all the events of the last few years. Thanks to all the team members and customers as we improve each day, and with that, we'll open it up to questions.

Thank you. At this time, we will open the floor for questions. If you'd like to ask a question, you may press star 1 on your telephone keypad. If you'd like to remove yourself from the queue, you may press star 2. Again, that is star 1 to ask a question. We'll take our first question from Jason Bedford with Raymond James.

Good afternoon, and thanks for taking the questions. Maybe just to start on the top line, nice acceleration in consumables. You mentioned rapid growth in niche markets. Can you just kind of flesh out a little bit where the reacceleration or the drivers are coming from in consumables?

Hi, Jason. Thanks for the questions. In the investor chart, it lays out the different pieces, the main buckets of the consumables stack. And it's a little bit of the thing we've been talking about, I don't know, for two or three quarters now. Oncology growth is back in a very attractive way. That's been an important driver, and that maybe is about us, but I think it's also about what's happening in the underlying market. And then I think some of the products that support the Reno markets, some of the products that support some of the home infusion or chronic care markets have been accelerating nicely. And obviously, in the big consumables business, this was the year where some of the GPO activity kicked in earlier in the year, the pricing changes that we were talking about last year.

And can we assume, though, you know, you grew 10% in consumables, I assume price wasn't a huge factor in that growth.

No, no, I think a lot of that, Jason, I think comes from, if you go back to last year, we did have kind of a noticeable step up on the consumables business from Q1 to Q2. And so I think we we're also seeing some of the benefit of a lower Q1 last year and just continued kind of strength that started in Q2 of last year.

Okay. Infusion systems, are you seeing more contribution from Duo? Is that starting to kind of layer into the revenue stream now?

I think there's been very, very few Duo installs. contracting, but we haven't installed that many. A few places.

Okay. So it's still second half of the year where you see that flush?

I'll take that as yes.

I'm sorry.

Nothing's different. No one wants to make a decision on that until the last possible day. They have to, right?

Okay. Okay. And just lastly for me, and I'll let someone else in the queue, on the tariffs, just to be clear, the $25 to $30 million, that's a 25 hit. That's not an annualized number. And then the second question on that is, is there any way you kind of walk through some of the geographies there, but is there a way to frame the geographic risk within that $25 to $30 million?

Again, I think we at least tried to put them in order of – the first thing is please, please do not take that number and annualize it, right? There are a bunch of things that are happening to improve our situation. We tried to lay them out in order of priority with the new tariff that was placed on Costa Rica is the single biggest item. and a very large proportion of the annual impact. And as all companies have been digging through every single thing they sell, a few items have popped up that are sourced from China, those we will address over time. That's the second biggest item. And then the third, as we were early in kind of describing what our USMCA compliance was, our compliance continues to be at the levels we thought are better, and that becomes the smallest issue of the three.

Okay. Thank you.

Thank you. Our next question will come from Brett Fishman with KeyBank Capital Markets.

Hey, guys. Thank you very much for taking the questions. Just starting off maybe with a follow-up on the tariff point from just a second ago. So it sounds like the Mexico issue may actually be getting a little bit better. I think you might have framed, like, the non-USMCA potential unmitigated impact at, like, less than $20 million. So maybe just, like, update us on what you're seeing there, if there are certain products that have, like, become compliant, and then if there's, like, any other – I guess, like pathways for products not currently compliant under USMCA to then become compliant that could further reduce the impact in that bucket?

Yeah, Brett. I mean, I think when the tariffs, the Mexico tariffs in particular, were put into effect, there was no USMCA exemption. And so that resulted in a meaningful exposure to us. But with the USMCA exemption, obviously, that mitigates a significant percentage of the tariff exposure coming from Mexico. And I think as we are working through our mitigation actions, we've seen even a little bit of improvement in kind of that percentage. And in addition to that, there are some other things beyond just USMCA we can do to further mitigate it. And so, yes, I think Now, Mexico, for us, clearly falls into the third tier of areas of exposure with Costa Rica and then China being one of two.

