ICUI
#Yes, sure.
Hey, <UNK>.
I think you have to unfortunately go back in history and the Q1 of 2014 was about the lowest quarter we had on an OEM basis right when I got here last year.
And so the growth rate looks high year-over-year.
I think when we look at the sequential numbers, that is what I was trying to say in the comments, it is basically up $2 million bucks from Q4 and then we are saying that we expected it to be down a bit sequentially.
So maybe it took a little bit more than it was running at this quarter and will give back a little bit more ---+ took a little bit more in Q1 and will give back a little bit more in Q2.
That was sort of what we were saying, and the unknown for us is the back half of the year and that is why we want to wait to Q2 to talk about it, but certainly I mean it's not lost on us, plus16 doesn't mean minus 5 to minus 10.
<UNK> mentioned it is probably somewhere in the middle.
Sure.
I think right now, with the changes we made on the sales force and new people we're hiring et cetera, I think there are no net negatives to the equation.
Sequentially our direct business was equal almost in Q1 as Q4.
But, we had a huge currency issue in Q1, so it sequentially grew to a level I think we felt pretty good about.
Again, if you compare that to Q1 of last year it looks a lot better because that really was the bottom in that case of our direct business, but I think initiatives are going well and again for me the proof will be can we keep sequentially doing this, right, regardless of what the year-over-year stuff says.
And I take currency out of that equation when I am looking at whether sequentially we're doing the right thing or not.
It is different for different parts of the world.
I think we see the US broad market growth as 2% to 3%, probably faster in some other spots in the world.
You really have to go deeper, <UNK>.
Look at how much available US infusion channels are out there to go get given all the change that's happened over the last four years and make your own model as to what the available market and what's a realistic capture rate for them.
And I think we've been appropriately conservative through that since we've started talking about it.
No, I think it will come true.
I think we're being cautious, right.
We're very sensitive to adding costs until we're certain the revenues are there, so we have been trying to be conservative and cautious waiting to see what the revenue picture looked like before we put anything back in, because we made commitments about what we would take out.
I think we actually had more than $10 million of cash cost reductions.
We talked about 10, but we wanted to make sure the revenues came through before we added anything back.
If we can afford it, there is not some magic margin target out there that we're shooting for.
I feel good about where our adjusted EBITDA margins came out this quarter.
We know what best-in-class in the industry is, but there's an opportunity to make an investment that can help us deploy capital or drive revenue growth, or do something strategic we're going to make it.
It's not about like hitting some magic margin number.
That's just a static thing.
That is (technical difficulty) not over long term.
I think as <UNK> mentioned, look at Quarter Two.
That is going to be a fairly good run rate going forward for our SG&A.
On oncology, as <UNK> said, constant currency growth was ---+
Pretty solid, like 20%.
We actually sell more oncology outside the US than we do inside the US, I have been saying for a long time.
So, we feel the pinch of currency on that line, but I think we feel really good about what we did there and then reported 11[%] on a direct.
Yes, we have been suffering because it's been choppy on the OEM side of that business and I think we continue to believe what we said in the last call or the call before that, which is we think by the middle of this year that should bleed itself out.
There was a lot of extra stuff in 2013 and I think they are doing what they can.
I do think our partner continues to be focussed on that, and it will get more intensity and we should see the results of it.
On the---+
You mean excluding the discrete.
The discrete was about $2 million.
I'll go first and see if <UNK> has got anything to add.
I think, <UNK>, again it is misleading to look a little bit ---+ I feel for our business it is misleading to look year-over-year, and so again I'm very focussed are we chipping away and improving at every quarter.
We did improve over Q4.
I think the components of that growth were not due to big industry changes.
I think the overall consumption rate, as we talked about in the last call continues to be positive for us.
We've had some wins, but there is not some sort of massive individual piece of business that we can point to.
It is a lot of little things than just being focused.
So I don't think there is some big individual thing, it's really the market went up in general.
Just compare it on a constant currency basis sequentially, <UNK>, and then it goes back to our thoughts around our product that it's extremely sticky, and I think you're seeing the results of that.
I don't think we've seen any ---+ maybe I would say on Diana system, <UNK>, I think it does help us get a better conversation going around a complete solution, around closed system transfer devices oncology.
Particularly high-volume centers, we have a unique offering there to make clinicians safer, more productive, et cetera.
In core IV, I don't think it's driving the attachment rate with the new valves.
The new valves are their own conversations.
Yes, that's correct.
I'll go and then <UNK> will pop in.
So when we got here and we talked about cleanup activities last year, there were a number of legacy items that made a lot of sense as a small company that probably didn't make as much sense when we became the scale that ICU was, and so we were passing a lot of value top to bottom to other people sitting between us and the customer, and it didn't make a lot of sense.
It wasn't moving market share.
And so we cleaned those items up and we get the full margin, and so that's been a big driver in that.
That's in the books now.
That is not going to get any better.
The thing that is going to get better from here on is volume, right.
More volume, any sort of revenue growth, or even at these levels you see anything we are able to do, you see above these levels it would get better.
If we are not above these levels, it's hard to argue it should get better.
Right now we feel pretty good about ---+
Improved margins.
Improved margins for the balance of this year relative to where we were last year.
Right, and we'll update you in more detail how we see the rest of the year ending up margin wise, but there is sustainability to what <UNK> mentioned and then the rest of the year we'll update you next call.
No, we were ---+ at the gross margin line it is neutral because we get a pickup from Mexico and a slight loss from Europe.
Outside of anything that we would have to do to keep manufacturing margins improving, quality folks or capital deployment, people can help on that, yes, that's it.
And those are all included in the guidance we gave for the year last time.
The concern in Q4 was we didn't have them filled so the Q4 SG&A I felt looked too light.
We gotten a lot of them filled.
Some of that just came in in February or March, so it is still not a perfect number.
By the time Q3 happens everything will be for good.
Okay.
No, I think for what we see right now that's the right number, but we will debit EBITDA margins and invest if we see something that can add revenue growth.
So I don't want to put a line in the sand and say it is permanently absolutely what it is.
If something can drive value, we'll make the investment.
Again, it is not perfecting margins for one quarter.
I think for what we see right now and the guidance we've given, we think it makes sense.
If we can do better, maybe it will change a little bit.
I think we're pretty disciplined, and it has got to pay itself back in a reasonable amount of time.
Getting closer.
We hope to release it by the end of this year.
It's hot out there.
We're looking.
We know we're on the clock.
At the minute right now we're focused on keep driving performance in the business, keep trying to improve.
Keep looking at things and when something makes sense, we'll do it.
I just feel like we can't count on that happening.
It's a very robust and frothy market out there and I don't want us to make a mistake, and so that's where we are.
All right.
Okay.
Thanks, everybody, for investing the time to learn about what we're doing here.
The Company is moving forward in a very positive way.
We have come together as a team and serving customers well, and I think we're really excited about what we're doing.
Our Q2 call I think is going to be super informative and I hope people dial into that and we're going to be working hard over the next 90 days to get there.
Thanks, everybody.
Thanks for the support.
