ICU Medical Inc (ICUI) 2024 Q3 法說會逐字稿

Good day, everyone, and welcome to today's ICU Medical, Inc. third-quarter 2024 earnings conference call. (Operator Instructions) Please note this call may be recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. John Mills. Please go ahead, sir.

大家好，歡迎參加今天的 ICU Medical, Inc. 2024 年第三季財報電話會議。（操作員說明）請注意，此通話可能會被錄音，如果您需要任何協助，我將隨時待命。現在我很高興將會議交給約翰·米爾斯先生。請繼續，先生。

Thank you. Good afternoon, everyone. Thank you for joining us to discuss ICU Medical's financial results for the third 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 the Events Calendar, and it will be under the third-quarter 2024 events.

謝謝。大家下午好。感謝您與我們一起討論 ICU Medical 2024 年第三季的財務表現。今天代表 ICU Medical 出席電話會議的是執行長兼董事長 Vivek Jain；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 年第三季的活動下方。

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.

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。

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 can have a direct bearing on operating results and financial position.

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，以獲取有關可能對經營業績和財務狀況產生直接影響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 the 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 Q3 revenue and earnings performance as we believe the results are straightforward and then provide a few highlights on the various earnings and quality improvement efforts.

謝謝約翰，大家下午好。我將快速瀏覽我們的第三季收入和獲利表現摘要，因為我們認為結果很簡單，然後提供有關各種獲利和品質改進工作的一些要點。

Brian will take it from there for more specifics on the quarter and the balance of the year, then I'll come back with a discussion on the strategic joint venture we just announced today with Otsuka and the overall situation around IV Solutions and the implications for our customers and ICU Medical with this transaction.

Brian 將從那裡獲取有關本季度和年度餘額的更多具體信息，然後我將討論我們今天剛剛與大塚宣布的戰略合資企業以及 IV Solutions 的整體情況以及對我們的客戶和ICU Medical 參與了此次交易。

Revenue for Q3 was $580 million for total company growth of 7% on a constant currency basis or 6% on a reported basis. Adjusted EBITDA was $95 million and EPS was $1.59. Gross margins were a little higher than expected due to capture of supply chain efficiencies, FX and sales mix. We again had a good quarter of free cash flow generation, which enabled us to reduce some of the AR factoring line as previously discussed, and our cash balance increased to approximately $313 million.

第三季營收為 5.8 億美元，以固定匯率計算，公司總成長率為 7%，以報告數據計算，成長率為 6%。調整後 EBITDA 為 9,500 萬美元，每股收益為 1.59 美元。由於供應鏈效率、外匯和銷售組合的影響，毛利率略高於預期。我們再次獲得了良好的自由現金流生成季度，這使我們能夠減少之前討論的一些 AR 保理額度，並且我們的現金餘額增加到約 3.13 億美元。

The broader demand and utilization environment in Q3 was healthy across all geographies and has felt that way this year to date. And since we're almost halfway through Q4, we've not really seen any major changes in the environment. The capital environment was status quo and the investments that customers need to make are getting made. Then finally, we had a quarter with the net impact of foreign exchange in our favor.

第三季更廣泛的需求和利用環境在所有地區都是健康的，今年迄今也是如此。由於第四季已經過半，我們還沒有真正看到環境有任何重大變化。資本環境維持現狀，客戶需要的投資正在進行中。最後，我們度過了一個季度，外匯的淨影響對我們有利。

Getting into our business units more specifically. Consumables grew 9% on both a constant currency and reported basis. The largest lines in this segment in order, Infusion Consumables, Vascular Access and Oncology, all grew high single digits or better. We continue to advance the points made on previous calls around focusing on clinical outcomes, new market creation and improving in geographies where we had a low share and now have direct operations. And we're focused on progressing the innovation road map as we've mentioned previously.

更具體地進入我們的業務部門。以固定匯率和報告數據計算，消耗品增加了 9%。此細分市場中最大的產品線依序為輸液耗材、血管通路和腫瘤學，均達到高個位數或更高的成長。我們繼續推進先前電話會議中提出的重點，圍繞臨床結果、新市場創建以及改善我們份額較低但現在擁有直接業務的地區。正如我們之前提到的，我們專注於推進創新路線圖。

For the balance of 2024, nothing else is new here, and we would expect the full-year results likely to finish above our original mid-single-digit targets with the legacy ICU consumables lines being at the current levels. Our ID Systems business unit grew 10% constant currency and 7% on a reported basis.

對於 2024 年的剩餘時間，這裡沒有什麼新鮮事，我們預計全年業績可能會高於我們最初的中個位數目標，而傳統 ICU 消耗品線處於當前水平。我們的 ID 系統業務部門以固定匯率計算成長了 10%，並按報告計算成長了 7%。

We had more balance across the product lines here as compared to Q2, sequentially off the very strong Q2 for ambulatory hardware devices, those levels decreased and the install calendar for LVPs was stronger than Q2, and therefore, we saw sequential growth in the LVP line.

與第二季度相比，我們的產品線更加平衡，行動硬體設備的第二季度表現強勁，這些水平有所下降，LVP 的安裝日曆比第二季度更強，因此，我們看到LVP 系列的連續增長。

Some key highlights here include continued new contract signings for our Plum Duo infusion system, and we're pleased with what we're seeing so far. We continue to advance our 510(k) submissions for our Plum Solo and LifeShield safety software. We have received FDA feedback on those submissions, and we're working to clear up the open questions.

這裡的一些關鍵亮點包括我們的 Plum Duo 輸液系統繼續簽訂新合同，我們對迄今為止所看到的感到滿意。我們繼續推進 Plum Solo 和 LifeShield 安全軟體的 510(k) 投稿。我們已收到 FDA 對這些提交的回饋，我們正在努力解決懸而未決的問題。

After these products are cleared, the combination of the dual channel, Plum Duo and the single channel Plum Solo will provide customers flexibility across all clinical care areas, and our energy will shift towards the refreshed syringe platform of Med Fusion with the goal of filing that 510(k) submission over the next several quarters and having it connect to our LifeShield safety software as well.

這些產品獲得批准後，雙通道、Plum Duo 和單通道 Plum Solo 的組合將為客戶在所有臨床護理領域提供靈活性，我們的精力將轉向更新的 Med Fusion 注射器平台，目標是申請在接下來的幾個季度提交510(k) 並將其連接到我們的LifeShield 安全軟體。

Our ambition is to have the most modern fleet of infusion devices that can anchor the portfolio for many years to come. Simplistically, we want customers to have the right tools for the right job, all connected with a common user interface and a software solution that minimizes training, improves onboarding enables interoperability and drive standardization. For the balance of 2024, nothing else is new here, we would expect results in line with our original targets.

我們的目標是擁有最現代化的輸液設備系列，可以在未來許多年穩定我們的產品組合。簡單地說，我們希望客戶擁有適合正確工作的正確工具，所有這些工具都與通用使用者介面和軟體解決方案連接，以最大限度地減少培訓、改進入職培訓、實現互通性並推動標準化。對於 2024 年剩餘時間，沒有什麼新鮮事，我們預期結果與我們最初的目標一致。

Just wrapping up the business segments. Our Vital Care segment was flat year-over-year on a constant currency and reported basis. Obviously, since the day of first day of Q4, there's been a lot happening in the IV Solutions marketplace, and we'll discuss that when we explained the choice to enter this new joint venture.

剛剛結束了業務部門。以固定匯率和報告計算，我們的重要護理業務同比持平。顯然，自第四季度第一天起，IV 解決方案市場發生了很多事情，當我們解釋進入這家新合資企業的選擇時，我們將討論這一點。

From an operations and quality standpoint, the cutover of our US and Canada order-to-cash systems was executed in Q3, and many thanks to the numerous folks who went above and beyond to make this as smooth as possible. Now that this work is under our belts, we're focused on optimizing our North American physical logistics and then we'll begin these activities internationally.

