ICU Medical Inc (ICUI) 2022 Q3 法說會逐字稿

Good afternoon, and welcome to the ICU Medical Third Quarter 2022 Earnings Conference Call. (Operator Instructions)

下午好，歡迎參加 ICU Medical 2022 年第三季財報電話會議。 （操作員指令）

Please note that this event is being recorded today. I would now like to turn the conference over to John Mills with ICR. Please go ahead, sir.

請注意，今天正在記錄此事件。現在我想將會議交給 ICR 的 John Mills。先生，請繼續。

Good afternoon, everyone. Thank you for joining us to discuss ICU Medical's financial results for the third quarter of 2022. On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman; and Brian Bonnell, Chief Financial Officer.

大家下午好。感謝您加入我們討論 ICU Medical 2022 年第三季的財務業績。以及財務長 Brian Bonnell。

We have a presentation accompanying today's prepared remarks. To view the presentation, please go to the Investor page and click on the Events Calendar, and it will be under the third quarter 2022 events.

我們有一份與今天的準備好的發言相關的簡報。要查看演示文稿，請前往“投資者”頁面並點擊“活動日曆”，它將位於 2022 年第三季的活動下。

Before we start our prepared remarks, I want to touch upon any forward-looking statements made during the call, including beliefs 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 risks and uncertainties. Future results may differ materially from management's current expectations. We refer you to the company's SEC filings for more detailed information on the risks and uncertainties that have a direct bearing on operating results and financial position.

在我們開始準備好的發言之前，我想談談電話會議中所做的任何前瞻性陳述，包括對公司未來表現的信念和期望。請注意，它們是基於管理層可獲得的最佳資訊和合理的假設。此類聲明並非旨在代表未來結果，並且受風險和不確定性的影響。未來結果可能與管理階層目前預期有重大差異。請您參閱該公司的美國證券交易委員會文件，以獲取有關對經營業績和財務狀況直接影響的風險和不確定因素的更多詳細資訊。

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'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.

請注意，在今天的電話會議中，我們還將討論非公認會計準則財務指標，包括調整後的結果。我們相信，這些財務指標有助於更全面地分析和更透明地了解 ICU Medical 的持續經營業績，特別是在比較不同時期的基本業績時。我們還在今天的發布中加入了這些非公認會計準則指標的對賬，並儘可能詳細地介紹了任何添加回來的附錄。

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

現在，我很高興將電話轉給 Vivek。

Thanks, John. Good afternoon, everybody, and we hope you are well. Once again, it's been a quick 90 days or so since the last call, and our legacy ICU business unit revenues were again very predictable in Q3, and we did have operational performance improvements for the businesses that came with Smiths Medical. The external economic volatility in the supply chain around freight and fuel that we've been describing since mid-2021 surpassed even the Q2 2022 levels, which was hard to believe. As we said previously, Q2 was the highest peak for any time our team has been in the industry. However, the issues around raw material availability are narrowing. From a customer perspective, we felt U.S. hospital census was stable, and international underlying demand was good in all geographies in Q3. Like everyone in our industry, we wanted to start first by thanking all of our customers and their frontline workers for trusting us to serve you during these times.

謝謝，約翰。大家下午好，祝大家一切安好。再次，自上次通話以來已經過去了 90 天左右，我們傳統的 ICU 業務部門收入在第三季度再次非常可預測，並且我們確實為史密斯醫療帶來的業務帶來了營運績效的改善。我們自 2021 年中期以來一直在描述的貨運和燃料供應鏈的外部經濟波動甚至超過了 2022 年第二季度的水平，這令人難以置信。正如我們之前所說，第二季度是我們團隊從事該行業以來的最高峰。然而，原材料供應方面的問題正在逐漸減少。從客戶角度來看，我們認為美國醫院普查穩定，第三季所有地區的國際潛在需求都很好。與我們行業中的每個人一樣，我們首先要感謝所有客戶和他們的第一線員工在這段時間信任我們為您服務。

While Q3 revenues were generally in line with our previous comments for legacy ICU Medical, our revenues for Smiths Medical were ahead of our expectations that we laid out on the last call. And since everyone is now talking about items they would have never imagined describing on an earnings call, we'll join that group and wanted to use the time today on the call to comment on the year-over-year drivers of the 3 main legacy ICU businesses; explain the Smiths Medical revenues we achieved in Q3 and how that bridges with our comments on the last call; provide a status update on the Smiths Medical 2 buckets of challenges we've been highlighting all year; go a bit deeper on the specific items that have really hurt gross margins this year because the scale is so astounding and it answers the question of where has the profit gone this year; foreshadow, and it's subject to change, how we might report next year as we realign our reporting business units; highlight the continued challenges with the strong U.S. dollar and why we're taking our medicine today and its most up-to-date impact in the near term; and lastly, note a few important strategic items we've now finished as they will impact the base of 2022 going forward as these were the first must-do strategic items as they were negative situations.

雖然第三季的收入與我們先前對傳統 ICU Medical 的評論基本一致，但我們對 Smiths Medical 的收入超出了我們在上次電話會議上提出的預期。由於現在每個人都在談論他們從未想過在財報電話會議上描述的項目，我們將加入這個群體，並希望利用今天的電話會議時間對三大主要傳統 ICU 業務的同比驅動因素進行評論；解釋一下我們在第三季度實現的史密斯醫療收入以及這與我們在上次電話會議上的評論有何關聯；提供我們全年一直強調的 Smiths Medical 2 大挑戰的最新狀態；深入探討今年真正損害毛利率的具體項目，因為規模太驚人了，它回答了今年利潤去哪了的問題；預示著我們明年在重新調整報告業務部門時可能如何報告，但這種情況可能會改變；強調強勢美元所帶來的持續挑戰以及我們今天採取應對措施的原因及其近期的最新影響；最後，請注意我們現在已經完成的一些重要的策略項目，因為它們將影響 2022 年的基礎，因為這些是第一批必須在負面情況下完成的策略項目。

And we'll skip the standard long-term value creation comments as that is after we get the self-help items secured in the near term.

我們將跳過標準的長期價值創造評論，因為那是在我們近期獲得自助項目之後。

Q3 2022 is our third quarter of joint reporting and finally the story is getting a bit shorter. I'll quickly summarize the whole company results and then discuss each segment of the business.

2022 年第三季是我們聯合報告的第三個季度，故事終於變得更簡短了。我會快速總結整個公司的業績，然後討論業務的每個部分。

We finished the quarter with $582 million in adjusted revenue. Adjusted EBITDA came in at $93 million and adjusted EPS was $1.75. We had a softer quarter of investment into the business, and it was largely about inventory builds that Brian will describe. Again, it was a less clean quarter in the cost of goods as we spent at a very high rate to improve the service levels of Smiths Medical, and we had restructuring and integration costs that we remain focused on reducing next year as they impact cash flow. The strong dollar and current -- and FX impact are worse in Q2 -- worse than Q2 at the moment.

本季我們的調整後營收為 5.82 億美元。調整後的 EBITDA 為 9,300 萬美元，調整後的 EPS 為 1.75 美元。我們在本季的業務投資較為疲軟，這主要是由於 Brian 所描述的庫存增加。再次，本季度的商品成本不太清晰，因為我們花費了大量資金來改善史密斯醫療的服務水平，而且我們進行了重組和整合，我們明年仍將重點關注如何降低這些成本，因為它們會影響現金流。美元走強以及外匯影響在第二季比目前第二季更糟。

So let me start with legacy ICU Medical, which is a relatively straightforward story. In Q2, legacy ICU had $320 million in revenue, which is flat on a constant currency basis and minus 2% reported. We had small growth on a year-over-year basis in our most differentiated businesses with negligible COVID impact, and as previously discussed, Q3 2021 had a strong COVID surge. Nothing was dramatically different on underlying demand in Q3, but there was some inter-quarter slowdown during the quarter and bounced back in September. The public hospital companies validated our view on their recent calls that surgeries were up and long-stay high acuity admissions were down. Our U.S. sales were flat to down year-over-year due to the strong COVID comp in Q3 of '21, and all the growth came from the international markets.

