icui-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission File No.: 001-34634

ICU MEDICAL, INC.

(Exact name of registrant as specified in its charter)


Delaware						33-0022692
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)

951 Calle Amanecer

San Clemente

California

92673

(Address of principal executive offices)

(Zip Code)

(949) 366-2183

(Registrant’s telephone number including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common stock, par value $0.10 per share	ICUI	The Nasdaq Stock Market LLC
		(Global Select Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:


Class						Outstanding at April 30, 2025
Common						24,611,937

ICU MEDICAL, INC. AND SUBSIDIARIES

Form 10-Q

March 31, 2025

Table of Contents


		Page Number
	Forward Looking Statements	1
PART I.	Financial Information
Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets at March 31, 2025 and December 31, 2024	3

	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024	5

	Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2025 and 2024	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

Item 4.	Controls and Procedures	51

PART II.	Other Information
Item 1.	Legal Proceedings	51

Item1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 5.	Other Information	53

Item 6.	Exhibits	53

	Signature	55

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of present and historical fact, contained in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding: our future results of operations and financial position, business strategy and approach; the anticipated benefits and costs associated with our purchase agreement with OPF (as defined below); expected capital expenditures; anticipated consumer demand; supply chain constraints; timing and resolution of the 2025 Warning Letter (as defined below); the expected impact of macroeconomic developments, such as foreign exchange, inflation and interest rates, and new accounting and tax regulations; tariffs; as well as plans and objectives of management for future operations, are forward-looking statements. Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as “aim,” “may,” “will,” “should,” “expect,” “exploring,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “seeks,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance, or achievements, and one should avoid placing undue reliance on such statements.

The forward looking statements in this Quarterly Report on Form 10-Q are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of known and unknown risks, uncertainties and assumptions, including without limitation, the following:

•our failure to compete successfully with our competitors and maintain market share;

•significant decline in demand for our products;

•our inability to fund substantial investment in product development and recover such investment through commercial product sales;

•prolonged periods of inflation, rising interest rates and the impact of foreign currency exchange rates as a result of the current global macroeconomic and geopolitical conditions, for example, armed conflicts between Ukraine and Russia and in Israel;

•significant changes in U.S. trade, tax or other policies that restrict imports or increase import tariffs for certain countries, particularly Mexico and Costa Rica, will escalate trade wars and will have a material adverse effect on our results of operations.

•continuing pressures to reduce healthcare costs and inadequate coverage and reimbursement;

•disruptions at the FDA, other government agencies or notified bodies caused by funding shortages, global health concerns, or turnover of personnel;

•failure to protect our information technology systems against security breaches, service interruptions, or misappropriation of data;

•our exposure to risks related to foreign currency exchange rates;

•damage to any of our manufacturing facilities or disruption to our supply chain network;

•our dependence on single and limited source third-party suppliers, which subjects our business and results of operations to risks of supplier business interruptions, and a loss or degradation in performance in our suppliers;

•our failure to achieve expected operating efficiencies or expense reductions associated with cost reduction and restructuring efforts;

•significant sales through our distributors;

•additional risks from international sales, related to competition with larger international companies and established local companies and our possibly higher cost structure;

•actual or perceived failures to comply with foreign, federal, and state data privacy and security laws, regulations and standards, or certain fraud and abuse and transparency laws;

•our failure to defend and enforce our patents or other proprietary rights and the cost of enforcing and of defending patent claims or claims of other proprietary rights; and expiration of our patents;

•our failure to effectively complete the integration of our business resulting from the Smiths Medical acquisition or manage our growth and changes to our business resulting from any other future acquisitions;

•our use of a significant portion of our cash on hand and incurrence of a substantial amount of debt to finance the Smiths Medical acquisition, which could adversely affect our business, including by restricting our ability to engage in additional transactions or incur additional indebtedness; and

•our ability to comply with applicable laws, rules and regulations, including, without limitation, matters raised in a warning letter issued by the FDA in 2025, regarding modifications to our cleared MedFusion™ Model 4000 Syringe Infusion Pump and CADD™ Solis VIP Ambulatory Infusion Pump that could affect the safety or effectiveness of these devices and could impact our continued commercial activity.

For a more detailed discussion of these and other factors, see the information under the sections entitled “Summary Risk Factors,” Part I. Item 1A. “Risk Factors” and Part II. Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”), and the sections in this Quarterly Report on Form 10-Q entitled Part II. Item 1A “Risk Factors” and Part I. Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case as updated by our periodic filings with the SEC.

Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

PART I - FINANCIAL INFORMATION

Item1.Financial Statements (Unaudited)

ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except par value data and treasury shares)


	March 31, 2025		December 31, 2024
	(Unaudited)		(1)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	289,704	$	308,566


Accounts receivable, net of allowance for doubtful accounts $13,403 at March 31, 2025 and $12,977 at December 31, 2024	170,928		182,828
Inventories	590,326		584,676
Prepaid income taxes	11,471		11,244
Prepaid expenses and other current assets	75,364		70,287

Assets held for sale	286,122		284,382
TOTAL CURRENT ASSETS	1,423,915		1,441,983

PROPERTY, PLANT AND EQUIPMENT, net	441,983		442,746
OPERATING LEASE RIGHT-OF-USE ASSETS	58,025		53,295


GOODWILL	1,455,113		1,432,772
INTANGIBLE ASSETS, net	716,667		740,789
DEFERRED INCOME TAXES	24,247		24,211
OTHER ASSETS	64,631		68,135
TOTAL ASSETS	$	4,184,581	$	4,203,931

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	180,409	$	148,020
Accrued liabilities	278,892		306,923
Current portion of long-term debt	47,813		51,000
Income tax payable	12,246		17,328

Liabilities held for sale	29,664		32,911
TOTAL CURRENT LIABILITIES	549,024		556,182


LONG-TERM DEBT	1,488,565		1,531,858
OTHER LONG-TERM LIABILITIES	77,637		66,745
DEFERRED INCOME TAXES	45,493		48,814
INCOME TAX LIABILITY	36,173		35,097
COMMITMENTS AND CONTINGENCIES (Note 20)
STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $1.00 par value; Authorized — 500 shares; Issued and outstanding — none	—		—
Common stock, $0.10 par value; Authorized — 80,000 shares; Issued — 24,611 shares at March 31, 2025 and 24,518 shares at December 31, 2024; and outstanding — 24,611 shares at March 31, 2025 and 24,517 shares at December 31, 2024	2,461		2,452
Additional paid-in capital	1,416,001		1,412,118
Treasury stock, at cost (420 shares at March 31, 2025 and 571 shares at December 31, 2024)	(60)		(92)
Retained earnings	674,682		690,158
Accumulated other comprehensive loss	(105,395)		(139,401)
TOTAL STOCKHOLDERS' EQUITY	1,987,689		1,965,235
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	4,184,581	$	4,203,931

______________________________________________________

(1) December 31, 2024 balances were derived from audited consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except per share data)


	Three months ended March 31,
	2025		2024
TOTAL REVENUES	$	604,702	$	566,655
COST OF GOODS SOLD	394,593		381,411
GROSS PROFIT	210,109		185,244
OPERATING EXPENSES:
Selling, general and administrative	157,233		157,657
Research and development	23,291		21,842
Restructuring, strategic transaction and integration	16,697		16,105
Change in fair value of contingent earn-out	—		295


TOTAL OPERATING EXPENSES	197,221		195,899
INCOME (LOSS) FROM OPERATIONS	12,888		(10,655)

INTEREST EXPENSE, NET	(22,031)		(23,772)
OTHER EXPENSE, NET	(1,763)		(2,341)
LOSS BEFORE INCOME TAXES	(10,906)		(36,768)
PROVISION FOR INCOME TAXES	(4,570)		(2,703)
NET LOSS	$	(15,476)	$	(39,471)
NET LOSS PER SHARE
Basic	$	(0.63)	$	(1.63)
Diluted	$	(0.63)	$	(1.63)
WEIGHTED AVERAGE NUMBER OF SHARES
Basic	24,539		24,222
Diluted	24,539		24,222

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In thousands)


	Three months ended March 31,
	2025		2024
NET LOSS	$	(15,476)	$	(39,471)
Other comprehensive income (loss), net of tax:
Cash flow hedge adjustments, net of tax of $(1,832) and $2,029 for the three months ended March 31, 2025 and 2024, respectively.	(5,884)		6,360
Foreign currency translation adjustment, net of tax of $0 for all periods	39,890		(22,817)

Other comprehensive income (loss), net of tax	34,006		(16,457)
COMPREHENSIVE INCOME (LOSS)	$	18,530	$	(55,928)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(Amounts in thousands)


	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss
	Shares	Amount										Total
Balance, January 1, 2025	24,518	$	2,452	$	1,412,118	$	(92)	$	690,158	$	(139,401)	$	1,965,235
Issuance of restricted stock and exercise of stock options	152	9		(8,299)		8,423		—		—		133
Tax withholding payments related to net share settlement of equity awards	(59)	—		—		(8,391)		—		—		(8,391)

Stock compensation	—	—		12,179		—		—		—		12,179
Other comprehensive income, net of tax	—	—		3		—		—		34,006		34,009
Net loss	—	—		—		—		(15,476)		—		(15,476)
Balance, March 31, 2025	24,611	$	2,461	$	1,416,001	$	(60)	$	674,682	$	(105,395)	$	1,987,689


	Common Stock			Additional Paid-in Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss
	Shares	Amount										Total
Balance, January 1, 2024	24,144	$	2,414	$	1,366,493	$	(262)	$	807,846	$	(53,081)	$	2,123,410
Issuance of restricted stock and exercise of stock options	378	27		(6,847)		6,970		—		—		150
Tax withholding payments related to net share settlement of equity awards	(110)	—		—		(11,400)		—		—		(11,400)

Stock compensation	—	—		11,598		—		—		—		11,598
Other comprehensive loss, net of tax	—	—		—		—		—		(16,457)		(16,457)
Net loss	—	—		—		—		(39,471)		—		(39,471)
Balance, March 31, 2024	24,412	$	2,441	$	1,371,244	$	(4,692)	$	768,375	$	(69,538)	$	2,067,830

Table of Contents

ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(In thousands)


	Three months ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(15,476)	$	(39,471)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	49,445		55,526

Noncash lease expense	4,475		5,341
Provision for doubtful accounts	—		549
Provision for warranty, returns and field action	3,634		(618)
Stock compensation	12,179		11,598
Loss (gain) on disposal of property, plant and equipment and other assets	1,696		(65)


Debt issuance costs amortization	1,700		1,708
Change in fair value of contingent earn-out liability	—		295

Usage of spare parts	5,023		4,201
Other	557		2,627
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable	22,439		13,967
Inventories	(8,224)		14,164
Prepaid expenses and other current assets	(8,464)		(5,735)
Other assets	(6,815)		(5,160)
Accounts payable	32,099		5,313
Accrued liabilities	(36,343)		(16,503)
Income taxes, including excess tax benefits and deferred income taxes	(6,598)		(1,946)
Net cash provided by operating activities	51,327		45,791
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(14,621)		(15,915)
Proceeds from sale of assets	42		507

Intangible asset additions	(2,232)		(2,954)


Proceeds from sale and maturities of investment securities	—		500
Net cash used in investing activities	(16,811)		(17,862)
CASH FLOWS FROM FINANCING ACTIVITIES:

Principal repayments of long-term debt	(47,750)		(12,750)

Proceeds from exercise of stock options	133		150
Payments on finance leases	(328)		(245)
Payments of contingent earn-out liability	—		(2,600)
Tax withholding payments related to net share settlement of equity awards	(8,391)		(11,400)
Net cash used in financing activities	(56,336)		(26,845)
Effect of exchange rate changes on cash	2,958		(3,883)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(18,862)		(2,799)
CASH AND CASH EQUIVALENTS, beginning of period	308,566		254,222
CASH AND CASH EQUIVALENTS, end of period	$	289,704	$	251,423

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - CONTINUED

(In thousands)


	Three months ended March 31,
	2025		2024




SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:
Purchases of property, plant, and equipment in accounts payable	$	10,247	$	4,408

The accompanying notes are an integral part of these condensed consolidated financial statements.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note 1:Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of ICU Medical, Inc., ("ICU" or the "Company"), a Delaware corporation, have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.") and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of only normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the consolidated results for the interim periods presented. Results for the interim period are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of ICU for the year ended December 31, 2024.

We develop, manufacture and sell innovative medical products used in infusion therapy, vascular access, and vital care applications. ICU's product portfolio includes ambulatory, syringe, and large volume IV pumps and safety software; dedicated and non-dedicated IV sets, needlefree IV connectors, peripheral IV catheters, and sterile IV solutions; closed system transfer devices and pharmacy compounding systems; as well as a range of respiratory, anesthesia, patient monitoring, and temperature management products. We sell the majority of our products globally through our direct sales force and through independent distributors throughout the U.S. and internationally. We also sell certain products on an original equipment manufacturer basis to other medical device manufacturers. All subsidiaries are wholly owned and are included in the condensed consolidated financial statements. All intercompany balances and transactions have been eliminated.

Certain reclassifications have been made to the prior year financial statements and footnotes to conform to the presentation used in the current year. In Note 12: Prepaid Expenses and Other Current Assets and Other Assets and Note 16: Accrued Liabilities and Other Long-Term Liabilities, we reclassified certain categories. These reclassifications had no impact on the condensed consolidated balance sheets.

Note 2: New Accounting Pronouncements

Recently Issued Accounting Standards Not Yet Adopted

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. The amendments in this update modify the disclosure or presentation requirements of a variety of Topics in the Accounting Standards Codification ("ASC") in response to the SEC’s Release No. 33-10532, Disclosure Update and Simplification Initiative, and align the ASC’s requirements with the SEC’s regulations. For entities within the scope, the guidance will be applied prospectively with the effective date for each amendment to be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If the SEC has not removed the related disclosure from its regulations by June 30, 2027, the amendments will be removed from the Codification and will not become effective. We are currently assessing what impact this guidance will have on the Company's consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures. The amendments in this update expand disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid information. The update will be effective for annual periods beginning after December 15, 2024 and is applicable to our Annual Report on Form 10-K for the fiscal year December 31, 2025, with early application permitted. We are currently assessing the effect of this update on the Company's consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The guidance requires disclosure of disaggregated income statement expense information about specific categories (including purchases of inventory, employee compensation, depreciation, and intangible asset amortization) in the notes to financial statements. In January 2025, FASB released ASU 2025-01 to clarify the guidance will be effective for annual periods beginning after December 15, 2026. This update will be applicable to our Annual Report on Form 10-K for the fiscal year December 31, 2027, with early application permitted. We are currently assessing the effect of this update on our consolidated financial statements and related disclosures.

Note 3: Restructuring, Strategic Transaction and Integration

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Restructuring, strategic transaction and integration expenses were $16.7 million and $16.1 million for the three months ended March 31, 2025 and 2024, respectively.

Restructuring

During the three months ended March 31, 2025 and 2024, restructuring charges were $6.8 million and $5.3 million, respectively, and were primarily related to facility closure costs and severance costs, respectively.

