ICUI - Earnings call 4 2023 | ICU Medical, Inc.

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Operator

Good day and welcome to the ICU Medical, Inc. Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded. I would now like to turn the conference over to John Mills. Please go ahead, sir.

John Mills

thank results joining and for of and ICU to full everyone, XXXX. financial Medical's the afternoon, you us for discuss year Good fourth quarter

click Executive Medical call well. Financial the Chief To Events remarks it please a XXXX wanted on know presentation, Vivek representing presentation the everyone We Chairman; go ICU beat will let events. Investor we On Jain, Brian the today Officer. page Chief and to as that under Officer to Bonnell, accompanying and and prepared and is Calendar, our be have quarter today's fourth

are start they during want statements to the are be best available based we results. management about and differ expectations. uncertainties. future information and bearing subject touch operating made beliefs on prepared more to including future results risks statements representation expectations detailed all on refer the assumptions Such SEC and the forward-looking We from a materially the filings of Before reasonable. you for remarks, to that results and a that and are direct call, the are information of position. have our company's to aware on uncertainties to upon and may financial management's intended be I not company's any risks results Future Please current

as on in as reconciliation added are when financial ongoing financial Please call, results these included will facilitate period results any can of including non-GAAP of measures, non-GAAP addendums today's into to an measures more possible note comparing ICU detail that operations, on period. a greater from today's basis. complete discuss transparency provided results Medical's and during much believe release also particularly measures that also analysis a these underlying back. adjusted We've We we and

is pleasure to And to it with the call over that, turn my Vivek.

Vivek Jain

provide of and walk some outlook XXXX everyone. brief XXXX I'll the comments back good on full the and to come John, to QX our and of medium-term actions topics with provide revenue main and After to front that, afternoon our turn our to recap it commentary performance, performance. guidance. and over earnings QX improve highlight results fiscal through Brian and I'll some opportunities and our then Thanks, and in us XXXX on the

QX a for was been of EPS $X.XX. total million was Adjusted taking was our $XXX million to growth. result Revenue combined $XX $XX modest actions the of for added X%. of we've with and sheet on company as cash We balance EBITDA million growth inventory

to There customers to labor the earlier get investments continued. inflationary countries the sequential QX every almost inventory positive broader growth As utilization need the in the it no in production QX geography. tailwinds environment macro all and some environment quo, or headwinds status versus capital The that a were in segments was do environment year anticipated, we we had of with the larger since XXXX most larger The appear done. get and and had additional does done reduction in in demand QX. as compared across but

tax of capacity improved reaching quarter clinical around census sequential creation market lines to 'XX. new to overstated with X% XX% more on increased into grew a focus hit throughout more levels. and combined, of this But legacy businesses product level currency the at global our finally probably constant sequentially and points markets. in driven was new customer in with product differentiation The absolute Access serve record ICU customer consumables XXXX the least to X% X QX importantly and by Vascular our segment in in of -- due oncology which and accrual all ability the growth again therapy or reported. Getting sales specifically, and QX IV few grew a is with segment families Italian well The turning implementations, growth, us, niche

down currency business X% a IV lines performance in across X% and wide reported constant year was There or range systems the quarter was down of total. product was Our of here. the the best

their Plum pump into grew last our to XX% the ready dedicated business hardware years road year-over-year the and to a XXXX. did make software the the have were still levels, newly Plum shipments had was available. cleared normal our installed since release our Duo safety anchor related system created for but be down in through infusion larger environment, a our product strong year-over-year segment. Ambulatory U.S. believe performance super and come. incorporating This our census levels to The call, is and LVP many we're to putting IDN down pumps early be pumps real-world base product the from QX for of sold feedback IV map feedback LifeShield offering of we've XXXX expectations, meeting are we're Our with below near to generally consumables due safety improvement that environment, user best production can nice we use newly the and large cases quarterly and in and Since starting -- robust software higher historic been QX and of usually certain a holds. but Syringe due as were a sequential and capital. Duo

the because in the of we've more The levels Temperature our a to logistics quarters And segments, has being our Just all value respiratory, both has efforts sequential chain X solutions years. up of to supply nice team. X% customers, backorders far From be Vital towards improvements. operational last sequentially. an flat business had of up Care the our running discussions X X best is grew stable more and innovation amassed. X% and Management IV what the finally, and shifted fulfillment company appears very and been the perspective Customer it integrated and predictable wrapping in with have what lowest the environment. the at

