Good morning, ladies and gentlemen, and welcome to Baxter International's fourth quarter 2024 earnings conference call. Your lines will remain in a listen-only mode until the question-and-answer segment of today's call. At that time, if you have a question, you will need to press the star one on your touchstone phone. If anyone should require assistance during the conference, please press star then zero on your touchstone phone. As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcast without Baxter's permission. If you have any objections, please disconnect at this time. I would now like to turn the call over to Ms. Claire Trachman, Senior Vice President, Chief Investor Relations Officer at Baxter International. Ms. Trachman, you may begin.

Good morning, and welcome to our fourth quarter 2024 earnings conference call. Joining me today are Brent Schaefer, Baxter's Chair and Interim Chief Executive Officer, Joel Grady, Baxter's Executive Vice President and Chief Financial Officer, and Heather Knight, Baxter's newly appointed Chief Operating Officer. On the call this morning, we will be discussing Baxter's fourth quarter and full year 2024 results, along with our financial outlook for the first quarter and full year 2025. With that, let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook for the first quarter and full year 2025 the anticipated impact of our strategic actions the potential impact of various regulatory and operational matters and the macroeconomic environment on our results of operations contain forward-looking statements that involve risks and uncertainties and of course our actual results could differ materially from our current expectations please refer to today's press release in our sec filings for more detail concerning factors that could cause actual results to differ materially. In addition, on today's call, non-GAAP financial measures will be used to help investors understand factors' ongoing business performance. A reconciliation of certain non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in the accompanying investor presentation and available in our earnings release issue this morning, which are both available on our website. As a reminder, continuing operations excludes Baxter's kidney care business and Baxter's former biopharma solutions business, which are both reported as discontinued operations. During the Q&A session this morning, Brent, Heather, Joel, and I will be available to address questions. Questions on our results and outlooks will be addressed by me and Joel. Now I'd like to turn the call over to Brent.

Thank you, Claire, and good morning, everyone. I appreciate you joining us. As you know, I recently stepped into the role of chair. Joel Ameda led the business through a period and we're sincerely grateful for it. One of the board's top priorities, of course, is the identification. The board is actively engaged in the search process with the support of the leading firm, evaluating both internal and, but most importantly, we're taking a rigorous approach to lead backstories. During the transition period, I'm committed to helping ensure we remain focused on a crisp execution of our priorities and delivering strong, consistent results. I'm pleased to be working with the entire leadership team on these shared goals. We're continuing to move the company forward into a new era, and as recently announced, we closed the sale of Vantiv on January 31, 2025. This significant milestone was the final step of three strategic actions outlined in January of 2023 to transform the business. You'll recall these actions included the implementation of a new verticalized option. As a director and in my role as interim CEO, I can confirm that this segment-driven approach has created increased focus and execution-related benefits, bringing greater clarity and agility to how we pursue it. And as part of our transformation efforts, we completed the divestiture of Baxter's non-CORF. Since joining Baxter's board in 2022, I've observed and supported these shifts, and I'm extremely proud of the hard work and dedication of our teams to reach these actions have positioned Baxter to accelerate innovation for patients and customers and to drive profit quarterly and full-year performance, as well as our outlook. As seen in this morning's release, we finished 2024 on a high note, meeting our fourth quarter guidance for continuing operations on both, and we're starting 2025 building on this positive momentum. During this interim period, I'll be working closely with Heather, Joel, and the rest of Baxter's strong leadership team to ensure we maintain that momentum. I've been very impressed by what I've been engaged, talented, highly motivated team, A truly collaborative spirit of focus includes initiatives focused on innovation and profitable growth to increase value and to better serve the needs of our people. To support these efforts, and as we've shared earlier this month, we've instituted a new chief operating officer position as a next step. We're fortunate to have Heather Knight step into this role as COO. Heather brings extensive experience and a proven track record. principal tenure as head of our largest segment leading day-to-day operations across our three segments encompassing global commercial operations, R&D, supply chain, her leadership will be critical as we navigate the next days of growth. Now I'd like to turn it over to Heather to share her respect.

