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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: June 30, 2020
 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from:              to
 
Commission File No.: 001-34634
 ICU MEDICAL, INC.
(Exact name of registrant as specified in its charter)
 
Delaware 33-0022692
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
951 Calle Amanecer,San Clemente,California92673
(Address of principal executive offices)(Zip Code)
 (949) 366-2183
(Registrant’s telephone number including area code)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes x  No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
 
Large accelerated filerx 
Accelerated filer o
Non-accelerated filer o
 Smaller reporting company
 Emerging growth company
 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):  Yes  No x

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.10 per shareICUIThe Nasdaq Stock Market LLC
(Global Select Market)
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
Class Outstanding at July 31, 2020
Common 20,937,857




ICU MEDICAL, INC. AND SUBSIDIARIES
Form 10-Q
June 30, 2020

Table of Contents
PART I.Financial Information Page Number
   
Item 1.Financial Statements (Unaudited)  
   
Condensed Consolidated Balance Sheets, at June 30, 2020 and December 31, 2019 
   
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019 
   
Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2020 and 2019 
Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2020 and 2019
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 
   
 
   
Item 2. 
   
Item 3. 
   
Item 4. 
   
PART II.  
Item 1. 
   
Item1A. 
   
Item 2. 
   
Item 6. 
   
 
2


PART I - FINANCIAL INFORMATION
Item1.Financial Statements (Unaudited)

ICU MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value data) 
 June 30,
2020
December 31,
2019
 (Unaudited)(1)
ASSETS  
CURRENT ASSETS:  
Cash and cash equivalents$446,134  $268,670  
Short-term investment securities14,564  23,967  
TOTAL CASH, CASH EQUIVALENTS AND INVESTMENT SECURITIES460,698  292,637  
Accounts receivable, net of allowance for doubtful accounts of $19,648 at June 30, 2020 and $20,219 at December 31, 2019
197,775  202,219  
Inventories322,766  337,640  
Prepaid income tax11,694  15,720  
Prepaid expenses and other current assets43,772  33,981  
TOTAL CURRENT ASSETS1,036,705  882,197  
PROPERTY AND EQUIPMENT, net454,824  456,085  
OPERATING LEASE RIGHT-OF-USE ASSETS49,712  34,465  
GOODWILL32,472  31,245  
INTANGIBLE ASSETS, net203,720  211,408  
DEFERRED INCOME TAXES28,776  27,998  
OTHER ASSETS52,853  48,984  
TOTAL ASSETS$1,859,062  $1,692,382  
LIABILITIES AND STOCKHOLDERS’ EQUITY  
CURRENT LIABILITIES:  
Accounts payable$101,127  $128,629  
Accrued liabilities107,083  117,776  
Short-term debt150,000    
Income tax liability941  2,063  
TOTAL CURRENT LIABILITIES359,151  248,468  
CONTINGENT EARN-OUT LIABILITY20,000  17,300  
OTHER LONG-TERM LIABILITIES49,883  32,820  
DEFERRED INCOME TAXES2,091  2,091  
INCOME TAX LIABILITY16,140  14,459  
COMMITMENTS AND CONTINGENCIES (Note 18)    
STOCKHOLDERS’ EQUITY:  
Convertible preferred stock, $1.00 par value Authorized—500 shares; Issued and outstanding none
    
Common stock, $0.10 par value — Authorized, 80,000 shares; Issued — 20,937 shares at June 30, 2020 and 20,743 shares at December 31, 2019 and outstanding — 20,936 shares at June 30, 2020 and 20,742 shares at December 31, 2019
2,094  2,074  
Additional paid-in capital675,497  668,947  
Treasury stock, at cost(140) (157) 
Retained earnings757,524  721,782  
Accumulated other comprehensive loss(23,178) (15,402) 
TOTAL STOCKHOLDERS' EQUITY1,411,797  1,377,244  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$1,859,062  $1,692,382  
______________________________________________________
(1) December 31, 2019 balances were derived from audited consolidated financial statements.
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ICU MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
 