The actions are similar to the ones that were described in the original slide, right, focusing on logistics and where the product is consumed in the world, et cetera. I don't think the strategies have changed that much, Brett.

on all these numbers, so.

All right, yeah, for sure, and definitely appreciate the, you know, dynamic backdrop and, you know, changing exposures here. And just also, you know, for my follow-up, wanted to just clarify the comments around, like, guidance. You know, you've updated the slide, and most of the numbers are, you know, intact. So it's the right way to think about it. Like you still think that there's opportunity to hold the low end of the ranges for items like gross margin 39 to 40% and adjusted EBITDA 380 to 405 and the tariff plus currency plus mitigation just makes it like more challenging. Is that kind of like the message? Thank you very much.

Yeah, I think when you kind of net all that together, it is our goal to hold at least the low end of the range. And I think we did talk about sort of what's assumed as we think about the rest of the year. And there are some things that it would be difficult to predict, including the impact of tariffs on inflation. So we haven't tried to quantify some of that exposure. But yeah, I think you've characterized it correctly.

I mean, it's not really fair, Brett, to talk just about the

We still got that question out.

Thank you. Our next question will come from Larry Solo with CJS Securities.

Hi. Good afternoon. First question, Vivek, I know you've spoken about the Plum Duo, Plum Solo, and the heavy investment you guys have done over the last several years on that. I'm just curious, early... maybe anecdotally, just the reception from customers, just how people are viewing it, and as you look out the next few years, do you expect an upgrade on the install base? Is that something that you expect to happen over time, I suppose, but will customers eventually switch in some cases? I'm just kind of seeing how you view that versus the opportunity to grab new business.

It's a great question, Larry. I'll take them in reverse. The nature of this pump is it has a huge incumbency advantage, as we've talked about. That makes competitive situations very desirable, but it also accrues to the advantage of the incumbent. We have hundreds of thousands of pumps in our own install base, which entered service in 2017. 10 years. And so most of our portfolio of those devices are reaching the right time where an upgrade discussion is sensible. And we have the opportunity with Plum Solo to have a very meaningful upgrade discussion with the features that that customer appreciated in the device have been enhanced to all the things that are today's conversations on EHR integration, et cetera, et cetera. So certainly the upgrade cycle starts in earnest end of this year, next year, and then continues for a while. So that's why Solo was so important to us. In addition to some competitive accounts prefer a mixed house. They want a higher complexity device in the most critical care environments and a less complicated device in the normal med-surg floors. And the combination of both products, we believe, positions us best for the competitive situations. I think people's, it's not a device that people are rushing to change unless they really have a deep, sincere interest in changing their clinical practice. And so when we've had situations where people are deeply interested in learning, the reaction to the product is phenomenal. If it's just a discussion to keep everything the same, People sometimes aren't willing to invest the time to understand the power of the new device. And so we need to find the situations where there's a real willingness to move. And again, there's some portion of the market that certainly wants to do that, that will get over the incumbent advantage. That's what we've talked about on these calls for a while now.

Got it. That's very helpful. And just in terms of pretty rapid, strong growth in consumables, I know it's continuing for several quarters now. you spoke about some of the newer products. What about just on, on the price? I think you mentioned that as one of the higher on your list of, of growth drivers. I don't know if it was, you know, that was meant to order a priority amount, but it wasn't necessarily order.

It wasn't necessarily the order of priority. I'm just saying, you know, we've been, we've been working on that as, as we got healthy the last couple of years.

Gotcha. But what, just the price outlook prices have been improving. I guess, um, I know you had some, a bunch of new contracts kind of reset in the last year, right? So, um,

some on the vital care and infusion side, but I guess... I think the words Brian used on the last call still apply, which was 100 bps of price for the year, right? I mean, the statement we made last time, I wouldn't want to say something different than that.

Gotcha. Perfect. Last question. I think you mentioned census, hospital... Mutilation volumes sounds like they're steady, still relatively strong. Anything noteworthy there?

I mean, increasing over the prior period felt okay, not as good as the step-ups were last year.