從營運和品質的角度來看，我們在第三季執行了美國和加拿大訂單到現金系統的切換，非常感謝眾多竭盡全力使這一過程盡可能順利的人們。現在這項工作已由我們負責，我們將專注於優化北美的實體物流，然後我們將在國際上開始這些活動。

We continue to work on the previously announced factory consolidations with essentially most projects completed by the end -- intended to be completed by the end of 2025. The vast majority of our real estate contracts have now been exited or repriced and savings in this area will come into the P&L over 2025 and beyond. While these may seem like mundane topics, all three items I just mentioned are economically meaningful and contribute to improving our profitability level.

我們繼續致力於先前宣布的工廠合併工作，大部分項目基本上在年底前完成——預計在 2025 年底前完成。我們絕大多數的房地產合約現已退出或重新定價，這方面的節省將在 2025 年及以後計入損益表。雖然這些看似平常的話題，但我剛才提到的所有三個項目都具有經濟意義，有助於提高我們的獲利水準。

From a quality perspective, we believe we've launched the majority of field corrective actions as we needed to stabilize the acquired LSM products. There will be a few more here, but we're optimistic that they will be smaller, both in terms of absolute number and scope.

從品質角度來看，我們相信我們已經啟動了大部分現場糾正措施，因為我們需要穩定所收購的 LSM 產品。這裡還會有更多，但我們樂觀地認為它們在絕對數量和範圍上都會更小。

In Q3, we also had a very detailed FDA follow-up inspection relating to the acquired warning letter at our Minneapolis site. That inspection was completed with no observations and is an important part of our quality improvement journey, and we're awaiting our end of inspection report. That's really the quick update on Q3.

在第三季度，我們還針對明尼阿波利斯工廠獲得的警告信進行了非常詳細的 FDA 後續檢查。該檢查已完成，沒有任何發現，是我們品質改進之旅的重要組成部分，我們正在等待檢查報告的結束。這確實是第三季的快速更新。

And with that, I'll turn it over to Brian, and then I'll come back to talk a bit more about IV Solutions and our newly announced joint venture.

接下來，我會將其交給 Brian，然後我會回來詳細討論 IV Solutions 和我們新宣布的合資企業。

Thanks, Vivek, and good afternoon, everyone. Since Vivek covered the Q3 revenue for each of the businesses, I'll focus my remarks on recapping the Q3 performance for the remainder of the P&L as well as the Q3 balance sheet and cash flow and along the way, provide commentary on any implications to our expectations for the full year.

謝謝維韋克，大家下午好。由於Vivek 涵蓋了每項業務的第三季度收入，因此我的發言重點是回顧損益表其餘部分的第三季度業績以及第三季度的資產負債表和現金流，並在此過程中提供對任何影響的評論。

As you can see from the GAAP to non-GAAP reconciliation in the press release, adjusted gross margin for the second quarter was 37%, which was slightly better than our expectations. Similar to the first half of the year, we experienced favorable product mix with a higher proportion of disposables revenue relative to hardware during the quarter compared to our plan, along with the benefits from supply chain synergies as we make progress towards capturing the balance of $50 million of synergies over the next few years.

從新聞稿中的 GAAP 與非 GAAP 調整表可以看出，第二季調整後毛利率為 37%，略優於我們的預期。與今年上半年類似，我們經歷了有利的產品組合，與我們的計劃相比，本季可支配收入相對於硬體的比例更高，隨著我們在實現50 美元餘額方面取得進展，供應鏈協同效應也帶來了好處未來幾年將產生數百萬的綜效。

In the third quarter, we also experienced a more favorable foreign currency environment compared to the first half of the year, whereby the US dollar weakened relative to the currencies in our key selling geographies and at the same time, strengthened versus the Mexican peso, which is our primary manufacturing foreign currency.

與上半年相比，第三季我們也經歷了更有利的外匯環境，美元相對於我們主要銷售地區的貨幣走弱，同時相對於墨西哥比索走強，是我們的主要製造業外匯。

For Q4, we expect gross margins to be in the 36% to 37% range, reflecting the additional benefits from continued capture of synergies, offset by the impacts of two items, the first of which is the expected higher revenue mix of IV Solutions which has a lower gross margin profile; and the second being the recent reversal of the favorable foreign currency environment we experienced in Q3 as the US dollar has now strengthened relative to our selling foreign currencies.

對於第四季度，我們預計毛利率將在36% 至37% 範圍內，反映了持續獲得協同效應帶來的額外收益，但被兩個項目的影響所抵消，第一個項目是IV Solutions 預期更高的收入組合，毛利率較低；第二個是我們在第三季經歷的有利外匯環境最近發生逆轉，因為美元相對於我們賣出的外幣而言現在已經走強。

Adjusted SG&A expense was $120 million in Q3, and adjusted R&D was $20 million. Total adjusted operating expenses were $140 million and represented 24.2% of revenue. Both the total dollar amount of spend and spend as a percentage of revenue were exactly the same as Q2. On a year-over-year basis, total operating expenses were up 11%, reflecting a combination of increased selling expenses from higher revenues and higher incentive compensation.

第三季調整後的 SG&A 費用為 1.2 億美元，調整後的研發費用為 2,000 萬美元。調整後的營運支出總額為 1.4 億美元，佔營收的 24.2%。支出總額和支出佔收入的百分比與第二季完全相同。與去年同期相比，總營運費用增加了 11%，反映出收入增加和激勵薪酬增加導致銷售費用增加。

Restructuring, integration and strategic transaction expenses were $17 million in the third quarter and related primarily to IT system integration and manufacturing network consolidation. Adjusted diluted earnings per share for the quarter was $1.59 compared to $1.57 last year. The current quarter results reflect net interest expense of $25 million. The third quarter adjusted effective tax rate was 20% and includes a discrete benefit related to US federal return to provision adjustments, which contributed approximately $0.10 per share.

第三季的重組、整合和策略交易費用為 1700 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 1.59 美元，去年同期為 1.57 美元。當前季度業績反映淨利息支出為 2500 萬美元。第三季調整後的有效稅率為 20%，其中包括與美國聯邦撥備調整回報相關的離散收益，該收益約貢獻每股 0.10 美元。

For comparison purposes, the prior year tax rate reflected discrete benefits, which contributed approximately $0.25 per share. Diluted shares outstanding for the quarter were 24.6 million. And finally, adjusted EBITDA for Q3 increased by 6% to $95 million compared to $90 million last year.

出於比較目的，上一年的稅率反映了離散收益，約為每股 0.25 美元。本季稀釋後流通股數為 2,460 萬股。最後，第三季調整後 EBITDA 成長 6%，達到 9,500 萬美元，而去年為 9,000 萬美元。

Now moving on to cash flow and the balance sheet. For the quarter, free cash flow was $16 million, which includes the impact of a $26 million outflow related to lower utilization of our accounts receivable purchase program. It was another solid free cash flow quarter when taking into consideration the impact from lower usage of the receivable program. We mentioned during the Q2 call that we expected to reduce our usage of the program during the second half of this year as our liquidity position continues to improve.

現在轉向現金流和資產負債表。本季自由現金流為 1,600 萬美元，其中包括因應收帳款購買計畫利用率較低而產生的 2,600 萬美元流出的影響。考慮到應收帳款計畫使用率下降的影響，這是另一個穩定的自由現金流季度。我們在第二季電話會議中提到，隨著我們的流動性狀況持續改善，我們預計將在今年下半年減少該計劃的使用。

As of the end of the quarter, we had $27 million outstanding under the program, and we expect this balance to further reduce by year-end. During the quarter, we invested $8 million of cash spend for quality system and product-related remediation activities, $17 million on restructuring and integration and $20 million on CapEx for general maintenance and capacity expansion at our facilities as well as placement of revenue-generating infusion pumps with customers outside the US.

截至本季末，該計劃下的未償餘額為 2,700 萬美元，我們預計這一餘額到年底將進一步減少。本季度，我們投資了800 萬美元的現金支出用於品質系統和產品相關的補救活動，1700 萬美元的現金支出用於重組和整合，2000 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創收輸注的安排與美國以外的客戶合作的幫浦。

And just to wrap up on the balance sheet, we finished the quarter with $1.6 billion of debt and $313 million of cash. As we think about cash flows over the near term, there are a couple of items worth mentioning. First, as discussed on the last call, we believe the current cash balance is adequate to support the day-to-day liquidity needs of the business, and we would anticipate any further increases to the cash balance to be used for either early paydown of term loan principal or reducing usage of the accounts receivable factoring program. And second, year-to-date free cash flow is $109 million, which is already ahead of our original full year guidance.

