ICU Medical Inc (ICUI) 2024 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the ICU Medical, Inc. First Quarter 2024 Earnings Conference Call. (Operator Instructions). This call is being recorded on Tuesday, May 7, 2024.

女士們、先生們，下午好，歡迎參加 ICU Medical, Inc. 2024 年第一季財報電話會議。 （操作員說明）。此電話錄音於 2024 年 5 月 7 日星期二進行。

I would now like to turn the conference over to John Mills, ICR Managing Partner. Please go ahead.

現在我想將會議交給 ICR 管理合夥人約翰米爾斯 (John Mills)。請繼續。

Good afternoon, everyone. Thank you for joining us to discuss ICU Medical's financial results for the first quarter of 2024. On the call today representing ICU Medical is Vivek Jain, Chief Executive Officer and Chairman; and Brian Bonnell, Chief Financial Officer. We wanted to let everyone know that we have a presentation accompanying today's prepared remarks. To view the presentation, please go to our Investor page and click on Events Calendar, and it will be under the first quarter 2024 events.

大家下午好。感謝您與我們一起討論 ICU Medical 2024 年第一季的財務業績。和財務長布萊恩·邦內爾。我們想讓大家知道，我們有一個演講伴隨著今天準備好的演講。要查看演示文稿，請前往我們的投資者頁面並​​點擊“活動日曆”，它將位於 2024 年第一季活動下方。

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 all of you to the company's SEC filings for more detailed information on the risks and uncertainties that have been direct bearing on the operating results and financial position.

在我們開始準備好的發言之前，我想談談電話會議期間所做的任何前瞻性陳述，包括對公司未來業績的信念和期望。請注意，它們基於管理層可獲得的最佳資訊和合理的假設。此類陳述並不代表未來結果，並且存在風險和不確定性。未來的結果可能與管理層目前的預期有重大差異。我們建議大家查閱該公司向 SEC 提交的文件，以獲取有關直接影響經營業績和財務狀況的風險和不確定性的更多詳細資訊。

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 in ICU Medical's ongoing results of operations, particularly when comparing underlying results from period to period. We've also included a reconciliation of these non-GAAP measures in today's release and provided as much detail as possible on any addendums that are added back.

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，這些財務措施可以促進 ICU Medical 持續營運結果的更完整分析和更大透明度，特別是在比較不同時期的基本結果時。我們還在今天的發布中包含了這些非公認會計原則措施的調節，並就添加回來的任何附錄提供了盡可能詳細的資訊。

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

至此，我很高興將電話轉給 Vivek。

Thanks, John, and good afternoon, everyone. I'll quickly walk through our summary of Q1 revenue and earnings performance, provide some commentary on the overall health of the company and then turn it over to Brian to recap the full Q1 results. After that, I'll come back with updates on the various integration and consolidation efforts that will improve our medium-term profit outlook.

謝謝約翰，大家下午好。我將快速瀏覽我們對第一季營收和獲利表現的總結，對公司的整體健康狀況提供一些評論，然後將其交給布萊恩回顧完整的第一季業績。之後，我將帶來有關各種整合和整合工作的最新信息，這些努力將改善我們的中期利潤前景。

Revenue for Q1 was $553 million for total company growth of 1% on a constant currency basis or minus 1% on a reported basis. Adjusted EBITDA was $79 million and EPS was -- adjusted EPS was $0.96. Gross margins were a little higher than expected due to supply chain efficiencies and mix. Our cash balance was near flat sequentially as we continued to reduce inventory and had our typical higher Q1 cash outflows.

第一季營收為 5.53 億美元，公司總營收以固定匯率計算成長 1%，按報告計算成長負 1%。調整後 EBITDA 為 7,900 萬美元，調整後每股收益為 0.96 美元。由於供應鏈效率和組合，毛利率略高於預期。由於我們繼續減少庫存，並且第一季現金流出量通常較高，因此我們的現金餘額環比接近持平。

The broader demand and utilization environment in Q1 was healthy across all geographies with March seeing some reduction in census and it appears to be fine in Q2 at the moment. The capital environment with status quo and investments that customers need to make are getting made. The only additional macro headwind is the strong U.S. dollar in certain commercial geographies, which impacts our IV Systems segment the most as it's our largest OUS business.

第一季更廣泛的需求和利用環境在所有地區都是健康的，三月人口普查有所減少，目前第二季似乎還不錯。現狀的資本環境和客戶所需的投資正在形成。唯一的額外宏觀阻力是某些商業地區的美元走強，這對我們的 IV 系統部門影響最大，因為它是我們最大的 OUS 業務。

Getting into our businesses more specifically, our consumables segment grew 3% constant currency [as] reported. Growth was driven by our Oncology and Vascular Access lines, which were both at or above 6%, IV therapy was low single digits, and [Traches] was closer to flat. We did expect some sequential declines given the very robust volumes we saw in Q4. Nothing else is new here, we would expect sequential improvements in this segment as we wrap up Q2.

更具體地說，我們的消費品部門以固定匯率計算成長了 3%（據報導）。成長是由我們的腫瘤和血管通路產品線推動的，這些產品線的增長率均達到或超過 6%，靜脈注射療法的增長率僅為個位數，而 [氣管] 則接近持平。鑑於我們在第四季度看到的非常強勁的銷量，我們確實預計會出現一些連續下降。這裡沒有什麼新鮮事，我們預計隨著第二季的結束，該領域將持續改進。

Our IV systems business was flat on a constant currency basis or down 3% reported due to the currency impact I just mentioned. Again, we had a wide range of performance across the product lines, our LVP pump business grew 8% with good dedicated set utilization due to census and a larger installed base, syringe pumps sold slightly above normal quarterly levels and grew 5%, ambulatory pumps were down 10% as Q1 '23 was the last quarter of the catch-up we were dealing with at the time, which will finally get lapped now. More importantly, ambulatory was sequentially flat and the line is stable and the macro trends of home care remains solid.