investment. area We has footing. Quality an on solid we're heavy feel been of

perspective, have growth not and made. quality to have the had as unlock pursue but to respectively. had and our part investments that we continue certain quality well year differentiated quality patients few call underutilized the and efforts additional integration stability finished We most, will the to with improving on have lines. to progress And likely all started the QX remaining and year. in XXXX separation production which a at working We revenue for in have did we're level. remediation we're rationalize sensible end XXXX will synergies. be customer we address. our that and portfolio finally increase to portfolio and growth opportunities of of as place projects any ensured we high previously remediation levels. of authorities, That's notifications, synergies enhancements reiterated recap improved operational by at for and product a more overall from We quality X but and all last each the necessary and a my revenue compliance of goals towards in cash important regulatory We flow We TSA the assets the as brief Ultimately, groundwork high discussed burdened

a comments over Brian and with on to few and now then some other few it targets I'll our a thoughts. back medium-term outlook, turn come

Brian Bonnell

our our Vivek the second, focus year recapping my revenue P&L, QX for and expectations; to the and remainder Vivek, providing revenue guidance sheet balance third, on remarks everyone. the I'll expectations performance cash covered each full Since businesses, afternoon, and along the on compared performance original QX for of good the with first, Thanks, the discussing for flow; of QX XXXX.

with a So flat of X% to was year revenue Access, The shortfall category was constant anticipated full adjusted primarily Vascular constant X currency in in to basis business due variances business X% original At for of a growth. flat unit we was down a recap year compared on level, the our previous where because consolidated performance, than the QX was our currency. decline within reported finally the down access saw XXXX consumables the reported unit. sequential mid-single-digit vascular expectations few quarters revenue and But to other improvement. revenue product important after stability larger was along the

and up mid-single original Systems the was for the on a of combination basis line low up Infusion little. end constant the with revenue of In lines. down by constant syringe X% and X% of Care guidance reported driven minus of year, a in and our at Vital was reported guidance currency digits, LVP a flat year X% down X% our range or for currency, product is original the which full plus

the was product gap expectations, partially growth within Solutions largest offset Here, critical care temperature management by and our the to categories. IV solid

on further QX the down Moving results to P&L. and

expectations we to quarter fourth which and gross X combined stock quarter manufacturing one, cash to bolster see date acquisition, in across As delayed; stock the reconciliation the was levels and $XX of absorption reduce non-GAAP line GAAP increased the SM new with order average of the improve in we that the of our which from the was EU MDR for continue inventory you from to, following almost in build three, address bridge margin an impact in situation; can inventory by company. XX%, requirements, backorder quarters for anticipation as levels million two, was the lower the press reflects and safety each release, legacy flow. eventually Recall the first the effective

did call, benefit underlying action demand. on $XX to XXXX, in flow bring the situations and they And 'XX, during the that the a these we to of as early third first decreased fourth one inventory with reduction We reductions inventory inventory the each levels earnings levels for we as However, saw inventory of quarter, line said took over of quarter evolved, accelerate we cash QX million. in in from time. we expected

some levels extent, the and negatively in However, gross QX lower in the quarter. margins to impacted production QX,

was results last to was million. year-over-year for along under QX reflect diluted equates operating $XX to net million expenses X.X% on a of reflect and strategic integration. which interest an basis. million current $X.XX and XXXX. primarily R&D up to $X.XX acquisition selling expense a quarter QX from just related revenues, expense Restructuring, in is prior transaction The $X.XX $X Adjusted of higher the were million share and was quarter the lower year. million incentive SG&A in over Adjusted year expenses per compared per compensation $XX of the earnings in and share increase Total and quarter expenses increased with adjusted were fourth combination $XX integration $XXX adjusted

and million to certain discrete decreased last Fourth shares million. finally, EBITDA year. the that $X.XX items to approximately adjusted quarter quarter of was rate QX for outstanding $XX tax benefit year-end compared million in XX.X Diluted contributed $XX per share. effective And includes adjusted XX% were a benefits X% for