就資產負債表而言，本季末我們的債務為 16 億美元，現金為 3.13 億美元。當我們考慮近期現金流時，有幾個項目值得一提。首先，正如上次電話會議中所討論的，我們認為當前的現金餘額足以支持業務的日常流動性需求，並且我們預計現金餘額的任何進一步增加將用於提前支付定期貸款本金或減少應收賬款保理計劃的使用。其次，今年迄今的自由現金流為 1.09 億美元，這已經超出了我們最初的全年指導。

For the fourth quarter, we don't expect the same pace of cash generation as the fourth quarter typically has higher cash outflows for capital expenditures and tax payments. Plus, there is the potential reduction in the utilization of our receivable factoring program given our improved liquidity position.

對於第四季度，我們預期現金產生的速度不會相同，因為第四季度資本支出和納稅的現金流出通常較高。此外，鑑於我們的流動性狀況有所改善，我們的應收帳款保理計畫的使用率可能會減少。

During the second quarter earnings call, we provided updated full-year adjusted EBITDA and EPS guidance. Based on our Q3 results as well as the latest outlook for Q4, we are narrowing and raising the midpoint of our previously provided adjusted EBITDA guidance range of $345 million to $365 million to a range of $355 million to $365 million.

在第二季財報電話會議上，我們提供了最新的全年調整後 EBITDA 和 EPS 指引。根據我們第三季的業績以及第四季的最新展望，我們正在將先前提供的調整後 EBITDA 指引範圍（3.45 億美元至 3.65 億美元）的中點縮小並提高至 3.55 億美元至 3.65 億美元。

For adjusted EPS, we are raising our previously provided guidance range of $4.95 to $5.35 per share to $5.40 to $5.70 per share, reflecting the improved outlook for adjusted EBITDA plus the previously mentioned $0.10 tax benefit recognized in the third quarter.

對於調整後每股收益，我們將先前提供的每股4.95 美元至5.35 美元的指導範圍提高至每股5.40 美元至5.70 美元，反映了調整後EBITDA 前景的改善以及之前提到的第三季度確認的$0.10 稅收優惠。

The guidance assumes higher demand for IV Solutions, a commercial environment consistent with the third quarter, including no material impact from the deferral or cancellation of procedures and today's foreign currency rates. And for modeling purposes, you can assume Q4 net interest expense of $24.5 million, a Q4 adjusted tax rate of 24% and Q4 diluted shares outstanding of 24.6 million.

該指引假設對 IV 解決方案的需求增加，商業環境與第三季一致，包括延遲或取消程序以及當今的外幣匯率不會產生重大影響。出於建模目的，您可以假設第四季度淨利息支出為 2,450 萬美元，第四季度調整後稅率為 24%，第四季度攤薄後已發行股票為 2,460 萬股。

To wrap up, we're happy with our performance for the first three quarters of the year, including improvement in our gross margin rate, better-than-planned free cash flow generation and an improving balance sheet. We remain focused on the foundational work that will drive earnings improvement in 2025 and beyond.

總而言之，我們對今年前三個季度的業績感到滿意，包括毛利率的提高、自由現金流的產生好於計劃以及資產負債表的改善。我們仍專注於推動 2025 年及以後獲利改善的基礎工作。

And now I'll hand the call back over to Vivek, who will provide more specifics on today's announced IV Solutions joint venture.

現在我將把電話轉回 Vivek，他將提供有關今天宣布的 IV Solutions 合資企業的更多細節。

Okay. Thanks, Brian. I'll spend the balance of the time on what's happening with our IV Solutions business and our excitement about the joint venture we're announcing, why Otsuka is the best partner in the world for us, how this will be a great outcome for our customers and the broader North American market, our strategic thinking on why this structure and some economic implications for ICU Medical.

好的。謝謝，布萊恩。我將把剩下的時間花在我們的IV 解決方案業務的進展以及我們對我們宣布的合資企業的興奮上，為什麼大塚是我們世界上最好的合作夥伴，這將如何為我們帶來一個優秀的結果客戶和更廣泛的北美市場，我們對為什麼採用這種結構的策略思考以及對 ICU 醫療的一些經濟影響。

Obviously, the US IV Solutions market has been impacted by the events in North Carolina, and we empathize with the people and customers impacted by the crisis. We had and still have unabsorbed capacity in our Austin location and have been ramping up to first ensure our long-term committed customers are well served and to be able to help new systems that are willing to make longer-term commitments as we learned a few lessons in our experience through Hurricane Maria. Frankly, we've seen the best of customers and human nature in these moments. And we've also seen some of the characteristics that led to the market concentration that the country has faced.

顯然，美國 IV 解決方案市場受到了北卡羅來納州事件的影響，我們對受危機影響的人們和客戶表示同情。我們在奧斯汀工廠擁有並且仍然擁有未吸收的產能，並且一直在加大力度，首先確保我們的長期承諾客戶得到良好的服務，並能夠幫助願意做出長期承諾的新系統，正如我們了解到的一些資訊我們透過颶風瑪莉亞所獲得的經驗教訓。坦白說，我們在這些時刻看到了最好的客戶和人性。我們也看到了導致該國面臨的市場集中化的一些特徵。

On these earnings calls for years, we've talked about the intrinsic value of IV Solutions being out of line with its economic price. Maybe a simple analogy, it's the $0.10 screw that keeps the wheels on the bus. We've spent years pitching geographic diversification. We went as far as asking the GPOs if they wanted to buy into our business over the years. And we've read the same articles in these times of crisis, arguing that the government should mandate diversification when it practically has very few tools to do so and the market has chosen not to.

多年來，在這些財報電話會議上，我們一直在討論 IV Solutions 的內在價值與其經濟價格不符。也許是一個簡單的比喻，就是將車輪固定在公車上的 0.10 美元螺絲。我們花了數年時間來推動地域多元化。多年來，我們甚至詢問 GPO 是否願意收購我們的業務。我們在這些危機時期讀過同樣的文章，認為政府應該強制實行多元化，但實際上政府幾乎沒有什麼工具可以做到這一點，而市場選擇不這樣做。

Yet there are -- yes, there are certain customers who get it and are willing to do the work to diversify. But our conclusion, which predates the current crisis is that there has to be better choice in the market as defined by product breadth, supply reliability, innovation, geographic diversity, the ability to invest and then maybe the market itself will work and balance the risk better across suppliers.

然而，是的，有些客戶明白這一點，並願意努力實現多元化。但我們在當前危機之前得出的結論是，市場上必須有更好的選擇，包括產品廣度、供應可靠性、創新、地理多樣性、投資能力，然後市場本身可能會發揮作用並平衡風險更好地跨供應商。

That's why we're so excited to announce the creation of a manufacturing and innovation joint venture with Otsuka Pharmaceutical Factory around IV Solutions. They are the single best partner on the planet for us, and I'll go through the reasons why that's the case on the attached slides that follow the revenue schedule in our investor presentation.

這就是為什麼我們如此興奮地宣布與大塚製藥廠圍繞 IV 解決方案創建一家製造和創新合資企業。對我們來說，他們是地球上最好的合作夥伴，我將在投資者簡報中按照收入計劃附上的幻燈片上詳細解釋為什麼會發生這種情況。

And just to preempt the question, this is not some hastily arranged shotgun relationship. I first met with this company over a decade ago on other product categories. We were in some conversations in 2019 pre-COVID and we've spent the better part of this year exploring this opportunity with hundreds of hours of technical reviews, site visits across continents and building a relationship and shared vision about something that could last for over the next decade.

