Company: ICUI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0000883984-25-000030
Chunk: 89

Company: ICU MEDICAL INC/DE
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 1
Chunk 89
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 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 fluctuating inflation rates, 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. 

2025 Events

The U.S. administration has continued to engage in trade discussions and impose tariffs on imports from other countries. Certain of these tariffs have been subsequently paused or modified, and the situation remains highly fluid. For example, most recently, on July 31, 2025, the U.S. announced that the 10% baseline reciprocal tariff on imports from all countries would be raised to 15% for certain countries, including Costa Rica. 

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, however, 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 may have a material impact remains fluid. These tariffs did not significantly impact our results of operations for the three and six months ended June 30, 2025. During the second quarter of 2025, we incurred $12.3 million in tariffs, of which $8.6 million was capitalized and $3.7 million was expensed.

In June 2025, a conflict between Israel and Iran and the subsequent U.S. intervention, as well as the resulting and potentially escalating tensions in the region, caused volatility with respect to oil prices. In particular, if Iran seeks to close the Strait of Hormuz, it could create an oil supply shortage that could significantly drive up prices, increase inflation and slow economic