因此，讓我先從傳統的 ICU 醫療開始，這是一個相對簡單的故事。第二季度，傳統 ICU 的營收為 3.2 億美元，以固定匯率計算持平，且報告下降了 2%。我們最具差異化的業務同比增長較小，受新冠疫情的影響可以忽略不計，而且如前所述，2021 年第三季度出現了強勁的新冠疫情激增。第三季的基本需求並無太大變化，但本季間出現了一些放緩，並在 9 月有所反彈。公立醫院公司最近的報告證實了我們的觀點，即手術量增加，長期住院高風險患者入院量減少。由於 21 年第三季強勁的新冠疫情影響，我們的美國銷售額較去年同期持平或下降，所有成長都來自國際市場。

So let's go through the businesses quickly and then come back to discuss the current environment. Starting as usual with Infusion Consumables, which is our largest business. Infusion Consumables had revenues of $141 million, which was a 1% increase on a year-over-year constant currency basis and minus 3% on a reported basis. We had growth in the OUS markets and the U.S. market was slightly down in core IV and helped by the specialty categories, which fits with the strong COVID comp in the summer of '21. In oncology, we've been a bit constrained due to some raw material challenges that should abate by the end of this year. We're happy the international markets are holding up, and the U.S. is a little harder to judge right now.

讓我們快速瀏覽一下業務，然後再回過頭來討論當前的環境。像往常一樣從輸液耗材開始，這是我們最大的業務。輸液耗材的營收為 1.41 億美元，以固定匯率計算年增 1%，以報告匯率計算則下降 3%。我們在 OUS 市場實現了成長，而美國市場在核心 IV 方面略有下降，並受到專業類別的推動，這與 21 年夏季強勁的 COVID 表現相吻合。在腫瘤學領域，我們受到了一些原料挑戰的限制，但這些挑戰應該會在今年年底前得到緩解。我們很高興看到國際市場保持穩定，而美國市場目前的情況有點難以判斷。

Moving to Infusion Systems, which is primarily our LVP pumps and associated dedicated sets. This segment did $88 million in adjusted revenues, which was an increase of 1% on a constant currency basis or minus 3% on a reported basis. We did have a decent level of installs in Q3. And here, we had some dedicated set declines on a year-over-year basis in the U.S. due to COVID in '21, but the segment grew due to better international performance. On the last call, we said we felt that customer attention was back with bandwidth -- have real discussions as some of the fatigue from COVID is passing and the acceptance of inflation and the cost of nursing, et cetera, being internalized. Yes, the stresses of the current environment do make it a bit bumpier for decision-making, but we don't believe over the medium term, relative to our size, there's any change to our competitive opportunity. And we are focused on commercial execution here and have no change to our previous commentary on this segment.

轉向輸液系統，主要是我們的 LVP 幫浦和相關專用設備。該部門調整後營收為 8,800 萬美元，以固定匯率計算成長 1%，按報告基礎計算則下降 3%。我們在第三季的安裝量確實相當可觀。在這裡，由於21年的新冠疫情，我們在美國出現了一些同比下降，但由於國際表現更好，該細分市場實現了成長。在上次通話中，我們說，我們感覺到客戶的注意力已經恢復正常——隨著 COVID 帶來的一些疲勞正在消退，以及對通貨膨脹和護理成本等的接受被內部化，進行了真正的討論。是的，當前環境的壓力確實使決策變得更加艱難，但我們認為，從中期來看，相對於我們的規模，我們的競爭機會不會發生任何變化。我們專注於商業執行，對這一部分的先前評論沒有改變。

Finishing the segment discussion with Infusion Solutions (sic) [IV Solutions]. We had $81 million in adjusted revenue or about the same as last year on a year-over-year basis. No additional comments on the revenue side here. The bigger issue for us is this is a segment that has disproportionately absorbed the majority of inflation at legacy ICU, which has impacted legacy ICU profits. The vast majority of unexpected inflation and earnings pressure relative to our view on 2022 legacy ICU profits is primarily about fuel and shipping costs and currency and to a lesser degree, electronic component surge pricing. Through Q3, labor has been much more consistent this year, and we budgeted those items properly. Yes, there's been some raw material surge pricing, but as we highlighted in the last few calls, these items are not so much more inherently valuable over the long term. We have talked about believing in the markets and when capacity increases, pricing should rationalize. So for us, it's about trying to run a stable and predictable operation in a normal environment to get price improvement where we can and to try to illustrate to customers the need to have some of these costs indexed with the belief that supply and demand will balance over time.

以輸液解決方案（原文如此）[IV 解決方案]結束分段討論。我們的調整後收入為 8,100 萬美元，與去年同期相比大致相同。關於收入方面這裡沒有其他評論。對我們來說，更大的問題是，這個部分不成比例地吸收了傳統 ICU 的大部分通貨膨脹，這影響了傳統 ICU 的利潤。相對於我們對 2022 年傳統 ICU 利潤的看法，絕大多數意外通膨和獲利壓力主要來自燃料和運輸成本以及貨幣，其次是電子元件價格上漲。截至第三季度，今年的勞動力更加穩定，我們也對這些項目進行了合理的預算。是的，一些原材料的價格確實出現了上漲，但正如我們在最近幾次電話會議中所強調的那樣，從長遠來看，這些產品的內在價值並沒有那麼高。我們已經討論過相信市場，當產能增加時，定價應該合理化。因此對我們來說，就是要在正常環境下努力實現穩定、可預測的運營，盡可能地改善價格，並試圖向客戶說明需要將部分成本與供需將隨著時間的推移而平衡的信念掛鉤。

But there is a longer-term tactical element to this in some of the businesses. We listened to the comments on price actions from the larger players in the industry, and we obviously support that. But we're also focused on the next round of contracting -- how to separate the costing on some of these items. For example, our transportation and logistics costs should be separate items, no different than airline seat and baggage fees or next-day delivery. Given the historical margin structure of the health care industry and historical negligible inflation, suppliers never had to think this way.

但對某些企業來說，此舉還有更長期的戰術考量。我們聽取了業內較大參與者對價格行為的評論，我們顯然支持這一點。但我們也關注下一輪承包——如何分攤其中一些項目的成本。例如，我們的運輸和物流成本應該是單獨的項目，與航空座位和行李費用或隔天送達的費用沒有什麼不同。考慮到醫療保健產業的歷史利潤結構和歷史上可忽略不計的通貨膨脹，供應商從來不會這樣想。

Okay. So let me move to the Smiths businesses. First, talking about aggregate revenues relative to our last comments and then to update the 2 buckets of issues we've been talking about all year. The Smiths Medical revenues came in at $262 million with Infusion Systems at $97 million, Vascular Access at $95 million and Vital Care at $70 million. This was more than we expected, and the short story on why this happened is a combination of a few more billing days -- that part we knew -- but with more stable operational processes in terms of IT systems and labor, all of which led to improved performance on clearing some of our back orders, albeit again spending freely to do so. The underlying performance for the domestic business has substantially improved with international performance still under repair.

好的。那麼讓我來談談史密斯公司的情況。首先，談論相對於我們上次評論的總收入，然後更新我們全年一直在談論的兩類問題。史密斯醫療公司營收為 2.62 億美元，其中輸液系統營收為 9,700 萬美元，血管通路營收為 9,500 萬美元，生命照護營收為 7,000 萬美元。這超出了我們的預期，而發生這種情況的簡單原因是，結算日增加了幾天——這是我們知道的——但 IT 系統和勞動力方面的營運流程更加穩定，所有這些都使我們在清理部分積壓訂單方面的業績有所提高，儘管我們再次花費了巨額資金。國內業務的基本業績已大幅改善，國際業務業績仍在修復中。

On the last call, we talked about more confidence and predictability in the Smiths Infusion Systems line. We did better than we thought in Q3 as we supported existing Medfusion customers and more importantly, all U.S. backorders on CADD disposables were cleared, which makes the competitive focus on new wins more actionable. We had not anticipated a recovery until Q4, but regardless, the entire unit is running better now with reliable production and fulfillment on the Smiths dedicated pump sets and some of the other items.

在上次通話中，我們談到了對史密斯輸液系統產品線的更多信心和可預測性。由於我們為現有的 Medfusion 客戶提供了支持，我們在第三季度的表現比我們想像的要好，更重要的是，美國所有 CADD 一次性用品的積壓訂單都已清除，這使得對新勝利的競爭重點更加可行。我們原本預計直到第四季才會復甦，但無論如何，整個部門現在運作得更好，Smiths專用幫浦組和其他一些產品的生產和履行可靠。

On the last call, we also said Vascular Access would have some improvement, but still a work in progress, even with a strong Q3. We did benefit $5 million from the last COVID syringe order. And here, too, we're very healthy from a production and U.S. distribution standpoint on all the major subproduct lines, but our commercial execution remains a work in progress, as Smiths, like Hospira, did go backwards here.