先說一下這個問題，這並不是什麼倉促安排的獵槍關係。十多年前，我在其他產品類別上第一次見到這家公司。我們在2019 年新冠疫情爆發之前進行了一些對話，今年的大部分時間我們都在探索這個機會，進行了數百小時的技術審查、跨大洲的現場訪問，並建立了一種關係，並就可持續發展的事物達成了共同願景。

First, just a few facts about Otsuka on slide 5 and 6. They are a Japanese global health care company that's been in business for over 100 years and are an active participant in branded pharma in the US market. The stats on the right-hand side of the slide are self-evident, but they have a big pharma-like balance sheet and capitalization, which is different than all the current public company suppliers of IV solutions, including ourselves. Their IV solutions portfolio is part of their original business, and they're the largest supplier in Asia, and we believe they have the best innovation of any global supplier.

首先，投影片 5 和 6 介紹了有關大塚的一些事實。他們是一家日本全球醫療保健公司，已有 100 多年的經營歷史，並且是美國市場品牌製藥的積極參與者。幻燈片右側的統計數據是不言而喻的，但他們擁有類似製藥公司的龐大資產負債表和資本，這與目前所有 IV 解決方案的上市公司供應商（包括我們自己）不同。他們的 IV 解決方案組合是其原始業務的一部分，他們是亞洲最大的供應商，我們相信他們擁有全球供應商中最好的創新。

That innovation is everything from packaging, being the world's only producer of a 4-chamber TPN bag to very cool admixture and reconstitution formats to all materials being PVC-free across the entire portfolio, to core pharma competency around formulations and stability to fit with the other skills. Slide 6 shows some of this track record of innovation.

這種創新體現在方方面面，從包裝（世界上唯一生產4 室TPN 袋的生產商）到非常酷的混合物和重構形式，再到整個產品組合中所有不含PVC 的材料，再到圍繞配方和穩定性的核心製藥能力，以適應市場需求。幻燈片 6 顯示了一些創新記錄。

Slide 7 outlines the core reasons we were attracted to them, if not obvious, already. Our main reasons were scale and redundancy, innovation, the cultural mindset, financial strength and the experience in US partnerships. Key highlights of the transaction are at the bottom of the slide, which is an upfront payment to ICU Medical, a milestone after a milestone payment potentially after two years and a put call option for either party starting in 2030, shared governance, et cetera.

投影片 7 概述了我們被它們吸引的核心原因（即使不是很明顯）。我們的主要原因是規模和冗餘、創新、文化心態、財務實力以及美國合作夥伴關係的經驗。該交易的主要亮點位於幻燈片的底部，這是對ICU Medical 的預付款，是兩年後可能進行的里程碑付款之後的一個里程碑，以及從2030 年開始為任何一方提供的看跌期權、共同治理等。

From an ICU perspective versus our other lines of business, it's been hard for us to drive meaningful innovation in the IV Solutions category. And our business generally set alone as a domestic-only enterprise in Austin, Texas. Slide 8 shows Otsuka's global manufacturing footprint, and Austin will join 16 owned Otsuka sites with a long-term goal of FDA approval at a number of these locations to create more redundancy.

從 ICU 的角度來看，與我們其他業務線相比，我們很難在 IV 解決方案類別中推動有意義的創新。我們的業務通常是德克薩斯州奧斯汀市的國內企業。幻燈片 8 顯示了大塚的全球製造足跡，奧斯汀將加入大塚旗下的 16 個工廠，其長期目標是在其中一些工廠獲得 FDA 批准，以創造更多的冗餘。

Just one comment on slide 9. In a long-term partnership, culture and alignment matters, they operate with a long-term mindset backed by financial strength and experience. They operate in geographies faced with natural disaster risk daily and the commitment to new production technology, combined with risk mitigation, is ingrained in their culture, and I've seen firsthand how they've hardened their sites in Japan.

僅對投影片 9 發表一則評論。在長期合作關係中，文化和協調很重要，他們以財務實力和經驗為後盾，以長期思維方式運作。他們在每天面臨自然災害風險的地區開展業務，對新生產技術的承諾與風險緩解相結合，在他們的文化中根深蒂固，我親眼目睹了他們如何加固他們在日本的工廠。

From a customer perspective, we want to bring more innovation along with clear supply redundancy to allow the market to fix the concentration problem. We love this structure outlined on slide 10, the key items slide, because it creates something that will be seamless to customers. On the front end, it will feel exactly the same to customers with us providing everything as we currently do, sales, logistics, billing, et cetera, but with additional resources on the manufacturing side.

從客戶的角度來看，我們希望帶來更多的創新以及明顯的供應冗餘，讓市場解決集中度問題。我們喜歡幻燈片 10（關鍵項目幻燈片）中概述的這種結構，因為它創造了對客戶來說無縫的東西。在前端，客戶的感覺與我們提供與目前一樣的一切（銷售、物流、計費等）完全相同，但在製造方面提供了額外的資源。

We've also stated on these calls for years that IV Solutions should be priced relative to its own individual intrinsic value. If the market continues to combine this category with other infusion items, we can stay in this structure or if the market separates these items in the next GPO cycle one after that, we have a put call structure that allows us to make those decisions after a minimum of five years.

多年來，我們也在這些呼籲中表示，IV 解決方案的定價應根據其自身的內在價值進行。如果市場繼續將該類別與其他輸液項目結合起來，我們可以保持這種結構，或者如果市場在下一個 GPO 週期中將這些項目分開，我們有一個看跌期權結構，允許我們在至少五年。

To conclude this discussion, we are really honored that Otsuka chose to work with us and look forward to many years of a fruitful partnership. Now there will be implications for ICU Medical. It was a tough call to make, but it was an important for Otsuka to be able to consolidate the revenues of the joint venture.

最後，我們非常榮幸大塚選擇與我們合作，並期待多年的富有成果的合作夥伴關係。現在這將對 ICU 醫療產生影響。這是一個艱難的決定，但對大塚來說，能夠鞏固合資企業的收入非常重要。

So as a result, ICU will deconsolidate IV Solutions' financial results and recognize only our proportional share in the net earnings of the JV. While it's painful to give up so much revenue, we do believe with the upfront payment, the transaction will be EPS breakeven to ICU. Simply stated, the interest expense savings from debt paydown from the upfront $200 million payment equals the current EBIT contribution of the business.

因此，ICU 將取消合併 IV Solutions 的財務業績，並僅確認我們在合資企業淨利潤中所佔的比例份額。雖然放棄如此多的收入是痛苦的，但我們相信透過預付款，這筆交易將使 ICU 的每股盈餘達到盈虧平衡。簡而言之，預付 2 億美元的債務償還債務所節省的利息費用等於企業當前的息稅前利潤貢獻。

We have to work through the financial reconciliations between now and closing. But net-net, our gross margin will change between 300 to 400 basis points initially after close and could reach 500 basis points as the JV stands up its own services, but that will take some time. We would have to subtract around $25 million in annual EBITDA from our roll-up next year, and we believe the JV will be able to sustain its own CapEx and we can make other choices with that capital.

我們必須從現在到交易結束之間完成財務對帳工作。但淨淨來看，我們的毛利率在交易結束後最初將在300 至400 個基點之間變化，隨著合資公司推出自己的服務，我們的毛利率可能會達到500 個基點，但這需要一些時間。我們必須從明年的總結中減去約 2500 萬美元的年度 EBITDA，我們相信合資企業將能夠維持自己的資本支出，我們可以用這筆資本做出其他選擇。

In the bigger picture of ICU, on the last few calls, we've talked about revenue stabilization and the ability to grow our differentiated product lines as demonstrated in Q3. While it's nice to have that revenue growth now, it's not lost on us that we're still under-earning as a company relative to the industry as evidenced by the fact we had higher earnings with less revenues historically.

在 ICU 的大局中，在最近幾次電話會議中，我們討論了收入穩定和發展差異化產品線的能力，如第三季度所展示的那樣。雖然現在收入成長很好，但我們並沒有忘記，作為一家公司，相對於行業來說，我們的收入仍然不足，這一點可以從歷史上我們的收入較高但收入較少的事實證明。

This JV does not solve that issue on an absolute basis even if some of the margin ratios change. We continue to be extremely focused on all the actions to improve profit in the medium term, which are about revenue growth, mix and pricing, operational efficiency from my introductory comments and eventually waiting for the macro items and currency and interest rates to improve. Where this JV does impact us is how long we can bear interest expense to make sure we're maximizing the value of any of our other assets.