The following table summarizes the activity in our restructuring-related accrual by major type of cost for the three months ended March 31, 2025 (in thousands), which is included in accrued liabilities and other long-term liabilities on the condensed consolidated balance sheets:


	Severance Pay and Benefits		Retention and Facility Closure Costs		Total
Accrued balance, January 1, 2025	$	9,538	$	407	$	9,945

Charges incurred	2,401		4,397		6,798
Payments	(3,482)		(2,905)		(6,387)
Other(1)	(900)		—		(900)
Currency translation	155		14		169
Accrued balance, March 31, 2025	$	7,712	$	1,913	$	9,625

__________________________

(1) Relates to prior year accrued restructuring charges for estimated severances costs that were reclassed to other accounts during the three months ended March 31, 2025.

Strategic Transaction and Integration Expenses

We incurred and expensed $9.9 million and $10.8 million in strategic transaction and integration expenses during the three months ended March 31, 2025 and 2024, respectively, which are included in restructuring, strategic transaction and integration expenses in our condensed consolidated statements of operations. The strategic transaction and integration expenses during the three months ended March 31, 2025 and 2024 were primarily related to consulting expenses, employee costs incurred to integrate our Smiths Medical business acquired in 2022, and transaction costs related to the sale of 60% of our IV solutions business in the first quarter of 2025.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Note 4: Assets Held For Sale

On November 12, 2024, the Company and ICU Medical Sales, Inc., a Delaware corporation (collectively, the "ICU Medical Entities") entered into a purchase agreement (the "Agreement") with Otsuka Pharmaceutical Factory America, Inc., a Delaware corporation ("OPF"). Pursuant to the Agreement, prior to the closing, the ICU Medical Entities were required to form a Delaware limited liability company (the "LLC") and the ICU Medical Entities, and the LLC were to enter into a contribution agreement under which the ICU Medical Entities would transfer the assets, liabilities and operations that comprise the IV Solutions product line to the LLC. The Agreement provided that, at the closing, OPF would acquire a 60% equity interest in the LLC from the ICU Medical Entities. Pursuant to the Agreement, the consideration receivable by the ICU Medical Entities is comprised of (a) estimated cash consideration of approximately $209.5 million at closing and (b) a potential milestone payment paid by OPF to the Company for any incremental revenue and incremental gross profit recognized by the LLC, as calculated under the terms of the Agreement upon the final determination of the LLC's audited financial statements for the year-ending and as of December 31, 2026. In connection with the closing under the Agreement, on May 1, 2025, the ICU Medical Entities and OPF entered into an Amended and Restated Operating Agreement of the LLC (the "Operating Agreement"). Pursuant to the Operating Agreement, the Board of Directors of the LLC shall initially consist of five Directors, of which the ICU Medical Entities, based upon their ownership of units of the LLC at the time of Closing, shall appoint two Directors. As provided under the Operating Agreement, each of OPF and the ICU Medical Entities have granted certain exclusive call and put options with respect to the ICU Medical Entities' remaining ownership interest in the LLC. Such options are exercisable at certain specified dates and for such amounts as are set forth in the Operating Agreement beginning five years after the closing. Additionally, at the closing, the LLC, and the Company entered into certain commercial agreements, a services agreement and a license agreement, which provide for, among other things, certain administrative, marketing, distribution, sales support and logistic services to the LLC for a specified period of time. Based upon initial estimates, no impairment in the assets held for sale was identified and the expected gain from the sale will be recognized upon close of the transaction.

As of December 31, 2024 and March 31, 2025, certain presentation criteria were met, and accordingly we presented certain IV Solutions assets and liabilities as held for sale.

The following table summarizes the carrying values of the assets and liabilities presented as held for sale in our consolidated balance sheet as of March 31, 2025 and December 31, 2024 (in thousands):


	As of
Assets:	March 31, 2025		December 31, 2024
Accounts receivable, net of allowance of $907 and $465 at March 31, 2025 and December 31, 2024, respectively	$	5,958	$	13,331
Inventories	97,413		88,656
Prepaid expenses and other current assets	2,766		4,140
Property, plant and equipment, net	157,152		155,426
Other assets	22,833		22,829
Total assets held for sale	$	286,122	$	284,382

Liabilities:
Accounts payable	$	16,832	$	13,533
Accrued liabilities	12,832		19,378
Total liabilities held for sale	$	29,664	$	32,911

Net assets held for sale	$	256,458	$	251,471

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Note 5: Revenue

Revenue Recognition

Our business units are Consumables, Infusion Systems and Vital Care. The vast majority of our sales of these products within these business units are made on a stand-alone basis to hospitals and distributors. Revenue is typically recognized upon transfer of control of the products, which we deem to be at point of shipment. For purposes of revenue recognition for our software licenses and renewals, we consider the control of these products to be transferred to a customer at a certain point in time; therefore, we recognize revenue at the start of the applicable license term.

Payment is typically due in full within 30 days of delivery or the start of the contract term. Revenue is recorded in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We include variable consideration in net sales only to the extent that a significant reversal in revenue is not probable when the uncertainty is resolved. Our variable consideration includes distributor chargebacks, product returns and end customer rebates with distributor chargebacks representing the majority and subject to the greatest judgment.

Chargebacks are the difference between the prices we charge our distribution customers at the time they purchase our products and the contracted prices we have with the end customer, most often in the U.S. and Canada. When a distributor sells our products to one of our contracted end customers, the distributor typically will claim a refund from us for the chargeback amount which we process as a credit to the distributor.

In estimating the transaction price to present as net revenue for sales to distributors, we must estimate the expected chargeback amount that we will refund to the distributor after they sell our product to a contracted end customer. Determining the appropriate chargeback reserve requires judgment around the following assumptions:

(i) The estimated chargeback amount (the difference between the price we invoice the distributor and the contractually agreed price with specified end customers); and

(ii) The estimated period of time between the sale to the distributor and the receipt of a chargeback claim.

For purposes of estimating the expected chargeback amount, we utilize actual recent historical chargebacks paid to the specific distributor for similar products as determined at either a product or product-family level. While individual chargeback rates can vary significantly depending on the product and contracted prices with distributors and end customers, our chargeback reserve estimate is not overly sensitive to those individual price changes due to the long-term nature of our distributor and end customer contracts as well as consistency in purchasing patterns. Additionally, the use of the actual chargeback history to calculate an average chargeback rate has historically resulted in a reasonable estimation of overall current contract rates.

For purposes of estimating the period of time between the sale to the distributor and the receipt of a chargeback claim, we utilize several sources of information including actual inventory quantities of our products on hand at distributors. This inventory on hand information is received from the distributors or, when specific quantities are not provided, estimated by using the targeted days of inventory on hand for distributors. Historical experience of actual chargebacks paid has indicated that use of this information has reasonable predictive value of outstanding chargebacks and accounts for the variability of purchasing

patterns and expected timing and volume of sales to end customers. The value of the chargeback reserve generally represents approximately two months of obligation due to the timing difference between the initial sale to a distributor and the processing of a chargeback claim after the product is sold to the end customer.

The chargeback reserve estimates change from period-to-period primarily based on changes in revenue from/and the inventory levels of distributors. Our judgments regarding the information used to calculate the chargeback reserve are consistent from period to period; however, on a regular basis, we evaluate the adequacy of the chargeback reserve to reassess and ensure that the variable consideration is appropriately constrained, and the likelihood of future revenue reversal is not probable. We use metrics including chargeback provision as a percentage of gross revenue, movements in inventory on hand at distributors, trends in accrued versus paid chargebacks and impacts from price changes and similar metrics.

The chargeback reserve reflects a reasonable estimate of the amount of consideration using the expected value method and is recorded as a reduction of accounts receivable, net on the consolidated balance sheets.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

We also offer certain volume-based rebates to both our distribution and end customers, which is recorded as variable consideration when calculating the transaction price. Rebates are offered on both a fixed and tiered/variable basis. In both cases, we use information available at the time, including current contractual requirements, our historical experience with each customer and forecasted customer purchasing patterns, to estimate the most likely rebate amount.

We also warrant products against defects and have a policy permitting the return of defective products, for which we accrue and expense at the time of sale using information available at that time and our historical experience. We also provide for extended service-type warranties, which we consider to be separate performance obligations. We allocate a portion of the transaction price to the extended service-type warranty based on its estimated relative selling price, and recognize revenue over the period the warranty service is provided.

Arrangements with Multiple Performance Obligations

We also enter into arrangements which include multiple performance obligations. The most significant judgments related to these arrangements include:

•Identifying the various performance obligations of these arrangements.

•Estimating the relative standalone selling price of each performance obligation, typically using a directly observable method or calculated on a cost plus margin basis method.

Revenue Disaggregated

The following table represents our revenues disaggregated by product line (in thousands):


	Three months ended March 31,
Product line	2025		2024
Consumables	$	266,226	$	244,039
Infusion Systems	166,300		157,338
Vital Care	172,176		165,278
Total Revenues	$	604,702	$	566,655

The following table represents our revenues disaggregated by geography (in thousands):


	Three months ended March 31,
Geography	2025		2024
United States	$	388,245	$	366,155
Europe, the Middle East and Africa	95,688		98,389
APAC	59,411		51,853
Other Foreign	61,358		50,258
Total Revenues	$	604,702	$	566,655

Contract Balances

The following table presents the changes in our contract balances for the three months ended March 31, 2025 and 2024 (in thousands), which is included in accrued liabilities and other long-term liabilities on the condensed consolidated balance sheets:

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


	Contract Liabilities
Beginning balance, January 1, 2025	$	39,403

Equipment revenue recognized	(15,298)
Equipment revenue deferred due to implementation	19,937
Software revenue recognized	(3,077)
Software revenue deferred due to implementation	1,201
Government grant income recognized(1)	(509)

Other deferred revenue recognized	(211)
Other deferred revenue	239
Ending balance, March 31, 2025	$	41,685

Beginning balance, January 1, 2024	$	42,177

Equipment revenue recognized	(7,499)
Equipment revenue deferred due to implementation	9,340
Software revenue recognized	(4,677)
Software revenue deferred due to implementation	5,571
Government grant income recognized(1)	(515)

Other deferred revenue recognized	(1,195)
Other deferred revenue	155
Ending balance, March 31, 2024	$	43,357

____________________________

(1) The government grant income deferred is amortized over the life of the related depreciable asset as a reduction to depreciation expense.

Our contract liabilities are included in accrued liabilities or other long-term liabilities in our condensed consolidated balance sheet based on the expected timing of revenue recognition.

As of March 31, 2025, revenue from remaining performance obligations is as follows:


	Recognition Timing
(in thousands)	< 12 Months		> 12 Months
Equipment deferred revenue	$	20,111	$	385
Software deferred revenue	8,646		1,899
Government grant deferred income(1)	2,064		6,834
Other deferred revenue(2)	1,664		82
Total	$	32,485	$	9,200

_________________________________

(1) The government grant deferred income is amortized over the life of the related depreciable asset as a reduction to depreciation expense.

(2) Other deferred revenue includes pump development programs, purchased training and extended warranty.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Note 6: Segment Data

The Company has a single operating and reportable segment. The Company derives revenues from the manufacture and sale of our medical products which are used in infusion therapy, vascular access, and vital care applications. Our product portfolio includes ambulatory, syringe, and large volume IV pumps and safety software; dedicated and non-dedicated IV sets, needlefree IV connectors, IV catheters, sharps safety products, and sterile IV solutions; closed system transfer devices and pharmacy compounding systems; as well as a range of respiratory, anesthesia, patient monitoring, and temperature management products. Our product lines, as disclosed in Note 5: Revenue, were determined to be a single operating segment as discrete financial information by product-line is limited to revenue and standard cost. Other cost of sale expenses, which include above-site manufacturing costs, manufacturing variances and supply chain costs including freight and warehousing are not allocated to individual product lines. Similarly, quality, regulatory and other operating expenses are only provided to our chief operating decision maker ("CODM") at the consolidated level.

For information on disaggregation of revenues by product-line and geography, see Note 5: Revenue.

Our chief executive officer is our CODM. Our CODM uses net profit (loss) to manage our business activities on a consolidated basis and to evaluate and assess the performance of the Company when determining how to allocate capital resources. Our segment performance is monitored and resource allocation is determined during the consolidated annual budget/forecast processes. The measure of segment assets is reported on the consolidated balance sheets as total assets. Expenditures for additions to long-lived assets were $16.9 million and $18.9 million for the three months ended March 31, 2025 and 2024, respectively.

The following table presents information about our segment revenue, segment profit or loss, and significant segment expenses (in thousands):


	Three months ended March 31,
	2025		2024
REVENUES	$	604,702	$	566,655
Less:
Standard COGS(1)	$	293,408	$	283,001
Quality remediation/recall(2)	$	9,980	$	7,498
Other COGS(3)	$	91,205	$	90,912
Selling, general and administrative	$	157,233	$	157,657
Research and development	$	23,291	$	21,842
Restructuring and integration	$	16,697	$	16,105
Other segment items(4)	$	(1,469)	$	(9)
Interest expense	$	25,263	$	26,417
Income tax provision	$	4,570	$	2,703
Consolidated net loss	$	(15,476)	$	(39,471)

_______________

(1) Represents the average annual budgeted cost of producing each good sold in the period.

(2) Represents significant labor and material costs to replace or repair a product outside the scope of standard warranty and compliance costs related to quality systems and manufacturing operations.

(3) Includes costs related to capitalized manufacturing variances to standard COGS, supply chain and logistics costs including freight, inventory management and reserves, hardware service, quality and regulatory, and operations and supply chain management costs.

(4) Includes changes in fair value of contingent earn-out, interest income, gain/loss on disposition of assets, gain/loss on foreign exchange, other miscellaneous income/expense and equity in the income of equity method investees.

For information on depreciation expense, see Note 14: Property, Plant, & Equipment. For information on amortization expense, see Note 15: Goodwill and Intangible Assets, Net.

Significant Customers

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

We sell products worldwide, on credit terms on an unsecured basis, as an OEM supplier, to independent medical supply distributors and directly to end customers. The manufacturers and distributors, in turn, sell our products to healthcare providers. For the three months ended March 31, 2025 and 2024, we had net sales of 17%, and 17%, respectively, of consolidated worldwide net sales to a single distributor.

Geographic Information

The table below presents our gross long-lived assets, consisting of property, plant and equipment, by country or region (in thousands):


	As of
	March 31, 2025		December 31, 2024
Costa Rica	157,576		156,149
Mexico	112,378		111,043
Other LATAM	59,660		55,451
Canada	1,493		5,284
Italy	31,093		29,124



Spain	18,119		17,141
Czech Republic	12,576		11,909
Other Europe	10,767		11,445
APAC	27,365		27,550
Total Foreign	$	431,027	$	425,096
United States*	618,863		610,547
Worldwide Total	$	1,049,890	$	1,035,643

________________________________

*As of March 31, 2025 and December 31, 2024, we presented within the assets held for sale line item in our consolidated balance sheet, the gross long-lived assets that were part of a disposal group that met the criteria as held for sale during the fourth quarter of 2024 (See Note 4: Assets Held For Sale).

