Company: ICUI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000883984-25-000016
Chunk: 78

Company: ICU MEDICAL INC/DE
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 78
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ays;

•Peripheral Nerve Block Trays; and

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

40

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