在上次電話會議中，我們也表示，血管通路會有所改善，但即使第三季表現強勁，工作仍在進行中。我們確實從上一筆 COVID 注射器訂單中獲益 500 萬美元。同樣，從生產和美國分銷的角度來看，我們在所有主要子產品線上的狀況都非常健康，但我們的商業執行仍在進行中，因為 Smiths 和 Hospira 一樣，在這裡確實倒退了。

Lastly, Vital Care remains an area where some of the supply challenges -- remaining back orders -- continue to be worked as it was neglected the most. We spent a lot of time -- airtime on the last 2 calls explaining the 2 buckets of issues. Let me take them in a reverse order today from the previous scripts.

最後，重要護理仍然是供應方面面臨的一些挑戰（剩餘的積壓訂單）需要繼續解決的領域，因為它是最容易被忽略的。我們花了很多時間——在最後兩次電話會議上解釋這兩類問題。今天，讓我按照與之前的腳本相反的順序來講述它們。

On the quality-related interruptions, we continue to make execution progress that supports the previous communication to both customers and regulators on our view of the path forward and have made some significant decisions. Those decisions, such as stopping sales for certain older generational -- older generation products and committing to a deliberate and timely remediation plan have allowed us to begin supporting existing Medfusion syringe pump customers in early Q3.

對於與品質相關的中斷，我們繼續取得執行進展，以支持先前向客戶和監管機構傳達的我們對未來道路的看法，並做出了一些重大決定。這些決定，例如停止銷售某些老一代產品、承諾制定深思熟慮且及時的補救計劃，使我們能夠在第三季初開始為現有的 Medfusion 注射幫浦客戶提供支援。

We've also made progress in addressing the root causes of the warning letter that we received in late 2021. This part feels very similar to Hospira and our previous experience, and we have the right people who have been through the exact same experience, and our team is fully embedded into the operation.

我們在解決 2021 年底收到的警告信的根本原因方面也取得了進展。

We say the main difference since the last call is, in Q3, we began to execute the various field actions in line with our commitments that we had made in the earlier communication period. As we said on our last calls, the existence of a warning letter, while undesirable, is the regulatory agency trying to move the ball forward, and we talked about how these regulations give us the right to participate. We're making progress in solidifying the foundation and hope to be in a position where we can demonstrate further progress as soon as possible. Again, regardless of where it appears on the P&L, we're spending heavily, so making progress here is extremely important.

我們說，自上次通話以來，主要的區別是，在第三季度，我們開始按照我們在早先的溝通期間所做的承諾執行各種現場行動。正如我們在上次電話會議中所說的那樣，警告信的存在雖然是不可取的，但這是監管機構試圖推動事情向前發展的舉措，我們也討論了這些法規如何賦予我們參與的權利。我們正在鞏固基礎方面取得進展，並希望能夠盡快展示進一步的進展。再說一遍，無論它在損益表上出現在哪裡，我們都花費巨大，因此在這裡取得進展極為重要。

On the operational issues with regards to production, it can generally be said that the entire Smiths production network is producing at acceptable levels with a few minor interruptions. The silicone availability we described on the last call has resolved and now we're fully producing those items. We continue to work on securing the base of supply and in-sourcing the key high-margin disposable components with proper factory staffing levels. From an expense perspective, we've been spending carte blanche to improve customer service levels with an ICU mindset and with the factories only getting to scale recently, there continues to be a drag to gross margins.

關於生產方面的營運問題，總體來說，史密斯整個生產網路的生產水準都處於可接受水平，只有少數輕微的中斷。我們在上次電話會議中描述的矽膠供應問題已經解決，現在我們正在全力生產這些產品。我們將繼續致力於確保供應基礎，並透過適當的工廠人員配備水準來採購關鍵的高利潤一次性零件。從費用角度來看，我們一直以 ICU 思維全權投入來提高客戶服務水平，而且由於工廠最近才開始擴大規模，因此毛利率持續受到拖累。

In the vein of "we can't believe we're talking about this," we did want to give a little more detail on the largest gross margin variances from expectations, because at this moment, those are the largest buckets of addressable opportunities and the scale is so astounding, and it goes a long way to answering where has the profit gone this year. Brian will go through those in more detail. We've already seen our ability to manage our costs across operating expenses, and our focus obviously needs to be on growing revenues, but it's equally important to improve our gross margin performance.

就像「我們不敢相信我們正在談論這個」一樣，我們確實想更詳細地說明與預期相比最大的毛利率差異，因為目前，這些是最大的可尋址機會，而且規模如此驚人，這對於回答今年的利潤去了哪里大有幫助。 Brian 將更詳細地介紹這些內容。我們已經看到了我們管理營運費用成本的能力，我們的重點顯然需要放在增加收入上，但提高毛利率表現也同樣重要。

One area I'd highlight is our freight and logistics costs, which will approach $250 million this fiscal year. That is orders of magnitude more than any historical level. Part of that is diesel cost, part is ocean freight rates, part is expedited shipping costs, not only to our customers, but also to ensure we have the right raw material supply to our network. This is not something we intend to talk about regularly, but it's hard to understand the profit shortfall without some huge drivers as it's not like ASP is going down anywhere in the business. This area, along with other large items like improving the quality system and reducing remediation costs, are all large areas for self-help and cash flow generation.

我要強調的一個領域是我們的貨運和物流成本，本財年將接近 2.5 億美元。這比任何歷史水準都要高出幾個數量級。其中一部分是柴油成本，一部分是海運費，一部分是加急運輸成本，這不僅對我們的客戶而言，也是為了確保我們的網路有正確的原料供應。這不是我們打算定期談論的話題，但如果沒有一些巨大的驅動因素，就很難理解利潤短缺的原因，因為並不是說業務中任何地方的平均售價都在下降。這個領域，以及改善品質系統、降低補救成本等其他大項目，都是自救和產生現金流的大型領域。

In terms of next year, we did want to foreshadow -- and it's subject to change -- how we might report as we realign our reporting business units. It's likely that we'll aggregate revenues into 3 segments. The largest would be a consumable segment that would contain the legacy ICU IV consumables, most of the legacy Smiths Medical, Vascular Access and a few other consumables lines. We think production and operations for most of that pillar should be improved in 2023 with work needed on the Vascular Access commercial execution, as previously mentioned.

就明年而言，我們確實想預示——而且可能會發生變化——我們在重新調整報告業務部門時可能如何報告。我們可能會將收入匯總為三個部分。最大的部分是耗材部分，其中包含傳統的 ICU IV 耗材、大部分傳統的 Smiths Medical、血管通路和一些其他耗材產品線。我們認為，該支柱的大部分生產和運作應該在 2023 年得到改善，並且需要進行血管通路商業執行方面的工作，如前所述。

The second segment would be a System segment, which was all the legacy ICU IV pumps combined with most of the legacy Smiths Medical IV systems segment and the associated dedicated disposables. Again, we think service levels and quality for most of that pillar should be improved in 2023. This segment would have almost all the capital sales of the company. And as a reminder, we published in previous investor presentation, capital sales are less than 15% of the total company and that includes a large amount of software service, spare parts, accessories, et cetera.

第二部分是系統部分，其中包括所有傳統的 ICU IV 幫浦和大部分傳統的 Smiths Medical IV 系統部分以及相關的專用一次性用品。同樣，我們認為該支柱的大部分服務水準和品質應該在 2023 年得到改善。提醒一下，我們在先前的投資人報告中提到，資本銷售額占公司總銷售額的不到 15%，其中包括大量的軟體服務、備件、配件等。

The remaining segment would be a Vital Care segment, combining legacy ICU IV solutions, critical care and most of what is in the legacy Smiths Medical Vital Care segment. We'll provide some schedules when ready. And just to note, there are a few strategic efforts that would adjust the base here of 2022. Some examples are items we just finished recently, such as an agreement to exit India as a direct selling organization via distributor and exiting other negative margin situations if pricing or costs cannot be rationed. So these may be a small hit to base year revenues but are being done to improve a negative profit situation to a neutral or positive.