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Note 7: Leases

We determine if an arrangement is a lease at inception. Our operating lease assets are separately stated in operating lease right-of-use ("ROU") assets and our financing lease assets are included in other assets on our condensed consolidated balance sheets. Our lease liabilities are included in accrued liabilities and other long-term liabilities on our condensed consolidated balance sheets. We have elected not to recognize an ROU asset and lease liability for leases with terms of twelve months or less.

Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Most of our leases do not provide an implicit rate; therefore, we use our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term based on the information available at commencement date. Our lease ROU assets exclude lease incentives and initial direct costs incurred. Our lease terms include options to extend when it is reasonably certain that we will exercise that option. All of our leases have stated lease payments, which may include fixed rental increases. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Our leases are for corporate, research and development and sales and support offices, manufacturing and distribution facilities, device service centers and certain equipment. Our leases have original lease terms of one year to fifteen years, some of which include options to extend the leases for up to an additional five years. For all of our leases, we do not include optional periods of extension in our current lease terms because we determined the exercise of options to extend is not reasonably certain.

The following table presents the components of our lease cost (in thousands):


	Three months ended March 31,
	2025		2024
Operating lease cost	$	5,026	$	5,814
Finance lease cost — interest	53		33
Finance lease cost — reduction of ROU asset	189		255
Short-term lease cost	2		—


Total lease cost	$	5,270	$	6,102

Interest expense on our finance leases is included in interest expense, net in our condensed consolidated statements of operations. The reduction of the operating and finance ROU assets is included as noncash lease expense in costs of goods sold and selling, general and administrative expenses in our condensed consolidated statements of operations.

The following table presents the supplemental cash flow information related to our leases (in thousands):


	Three months ended March 31,
	2025		2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,379	$	5,884
Operating cash flows from finance leases	$	53	$	33

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	8,654	$	252
Finance leases	$	393	$	156

The following table presents the supplemental balance sheet information related to our operating leases (in thousands, except lease term and discount rate):

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


	As of
	March 31, 2025			December 31, 2024
Operating leases
Operating lease right-of-use assets	$	58,025		$	53,295

Accrued liabilities	$	13,472		$	15,695
Other long-term liabilities	48,234			40,777
Total operating lease liabilities	$	61,706		$	56,472

Weighted-Average Remaining Lease Term
Operating leases	6.6 years			5.8 years

Weighted-Average Discount Rate
Operating leases	5.23		%	4.90		%

The following table presents the supplemental balance sheet information related to our finance leases (in thousands, except lease term and discount rate):


	As of
	March 31, 2025			December 31, 2024
Finance leases
Finance lease right-of-use assets	$	3,321		$	3,259

Accrued liabilities	$	1,128		$	1,066
Other long-term liabilities	2,342			2,332
Total finance lease liabilities	$	3,470		$	3,398

Weighted-Average Remaining Lease Term
Finance leases	3.4 years			3.5 years

Weighted-Average Discount Rate
Finance leases	5.77		%	5.63		%

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

As of March 31, 2025, the maturities of our operating and finance lease liabilities for each of the next five years and thereafter are approximately (in thousands):


	Operating Leases		Finance Leases
Remainder of 2025	$	12,458	$	833
2026	14,040		1,280
2027	11,444		920
2028	8,920		549
2029	7,254		204
2030	4,115		48
Thereafter	14,256		—
Total Lease Payments	72,487		3,834
Less imputed interest	(10,781)		(364)
Total	$	61,706	$	3,470

Note 8: Net Loss Per Share

Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed by dividing net loss income by the weighted-average number of common shares outstanding during the period plus dilutive securities. Dilutive securities include outstanding common stock options and unvested restricted stock units, less the number of shares that could have been purchased with the proceeds from the exercise of the options, using the treasury stock method. Options and restricted stock units that are anti-dilutive are not included in the treasury stock method calculation. A net loss for the three months ended March 31, 2025 and 2024, causes all of the potentially dilutive common shares to be antidilutive, and accordingly, they were not included in the computation of diluted earnings per share and basic and diluted net loss per share are equal for each of these periods.

The following table presents the calculation of net earnings per common share (“EPS”) — basic and diluted (in thousands, except per share data):


	Three months ended March 31,
	2025		2024
Net loss	$	(15,476)	$	(39,471)

Weighted-average number of common shares outstanding (basic)	24,539		24,222
Dilutive securities(1)	—		—
Weighted-average common and common equivalent shares outstanding (diluted)	24,539		24,222
EPS — basic	$	(0.63)	$	(1.63)
EPS — diluted	$	(0.63)	$	(1.63)

Total anti-dilutive stock options and restricted stock awards	40		576

_______________________________

(1) Due to the net loss for the three months ended March 31, 2025 and 2024, there are no potentially dilutive common shares included in the computation of diluted earnings per share.

Note 9: Derivatives and Hedging Activities

Hedge Accounting and Hedging Program

The purposes of our cash flow hedging programs are to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit, and to manage floating interest rate risk associated with future interest payments on the variable-rate term loans issued in 2022. We do not issue derivatives for trading or speculative purposes.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The derivative instruments we utilize, including various foreign exchange contracts and interest rate swaps, are designated and qualify as cash flow hedges. Our derivative instruments are recorded at fair value on the condensed consolidated balance sheets and are classified based on the instrument's maturity date. We record gains or losses from changes in the fair values of the derivative instruments as a component of other comprehensive income (loss) and we reclassify those gains or losses into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. If the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, we reclassify the gain or loss on the related derivative instrument from accumulated other comprehensive loss into earnings immediately.

Foreign Currency Exchange Rate Risk

Foreign Exchange Forward Contracts

We enter into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated revenues and expenses to minimize the effect of foreign exchange rate movements on the related cash flows. These contracts are agreements to buy or sell a quantity of a currency at a predetermined future date and at a predetermined exchange rate. Our foreign exchange forward contracts hedge exposures principally denominated in Mexican Pesos ("MXN"), Euros ("EUR"), Czech Koruna ("CZK"), Japanese Yen ("JPY"), Swedish Krona ("SEK"), Danish Krone ("DKK"), Chinese Renminbi ("CNH"), Canadian Dollar ("CAD"), U.S. Dollar ("USD") and Australian Dollar ("AUD") and have varying maturities with an average term of approximately eleven months. The total notional amount of these outstanding derivative contracts as of March 31, 2025 was $77.5 million, which included the notional equivalent of $4.5 million in CAD, $4.7 million in AUD, $40.5 million in MXN, $22.2 million in USD and $5.6 million in other foreign currencies, with terms currently through January 2026.

Floating Interest Rate Risk

In 2022, we entered into interest rate swaps to reduce the interest rate volatility on our variable-rate term loan A and variable-rate term loan B (see Note 18: Long-Term Debt). We exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. Effective March 30, 2022, the term loan A swap, as amended, has an initial notional amount of $300.0 million, reducing to $150.0 million evenly on a quarterly basis excluding its final maturity on March 30, 2027. We pay a fixed rate of 1.32% and will receive the greater of 3-months USD Secured Overnight Financing Rate ("SOFR") or (0.15)%. The total notional amount of this outstanding derivative as of March 31, 2025 was approximately $205.3 million. Effective March 30, 2022, the term loan B swap, as amended, has an initial notional amount of $750.0 million, reducing to $46.9 million evenly on a quarterly basis through its final maturity on March 30, 2026. We pay a fixed rate of 1.17% and will receive the greater of 3-months USD SOFR or 0.35%. The total notional amount of this outstanding derivative as of March 31, 2025 was approximately $187.5 million.

In June 2023, we entered into an additional interest rate swap that hedges both term loan A and term loan B interest payments. The total notional amount of the swap is $300.0 million. The hedge matures on June 30, 2028. We pay a fixed rate of 3.88% and will receive 3-months USD SOFR.

These swaps effectively convert the relevant portion of the floating-rate term loans to fixed rates.

The following table presents the fair values of our derivative instruments included within the Condensed Consolidated Balance Sheets (in thousands):

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


	Derivatives Designated as Cash Flow Hedging Instruments
Condensed Consolidated Balance Sheet Location	Foreign Exchange Contracts		Interest Rate Swaps		Gross Derivatives

As of March 31, 2025
Prepaid expenses and other current assets	$	3,560	$	8,403	$	11,963
Other assets	—		512		512
Total assets	$	3,560	$	8,915	$	12,475

Accrued liabilities	$	4,335	$	—	$	4,335

Total liabilities	$	4,335	$	—	$	4,335

As of December 31, 2024
Prepaid expenses and other current assets	$	6,716	$	11,038	$	17,754
Other assets	—		5,724		5,724
Total assets	$	6,716	$	16,762	$	23,478

Accrued liabilities	$	7,391	$	—	$	7,391

Total liabilities	$	7,391	$	—	$	7,391

We recognized the following (losses) gains on our derivative instruments designated as cash flow hedges in other comprehensive income before reclassifications to net loss (in thousands):


	(Losses) Gains Recognized in Other Comprehensive Income (Loss)
	Three months ended March 31,
	2025		2024
Derivatives designated as cash flow hedging instruments:
Foreign exchange forward contracts	$	(174)	$	4,940
Interest rate swaps	(4,091)		13,393
Total derivatives designated as cash flow hedging instruments	$	(4,265)	$	18,333

The following table presents the effects of our derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Operations (in thousands):


	Gains (Losses) Reclassified From Accumulated Other Comprehensive Income (Loss) into Income
		Three months ended March 31,
	Location of Gains (Losses) Recognized in Net Loss	2025		2024
Derivatives designated as cash flow hedging instruments:
Foreign exchange forward contracts	Total revenues	$	709	$	700
Foreign exchange forward contracts	Cost of goods sold	(1,014)		1,280


Interest rate swaps	Interest expense	3,756		7,964
Total derivatives designated as cash flow hedging instruments		$	3,451	$	9,944

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

As of March 31, 2025, we expect an estimated $0.8 million in deferred losses on the outstanding foreign exchange contracts and an estimated $8.4 million in deferred gains on the interest rate swaps will be reclassified from accumulated other comprehensive loss to net income during the next 12 months concurrent with the underlying hedged transactions also being reported in net income.

Note 10: Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs that may be used to measure fair value:

•Level 1: quoted prices in active markets for identical assets or liabilities;

•Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

•Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

Contingent Earn-out Liabilities

In 2022, we acquired Smiths Medical with a combination of cash consideration and share consideration issued at closing. Total consideration for the acquisition included a potential earn-out payment of $100.0 million in cash contingent on our common stock achieving a certain volume-weighted average price (the "Price Targets") from the closing date to either the third or fourth anniversary of closing and provided Smiths beneficially owns at least 50.0% of the shares of common stock issued at closing at the time the Price Target is achieved. During the period ending March 31, 2024, the change in fair market value of the earn-out was $0.3 million and is included in income from operations in a separate line. During July 2024, Smiths sold 1.2 million common shares of ICU Medical, Inc. The sale of shares when combined with other sales in prior periods renders Smiths unable to achieve the contingent consideration based on certain price targets during the third and fourth anniversary of closing as Smiths no longer meets the required minimum beneficial ownership percentage. Accordingly, the valuation of the contingent earn-out liability as of December 31, 2024 was zero.

In November 2021, we acquired a small foreign infusion systems supplier. Total consideration for the acquisition included a potential earn-out payment of up to $2.5 million, consisting of (i) a cash payment of $1.0 million contingent on the achievement of certain revenue targets for the annual period ended December 31, 2022 and, separately, (ii) a cash payment of $1.5 million contingent upon obtaining certain product-related regulatory certifications. As of December 31, 2022, the measurement period related to the contingent earn-out based on certain revenue targets ended and based on the actual revenue achieved during the measurement period the fair value of the contingent earn-out was determined to be zero as the minimum threshold for earning the earn-out was not met. As of December 31, 2024, the earn-out measurement period related to certain product-related regulatory certifications had ended and the product-related regulatory certification had not been achieved, accordingly, the estimated fair value for the contingent consideration was reduced to zero.

In August 2021, we entered into an agreement with one of our international distributors whereby that distributor would not compete with us in a specific territory for a three-year period that ended September 2024. The terms of the agreement included a contingent earn-out payment. The contingent earn-out payment could not exceed $6.0 million and was to be earned based on certain revenue targets over a twelve-month measurement period determined by the highest four consecutive quarters commencing over a two-year period starting on the closing date of the agreement and provided that the distributor is in compliance with its obligations under the agreement. As of December 31, 2023, the earn-out measurement period ended. The fair value of the contingent earn-out was determined to be $3.4 million and was paid out in the first quarter of 2024.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Foreign Exchange Contracts and Interest Rate Contracts

The fair value of our Level 2 foreign exchange contracts is estimated using observable market inputs such as known notional value amounts, spot and forward exchange rates. These inputs relate to liquid, heavily traded currencies with active markets which are available for the full term of the derivative.

The fair value of our Level 2 interest rate swaps is estimated using a pricing model that reflects the terms of the contracts, including the period to maturity, and relies on observable market inputs such as known notional value amounts and USD interest rate curves.

Our assets and liabilities measured at fair value on a recurring basis consisted of the following Level 1, 2 and 3 inputs as defined above (in thousands):


	Fair value measurements as of March 31, 2025
	Total carrying value		Quoted prices in active markets for identical assets (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)
Assets:






Foreign exchange contracts:
Prepaid expenses and other current assets	$	3,560	$	—	$	3,560	$	—



Interest rate contracts:
Prepaid expenses and other current assets	8,403		—		8,403		—
Other assets	512		—		512		—
Total Assets	$	12,475	$	—	$	12,475	$	—

Liabilities:


Foreign exchange contracts:
Accrued liabilities	4,335		—		4,335		—



Total Liabilities	$	4,335	$	—	$	4,335	$	—

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


	Fair value measurements as of December 31, 2024
	Total carrying value		Quoted prices in active markets for identical assets (level 1)		Significant other observable inputs (level 2)		Significant unobservable inputs (level 3)
Assets:






Foreign exchange forwards:
Prepaid expenses and other current assets	6,716		—		6,716		—

Interest rate contracts:
Prepaid expenses and other current assets	11,038		—		11,038		—
Other assets	5,724		—		5,724		—

Total Assets	$	23,478	$	—	$	23,478	$	—

Liabilities:





Foreign exchange contracts:
Accrued liabilities	7,391		—		7,391		—

Total Liabilities	$	7,391	$	—	$	7,391	$	—

Note 11: Investment Securities

Investments in Non-Marketable Equity Securities

We own approximately 20% non-marketable equity interest in a nonpublic company and entered into a three-year distribution agreement where we have the exclusive rights to market, sell and distribute the company's products in exchange for a cash payment of $3.3 million. In addition, we were granted an exclusive license for all of the seller's intellectual property. At the expiration of the distribution agreement we have the right but not the obligation to acquire the remaining interest in the business.