由於我剛才提到的貨幣影響，我們的 IV 系統業務在固定匯率基礎上持平或下降了 3%。同樣，我們在整個產品線上都有廣泛的表現，我們的LVP 泵業務增長了8%，由於人口普查和更大的安裝基數，專用設備利用率良好，注射泵的銷量略高於正常季度水平，成長了5%，流動泵下降了 10%，因為 23 年第一季是我們當時面臨的追趕的最後一個季度，現在終於要被追趕了。更重要的是，門診量連續持平，線穩定，家庭護理的宏觀趨勢仍然穩固。

We have some specific opportunities that are additive to getting the business back to historical levels which are, first, the replacement of our own LifeCare PCA products in the market; and second, a market event with a smaller player, which is relevant to us. Our new Plum Duo device and LifeShield IV safety software have been fully available for the last few weeks, and we've had our first customer signing. The early feedback is meeting our expectations and we are incorporating super user feedback into our road map and believe we have a hardware product and related safety software that can be the anchor of our offering for many years to come.

我們有一些特定的機會可以幫助我們的業務恢復到歷史水平，首先是在市場上更換我們自己的 LifeCare PCA 產品；第二，參與者規模較小的市場事件，與我們相關。我們的新 Plum Duo 設備和 LifeShield IV 安全軟體在過去幾週內已完全可用，並且我們已經有了第一個客戶簽約。早期回饋滿足了我們的期望，我們正在將超級用戶回饋納入我們的路線圖，並相信我們擁有的硬體產品和相關安全軟體可以成為我們未來許多年產品的支柱。

Just wrapping up the business segments, our Vital Care segment was down 4%, both on a constant currency and reported basis. IV Solutions, the largest component of the segment was flat, and the entire decline was essentially due to Critical Care, where we had a reduction in nonhospital OEM sales due to a large order we had in Q1 of last year. The rest of the segment was flat. From an operational perspective towards our customers, like the comments on the last call, the company is running the best it has in the last few years. Customer back orders are at the lowest level in 9 quarters, and fulfillment has been very stable because of all of the efforts of our team. The discussions have shifted far more to innovation and the integrated value of what we've amassed.

剛結束業務部門時，我們的重要護理部門以固定匯率計算和報告的基礎上均下降了 4%。該細分市場最大的組成部分 IV 解決方案持平，整個下降主要歸因於重症監護，由於去年第一季的大量訂單，我們的非醫院 OEM 銷售額有所減少。該細分市場的其餘部分持平。從我們客戶的營運角度來看，就像上次電話中的評論一樣，該公司的營運狀況是過去幾年中最好的。客戶延期交貨訂單處於九個季度以來的最低水平，在我們團隊的努力下，履行情況非常穩定。討論更多地轉向創新和我們所累積的綜合價值。

Quality has been an area of heavy investment. We feel we're on solid footing. We have had and likely will have a few more important customer notifications, all as part of the overall remediation efforts previously discussed and enhancements we have made. Our goals in 2024 are not so different from our historical goals as we lost time in the first 6 to 7 quarters following the acquisition. We expect revenue growth in all of our differentiated product lines. We have substantially progressed our quality remediation and insured quality for patients and high compliance for regulatory authorities and desire to bring our open warning letter to a close.

品質一直是大量投資的領域。我們感覺我們已經站穩了腳步。我們已經收到並且可能還會收到一些更重要的客戶通知，所有這些都是之前討論的整體修復工作和我們所做的改進的一部分。我們 2024 年的目標與我們的歷史目標沒有太大不同，因為我們在收購後的前 6 到 7 個季度中浪費了時間。我們預計所有差異化產品線的收入都會成長。我們已經在品質補救方面取得了實質進展，並確保了患者的品質和監管機構的高度合規性，並希望結束我們的公開警告信。

We intend to execute the substantial integration work as we have operational stability in place to pursue remaining synergies. And ultimately and obviously, these actions are intended to improve our profit levels and cash flow over the medium term. and we're focused on optimizing the portfolio from a revenue growth and quality perspective, which will increase any opportunities to rationalize the portfolio at sensible levels.

我們打算執行實質的整合工作，因為我們的營運穩定，可以追求剩餘的協同效應。最終，顯然，這些行動旨在提高我們的中期利潤水準和現金流。我們專注於從收入成長和品質的角度優化投資組合，這將增加在合理水平上合理化投資組合的機會。

That's my brief recap of Q1 at a high level. I'll turn it over to Brian and then come back -- and then I'll come back with a few thoughts and comments on our medium term outlook, some targets and a few other thoughts.

這是我對第一季的簡要回顧。我會把它交給布萊恩，然後回來——然後我會回來對我們的中期前景、一些目標和其他一些想法提出一些想法和評論。

Thanks, Vivek, and good afternoon, everyone. Since Vivek covered the Q1 revenue for each of the businesses, I'll focus my remarks on recapping the Q1 performance for the remainder of the P&L, as well as the Q1 balance sheet and cash flow, and along the way, provide commentary on any implications to our expectations for the full year. As you can see from the GAAP to non-GAAP reconciliation in the press release, adjusted gross margin for the quarter was 35%, which was higher than expected for this point in the year.

謝謝維韋克，大家下午好。由於 Vivek 涵蓋了每項業務的第一季收入，因此我的評論將集中於回顧損益表其餘部分的第一季業績，以及第一季的資產負債表和現金流，並在此過程中對任何對我們全年預期的影響。從新聞稿中的 GAAP 與非 GAAP 調整表中可以看出，該季度調整後的毛利率為 35%，高於今年此時的預期。

The drivers of this favorability were roughly equally split between first, product mix, where we experienced a higher proportion of disposables revenue relative to capital during the quarter compared to our plan, and second, supply chain synergies captured earlier in the year than expected. These favorable items helped to offset much of the anticipated negative impact from the manufacturing under absorption related to the recent inventory reductions, which is reflected in the Q1 gross margin rate consistent with our previous guidance. I'll get into the implications to the full year outlook in a moment when taken into consideration with some other items.