Now and the sheet. moving on balance flow to cash

to million. $XX XXXX. million, was significant returns. cash you if for flow future investments for system than inventory meaningful quarter QX the drive Free CapEx cash legacy while SM, to of product-related remediation, flow still receivable million investing onetime positive cash in quality first quarter, focus spend of integration $XX a quarter balance of on and driven positive you on in reduction up with million maintenance benefit a free and our the $XX recall, restructuring the relative if exclude revenue-generating included cash $X.X and of investments. a million the For and and $XXX of areas for program QX step by of the will cash wrap acquisition that accounts the general $XX of just from These infusion capacity generate This we of debt placement flow primarily pumps U.S. $XX was improvement in as And was allowed expansion sales which quarter facilities well to free more And flow on inventory represents the The during the up us free customers finished as million. million the and cash $XX with billion on sheet, outside since QX the at

The gain given and for growth outlook, XXXX and share units growth The revenue access and modest volume in flat of continued in year recovery of oncology the core we roughly that benefit we've low and and bit a rates vascular with combination signing discussed Plum the adjusted assumption the some customer by higher reflects growth, which P&L in implementation. digits infusion, business to price with consolidated the full Vital consumables outlook for growth to market price volume Care. mid-single driven in expect both infusion a XXXX, of the reflects impact little specialty. consumables infusion markets growth to we longer-term range, for systems be is lag for line limited mid-single-digit expect forward and and increases systems of between from normal the underlying before, Moving and usual of Duo growth in the contract each the

pressure our be includes increases from lower stable margin the environment exchange over and offsetting XX%. for peso further we expect assumes further impacts plants a impact XX% of in the year rates from the to as we gross reductions from and adjusted for temporary the the expect The approximately course negative the full continued It as also labor Mexican P&L, Moving inventory fuel. rate down absorption relatively freight price XXXX. reflects as inflation well

takes manufacturing In the of over with improvement reduction gross the the course higher terms the as volumes over from be inventory growth inventory quarter effect. as taper a progression of recognition that we of and the QX in reductions lowest margin occurred year, of expect XXXX in delayed revenue from result to P&L XXXX first

revenue similar levels, synergies, offsetting the resetting and inflationary operating incentive for planning from increases. plans the compensation of under to impact is are from We which be XX%, just percentage reflecting as XXXX a to benefit expenses general adjusted

to are discrete adjusted EBITDA million $X.XX The rate expense adjusted XXXX of on shares based tax and million is share. as estimated components these the range rate average portion normalized in adjusted our $X.XX around items tax in $XXX and $XXX range year. outstanding to interest of rate be finally, Bringing to before the million results approximately together $XX.X of Net during in well per should EPS roll-off swaps. interest the interest of diluted $XXX our market is expected which forecast XX%, a rates the current be million as for to

free accounts program driven during Now ended the which of cash flow is XXXX first for cash onetime on the receivable the flow. the We $XX million benefit from with by year, implementation to quarter. mostly factoring of the

depend the completing the amount XXXX, entirely is we XXXX, integration this free driven For levels that in synergies. in one, capture but inventory as to we reduction; the to additional choose sooner to of And be will and there the be quality remediation final operations. expect two, degree work on, cash same as flow to by invest around amount activities value and

more total In QX, fair XXXX. on that's terms assumption of And in said reduction, go last we headed $XX that million call roughly after than was $XXX would million. that million the opportunity ballpark remaining inventory into a $XX and left the to leave think captured we

first year of to with expect In historical benefit prior with free requirements revenue the the addition, trend, helped of as see in which flow result quarter for is by $XXX $XX a million. payments lighter compensation CapEx consistent be to to of million we throughout incentive cash improvement in remainder Timing year annual the the our over the year XXXX growth. in be the of range of should our

flow. the saw To QX wrap cash businesses up, with we're free in sequential happy we X improvements that well revenue across as as the step-up all in meaningful

expand upon. Vivek and we're on XXXX, improvement For drive that focused XXXX will work which in earnings foundational beyond, will

hand Now Vivek. the I'll to call back over

Vivek Jain

and But somewhere lag over obviously reality think margin do in market. and of has of XXs and And competitive are business, capable not now us reality this our rest in inflation we should this But is time. a unique own even all and achieving margin of reasonably types portfolio in we markets been that, of parts EBITDA general these in on Brian. the underlying now. between its our lost Thanks, industry we impacted are each such the right be. of misvaluation the where competitive the the with think Solutions the of But the in differentiation efficient we a by what's most with Profitability that's dynamics think where dynamics Okay. product to We is which level. pricing IV do companies has not of the apply category. low can

