ICU Medical, Inc. (NASDAQ:ICUI) Q4 2022 Earnings Call Transcript

Brian Bonnell: I think if you were to start with kind of the more macroeconomic items, certainly, FX, we saw in ’22 what an impact that can have in a negative direction. And so certainly, that’s something that can have a meaningful impact to our results. And then on the commercial side, I think that there’s probably some opportunities there, especially within the legacy Vascular Access business, that could probably — where we probably have some upside if we are able to get back some of that business that could.

Vivek Jain: We tried to give the exact bridge the missing 100, right, the missing 100 — the $100 million variance, Brian, there’s examples in gross margin, right? Some of the gross margins up is permanent, right? Labor is permanent — labor is staying permanent for 2 years. Some of the raw material increases are absolutely permanent. And then there’s some surge stuff that is going to go away. There is the macro on FX and fuel but it always comes back to revenues, right? And we have $100 million less of high-margin revenues that went away. We’ve got to figure out how to get those back. That’s how we get the overall return to where we want it. And we kind of say, what were those buckets of what was missing? You can make your own call and the individual components there and the market structures of those categories.

The ones that we feel are self-inflicted, there’s no reason we shouldn’t be out there trying to take those market shares back. The ones that have competitive challenges, we have to execute and go win.

Matt Mishan: Is that separate — I think I caught a comment where you said you were going to maintain a higher level of inventory that could help on — for onboarding new customers. I guess I’m just — when I hear that, it seems like you guys are going to go after revenue growth incremental to customers you already have. But I guess it’s also to a point, I mean, by having that higher inventory, do you think you can get back some of the customers — some of the sales that you may have lost with existing customers? Is that completely two separate items or a single item with the inventory?

Vivek Jain: Well, it’s a little bit of what we experienced with Hospira, right? We bought a situation that was challenged and we went on a global apology tour. And if you want to get some pieces of business back, you do have to make commitments about your reliability and your ability to supply because people only left because they couldn’t get the product from Smiths. And so we do have to show better levels of inventory and we do have to make some commitments around it. So that’s just called putting more money into the transaction, right? That’s what I was saying we lost time and we cost a little bit more capital but we have to get a return on that by getting the business back.

Matt Mishan: And then last one. I hate to ask a near-term question like this but it just — it does seem like you had a good November, December and then January and February what it seems like from an outside perspective, it seems relatively steady. Is this kind of the steadiest environment you guys have seen in a very long time? And is that translating to more confidence in the business?