這種有利的驅動因素大致相等，首先是產品組合，與我們的計劃相比，本季度我們的可支配收入相對於資本的比例更高，其次是今年早些時候捕獲的供應鏈協同效應比預期的要高。這些有利的項目有助於抵消近期庫存削減相關的吸收製造業的大部分預期負面影響，這反映在第一季度的毛利率中，與我們先前的指導一致。當考慮到其他一些項目時，我將立即討論對全年前景的影響。

Adjusted SG&A expense was $115 million in Q1 and adjusted R&D was $21 million. Total adjusted operating expenses were up 3% year-over-year and reflect a combination of increased selling expenses and R&D investments. Adjusted operating expenses were 24.7% of revenue for the quarter, and we continue to expect the full year rate to be at or below 24%. Restructuring, integration and strategic transaction expenses were $16 million in the first quarter and related primarily to IT system integration and manufacturing network consolidation. Adjusted diluted earnings per share for the quarter was $0.96 compared to $1.74 last year.

第一季調整後的 SG&A 費用為 1.15 億美元，調整後的研發費用為 2,100 萬美元。調整後營運費用總額年增 3%，反映銷售費用和研發投資的增加。調整後的營運費用佔本季收入的 24.7%，我們繼續預計全年比率將在 24% 或以下。第一季的重組、整合和策略交易費用為 1,600 萬美元，主要與 IT 系統整合和製造網路整合相關。本季調整後攤薄每股收益為 0.96 美元，去年同期為 1.74 美元。

The current quarter results reflect net interest expense of $24 million. The first quarter adjusted effective tax rate was 28% and includes a discrete expense related to equity compensation. We continue to expect the full year adjusted effective tax rate to be around 23%. Diluted shares outstanding for the quarter were 24.4 million. And finally, adjusted EBITDA for Q1 decreased to $79 million compared to $102 million last year. The lower profitability on roughly similar levels of revenue reflects the prior year benefits from inventory builds, combined with the current period impacts from inventory reductions.

當前季度業績反映淨利息支出為 2,400 萬美元。第一季調整後的有效稅率為 28%，其中包括與股權補償相關的離散費用。我們繼續預計全年調整後有效稅率約為 23%。本季稀釋後流通股數為 2,440 萬股。最後，第一季調整後 EBITDA 下降至 7,900 萬美元，而去年為 1.02 億美元。收入水準大致相似的獲利能力較低，反映了上一年庫存增加的好處，以及庫存減少對本期的影響。

Now moving on to cash flow and the balance sheet. For the quarter, free cash flow was $30 million, which represents the third consecutive quarter of positive free cash flow. Reductions in inventory contributed $14 million of cash and we remain on track to reduce inventory levels this year by our previously stated target of around $40 million, with most of this reduction coming in the first half of the year. The focus on inventory allowed us to generate meaningful free cash flow while still investing in the areas that will drive future returns. These investments included $10 million of cash spend for quality system and product-related remediation, $15 million on restructuring and integration and $15 million on CapEx for general maintenance and capacity expansion at our facilities as well as placement of revenue-generating infusion pumps with customers outside of the U.S.

現在轉向現金流和資產負債表。本季自由現金流為 3,000 萬美元，這是連續第三個季度實現正自由現金流。庫存減少貢獻了 1,400 萬美元現金，今年我們仍有望將庫存水準降低到先前設定的 4,000 萬美元左右的目標，其中大部分減少發生在今年上半年。對庫存的關注使我們能夠產生有意義的自由現金流，同時仍投資於能夠推動未來回報的領域。這些投資包括用於品質系統和產品相關修復的1000 萬美元現金支出、用於重組和整合的1500 萬美元現金支出以及用於我們設施的一般維護和產能擴張以及向外部客戶安置創收輸液泵的資本支出1500 萬美元。

As anticipated and consistent with last year, our CapEx spend was a bit lighter in Q1 and should pick up over the course of the year. And just to wrap up on the balance sheet. We finished the quarter with $1.6 billion of debt and $251 million of cash. As we think about full year earnings in light of Q1 performance, we still plan to make any revisions to our guidance, if necessary, on our Q2 call, consistent with our historical cadence. For now, we believe the correct approach is to continue to assume adjusted gross margin for the year at our original guidance of 35%.

正如預期並與去年一致，我們第一季的資本支出有所減少，並且在今年應該會有所回升。最後總結一下資產負債表。本季末，我們的債務為 16 億美元，現金為 2.51 億美元。當我們根據第一季的業績考慮全年收益時，如有必要，我們仍計劃在第二季度的電話會議上對我們的指導進行任何修改，與我們的歷史節奏保持一致。目前，我們認為正確的做法是繼續假設今年調整後的毛利率為我們最初指導的 35%。

While a portion of the supply chain synergies that provided upside in Q1 are more permanent in nature, there is volatility in the global environment that may impact fuel and transportation costs from the current levels. Also, and more importantly, currency and a higher for longer interest rate environment does make an impact as we don't report currency adjusted earnings. Over the course of the first quarter, we saw our large international sales currencies, yen, euro, et cetera, weaken against the dollar, with no strengthening of the dollar against our production currencies of the Mexican peso and Costa Rica colón, which for the full year adds up to over $10 million of EBITDA variance from the rates assumed in our plan.

雖然第一季帶來的部分供應鏈協同效應本質上更為持久，但全球環境的波動可能會影響當前水準的燃料和運輸成本。此外，更重要的是，貨幣和長期較高的利率環境確實會產生影響，因為我們不報告貨幣調整後的收益。在第一季中，我們看到我們的主要國際銷售貨幣（日圓、歐元等）兌美元走弱，但美元兌我們的生產貨幣墨西哥比索和哥斯達黎加科朗沒有走強，這對於全年EBITDA 與我們計劃中假設的比率的差異總計超過1000 萬美元。

While we believe our supply chain synergies, if things remain stable, can offset most of this currency impact, it's too early in the year to be precise. And finally, as it relates to the Q1 gross margin benefit from product mix, our original full year forecast for capital and disposables revenue mix hasn't changed as we expect to be selling more capital in future quarters.