Thank you Brent and good morning everyone. I'm very pleased to be joining today's call. I look forward to building upon what we've achieved to date and helping to launch a new chapter of accelerated performance for the company. As Brent mentioned, over the last two years, I've had the privilege of leading medical products and therapies, or MPT, which is Baxter's largest segment with over $5 billion in sales and operations spanning the globe. During this time, I spearheaded numerous vital initiatives with the support of my talented colleagues, including the recent successful launch of our Novum IQ infusion pump platform in the United States. As the leader of MPT, I also helped oversee the North Cove recovery efforts following Hurricane Helene. Given the essential nature of the products that are manufactured in North Cove, we spared no expense in our efforts to help address product supply for patients and customers, including importing products from Baxter sites globally. Thanks to the incredible dedication and resilience of the North Cove and broader Baxter teams, we were able to restart production on eight of the site's ten manufacturing lines in the fourth quarter. Our final two manufacturing lines came online in January and I'm very proud to report that we are now producing at pre-hurricane levels. This is just another critical milestone in our recovery as we continue to work to replenish inventory and support our customers and patients needs. Additionally, I've served as the lead interface to many of our key customers and have been deeply involved in successfully renegotiating the recent renewals of select US GPO contracts, helping to ensure we continue to meet our customers' needs while also delivering positive movement and pricing. As COO, I'm excited to build upon my deep knowledge and understanding of our markets and operations to enhance collaboration across our segments and create a more holistic Baxter experience for our customers and the patients they serve. I'm confident that by harnessing our combined strengths and expertise, we can unlock significant value and accelerate our efforts to drive customer-inspired innovation for all of our stakeholders. I look forward to partnering with Brent, Joel, and the entire Baxter team as we work to achieve our strategic objectives and deliver exceptional results. I'll now turn it over to Joel to discuss our financial performance in more detail.