We apply the equity method of accounting for investments when we determine we have a significant influence, but not a controlling interest in the investee. We determine whether we have significant influence by considering key factors such as ownership interest, representation on the board of directors, participation in policy making decisions, business relationship and material intra-entity transactions, among other factors. Our equity method investment is reported at cost and adjusted each period for our share of the investee's income or (loss) and dividend paid, if any. We eliminate any intra-entity profits to the extent of our beneficial interest. We report our proportionate share of the investee's income or (loss) resulting from this investment in other income, net in our condensed consolidated statements of operations. The carrying value of our equity method investment is reported in other assets on our condensed consolidated balance sheets (see Note 12: Prepaid Expenses and Other Current Assets and Other Assets). We assess our equity method investments for impairment on an annual basis or whenever events or circumstances indicate that the carrying value of the investment may not be recoverable. Our recorded share of the investee's loss was not material for the three months ended March 31, 2025 and 2024. We did not receive any dividend distributions from this investment during the three months ended March 31, 2025 and 2024.

Our non-marketable equity method investment consists of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Equity method investment	$	3,038	$	3,038

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Note 12: Prepaid Expenses and Other Current Assets and Other Assets

Prepaid expenses and other current assets consist of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Other prepaid expenses and receivables*	$	25,341	$	17,312

Deferred costs	11,386		9,060
Prepaid insurance and property taxes*	7,143		10,284
VAT/GST receivable	8,406		4,445
Deferred tax charge	5,511		5,511
Foreign exchange contracts	3,560		6,716
Interest rate contracts	8,403		11,038


Other*	5,614		5,921
	$	75,364	$	70,287

____________________________

*As of March 31, 2025 and December 31, 2024, certain prepaid expense account balances that are part of a disposal group that met the criteria for assets held for sale during the fourth quarter of 2024 were combined with other disposal group assets and presented as a separate line item "Assets Held For Sale" in our consolidated balance sheet (See Note 4:Assets Held For Sale).

Other assets consist of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Pump lease receivables	$	23,947	$	23,631
Spare parts*	29,826		28,632
Equity method investment	3,038		3,038
Deferred debt issuance costs	1,289		1,719
Finance lease right-of-use assets	3,321		3,259
Interest rate contracts	512		5,724

Other	2,698		2,132
	$	64,631	$	68,135

____________________________

*As of March 31, 2025 and December 31, 2024, spare parts account balances that are part of a disposal group that met the criteria for assets held for sale during the fourth quarter of 2024 were combined with other disposal group assets and presented as a separate line item "Assets Held For Sale" in our consolidated balance sheet (See Note 4:Assets Held For Sale).

Note 13: Inventories

Inventories are stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. Inventory costs include material, labor and overhead related to the manufacturing of our products.

Inventories consist of the following (in thousands):

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


	As of
	March 31, 2025		December 31, 2024
Raw materials	$	282,615	$	265,275
Work in process	44,396		37,528
Finished goods	263,315		281,873
Total inventories	$	590,326	$	584,676

_____________________________

As of March 31, 2025 and December 31, 2024, inventory account balances that are part of a disposal group that met the criteria for assets held for sale during the fourth quarter of 2024 were combined with other disposal group assets and presented as a separate line item "Assets Held For Sale" in our consolidated balance sheets (See Note 4:Assets Held For Sale).

Note 14: Property, Plant and Equipment

Property, plant and equipment consists of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Machinery and equipment(1)	$	410,681	$	400,861
Land, building and building improvements(1)	174,125		177,089
Molds	99,480		96,318
Computer equipment and software(1)	122,237		122,208
Furniture and fixtures(1)	27,329		27,871
Instruments placed with customers(2)	131,248		124,290
Construction in progress(1)	84,790		87,006
Total property, plant and equipment, cost(1)	1,049,890		1,035,643
Accumulated depreciation(1)	(607,907)		(592,897)
Property, plant and equipment, net(1)	$	441,983	$	442,746

______________________________

(1) As of March 31, 2025 and December 31, 2024, certain property, plant and equipment category account balances that are part of a disposal group that met the criteria for assets held for sale during the fourth quarter of 2024 were combined with other disposal group assets and presented as a separate line item "Assets held For Sale" in our consolidated balance sheets.

(2) Instruments placed with customers consist of drug-delivery and monitoring systems placed with customers under operating leases.

Depreciation expense was $16.9 million and $22.4 million for the three months ended March 31, 2025 and 2024, respectively, of which $14.8 million and $19.4 million, respectively, are included in cost of goods sold.

Note 15: Goodwill and Intangible Assets, Net

Goodwill

The following table presents the changes in the carrying amount of our goodwill (in thousands):


	Total
Balance as of January 1, 2025	$	1,432,772


Currency translation	22,341
Balance as of March 31, 2025	$	1,455,113

Intangible Assets, Net

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible assets, carried at cost less accumulated amortization and amortized on a straight-line basis, were as follows (in thousands):


	Weighted-Average Amortization Life in Years	March 31, 2025
		Cost		Accumulated Amortization		Net
Patents	10	$	37,697	$	23,519	$	14,178
Customer contracts	12	9,770		7,050		2,720
Non-contractual customer relationships	8	549,630		251,139		298,491
Trademarks	1	5,425		5,425		—
Trade name	15	18,240		8,659		9,581
Developed technology(1)	10	622,438		244,464		377,974
Non-compete	3	9,100		9,100		—
Total amortized intangible assets		$	1,252,300	$	549,356	$	702,944

Internally developed software(1)		$	13,723			$	13,723

Total intangible assets		$	1,266,023	$	549,356	$	716,667

______________________________

(1) Internally developed software will be amortized when the projects are complete and the assets are ready for their intended use.


	Weighted-Average Amortization Life in Years	December 31, 2024
		Cost		Accumulated Amortization		Net
Patents	10	$	36,811	$	22,913	$	13,898
Customer contracts	12	9,818		6,994		2,824
Non-contractual customer relationships	8	546,404		236,267		310,137
Trademarks	1	5,425		5,425		—
Trade name	15	18,239		8,357		9,882
Developed technology(1)	10	619,540		227,869		391,671
Non-compete	3	9,100		9,100		—
Total amortized intangible assets		$	1,245,337	$	516,925	$	728,412

Internally developed software(2)		$	12,377			$	12,377

Total intangible assets		$	1,257,714	$	516,925	$	740,789

_______________________________

(1) Developed technology primarily consists acquired patented technologies and internally developed software. Upon completion of development, the assets will be amortized over their estimated useful lives.

(2) Internally developed software will be reclassified to developed technology and amortized when the projects are complete and the assets are ready for their intended use. During 2024, we reclassified $33.2 million to developed technology.

Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives. Intangible asset amortization expense was $32.6 million and $33.1 million during the three months ended March 31, 2025 and 2024, respectively, of which $1.0 million and $0.0 million, respectively, are included in cost of goods sold.

As of March 31, 2025 estimated annual amortization for our intangible assets for each of the next five years and thereafter is approximately (in thousands):

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Remainder of 2025	$	96,924
2026	129,911
2027	118,732
2028	118,134
2029	115,048
2030	52,618
Thereafter	71,577
Total	$	702,944

Note 16: Accrued Liabilities and Other Long-Term Liabilities

Accrued liabilities consist of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024
Salaries and benefits	$	71,756	$	60,815
Incentive compensation	29,124		59,445

Operating lease liability-ST	13,472		15,695



Accrued sales taxes and other taxes	7,201		9,013
Restructuring accrual	8,522		9,945

Deferred revenue	32,485		30,358


Italy medical device payback provision(1)	25,530		23,937
Legal accrual	3,159		3,425

Distribution fees	14,072		16,548
Warranties and returns	4,070		4,094
Field service corrective action(2)	29,291		32,844
Accrued freight	9,413		13,206
Foreign exchange contracts	4,335		7,391




Accrued audit and professional services	7,579		7,562
Defined benefit plan	4,276		3,111


Other	14,607		9,534
	$	278,892	$	306,923

___________________________

(1) Related to potential payments associated with the IMDP (as defined below) as a result of 2015 legislation enacted requiring medical device companies to make payments to the Italian government based on regional expenditure ceilings (see Note 20: Commitments and Contingencies for further details).

(2) Primarily includes field corrective actions associated with certain products in connection with a 2021 Warning Letter (as defined below) received by Smiths Medical from the FDA following an inspection of Smiths Medical's Oakdale, Minnesota Facility (see Note 20: Commitments and Contingencies for further details).

As of March 31, 2025 and December 31, 2024, certain accrued liability account balances that are part of a disposal group that met the criteria for assets held for sale during the fourth quarter of 2024 were presented as a separate line item "Liabilities held for sale" in our consolidated balance sheet (See Note 4:Assets Held For Sale).

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Other long-term liabilities consist of the following (in thousands):


	As of
	March 31, 2025		December 31, 2024

Operating lease liability-LT	$	48,234	$	40,777
Benefits	3,896		3,830





Finance lease liability-LT	2,342		2,332
Deferred revenue	9,200		9,045
Field service corrective action(1)	8,351		6,401
Other	5,614		4,360
	$	77,637	$	66,745

______________________________

(1) Primarily related to field service corrective actions associated with certain products in connection with a 2021 Warning Letter (as defined below) received by Smiths Medical from the FDA following an inspection of Smiths Medical’s Oakdale, Minnesota Facility (see Note 20: Commitments and Contingencies for further details).

Note 17: Income Taxes

Income taxes were accrued at an estimated effective tax rate of (42)% and (7)% for the three months ended March 31, 2025 and 2024, respectively.

The effective tax rate for the three months ended March 31, 2025 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, section 162(m) excess compensation, federal and state valuation allowance, and tax credits.

The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Due to the weight of objectively verifiable negative evidence, the Company recorded a valuation allowance of $6.4 million tax expense, against certain U.S. federal and state deferred tax assets during the three months ended March 31, 2025. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses. The company's ability to use our deferred tax assets depends on the amount of taxable income in future periods. Based on current earnings and anticipated future earnings along with expected changes in our deferred tax asset and liability balances, it is likely that the current valuation allowance position will be adjusted during the year. An additional valuation allowance may be required beyond the current year if future earnings are not sufficient to support the realization of deferred tax assets.

In December 2022, the European Union (EU) agreed to implement Pillar Two, the OECD’s global minimum tax rate of 15% for multinationals that meet a global revenue threshold. All of the EU countries and some of the non-EU countries in which we operate have enacted or have announced plans to enact legislation to adopt Pillar Two. Some aspects of the Pillar Two legislation were effective for our fiscal year beginning January 1, 2024, with certain remaining impacts to be effective in 2025. For fiscal year 2025, we have considered the impact of Pillar Two in our tax provision and effective tax rate. However, the Pillar Two rules continue to evolve and their application may alter our tax obligations in certain countries in which we operate for fiscal periods beyond 2025 as we continue to assess the impact of tax legislation in these jurisdictions.

The effective tax rate for the three months ended March 31, 2024 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, state income taxes, section 162(m) excess compensation, federal and state valuation allowance, and tax credits.

The Company recorded a valuation allowance of $10.1 million tax expense, against certain U.S. federal and state deferred tax assets during the three months ended March 31, 2024. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 18: Long-Term Debt

2022 Credit Agreement

In 2022, in connection with the acquisition of Smiths Medical, we entered into a Credit Agreement (the "Credit Agreement") with Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, Barclays Bank PLC and certain other financial institutions (the “Lenders”) for $2.2 billion of senior secured credit facilities. The senior secured credit facilities include (i) a five-year Tranche A term loan of $850.0 million (the "Term Loan A"), (ii) a seven-year Tranche B term loan of $850.0 million (the "Term Loan B") and (iii) a five-year revolving credit facility of $500.0 million (the "Revolving Credit Facility"), with separate sub-limits of $50.0 million for letters of credit and swingline loans (collectively, the "Senior Secured Credit Facilities"). We used the proceeds from borrowings under the Term Loan A and the Term Loan B (collectively, the "Term Loans") to fund a portion of the cash consideration for the purchase of Smiths Medical and the related fees and expenses incurred in connection with the acquisition. We did not incur borrowings under the Revolving Credit Facility on the closing date of the acquisition. The proceeds from any future borrowings under the Revolving Credit Facility may be used for working capital and other general corporate purposes.

In connection with entering into the Credit Agreement in 2022, we incurred $37.8 million in debt discount and issuance costs, which were allocated to the Term Loan A, the Term Loan B and the Revolving Credit Facility based on lender commitment amounts relative to each type of fees paid. The lender and third-party discount and issuance costs allocated to the Term Loan A and the Term Loan B were $15.8 million and $13.4 million, respectively, the current unamortized balances are reflected as a direct deduction from the face amount of the corresponding term loans on the condensed consolidated balance sheets. These costs are being amortized to interest expense over the respective terms of the loans using the effective interest method. The issuance costs allocated to the Revolving Credit Facility were $8.6 million, which are capitalized and included in prepaid expenses and other current assets and other assets on our condensed consolidated balance sheets. These costs are being amortized to interest expense over the term of the Revolving Credit Facility using the straight-line method.

The net funds received from the Term Loan A and the Term Loan B, after deducting debt issuance costs, were $834.2 million and $836.6 million, respectively.

Maturity Dates

The maturity date for the Term Loan A and the Revolving Credit Facility is January 6, 2027, and the maturity date for the Term Loan B is January 6, 2029. Pursuant to the terms and conditions of the Credit Agreement, the maturity dates of the Term Loans and the Revolving Credit Facility may be extended upon our request, subject to the consent of the Lenders.

Interest Rate Terms

In general, the Term Loans and borrowings under the Revolving Credit Facility denominated in U.S. dollars bear interest, at our option, on either: (1) the Base Rate, as defined below, plus the applicable margin, as indicated below ("Base Rate Loans") or (2) the Adjusted Term Secured Overnight Financing Rate ("Adjusted Term SOFR"), as defined below, plus the applicable margin, as indicated below ("Term SOFR Loans").

The Base Rate is defined as the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) Adjusted Term SOFR (as defined below) for a one-month period plus, in each case, 1.00%.

Adjusted Term SOFR is the rate per annum equal to (a) the Term SOFR plus (b) the Term SOFR Adjustment. Term SOFR is the forward-looking term rate based on SOFR and is calculated separately for Term SOFR Loans and Base Rate Loans, as specified in the Credit Agreement. The Term SOFR Adjustment is a percentage per annum of 0.10% for Base Rate Loans and between 0.10% to 0.25% for Term SOFR Loans based on the applicable interest period.

Revolving Credit Facility Commitment Fee

The Revolving Credit Facility has a per annum commitment fee at an initial rate of 0.25% which is applied to the available amount of the Revolving Credit Facility. Effective on the first Adjustment Date, as defined in the Credit Agreement, occurring subsequent to our quarter ended June 30, 2022, the commitment fee is determined by reference to the leverage ratio in effect from time to time as set forth in the table below.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Applicable Interest Margins

The Term Loan A and borrowings under the Revolving Credit Facility have an initial applicable margin of 0.75% per annum for Base Rate Loans and 1.75% per annum for Term SOFR Loans.