Given the commit fair in our last date time few willing what to of are we been in us experience have that, a a quarters, metric. not but the believe through makes to that's we there, being category certain

all many to control. We that growth related For metric with is costs type we're gross And our case which more of on not opportunities directly all and achieving company, revenue this the logistics these solid us as about our most for and include of improvement margins be lean predictable, are should areas. other our sustained still we of are lines been the growth, items under has to but capable prove which going need footing now. certain backwards, revenue

near next we're creating solo of and the Our be by we've We get this can cleared syringe space. number we our in the levels, our of just of of to long at pump was ensure the our work either original first share the products safety infusion goal share. of already and series the LifeShield back Plum to a software and the will a families for the year. of losses. a Duo products background, sales protecting refreshed model infusion have will given should these of been take technologies. just additional to products end step FDA plum need generation single-channel new in a price at on file or and of would historical These some with a actively beginning capable that that in refreshing portfolio But markets product was cycle

and New that new portfolio the XX family launches, with area drug the of We business. to in the temperature last XX next products series management devices and refreshed there We're and a refreshed Alongside examples help expect prep our series already in existing that growing new have Cogent. positions of certain today, these monitor over the revenue upgraded Select, been months called would and filings tracheostomy number should used Blue valuable our be a the products, year in consumables a that, over large X, include We've York by obviously, or in portion a refresh preparation hemodynamic drives supplemented the a with to sustained key Diana our been these targeting of CSTD the of disposable growth. capital be investments because, parts already carefully significant done. a innovation will

inventory been those that volatility, record But and are and businesses have where the call businesses environments margin some the talk gross this the transformational to on But need or network the we where compounded challenge we last improving real year, fully efficiencies. or optimization basic pain other made magic of we've utilized anything levels, the do has and we consolidations. at we about have mentioned inefficiencies here no revenue. This smaller, of have nor for we tackling like with of been has the choices programs is where There's are that. production loss areas blocking

been Rica City estate. production U.S. have said, of them other and center and Costa syringe consolidation in service less the pump like full, and the place in announced and have right Some our for the pump at Salt move in ambulatory same at flight. projects goes and Lake Simply are places have our real

versus sometime list where network actions work portion foundation need That stage a type times us, our of also assets getting consolidation quality IT for long more our sensible expense perspective, on margin Logistics and the been that happen year. huge interest some assets revenue, integration. change it not in value the more value it's and do several they execute. we improving. gross costs, of planning more But which Out and do now. but normal that has embedded system done of This the take control to from is manageable it the depends those our maximizing bumps to economically but we is U.S. and we this expect we'll as bear offsetting of where eroding of integrate felt of to meaningful this in as by are system We've is in to interest and in QX a eventually. business, be laid, time earnings project contributes

industry businesses transfer would extra for the our our cash and be to to to acceptable and goals profit or allocation the systems continues X, rest acceptable ultimately portfolio. paydown above an with and capital on repayment. of where our deliver our margin consumables up equity. we Debt growers network we add margin reliable to next go needs allows manufacturing be priority, that To direct any be year highest each most levels won optimized innovation tightest we with us to a and to multiyear an value from want the to And the with debt portfolio profit

no produce pursuit these that There the customers require in want to the of that frivolous really Thanks within we is hold essential must. and market we needs switch company over don't confusion do The goals, and items improve any clinical events not ICU and few items an training, have and manufacturing be our We company barriers and unless here. day. team the general from our Medical members reliable they last years. the all stronger customers innovative, to all is each supplier as activities to

And with it questions. I'll that, open up to

Operator

from first today's And question with Jayson Instructions] [Operator Bedford comes Raymond James.

Jayson Bedford

And additional the thanks on details, 'XX. for all especially

maybe on revenue the So to guide. start just

first can second the given comps, than Just half revenue terms in in the assume higher the is we growth? that growth of the

Vivek Jain

I little Probably year. Jayson. be revenue part low QX a margins I'd it's a throughout right in in pretty the between, say different. back-end for might little was a weighted, is probably little us balanced so the Maybe more mean

Brian Bonnell

than average probably pretty but the remainder the consistent. of be provided, may lower bit a that we guidance quarters little are QX the

Jayson Bedford

Is price of in Okay. 'XX then bigger than 'XX? is And was couple price the it expectation mentioned a that a you tailwind times. in

Brian Bonnell

impact. of magnitude probably same No, it be wouldn't around the greater

Jayson Bedford

Okay.