Joel? Thanks Heather and good morning everyone. I'm happy to be joining the call this morning to provide some additional details on Baxter's fourth quarter and full year 2024 commentary on our financial outlook for 2025. As Brent mentioned and bottom lines driven by better than expected sales and solid operational performance. From continuing operations of $2.75 billion, increased 1% on a reported basis and 2% and compared favorably to our prospective positive sales. Hurricane Helene continued operations at $10.6 billion on both a reported and constant currency basis. Hurricane Helene negatively impacted growth. Adjusted earnings per share from continuing operations were $0.58 and came in ahead of our prior guidance of 50% to 53% favorable top-line results. In addition, that's a negative impact. Earlier basis, continued operations has declined 11% into the negative impact of Hurricane Helene on our continued operations, increased 11%, including a walkthrough of results for our MPT segment for $1.3 billion and coming in favorable to $1.2 billion. MPT sales growth is approximately 9%. Within NPT, four-quarter sales from our significant growth from IQ pump platform continues to build momentum with double digits globally, reflecting strength in the U.S. as we continue to build out our as-anticipated IV solutions declined in the quarter through the impact of Hurricane Helene. Q4 sales and advanced surgery totaled $292 million in positive pricing and sealants across the operating margin for the quarter with 16.5%, coming in better than expected due to the sales outcome decline year-over-year, primarily reflecting the impact of the hurricane. In healthcare systems and technologies, decreasing 1%. Within the HFC segment, sales in the quarter for our Care and Connectivity Solutions, or CCS division, were $504 million, driven by 9% of the continued momentum in our patient support systems, or PSS business, which once again delivered strong growth and reflected a benefit from competitive wins in both our med-surg and ICU and increased 15%, reflecting a difficult comparison to the price. Combined care sales in the quarter were $280 million and declined 8%. The difference in the quarter was impacted by the backlog reductions, which positively contributed. Results in the quarter also reflected the impact of certain market exits and supply constraints, which collectively impacted sales by approximately $15 million in the quarter. We expect the supply constraints in the first quarter. We believe that performance for this division will also benefit from stabilization in the primary care market over the course of several new products in the second half of this year that are expected to contribute to positive performance for FLC in 2025 and beyond. HST fourth quarter adjusted operating margins of 18.5% increased sequentially, continuing the trend of increasing 8%. Injectables and anesthesia of $383 million, performance in the quarter reflected mid-teens growth in our specialty injectables portfolio, and anticipated rebound from the third quarter, which was impacted by the timing of some orders. For U.S. premixed products and the continued rollout of new products, as well as the benefit from targeted sales, the slightly tempered overall performance for the injectables and anesthesia. Continued demand for services, adjusted operating margins were 15.9%, increased in 600 basis points. Adjusted operating margins decreased 370 basis points, resulting in the impact on the BPS sale, and increased operating expenses. The pharmaceuticals team remains focused, executing on margin of debt directly through certain of our $5 billion in the quarter for full year 2020. Before moving on to the rest of the P&L results, I wanted to make some comments. Last quarter, due to the change of moving kidney care business results to discontinued operations, corporate costs that have previously been allocated to the kidney care segment of the kidney care business in the sale, reported in unallocated commented, we plan to offset a large portion of these expenses in 2025 through income to be received from Vantiv under the Transition Services Agreement. Cost containment initiatives the company is already in the process of undertaking. The impact of these stranded costs and the loss of TSA income by the end of 2027. 34.5% coming in favorable to expectations and reflecting a sequential improvement of 80 basis points. Year-over-year basis, adjusted gross margins declined slightly by 10 basis. Back to the manufacturing margin in the quarter were ongoing benefits from our pricing initiatives from continued operations. An increase of 190 basis points, we continue to make select investments to support our growth objectives and new product launches. This increase also included approximately $30 million of select discrete items. The increased employee health care compensation expense, 4.8% is a percentage of sales, an increase of 10% are continued investments in an adjusted operating margin of 15.2% on a continuing operations basis, coming in favorable to expectations, and improving 70 basis points compared to the prior year, adjusted operating margins from continued operations decreased to 190 basis points, driven by the factors I just discussed back from foreign exchange. the operating margin from Continued Operations, or 13.9% of sales. Net interest expense grew $90 million in the quarter, an increase of $18 million, reflecting the benefit of our debt. The Continued Operations adjusted tax rate for the quarter was 10.8% and came in lower than expected. The Continued Operations tax rate was 17.5% tax rates we have undertaken from Continued Operations were $0.58 per share for the quarter and decreased 11% of the contributions to earnings, included improved commercial performance for new product launches and positive pricing. In the quarter, these drivers were offset by the negative impact of the main impact on our results of approximately 6 cents per share. For adjusted earnings per share from continued operations, an increase of 11%, including some key assumptions of kidney care discontinued. As you expect, on the anticipated MSA revenue, this guidance excludes the company continues to focus on the negative impact from exiting the IV solutions business in China is approximately 50 basis points. It is as follows. We expect sales to buy continued momentum with our Novum LDP launch, the benefit of positive pricing in the U.S., and this guidance which is estimated to impact sales on our HSC segment are expected to increase approximately, expected to be balanced across both CCS and FLT. We expect pharmaceuticals to increase approximately 5% to 6%, driven by mid-single-digit growth in both specialty injectables, alternative to our outlook for other P&L line items. As previously shared, we expect from continuing operations to total approximately 16.5% and includes TSA income of approximately $100, which includes net interest expense and other income between $250 to $270 million. On a continued operations basis, we anticipate a 19.5 million shares to $2.55 per estimated negative impact of approximately $0.03 per share. A couple of other quick comments I'd like to make regarding our outlook. I'd point out that our current guidance from tariffs and that does not reflect any impact from potential tariffs that are given the fluidity of the situation. For further delays in 2024, costs that have previously been allocated to kidney care that did not convey with a discontinuity. These costs will be allocated to the three cents. Specifics in the first quarter of 2025, we expect continued operations sales growth of approximately 3% to 4% on a reported basis and approximately 4% on an operational basis. It's expected to negatively impact the top line. MSA revenues are expected to be 60 basis points. On a continued operations basis, we expect adjusted earnings per share of $0.47 to $0.50 per share. This guidance reflects the impact of closing Vantiv on January 31st, which negatively impacted earnings for closing the sale on the…

Thank you. We will now begin our question and answer session. If you have dialed in and would like to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. So that we may be respectful of everyone's time, please limit yourselves to one question with one follow-up question if necessary. We appreciate everyone's patience and would like to provide as many of you as possible the opportunity to ask a question. We will pause for a moment while the list is being compiled. I would like to remind the participants that this call is being recorded and a digital replay will be available on the Baxter International website for 60 days at www.baxter.com. Thank you. Your first question comes from the line of Robby Marcus with J.P. Morgan. Please go ahead.