Effective on the first Adjustment Date, as defined in the Credit Agreement, occurring subsequent to our quarter ended June 30, 2022, the applicable margin for the Term Loan A and borrowings under the Revolving Credit Facility is determined by reference to the leverage ratio in effect from time to time as set forth in the following table:


Leverage Ratio	Applicable Margin for Term SOFR Loans	Applicable Margin for Base Rate Loans	Commitment Fee Rate
Greater than 4.00 to 1.0	2.25%	1.25%	0.35%
Less than or equal to 4.00 to 1.0 but greater than 3.00 to 1.0	2.00%	1.00%	0.30%
Less than or equal to 3.00 to 1.0 but greater than 2.50 to 1.0	1.75%	0.75%	0.25%
Less than or equal to 2.50 to 1.0 but greater than 2.00 to 1.0	1.50%	0.50%	0.20%
Less than or equal to 2.00 to 1.0	1.25%	0.25%	0.15%

The Term Loan B has an initial applicable margin of 1.5% per annum for Base Rate Loans and 2.5% per annum for Term SOFR Loans.

Effective on the first Adjustment Date, as defined in the Credit Agreement, occurring subsequent to our quarter ended June 30, 2022, the applicable margin for the Term Loan B is determined by reference to the leverage ratio in effect from time to time as set forth in the following table:


Leverage Ratio	Applicable Margin for Term SOFR Loans	Applicable Margin for Base Rate Loans
Greater than 2.75 to 1.0	2.50%	1.50%
Less than 2.75 to 1.0	2.25%	1.25%

Principal Payments

Principal payments on the Term Loans are due on the last day of each calendar quarter commencing on June 30, 2022.

The Term Loan A amortizes in nineteen consecutive quarterly installments in an amount equal to 2.50% of the original principal amount in each of the first two years, 5.00% in each of the third and fourth years and 7.50% in the fifth year, with a final payment of the remaining outstanding principal balance due on the maturity date.

The Term Loan B matures in twenty-seven consecutive quarterly installments in an amount equal to 0.25% of the original principal amount, with a final payment of the remaining outstanding principal balance due on the maturity date.

We may borrow, prepay and re-borrow amounts under the Revolving Credit Facility, in accordance with the terms and conditions of the Credit Agreement, with all outstanding amounts due at maturity.

For the three months ended March 31, 2025 and 2024, total principal payments on the Term Loans were $47.8 million and $12.8 million, respectively. The three months ended March 31, 2025 included an additional prepayment of $35.0 million on Term Loan B.

Interest Payments

Interest payments on Base Rate Loans are payable quarterly in arrears on the last business day of each calendar quarter and the applicable maturity date. Interest periods on Term SOFR Loans are determined, at our option, as either one, three or six months and will be payable on the last day of each interest period and the applicable maturity date. In the case of any interest

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

periods of more than three months' duration, the interest payment are payable on each day prior to the last day of such interest period that occurs at three-month intervals.

The commitment fee on the Revolving Credit Facility is payable quarterly in arrears on the third business day following the last day of each calendar quarter and at the maturity date. The commitment fee is included in interest expense in our condensed consolidated statements of operations.

Guarantors and Collateral

Our obligations under the Credit Agreement are unconditionally guaranteed, on a joint and several basis, by ICU Medical, Inc. and certain of our existing subsidiaries.

Debt Covenants

The Credit Agreement contains affirmative and negative covenants, including certain financial covenants. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, certain merger and acquisition transactions, asset sales and other dispositions, other investments, dividends, share purchases and payments affecting subsidiaries, changes in nature of business, fiscal year or organizational documents, prepayments and redemptions of subordinated and other junior debt, transactions with affiliates, and other matters.

The financial covenants include the Senior Secured Leverage Ratio and the Interest Coverage Ratio, both defined below, and pertain to the Term Loan A and the Revolving Credit Facility.

The Senior Secured Leverage Ratio is defined, at any measurement date, as the ratio of: (a) all Funded Debt, as defined in the Credit Agreement, that is secured by a lien on any asset or property minus the lesser of (i) all unrestricted cash and cash equivalents and (ii) $500.0 million, to (b) Consolidated EBITDA, as defined in the Credit Agreement, for the most recently completed four fiscal quarters, calculated on a pro forma basis. The maximum Senior Secured Leverage Ratio is 4.50 to 1.00 until June 30, 2024. Thereafter, the maximum Senior Secured Leverage Ratio is 4.00 to 1.00, with limited permitted exception.

The Interest Coverage ratio is defined, at any measurement date, as the ratio of Consolidated EBITDA, as defined in the Credit Agreement, to Consolidated Interest Expense, as defined in the Credit Agreement, paid or payable in cash, for the most recently completed four fiscal quarters. The minimum Interest Coverage ratio is 3.00 to 1.00.

We were in compliance with all financial covenants as of March 31, 2025.

The Credit Agreement contains customary events of default, including, among others: non-payments of principal and interest; breach of representations and warranties; covenant defaults; cross-defaults and cross-acceleration to certain other material indebtedness; the existence of bankruptcy or insolvency proceedings; certain events under ERISA; material judgments; and a change of control. If an event of default occurs and is not cured within any applicable grace period or is not waived, the administrative agent and the Lenders are entitled to take various actions, including, without limitation, the acceleration of all amounts due and the termination of commitments under the Senior Secured Credit Facilities.

The carrying values of our long-term debt consist of the following (in thousands):

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	Effective Interest Rate		As of March 31, 2025		Effective Interest Rate		As of December 31, 2024

Senior Secured Credit Facilities:
Term Loan A — principal	7.17	%	$	759,688	8.03	%	$	770,313
Term Loan B — principal	7.51	%	789,500		8.38	%	826,625
Revolving Credit Facility — principal	—	%	—		—	%	—
Less unamortized debt issuance costs(1)			(12,810)				(14,080)
Total carrying value of long-term debt			1,536,378				1,582,858
Less current portion of long-term debt			47,813				51,000
Long-term debt, net			$	1,488,565			$	1,531,858

_______________________________

(1) Comprised of $5.3 million and $7.5 million relating to the Term Loan A and the Term Loan B, respectively, as of March 31, 2025.

As of March 31, 2025, the aggregate amount of principal repayments of our long-term debt (including any current portion) for each of the next five years and thereafter is approximately (in thousands):


Remainder of 2025	$	31,875
2026	63,750
2027	664,063
2028	—
2029	789,500
2030	—

Total	$	1,549,188

The following table presents the total interest expense related to our long-term debt (in thousands):


	Three months ended March 31,
	2025		2024
Contractual interest	$	26,888	$	32,276
Amortization of debt issuance costs	1,699		1,708
Commitment fee — Revolving Credit Facility	375		379
Total long-term debt-related interest expense	$	28,962	$	34,363

We currently hedge against the contractual interest expense on our long-term debt (see Note 9: Derivatives and Hedging Activities).

Note 19: Stockholders' Equity

Treasury Stock

In August 2019, our Board approved a share purchase plan to purchase up to $100.0 million of our common stock. This plan has no expiration date. During the three months ended March 31, 2025 and 2024, we did not purchase any shares of our common stock under our share purchase plan. As of March 31, 2025, all of the $100.0 million available for purchase was remaining under the plan. We are currently limited on share purchases in accordance with the terms and conditions of our Credit Agreement (see Note 18: Long-Term Debt).

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the three months ended March 31, 2025, we withheld 58,858 shares of our common stock from employee vested restricted stock units in consideration for $8.4 million in payments made on the employees' behalf for their minimum statutory income tax withholding obligations. For the three months ended March 31, 2024, we withheld 110,119 shares of our common stock from employee vested restricted stock units in consideration for $11.4 million in payments made on the employees' behalf for their minimum statutory income tax withholding obligations. Treasury stock is used to issue shares for stock option exercises and restricted stock grants.

Accumulated Other Comprehensive (Loss) Income ("AOCI")

The components of AOCI, net of tax, were as follows (in thousands):


	Foreign Currency Translation Adjustments		Unrealized Losses on Cash Flow Hedges		Other Adjustments		Total
Balance as of January 1, 2025	$	(146,942)	$	5,722	$	1,819	$	(139,401)
Other comprehensive income (loss) before reclassifications	39,890		(3,260)		—		36,630
Amounts reclassified from AOCI	—		(2,624)		—		(2,624)
Other comprehensive income (loss)	39,890		(5,884)		—		34,006
Balance as of March 31, 2025	$	(107,052)	$	(162)	$	1,819	$	(105,395)


	Foreign Currency Translation Adjustments		Unrealized Gains (Losses) on Cash Flow Hedges		Other Adjustments		Total
Balance as of January 1, 2024	$	(76,784)	$	21,884	$	1,819	$	(53,081)
Other comprehensive (loss) income before reclassifications	(22,817)		13,908		—		(8,909)
Amounts reclassified from AOCI	—		(7,548)		—		(7,548)
Other comprehensive (loss) income	(22,817)		6,360		—		(16,457)
Balance as of March 31, 2024	$	(99,601)	$	28,244	$	1,819	$	(69,538)

Note 20: Commitments and Contingencies

Legal Proceedings

From time to time, we are involved in various legal proceedings, most of which are routine litigation, in the normal course of business. Our management does not believe that the resolution of the unsettled legal proceedings that we are involved with will have a material adverse impact on our financial position or results of operations.

Off-Balance Sheet Arrangements

In the normal course of business, we have agreed to indemnify our officers and directors to the maximum extent permitted under Delaware law and to indemnify customers as to certain intellectual property matters or other matters related to sales of our products. There is no maximum limit on the indemnification that may be required under these agreements.

Although we can provide no assurances, we have never incurred, nor do we expect to incur, any material liability for indemnification.

Contingencies

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Prior to being acquired, during 2021, Smiths Medical received a Warning Letter from the U.S. Food and Drug Administration ("FDA") following an inspection of Smiths Medical’s Oakdale, Minnesota Facility (the "2021 Warning Letter"). The 2021 Warning Letter cited, among other things, failures to comply with FDA's medical device reporting requirements and failures to comply with applicable portions of the Quality System Regulation. A provision for the estimated costs related to the field service corrective actions identified as of the closing date of the acquisition was recorded on the opening acquired balance sheet of Smiths Medical in the amount of $55.1 million. The initial estimate recorded was based on a probability-weighted estimate of the costs required to settle the obligation related to known field corrective actions. The actual costs to be incurred are dependent upon the scope of the work necessary to achieve regulatory clearance, including potential additional field corrective actions, and could differ from the original estimate. For the three months ended March 31, 2025 and 2024, we recorded a provision of $1.7 million and $0.4 million, respectively, to adjust the estimated cost to complete the field corrective actions to the amounts expected to be incurred based on historical experience. As of March 31, 2025, approximately $30.8 million of the $37.6 million of accrued field service corrective action recorded was related to the 2021 Warning Letter.

In 2015, legislation was enacted in Italy which requires medical device companies to make payments to the Italian government if Italy's medical device expenditures for certain years exceeded annual regional expenditure ceilings. Since its enactment, the legislation has been subject to appeals in the Italy court system. In the third quarter of 2024, Italy's Constitutional Court issued two judgments, one of which confirmed the legitimacy of the legislation on the Italy Medical Device Payback ("IMDP"). However, litigation proceedings are still pending and the ultimate resolution remains unknown. The timing and amount of payments could ultimately differ from our current expectations (see Note 16: Accrued Liabilities and Other Long-Term Liabilities for details on amounts accrued for potential payments related to the IMDP).

In April 2025, the Company received a warning letter from the FDA following an inspection of Smiths Medical's Oakdale, Minnesota Facility that occurred from July 23, 2024 through August 9, 2024 (the "2025 Warning letter"). The 2025 Warning Letter noted changes the Company made to the MedFusion™ Model 4000 Syringe Infusion Pump and CADD™ Solis VIP Ambulatory Infusion Pump that could affect the safety or effectiveness of these devices and therefore require new 510(k) clearance. The Company previously notified the FDA of these changes and intend to seek clearance for its next generation of MedFusion™ and CADD™ infusion pumps during the third quarter of 2025. The Company cannot, however, give any assurances that the FDA will be satisfied with its response or its expected timing to address the matters cited in the 2025 Warning Letter. Until the matters cited in the 2025 Warning Letter are resolved to the FDA’s satisfaction, additional legal or regulatory action may be taken without further notice. As a result, the outcome and the financial impact of the 2025 Warning Letter cannot be predicted at this time. Accordingly, no loss contingency has been recorded for the 2025 Warning Letter, and the likelihood of loss is not considered probable or reasonably estimable as of March 31, 2025.

Commitments

We have non-cancelable operating lease agreements where we are contractually obligated to pay certain lease payment amounts (see Note 7: Leases).

Note 21: Collaborative and Other Arrangements

On February 3, 2017, we entered into two Manufacturing and Supply Agreements ("MSAs") whereby (i) Pfizer would manufacture and supply us with certain agreed upon products for an initial five-year term with a one-time two-year option to extend and (ii) we will manufacture and supply Pfizer certain agreed upon products for a term of five or ten years depending on the product, also with a one-time two-year option to extend. We no longer purchase products from Pfizer under the MSA as described in (i) above.

The MSA described in (ii) above provides each party with mutually beneficial interests and is jointly managed by both Pfizer and ICU. On January 1, 2021, we amended our MSA with Pfizer, whereby we manufacture and supply certain agreed upon products to Pfizer. The amendments included a change to the term of the agreement to end on December 31, 2024. The MSA was amended on January 24, 2025 to extend the term through 2027 for certain Solutions products. Changes to the terms of the MSA include (i) amendments to our level of supply of products to Pfizer and (ii) updates to our supply price for 2025.

ICU MEDICAL, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 22: Accounts Receivable Purchase Program

On January 19, 2023, we entered into a revolving $150 million uncommitted receivables purchase agreement with Bank of The West, which was subsequently acquired by BMO in February 2023. This agreement provided for a less expensive form of capital. The discount rate applied to the sold receivables equals a rate per annum equal to the sum of (i) an applicable margin, plus (ii) Term SOFR for a period equal to the discount period which is calculated with respect to the payment terms of the specific receivable. The accounts receivable sold have payment terms ranging between 30 and 60 days, and are related to customer accounts with good credit history. The transfer of the purchased accounts receivable under the agreement is intended to be an absolute and irrevocable transfer constituting a true sale as the transferred receivables have been isolated beyond the reach of the Company and our creditors, even in bankruptcy or other receivership. We do not retain effective control over the sold receivables and BMO has the right upon purchase to pledge and/or exchange the transferred assets without restrictions. The Company acts as collection agent for BMO and collection services are undertaken by our accounts receivable personnel in their normal course of business and collected funds are remitted to BMO. We do not have any continuing involvement with the sold receivables other than the collection services which does not provide us with more than a trivial benefit. The discount rate has been negotiated net of consideration for the collection services, the cost of collection is immaterial to the Company; therefore, we did not separately record any related servicing assets or liabilities related to the sold receivables.

The following table presents information in connection with the purchase program (in thousands):


	Three months ended March 31,
	2024
Trade receivables sold(1)	$	175,692
Cash received in exchange for trade receivables sold(2)	174,600
Loss on sale of receivables(3)	1,092

_______________________________

(1) Represents carrying value of trade receivables sold to BMO.

(2) Cash proceeds received from BMO.

(3) Reflected in other expense, net in our condensed consolidated statement of operations.