雖然我們相信，如果情況保持穩定，我們的供應鏈協同效應可以抵消大部分貨幣影響，但今年還為時過早。最後，由於它與產品組合帶來的第一季毛利率收益相關，我們對資本和可支配收入組合的最初全年預測並沒有改變，因為我們預計在未來幾季出售更多資本。

To wrap up, we're happy with the first quarter performance, including improvement in our gross margin rate and continued progress in free cash flow generation. We remain focused on the foundational work that will drive earnings improvement in 2025 and beyond.

總而言之，我們對第一季的業績感到滿意，包括毛利率的提高和自由現金流產生的持續進展。我們仍專注於推動 2025 年及以後獲利改善的基礎工作。

I'll now hand the call back over to Vivek, who will provide updates on the specific initiatives underlying net earnings improvement.

我現在將把電話轉回給維韋克，他將提供有關淨利潤改善的具體舉措的最新資訊。

Okay. Thanks, Brian. On the last call, and we don't need to rehash all the reasons here, we tried to articulate our belief that we were under earning as a company relative to the industry and we wanted to go through the actions to date to improve profit in the medium term. We still need to prove that we're capable of predictable sustained revenue growth, but do believe we have seen less volatility over the last few quarters as the business has stabilized.

好的。謝謝，布萊恩。在最後一次電話會議上，我們不需要在這裡重述所有原因，我們試圖闡明我們的信念，即作為一家公司，相對於行業而言，我們的盈利水平較低，我們希望採取迄今為止的行動來提高利潤中期。我們仍然需要證明我們有能力實現可預測的持續收入成長，但我們確實相信，隨著業務趨於穩定，過去幾季的波動性較小。

Our original model expectations continue for a number of our acquired products where the goal is to get back to near historical sales levels and for some of the legacy ICU lines to recoup the substantial inflation we absorbed over time with price improvements. But sustained revenue growth is also at innovation. And on the last call, we described some of the key programs. An update versus the last call is that we now expect to get our Plum Solo IV pump and LifeShield safety software with interoperability 510(k) submissions to the FDA before the end of Q3, a quarter earlier than expected. This is an important program because in addition to broadening out the full infusion hardware suite, it specifically allows us to approach our existing installed base with a better tech solution.

我們對許多收購的產品的原始模型預期仍然存在，其目標是恢復到接近歷史的銷售水平，而一些傳統的 ICU 系列則通過價格改善來彌補我們隨著時間的推移吸收的大幅通貨膨脹。但收入的持續成長也取決於創新。在最後一次電話會議上，我們描述了一些關鍵計劃。與上次通話相比的更新是，我們現在預計將在第三季末之前向 FDA 提交具有互通性 510(k) 的 Plum Solo IV 泵和 LifeShield 安全軟體，比預期早了一個季度。這是一個重要的計劃，因為除了擴大完整的輸液硬體套件之外，它還特別允許我們透過更好的技術解決方案來接近我們現有的安裝基礎。

As a reminder, most of our current Plum 360 pumps were only put into service from 2015 onward, and we've never really had the benefit of having our own installed base rolled over to any substantial degree. We continue to expect to refresh syringe [pump on] filed by the end of the year, and all of these products will work with the latest version of LifeShield software. We also expect certain important new filings over the next 12 to 24 months, in our consumables area and the valuable temperature management business. We're growing our position with existing products of today, and these will be supplemented by a significant refresh in key parts of the portfolio with a large portion already done. We have been careful targeting these investments because innovation drives sustained revenue growth.

提醒一下，我們目前的大多數 Plum 360 泵都是從 2015 年起才投入使用的，而且我們從未真正受益於我們自己的安裝基礎達到任何實質性程度的滾動。我們繼續期望在今年年底之前更新提交的注射器[泵開]，並且所有這些產品都將與最新版本的 LifeShield 軟體配合使用。我們也預計在未來 12 至 24 個月內，我們的耗材領域和有價值的溫度管理業務將收到某些重要的新申請。我們正在透過今天的現有產品來提高我們的地位，並且這些產品將透過對產品組合的關鍵部分進行重大更新來補充，其中大部分已經完成。我們一直謹慎地瞄準這些投資，因為創新推動了持續的收入成長。

The other half of improving our earnings power is about gross margin expansion outside of the price or the mix or volume inputs. Where we've had businesses at or near record levels, those production environments are fully utilized and improving efficiencies. But where we've had businesses that are smaller, we've absorbed real inefficiencies and the pain was compounded with the inventory choices we made. This leads to the basic blocking and tackling of network consolidations, which is not some grand transformational program or anything like that. Since the last call, we've announced additional closures of 2 large underutilized production sites and consolidation of those products into existing space in our network dovetailing with our previous comments to have fewer places have them full and have them in the right geography.

提高我們獲利能力的另一半是關於價格、組合或數量投入之外的毛利率擴張。在我們的業務達到或接近創紀錄水平的地方，這些生產環境得到了充分利用並提高了效率。但在我們的業務規模較小的地方，我們已經吸收了真正的低效率，我們所做的庫存選擇也加劇了痛苦。這導致了網路整合的基本阻止和解決，這不是什麼宏大的轉型計劃或類似的東西。自上次電話會議以來，我們宣布額外關閉2 個未充分利用的大型生產基地，並將這些產品整合到我們網絡中的現有空間中，這與我們之前的評論相吻合，即減少滿員的地方並將它們放置在正確的地理位置。

We can handle this now as our pump production has almost been fully consolidated in the Costa Rica. These aren't easy choices, and they impact real people who have been team members for many years, but it must be done to drive value for us and for our competitive positioning to the customer. Additionally, we're just about ready to consolidate our U.S. order-to-cash systems over the summer which will lead to available logistics and back-office synergies in the quarters to follow. And we continue to whittle down underutilized real estate as leases present themselves. This list of actions is economically meaningful and contributes to getting where we need to be and offsets the normal bumps that happen in business, but it will take some time to execute.