即使某些保證金比率發生變化，該合資企業也不能絕對解決該問題。我們繼續高度關注中期提高利潤的所有行動，這些行動涉及收入成長、組合和定價、我的介紹性評論中的營運效率，並最終等待宏觀項目以及貨幣和利率的改善。該合資企業確實對我們產生影響的是我們可以承擔利息費用多長時間，以確保我們最大化任何其他資產的價值。

Net debt at the end of Q3 was about $1.3 billion, as Brian referenced, between our mandatory principal payments of around $75 million-ish in 2025 plus $200 million in paydown of the term loans from this situation, it would put us approximately around $1 billion of net debt by the end of 2025. If earnings can continue to improve alongside an improving interest rate environment and lower leverage ratio spread, perhaps we can think about other ways to return capital to shareholders over time.

正如Brian 所提到的，第三季末的淨債務約為13 億美元，2025 年我們的強製本金支付約為7,500 萬美元左右，加上這種情況下償還的定期貸款2 億美元，這將使我們約為10 億美元到 2025 年底，債務淨額將減少。如果隨著利率環境的改善和槓桿率利差的降低，獲利能夠繼續改善，也許我們可以考慮其他方式，隨著時間的推移向股東返還資本。

Again, all of this has to happen, but it's certainly not out of the range of potential outcomes. To be direct on our goals for the next year or two, we want our consumables and systems business to be reliable growers with an industry acceptable profit margin with the tightest and most optimized manufacturing network and each with a multiyear innovation portfolio, and we ultimately want to transfer value from debt to equity, which Brian noted, we are finally better prepared to move on.

再說一次，所有這一切都必須發生，但它肯定不會超出潛在結果的範圍。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，具有行業可接受的利潤率，擁有最嚴格和最優化的製造網絡，並且每個業務都擁有多年的創新組合，我們最終希望布萊恩指出，將價值從債務轉移到股權，我們終於為繼續前進做好了更好的準備。

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

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。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，除非必須，否則客戶不願意更換。市場需要 ICU Medical 成為一家創新、可靠的供應商，我們的公司從過去幾年發生的所有事件和今天的好消息中變得更加強大。

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

感謝我們所有的團隊成員和客戶，我們每天都在進步。說到這裡，我將開放提問。

(Operator Instructions)

（操作員說明）

Brad Erickson, KeyBanc.

布拉德·埃里克森，KeyBanc。

Hey, guys. Thanks so much for taking the questions. Vivek, you definitely gave a lot of detail around why this was the best partner in terms of entering this type of JV arrangement. Was just curious if you could give a little bit more around the strategic thought process of going in this direction with the JV, whether you guys consider to sell. And then why you think sticking around in the solutions business for the foreseeable future is the best decision for the company.

嘿，夥計們。非常感謝您提出問題。Vivek，您確實詳細說明了為什麼這是進入此類合資安排的最佳合作夥伴。我只是好奇您是否可以提供更多有關與合資企業朝這個方向發展的戰略思維過程的信息，無論你們是否考慮出售。那麼為什麼您認為在可預見的未來繼續從事解決方案業務對公司來說是最好的決定。

Sure, Brett. I don't think we ever had any considerations about a sale. It's a core product for our customers that's deeply linked with the other things that we do. I think where we struggled was what I tried to outline in the script is trying to be the best innovator we can be on pumps and software, trying to be the best innovator around consumables and category creation. It was hard for us to do all of it.

當然，布雷特。我認為我們從未考慮過出售。它是我們客戶的核心產品，與我們所做的其他事情密切相關。我認為我們掙扎的地方是我在劇本中試圖概述的，就是努力成為泵和軟體方面最好的創新者，努力成為消耗品和類別創建方面的最佳創新者。我們很難做到這一切。

And our portfolio was a little narrower here than some of the other players. We were looking for a way to stay in the market still absolutely deliver these items to our customer but make sure we could bring the innovation that could be more relevant to them and diversify the market a little bit. And for us, like the choices in the other ategories who came down to who had market leadership around the world and the other geographies and who have the most innovation.

我們的投資組合比其他一些參與者要窄一些。我們正在尋找一種方法，既能留在市場中，又能絕對地將這些產品交付給我們的客戶，但確保我們能夠帶來與他們更相關的創新，並使市場更加多元化。對我們來說，就像其他類別的選擇一樣，誰在全球和其他地區擁有市場領導地位，誰擁有最多的創新能力。

All right. I appreciate that color. And then just one question on the ERP. You touched on it briefly. I believe that you've now completed the US and North America portion of it, and it sounds like it was relatively successful. Just curious if there was any disruption intra-quarter from that at all. And what kind of incremental benefits you might be seeing as we progress into the fourth quarter?

好的。我很欣賞那種顏色。然後是關於 ERP 的一個問題。你簡單地談到了它。我相信你現在已經完成了美國和北美部分，聽起來還是比較成功的。只是好奇季度內是否有任何干擾。當我們進入第四季時，您可能會看到什麼樣的增量收益？

I mean there was certainly disruption to the team members' lives during the quarter. We have to deal with it, ourselves included. I -- it's a lot of work, a lot of people sacrificed. I mean during, I would say, the month of August, yes, there was a little bit of bumpiness. We had the month of September to clean up some of those items, but it only gets cleaned up because people gave a lot.

我的意思是，本季團隊成員的生活肯定受到了乾擾。我們必須應對它，包括我們自己。我──這是很多工作，很多人犧牲了。我的意思是，我想說的是，八月份，是的，有一點坎坷。我們在九月清理了其中一些物品，但之所以清理乾淨是因為人們付出了很多。

Brett, to your point, I would say that although there was some volatility during the quarter, the quarter itself really wasn't impacted at all when you look at it kind of in total. So from my standpoint, as CFO, that's the definition of success.

布雷特，就你的觀點而言，我想說，儘管本季存在一些波動，但從整體來看，本季本身確實沒有受到任何影響。因此，從我作為財務長的角度來看，這就是成功的定義。

All right. Thanks again. I'll jump back in the queue.

好的。再次感謝。我會跳回到隊列中。

Eric Fleming, Raymond James.

艾瑞克‧弗萊明，雷蒙德‧詹姆斯。

Hey, guys. It's [Aldritch Jayson] tonight. A couple of quick questions. On the LVP on Duo. Have you been able to hold the pricing levels that you were talking about earlier this year?

嘿，夥計們。今晚是[奧爾德里奇·傑森]。幾個簡單的問題。在 Duo 上的 LVP 上。你們能保持今年早些時候所說的定價水準嗎？

I don't know that we've publicly articulated the pricing levels, but I would say we recognize that you don't have many chances to have new technology reset in the market. We believe in the technology. We want customers who believe in that. We're focused on holding that level. We have not made any changes to where we thought we would start marketing that product.

我不知道我們是否公開闡明了定價水平，但我想說，我們認識到，在市場上重置新技術的機會並不多。我們相信技術。我們希望客戶相信這一點。我們專注於保持這個水平。我們沒有對我們認為開始行銷該產品的地方做出任何改變。

And how is the market share looking with everyone now back on the market?

現在每個人都重返市場，市場佔有率如何？

I mean again, I think everybody -- it's obviously -- it's a very hot topic given all the competitors' comments on it. I think we feel good about the cards we're holding. We feel good about it from a competitive standpoint with Duo in the market and the amount of conversations. And again, we were very transparent on the power of incumbency, et cetera, on the previous calls. It's all relative to the size of our business, which frankly isn't that big in the US.