 Three months ended
June 30,
Six months ended
June 30,
 2020201920202019
TOTAL REVENUES$303,379  $312,282  $631,986  $643,214  
COST OF GOODS SOLD197,095  208,413  404,287  404,042  
GROSS PROFIT106,284  103,869  227,699  239,172  
OPERATING EXPENSES:  
Selling, general and administrative67,242  67,824  139,547  140,457  
Research and development10,279  11,199  21,025  24,022  
Restructuring, strategic transaction and integration6,482  37,041  18,789  61,433  
Change in fair value of contingent earn-out2,700  (39,500) 2,700  (47,200) 
Contract settlement25  1,039  25  3,822  
TOTAL OPERATING EXPENSES86,728  77,603  182,086  182,534  
INCOME FROM OPERATIONS19,556  26,266  45,613  56,638  
INTEREST EXPENSE(771) (139) (967) (272) 
OTHER INCOME (EXPENSE), net2,053  1,479  (3,427) 4,670  
INCOME BEFORE INCOME TAXES20,838  27,606  41,219  61,036  
PROVISION FOR INCOME TAXES(1,930) (4,773) (5,477) (7,205) 
NET INCOME$18,908  $22,833  $35,742  $53,831  
NET INCOME PER SHARE  
Basic$0.91  $1.11  $1.72  $2.62  
Diluted$0.88  $1.06  $1.66  $2.50  
WEIGHTED AVERAGE NUMBER OF SHARES  
Basic20,880  20,622  20,831  20,577  
Diluted21,506  21,520  21,545  21,546  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ICU MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In thousands)
 