As of March 31, 2025, we are not actively utilizing the program and there are no outstanding balances to be collected on behalf of BMO.

Note 23: Subsequent Events

On April 24, 2025, pursuant to the Agreement described above (see Note 4: Assets Held For Sale), the Company completed the formation of the LLC and transferred the assets, liabilities and operations that comprise the IV Solutions product line to the LLC. At the closing under the Agreement, as consideration for sale of a 60% interest in the LLC to OPF, the Company received preliminary cash consideration of $209.5 million, comprising the estimated sales price. The estimated sales price is subject to final purchase price adjustments. The Company also has the potential to receive a milestone payment from OPF, as calculated under the terms of the Agreement upon the final determination of the LLC's audited financial statements for the year-ending and as of December 31, 2026. On May 1, 2025, the Company used approximately $200.0 million to pay down a portion of its outstanding Term Loan A long-term debt.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and accompanying notes in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and related notes thereto included in our 2024 Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the caption entitled “Forward-Looking Statements” in this section and Part I, Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K as may be further updated from time to time in our other filings with the SEC.

When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” and “our” refer to ICU Medical, Inc. ("ICU" or the "Company") and its consolidated subsidiaries included in our condensed consolidated financial statements unless context requires otherwise.

Business Overview and Highlights

We develop, manufacture, and sell innovative medical products used in infusion systems, infusion consumables and high-value critical care products used in hospital, alternate site and home care settings. Our team is focused on providing quality, innovation and value to our clinical customers worldwide. Our product portfolio includes ambulatory, syringe, and large volume IV pumps and safety software; dedicated and non-dedicated IV sets, needlefree IV connectors, peripheral IV catheters, and sterile IV solutions; closed system transfer devices and pharmacy compounding systems; as well as a range of respiratory, anesthesia, patient monitoring, and temperature management products.

Products

Our primary product offerings are described below.

Consumables

Our Consumables business unit includes Infusion Therapy, Oncology, Vascular Access and Tracheostomy products.

Infusion Therapy

Our Infusion Therapy products include non-dedicated infusion sets, extension sets, needle-free connectors, and disinfection caps. Infusion sets used in hospitals and ambulatory clinics consist of flexible sterile tubing running from an IV bag or bottle containing a drug product or solution to a catheter inserted in a patient’s vein that may or may not be used with an infusion pump. Disinfection caps are used to actively disinfect access points into the infusion sets and catheters. Our primary Infusion Therapy products are:

•Clave™ needlefree products, including the MicroClave, MicroClave Clear, and NanoClave™ brand of connectors, accessories, extension and administration sets used for the administration of IV fluids and medications;

•Neutron™ catheter patency device, used to help maintain patency of central venous catheters;

•Tego™ needlefree connector utilized to access catheters for hemodialysis and apheresis applications; and

•ClearGuard™, SwabCap™ and SwabTip™ disinfection caps.

Oncology

Closed System Transfer Devices ("CSTD") and hazardous drug compounding systems are used to prepare and deliver hazardous IV medications such as those used in chemotherapy, which, if released, can have harmful effects on the healthcare worker and environment. Our primary Oncology products are:

Table of Contents

•ChemoLockTM CSTD ("Chemolock"), which utilizes a proprietary needlefree connection method, is used for the preparation and administration of hazardous drugs. ChemoLock is used to limit the escape of hazardous drug or vapor concentrations, block the transfer of environmental contaminants into the system, and eliminates the risk of needlestick injury;

•ChemoClaveTM ("Chemoclave"), an ISO Connection standard and universally compatible CSTD used for the preparation and administration of hazardous drugs. ChemoClave utilizes standard ISO luer locking connections, making it compatible with all brands of needlefree connectors and pump delivery systems. ChemoClave also is used to limit the escape of hazardous drug or vapor concentrations, block the transfer of environmental contaminants into the system, and eliminate the risk of needlestick injury; and

•Deltec® GRIPPER® non-coring needles for portal access.

The preparation of hazardous drugs typically takes place in a pharmacy where drugs are removed from vials and prepared for delivery to a patient. Those prepared drugs are then transferred to a nursing unit where the chemotherapy is administered via an infusion pump set to a patient. Components of the ChemoClave and ChemoLock product lines are used both in pharmacies and on the nursing floors for the preparation and administration of hazardous drugs.

Vascular Access

Our Vascular Access products are used by clinicians to access the patients' bloodstream to deliver fluids and medication or to obtain blood samples. Our primary Vascular Access products are:

•Jelco® safety and conventional peripheral IV catheters and sharps safety devices for hypodermic injection, designed to help prevent accidental needlestick injury;

•Safe-T Wing® venipuncture and blood collection devices;

•Port-A-Cath® implantable ports;

•Portex® arterial blood sampling syringes;

•PowerWand® midline catheters; and

•Cleo® subcutaneous infusion catheters and sets.

Tracheostomy

Our tracheostomy products are used in the placement of a secure airway using both surgical and percutaneous insertion techniques. Our primary Tracheostomy products are:

•Portex BLUselect® PVC tracheostomy tubes, which feature an inner cannula as well as a Suctionaid option for above the cuff suctioning and vocalization capability;

•Portex Bivona® silicone tracheostomy tubes, which offer the added benefits of comfort and mobility and come in a variety of configurations suited to meet the clinical needs of neonatal through adult patients; and

•Portex BLUperc® percutaneous insertion kits, which allow for safe placement of the tracheostomy tube at the bedside.

Infusion Systems

We offer a comprehensive portfolio of infusion pumps, dedicated IV sets, software and professional services to meet the wide range of infusion needs. Our primary Infusion System products are:

Large Volume Pump ("LVP") Hardware:

Table of Contents

•Plum Duo™ and Plum Solo™ precision infusion pumps, which recently received FDA 510(k) clearance during April 2025, are a new category of precision pumps that bring unprecedented accuracy and unmatched usability in a flexible, clinician-friendly single or dual channel design, capable of delivering up to four compatible medications through a single pump (dual channel). These pumps provide ±3% delivery accuracy, regardless of the placement of the medication bag or pump, or positioning of the patient. Designed with clinical efficiency in mind, Plum precision pumps simplify workflows with fewer alarm and setup burdens, smarter guidance, and more focused care. The pumps feature vibrant high-definition displays that provide clear, critical information at a glance. Combined with LifeShield™ IV safety software, Plum precision pumps are fully IV-EHR interoperable and provide a future-ready platform to enhance safety and efficiency across all IV touchpoints.

•Plum 360™ infusion pumps feature the unique Plum cassette system that helps to enhance patient safety and workflow efficiency. PlumSet™ dedicated IV sets include an air trap to help minimize interruptions and a direct connection to the secondary line that eliminates the risk of common setup errors and enables concurrent delivery of two compatible medications through a single line. Plum 360 has been named Best in KLAS for eight years in a row (2018, 2019, 2020, 2023 – Best in KLAS Smart Pump Traditional; 2021, 2022, 2023, 2024, 2025 Best in KLAS Smart Pump EMR Integrated) and was the first medical device to be awarded UL Cybersecurity Assurance Program Certification.

Ambulatory Infusion Hardware:

•CADD™ ambulatory infusion pumps and disposables, including administration sets and medication cassette reservoirs, serve as a single pain management platform across all types of IV pain management therapies and all clinical care areas from the hospital to outpatient treatment.

Syringe Infusion Hardware:

•Medfusion™ syringe infusion pumps are designed for the administration of fluids and medication to address the needs of the most vulnerable patients requiring precisely controlled infusion rates. Focused on delivery accuracy, the Medfusion 4000 can deliver from a comprehensive portfolio of syringes to meet syringe pump guidance to deliver medication from the smallest syringe size possible.

IV Medication Safety Software:

•LifeShield™ infusion safety software for Plum precision pumps (Plum Solo, Plum Duo) is an enterprise-wide platform designed with the input of pharmacists, nurses and administrators to empower health systems to raise the bar in IV performance. The system’s hybrid architecture provides cloud-based functionality to allow access anywhere with on-premise management providing security and control.

•ICU Medical MedNet™ software is an enterprise-class medication management platform that can help reduce medication errors, improve quality of care, streamline workflows and maximize revenue capture. ICU Medical MedNet connects our industry-leading Plum 360 smart pumps to a hospital’s electronic health record ("EHR"), asset tracking systems, and alarm notification platforms to further enhance infusion safety and efficiency.

•PharmGuard™ medication safety software for Medfusion 4000 syringe and CADD-Solis™ pumps allows for customized drug libraries to support the standardization of protocols for medication administration throughout the facility.

Professional Services:

•In addition to the products above, our teams of clinical and technical experts work with customers to develop

safe and efficient infusion systems, providing customized and personalized configuration, implementation,

and data analytics services to optimize our infusion hardware and software.

Vital Care

Table of Contents

Our Vital Care business unit includes IV Solutions, Hemodynamic Monitoring, General Anesthesia and Respiratory, Temperature Management Solutions and Regional Anesthesia/Pain Management products.

IV Solutions

Our IV Solutions products include a broad portfolio of injection, irrigation, nutrition and specialty IV solutions including:

•IV Therapy and Diluents, including Sodium Chloride, Dextrose, Balanced Electrolyte Solutions, Lactated Ringer's, Ringer's, Mannitol, Sodium Chloride/Dextrose and Sterile Water.

•Irrigation, including Sodium Chloride Irrigation, Sterile Water Irrigation, Physiologic Solutions, Ringer's Irrigation, Acetic Acid Irrigation, Glycine Irrigation, Sorbitol-Mannitol Irrigation, Flexible Containers and Pour Bottle Options.

Hemodynamic Monitoring

Our Hemodynamic Monitoring products are designed to help clinicians get accurate real-time access to patients’ hemodynamic and cardiac status with an extensive portfolio of monitoring systems and advanced sensors & catheters. Measurements provided by our systems help clinicians determine how well the heart is pumping blood and how efficiently oxygen from the blood is being used by the tissues. Our Hemodynamic Monitoring products include:

•Cogent™ 2-in-1 hemodynamic monitoring system;

•CardioFlo™ hemodynamic monitoring system;

•TDQ™ and OptiQ™ cardiac output monitoring catheters;

•TriOxTM venous oximetry catheters;

•Transpac™ blood pressure transducers;

•SafeSet™ closed blood sampling and conservation system; and

•MEDEX® LogiCal® Pressure Monitoring System and components.

General Anesthesia & Respiratory

We offer a broad range of anesthesia systems and devices and breathing circuits, ventilation, respiratory and specialty airway products that maintain patients’ airways before, during and after surgery. Our primary Anesthesia & Respiratory products are:

•Portex® acapella® bronchial hygiene products used to mobilize pulmonary secretions to facilitate the opening of airways in patients with chronic respiratory diseases such as chronic obstructive pulmonary disease, or COPD, asthma and cystic fibrosis.

Temperature Management Solutions

Temperature Management solutions systems are used in perioperative and critical care settings to help monitor and regulate patient temperature. Our primary Temperature Management products include:

•Level 1® rapid infusion, fluid warming, routine blood and fluid warming, irrigation fluid warming, convective patient warming and temperature probes.

Regional Anesthesia/Pain Management Trays

We offer a comprehensive range of Portex® regional anesthesia/pain management trays and components. Our primary products include:

•Epidural Trays;

•Spinal Trays;

•Combined (CSE) Trays;

•Peripheral Nerve Block Trays; and

•Specialty Trays (Lumbar Puncture, Amniocentesis, Myelogram).

Table of Contents

In the U.S. a substantial amount of our products are sold to group purchasing organization member hospitals. We believe that as healthcare providers continue to either consolidate or join major buying organizations, the success of our products will depend, in part, on our ability, either independently or through strategic relationships, to secure long-term contracts with large healthcare providers and major buying organizations.

Global Economic Challenges

In recent years, we have experienced, and may continue to experience, significant impacts to our business as a result of global economic challenges, resulting from, among other events, health pandemics and geopolitical conflicts which have resulted in rising inflation, especially with respect to freight costs driven by higher fuel prices, increased cost and shortages of raw materials, supply chain disruptions, higher interest rates and volatility on foreign currency exchange rates.

More recently, in January 2025, the current presidential administration issued executive orders imposing tariffs on certain imported goods from countries including Mexico, Canada and China, and in response, Canada and China announced similar tariffs on U.S. imports. On April 2, 2025, the U.S. imposed a 10% baseline reciprocal tariff on imports from all countries, plus an additional country-specific tariff on imports from select trading partners, and again in response other countries have announced retaliatory actions or plans for retaliatory actions. On April 9, 2025, the U.S. implemented a 90-day pause on the country-specific tariffs for all countries except China, while maintaining the 10% baseline tariff. It is uncertain to what extent the U.S. tariffs and retaliatory tariffs will be imposed, if at all, following the 90-day pause. A meaningful portion of our global revenues are from products manufactured in our Costa Rica and Mexico manufacturing facilities and imported into the U.S. Currently the majority of products manufactured in our Mexico facilities are exempted from tariffs under the United States-Mexico-Canada Agreement ("USMCA"). If the USMCA exemptions were eliminated in the future, our tariff expense for products manufactured in Mexico would increase substantially. The tariffs as currently implemented are likely to have a material impact on our business, financial condition and results of operations through the incurrence of additional costs; however, the extent to which the imposition of tariffs, possible delays and exemptions remains fluid. These tariffs did not significantly impact our results of operations for the three months ended March 31, 2025.

Based on current economic conditions we expect foreign currency rates, freight costs and interest rates to remain subject to volatility in the market.

While we continually monitor the ongoing and evolving impact of the above events on our operations the overall impact remains uncertain and may not be fully reflected in our results of operations until future periods. The overall impact to our results of operations will depend on a number of factors, many of which are out of our control, none of which can be fully predicted at this time. See "Part I. Item 1A. Risk Factors" in our 2024 Annual Report on Form 10-K as updated in this Quarterly Report on Form 10-Q for a discussion of risks and uncertainties.

Consolidated Results of Operations

We present income statement data in Part I, Item 1. "Financial Statements." The following table shows, for the three months ended March 31, 2025 and 2024, the percentages of each income statement caption in relation to total revenue:

Table of Contents


	Three months ended March 31,
	2025		2024
Total revenues	100	%	100	%
Gross profit	35	%	33	%
Selling, general and administrative expenses	26	%	28	%
Research and development expenses	4	%	4	%
Restructuring, strategic transaction and integration expenses	3	%	3	%
Change in fair value of contingent earn-out	—	%	—	%


Total operating expenses	33	%	35	%
Income (Loss) from operations	2	%	(2)	%

Interest expense, net	(4)	%	(4)	%
Other expense, net	—	%	—	%
Loss before income taxes	(2)	%	(6)	%
Provision for income taxes	(1)	%	—	%
Net loss	(3)	%	(6)	%

Seasonality/Quarterly Results

There are no significant seasonal aspects to our business. We can experience fluctuations in net sales as a result of variations in the ordering patterns of our largest customers, which may be driven more by production scheduling and customer inventory levels, and less by seasonality. Our expenses often do not fluctuate in the same manner as net sales, which may cause fluctuations in operating income that are disproportionate to fluctuations in our revenue.