我的意思是，我認為每個人 - 顯然 - 考慮到所有競爭對手對此的評論，這是一個非常熱門的話題。我認為我們對手中的牌感覺良好。從與 Duo 在市場上的競爭和對話量的角度來看，我們對此感覺良好。再說一次，我們在先前的電話會議中對現任者的權力等問題非常透明。這一切都與我們的業務規模有關，坦白說，我們的業務在美國並沒有那麼大。

And we feel very good if Solo comes and the ability to access our own installed base, where our equipment is finally aging out and needing a little bit of refresh. So I think we feel good on both of those fronts. And then the CAD product is almost a separate conversation but continues to be the best asset that came with the acquisition.

如果 Solo 到來並且能夠訪問我們自己的安裝基地，我們感覺非常好，我們的設備終於老化了，需要一點更新。所以我認為我們在這兩方面都感覺良好。然後，CAD 產品幾乎是一個單獨的對話，但仍然是收購帶來的最佳資產。

Sorry, and one other follow up -- not follow up, another question. On the Mexican peso, with the recent election results, what's the outlook in terms of any potential tariffs and the impact on the benefit you're getting in the peso right now?

抱歉，還有一個跟進 - 不跟進，另一個問題。就墨西哥比索而言，根據最近的選舉結果，任何潛在關稅的前景以及對您目前以比索獲得的利益的影響如何？

I mean I think obviously, it's unclear. Last time around, it was not particularly meaningful. I would say, we are a bit player of the amount of stuff coming from Mexico, not only in the health care industry, but automotive consumer whatever will all be treated same way. Right now, we're not sitting around and spending a lot of time planning on that scenario.

我的意思是我認為顯然，這還不清楚。上次，並沒有什麼特別的意義。我想說，我們是來自墨西哥的大量產品的參與者，不僅在醫療保健行業，而且在汽車消費者方面都將受到同樣的對待。現在，我們不會坐以待斃，花費大量時間來規劃該場景。

Thanks. And then just sorry, one last one. You mentioned the FDA has inspected that Smiths facility with the warning letter and you're just awaiting the final report. Is that correct?

謝謝。然後抱歉，最後一件事。您提到 FDA 已通過警告信檢查了 Smiths 的工廠，您正在等待最終報告。這是正確的嗎？

We said at the site, at the site that where the warning letter was issued, we did have a very thorough follow-up inspection. We had no observations. That's one of the components to getting a full clean bill of health. It's the hardest and most strenuous one. And so that box got checked. At the end of that, you're issued an end of inspection report, you could receive that any number of months after the inspection, and we don't have that in hand yet.

我們在現場說，在現場，發出警告信的地方，我們確實有非常徹底的追蹤檢查。我們沒有觀察到。這是獲得完全清潔健康證明的組成部分之一。這是最難、最費力的一件事。所以那個框被選中了。最後，您會收到一份檢查結束報告，您可以在檢查後的任何幾個月內收到該報告，但我們手頭上還沒有該報告。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

Larry Solow, CJS Securities.

拉里·索洛，CJS 證券。

I guess just going back to the strategy of the deal. I guess you kind of get the best of both worlds in that, you can still control the solutions piece and enable it to sell it with the systems and consumables, while you also have another partner helping, I guess, take 50% of that investment and also you're adding I assume some complementary products that they're bringing as well as the manufacturing redundancy. So to me, it seems like almost a win-win if I'm looking at that correctly.

我想還是回到交易策略。我想你可以兩全其美，你仍然可以控制解決方案部分並使其能夠與系統和消耗品一起銷售，同時你還有另一個合作夥伴幫助，我想，拿走投資的 50%而且你還補充說，我假設他們帶來了一些補充產品以及製造冗餘。所以對我來說，如果我正確地看待這一點，這似乎幾乎是雙贏。

We thought about it a lot. I appreciate the comments, Lawrence. We thought about it a lot. It's obviously joking aside, it's a very fluid time in the market. We tried to come up with a structure that protected us in the near term, sort of in the medium term and maybe hedge a little bit of the risk we have today, but certainly kept us in the business for the long term, if we can do what we think we can do together. So we are -- we really think we kind of win-win on the structure. And it's -- we have searched for this for a long time. It's not easy to do. It took a long time.

我們想了很多。我很欣賞你的評論，勞倫斯。我們想了很多。這顯然是在開玩笑，現在是市場非常不穩定的時期。我們試著想出一種結構，在短期內保護我們，在中期保護我們，也許可以對沖我們今天面臨的一點風險，但如果可以的話，肯定能讓我們長期從事這項業務。的事情。所以我們真的認為我們在結構上是雙贏的。我們已經尋找這個問題很久了。這並不容易做到。花了很長時間。

And the valuation, right. And the valuation looks like at 16 times EBITDA, I guess there must be Otsuka must have and you as well, think that this number is certainly a depressed number for the last couple of years. So I'm sure there's some low-hanging fruit just on pricing and things, but then the ability to add their products into our distribution network, I guess, brings that up a lot more potentially. But I guess the question I have is there's a decent amount of assets right on your balance sheet tied to solutions that, I guess, will come off in the deconsolidation. Is there any way to frame that?

還有估值，對吧。而且估值看起來是16倍EBITDA，我想一定有大塚，你也認為這個數字肯定是近幾年來的一個低迷的數字。因此，我確信在定價和其他方面有一些容易實現的目標，但我想，將他們的產品添加到我們的分銷網絡中的能力會帶來更大的潛力。但我想我的問題是，你的資產負債表上有相當多的資產與解決方案相關，我猜這些資產將在分拆中消失。有什麼辦法可以框住它嗎？

Yeah, Larry, it's Brian. Your question around multiples, which we don't really pay attention to, I think it's probably closer to 13 times or something like that rather than the 16 times you mentioned, but we think it's representative of the value of the business, of course, and the value that can be created as -- with our partners. Yes. And then, of course, I guess just from an accounting standpoint, we will deconsolidate the financial results as well as kind of the assets and liabilities on the balance sheet.

是的，拉里，是布萊恩。你關於倍數的問題，我們並沒有真正關注，我認為它可能更接近 13 倍或類似的東西，而不是你提到的 16 倍，但我們認為它代表了業務的價值，當然，以及與我們的合作夥伴一起創造的價值。是的。當然，我想從會計的角度來看，我們將取消合併財務績效以及資產負債表上的資產和負債類型。

I think the decision-making structure was one part of Larry, the other decision-making was fundamentally about is this better for customers? Is it better for the marketplace to check the boxes that help undo the concentration from by bringing innovation and more choice. And we looked in the merit at every one of those. We felt like this will be better for the marketplace, better for customer. We couldn't get there on our own.

我認為決策結構的一部分是拉里，另一部分決策從根本上來說是關於這對客戶更好嗎？對於市場來說，透過帶來創新和更多選擇來檢查有助於消除集中度的方框是否更好？我們研究了其中每一項的優點。我們認為這對市場和客戶都更好。我們無法獨自到達那裡。

Got you. Great. And if I could just squeeze one more question just on the gross margin. Independent of the lift you expect from the deconsolidation, but just on the core or the entire business ex the solutions piece. You've captured it sounds like some supply chain efficiencies or expedited those in the last couple of quarters.

明白你了。偉大的。我能否再問一個關於毛利率的問題。獨立於您期望從拆分中獲得的提升，但僅針對核心或整個業務（解決方案部分）。您已經發現，聽起來供應鏈效率有所提高，或在過去幾季中有所加快。

Are those kind of just a little bit faster than you assumed you get them but nothing really to -- perhaps the outlook for next year doesn't really change that much? You've just gotten a little bit better this year faster? I guess question one. And then do you still expect consolidation to drive like a 200-basis point improvement in gross margin, plus or minus, I would say, [26] when you get the full year benefit? Thanks.

這些是不是比你想像的要快一點，但實際上並沒有什麼改變——也許明年的前景並沒有真正改變那麼多？今年你是不是進步得更快了？我猜問題一。然後，當您獲得全年收益時，您是否仍然期望整合能夠推動毛利率提高 200 個基點，加減，我想說，[26]？謝謝。

Yeah, Larry. So on the two questions, one, as it relates to the favorability we saw in Q3, yeah, we're getting those synergies a little bit sooner than expected. We've talked about $50 million is kind of what we expect as a part of Phase 2 in total. Most of that's going to show up in the gross margin line. And we -- but we still think that the time line for capturing everything is by the end of next year. So we're still -- we just happen to be a little bit ahead of schedule. So I don't think it really changes the opportunity.