 Three months ended
June 30,
Six months ended
June 30,
 2020201920202019
NET INCOME$18,908  $22,833  $35,742  $53,831  
Other comprehensive income (loss), net of tax:
Cash flow hedge adjustments, net of taxes of $356 and $116 for the three months ended June 30, 2020 and 2019, respectively, and ($577) and $322 for the six months ended June 30, 2020 and 2019, respectively1,126  369  (1,826) 1,019  
Foreign currency translation adjustment, net of taxes of $0 for all periods4,604  2,838  (5,872) 1,246  
Other adjustments, net of taxes of $0 for all periods4    (78) 6  
Other comprehensive income (loss), net of taxes5,734  3,207  (7,776) 2,271  
TOTAL COMPREHENSIVE INCOME$24,642  $26,040  $27,966  $56,102  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
(Amounts in thousands)
 Common Stock   Accumulated 
  Additional  Other 
SharesAmountPaid-In
Capital
Treasury
Stock
Retained
Earnings
Comprehensive
Loss
Total
Balance, January 1, 202020,742  $2,074  $668,947  $(157) $721,782  $(15,402) $1,377,244  
Issuance of restricted stock and exercise of stock options155  9  (10,207) 10,758  —  —  560  
Tax withholding payments related to net share settlement of equity awards(64) —  —  (12,174) —  —  (12,174) 
Stock compensation—  —  6,939  —  —  —  6,939  
Other comprehensive loss, net of tax—  —  —  —  —  (13,510) (13,510) 
Net income—  —  —  —  16,834  —  16,834  
Balance, March 31, 202020,833  $2,083  $665,679  $(1,573) $738,616  $(28,912) $1,375,893  
Issuance of restricted stock and exercise of stock options106  11  4,408  1,820  —  —  6,239  
Tax withholding payments related to net share settlement of equity awards(2) —  —  (387) —  —  (387) 
Stock compensation—  —  5,410  —  —  —  5,410  
Other comprehensive income, net of tax—  —  —  —  —  5,734  5,734  
Net income—  —  —  —  18,908  —  18,908  
Balance, June 30, 202020,937  $2,094  $675,497  $(140) $757,524  $(23,178) $1,411,797  
 Common Stock   Accumulated 
  Additional  Other 
SharesAmountPaid-In
Capital
Treasury
Stock
Retained
Earnings
Comprehensive
Loss
Total
Balance, January 1, 201920,492  $2,049  $657,899  $(95) $620,747  $(16,945) $1,263,655  
Issuance of restricted stock and exercise of stock options254  18  (4,289) 5,196  —  —  925  
Tax withholding payments related to net share settlement of equity awards(78) —  —  (18,157) —  —  (18,157) 
Stock compensation—  —  6,209  —  —  —  6,209  
Other comprehensive loss, net of tax—  —  —  —  —  (936) (936) 
Net income—  —  —  —  30,998  —  30,998  
Balance, March 31, 201920,668  $2,067  $659,819  $(13,056) $651,745  $(17,881) $1,282,694  
Issuance of restricted stock and exercise of stock options    (8,505) 11,514  —  —  3,009  
Tax withholding payments related to net share settlement of equity awards  —  —  (108) —  —  (108) 
Stock compensation—  —  6,229  —  —  —  6,229  
Other comprehensive income, net of tax—  —  —  —  —  3,207  3,207  
Net income—  —  —  —  22,833  —  22,833  
Balance, June 30, 201920,668  $2,067  $657,543  $(1,650) $674,578  $(14,674) $1,317,864  
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ICU MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands) 
 Six months ended
June 30,
 20202019
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income$35,742  $53,831  
Adjustments to reconcile net income to net cash provided by operating activities: 
Depreciation and amortization42,575  37,838  
Amortization of right-of-use assets4,527  4,150  
Provision for doubtful accounts162  5,838  
Provision for warranty and returns(1,221) 1,249  
Stock compensation12,349  12,438  
Loss on disposal of property and equipment and other assets1,078  12,845  
Bond premium amortization85  68  
Debt issuance costs amortization144  144  
Change in fair value of contingent earn-out2,700  (47,200) 
Product-related charges2,626    
Usage of spare parts5,045  14,649  
Other1,615  (346) 
Changes in operating assets and liabilities: 
Accounts receivable5,293  (46,861) 
Inventories8,481  (16,060) 
Prepaid expenses and other assets(9,333) 6,111  
Other assets(7,223) (18,079) 
Accounts payable(23,305) 2,032  
Accrued liabilities(15,257) (21,124) 
Income taxes, including excess tax benefits and deferred income taxes2,657  735  
Net cash provided by operating activities68,740  2,258  
CASH FLOWS FROM INVESTING ACTIVITIES:  
Purchases of property and equipment(38,517) (48,726) 
Proceeds from sale of asset147  19  
Business acquisitions, net of cash acquired  (4,600) 
Intangible asset additions(4,104) (4,088) 
Purchases of investment securities(7,082) (17,994) 
Proceeds from sale of investment securities16,400  33,400  
Net cash used in investing activities(33,156) (41,989) 
CASH FLOWS FROM FINANCING ACTIVITIES:  
Proceeds from short term debt150,000    
Proceeds from exercise of stock options6,799  3,934  
Payments on finance leases(116)   
Tax withholding payments related to net share settlement of equity awards(12,561) (18,265) 
Net cash provided by (used in) financing activities144,122  (14,331) 
Effect of exchange rate changes on cash(2,242) 1,148  
NET INCREASE (DECREASE) CASH AND CASH EQUIVALENTS177,464  (52,914) 
CASH AND CASH EQUIVALENTS, beginning of period268,670  344,781  
CASH AND CASH EQUIVALENTS, end of period$446,134  $291,867  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ICU MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - CONTINUED
(In thousands)
Six months ended
June 30,
20202019
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
  Accounts payable for property and equipment$9,775  $11,736  

The accompanying notes are an integral part of these condensed consolidated financial statements.
8

ICU MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


Note 1:Basis of Presentation
 
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.") and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of only normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the consolidated results for the interim periods presented. Results for the interim period are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of ICU Medical, Inc., ("ICU") a Delaware corporation, filed with the SEC for the year ended December 31, 2019.
 