剩下的部分將是生命關懷部分，結合了傳統的ICU IV解決方案、重症監護和傳統的Smiths Medical生命關懷部分的大部分內容。準備好後我們將提供一些時間表。值得注意的是，有一些策略性努力將調整 2022 年的基礎。因此，這些措施可能會對基準年收入造成小幅影響，但為了將負利潤狀況改善為中性或正利潤。

In terms of the balance of this year, from an earnings perspective, the only real difference from our last -- from our previous call is currency. Even though the euro has been in the more stable range the last few months, our largest direct countries are Canada, Japan, Australia, which have all had additional currency weakness. For what it's worth, we only carried the legacy currency hedges inherited from Smiths this year. ICU always ran unhedged, so to speak. As a result, we've really taken our medicine today, and it's had a large impact on the year. From a revenue standpoint, we felt Q3 showed what we can do when fulfillment operations are more stable, even if more expensive. We did catch up on some of the back orders faster than we thought, so that may impact Q4 depending on where this underlying market settles. Regarding longer-term performance, I'm not going to repeat the comments from the previous calls as we feel we've been transparent here on the size and scale of the self-help opportunities.

就今年的餘額而言，從獲利角度來看，與我們上次預測的唯一真正區別是貨幣。儘管歐元在過去幾個月一直處於較為穩定的區間，但我們最大的直接投資國家是加拿大、日本、澳大利亞，這些國家的貨幣都出現了進一步疲軟的跡象。不管怎樣，我們今年只繼承了從史密斯公司繼承的遺留貨幣對沖。可以這麼說，ICU 的運作始終不受限制。結果，我們今天真的吃了苦頭，這對今年產生了很大的影響。從收入的角度來看，我們認為第三季展示了當履行操作更加穩定時我們可以做什麼，即使成本更高。我們確實比想像中更快地完成了一些積壓訂單，因此這可能會對第四季度產生影響，具體取決於這個基礎市場的穩定情況。至於長期表現，我不會重複先前電話會議中的評論，因為我們認為我們在自助機會的規模和範圍方面已經很透明了。

What we want to get back to after the challenges of this year is to the aggregate positioning of the combined portfolio and its relevance for customers and their reactions. Yes, the situation is harder than we expected, but the customer logic continues to make sense. Like with the Hospira transaction, we need to change the conversation from the historical perception to demonstrating our value through innovation and service. These portfolios make sense together, and we're working on how to integrate them either literally or economically when sensible. And we do believe more doors are being opened as a result of having a broader set of items that are mandatory for care. We get this needs to show up on the P&L to prove that value.

經歷了今年的挑戰之後，我們想要重新審視組合投資組合的整體定位以及它與客戶的相關性和他們的反應。是的，情況比我們預想的要困難，但客戶邏輯仍然有意義。就像 Hospira 交易一樣，我們需要將主題從歷史視角轉變為透過創新和服務來展示我們的價值。這些投資組合放在一起是有意義的，我們正在研究如何在合理的情況下從字面上或經濟上整合它們。我們確實相信，隨著強制照護計畫範圍的擴大，我們將為人們打開更多的大門。我們知道這需要在損益表上體現以證明其價值。

For legacy ICU, our most differentiated businesses will end 2022 larger than ever, with appropriate profitability levels. The core premise of the Smiths transaction is to enhance the product offering for these exact categories that drive our returns as well as have logical adjacencies predicated on the same characteristics, sticky categories, low capital intensity, single-use disposables, opportunities to innovate and participate in a logical industry structure. Even though we've been consumed with basic operations, we still believe this is all the strategic case and the big opportunity over the long term is using this combined portfolio to improve our position in existing markets and also move to the right areas as the value shifts into new spaces. The construction of the Smiths portfolio was logical, and frankly, why it survived over the years. The other part of value is maximizing the opportunity with each piece of the portfolio. We believe as we clean up, stabilize and improve the operations, we could be presented with more opportunities here.

對於傳統 ICU，我們最具差異化的業務將在 2022 年底達到比以往更大的規模，並擁有適當的獲利水準。 Smiths 交易的核心前提是增強這些精確類別的產品供應，以推動我們的回報，並基於相同特徵、黏性類別、低資本密集度、一次性使用物品、創新機會和參與邏輯產業結構等具有邏輯鄰近性。儘管我們一直忙於基礎運營，但我們仍然相信這都是策略案例，而長期來看，最大的機會是利用這種綜合投資組合來改善我們在現有市場中的地位，並隨著價值轉移到新的領域而轉向正確的領域。史密斯投資組合的建構是合理的，坦白說，這也是它多年來能夠生存下來的原因。 價值的另一部分是最大化投資組合中每個部分的機會。我們相信，隨著我們清理、穩定和改善運營，我們將在這裡獲得更多機會。

While the pandemic introduced substantial volatility, strategically, we do think the weakness that it has exposed in the health care supply chain add to the argument for all participants to be healthy and stable, which has been our commentary since we became a full line supplier. Smiths Medical also produces essential items that require significant clinical training, hold manufacturing barriers and in general, are items that customers do not want to switch unless they have to. The market needs Smiths Medical to be a reliable supplier and the combination positions us better. Our company has emerged stronger from all the events over the last few years. We've gotten knocked down a bit, but we see the hill to run up again together with our new colleagues -- drive value out of the combination. Thank you to all the customers, suppliers and frontline health care workers as we improve each day. Our company appreciates the role each of us has had to play.

雖然疫情帶來了巨大的波動，但從戰略上講，我們確實認為，疫情在醫療保健供應鏈中暴露出的弱點，為所有參與者保持健康和穩定提供了理由，這也是我們成為全線供應商以來一直堅持的觀點。 Smiths Medical 也生產需要大量臨床培訓、具有製造障礙的必需品，一般而言，這些是客戶在非萬不得已的情況下不願意更換的物品。市場需要史密斯醫療公司成為可靠的供應商，這種結合將使我們處於更有利的地位。我們公司在過去幾年所發生的一切事情中變得更加強大。我們雖然遭受了些許打擊，但我們看到，我們將與新同事一起再次攀登高峰——發揮聯合體的價值。感謝所有客戶、供應商和第一線醫護人員，我們每天都在進步。我們公司感謝我們每個人所扮演的角色。

And with that, I'll turn it over to Brian.

現在，我將把話題交給 Brian。

Thanks, Vivek, and good afternoon, everyone. To begin, I'll first walk down the P&L and discuss our results for the third quarter and then move on to cash flow and the balance sheet. Along the way, I'll provide our updated outlook for the full year for each of these areas.

謝謝，維韋克，大家下午好。首先，我將先介紹損益表，討論第三季的業績，然後再討論現金流和資產負債表。在此過程中，我將針對每個領域提供全年的最新展望。

So starting with the revenue line. Our third quarter 2022 GAAP revenue was $598 million compared to $336 million last year, which is up 78% on a reported basis, reflecting the impact of the Smiths Medical acquisition. For your reference, the 2021 and 2022 adjusted revenue figures by business unit can be found on Slide #3 of the presentation.

因此從收入線開始。我們 2022 年第三季的 GAAP 收入為 5.98 億美元，而去年為 3.36 億美元，報告顯示成長了 78%，反映了收購史密斯醫療的影響。供您參考，您可以在簡報的第 3 張投影片中找到按業務部門劃分的 2021 年和 2022 年調整後收入資料。

For the legacy ICU business, adjusted revenue for the quarter was $320 million compared to $328 million last year, which is flat on a constant currency basis and down 2% on a reported basis. Infusion Consumables was up 1% constant currency and down 3% reported. Infusion Systems was also up 1% constant currency and down 3% reported, and IV Solutions was down 1% on both a constant currency and reported basis. Overall, we were pleased with the results for the legacy ICU businesses as compared to a very strong Q3 last year.

對於傳統 ICU 業務，本季調整後的收入為 3.2 億美元，而去年同期為 3.28 億美元，按固定匯率計算持平，按報告基礎計算下降 2%。輸液耗材以固定匯率計算上漲 1%，以報告匯率計算下跌 3%。輸液系統 (Infusion Systems) 的股價以固定匯率計算上漲了 1%，但報告股價下跌了 3%，而靜脈輸液系統 (IV Solutions) 的股價以固定匯率計算和報告股價均下跌了 1%。總體而言，與去年第三季的強勁表現相比，我們對傳統 ICU 業務的業績感到滿意。

For the third quarter, Smiths Medical contributed $262 million in revenue. Compared to the second quarter, this represents a sequential quarter increase of $39 million. It is worth noting that Smiths Medical's historical financial reporting calendar resulted in 5 additional business days during the quarter as compared to legacy ICU. We estimate that these 5 additional business days accounted for approximately half of the $39 million sequential increase in revenue, with the remaining increase due primarily to improvement in customer order fulfillment and reductions in back order levels, most notably within the legacy Smiths Medical, Infusion Systems and Vascular Access businesses.