Oh, great. Good morning and thank you for taking the questions. Two for me.

First, Joel, how should we think about with all the moving pieces on the top and bottom line, the cadence for 2025? sure good morning robbie thanks for the question so i'll start on the sales line and you know as as you know we normally have some rates to see how that all plays out you know so again i'd say from a conservatism standpoint i would say the other thing i would call out with larger quarter up against the impact of helene so those are a couple things that i'd probably call on from a Caden's perspective on the top. Caden's perspective on the OI, I think the main thing I'd call it mostly driven will be kicking in and continued improvements.

The HST business, especially frontline care, was still negative growth this quarter. What's the latest you're seeing there, the confidence you could turn it around in 2025 and your level of visibility to it? Thanks.

Yeah, so I'd say a couple things there i mean first of all you know we are anticipating a uh stable and you know we we certainly have you obviously had a substantial decline in 2024 and so you know from that uh yeah certainly you know some of the government orders some of the things that were supply constraints i think generally speaking the same way your next question comes from the line of

David Roman with Goldman Sachs. Please go ahead.

Thank you. Good morning, everybody. Heather, congratulations on the new role. I'm looking forward to working with you in this capacity. And Claire, thank you and the finance team for the extensive financial information here. Super helpful as we look at the company post-Vantiv. I answer my first question. The past several years for Baxter have been characterized by exogenous events like Hurricane Helene, elevated inflationary pressures, the transition with the Hill-Rom deal, and the strategic actions you've taken with BPS and Vantiv. Can you help us think about the direction of the company from here and how you're thinking about strategic priorities? And maybe at the same time, give us a flavor for how that fits into the profiling characteristics as you go through the CEO search.

Absolutely. I'll start with Brent Canadi, and he'd like to on the second piece of that. And obviously, you know, job and really so how do i think about priority ceo has been uh been named but we're starting uh i would say it starts with customer inspired innovation these are things that we as a company want to make sure that we are driving by our customer markets i would say it's it's one of the kind of the grow with the growers how do we find those opportunities in places that's ultimately going to drive growth for the organization you know i'd say the third thing really i think about it is how do we optimize with this you know optimizing both our cost structure from a state perspective and some of the things that allow us you know to take advantage of some of the what's called a more simple supply chain opportunity without having to have our business so that's that's the third thing yeah I'd say fourth consistent execution is really around disciplined capital allocation you know focus on driving growth you know both or so I would call those things um and again i'll i'm looking for stability predictable consistent strong results

and and uh like joel i give tremendous credit to this organization for all the things they have worked through many of them very complex projects time consuming etc so directionally starting to move the organization to more of an emphasis on growth both through innovation and through commercial execution in the short term moves we can make that accelerate progress in the in the company and as far as CEO search looking at that at the board level and that work is already underway and as you can imagine there's a pretty good profile of Baxter Baxter's portfolio portfolio where we are at this point in time. So the experience would be appropriate with the company's situation and opportunities in front of us. So the candidates need to have that experience and a vision that can lead the company forward to its next chapter. And having been here and now been on the board and just working with this man, phenomenal opportunity here because so much heavy lifting has been done over the last...

Thank you. And maybe just a quick follow-up on the financial side. Joel, can you walk us through the post-Vantiv sales capital structure of the company and maybe update us on target leverage ratios and the time frame to achieve that?

Yeah, absolutely. So, maybe I'll start with a leverage ratio. Certainly, what we've talked about we're continuing to be committed to is a target leverage ratio around three times, that's EBITDA. I think that is a level that gives us opportunity to both balance our capital structure. We anticipate...

Terrific. Thanks so much.

Thanks, Dennis. Your next question comes from the line of Matt Miksik with Barclays. Please go ahead.

Thanks so much for taking the questions. and congrats on a nice end to this busy, busy year. So I wanted to follow up on some of the comments you've made on new product investments and product pipeline. If you could talk a little bit about which business lines, which you'd highlight, and then maybe timing as to when we might start to see some of the benefits to these investments, then I have one follow-up.