We are engaged in the development, manufacturing and sale of innovative medical products used in vascular therapy and critical care applications.  We sell the majority of our products through our direct sales force and through independent distributors throughout the U.S. and internationally.  Additionally, we sell our products on an original equipment manufacturer basis to other medical device manufacturers. All subsidiaries are wholly owned and are included in the condensed consolidated financial statements.  All intercompany balances and transactions have been eliminated.

Note 2: New Accounting Pronouncements

Recently Adopted Accounting Standards

        In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Topic 350): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software and hosting arrangements that include an internal use software license. Costs to develop or obtain internal-use software that cannot be capitalized under subtopic 350-40, such as training costs and certain data conversion costs, also cannot be capitalized for a hosting arrangement that is a service contract. Therefore, an entity in a hosting arrangement that is a service contract determines which project stage (that is, preliminary project stage, application development stage, or post-implementation stage) an implementation activity relates to. Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. The amendments in this update require the entity to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. The amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The amendments in this update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We adopted this ASU effective January 1, 2020. This ASU did not have a material impact on our condensed consolidated financial statements or related disclosures.

        In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements in Topic 820. The amendments remove from disclosure: the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level 3 fair value measurements. The amendments also made the following disclosure modifications: for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly; and the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. The amendments also added the following disclosure requirements: the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The amendments in ASU 2018-02 are effective for fiscal years
9

ICU MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
beginning after December 15, 2019. Early adoption is permitted. We adopted this ASU effective January 1, 2020. This ASU did not have a material impact on our condensed consolidated financial statements or related disclosures.

        In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update amends the FASB's guidance on the impairment of financial instruments by requiring timelier recording of credit losses on loans and other financial instruments. The ASU adds an impairment model that is based on expected losses rather than incurred losses. The ASU also amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. In April 2019, the FASB issued ASU No. 2019-04 - Codification Improvements to Topic 326, Financial Instruments - Credit Losses and in May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses to Topic 326, Financial Instruments - Targeted Transition Relief. ASU 2019-04 clarifies and corrects certain areas of the Codification and ASU 2019-05 provides entities with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments—Overall, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The amendments in these updates will be effective for fiscal years beginning after December 15, 2019. Early adoption is permitted as of the fiscal years beginning after December 15, 2018. The updated guidance requires a modified retrospective adoption. We adopted this ASU effective January 1, 2020. This ASU did not have a material impact on our condensed consolidated financial statements or related disclosures.

Recently Issued Accounting Standards

        In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional guidance for a limited period of time to ease the potential burden for reference rate reform on financial reporting. Due to concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of the London Interbank Offered Rate ("LIBOR"), regulators around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued as a result of reference rate reform. Optional expedients may be applied to contracts that are modified as a result of the reference rate reform. Modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate. Modifications of contracts within the scope of ASC 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate (incremental borrowing rate). Exceptions to Topic 815, Derivatives and Hedging, results in not having a dedesignation of a hedging relationship if certain criteria are met. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. We are currently reviewing the impact of this ASU on our contracts.  

Note 3: Restructuring, Strategic Transaction and Integration

        Restructuring, strategic transaction and integration expenses were $6.5 million and $18.8 million for the three and six months ended June 30, 2020, respectively, as compared to $37.0 million and $61.4 million for the three and six months ended June 30, 2019, respectively.

Restructuring

        During the three and six months ended June 30, 2020, restructuring charges were $0.9 million and $8.1 million, respectively. During the three and six months ended June 30, 2019, restructuring charges were $6.9 million and $7.7 million, respectively. Restructuring charges for the three and six months ended June 30, 2020 were primarily related to severance and costs related to office and other facility closures. Restructuring charges for the three and six months ended June 19, 2019 were primarily related to a one-time charge to move our U.S. pump service depot to our existing Salt Lake City facility. Restructuring charges are included in the restructuring, strategic transaction and integration line item in our condensed consolidated statement of operations.