Non-GAAP Financial Measures

In addition to comparing changes in revenue on a U.S. GAAP basis, we also compare the changes in revenue from one period to another using constant currency. The presentation of revenues on a constant currency basis is a non-GAAP financial measure that excludes the impact of fluctuations in foreign currency exchange rates that occurred between the comparative periods. We provide constant currency information to enhance the visibility of underlying business trends, excluding the effects of changes in foreign currency translation rates. We believe this information is useful to investors to facilitate comparisons and better identify trends in our business. Our constant currency revenues reflect current period local currency revenues at prior period's average exchange rates. We consistently apply this approach to revenues for all currencies where the functional currency is not the U.S. dollar. These results should be considered in addition to, not as a substitute for, results reported in accordance with GAAP. Revenues on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with GAAP.

Consumables

The following table summarizes our total Consumables revenue (in millions, except percentages):


	Three months ended March 31,
	2025			2024		$ Change		% Change
Consumables revenue (GAAP)	$	266.2		$	244.1	$	22.1	9.1	%
Impact of foreign currency exchange rate changes	3.0
Consumables revenue on a constant currency basis (non-GAAP)	$	269.2
$ Change in constant currency	$	25.1
% Change in constant currency	10.3		%

Table of Contents

Consumables revenue increased for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to new customer installations and increased demand for our Infusion Consumables, Vascular Access and Oncology product lines.

Infusion Systems

The following table summarizes our total Infusion Systems revenue (in millions, except percentages):


	Three months ended March 31,
	2025			2024		$ Change		% Change
Infusion Systems (GAAP)	$	166.3		$	157.3	$	9.0	5.7	%
Impact of foreign currency exchange rate changes	3.0
Infusion Systems on a constant currency basis (non-GAAP)	$	169.3
$ Change in constant currency	$	12.0
% Change in constant currency	7.6		%

Infusion Systems revenue increased for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to increased sales of LVP pump hardware and dedicated sets.

Vital Care

The following table summarizes our total Vital Care revenue (in millions, except percentages):


	Three months ended March 31,
	2025			2024		$ Change		% Change
Vital Care (GAAP)	$	172.2		$	165.3	$	6.9	4.2	%
Impact of foreign currency exchange rate changes	1.5
Vital Care on a constant currency basis (non-GAAP)	$	173.7
$ Change in constant currency	$	8.4
% Change in constant currency	5.1		%

Vital Care revenue increased for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to higher sales of IV Solutions and Critical Care products.

Gross Margins

For the three months ended March 31, 2025 and 2024, gross margins were 34.8% and 32.7%, respectively. The increase in gross margin for the three months ended March 31, 2025, as compared to the same period in the prior year, was primarily driven by price increases, higher production levels, the impact of foreign exchange, lower supply chain costs and the realization of integration synergies.

Selling, General and Administrative (“SG&A”) Expenses

The following table summarizes our total SG&A Expenses (in millions, except percentages):


	Three months ended March 31,
	2025		2024		$ Change		% Change
SG&A	$	157.2	$	157.7	$	(0.5)	(0.3)	%

Table of Contents

SG&A expenses slightly decreased for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a decrease of $2.4 million in depreciation and amortization expense, which when combined with other smaller category decreases were mostly offset by increases of $1.8 million in dealer fees and $1.5 million in professional services. Depreciation and amortization expense decreased primarily due to certain assets that reached the end of their useful lives and and certain assets classified as held for sale. Dealer fees increased due to an increase in revenue to distributors. Professional services increased due to increase in audit and consulting fees.

Research and Development (“R&D”) Expenses

The following table summarizes our total R&D Expenses (in millions, except percentages):


	Three months ended March 31,
	2025		2024		$ Change		% Change
R&D	$	23.3	$	21.8	$	1.5	6.9	%

R&D expenses increased for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily related to higher headcount and employment expense in support of ongoing R&D projects. R&D expenses for both periods presented generally included increased compensation and benefit expenses, consulting fees, production supplies, samples, travel costs, utilities and other miscellaneous administrative costs incurred in our ongoing R&D projects.

Restructuring, Strategic Transaction and Integration Expenses

Restructuring, strategic transaction and integration expenses were $16.7 million and $16.1 million for the three months ended March 31, 2025 and 2024, respectively.

Restructuring charges

Restructuring charges were $6.8 million and $5.3 million for the three months ended March 31, 2025 and 2024, respectively, and were primarily related to facility closure costs and severance costs, respectively. As of March 31, 2025, we expect to pay the majority of our outstanding restructuring charges during the remainder of 2025.

Strategic transaction and integration expenses

Strategic transaction and integration expenses were $9.9 million and $10.8 million for the three months ended March 31, 2025 and 2024, respectively. The strategic transaction and integration expenses during the three months ended March 31, 2025 and 2024 were primarily related to ongoing consulting expenses, employee costs incurred to integrate our Smiths Medical business acquired in 2022, and transaction costs related to the sale of 60% of our IV solutions business in the first quarter of 2025.

Change in Fair Value of Contingent Earn-out

For the three months ended March 31, 2024, we recorded a loss of $0.3 million related to adjusting the contingent earn-out related to the Smiths Medical acquisition. As of December 31, 2024, Smiths had sold all of its ownership interest in ICU Medical shares. Smiths no longer holds the shares necessary to meet the minimum beneficial ownership percentage required to earn the contingent earn-out. Accordingly, the Smiths Medical contingent earn-out was adjusted to zero during 2024.

Interest Expense, net

Table of Contents

The following table presents interest expense, net (in thousands):


	Three months ended March 31,
	2025		2024
Interest expense	$	(25,263)	$	(26,417)
Interest income	3,232		2,645
Interest expense, net	$	(22,031)	$	(23,772)

Interest expense, net for the three months ended March 31, 2025 and 2024 primarily included the contractual interest incurred on borrowings under the Credit Agreement, the per annum commitment fee charged on the available amount of the revolving credit facility contained in the Credit Agreement, the amortization of debt issuance costs incurred in connection with entering into the Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements), the impact of the interest rate swaps, and interest income. The interest expense component decreased for the three months ended March 31, 2025, as compared to the respective prior year periods, primarily due to decreases in the applicable SOFR reference rate.

Other Expense, net

The following table presents other expense, net (in thousands):


	Three months ended March 31,
	2025		2024
Foreign exchange losses, net	$	(1,803)	$	(1,724)
Loss on disposition of assets	(169)		$	65
Other miscellaneous expense, net	209		(682)
Other expense, net	$	(1,763)	$	(2,341)

For the three months ended, March 31, 2025 and 2024, the foreign exchange losses were primarily related to the strengthening of the U.S. dollar relative to certain foreign currencies, most notably including the British Pound in the first quarter of 2025 and the Mexican peso and Argentine peso during the first quarter of 2024.

Income Taxes

For the three months ended March 31, 2025 and 2024, income taxes were accrued at an estimated effective tax rate of (42)% and (7)%, respectively.

The Company regularly assesses the realizability of deferred tax assets and records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized. In assessing the realizability of our deferred tax assets, we weigh all available positive and negative evidence. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Due to the weight of objectively verifiable negative evidence, the Company recorded an additional valuation allowance of $6.4 million tax expense, against certain U.S. federal and state deferred tax assets during the three months ended March 31, 2025. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses. The Company's ability to use our deferred tax assets depends on the amount of taxable income in future periods. Based on current earnings and anticipated future earnings along with expected changes in our deferred tax asset and liability balances, it is likely that the current valuation allowance position will be adjusted during the year. An additional valuation allowance may be required beyond the current year if future earnings are not sufficient to support the realization of deferred tax assets.

Table of Contents

In December 2022, the European Union (EU) agreed to implement Pillar Two, the OECD’s global minimum tax rate of 15% for multinationals that meet a global revenue threshold. All of the EU countries and some of the non-EU countries in which we operate have enacted or have announced plans to enact legislation to adopt Pillar Two. Some aspects of the Pillar Two legislation were effective for our fiscal year beginning January 1, 2024, with certain remaining impacts to be effective in 2025. For fiscal year 2025, we have considered the impact of Pillar 2 in our tax provision and effective tax rate. However, the Pillar Two rules continue to evolve and their application may alter our tax obligations in certain countries in which we operate for fiscal periods beyond 2025 as we continue to assess the impact of tax legislation in these jurisdictions.

Liquidity and Capital Resources

We regularly evaluate our liquidity and capital resources, including our access to external capital, to assess our ability to meet our principal cash requirements, which include working capital requirements, planned capital investments in our business, commitments, acquisition restructuring and integration expenses, investments in quality systems and quality compliance objectives, payment of interest expense, repayment of outstanding borrowings, income tax obligations and acquisition opportunities in accordance with our growth strategy.

Sources of Liquidity

Our current primary sources of liquidity are cash and cash equivalents and cash flows from our operations including access to borrowing arrangements.

Funds generated from operations are held in cash and cash equivalents. During the three months ended March 31, 2025, our cash and cash equivalents decreased by $18.9 million from $308.6 million at December 31, 2024 to $289.7 million at March 31, 2025, primarily due to debt principal payments of $47.8 million during the quarter.

2022 Credit Agreement and Access to Capital

As discussed in Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements, we entered into the Credit Agreement with various lenders on January 6, 2022 in connection with the closing of the Smiths Medical acquisition. The Credit Agreement provides for a five-year term loan A facility of $850.0 million (the "Term Loan A"), a seven-year term loan B facility of $850.0 million (the "Term Loan B") and a five-year revolving credit facility of $500.0 million (the "Revolving Credit Facility") (collectively, the "Senior Secured Credit Facilities"). The proceeds from the term loans were used to finance a portion of the cash consideration for the Smiths Medical acquisition. The outstanding aggregate principal amount of the term loans is $1.5 billion as of March 31, 2025, which includes the Term Loan A that will mature in January 2027 and the Term Loan B that will mature in January 2029. The proceeds of future borrowings under the Revolving Credit Facility, which expires in January 2027, may be used as a source of liquidity to support our ongoing working capital requirements and other general corporate purposes. There are no outstanding borrowings under the Revolving Credit Facility as of March 31, 2025. As part of entering into the Senior Secured Credit Facilities, we were assigned issuer and Term Loan B credit ratings. At the date of issuance of this report, our issuer and Term Loan B credit ratings assigned and outlook were as follows:


	Issuer/Term Loan B Credit Ratings	Outlook
Moody's	B1/B1	Stable
Fitch	BB/BB+	Negative
Standard & Poor's	BB-/BB-	Negative

The Credit Agreement contains financial covenants that pertain to the Term Loan A and the Revolving Credit Facility. Specifically, we were required to maintain a Senior Secured Leverage Ratio of no more than 4.00 to 1.00 and an Interest

Table of Contents

Coverage Ratio of no less than 3.00 to 1.00 (defined and discussed in greater detail in Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements). We were in compliance with these financial covenants as of March 31, 2025.

In January 2023, we entered into a receivables purchase agreement with Bank of the West, which was subsequently acquired by BMO in February 2023. This agreement accelerates our access to capital; however as of December 31, 2024, we are not currently utilizing this program (see Note 22: Accounts Receivable Purchase Program).

We believe that our existing cash and cash equivalents along with cash flows expected to be generated from future operations and the funds received and accessible under the Senior Secured Credit Facilities will provide us with sufficient liquidity to finance our cash requirements for the next twelve months and the foreseeable future. In the event that we experience downturns, cyclical fluctuations in our business that are more severe or longer than anticipated, fail to achieve anticipated revenue and expense levels, or have significant unplanned cash expenditures, we may need to obtain or seek alternative sources of capital or financing, and we can provide no assurances that the terms of such capital or financing will be available to us on favorable terms, if at all. Our ability to generate cash flows from operations, issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or in the solvency of our customers or suppliers, deterioration in our key financial ratios or credit ratings or other significantly unfavorable changes in economic conditions. See Part I. Item 1A. "Risk Factors” in our 2024 Annual Report on Form 10-K for discussion of the risks and uncertainties associated with our debt financing.

Uses of Liquidity

Capital Expenditures

As of March 31, 2025, there have been no material changes to our range of $90 million to $110 million for estimated 2025 planned capital expenditures previously disclosed in our 2024 Annual Report on Form 10-K.

Contractual Obligations

Our principal commitments at March 31, 2025 include both short and long-term future obligations.

Operating Leases

We have non-cancelable operating lease agreements where we are contractually obligated for certain lease payment amounts. For more information regarding our operating lease obligations, (see Note 7: Leases to our accompanying condensed consolidated financial statements).

Long-term Debt

In January 2022, we incurred borrowings under Senior Secured Credit Facilities. The principal repayment obligations and estimated interest payments on the term loans and estimated commitment fee payments on the revolver are estimated in the table below. Interest payments on the term loans were estimated using an Adjusted Term SOFR rate and an applicable margin of 2.00% for Term Loan A and 2.50% for Term Loan B and the revolver commitment fees were estimated using the rate of 0.30%. The applicable margin rate and commitment fee rate will change from time to time in accordance with a preset pricing grid based on the leverage ratio (see Note 18: Long-Term Debt to our accompanying condensed consolidated financial statements for pricing grids related to the Senior Secured Credit Facilities).

We expect to fund these capital expenditures and contractual obligations with our existing cash and cash equivalents, cash generated from our future operations and expected proceeds of approximately $209.5 million from the sale of 60% of our IV Solutions business. The expected proceeds from the sale of 60% of the IV Solutions business will be used to prepay a portion of the Term Loan A during the second quarter of 2025. In the first quarter of 2025 we prepaid $35.0 million in Term Loan B principal payments; therefore there are no principal payments due on Term Loan B until 2029. See Note 23: Subsequent Events to our accompanying condensed consolidated financial statements.

Table of Contents


	(in millions)
	Remainder of 2025		2026		2027		2028		2029
Term Loan A Principal Payments	$	31.9	$	63.8	$	664.1	$	—	$	—
Term Loan A Interest Payments	34.6		36.9		0.5		—		—
Term Loan B Principal Payments	—		—		—		—		789.5
Term Loan B Interest Payments	39.5		46.9		42.7		42.3		0.7
Revolver Commitment Fee	1.2		1.3		—		—		—
	$	107.2	$	148.9	$	707.3	$	42.3	$	790.2

Other Future Capital Investments

Other future capital investments include restructuring and integration expenses along with spending to support quality systems and quality compliance objectives, which includes acquired field action liabilities. As of March 31, 2025, there have been no material changes to our range of $90 million to $110 million for estimated 2025 other future capital investments previously disclosed in our 2024 Annual Report on Form 10-K.

Contingent Payments

In 2015, legislation was enacted in Italy, which requires medical device companies to make payments to the Italian government if Italy's medical device expenditures for certain years exceeded annual regional expenditure ceilings. Since its enactment, the legislation has been subject to appeals in the Italian court system. In the third quarter of 2024, Italy's Constitutional Court issued two judgments, one of which confirmed the legitimacy of the legislation on the Italy Medical Device Payback ("IMDP"), however, litigation proceedings are still pending and the ultimate resolution remains unknown. As of March 31, 2025, we have accrued $25.5 million for potential payments related to the IMDP, which is classified within our accrued liabilities; however, the timing and amount of payments could ultimately differ from our current expectations.