Sure. So really, let me start with the fact that it's really across our portfolio where we actually have, obviously, the launch has gone extremely well. We'll have a full year, you know, during the HST perspective.

The one other comment I wanted to make as maybe a follow-up on Robby's on HST is just the environment for, you know, some of the patient support devices and other things that you're selling, fleets or beds, et cetera, that you're selling in hospitals. Just maybe a general comment that can help us.

Yeah, absolutely. Thanks for the question. Yeah, so I would say, generally speaking, the capital environment is quite good. As we've talked about this year, our capital orders, particularly in PSS in the U.S., especially the second half of the year, have actually been in those. You know, there's a timing. Momentum, we expect to continue to build on that momentum. I would say, generally speaking, the capital environment is quite good, both from the patient monitoring devices as well as from a BEDS perspective. Obviously, we've had continued success with our Progressive Plus model as well. So, you know, I think overall, there's some new products coming up.

I believe, from what I've seen, there's been a significant improvement in the commercial organizations in the U.S. particularly in those categories. And so I think we're seeing the benefit of upgrades made in that area in real commercial processes.

Excellent. I appreciate the color. You guys.

Your next question comes from the line of Vijay Kumar with Evercore ISI. Please go ahead.

Hi, guys. Good morning, and thank you for taking my question. And, Joel, maybe my first question was on margins here. I know the optics, these are apples to oranges comparison, right? But the year-on-year, it does look margins were up to 150 basis points. So if you can just break the down rate, what is TSA, how much of this was stranded costs, which were there in fiscal 24, and that's going away? What is the pricing element here? and did the China IG fluid exit, is that a headwind or a tailwind to Martians?

Thanks for the question, Vijay. Let me start with the, I guess, I think the easiest way. If you take the 13, those are things like length pricing, particularly in the U.S. Those are things like product. That is the improvement of our injectables portfolio, the higher growth in there. We talked about reinvesting some. And then, in fact, the stranded pods that haven't yet been addressed on that. Can you repeat your second question?

No, that was extremely helpful, Joel. My second one was on, you know, if I look at the performance in the quarter, it looks like the B was, this was just more than, you know, the headwinds from Hurricane Helene coming in slightly better than expectations rate. Can you quantify what the headwind from Helene was in the quarter and what drove the BX, the hurricane impact? It looks like pumps was very strong. So maybe some commentary around pump performance.

Yeah, I'll start with the quarter, but then I'll pass it over to Heather to talk a little bit about the performance of the .

So obviously, you know, the top line and 10 cents on the bottom line. and then but obviously the great news on that is that we actually sure hi bj good morning so we we did better in q4 with the swift recovery of our north coast site you know thanks to the great work of our team so about 45 million dollars better as a result of the swift recovery that we had out of that location so we did see strengths across our infusion therapies business and the infusion pump platform in particular in the fourth quarter so i'll say we're very happy with the launch of Novum IQ and where we are. You know, the teams are doing a great job driving this new platform. You know, if you recall, Baxter placed a pretty big bet to internally develop a brand new to market and novel infusion pump platform, both with the hardware, software, and digital platform, and we're seeing it pay off. So, our infusion business grew 50% last year in 2024, and we're expecting another great year this year in 2025. And it's not only important because we get the revenue from the hardware and software, but also because we get to pull through very consistent revenue over the life of that pump. So share capture, competitive gains are really important, and customer satisfaction right now is very high, both on the implementation of the pump as well as the EMR integration with the new platform. and this was developed in collaboration with our customers so again we're starting to see the benefit of that we took multiple points of market share last year in 2024 and we're expecting to see more of the same more competitive gains in 2025 and then we have some new complimentary digital suites that are now launching that will be a great complement to this launch mid-year in 2024 that we released so I'll tell you I'm pretty excited about where we are in this new chapter, the new pace, momentum that we're building around the NOVEM platform and IVs are stable. We've gone through the GPO re-sign and are in line with our expectations, if not slightly better than we expected. So we're expecting a great rebound in 2025 and certainly really appreciate our customer support during the recovery of Hurricane Helene and hats off to the Baxter team.