IV 'XX? to then quarter. the rate for growth on And on think just Okay. good in right about kind here quarterly the a fourth this Solutions, of Is level run

Brian Bonnell

kind We -- that's on it that's think here from the at of out. same should Yes. level be

Vivek Jain

XX [ calls. previous from in products we've about were talked used ]. getting as Jayson, would to be Pfizer gap minus we We at Essentially, the the be the

Jayson Bedford

Right.

Okay.

just few out. ask to of Solutions that called just I'm IV you margins, Sorry, kind more a on But here. going

can else I IV price, think we all than to that. understand you improve what margins? do Solutions other But maybe

Vivek Jain

delivery, in to works the type find ensuring the the between we industry. specifically value of There manufacturing quality service chain traditional a it's of, how and Jayson, areas for high of right And customer. try are I opportunities think, customer. reliability one, for terms balance costs, think the service the the I to what are is of we which factory but of products. business, -- the available et think try about if we a potentially logistics huge improvements into available that type what cetera, put floor we've are component there model, There CapEx clinically. very on improvements

it's more normal So -- a of trying the price category traditional of really to operations -- bit, more outside long-term manufacturing it's sort manufacture revalued and get operational improvements.

Jayson Bedford

Okay. And then those maybe left and kind what's on lastly, and of just the jump impact the on I'll in. let what's someone But potential else efforts Smiths integration, the of P&L?

Brian Bonnell

and at as It's do scheduled this happen it's in in as we of by support some have some this networks, be of after logistics come orgs get And probably are that spots. if looked track, to system savings duplicative synergies detail both allows went integration where and would QX Well, of duplicative logistics of are back are, we when some service year. Hospira. to functions terms gap that is That tried that full Hospira cost still where from it we scripts, with some to work, and things those similar like well we you us than valuable simpler on duplication. held margins previous do a underpinned the to was

Operator

And Solow Securities. the comes Larry from with next CJS question

Lawrence Solow

And in And filings call. first business. of confident like the recent some first I you're And guess recent sounds on investment. lots if out -- checking long-term question color I guess the I in sort were of appreciate our I that it all, guidance. is this appreciate you reflected of

So target? don't is want that, like low margin, you the that EBITDA good to just for X- terms time margin, that. expectation? to a know a reasonable X-year on put target that to back that fact that see that line is But XXs of any I in but

Vivek Jain

be next value we I will saying end think, we consolidation implemented But year with year comfortable think yes. next feel feel network right activities, this year. the by now savings I answer the aspect the is fully step-up over of short -- big would cost the would all the in largely Larry, those of I actually mean,

they the over that's So I revenue on exactly line revenues, that get growth, want don't most rarely is that some to think of couple We us do for out prefer to LRPs last saying this but balance year. put a to in, people's things where that the time think. there's sand clear to in but about synergies the points, Then are stuff in still the you're all some get. of happening not take and way to come get in part big there is is the to us it's we the

Lawrence Solow

in Got comfortable for at again, take get mid-single-digit it target without need revenue more to that may these putting you that confidence get and or it. And -- out time little that feel sustainable, actually to you that do growth, of of bit consumables a now you're maybe maybe kind you'll once margin gave But your a feel a that but growth can get leverage now systems visibility and we target, that that X% to you of Do and spot a terms have when this revenue for can like to and care a without of it, somewhat while vital revenue you maybe you line obviously, in get kind on you a growth goal. target of have maintain little bit levels? place your better year. pricing sort little in least

Vivek Jain

least the years with for giving guidance struggles and it we're year, X giving we're of look, mean, -- years this last some under X I at our belt.

company -- are moment work short we're feel a revenues. line. that we where earnings, in best So innovation, The We And just in to expense way that do for I about story certainly and now, out a items in there moments with get earning. is margin patients where need in But right history think under to the our there. synergies it do overearned. way, has time talk long we under the and frankly for the is running we're customers, for we is that 'XX feel is and the

Lawrence Solow

the major in and a utilization, obviously, Just the in do general customers lastly, just lesser just budgets customers hospital just outlook, terms today? to union just state expenses or you extent, maybe feel brief summary your and operational trends, your about hospitals capital the your how just of But forward. of going

Vivek Jain

say of it's utilization labor like time like our to itself it view been It me. this I between to is reimbursement sort tried long changing sorting the lag think normal. feels happen, it's it and if really front of getting time. reliable seems -- a is in as all in I out back I is