Indemnifications

In the normal course of business, we have agreed to indemnify our officers and directors to the maximum extent permitted under Delaware law and to indemnify customers as to certain intellectual property matters related to sales of our products. There is no maximum limit on the indemnification that may be required under these agreements. Although we can provide no assurances, we have never incurred, nor do we expect to incur, any liability for indemnification.

Historical Cash Flows

Cash Flows from Operating Activities

Our net cash provided by operations for the three months ended March 31, 2025 was $51.3 million. The changes in operating assets and liabilities included a $22.4 million decrease in accounts receivable and a $32.1 million increase in accounts payable. Offsetting these amounts was a $8.2 million increase in inventories, a $8.5 million increase in prepaid expenses and other current assets, a $6.8 million increase in other assets, $36.3 million decrease in accrued liabilities, and $6.6 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The decrease in accounts receivable was primarily due to the amount and timing of revenues. The increase in accounts payable was due to the timing of payments. The increase in inventory was primarily to build inventory safety stock levels. The increase in prepaid expenses and other current assets was primarily due to an increase in deferred costs related to infusion pumps sold and the payment of other miscellaneous prepaid invoices. The increase in other assets was due to the purchase of spare parts. The decrease in accrued liabilities was primarily due to payout of annual bonuses, accrued freight charges and payments of field service corrective action. The net changes in income taxes was a result of recording the current deferred provision, the timing of payments, and valuation allowance.

Our net cash provided by operations for the three months ended March 31, 2024 was $45.8 million. The changes in operating assets and liabilities included a $14.0 million decrease in accounts receivable, $14.2 million decrease in inventories, and a $5.3 million increase in accounts payable. Offsetting these amounts was a $5.7 million increase in prepaid expenses and

Table of Contents

other current assets, a $5.2 million increase in other assets, $16.5 million decrease in accrued liabilities, and $1.9 million in net changes in income taxes, including excess tax benefits and deferred income taxes. The decrease in accounts receivable was primarily due to the amount and timing of revenues. The decrease in inventory was primarily due to our focus on reducing inventory levels. The increase in accounts payable was due to the timing of payments. The increase in prepaid expenses and other current assets was primarily due to increase in deferred costs and the payment of other miscellaneous prepaid invoices. The increase in other assets was due to the purchase of spare parts. The net changes in income taxes was a result of recording the current deferred provision, the timing of payments, and valuation allowance. The decrease in accrued liabilities was primarily due to payout of annual bonuses, accrued freight charges and payments of field service corrective action.

Cash Flows from Investing Activities

The following table summarizes the changes in our investing cash flows (in thousands):


	Three months ended March 31,
	2025		2024		Change
Investing Cash Flows:
Purchases of property, plant and equipment	$	(14,621)	$	(15,915)	$	1,294	(1)

Proceeds from sale of assets	42		507		(465)

Intangible asset additions	(2,232)		(2,954)		722


Proceeds from sale of investment securities	—		500		(500)		(2)
Net cash used in investing activities	$	(16,811)	$	(17,862)	$	1,051

_______________________________

(1) Our purchases of property, plant and equipment may vary from period to period based on additional investments needed to support new and existing products and expansion of our manufacturing facilities.

(2) Proceeds from the sale of our investment securities may vary from period to period based on the maturity dates of the investments.

Cash Flows from Financing Activities

The following table summarizes the changes in our financing cash flows (in thousands):


	Three months ended March 31,
	2025		2024		Change
Financing Cash Flows:

Principal payments on long-term debt	(47,750)		(12,750)		(35,000)		(1)

Proceeds from exercise of stock options	133		150		(17)		(2)

Payments on finance leases	(328)		(245)		(83)
Payment of contingent earn-out liability	—		(2,600)		2,600		(3)
Tax withholding payments related to net share settlement of equity awards	(8,391)		(11,400)		3,009		(4)
Net cash used in financing activities	$	(56,336)	$	(26,845)	$	(29,491)

_______________________________

(1) Relates to scheduled principal payments on the Senior Secured Credit Facilities. In March 2025, we prepaid $35.0 million on our Term Loan B.

(2) Proceeds from the exercise of stock options will vary from period to period based on the volume of options exercised and the exercise price of the specific options exercised.

(3) During the first quarter of 2024, we paid $3.4 million in cash related to the settlement of the Mediverse contingent earn-out. Of the $3.4 million, the amount recorded as the acquisition date fair value, which is considered financing cash flows, was $2.6 million (see Note 10: Fair Value Measurements).

Table of Contents

(4) During the three months ended March 31, 2025, our employees surrendered 58,858 shares of our common stock from vested restricted stock unit awards as consideration for approximately $8.4 million in minimum statutory withholding obligations paid on their behalf. During the three months ended March 31, 2024, our employees surrendered 110,119 shares of our common stock from vested restricted stock unit awards as consideration for approximately $11.4 million in minimum statutory withholding obligations paid on their behalf.

Our common stock purchase plan, which authorized the repurchase of up to $100.0 million of our common stock, was approved by our Board of Directors in August 2019. This plan has no expiration date. As of March 31, 2025, all of the $100.0 million available for purchase was remaining under the plan. We are limited on share purchases in accordance with the terms and conditions of our Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements).

Critical Accounting Policies

In our 2024 Annual Report on Form 10-K, we identified the critical accounting policies which affect our more significant estimates and assumptions used in preparing our consolidated financial statements. There have been no material changes to our critical accounting policies from those previously disclosed in our 2024 Annual Report on Form 10-K.

New Accounting Pronouncements

See Note 2: New Accounting Pronouncements Not Yet Adopted to the accompanying condensed consolidated financial statements.

Item 3.Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

Credit Facility

In connection with the Smiths Medical acquisition on January 6, 2022 we entered into the Senior Secured Credit Facilities totaling approximately $2.2 billion consisting of a variable-rate term loan A facility of $850.0 million, a variable-rate term loan B facility of $850.0 million and a revolving credit facility of $500.0 million. We are exposed to changes in interest rates on all of these variable-rate debt instruments.

The term loan A facility currently bears interest based on Adjusted Term SOFR plus an applicable margin of 2.00% per year. The term loan B facility currently bears interest based on Adjusted Term SOFR subject to a 0.50% floor plus an applicable margin of 2.50%. We used a sensitivity analysis to measure our interest rate risk exposure. If the SOFR rate increases or decreases 1% from March 31, 2025, the additional annual interest expense or savings related to the term loans would amount to approximately $15.5 million.

In order to mitigate and offset a portion of this interest rate risk exposure associated with these debt instruments we entered into interest rate swaps to achieve a targeted mix of fixed and variable-rate debt. The term loan A swap has an initial notional amount of $300.0 million, reducing to $150.0 million evenly on a quarterly basis through its final maturity on March 30, 2027 and we will pay a fixed rate of 1.32% and will receive the greater of 3-month USD SOFR or (0.15)%. The term loan B swap has an initial notional amount of $750.0 million, reducing to $46.9 million evenly on a quarterly basis through its final maturity on March 30, 2026 and we will pay a fixed rate of 1.17% and will receive the greater of 3-month USD SOFR or 0.35%. In June 2023, we entered into an additional swap with a notional amount of $300.0 million with a maturity date of June 30, 2028 and we will pay a fixed rate of 3.8765% starting on June 30, 2023 and receive 3-month USD SOFR. See Note 9: Derivatives and Hedging Activities to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

Foreign Currency Exchange Rate Risk

We transact business globally in multiple currencies, some of which are considered volatile. Our international revenues and expenses and working capital positions denominated in these foreign currencies expose us to the risk of fluctuations in foreign currency exchange rates against the U.S. dollar. As the receiver of foreign currencies we are adversely affected by the strengthening of the U.S. dollar and other currencies relative to the operating unit functional currency. Our hedging policy attempts to manage these risks to an acceptable level. We manage our foreign currency exposures on a consolidated basis to

Table of Contents

take advantage of net exposures and natural offsets, which are then further reduced by the gains and losses of our hedging instruments. Gains and losses on the hedging instruments offset gains and losses on the hedged forecasted transactions and reduce the earnings volatility related to foreign exchange, however we do not hedge our entire foreign exchange exposure and are still subject to earnings volatility due to foreign currency exchange rate risk.

Our foreign currency exchange forward contracts hedge a portion of our forecasted foreign currency-denominated revenues and expenses (principally U.S. Dollar, Euros, Mexican Pesos, Czech Koruna, Japanese Yen, Swedish Krona, Danish Krone, Canadian Dollar, Australian Dollar, and Chinese Renminbi) that differ from the functional currency of the operating unit. These derivative contracts are designated and qualify as cash flow hedges (see Note 9: Derivatives and Hedging Activities to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q). We performed a sensitivity analysis to estimate changes in the fair value of our foreign exchange derivatives due to potential changes in near-term foreign currency exchange rates. At March 31, 2025, the effect of a hypothetical 10% weakening in the actual foreign currency exchange rates used for the applicable currencies would result in an estimated decrease in the fair value of these outstanding derivative contracts by approximately $4.3 million.

Item 4.Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls

and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the

desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there

are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible

controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), as of the end of the period covered by this Quarterly Report. Based on the evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2025, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.Legal Proceedings

Certain legal proceedings in which we are involved are discussed in Part I, Item 1. "Financial Statements" of this Form 10-Q in Note 20. Commitments and Contingencies to the Condensed Consolidated Financial Statements, and is incorporated herein by reference.

Table of Contents

Item 1A.Risk Factors

In evaluating an investment in our common stock, investors should consider carefully, among other things, the risk factors previously disclosed in Part I, Item 1A of our 2024 Annual Report on Form 10-K, as well as the information contained in this Quarterly Report, in each case, as updated by our other filings with the SEC. There have been no material changes to the risk factors disclosed in Part I, Item 1A of our 2024 Annual Report on Form 10-K, except as set forth below.

We derive a significant portion of our revenues from non-U.S. sales and from products manufactured at our non-U.S. facilities which are then imported to the U.S. We are therefore subject to risks of doing business in other countries, including those related to tariffs, retaliatory counter measures and further escalation of trade tensions.

The imposition of tariffs by the U.S. government and retaliatory tariffs imposed by other foreign governments is expected increase our costs. Where possible, we may address increasing supply chain costs in pricing; however, we operate to a large extent under long-term contracts whereby pricing is fixed for a set period of time. The tariffs as currently implemented are likely to have a material impact on our business, financial condition and results of operations; however, the extent to which the imposition of tariffs, possible delays and exemptions remains fluid.

Additionally, the imposition of higher tariffs could undermine the competitiveness of a U.S. based company in the global market and could result in termination of orders by customers, lower demand for products and the loss of market share.

A meaningful portion of our global revenues is from products manufactured in our Costa Rica and Mexico manufacturing facilities which are then imported into the U.S. We expect revenues from goods manufactured in Costa Rica and Mexico and imported to the U.S. to remain a significant portion of our revenues for the foreseeable future.

In January of 2025, the current presidential administration first issued executive orders imposing tariffs on imported goods from Mexico, and China. Tariffs initially imposed were 25% on certain goods from Mexico and 10% on all goods from China. Currently the majority of products manufactured in our Mexico facilities are exempted from tariffs under the United States-Mexico-Canada Agreement ("USMCA"). If the USMCA exemptions were eliminated in the future, our tariff expense for products manufactured in Mexico would increase substantially. On April 2, 2025, the U.S. further announced a 10% baseline reciprocal tariff on imports from all countries, plus an additional country-specific tariff on imports from select trading partners. On April 9, 2025, the U.S. implemented a 90-day pause on the country-specific tariffs for all countries except China, while maintaining the 10% baseline tariff.

These actions have resulted, and are expected to further result, in retaliatory measures on U.S. goods by other foreign governments. If maintained, these recently announced tariffs, and the potential escalation of trade disputes could pose a risk to our business that could further affect our financial condition or results of operations and/or cash flows, as well as, our long-term investment strategies. The extent and duration of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and are expected to be impacted by various factors, such as negotiations between U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that already exist or may be granted, availability and cost of alternative sources of our products and materials, and our ability to offset the effects of any tariffs that might be imposed.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

Purchase of Equity Securities

The following is a summary of our stock repurchasing activity during the first quarter of 2025:


Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of a publicly announced program	Approximate dollar value that may yet be purchased under the program(1)
01/01/2025 — 01/31/2025	—	$	—	—	$	100,000,000
02/01/2025 — 02/28/2025	—	$	—	—	$	100,000,000
03/01/2025— 03/31/2025	—	$	—	—	$	100,000,000
First quarter of 2025 total	—	$	—	—	$	100,000,000

____________________________

Table of Contents

(1) Our common stock purchase plan, which authorized the repurchase of up to $100.0 million of our common stock, was authorized by our Board of Directors and publicly announced in August 2019. This plan has no expiration date. We are not obligated to make any purchases under our stock purchase program. Subject to applicable state and federal corporate and securities laws and any restrictions on share purchases under our debt agreements, purchases under a stock purchase program may be made at such times and in such amounts as we deem appropriate. Purchases made under our stock purchase program can be discontinued at any time we feel additional purchases are not warranted. We are limited on share purchases in accordance with the terms and conditions of our Credit Agreement (see Note 18: Long-Term Debt in our accompanying condensed consolidated financial statements).

Item 5. Other Information

(a) None.

(b) None.

(c) During the three months ended March 31, 2025, none of the Company's directors or "officers" (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" intended to satisfy the affirmative defense of Rule 10b5-1(c) or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Table of Contents



Exhibit Number	Exhibit Description	Filed/ Furnished Herewith
2.1	Share Sale and Purchase Agreement, dated September 8, 2021, by and between Smiths Group International Holdings Limited, a private limited company incorporated in England and Wales, and ICU Medical, Inc., a Delaware corporation. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed on September 8, 2021 (File No. 001-34634).
2.2	Put Option Deed from ICU Medical, Inc., a Delaware corporation to Smiths Group International Holdings Limited, a private limited company incorporated in England and Wales. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed on September 8, 2021 (File No. 001-34634).
2.3	Purchase Agreement, dated November 12, 2024, by and between ICU Medical, Inc., a Delaware corporation, ICU Medical Sales, Inc., a Delaware corporation and Otsuka Pharmaceutical Factory America, Inc., a Delaware corporation. Filed as an Exhibit to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024, filed on November 12, 2024 (File No. 001-34634)
3.1	Registrant's Certificate of Incorporation, as amended and restated. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed on June 10, 2014 (File No. 001-34634).
3.2	Registrant's Bylaws, as amended and restated. Filed as an Exhibit to Registrant's Current Report on Form 8-K filed on November 3, 2023 (File No. 001-34634).

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	*

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	*

32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	**

101.INS	XBRL Instance Document - this instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	*

101.SCH	XBRL Taxonomy Extension Schema Document	*

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	*

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	*

101.LAB	XBRL Taxonomy Extension Label Linkbase Document	*

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	*

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)	*

* Filed herewith.

** Furnished herewith.

Table of Contents

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ICU Medical, Inc.