我們現在可以處理這個問題，因為我們的泵浦生產幾乎已完全整合在哥斯達黎加。這些都不是容易的選擇，它們會影響多年來一直是團隊成員的真實人員，但必須這樣做才能為我們帶來價值，並提高我們對客戶的競爭地位。此外，我們即將在夏季整合我們的美國訂單到現金系統，這將在接下來的幾個季度帶來可用的物流和後台協同效應。隨著租賃的出現，我們將繼續削減未充分利用的房地產。這份行動清單具有經濟意義，有助於實現我們需要的目標，並抵消業務中發生的正常障礙，但執行起來需要一些時間。

Given what we've been through the last few quarters, we're not willing to commit to specific dates in absolute margin levels, but our team's experience and integration allows us to go as fast as possible. Out of our controller interest costs, which we do expect to change eventually, but we are operating with a higher for longer mindset. From a value perspective, we felt it more sensible to bear more interest expense as long as manageable versus not maximizing the assets where the revenue, earnings and quality of those assets is improving but requires investment. Debt paydown continues to be our highest capital allocation priority, and any extra cash above our needs would go to repayment.

鑑於我們過去幾個季度的經歷，我們不願意承諾絕對利潤水平的具體日期，但我們團隊的經驗和整合使我們能夠盡快完成。從我們的控制者利息成本來看，我們確實預計最終會改變，但我們正在以更高、更長期的心態進行運作。從價值角度來看，我們認為，在可管理的範圍內，承擔更多的利息費用比在收入、利潤和品質正在改善但需要投資的情況下不最大化資產更明智。償還債務仍然是我們資本配置的最高優先級，任何超出我們需求的額外現金都將用於償還。

To be direct on our goals for the next year or 2, we want our consumables and systems businesses to be reliable growers with an industry acceptable profit margin with the tightest and most optimized manufacturing network in each with a multiyear innovation portfolio. And we want the rest of the portfolio to add up to levels where we deliver an acceptable profit margin that ultimately allows us to transfer value from debt to equity. There is no confusion within the company in the pursuit of these goals, and we don't really have any frivolous activities here.

為了直接實現我們未來一兩年的目標，我們希望我們的消耗品和系統業務成為可靠的成長者，擁有行業可接受的利潤率，擁有最緊密、最優化的製造網絡，並擁有多年的創新組合。我們希望投資組合的其餘部分能夠達到可以接受的利潤率水平，最終使我們能夠將價值從債務轉移到股權。在追求這些目標的過程中，公司內部沒有任何混亂，我們這裡也沒有任何無聊的活動。

We produce essential items that require significant clinical training, hold manufacturing barriers and in general, items that customers do not want to switch unless they must. The market needs ICU Medical to be an innovative, reliable supplier and our company is stronger from all the events over the last few years.

我們生產的必需品需要大量的臨床培訓，有製造障礙，一般來說，客戶不願意更換的產品，除非他們必須這樣做。市場需要 ICU Medical 成為創新、可靠的供應商，我們公司從過去幾年的所有事件中變得更加強大。

Thank you to all our -- of all of our team members and customers as we improve each day. With that, we'll open it up for questions.

感謝我們所有的團隊成員和客戶，我們每天都在進步。至此，我們將開放提問。

(Operator Instructions). Your first question comes from the line of Jayson Bedford from Raymond James.

（操作員說明）。你的第一個問題來自雷蒙德詹姆斯的傑森貝德福德。

Congrats on the quarter. So maybe just a few questions. Just -- I know you're not changing any guidance here, but the revenue -- I don't think you necessarily guided it. But last call, you talked about low to mid-single-digit revenue growth in '24 based on 1Q, would you tweak any of the segments or that commentary at all?

恭喜本季。所以也許只是幾個問題。只是 - 我知道你不會改變這裡的任何指導，但收入 - 我認為你不一定會指導它。但在上次電話會議中，您談到了 24 年基於第一季的低至中個位數收入成長，您會調整任何細分市場或評論嗎？

I don't think we have any change at all, Jayson, on that.

傑森，我認為我們在這方面沒有任何改變。

Yes, and just certainly not on a constant currency basis, which is what our guidance was based off of.

是的，但肯定不是以固定匯率為基礎，而這正是我們的指導方針所依據的。

Okay. Gross margin is clearly the highlight here. I understand the mix dynamic, but what were the supply chain dynamics that went better in the quarter? And just can you talk about the sustainability of that?

好的。毛利率顯然是這裡的亮點。我了解混合動態，但本季供應鏈動態有哪些改善？您能談談這種做法的可持續性嗎？

Jayson, I would say it wasn't necessarily any 1 thing related to supply chain. It was just a number of initiatives to bring together the supply chain operations from the combined -- from the 2 separate companies into one. And we're able to get some of those things in place a little bit sooner than expected. We had anticipated it would happen at some point in the year. It's just that we guided a quarter or 2 sooner.

傑森，我想說這不一定是與供應鏈相關的任何一件事。這只是將兩家獨立公司的供應鏈業務整合為一家公司的一系列舉措。我們能夠比預期更早完成其中一些事情。我們預計這會在一年中的某個時候發生。只是我們提前了一兩個季度進行了指導。

Okay. And then maybe Vivek on the Duo rollout. Where are you in terms of kind of a full launch? And when would you expect the full launch?

好的。然後 Vivek 可能會推出 Duo。就全面啟動而言，您處於什麼位置？您預計什麼時候會全面推出？

I would say, Jayson, for the last 8 weeks, 10 weeks, we've essentially been in a full launch. We're getting people familiar with the architecture of the system. And that's why it's really important for the solo and the syringe to follow on the heels of that as people get comfortable with all the different pieces of the system. So I would say we're there right now. Again, things don't happen that fast in pumps in our experience, but it is a long game, and there is a lot of activity in the next 2 or 3 years in the market. So we think we're in a pretty good place.

我想說，傑森，在過去的 8 週、10 周里，我們基本上處於全面啟動狀態。我們正在讓人們熟悉系統的架構。這就是為什麼當人們對系統的所有不同部分感到滿意時，獨奏和注射器緊隨其後非常重要。所以我想說我們現在就在那裡。再說一遍，根據我們的經驗，泵浦的發展速度不會那麼快，但這是一場漫長的遊戲，未來兩三年市場上會有很多活動。所以我們認為我們處於一個非常好的位置。

Okay. And just the competitive landscape, you've got obviously 3 big players with kind of the hand -- all the hands are out there. And so I guess my question is, the competitive environment, is it favorable? Where do you see opportunity? And you kind of alluded to the capital dynamic, but is there a desire to make decisions out there today?