The work to work through that effectively, bring the plant back up, really look after the community at the same time. It's just a world-class response. I personally want to thank them all, especially Heather.

Thank you. Thank you. Very helpful answers.

Thanks, AJ.

Thanks, BJ.

Your next question comes from the line of Travis State with Bank of America Securities. Please go ahead.

Hey, thanks. I'll follow up a question on the saline side, and obviously, great job on the fast recovery i think it went better than most expected it was just thinking about how you think about the book of saline business kind of before and after the hurricane did you see customers you know at a second source and how you're kind of thinking about the share of that and then had a follow-up question on on free cash flow yeah thanks for the question travis so as i mentioned to vj i mean our expectations are in line or even slightly better um i think because of the fast fast recovery that we had, quite honestly, out of North Coast.

So we're not seeing as many customers take on a second source, particularly because, as we've mentioned, we're back to pre-hurricane levels at this point. So these new U.S. GPO contracts, in particular, started on January 1st and February 1st. So now that we've fully recovered, you know, most customers are still committed to their remaining compliance and minimum committed volumes that they've given to Baxter. So we're pleased with the response and our customers sticking with Baxter. During this time, we know the fourth quarter wasn't easy for them, but we proved to them the resiliency that we have in the investments, quite honestly, that we've made over the last few years. And our global network and activating that during Helene, you know, certainly helped and relieved some of the pressure. So we think that that's pretty unique to Baxter and the hundreds of millions that we've invested in our platform and IV solutions due to the critical nature that they play in healthcare. So again, in line are slightly better and working closely with our customers to make sure that they can resume normal clinical practice as they've had and patients can get the critical solutions that they need.

Great. That's helpful. And then I did want to ask on free cash flow generation. I know there's a lot of adjustments this quarter. How should we think about some of these adjustments going forward, when do you think you can kind of get back to kind of 80% free cash flow conversion? I don't think you gave a guidance for free cash flow next year. I'm curious how you're thinking about that. And then the frontline care right down, any more color on that? I don't know if that's kind of a change in the growth expectations for that business long term.

Yeah, thanks Travis. So free cash flow, the way I would think about that is that we have talked about the fact that we want to have an 80% conversion in that area of free cash flow. And I expect that to be, generally speaking, well, and that is in the first quarter, we're anticipating some, you know, think about it this way. It's two things from a working capital perspective. Number one, is some of the expenses we encourage are going to be paid in Q1, maybe some level of restock. I was thinking about it by the first quarter, normal cash conversion, and the second quarter, we continue to improve that as we go forward. tangibles. I guess I would, you know, anytime.

Very great. Thanks, Jim. Thank you.

Your next question comes from the line of Lawrence Vigilson with Wells Fargo. Please go ahead.

Good morning. Thanks for taking the questions and congrats on the nice finish to the year here. Brent, I was hoping to ask you two questions. First, you know, David earlier in the call, you know, talked about the challenges Baxter's had in recent years. How do you think about the pros and cons of an external versus internal candidate for CEO, you know, bringing in, you know, a fresh perspective versus someone who kind of already knows Baxter? I have one follow-up for you.

Well, I mean, that's the big question, I guess, and the board is very focused on that because there are pros and cons to either solution obviously an internal candidate knows all the details of the business how it runs how it operates an external one can bring a fresh perspective but they have to ramp up quickly to try to catch that that same level of knowledge which which takes a while especially in a complex business so I can just tell you that it is a full board activity. The board is very focused on this. And though they would like to move as quickly as possible, the general sense is it's more important to get the right fit for the company at this point in time than it is to necessarily be quick. So I hope that gives you a little flavor for it.

That does. Thank you. And secondly, Brent, how did you evaluate the guidance as interim CEO And, you know, how do you think about the process for the permanent CEO to reevaluate it? You know that, you know, just to be candid, right, you know, the investors typically think a new CEO will come in and, you know, want to put his or her stamp on the guidance, may want to change, you know, investment priorities and things like that. So how did you think about that? Thanks for taking the question.

How do I think it coming in as an interim, you mean?

Well, yeah. I mean, is there a risk the new CEO comes in and says, hey, we need to invest more and changes the guidance?