        During the year ended December 31, 2015, we incurred restructuring charges related to an agreement with Dr. Lopez, a member of our Board of Directors and a former employee in our research and development department, pursuant to which we bought out Dr. Lopez's right to employment under his then-existing employment agreement. The buy-out, including payroll taxes, is paid in equal monthly installments until December 2020.
        
        The following table summarizes the details of changes in our restructuring-related accrual for the period ended June 30, 2020 (in thousands):
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ICU MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accrued Balance January 1, 2020Charges
Incurred
PaymentsCurrency
Translation
Accrued Balance
June 30, 2020
Severance pay and benefits$3,878  $3,706  $(4,219) $(83) $3,282  
Employment agreement buyout460    (279)   181  
Facility closure expenses1,211  4,384  (4,239) 203  1,559  
$5,549  $8,090  $(8,737) $120  $5,022  

Strategic transaction and integration expenses

        We incurred and expensed $5.6 million and $10.7 million in strategic transaction and integration expenses during the three and six months ended June 30, 2020, respectively, as compared to $30.1 million and $53.7 million during the three and six months ended June 30, 2019, respectively. The strategic transaction and integration expenses during the three and six months ended June 30, 2020 and 2019, were primarily related to the integration of the Hospira Infusion Systems ("HIS") business acquired in 2017 from Pfizer, which for the six months ended June 30, 2020, included expenses for the migration of IT systems at our Austin facility. The strategic transaction and integration expenses during the three and six months ended June 30, 2019, included a one-time strategic supply chain restructuring charge of $22.1 million, which reduced our contracted commitments to our third party manufacturer. The six months ended June 30, 2019 also included a $12.7 million non-cash write-off of assets related to our final Pfizer separation costs.

Note 4: Revenue

        Our primary product lines are Infusion Consumables, Infusion Systems, IV Solutions and Critical Care. The vast majority of our sales of these products are made on a stand-alone basis to hospitals and distributors. Revenue is typically recognized upon transfer of control of the products, which we deem to be at point of shipment.

        Payment is typically due in full within 30 days of delivery or the start of the contract term. Revenue is recorded in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We offer certain volume-based rebates to our distribution customers, which we record as variable consideration when calculating the transaction price. Rebates are offered on both a fixed and tiered/variable basis. In both cases, we use information available at the time and our historical experience with each customer to estimate the most likely rebate amount. We also provide chargebacks to distributors that sell to end-customers at prices determined under a contract between us and the end-customer. We use information available at the time and our historical experience to estimate and record provisions for chargebacks.

        We also warrant products against defects and have a policy permitting the return of defective products, for which we accrue and expense at the time of sale using information available at that time and our historical experience. We also provide for extended service-type warranties, which we consider to be separate performance obligations. We allocate a portion of the transaction price to the extended service-type warranty based on its estimated relative selling price, and recognize revenue over the period the warranty service is provided.

Revenue disaggregated
        
        The following table represents our revenues disaggregated by geography (in thousands):
For the three months
ended June 30,
For the six months
ended June 30,
Geography2020201920202019
Europe, the Middle East and Africa$28,583  $32,978  $66,511  $65,356  
Other Foreign66,572  51,594  127,093  102,955  
Total Foreign95,155  84,572  193,604  168,311  
United States208,224  227,710  438,382  474,903  
Total Revenues$303,379  $312,282  $631,986  $643,214  
        
        
        The following table represents our revenues disaggregated by product (in thousands):
11

ICU MEDICAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the three months ended
June 30,
For the six months ended
June 30,
Product line2020201920202019
Infusion Consumables$110,993  $117,669  $234,500  $238,249  
Infusion Systems91,088  81,309  179,468  165,591  
IV Solutions89,178  102,635  193,469  215,817  
Critical Care12,120  10,669  24,549  23,557  
Total Revenues$303,379  $312,282  $