好的。就競爭格局而言，顯然有 3 位大牌玩家，所有牌手都在那裡。所以我想我的問題是，競爭環境是否有利？您在哪裡看到機會？您提到了資本動態，但今天是否有決策的意願？

Two parts in that. The first is capital environment is fine. I mean it's not -- it's not any better, it's not any worse than it has been for a while. It's -- stuff that needs to get done, gets done. Obviously, it's a good time to be a customer. There's more choice, which is good for the market. In terms of the market itself, people have dragged the feet on making some decisions and given some of the industry dynamics, customers have to make decisions over the next few years. And so there are more decisions being made finally and folks, given some of the background, the equipment has gotten older in the marketplace and requires refreshment for a variety of different reasons. And so the decision-making is better than it has been. And yes, while there's more vendors, there are more decisions being made, which one could argue is good for all participants.

其中有兩個部分。一是資本環境良好。我的意思是，與一段時間以來的情況相比，並沒有更好，也沒有更糟。這是──需要完成的事情，就完成了。顯然，現在是成為客戶的好時機。有更多的選擇，這對市場來說是好事。就市場本身而言，人們在做出一些決定時拖了後腿，考慮到一些行業動態，客戶必須在未來幾年內做出決定。因此，最終做出了更多的決定，考慮到一些背景，設備在市場上已經變得陳舊，並且由於各種不同的原因而需要更新。因此，決策比以前更好。是的，雖然有更多的供應商，但也有更多的決策正在製定，人們可以說這對所有參與者都有好處。

Your next question comes from the line of Brett Fishbin from KeyBanc.

您的下一個問題來自 KeyBanc 的 Brett Fishbin。

Just wanted to follow up on one of the opening comments that you guys made around hospital utilization trends. It sounded like January and February were particularly strong months and you might have noted a little bit of normalization into March, and you said things into 2Q have been looking fine. Just maybe like a little bit more on like how you define that March and trend into 2Q, and how much of like a pullback you may be seeing versus Jan and Feb?

只是想跟進你們圍繞醫院利用率趨勢發表的開場評論之一。聽起來 1 月和 2 月是特別強勁的月份，您可能已經注意到 3 月出現了一些正常化，並且您說第二季的情況看起來不錯。只是也許更多地了解您如何定義三月和第二季度的趨勢，以及與一月和二月相比，您可能會看到多少回檔？

Yes. I mean, Brett, obviously, we don't want to get into like the -- because you don't have perfect information what's happening every day or every week out there. It was really busy for 3 months in the fourth quarter of last year and then January and February. And the March had to go below those levels. I think when we make those comments on it's a relative basis, is the trend going. We would consider status quo to mean flat to up. That's probably what we see and bad to us would be down. I don't think we're -- so when we say fine, we would say it's equal to or greater than what the most recent period everybody has talked about has been.

是的。我的意思是，布雷特，顯然，我們不想陷入這樣的困境——因為你沒有關於每天或每週發生的事情的完美資訊。去年第四季有3個月，然後是1月和2月，真的很忙。而三月的價格必須低於這些水準。我認為，當我們在相對基礎上發表這些評論時，趨勢正在發展。我們認為現狀意味著持平到上升。這可能就是我們所看到的，對我們不利的將會下降。我不認為我們是 - 所以當我們說很好時，我們會說它等於或大於每個人都在談論的最近一段時間。

All right. Yes, definitely fair. One quick follow-up on gross margins. Definitely appreciate some of the puts and takes and then presumably not wanting to get too far ahead of like how you're thinking about the full year after only 1 quarter. I just wanted to get a sense, you had 35.3% this quarter. We're talking about 35% range for the year. Some of the potential headwinds or offsets around currency or fuel. Are those things that you're seeing already in 2Q, and we should be modeling some type of reduction in 2Q? Or is that comment more around just some of the puts and takes, like for the full year?

好的。是的，絕對公平。對毛利率的快速跟進。絕對欣賞一些看跌期權，然後大概不想像你在僅一個季度後對全年的思考那樣走得太遠。我只是想了解一下，本季的佔有率為 35.3%。我們談論的是今年 35% 的範圍。圍繞貨幣或燃料的一些潛在阻力或抵消。您是否已經在第二季度看到了這些情況，我們應該對第二季度的某種類型的減少進行建模？還是該評論更多地圍繞著一些看跌期權，例如全年？

Yes, Brett, I think on that, just the couple of items that we've mentioned as being headwinds were the impact of FX as well as potential volatility within the kind of freight rate and diesel markets. I think it's -- the first one of those FX is very real, and we are seeing it, and we started to see some impact late in Q1, and I think that is something that should be considered as we think about what -- how the rest of the year plays out. I think as it relates to the broader environment around supply chain expenses. There's the potential for some volatility there, but I don't think there's anything specific worth modeling.

是的，布雷特，我認為，我們提到的幾個不利因素是外匯的影響以及運費和柴油市場的潛在波動。我認為，第一個外匯是非常真實的，我們正在看到它，我們在第一季末開始看到一些影響，我認為這是我們在思考如何進行時應該考慮的事情今年剩下的時間都會結束。我認為這與供應鏈費用的更廣泛環境有關。那裡可能會出現一些波動，但我認為沒有任何具體值得建模的東西。

All right. Very helpful. And then last question for me. It feels like the quality remediation and warning letter item, like all of the stuff that's on your end in your control seems to be progressing at least in line with how you were thinking about it. So question is just what still needs to get done besides waiting around for an eventual FDA inspection? I guess is there still some stuff in your hands that still needs to get done before that can happen?