Well, I think we've seen, at a board level, seen the three-year look at the business and where are the details and the drivers. And being on board now and in the business, I feel good. I feel like there are solid plans in place. Of course, when you have another person at the helm, and I'm an interim leader, so my focus is really on executing the plans that are in place. You know, another person may put a different filter on it, but the general situation around our markets, our offerings are known very well in the business. you know anything anyone coming in would be building on that I guess that's I can assume it's kind of it's kind of a hard question to answer because it depends I'd be in I think the one thing I would just give Brett the opportunity and he's talked about it I would just reiterate the fact that you know this is a great opportunity for someone to come in and again Brett has a perspective on that and maybe could share that as well but I I think as we talked about some of the key strategic initiatives that have been done over these last three years again

And there's really a lack of hope for someone to come in here and take a company that really Yeah, my comment a little bit about that.

I mean, the organization, as you know, has been consumed with a lot of project work, very tough, detailed work, working through these separations. And there is a real energy in the organization to turn now to growth and innovation. And so you can feel it. You really can. And that is a real opportunity here. There are good leaders ready to move it forward. And I think whoever comes into the role, that is the key piece to drive is that profit from the base that's been done now because a lot of cleanup has been done.

All right. Very helpful. Thank you for taking the questions.

The next question comes from the line of Daniel and Tolfing with QBS. Please go ahead.

Hey, good morning, everyone. Thank you so much for taking the question. And Heather, are excited to work with you. Just a quick question. Actually, Larry's question is a good segue into Brent and Joel and Heather. Just as we look to 2025 and sort of some of the pipeline drivers specific to 2025 and maybe even 2026, I know you guys talked about like 10 product launches in pharma, for example, but any color you can give on sizing these and what we as analysts and investors can look forward to over the next 12 to 24 months. And that's all. Thanks so much.

Sure. I'll start and others can chime in as they like. So I guess we'll start with what I call a few of the kind of key drivers as we think about our guidance in 2025 and the year ahead of us. Number one, we continue to have strong growth in MPT. Our clinical nutrition business, which actually kind of an interesting notice and started into penetration into the next year. We talked a little earlier about the continued momentum on the capital side, in particular the PSS in the US, as well as the stabilization of FLC. We talked about mix improvement of rejectables relative to compounding and stabilization. I think the continued improvements in our eyes and and continued impact from what we've talked about here. So I think those are, you know, to look forward.

Again, I'm looking forward to working with you, too. This is Heather. So some things that I'm excited about, I mean, the PUMP platform, as I mentioned, is something that we will continue to build on, and we have additional launches to support Novom IQ and a gateway now that can work across our entire portfolio. So really excited about that and a connected ecosystem in the hospital, which is going to help clinical decision support and more personalized patient care. I mean, that's something that was, you know, the original thesis of the Hill-ROM acquisition, and we're starting to really see good pilots and momentum with our customers on that. HST is going to be introducing some new products. They've got launches coming out throughout 2025 and early 26. We're still seeing great momentum on Progressive Plus and PSF, so that continues to pay good dividends and taking market share there. And then pharma is hitting a really exciting cadence of new product launches, getting into more complex molecules, 10 to 12 launches a year that are really going to help buoy. And as Joel mentioned, the margins of that business are really focused on that. And when they hit this innovation cycle that they're on right now. So those are some of the things that I'm personally excited about. And then he mentioned alternate site. You know, we made investments two years ago, an alternate site in the United States, and we are starting to see dividends paid there in the nutrition portfolio and some small tuck-ins, licensing and distribution deals that we did in MPT, and those are starting to bear fruit. So that momentum in the U.S. will continue. So those are just a few things that I'm personally excited about. So when I talk about a new rhythm, a new pace, and momentum that's building, we're definitely starting to see that across the portfolio and those investments that we made bearing fruit now moving into 25 and 26. Thanks for the question.

Yeah, thanks, Heather. This is Brent. I just added to that. I sort of referred to it, but really starting right now, we're putting emphasis. So that's because right now is how to speed up that whole innovation cycle and get product.

Ladies and gentlemen, those are all the questions the time allows us to take. Therefore, that concludes today's question and answer session in today's conference call. We thank you for your participation. You may now disconnect.