So ability to environment, really on we customer to don't right? really anything our negative execute. under have It's the say

Operator

the Stewart question from next with CLK. And comes Kristen

Kristen Stewart

Can hear okay? me you guys

Vivek Jain

Kristen, a first-time caller. as

Kristen Stewart

focus XXs. margins. I I gross you EBITDA the get color share normalized if wondering bit to to how back quickly, you just a that a on more appreciate margins for was on getting And long-term What all low margins? we the guess, I can could more imply little level? gross does

Brian Bonnell

in of Yes. out. Vivek gross I guess margin thinking EBITDA laid the the context that improvement about margins

drive we But require do term, the manufacturing over slightly to much means saw and we'll same of think it 'XX won't those 'XX, exit rate that. the it's at the also the of because that I 'XX the which we of level be throughout as benefited were levels gross us XX%, guess, on growth expect be gross full gross we will in think is, above show well margin we within up then, to thinking the get important First But of about margin that as savings near is underlying to from we year nature top of would And XX% at of to those excess that some cost most EBITDA expect the XXXX that exit kind did improvement some does QX very demand. I expansion of items say back I revenue volumes quarters margins that talked in that rates QX given and margin about probably rate. year, of where for it. note

Kristen Stewart

in improvements we correct? savings can end largely And come I mentioned some XXXX. cost Vivek XXXX? those that Okay. towards Is that think of would Or the see

Vivek Jain

them of was the the items, take the meaning Kristen, it but would clear. if 'XX wasn't the actions cost-saving I to done, to Sorry, end all the implemented, saying of synergy I items, fully value actual year. over still intended some would beyond meaningful future. But a more would the 'XX in value it than was that. would make capture economic be 'XX difference to next fully there be the have

Kristen Stewart

Okay. outlook last for the XXXX, then product Access be line? Perfect. What's to And your that embedded for that question, Vascular forecast in stabilizing. seems

Vivek Jain

here I modest -- you growth. think going from in the I I'm the Brian memory said used words think script,

mid-singles the just So for consider segment. in sort I talked we would of line the with about that it

Operator

And the Fishbin question Brett comes with from next KeyBanc.

Unknown Analyst

have start to of that more question with off lines quick to I wanted a headwinds Just about the product ask follow-up been couple a growth Kristen's XXXX. because to wanted in to

pumps could question, quarters, touch understanding past vascular XXXX. on maybe few just improvement was that in the following if a So seeing as you any on access category, visibility you're ambulatory a into the headwind toward

Vivek Jain

you. to hear nice Yes. Brett. Also, welcome, It's

medication we've you has and of line the bumpy operational the year of one to pretty referenced important maybe been dedicated position this the I reasonably spots, key in and better with selling the an of global QX able below necessarily first operational feels fleet. lower environment. continues historical led X a And today, still home transaction and/or or alternatives, it's looking it of think those so, bit levels that has supply pumps certainly potentially little many the of months those quarters of there. stable still to an for aging customers X category of incredibly very a quarters, being had challenges challenges, It product was and hold in it's been couple not over other utilization the the finally acquisition. sets delivery, because that until it's value the underpin all last leadership to care in really that meaning

open is And so the in there an normal starting more capital there making business up minds. of happens opportunity all the utilization pump out aged that multiple the have pumps to the is sure just that opened refresh they're and our is the the pumping. are that for world of up two opportunities more, as in we One fleet there's is pumps, -- as driving

there's X and ambulatory that reasons important think there's been been real challenges is challenging has And so are to or the X prove line. gone of operational all I opportunities there, really

Unknown Analyst

kind how similar then progressing customers. in in on of of pumps. and in the to implement of then question Becton see couple years of a to recall of been how early opportunity around around the of years capacity pumps early upgrades And you a still talking understand demand helpful. and follow-up a just just how plum maybe limited the And that and conversations? the a the a broader topic off maybe has year? coming Super see Definitely pretty right. bit you you're and curious the several of All competitive just cycle through But customer initial reception little

