ICU Medical Inc Wells Fargo 21st Annual Healthcare Conference

Thanks for including us in this great event. Once again, we appreciate it.

Yeah, obviously a lot of discussion this week on what's happening with underlying volumes. For us, our business is most directly tied to census and admissions, and we haven't seen a lot of change. We said on the call script, demand was in line with our underlying guidance assumptions. We continue to feel that way. The rate of growth has decelerated versus last year, which had a bigger step up, or the year before. But it's certainly meeting our needs, and we don't have a lot of negative things to say about the demand side of it right now. Now we don't see the actual end use, whether it's in an elective case or a surgery center, whatever it may be. But regular hospital admissions and level of busyness is pretty good to us.

If we reflect on our journey, our company's journey, ICU's journey, for the last 7 or 8 years, we essentially took a small parts supplier and built an integrated infusion company around it. I do not think the intent of that was to optimize the market growth rate. It was really to build a coherent portfolio with things that made sense together. We had to make our first move into the pump business really defensively because our partner, which was Hospira at the time, was not focused on the business, and that led us to other choices of things to add along the way. I think the guiding principles for us, more than chasing growth rate, has been where can we put assets together where we could innovate and bring value to the customer? That value was really around safety and clinical efficacy.

I think that was sort of the main driver. The second driver related to more of our recent portfolio decisions, like the joint venture we created with Otsuka on IV solutions, is to optimize businesses that had less capital intensity, where we believe we did not add the same level of innovation. So our moves to date have been to try to improve capital efficiency and improve ROIC.

I think that's the last 10% of our portfolio. Back to the point on having the most coherent portfolio, there are parts of that that aren't as coherent. At this conference last year, we were starting to say we think there's something to do maybe with some of those assets. We have not been able to get something done at a level we thought made sense. For the moment, we run them until we have a better choice. I don't think that we would necessarily increase investment. Even today, you can see there's certain companies or divestitures may have been expected, and depending on who's on the other side of those conversations, you may not get the value you want. That is probably a pretty good comp for our situation.

Yeah. I think there's a couple of different ways, and on the earnings calls the last few times, towards the end of the call, we've tried to iterate the ways that we can create value in our pump business. The three or four ways we create value is really first and foremost competitive wins, because that captures new market share, and you get not only the benefit of selling the hardware, but you get 7 to 10 years of disposables utilization of razor blades with dedicated sets and some software fees. The second way we create value is refreshing our own install base, and that applies both for our LVP business, but also the syringe pump businesses, et cetera, things that we came in the last acquisition.

The third way we create value is by re-profitizing all of that with deeper software costs and more value we can add there. Most of the 2026 discussion, the back half has been the first item, which has been winning on the competitive front. Over time, the other parts, the refresh and the software, will come more into the equation, and there's some next gen stuff in the home care environment. But so far, it's really been about just taking advantage of the flux in this market in the U.S. more than anywhere else.

Yeah. I think we have been very careful, Larry, in our public talks to not necessarily. We say it will show up on our income statement, right? Either it does or it does not. Everybody in this line seems to talk their own book. For us, pumps are LVP pumps, syringe pumps, and ambulatory pumps. Not everybody may have the same mix there, and we try to talk on a net basis, not only what we won, but also what may have been lost. It is not clear to me that is an apples to apples. Again, for us, the other thing we said for years in our call script is that in the pump business, and certainly prior to our most recent acquisition, we are still very small. Therefore, we do not need a lot to keep us happy. Most of the wins have been competitive.