Company: ICUI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000883984-25-000016
Chunk: 15

Company: ICU MEDICAL INC/DE
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 15
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 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