好的。很有幫助。然後是我的最後一個問題。感覺就像是品質補救和警告信項目，就像你控制的所有事情似乎都在進展，至少與你的想法一致。那麼問題是，除了等待最終的 FDA 檢查之外，還需要做些什麼？我想在這一切發生之前，你手中是否還有一些事情要完成？

Sure. I'll answer that one. Our job, our responsibility, regardless of our own or what we acquired is to be improving on the quality scores every single day. And so there's never a day of sort of waiting around. I think the expectation is that you're improving you're improving your situation. And that can mean a lot of different things that can mean assessing every single product and where there's applicable notifications to customers making some of those notifications like we've referenced on the last 2 call scripts and you've seen in the in the various reports, it can also mean researching all the historical plates to make sure everyone is adequately composed. We've done a mountain of work. You've seen the investments into the quality remediation that we've put in for 8 quarters. You're never really done. We think we've come a long, long way, and we hope we get the opportunity to show that to somebody, but it's not really -- you just hit a line and stop, it and never ends.

當然。我來回答一下這個問題。我們的工作、我們的責任，無論是我們自己的還是我們獲得的，都是每天提高品質分數。所以從來沒有一天需要等待。我認為我們的期望是你正在改善，你正在改善你的處境。這可能意味著很多不同的事情，這可能意味著評估每一個產品，以及向客戶發出適用的通知，發出其中一些通知，就像我們在最後兩個呼叫腳本中引用的那樣，以及您在各種報告中看到的，它也可能意味著研究所有的歷史板塊，以確保每個人都充分組成。我們已經做了堆積如山的工作。您已經看到了我們在 8 個季度中投入的品質補救投資。你永遠不會真正完成。我們認為我們已經走了很長很長的路，我們希望有機會向某人展示這一點，但事實並非如此——你只是碰到了一條線然後停下來，它永遠不會結束。

Your next question comes from the line of Kristen Stewart from CL King.

您的下一個問題來自 CL King 的 Kristen Stewart。

Congrats on a good quarter. I was wondering if you could just focus a little bit on free cash flow in the quarter. It was positive, which is a great thing. How are you looking for the rest of the year from a cash flow perspective?

恭喜季度表現良好。我想知道您是否可以稍微關註一下本季的自由現金流。這是正面的，這是一件好事。從現金流的角度來看，您對今年剩餘時間有何看法？

Yes, Kristen, I think we got off to a pretty good start to the year, especially given Q1, we do tend to have more outflows in that quarter each year. I think -- we feel like our previous guidance around free cash flow is still relevant in that it would be basically the same as last year but without some of the financing benefit that we got, which means $80 million roughly, give or take, for the full year this year. And so I think we're still very much on track for that.

是的，克里斯汀，我認為我們今年有一個很好的開端，特別是考慮到第一季度，我們確實每年該季度都有更多的資金外流。我認為 - 我們覺得我們之前關於自由現金流的指導仍然具有相關性，因為它將與去年基本相同，但沒有我們獲得的一些融資收益，這意味著大約 8000 萬美元，給予或接受，今年全年。所以我認為我們仍然在朝著這個方向前進。

Okay. Great. And then I just wanted to turn over to Vascular Access. It sounds like that had a good quarter. How should we be thinking about that business going forward?

好的。偉大的。然後我只想轉向血管通路。聽起來這個季度表現不錯。我們應該如何考慮該業務的未來發展？

Kristen, it's Vivek. I think in our mid-single guidance for the Consumables segment for the year, we assume Vascular Access would be in line with that. But it is still far below peak historical levels. We've just gotten the house in order a bit over the difficulties we had in the first 6 quarters or something. So it feels a lot to us sort of what we went through post Hospira with consumables, where it really did take 2 years to be stable and to show that we could move it upwards. And we think we're in kind of the first part of that journey right now. There's a long way to go, but I think we, at a minimum, believe it would be in line with the overall segment that is.

克莉絲汀，我是維維克。我認為，在我們今年消耗品細分市場的中期指導中，我們假設血管通路將與此一致。但仍遠低於歷史峰值。我們剛剛克服了前 6 個季度或其他方面遇到的困難，讓房子變得井井有條。因此，我們對 Hospira 後消耗品的經歷有很多感覺，確實花了 2 年才穩定下來，並表明我們可以將其提升。我們認為我們現在正處於這趟旅程的第一部分。還有很長的路要走，但我認為我們至少相信這將與整個細分市場保持一致。

(Operator Instructions). Your next question comes from the line of Larry Solow from CJS Securities.

（操作員說明）。您的下一個問題來自 CJS 證券的 Larry Solow。

I guess coming back to Jason's question on the pump market. And you said it sounds like decisions are being made, so where do you stand? How do you feel with a lot more jump, I guess, if you will, and share of [programs]. You feel like you have an opportunity -- clearly, you've gained some share in the last couple of years, but now [Atrion] is back in the market. I think [Baxter] has a new pump. How do you feel your positioning is to continue to -- I know it's a slow moving market, but to continue sort of that positive momentum.

我想回到傑森關於泵市場的問題。你說聽起來像是在做出決定，那你的立場是什麼？我想，如果你願意的話，你對更多的跳躍和[節目]的分享感覺如何。你覺得你有機會——顯然，你在過去幾年中獲得了一些份額，但現在 [Atrion] 又回到了市場。我認為 [Baxter] 有一個新泵。你覺得你的定位是繼續下去——我知道這是一個緩慢變化的市場，但要繼續保持這種積極的勢頭。

It is jump ball season. It is the playoffs. I think our view is also not to sound less than ambitious here or hedge, it's also relative to the size of our business, right, which is the point we were trying to make on the other scripts the last 2 years, which is our business is actually -- it's big, but it's not that big relative to the total available market opportunity. And so if we can increase our win rate above historical levels, it makes a real meaningful difference on our P&L. And we think we have the right technology. And all participants, I suspect, have more conversations going on that they've had in the last number of years, which is good. Things will settle out. And we just need to -- we know what our peak share of our products were. We know how low they got and why we had to step in Hospira and we know what the opportunity is in front of us.