Nothing to complain about. Okay. Fair enough. Thanks. I appreciate it.

Thank you. Our next question will come from Michael Toomey with Jefferies.

Hey, guys. Congrats on the quarter. Thanks for taking my question. So a strong Q1 on the infusion systems. Do you think that was just market growth or any share gains there as well?

I think it was the – hi, Michael. It was the points I tried to go from the script. little bit on the LVP side that came in earlier in the year than we expected.

Okay. And then I guess following on from the prior question, just are you seeing from the tariffs any signs of CapEx slowing? I know you said it's kind of status quo in the capital environment, everything remains attractive, but any signs since the end of the last quarter of spending being delayed or any impact from tariffs?

I don't think we've, again, I don't think we've said the capital of our perspective. Things that need to get done, get done. And so some of these choices are thrust upon the customer. I don't think we've seen a meaningful change if people are saying, I don't have funding right now. A lot of this customer base always says they don't have funding. A lot of this customer base always says,

looks to delay, et cetera.

But in certain cases, there's no choice. And there are ways we can help on funding, and there are intermediaries that make these things available. So I don't think we've seen a big change in the capital environment for our size devices.

Yeah. Okay. Thanks very much.

Thank you. And again, as a quick reminder, if you'd like to ask a question, you may press star 1. Our next question comes from Mike Madsen with Needham.

hey guys how's it going this is uh joseph on from mike today um maybe just to start off uh plum solo pump plum duo i i just want to note maybe you guys can give a little bit more detail um on how you guys are you know going about marketing this um what what maybe contrast are you drawing from your competitors or maybe what advantages with the systems are kind of sticking the most with uh with the customers that you guys are talking to and then Just maybe for the, you know, the pumps that need that refresh, do you see customers opting for both, or do you think it's going to be an either-or or more of a mix in terms of Plum Solo, Plum Duo? Just kind of want to get your thinking around there.

Nice to meet you.

I think you should be more than welcome to take a look at some of the features that are outlined on the devices on our website. I mean, the core value prop of Plum going way back in history has been conserved into this device, and those core value props were around safety, fundamentally around safety and air and line management and a cassette-based delivery and a volumetric pump and a whole litany of things that go on beyond that. All of those things have been conserved both into Duo and Solo and address some of the innovation shortfalls over the play, et cetera. And so there's a lot of sort of bringing the device to a standard of what one should expect for any electronic device and certainly medical device in 2025, but keeping the things, not having differentiation on the things that made the product great originally. And so take a look at that, but I would say most of the conversation is around those features. In terms of what people will use, I think there are multiple scenarios where Some folks may not need a multiplex device whole house, and some people may have a split house. And, you know, again, we're happy we have both approvals, and we can offer either scenario to a customer.

Okay. Yeah, that's helpful. And then maybe in terms of the, I guess, timeline from submission to clearance, I was wondering if you guys could maybe tell us what you saw there. for Solo and Duo, maybe if we could extrapolate that to a time to clearance for the CAD and MedFusion once those are submitted?

I think it's sometimes dangerous in the regulatory environment to extrapolate things. We don't want to get burned in that. We thought we've made progress on things and we're still not out of the woods necessarily, so I wouldn't want to make any assumptions. took, I don't know, Brian, plus or minus a year from filing to approval. However, that was a device we had a high degree of familiarity with that we developed from the ground up. And while we think we've done the same with these filings, these weren't devices that were originally ours. So we feel very confident about them, but I wouldn't necessarily draw a conclusion from one device to the next.

Okay. Fair enough. Thanks for taking our questions.

Appreciate it.

Thank you. There are no additional questions at this time. I'd like to now turn it back to our presenters for any closing remarks.

Thanks, everyone. We know we're late in the quarter. We know it's been a long earnings season. Appreciate the interest. And it's a challenging environment out there. Look forward to updating everybody in our Q2 results shortly in August.

Thanks very much.

Thank you, ladies and gentlemen. This does conclude today's ICU Medical, Inc. First Quarter 2025 earnings call. You may now disconnect.