是的，拉里。因此，關於兩個問題，第一，因為它與我們在第三季度看到的好感度有關，是的，我們獲得這些協同效應的時間比預期要早一些。我們已經討論過，我們預計第二階段的投資總額為 5000 萬美元。其中大部分將體現在毛利率中。我們 - 但我們仍然認為捕獲所有內容的時間線是在明年年底之前。所以我們仍然——我們只是碰巧比計劃提前了一點。所以我認為這並沒有真正改變機會。

I just want to rephrase. I'm sorry, Brian. I felt like the projects that we only done by the end of next year, right, by taking longer the projects will be done. I think, Larry, I would focus on the gross margin percentage. We've been very clear, Brian, in every script. We had a target of [40] that we wanted to get to. And that [50] was part of [probably the gap] So it's all relative to where we are against that target.

我只是想重新表達一下。對不起，布萊恩。我感覺我們明年年底才完成的項目，對吧，需要更長的時間，項目就會完成。拉里，我想我會關注毛利率。布萊恩，我們在每個劇本中都說得很清楚。我們想要達到的目標是 [40]。[50] 是 [可能存在差距] 的一部分，所以這都與我們實現該目標的情況有關。

Yeah. Vivek referenced as it relates to the joint venture and margin impact there, the remaining 1 to 2 percentage point change would probably be coming later on than 2026 when the joint venture would potentially be stand a little more on its own as it relates to certain commercial type of activities.

是的。Vivek 提到，因為這與合資企業及其利潤率影響有關，剩下的 1 到 2 個百分點的變化可能會在 2026 年以後發生，屆時合資企業可能會更加獨立，因為它與某些商業相關活動類型。

Right. Got you. And then to get to [40], but just do the math just with the deconsolidation alone from where we are today are pretty close, right?

正確的。明白你了。然後到[40]，但只要從我們今天所處的位置進行數學分解就非常接近了，對吧？

Yes.

是的。

Got you. Okay, great. I appreciate all the color. Thanks.

明白你了。好的，太好了。我欣賞所有的顏色。謝謝。

Kristen Stewart, CL King.

克里斯汀·斯圖爾特，CL King。

Hi. Thanks for taking the question. I was wondering if you could just share a little bit more details on what you're seeing today with IV Solutions and your ability to ramp up manufacturing, how much you're able to ramp up to really take advantage of the dislocation from your competitor?

你好。感謝您提出問題。我想知道您是否可以分享更多關於您今天在 IV Solutions 中看到的情況以及您提高製造能力的細節，以及您能夠提高多少以真正利用競爭對手的混亂？

I mean we feel -- Kristen, let's go back, thanks for the question. We feel like we're not interested in really playing a short-term game. We got burned on that in Maria and our prize at the end of that was going to have to restructure our business back then, and we don't want to do that again.

我的意思是我們覺得——克里斯汀，讓我們回去吧，謝謝你的提問。我們覺得我們對真正玩短期遊戲不感興趣。我們在瑪麗亞身上被燒傷了，最後我們的獎品將不得不重組我們的業務，我們不想再這樣做了。

And so for us, the business we're interested in is if truly people want to diversify and take a long-term view on their either Dual or Solo, whatever may be supply, I don't think we're running around trying to be opportunistic. And part of this decision on this partnership was saying, we thought by bringing these set of skills and redundancy and innovation together, we could wind up with higher market share than we have today over time.

因此，對我們來說，我們感興趣的業務是，如果人們真的想要多元化，並對他們的雙人或單人採取長期的看法，無論供應如何，我不認為我們會四處奔走試圖機會主義。關於此次合作的決定的一部分是，我們認為，透過將這些技能、冗餘和創新結合在一起，隨著時間的推移，我們最終可能會獲得比現在更高的市場份額。

It wasn't about exploiting what's going on right now. And it's a very awkward time for customers because we certainly believe that just like what happened Maria, the situation will get rectified. People will come back and there will be adequate supply in the market. I think no one has -- we certainly don't want to speak for anybody, but no one has the illusion that share -- that capacity is not going to come back online, absolutely. So for us, it is much more about the long term.

這並不是為了利用現在正在發生的事情。對於顧客來說，這是一個非常尷尬的時刻，因為我們當然相信，就像瑪麗亞發生的事情一樣，情況會得到糾正。人們會回來，市場上會有充足的供應。我認為沒有人——我們當然不想代表任何人說話，但沒有人抱持共享的幻想——容量絕對不會恢復在線。所以對我們來說，更重要的是長遠。

Thanks very much.

非常感謝。

Mike Matson, Needham & Company.

麥克馬森，李約瑟公司。

Yeah. Thanks for taking my question. I've joined the call late. I apologize if you've gone through this. But just on this deal, it's going to be a JV. So all the -- is there any revenue benefit to ICU once the deal is completely set up? Or is all that revenue going to be flowing through the JV?

是的。感謝您提出我的問題。我很晚才加入通話。如果您經歷過這件事，我深感抱歉。但就這筆交易而言，它將成為合資企業。那麼，一旦交易完成，ICU 是否會獲得任何收入效益？或者所有收入將流經合資企業嗎？

So Mike, just I guess kind of how do the activities of the joint venture show up in our P&L. We will deconsolidate the results. So on the P&L, all we will show is the -- our portion of -- in the net earnings of the joint venture. So we will benefit economically from any incremental revenues if they generate incremental profits, but it doesn't -- it won't show up on our revenue line.

麥克，我想合資企業的活動如何顯示在我們的損益表中。我們將拆分結果。因此，在損益表上，我們將顯示的只是合資企業淨利潤中我們的部分。因此，如果任何增量收入產生增量利潤，我們將從經濟上受益，但事實並非如此——它不會出現在我們的收入線上。

Okay. Got it. And then just your sales team would be selling the IV solutions, or I mean, would those people move over to be part of the JV then? Or I guess --

好的。知道了。然後，只有您的銷售團隊會銷售 IV 解決方案，或者我的意思是，這些人會轉而成為合資企業的一部分嗎？或者我猜--

Yeah. Mike, it's commercially. Everything to the customer remains exactly the same. You ordered via ICU, ship via ICU. We run the warehouse, et cetera, we bill. Now those may be services that are provided on behalf of the JV, but the whole experience is seamless to the customer and the integrated value that's delivered, meaning the co-mingling of the value prop of some of these products across other infusion items continues because it's all held together commercially.

是的。麥克，這是商業性的。對客戶而言，一切都保持完全相同。您透過 ICU 訂購，透過 ICU 出貨。我們經營倉庫等等，我們開立帳單。現在，這些可能是代表合資企業提供的服務，但整個體驗對客戶來說是無縫的，並且提供了綜合價值，這意味著其中一些產品的價值支撐與其他輸液產品的混合仍在繼續，因為這一切都是商業化的。

The revenue benefit is really one of -- there's two different parts of that question. One part of the that is if we believe on our own, we had a better chance of the first two pillars of our company that we described in the call, the infusion consumable, the infusion pumps growing at a superior growth rate to solutions over time, it could be revenue growth accretive. That may not be the case in the short term, given what's going on. But the idea is the experience for the customer will feel exactly the same as it does today.

收入效益實際上是其中之一——這個問題有兩個不同的部分。其中一部分是，如果我們相信自己，我們就有更好的機會實現我們在電話中描述的公司的前兩個支柱，即輸液耗材、輸液泵，隨著時間的推移，解決方案將以優異的增長率增長，這可能會增加收入增長。考慮到正在發生的事情，短期內情況可能並非如此。但我們的想法是，客戶的體驗將與今天完全相同。

Yeah. Okay. Yeah, that makes a lot of sense then. So you're kind of potentially removing a slower growth business and but maintaining the benefits of bringing that along with everything else to the table for the customers.