現在是跳球季節。這是季後賽。我認為我們的觀點也不是聽起來不那麼雄心勃勃或對沖，這也與我們業務的規模有關，對吧，這就是我們過去兩年試圖在其他腳本上表達的觀點，這就是我們的業務實際上，它很大，但相對於整個可用市場機會來說，它並沒有那麼大。因此，如果我們能夠將勝率提高到歷史水準以上，這將對我們的損益產生真正有意義的影響。我們認為我們擁有正確的技術。我懷疑所有參與者都進行了比過去幾年更多的對話，這很好。事情會解決的。我們只需要知道我們產品的最高份額是多少。我們知道他們的處境有多低，也知道為什麼我們必須介入 Hospira，我們也知道擺在我們面前的機會是什麼。

So we feel good -- I would leave it at, we feel very good about the technology investments we've made and have been committed to for in a good sense of what we think customer preference could be in this product family. And we've obviously suffered a little bit, right? But we undertook getting the full line together right between syringe, ambulatory, et cetera.

所以我們感覺很好——我想說，我們對我們所做的技術投資感覺非常好，並一直致力於我們認為客戶對該產品系列的偏好。我們顯然也受了一點苦，對吧？但我們致力於將注射器、流動注射器等之間的完整產品線整合在一起。

Okay. I appreciate that color. Just on the gross margin back to that, the cadence sounds like maybe we come back down a little bit in Q2, like that's where you can have a little more inventory scale back as well and then maybe a little bit of stabilization in the back half, but regarding -- just regarding the cadence, but just kind of situationally, where do you think they'll stand as you exit the year, mostly inventory management should be behind you, hopefully, mix is starting to improve. But do you think you can sort of as we start next year, without giving the specific depth -- back a little bit off of the sort of mid-30s number and then we get more consolidation benefits next year and work from that, maybe you can give us just a little more guidance altogether.

好的。我很欣賞那種顏色。就毛利率而言，節奏聽起來可能會在第二季度回落一點，就像這樣，您也可以減少更多的庫存規模，然後在後半段可能會稍微穩定一些，但關於——只是關於節奏，但只是從某種情況來看，你認為今年結束時他們會處於什麼位置，大部分庫存管理應該在你身後，希望混合正在開始改善。但你認為你可以在我們明年開始時，在不給出具體深度的情況下，從 30 年代中期的數字上稍微退一步，然後我們明年會獲得更多的整合效益，並從中開展工作，也許你可以給我們多一點指導。

Yes, Larry, I think as it relates to this year. On the last call, we said we would expect to exit this year slightly above the 35% average for the year, absent something unusual happening in terms of product mix or currency or anything like that. I think we still think that's probably the most likely scenario. And you're right, that means that then throughout the year, we won't have the steep trajectory in gross margins that we were expecting, it will be a bit more flattish, I suppose. But I think our views on where we exit really haven't changed.

是的，拉里，我認為這與今年有關。在上次電話會議上，我們表示，如果產品組合或貨幣或類似情況沒有發生異常情況，我們預計今年的退出率將略高於全年 35% 的平均水平。我認為我們仍然認為這可能是最有可能的情況。你是對的，這意味著全年我們的毛利率不會像我們預期的那樣急劇上升，我想它會更加平坦。但我認為我們對退出方向的看法確實沒有改變。

I mean I think that -- Larry, it's back. I think the bigger picture is that, Brian was trying to say it as simply as you could in the script, which was last year, we had just a little less revenues than we had this quarter and look how much more money we made, and then I talked about all this manufacturing consolidation et cetera, and other things to drive gross margin synergies, right? The difference between Q1 this year and Q1 last year was a little bit of investment in SG&A, but it was the difference in gross margin. Obviously, the perception of the situation is very different in those moments. So we understand the value of getting the gross margin where it needs to be.

我的意思是我認為——拉里，它又回來了。我認為更大的圖景是，布萊恩試圖在劇本中盡可能簡單地說，這是去年，我們的收入比本季度少一點，看看我們賺了多少錢，以及然後我談到了所有這些製造業整合等，以及其他推動毛利率綜效的事情，對吧？今年第一季和去年第一季的差異在於SG&A的投資，但這是毛利率的差異。顯然，那些時刻對情況的看法是非常不同的。因此，我們了解獲得所需毛利率的價值。

I would like to just lastly, I know price pressure and solutions could be somewhat of a driver to -- not this year, but going forward. When do we -- when those contracts, I think that some of them will come more of your contracts up for grabs or coming up for renewal, I think, in the back half of this year? When will that be some better than [is building on].

最後，我想，我知道價格壓力和解決方案可能會在某種程度上成為推動因素——不是今年，而是未來。我們什麼時候——我想，今年下半年，當這些合約中的一些合約會出現更多的可供爭奪或續約的時候？什麼時候會比[正在建造]更好。

I mean the contracts are only part of the equation. They'll get done first in the process and then it's really getting individual systems and members to absorb whatever you may have been contracted, which is its own set of challenges to work through. All of that probably doesn't become effective until some point in Q1 of next year.

我的意思是合約只是等式的一部分。他們將在這個過程中首先完成，然後真正讓各個系統和成員吸收您可能簽訂的任何合同，這是它自己的一系列挑戰需要解決。所有這些可能要到明年第一季的某個時候才會生效。

And speakers, we don't have any questions over the phone. I would like to hand over the call to Mr. Vivek Jain, Chairman and Chief Executive Officer. Please continue.

發言者，我們在電話中沒有任何問題。我想將電話交給董事長兼執行長 Vivek Jain 先生。請繼續。

Thanks, Franz. Look, we hope today's call was direct into the point, a little bit shorter. We look forward to speaking to everybody on our Q2 call, and we'll update everybody on all of these various items we're working to make the company more valuable and drive innovation for patients. Thanks very much, everyone. Appreciate it.

謝謝，弗朗茨。聽著，我們希望今天的電話會議能夠直入主題，稍微短一點。我們期待在第二季度電話會議上與每個人交談，我們將向每個人通報我們正在努力使公司更有價值並推動患者創新的所有這些項目的最新情況。非常感謝大家。欣賞它。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。