ICU Medical, Inc.

Good afternoon, everyone, and welcome to today's ICU Medical second quarter 2025 earnings conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. To ask a question at that time, please press star 1. Also, please note that today's event is being recorded. I would now like to turn the conference over to Mr. John Mills, managing partner at ICR. Please go ahead, sir.

Thank you. And thank you for joining us to discuss ICU Medical's financial results for the second 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 events calendar, and it's under the second 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 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 in ICU Medical's ongoing results of operations, particularly when comparing underlying results from period to period. We've 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. I'll walk through our Q2 revenue and earnings performance and provide some commentary on the businesses and then turn it over to Brian to recap the full Q2 results and the more positive gross margin implications of our Ivy Solutions joint venture now that it's operational. and our current view on the impact of tariffs at the moment as there was an increase levied on our core production environment of Costa Rica. After that, I'll come back with some color on where we are in creating a comprehensive infusion therapy company and optimizing our portfolio and a bit of qualitative discussion on the evolving tariffs and just make a few comments about the medium-term activities of the company. Revenue for Q2 was in line with our expectations at $544 million, for total company growth of 2% on an organic basis or minus 6% reported, which is driven by the impact of the JV being consummated. Consumables and IV systems had good year-over-year growth. Adjusted EBITDA was $100 million and EPS was $2.10. Gross margins were ahead of our expectations due to the JV and cash generation was neutral as some cash was tied up in the JV creation itself, tax payment and tariffs. As a reminder, Between excess cash generated in Q1 and the net proceeds from the creation of the JV, we have repaid $250 million in principal year-to-date and expect the only variance to our cash flow planning for the year to be tariff payments. The broader demand and utilization environment in Q2 continue to be attractive across almost every geography, with the growth 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 are getting done. Currency at the moment is not quite as good as it was earlier in the quarter, but is obviously a benefit in the key selling geographies. Getting into our businesses more specifically, our consumables business grew 4% organic and 3% reported. It was a record quarter in absolute sales levels with good sequential growth driven by new global customer implications, price improvements, rapid growth in some of our niche markets, and solid census. We had mentioned on the previous call that last year we had major sequential increases in Q2 over Q1 of 2024, so we didn't expect Q2 growth now to be at the same rates as Q1. For the near term of Q3, we again see sequential growth and are very comfortable with our comments of mid single digit growth for the year. On the last few calls, we've made some high level comments around new product filings and innovation in our consumables business. One example of this in Q2 was we received an additional 510K clearance for our clave neutral displacement connectors, which are the anchor product of the segment. Inside this updated 510K is a published study which correlates the usage of clave connectors with lower patient infection rates. Specifically, the study shows that hospitals which standardize on clave needle-free connector technology report significantly lower patient infection rates versus hospitals not using clave technology. We're excited about this new clearance, both in that it provides more evidence around our largest, most differentiated business that we will market on for years to come, and it updates the regulatory approval to 2025 standards. We have a number of other new consumable line extensions and addictions that we're rapidly pushing in the development process and or have already submitted 510Ks to further strengthen our market positions. These products at their core are around enhancing patient safety and workflow efficiencies, in the infusion drug delivery process. A number of these programs are combining the parts and pieces of legacy ICU and what we acquired from Smith's. Our IV systems business grew 2% organic and reported. This was entirely driven by LVP growth, which was double digits, even with some of the installs that came in a little ahead of schedule in Q1. LVP growth was from new installations and strong census for dedicated set utilization. We continue to be engaged in many new RFP processes and our beginning customer discussions around the multi-year refresh of our Plum 360 install base with Plum Solo now that it's cleared. As we described in the last call, we had an excellent 2024 in selling our cat ambulatory pumps and would have a tougher set of comps on this line, particularly in Q2, which muted the overall segment growth. For the near term of Q3, we again see sequential growth here, Frankly, expect a record quarter in aggregate for the IV system segment and are comfortable with the previous comments on mid-single-digit growth for the year. On the last call, we provided a lot of detail on the actions related to the FDA warning letter, efforts to remediate products in the field, and filings over this year to ensure all pump products had the most up-to-date 510Ks in modern architecture, so I won't go into that detail again. What we are pleased to announce is that in early July, we did submit 510Ks for both the MedFusion 5000 syringe pump, the cat ambulatory pumps, and all related life-sealed safety software. These submissions have crossed the first acceptance stage of the review process, and dialogue has started around the filings themselves. I would characterize the MedFusion 5000 as a groundbreaking new innovative product, but like what we did with PlumDuo and PlumSolo, we conserved the core of the product that made it a market leader based on accuracy and workflow. We would describe the CAD submission as more of a catch-up filing, bringing a variety of product iterations up to date in a current filing. But the most important aspect of this, and what really is a milestone when these products get cleared, is that all of our pumps will now connect on a single software solution across all pump modalities, bringing the ease of use and tighter control of all types of infusions to a hospital customer. This was a core tenant of the acquisition to have a single software solution across hospital LVPs, syringe, and ambulatory pumps. 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. The last development item that will take longer to finish is what we call CAD Connect and is really the final frontier. connecting the home care CAD environment back into the same common software framework. We believe we're seeing the benefits of this vision in the marketplace today. And in addition to continuing to focus on competitive opportunities, we are just in the very early stages of refreshing our own install base with opportunities to create more value from the hardware and software offerings here. Just wrapping up the business segments, our vital care segment was down 4%. and 34% reported as IV solutions revenues were deconsolidated from our income statement. The non-IV solutions product lines in this segment were basically down $4 million sequentially. For the year, we continue to believe these products to be flattish, either up or down marginally. I'll come back after Brian with some comments on the joint venture, how we're thinking about the overall portfolio within vital care, and tariffs. And so with that, over to you, Brian.