第三季度，史密斯醫療貢獻了 2.62 億美元的收入。與第二季相比，這意味著環比增加了 3900 萬美元。值得注意的是，與傳統 ICU 相比，史密斯醫療的歷史財務報告日曆在本季增加了 5 個工作天。我們估計，這額外的 5 個工作日約佔 3,900 萬美元連續收入成長的一半，剩餘的成長主要歸功於客戶訂單履行情況的改善和積壓訂單水準的降低，最明顯的是在傳統的史密斯醫療、輸液系統和血管通路業務中。

During the quarter, we completed the IT systems work to align the Smiths Medical financial reporting calendar to that of ICU. And going forward, the number of business days will be the same across the combined company.

在本季度，我們完成了 IT 系統工作，使史密斯醫療的財務報告日曆與 ICU 的財務報告日曆保持一致。今後，合併後的公司的工作天數將維持不變。

As you can see from the GAAP to non-GAAP reconciliation in the press release, for the third quarter, our adjusted gross margin for the combined company was 35%. During the quarter, we continued to experience the impact from the same items as the second quarter and largely to the same degree with the exception of foreign exchange, which worsened during the third quarter as a result of the continued strengthening of the U.S. dollar. For the full year, we expect adjusted gross margin to be around 36%. Coming into 2022, we originally expected adjusted gross margins to be 40% or 4 percentage points higher than our current forecast.

正如您從新聞稿中的 GAAP 與非 GAAP 調整表所看到的，第三季度，合併後公司的調整後毛利率為 35%。在本季度，我們繼續受到與第二季度相同項目的影響，且影響程度大致相同，但外匯影響除外。我們預計全年調整後的毛利率約為36%。進入 2022 年，我們最初預計調整後的毛利率將達到 40%，比我們目前的預測高出 4 個百分點。

So let's recap the drivers of this difference, which fall into a few distinct categories. The first category is operational inefficiencies being driven by the current supply chain environment. Here, we're seeing a 2 percentage point impact to gross margin from a combination of the continued effect of lower manufacturing absorption from reduced volumes, plus additional expenses related to air freight and other forms of expedited shipping to customers, which has been incurred to address the legacy Smiths Medical operational challenges.

讓我們回顧一下造成這種差異的因素，它們可分為幾個不同的類別。第一類是目前供應鏈環境所導致的營運效率低。在這裡，我們看到毛利率受到了 2 個百分點的影響，這是由於產量減少導致製造吸收率持續下降，加上與空運和其他形式的加急運輸相關的額外費用，這些費用是為了解決史密斯醫療公司遺留的運營挑戰而產生的。

The second category is higher market prices for fuel and diesel as well as certain categories of raw materials. The higher freight rates are disproportionately driven by the legacy ICU Solutions business, while the higher raw material prices are spread more broadly. These higher freight and raw material costs reduced adjusted gross margin by approximately 2 percentage points.

第二類是燃料、柴油以及某些類別原料的市場價格上漲。運費上漲主要是受到傳統 ICU Solutions 業務的推動，而原物料價格上漲的影響範圍則更為廣泛。更高的運費和原物料成本導致調整後的毛利率降低約2個百分點。

And the final category is foreign exchange, which will have a 1 percentage point negative impact to adjusted gross margin for the year as a result of the strength in the U.S. dollar. Recently, we have seen some improvement related to manufacturing absorption as we continue to increase manufacturing output and improve customer fulfillment. But this benefit has been largely offset by the impact of foreign exchange from the continued strengthening of U.S. dollar. Additionally, our willingness to expedite shipments to ensure product availability for customers, along with the lag between manufacturing improvements and the cost recognition in the P&L -- we don't expect to see a meaningful improvement to adjusted gross margin during the fourth quarter.

最後一個類別是外匯，由於美元走強，將對全年調整後的毛利率產生 1 個百分點的負面影響。最近，隨著我們不斷增加製造產量並提高客戶滿意度，我們看到製造吸收方面取得了一些進展。但這好處在很大程度上被美元持續走強帶來的外匯影響所抵消。此外，我們願意加快發貨速度以確保客戶能夠獲得產品，再加上製造改進和損益表中的成本確認之間的滯後——我們預計第四季度調整後的毛利率不會有顯著改善。

Adjusted SG&A expense was $107 million in Q3 and adjusted R&D was $23 million. Total operating expenses in Q3 declined compared to Q2 by approximately $6 million from a combination of continued realization of synergies, lower personnel costs and timing. Restructuring, integration and strategic transaction expenses were $14 million in the third quarter and related primarily to the integration of the Smiths Medical acquisition. This was the same level of spend as the second quarter, and we anticipate we will maintain a similar level of spending in Q4.

第三季調整後的銷售、一般及行政支出為 1.07 億美元，調整後的研發支出為 2,300 萬美元。由於協同效應的持續實現、人員成本的降低和時間安排的合理安排，第三季的總營運費用與第二季相比下降了約 600 萬美元。第三季的重組、整合和策略交易費用為 1,400 萬美元，主要與史密斯醫療收購的整合有關。這與第二季的支出水準相同，我們預期第四季的支出水準也將維持類似的水準。

Adjusted diluted earnings per share for the second quarter -- for the third quarter was $1.75 compared to $2.07 last year. The current quarter results reflect an adjusted effective tax rate of 18.5% and basic and diluted shares outstanding for the quarter were 23.9 million. And finally, adjusted EBITDA for Q3 increased 29% to $93 million compared to $72 million last year.

第二季和第三季的調整後每股攤薄收益為 1.75 美元，去年同期為 2.07 美元。本季業績反映調整後有效稅率為18.5%，本季基本及稀釋流通股數為2,390萬股。最後，第三季調整後的 EBITDA 較去年的 7,200 萬美元成長 29%，達到 9,300 萬美元。

Now moving on to cash flow and the balance sheet. For the quarter, free cash flow was a net outflow of $18 million. Sequentially, this was a meaningful improvement compared to a net outflow of $86 million in the second quarter due to a combination of improved earnings and lower working capital.

現在討論現金流和資產負債表。本季度，自由現金流淨流出1800萬美元。從環比來看，由於獲利提高和營運資本減少，與第二季 8,600 萬美元的淨流出相比，這是一個有意義的改善。

And we saw this improvement in cash flow, while at the same time continuing to invest heavily into the 3 key areas of the business that we've highlighted for the past several calls. The first is higher levels of inventory to bolster safety stock and allow for onboarding of new customers. Here, we invested $52 million in additional raw materials and finished goods inventory during the quarter, most of which was related to the Smiths Medical product lines in order to protect our manufacturing operations from supply disruptions and to replenish our distribution channels to better serve customers.

我們看到現金流有所改善，同時繼續對過去幾次電話會議中強調的三大關鍵業務領域進行大力投資。首先是提高庫存水平，以增加安全庫存並允許新客戶入職。本季度，我們投資了 5,200 萬美元用於額外的原材料和成品庫存，其中大部分與史密斯醫療產品線有關，目的是保護我們的製造業務免受供應中斷的影響，並補充我們的分銷管道，以更好地服務客戶。

The second area was the integration of the Smiths Medical business, and as previously mentioned, we spent $14 million on restructuring and integration. And the third was quality improvement initiatives for Smiths Medical. And during the quarter, we spent $19 million on quality system and product-related remediation work. Additionally, we spent $21 million on CapEx for general maintenance and capacity expansion at our facilities as well as placement of revenue-generating infusion pumps with customers outside of the U.S. And we continue to expect total CapEx spending in 2022 of approximately $100 million.

第二個領域是史密斯醫療業務的整合，正如前面提到的，我們在重組和整合上花費了 1400 萬美元。第三個是史密斯醫療公司的品質改進舉措。本季度，我們在品質系統和產品相關的補救工作上花費了 1,900 萬美元。此外，我們還花費了 2,100 萬美元的資本支出，用於我們設施的一般維護和產能擴張，以及在美國以外的客戶處安裝創收輸液泵。

For the fourth quarter, we will continue to invest in the Smiths Medical integration and quality system improvements along with higher levels of inventory across the combined company. However, inventory has been the area of greatest investment with $152 million spent through the first 3 quarters this year, and we believe we are nearing the point of stabilization and expect inventory levels to peak by Q1 2023.