Vivek Jain

my than recalls And yes, remarks my of do done, now also the many done, the actually that get -- is really implement. buy get that in need a the the States of picture. investments do customers the pumps saying both in either in terms -- in addressed, opening need Yes, through have choices more virus capacity it's to has question it's there There be or comment United the right and to been that or right age to the value insightful years. devices

forced line. As it relates a time to almost -- on to and are reasonable

signings to that installs And doing in to a tried contract because general release phase. we even it's we properly. activity, just go Brian and slowly, As Duo a want didn't in put -- sure make the of just period reference, XXXX lot for getting things the into we're though we're do

right tone choices. that are good, players People make to now. of is the competitive, armed pump I it's big sort all market we of picture, the is take and have which think

Unknown Analyst

right. then question from All And me. Great. last

gave you of good a think figures. I bunch really guys

the about think topic Just inventory drawdown and XXXX. absorption for

a Just $XX-plus total in about able million And -- this goal. were your past thinking opportunity, in you put million wind context quarter. $XXX you you of that to down

drawdown to based place XQ of like margins? about the is tell, think XQ in gross drawdown how once you're takes And impact pace think fair that long think understanding that that remainder to most completed, -- Just tell margins? the impacting about where how that's how of like we do is it is XQ on? So margin the off of the the of kind

Brian Bonnell

think inventory to guess about the thinking able of to reductions, work do to reduction happens I each big capture of is QX. further easiest more the saw sort And around difficult. a first. such that I we I that, have that phenomenon happen But -- incremental think Yes, kind And pace stuff number. the be becomes what Brett, you of we why tend do in

'XX And a it $XX X to X get the or in million QX because kind so be coming all to of over bit further going is quarters remaining you harder, the the as get first does probably opposed of spread out little into just it.

Unknown Analyst

Got it. All right.

just point. last the -- like Just I'll clarify

So line. assuming XQ more a like to midyear time XQ

Just how inventory to quarters? tell the of future like gross think that drawdown about margin where impacting is the

Brian Bonnell

up Yes, just quarter that to the lag, X.X X a of delayed is impact probably speaking. on showing P&L kind generally

impact. ongoing be there So some will

Operator

Securities. Larry CJS a The Solow from follow-up is next question with

Lawrence Solow

follow-up. quick a Just

year. this Brian, Just it's you last good gave free you even not on the gave Essentially, cash guidance year. pretty flow, -- some with

years I the you are in off? future, over cash flow a would ease free next it is couple somewhat back near is that term, getting at of And Just just expenses to hope the remediation as you think that and something the target guys that holding getting net least expenses of remediation income. longer to

Brian Bonnell

then two and spending The That's spend by on items largest the integration. on the are remediation bucket the followed Yes. work.

Vivek Jain

and -- So why right? got was that it we inventory, one That's done.

finish, the to in Now remediation finish. have exactly and to the get get the That's that. done remediation we integration we got

Lawrence Solow

least the at a in it. Got time good Because not guy inventory is the run. short

Operator

James. Bedford from Raymond fall the is question next Jayson with the And

Jayson Bedford

Yes.

Sorry additional question. for the

'XX hear did that thought slightly but half. gross higher, would the margin, right first of XX%. on will on exiting be gross little be above a I Just depends margin kind I it the you Brian, it

correct, So that is higher slightly than XX%?

Brian Bonnell

Yes.

our this think that's assumption point. I at

Jayson Bedford

seems just we back envelope today? Okay. I solutions, margins at EBITDA a high. was about kind the of little on of IV the And doing that XX%, ex then whole but are where

So I'm wondering... just kind of

Vivek Jain

business segment units high. under I That's Jayson. XX.X%, it's in Solutions. individual the EBITDA said I why we somewhere love, I ballpark, It say, we're EBITDA that's somewhere report the high, XX% on that I I'd don't the margins earning. ex level. on think That's But IV range, like is -- mean again, think

Jayson Bedford

Okay.

in some than I For of lower reason, that was contribution. thought IV terms Solutions

Vivek Jain

on So again, approximately, at care we don't a that level.

Operator

question-and-answer I to any closing to the Jain our like would for back concludes Vivek Thank you. And turn floor over comments. session. this

Vivek Jain

in speaking Thanks, everybody's again. appreciate We keep will interest a Thanks to call, on be to improving for to everyone, in and much. weeks very ICU look your Most forward of just the your the in company I interest you QX matter Medical. and company. our efforts

Operator

presentation. The has concluded. today's Thank conference you. now you Thank for attending

You may now disconnect.

ICU Medical (ICUI) 27 Feb 242023 Q4 Earnings call transcript