是的。好的。是的，這很有意義。因此，您可能會取消成長較慢的業務，但保留將其與其他所有業務一起提供給客戶的好處。

I mean just to be super blunt about it, over the -- if we learned, yes, there's some shortage today, but if we learned what happened last time, and we learned what happened to the people who supply things during COVID, the market has happen -- vaccines, ventilators, testing, whatever you want, the market has a chance of reverting to the mean, rather, even if there's some uplift in recognition of the value of this market, the only way to make it a faster growth business for us was with more innovation, and we need a partner to help us do that.

我的意思是非常直白地說，如果我們知道，是的，今天有一些短缺，但如果我們知道上次發生了什麼，我們知道在新冠病毒期間供應物品的人發生了什麼，市場已經發生了— —疫苗、呼吸機、測試，無論你想要什麼，市場都有機會恢復到平均水平，相反，即使人們對這個市場價值的認識有所提高，這是讓它更快增長的唯一方法我們的業務需要更多的創新，我們需要一個合作夥伴來幫助我們做到這一點。

Okay. Got it. And then just want to ask one on the pump market and competitive dynamics there. So I guess I don't cover Becton, but just looking through their comments, it sounds like they kind of -- they're saying, at least that they're delivering on what they thought they could do in terms of reentering that market. So what are you seeing? And how -- to what degree have you been able to pick off share from them or other players?

好的。知道了。然後我想詢問一下泵浦市場的情況以及那裡的競爭動態。所以我想我不會報導 Becton，但只要瀏覽一下他們的評論，聽起來他們好像在說，至少他們正在實現他們認為在重新進入該市場方面可以做的事情。那你看到了什麼？你如何－在多大程度上能夠從他們或其他參與者那裡獲得份額？

It's an active market because a lot of people are forced to make a decision right now. I think, again, we've grown up in this business and our comments in the last couple of calls here's a huge advantage to incumbency to all players.

這是一個活躍的市場，因為很多人現在被迫做出決定。我再次認為，我們已經在這個行業中成長起來，我們在最近幾次電話會議中的評論對於所有參與者來說都是一個巨大的優勢。

But again, relative to our LVP size, which wasn't that big, there's enough choices out there to have us certainly get a meaningful return on our R&D investments into the Plum Duo and Plum Solo programs, and there's more conversations going on than there ever have been. We certainly think a huge majority of people generally stay with the incumbent, but the amount of market that needs to change is plenty for us to grow [in this year]

但同樣，相對於我們的 LVP 規模（沒有那麼大），有足夠的選擇可以讓我們在 Plum Duo 和 Plum Solo 項目的研發投資上獲得有意義的回報，並且正在進行的對話比那裡更多曾經有過。我們當然認為絕大多數人通常會留在現任者那裡，但需要改變的市場量足以讓我們成長[今年]

Yeah, okay. Yeah, that makes sense. Thank you.

是啊，好吧。是的，這是有道理的。謝謝。

Michael Toomey, Jefferies.

邁克爾·圖米，杰弗里斯。

Hey, guys. Thanks for taking my question. Most have been answered already, but just on the Otsuka JV. What would the free cash flow accretion look like for the deal? How much funding would that need on a CapEx perspective? I know you said it's neutral on adjusted EPS, but just on the CapEx and free cash flow.

嘿，夥計們。感謝您提出我的問題。大多數問題已經得到解答，但僅限於大塚合資企業。該交易的自由現金流增加會是什麼樣子？從資本支出的角度來看，這需要多少資金？我知道你說過調整後每股盈餘是中性的，但只是資本支出和自由現金流。

I would say, Mike, in terms of free cash flow, marginally positive, neutral to marginally positive for us.

麥克，我想說，就自由現金流而言，對我們來說，略微為正，中性到略微為正。

I mean we haven't had -- Mike, welcome to the call, by the way. It's not like we had tons of excess cash lying around the last year or two. There are some spots we want to invest in wouldn't -- some of the production assets in the other areas, I wouldn't assume like it changes the overall cash flow picture that much. It may just get reinvested in some other areas that are -- we can make more of a difference.

我的意思是，我們還沒有——麥克，順便說一句，歡迎來電。過去一兩年我們並沒有大量多餘的現金。有一些我們想要投資的地方卻不會——其他領域的一些生產資產，我認為它不會對整體現金流狀況產生太大的影響。它可能會被重新投資到其他一些領域——我們可以發揮更大的作用。

Okay. Got it. Thank you.

好的。知道了。謝謝。

Brett Fishbin, KeyBanc.

布雷特‧菲什賓 (Brett Fishbin)，KeyBanc。

Hey. Thanks for taking the follow-up. Just wanted to clarify one point. So yeah, I totally appreciate the comments around like short term versus long term and in full agreement. Just wanted to see, you did mention that there was some incremental capacity if there was some additional revenue or EBITDA that you're expecting to realize from that increased demand in the fourth quarter and what's included in guidance.

嘿。感謝您的關注。只是想澄清一點。所以，是的，我完全感謝大家的評論，像是短期與長期，並且完全同意。只是想看看，您確實提到，如果您期望從第四季度的需求增加以及指導中包含的內容中實現一些額外的收入或 EBITDA，那麼就會有一些增量產能。

We just haven't thought about it that much. Brett, we're going as fast as we can go. And we're doing that on the belief that there will be enough volume that's sustainable there. We're really not sitting around looking at it on a short-term basis.

我們只是還沒考慮那麼多。布雷特，我們會盡可能快地前進。我們這樣做是因為我們相信那裡會有足夠的可持續量。我們確實不會在短期內坐視它。

All right. Fair enough. And last question for me. Just can you explain any more you can about the put call option that's embedded in the JV agreement and what the mechanics look like at a high level? Thank you.

好的。很公平。還有我的最後一個問題。您能否進一步解釋一下合資協議中嵌入的看跌期權以及高層機制是什麼樣的？謝謝。

It will all be public in our filings over the next couple of days or weeks, whenever they go in. Essentially, it's an option that goes out a decade that can't exercise an option until the fifth year. And that option is based on a multiple of revenues. So if the market grows and expand in value, we participate in that and we receive that multiple of revenues times our ownership percentage. And so it's an incentive to keep growing the business, to make it as large and relevant to customers as possible.

在接下來的幾天或幾週內，無論何時提交，這些資訊都將在我們的文件中公開。本質上，這是一種有效期為十年的選擇權，直到第五年才能行使選擇權。該選項基於收入的倍數。因此，如果市場成長並價值擴大，我們就會參與其中，並獲得收入乘以我們所有權百分比的倍數。因此，這是不斷發展業務、使其規模盡可能擴大並與客戶相關的動力。

And vice versa, if companies only wound up supplying, call it wet items, if customers only want to buy fluids or solutions individually, a call option exists if there's no need to have some of these items together. But no one really knows today how the market is going to develop. And I think it's the best of all worlds as we can figure it out as it comes and to the customer, it just needs to be seamless.

反之亦然，如果公司僅最終供應（稱為濕物品），如果客戶只想單獨購買液體或解決方案，則如果不需要將其中一些物品放在一起，則存在看漲期權。但今天沒有人真正知道市場將如何發展。我認為這是世界上最好的，因為我們可以在它出現時弄清楚它，並且對於客戶來說，它只需要無縫。

And with no other questions holding, I'll now turn the conference back to our presenters for any additional or closing comments.

由於沒有其他問題，我現在將把會議轉回給我們的主持人，以徵求任何補充或結束意見。

Thanks, everyone, for your interest in ICU Medical. Sorry, the call was so late. We were obviously busy trying to get stuff done. I think this is certainly the latest in the quarter, and we've done it, and we will make sure it happens faster in the future. Have a good fall and talk to you soon. Thanks very much.

感謝大家對 ICU 醫療的關注。抱歉，這麼晚才打電話。我們顯然正忙著把事情做好。我認為這肯定是本季最新的，我們已經做到了，我們將確保它在未來更快發生。祝你秋天愉快，很快就和你說話。非常感謝。

This does conclude today's call. We thank you for your participation. You may disconnect at any time.

今天的電話會議到此結束。我們感謝您的參與。您可以隨時斷開連線。