第四季度，我們將繼續投資史密斯醫療的整合和品質系統改進，以及合併後公司的更高庫存水準。然而，庫存一直是投資最大的領域，今年前三個季度的支出為 1.52 億美元，我們相信我們已接近穩定點，預計庫存水準將在 2023 年第一季達到高峰。

And just to wrap up on the balance sheet, we finished the quarter with $1.7 billion of debt and $249 million of cash and investments.

總結資產負債表，本季結束時我們的債務為 17 億美元，現金和投資為 2.49 億美元。

Since our last call, the macroeconomic factors that impact our near-term earnings outlook remained mostly stable, with the exception of foreign exchange where the U.S. dollar has continued to strengthen relative to foreign currencies in markets where we have a meaningful presence. As a result of the foreign exchange impact on our P&L for the second half of this year, we expect to end the year at the lower end of our previously provided guidance ranges for adjusted EBITDA of $350 million to $370 million and adjusted EPS of $6.20 to $6.80 per share. For modeling purposes, the Q4 adjusted EPS guidance assumes interest expense of $21 million, a non-GAAP tax rate of approximately 23% and diluted shares outstanding of 24.1 million.

自上次電話會議以來，影響我們近期獲利前景的宏觀經濟因素基本上保持穩定，但外匯除外，在我們有重要業務的市場中，美元兌外幣繼續走強。由於今年下半年外匯對我們損益表的影響，我們預計今年年底的調整後 EBITDA 將低於我們先前提供的指導範圍的低端，即調整後的 EBITDA 為 3.5 億美元至 3.7 億美元，調整後的每股收益為 6.20 美元至 6.80 美元。出於建模目的，第四季調整後每股盈餘指引假設利息支出為 2,100 萬美元、非 GAAP 稅率約為 23% 且稀釋流通股為 2,410 萬股。

In summary, we're pleased with the meaningful progress we made during the third quarter to address the operational challenges of the Smiths Medical business. While profitability will remain constrained as we invest to repair the legacy Smiths Medical business and deal with the current macroeconomic pressures, we remain convinced of the longer-term opportunity to improve the financial performance of the combined organization with the list of items under our control. Strategically, we have broadened our available markets, and we're working to get all portions of the business on the same trajectory as legacy ICU. We look forward to providing updates on our progress along with our 2023 outlook during our call early next year.

總而言之，我們對第三季在解決史密斯醫療業務營運挑戰方面取得的重大進展感到高興。儘管在我們投資修復史密斯醫療遺留業務和應對當前宏觀經濟壓力的過程中，盈利能力仍將受到限制，但我們依然堅信，憑藉我們控制的項目清單，合併後的公司有機會長期改善財務業績。從策略上講，我們已經拓寬了可用市場，並正在努力使業務的所有部分與傳統 ICU 保持一致的發展軌跡。我們期待在明年初的電話會議上提供有關我們進展的最新資訊以及 2023 年的展望。

And with that, I'd like to turn the call over for any questions.

現在，我想將電話轉交給大家，以便大家提出問題。

(Operator Instructions)

（操作員指令）

At this time, we will take our first question, which is coming from Jayson Bedford with Raymond James.

現在，我們將回答第一個問題，來自 Raymond James 的 Jayson Bedford。

I always feel like I need more time to digest all of the information given in these calls, but let me take a stab at it here. On the legacy Infusion Systems business, a good set of installations. You did mention you're seeing a benefit from the Smiths combination. Are you seeing some selling synergies as a result of Smiths?

我總是覺得我需要更多的時間來消化這些電話中提供的所有信息，但讓我在這裡嘗試一下。在傳統的輸液系統業務上，有一套良好的安裝。您確實提到您看到了 Smiths 組合帶來的好處。您是否看到了史密斯帶來的一些銷售綜效？

I would say, Jayson, if you kind of look at the way the market's lined up historically, every place that used a Smiths product was using either our LVP pumps or someone else's. So we had a very good sense of where ours were. I think on the -- where it was being used in other spots, those are doors at least we have a reason to be in now where we didn't necessarily have a reason to be there before. So I would say, it's forcing us to have some conversations that -- or allowing us to have some conversations we may not have had access to before.

我想說，傑森，如果你看一下市場的歷史走勢，每個使用史密斯產品的地方都在使用我們的 LVP 泵或其他公司的泵。所以我們非常清楚自己的處境。我認為——它在其他地方被使用，那些門至少現在我們有理由進去，而以前我們不一定有理由在那裡。所以我想說，它迫使我們進行一些對話——或者允許我們進行一些我們以前可能無法進行過的對話。

And the environment for capital is conducive to those discussions?

資本環境是否有利於這些討論？

I think that's what I tried to address in the script. It was -- it felt pretty good 120 days ago. It's still pretty good. It's a little bit -- taking a little bit longer just given the week-to-week drama in the world right now. That's why I was saying it could slow down some decision-making. So we haven't seen anything material.

我想這就是我在劇本中試圖解決的問題。是的——120 天前的感覺非常好。還是挺好的。考慮到目前世界每週發生的戲劇性事件，這需要稍微長一點的時間。這就是我說它可能會減慢一些決策的原因。因此我們還沒有看到任何實質的東西。

The other point I was trying to make there is, if you look at kind of the stuff we published, capital -- what we call capital for the combined company is 15%. But if you dig a little bit deeper, a chunk of that is software -- like annual software licenses and service contracts and spare parts. Actual capital is not such a huge part of the company. Important obviously, because it drives future dedicated disposable share, but it's -- the vast majority of the company is single-use disposables.

我想表達的另一點是，如果你看我們發布的內容，資本——我們所說的合併後公司的資本是 15%。但如果你深入挖掘一下，你會發現其中很大一部分是軟體——例如年度軟體許可證、服務合約和備件。實際資本並不是公司很大的一部分。顯然，這很重要，因為它推動了未來專用一次性用品的份額，但該公司的絕大多數產品都是一次性用品。

Okay. And on the legacy consumables business, growth slowed. I realize you had a tough comp here. I think you alluded to some supply chain constraints, and I think in the past, you've called out oncology. Is there any way to either kind of quantify the impact of the supply chain constraints or at least just kind of frame the current situation and when it will be resolved?

好的。傳統消耗品業務的成長則有所放緩。我知道你在這裡遇到了困難。我認為您提到了一些供應鏈限制，而且我認為過去您曾提到過腫瘤學。有沒有什麼方法可以量化供應鏈限制的影響，或至少可以概括出當前的情況以及何時可以解決這個問題？

Yes. I think there's probably 2 issues that happened. One, that's why we were trying to say, there was a little bit of intra-quarter volatility. It was a little bit soft out there in U.S. hospitals kind of mid-July, early August. Maybe, I don't know, if it was holiday travel or what, but it was a little bit less than we had expected. And that's part of what happened in Q3. And the other part is being short some of these items on oncology in 1 or 2 other areas. I would say, I don't want to give a precise number around that, but it's certainly more than $1 million over the balance of the year.

是的。我認為可能發生了兩個問題。首先，這就是我們試圖說的，季度內存在一點波動。七月中旬至八月初，美國醫院的情況稍微好一點。或許吧，我不知道，如果是假期旅行或原因，但它比我們預期的少一點。這就是第三季發生的部分情況。另一部分是其他 1 或 2 個領域缺少一些有關腫瘤學的內容。我想說，我不想給出一個確切的數字，但今年的餘額肯定超過 100 萬美元。

Over the balance of the year or the quarter? Sorry.

是按年度還是按季度計算的？對不起。

Well, saying a lot of it happened in Q3. So $1 million in the quarter is probably better.

嗯，很多事情都發生在第三季。因此本季的金額為 100 萬美元可能會更好。

Okay. Just on gross margin, you kind of called out the $250 million impact. I think you cited diesel, ocean freight, expedited freight. But you also mentioned that there's areas of self-help within that. Is there any way to kind of walk us through where you see the opportunity? And when we'll see an impact on gross margin?

