Risk Factors Update Summary

• Increased R&D costs: Research and development costs were $85.3 million in 2023, $93.0 million in 2022, and $47.5 million in 2021.
• Effective tax rate for 2023 included a tax benefit of $6.5 million related to U.S. federal return-to-provision adjustments.
• Increased scrutiny on environmental sustainability and social initiatives may lead to higher costs and reputational risks.
• Currency exchange rates have been especially volatile, resulting in $5.9 million in foreign exchange losses in 2023.
• Added variable consideration details including distributor chargebacks, product returns, and end customer rebates. This change might result in more accurate revenue recognition.
• Fluctuating review times by regulatory authorities may delay product approvals, impacting business operations.
• Increase in deferred gains on foreign exchange forward contracts from $29 million to $23 million.
• Expansion of manufacturing capacity: Continued expansion may be necessary, with molds and automated assembly machines having a lead time of nine months or longer.
• Restructuring, strategic transaction, and integration expenses were $41.3 million in 2023, down from $71.4 million in 2022.
• Fluctuations in currency exchange rates and geopolitical conditions may adversely affect operations.
• Cash and cash equivalents increased by $41 million from $213.0 million at December 31, 2022, to $254.7 million at December 31, 2023.
• Sold trade receivables to BOW in 2023 for $629.1 million, resulting in a loss of $3.7 million.
• Granted PRSUs to executive officers in 2023 with varying vesting conditions. This change may impact executive compensation and performance incentives.
• Net income decreased from $74.3 million in 2022 to $29.7 million in 2023.
• Operating lease cost rose from $22,869 to $25,213 in 2023. This change may impact operating expenses significantly.
• Reliance on single-source suppliers for critical materials poses a risk of supply interruptions.
• Short-term investment securities decreased from $14.4 million to $4.2 million.
• Impact of geopolitical tensions: Geopolitical tensions, such as conflicts in Eastern Europe and the Middle East, may result in increased raw material costs and higher shipping costs.
• Increased revenue from $2,279,997 million to $2,259,126 million in 2023. This change indicates a significant revenue decrease.
• Decrease in total liabilities from $27,586 to $2,014 million, mainly due to contingent earn-out liability changes.
• Income before income taxes decreased from $114.4 million in 2022 to $78.3 million in 2023.
• The Smiths Medical acquisition in 2022 led to significant growth in personnel to approximately 14,000 employees.
• Research and Development expenses decreased in 2023 due to organizational synergies post the Smiths Medical acquisition.
• Cash collected and remitted to BOW in 2023 was $553.2 million, with $75.9 million remaining.
• New data protection laws and regulations may require additional compliance investments and process changes.
• Supply chain disruptions: Experienced supply chain disruptions and increased raw material costs and shipping costs in 2022.
• Increase in deferred tax asset from $17,351 to $30,190 million.
• Infusion Systems revenue increased from $740 million to $691 million in 2023. This change may impact product performance.
• Allowance for doubtful accounts decreased from $21,232 million in 2021 to $11,064 million in 2023.
• Interest expense increased in 2023 due to higher SOFR reference rates, impacting net interest expense.
• Long-term debt decreased from $1.623 billion to $1.577 billion.
• Consolidated SG&A expenses decreased slightly in 2023, primarily due to decreases in various expense categories.
• Tax provision increased from $20.1 million in 2022 to $48.6 million in 2023.
• Stock compensation expense increased from $36,025 to $40,563 in 2023. This change may affect employee compensation and financial performance.
• Total revenues increased from $2.279 billion to $2.259 billion.
• Legal and regulatory risks related to data privacy and security enforcement are evolving rapidly.
• Basic EPS decreased from $3.11 in 2022 to $1.23 in 2023.
• Inflationary cost increases: Inflationary cost increases during 2022 may restrict the ability to pursue business strategies.
• Increase in long-term debt from $54,053 to $76,973 million.
• Vital Care revenue increased from $691 million to $954 million in 2023. This change suggests growth in this product line.
• Warranty and return reserve for inventory increased from $(13,313) in 2021 to $57,796 in 2023.
• Increase in total interest expense from $75,032 to $133,882 million.
• Cost of goods sold decreased from $1.582 billion to $1.519 billion.
• Impact of heightened inflation: Heightened inflation may reduce or delay orders for products, impacting sales and operations.
• Directors' ages increased by one year each, reflecting changes in the board composition.
• Weighted average number of shares for basic EPS increased from 21,206 in 2022 to 24,091 in 2023.
• Compliance with new Health Technology Assessment regulations may impact product sales and operations.
• Changes in regulatory requirements, such as the EU Medical Devices Regulation, may affect product distribution.
• Other comprehensive income increased from $135.9 million in 2022 to $1.8 million in 2023.
• Increase in total assets from $358,980 to $403,546 million.
• Changes in officer titles and responsibilities were updated for accuracy and alignment.
• Impact of global macroeconomic conditions: Global macroeconomic conditions, including heightened inflation, higher interest rates, and currency rate fluctuations, may impact financial results.
• Gross profit increased from $697 million to $739 million.
• Increase in stockholders' equity from $40,237 to $21,779 million.
• Cash and cash equivalents decreased from $396.1 million at the end of 2022 to $254.2 million at the end of 2023.
• Various subsidiaries were renamed or updated, reflecting organizational changes and clarifications.