好的。僅就毛利率而言，您就指出了 2.5 億美元的影響。我想您提到了柴油、海運、加急貨運。但您也提到其中也包含自助的領域。能否向我們介紹一下您認為的機會在哪裡？我們什麼時候會看到對毛利率的影響？

Yes. Just to be clear, we were just saying $250 million is the absolute spent, right? And by any historical measure, spending 10% of your revenues on moving stuff around is not sort of a normal level. So it's not saying that's all incremental pain. There's lots of pieces of that you can pick at. I mean, one piece that we've been very focused on, we knew we were going to have some expedited freight when we did the transaction, and we were behind even some of our own production, which had more expedite. So I don't know, I'd say that the number of expedited freight costs this year was somewhere north of $20 million, $25 million. That's a very tangible thing that we need to go after. It's not all going to get solved in one quarter. It takes time to get it, but it's fully under our control, and we need to do that. And that's a big chunk of variance relative to our original plan for the year.

是的。要先明確的是，我們剛才說的 2.5 億美元是絕對花費，對嗎？以任何歷史標準來衡量，花費 10% 的收入用於運輸物品都不是正常水準。所以這並不是說這全都是漸進的痛苦。有很多部分可供您選擇。我的意思是，我們一直非常關注的一點是，我們知道在交易時我們會有一些加急貨運，而且我們甚至落後於我們自己的一些生產，這些生產需要更快的速度。所以我不知道，但我認為今年的加急貨運成本大約在 2,000 萬美元到 2,500 萬美元之間。這是我們需要追求的非常實在的東西。所有問題不可能在一個季度內解決。雖然這需要時間，但它完全在我們的掌控之中，我們需要這樣做。這與我們今年的原計劃相比有很大差異。

And seems to kind of clarify the spend -- I realize we're not in a normal environment, but what is normal? Meaning, if $250 million is what it was this year, in a normalized environment for a business this size, what would be the normal level?

這似乎澄清了支出問題——我意識到我們處在不正常的環境中，但什麼是正常的呢？意思是，如果今年的水準是 2.5 億美元，那麼在正常環境下，對於這樣規模的企業來說，正常水準是多少？

Yes. I think we want to separate IV Solutions. I don't want to get too granular, but we'd want to separate IV Solutions from everything else. Historically, those costs were in the 4% to 5% range for -- outside of Solutions, and we're obviously a much higher percentage right now.

是的。我認為我們想要分離 IV 解決方案。我不想談得太詳細，但我們希望將 IV 解決方案與其他所有內容分開。從歷史上看，除解決方案之外，這些成本都在 4% 到 5% 的範圍內，而我們現在的比例顯然要高得多。

Our next question will come from Matt Mishan with KeyBanc.

我們的下一個問題來自 KeyBanc 的 Matt Mishan。

Vivek, I don't want to get too granular around a single quarter, but I know a lot of people are focused on like the exit rate for this year and running that out to next year. So as I think about like low end on guidance, I'm thinking $350 million to $360 million, and the range that takes you down to $350 million is a step back from some of the progress you've made this quarter; and getting closer to $360 million is like another step forward and moving towards 2023. How should we think about like that range of outcomes for the fourth quarter?

Vivek，我不想對單一季度進行過於詳細的描述，但我知道很多人都專注於今年的退出率以及明年的退出率。因此，當我考慮指引的低端時，我認為是 3.5 億美元到 3.6 億美元，而降至 3.5 億美元的範圍與本季度取得的一些進展相比有所倒退；接近 3.6 億美元就像是向前邁出了又一步，並朝著 2023 年邁進。

I'm looking at, Brian. Sorry, Matt. Good to hear from you. I think we just -- it's been a difficult year, Matt, and we just don't want to make a mistake. I think your question is 100% fair. I mean we were pretty transparent on the last call script. We got a little ahead of that from a revenue perspective. There is room to improve margins. I would feel better just saying we stay within there and we'll address next year when we get there. if revenues didn't come through and currency got worse, there's a chance, you said -- what you just said could be right. We -- but there's an equal chance that if we do what we're supposed to do, we land where we intend to land. So I get the question. I don't want to pick at any one quarter either given what we put people through and what this year felt like.

我正在看，布萊恩。對不起，馬特。很高興收到你的來信。我想我們只是——這是艱難的一年，馬特，我們只是不想犯錯。我認為你的問題100％公平。我的意思是我們對上次通話腳本非常透明。從收入角度來看，我們略微領先於此。利潤率還有提升空間。如果我說我們留在那裡，等到明年到達那裡再解決，我會感覺更好。如果收入沒有增加，貨幣狀況惡化，你就有可能，你剛才說的可能是對的。我們——但是，如果我們按照我們應該做的去做，我們就有同樣的機會降落到我們想要降落的地方。我明白你的疑問。考慮到我們讓人們經歷的事情以及今年的感受，我不想挑選任何一個季度。

Okay. I think that's fair. And then you talked about a few strategic efforts you were making. How are you thinking about like the timing of portfolio rationalization at this point?

好的。我認為這是公平的。然後您談到了您正在進行的一些戰略努力。現在您如何考慮投資組合合理化的時機？

There was some -- there are -- there were, there are a few countries where we have lines of business that are truly money losing. And we should address those first, if they're actionable. And so we've been doing that some spots where we had to change pricing in the market and some spots where it just makes sense to have a different go-to-market model. And so we've been focused on those because those are true negatives. And then in terms of is there something else on the portfolio rationalization front, it's not exactly the best sellers market of things in the world, which I don't think is a groundbreaking news to anybody. So I think right now, our focus is to get the assets running well, in order and kind of see what the road brings, right? If they are positive cash flow contributing to the overall enterprise, we don't feel under any pressure or rush to do anything other than to maximize value.

在一些國家，我們的業務確實處於虧損狀態。如果它們可行，我們應該先解決這些問題。因此，我們一直在這樣做，在某些地方我們必須改變市場定價，而在某些地方採用不同的市場進入模式也是合理的。所以我們一直關注這些，因為它們是真正的負面。然後就投資組合合理化方面是否存在其他問題而言，它並不是世界上最暢銷的市場，我認為這對任何人來說都不是一個突破性的消息。所以我認為現在我們的重點是讓資產有序地運作起來，看看這條路會帶來什麼，對嗎？如果它們對整個企業有正現金流貢獻，我們就不會感受到任何壓力，也不會急於做除了最大化價值之外的任何事情。

Okay. And I don't know -- I'm not sure if Jayson asked this or not. How much was oncology constrained this year? Any chance you can quantify that?

好的。我不知道——我不確定傑森是否問過這個問題。今年腫瘤學受到了多大的限制？您能量化一下嗎？

I think the answer we gave there was about the quarter, which you could say, it was $1 million or something. I don't think it would be an unrealistic assumption to say if you annualize that number, that was the impact of oncology constraints this year.

我認為我們給出的答案與季度有關，你可以說，大約是 100 萬美元。我認為，如果將該數字年化，那麼這就是今年腫瘤學限制的影響，這並不是一個不切實際的假設。

And our next question will come from Larry Solow with CJS Securities.

我們的下一個問題來自 CJS Securities 的 Larry Solow。

Just a couple of follow-ups. The slowness in the U.S., July and August, could that also be -- is there -- like from what I'm hearing from a couple other companies, a little bit of a return to some seasonality. Could that -- kind of -- did you feel a little bit of that impact for you guys as well at the hospital level or...

只需幾個後續行動。美國七月和八月的經濟放緩是否也可能是——就像我從其他幾家公司聽到的那樣——有點季節性回歸。那樣的話——有點——你們在醫院層級是否也感受到了一點影響？

Possibly. It looked more like the world did pre-COVID, but even a bit less than that. So it's hard to say.

有可能。世界看起來更像新冠疫情之前的樣子，但比這還要差一點。所以很難說。

Okay. That's fair. What about, so something you mentioned...

好的。這很公平。那你提到的一些事情怎麼樣…

It's still a little bumpy even in the fourth quarter, right? That's what I was trying to say. We need to hold our market share, gain market share, create new categories, that's what we're focused on, right? We're not going to change so much [standing] but just make sure the portfolio is in the right places with the right customers.

即使到了第四季度，情況仍然有些坎坷，對嗎？這就是我想說的話。我們需要保持我們的市場份額，獲得市場份額，創造新的類別，這就是我們所關注的，對嗎？我們不會做出太多改變，而只是確保產品組合位於正確的位置，服務正確的客戶。

And Vivek, you mentioned some of the strategic efforts. Can you -- and I think you said, specifically, I think the exit of India for one. I imagine they're all kind of the small onesies and twosies, but can you give us an idea sort of -- can you quantify anything just to give us a little frame of reference about what some of these projects are entailing, what they're doing in terms of moving the needle at all?

維韋克，您提到了一些戰略努力。你能嗎——我想你說過，具體來說，我認為印度的退出就是其中之一。我想像它們都是小數目，但是您能否給我們一個概念——您能否量化一些東西，以便為我們提供一點參考框架，讓我們了解這些項目涉及哪些內容，它們在推動什麼方面發揮了什麼作用？

I mean, I think they're all onesies and twosies, but there's a number of them, right? So we'll take -- that's the world we live in right now. So we have to grab them if we can. Even if it's a low single-digit type of help, we've got to do it. We've got to do it.

我的意思是，我認為它們都是連身衣和兩體衣，但是有很多，對嗎？所以我們會接受──這就是我們現在所生活的世界。所以如果可以的話我們必須抓住它們。即使只是個位數的低幫助，我們也必須這麼做。我們必須這麼做。

Right. Right. And the gross margin pressure, obviously, nothing new. When you -- and I think you said -- I think Brian said, he expects sort of 35% in Q4 as well. Did you -- had you -- were you building in any kind of improvement on the prior expectations? I don't think so, but I just wanted to clarify on that one.

正確的。正確的。而毛利率壓力顯然不是什麼新鮮事。當你 — — 我想你說過 — — 我想布萊恩說過，他預計第四季的成長率也會達到 35% 左右。您是否 - 您是否 - 是否在先前的預期基礎上做出了任何改進？我不這麼認為，但我只是想澄清這一點。

No. Brian?

不。

No, we weren't, Larry. So I think [that's the same.]

不，我們不是，拉里。所以我認為[那是一樣的。

Same, right. some of the things really changed. FX has gotten a little worse, which has changed. But it feels like, freight at least has gotten a little better. Are you guys seeing at least a little bit of an improvement there? Maybe not enough to really move the needle just yet, but maybe some light at the end of the tunnel there?

一樣，對吧。有些事情確實發生了改變。 FX 變得有點糟糕了，這已經改變。但感覺貨運至少已經好了一些。你們看到那裡至少有一點點改善嗎？也許現在還不足以真正推動事態發展，但也許隧道的盡頭已經出現了一些光亮？

Well, if you believe the long-term forecasts, right, which show back half diesel price changing next year, you would believe that. But at the moment, we have not seen any, right? There's still a strong disconnect between diesel pricing and regular fuel pricing in the U.S. And ocean inbound to the U.S. from Asia, ocean is down. But we don't really use a lot of that, right? It's outbound to Europe and other spots for us and air costs have not changed at all for expedited. So air expedite is still very painful. And most of that stuff that drives that big, huge logistics number is variance on air and other expedites.

嗯，如果您相信長期預測，對吧，它顯示明年一半的柴油價格會發生變化，您就會相信這一點。但目前我們還沒有看到任何，對嗎？美國柴油價格與普通燃料價格之間仍然存在很大差距。但我們實際上並不經常使用它們，對吧？這是我們的出境航班，飛往歐洲和其他地方，加急航班的航空費用沒有任何變化。所以空運加急還是很麻煩的。而推動如此龐大的物流數字的大部分因素是空運和其他加急服務的差異。

Okay. Just a couple more. You mentioned on the Medi Line pump, it sounds like things -- are MedLine pumps (sic) [Medfusion] certainly progressing. So are you basically back in the market with all? Can you just kind of give us a little more color there -- an update?

好的。還剩幾個。您提到了 Medi Line 泵，這聽起來像是——MedLine 泵（原文如此）[Medfusion] 肯定正在取得進展。那麼，您基本上已經重返市場了？您能否向我們提供更多詳細資訊—更新資訊？

I think you mean the Medfusion.

我認為你指的是 Medfusion。

Medfusion pumps, excuse me, yes, yes.

Medfusion 泵，對不起，是的，是的。

No problem. I think I'd leave it at our comments in the script, which are -- we've informed customers, regulators of the actions that need to be taken to support the product. We are out in the field working on those actions, and we are supporting existing customers to have answers. And that's probably all I would say, right? They didn't have a lot of information a number of months ago, and they're getting real support in the field today.

沒問題。我想我會把它留在腳本中的評論中，即——我們已經通知客戶、監管機構需要採取哪些行動來支持該產品。我們正在進行這些行動，並支持現有客戶找到答案。這大概就是我想說的全部了，對吧？幾個月前他們沒有太多的信息，但今天他們在現場得到了真正的支持。

Got you. All right. Just last one for Brian. Just on the cash flow, I know this year has been -- year-to-date usage of cash, although it sounds like things are getting a little bit better. As you look out to '23 without giving numbers, I know you said at least the inventory should start hopefully becoming even a good guy for you guys next year in terms of positive. So would you expect that -- I imagine a lot of the integration stuff and costs will wind down. So hopefully, do you expect to return to free cash flow positive next year? And over the long run, can free cash flow approach -- it hasn't in the 10 years I think I have covered the company -- but can free cash flow sort of get close to net income?

明白了。好的。對 Brian 來說這只是最後一個了。就現金流而言，我知道今年迄今為止的現金使用情況，儘管聽起來情況正在好轉一些。當您展望23年而沒有給出具體數字時，我知道您說過至少庫存應該會開始預計在明年對您產生積極的影響。那麼您是否期望——我想很多整合工作和成本都會逐漸減少。那麼，您是否預計明年自由現金流將恢復為正值？從長遠來看，自由現金流能否接近淨收入——我認為在我關注該公司的 10 年時間裡，它還沒有達到這一水平——但是自由現金流能否接近淨收入？

Yes, Larry. Yes, on inventory, that's been the largest area of investment for us this year. It's $150 million to date. We do see that peaking by Q1 of next year and then probably stable after that. I don't know if it goes down, but certainly stable. And that alone should allow us to see some positive free cash flow next year. And then I think, while it will take a while since we are going to continue investing in the integration as well as the quality systems, yes, eventually, at some point, we do get to where free cash flow is in line with our GAAP net income.

是的，拉里。是的，就庫存而言，這是我們今年最大的投資領域。截至目前為止已達 1.5 億美元。我們確實看到這一趨勢在明年第一季達到頂峰，然後可能會趨於穩定。我不知道它是否會下降，但肯定是穩定的。光是這一點我們就應該能在明年看到一些正的自由現金流。然後我認為，雖然這需要一段時間，因為我們將繼續投資於整合和品質系統，但最終，在某個時候，我們確實會使自由現金流與我們的 GAAP 淨收入保持一致。

Yes. I mean I'll pile on just 2 things. One, I think, Larry, it's also the type of inventory because the supply chain has been so screwed up for a year, we can find a lot more raw materials. So even though the numbers (inaudible), that doesn't mean we have finished goods everywhere, and I'm sure that's a thing for lots of companies. The other thing is, look, it's not lost on us, right, for -- in the midst of COVID, net income and free cash flow were pretty tight here at very good levels. And of course, we want to get back to that. And the truth is, the transaction we had to use and go beyond even ICU's -- legacy ICU's cash flow to hold this together this year. That is what happened, right? And at a minimum, the transaction was to fund itself, and that's probably a halfway goal relative to getting all the way there.

是的。我的意思是我只會堆砌兩件事。首先，我認為，拉里，這也是一種庫存類型，因為供應鏈已經混亂了一年，我們可以找到更多的原料。因此，即使數字（聽不清楚），也不代表我們在各地都有成品，而且我相信對許多公司來說都是如此。另一件事是，你看，我們並沒有忽視這一點，對吧，因為——在 COVID 期間，這裡的淨收入和自由現金流都相當緊張，處於非常好的水平。當然，我們希望回到這一點。事實是，我們必須使用交易，甚至超越 ICU 的現金流——傳統 ICU 的現金流，才能在今年維持下去。事情就是這樣的，對吧？並且至少，交易需要自行籌資，這可能是實現全部目標的一半目標。

Thanks, everybody. We appreciate the interest in ICU Medical. We look forward to seeing you at various conferences early next year and having a call with you in the not-too-distant future. Thanks very much. Bye.

謝謝大家。我們感謝您對 ICU Medical 的關注。我們期待明年初在各種會議上見到您，並在不久的將來與您通話。非常感謝。再見。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.

會議現已結束。感謝您參加今天的演講。現在您可以斷開線路了。