Integer Holdings Corporation Fourth Quarter 2024 Earnings Conference Call February 20, 2025 Integer Holdings Corporation Fourth Quarter 2024 Earnings Conference Call 9 a.m. Eastern Time, February 20, 2025 Management Attendees: Joe Dziedzic President and Chief Executive Officer Andrew Senn Senior Vice President, Strategy, Business Development & Investor Relations Kristen Stewart, CFA Director, Investor Relations ITGR: 4Q24 Earnings Conference Call | February 20, 2025 | Page 2 Diron Smith Executive Vice Presi ...

Financial Data and Key Metrics Changes - Integer reported fourth quarter sales of $449 million, reflecting an 11% year-over-year growth on both an organic and reported basis [38] - For the full year 2024, sales reached $1.717 billion, representing a 10% increase year-over-year [41] - Adjusted operating income for 2024 was $285 million, up 20% compared to the prior year, which is two times the sales growth rate [41][61] - Adjusted net income for Q4 2024 was $51 million, a 6% increase year-over-year, resulting in adjusted diluted earnings per share of $1.43 [40] Business Line Data and Key Metrics Changes - Cardio and vascular product line sales increased by 14% year-over-year, driven by new product ramps in electrophysiology and structural heart [43] - Cardiac Rhythm Management and Neuromodulation sales increased by 8% year-over-year, with double-digit growth in neuromodulation [44] - The divestiture of the Portable Medical product line is expected to be completed by Q4 2025, which is part of the strategy to focus on higher growth markets [15] Market Data and Key Metrics Changes - Integer expects organic sales growth to continue above market rates at 6% to 8% for 2025, which is 200 basis points above the underlying market growth rate of 4% to 6% [52] - The company anticipates reported sales growth in Q1 2025 to approximate the full-year growth rate of 8% to 10% [57] Company Strategy and Development Direction - Integer's strategy focuses on sustaining above-market growth with expanding margins, targeting at least 200 basis points above market growth [14][61] - The company aims to optimize its portfolio and product line strategies to shift towards higher growth markets [12][25] - Recent acquisitions, including Precision Coatings and VSI Parylene, are intended to enhance vertical integration and proprietary capabilities [10][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continuing strong performance into 2025, with an outlook of 8% to 10% sales growth and 11% to 16% increase in adjusted operating income [61] - The operational environment has stabilized, allowing the company to focus on manufacturing excellence initiatives to expand margins [16] - Management highlighted the importance of a robust product development pipeline, with a 270% increase in product development sales since 2017 [28][34] Other Important Information - Integer ended 2024 with a strong sales backlog of $728 million, significantly above pre-pandemic levels [56] - The company expects to generate free cash flow between $110 million and $130 million in 2025, reflecting continued investment in capabilities and capacity [59] Q&A Session Summary Question: Guidance on cardiovascular segment growth - Management expects cardiovascular sales to grow in the low double-digit range for 2025, driven by success in targeted high-growth markets [68] Question: Background on Precision Coating acquisition - The acquisition was part of a long-term strategy to enhance capabilities in high-growth markets, with coatings identified as a key area for development [72][76] Question: Exposure to tariffs, particularly in Mexico - Management is preparing for potential tariffs and implementing operational changes to mitigate impacts, but specifics remain uncertain [81][100] Question: Contribution from high-growth markets in CMV - Management confirmed that underlying markets like electrophysiology and structural heart are expected to contribute significantly to growth, with guidance for cardiovascular sales to remain strong [90][92] Question: Gross margin performance in Q4 - Management noted that new product ramps and associated inefficiencies impacted gross margins, but they expect improvements as operations stabilize [122][128]

分组1 - Integer reported quarterly earnings of $1.43 per share, missing the Zacks Consensus Estimate of $1.46 per share, but showing an increase from $1.39 per share a year ago, resulting in an earnings surprise of -2.05% [1] - The company posted revenues of $449.5 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 0.75% and increasing from $413.15 million year-over-year [2] - Integer has surpassed consensus EPS estimates three times over the last four quarters and topped consensus revenue estimates two times in the same period [2] 分组2 - The stock has gained approximately 8.1% since the beginning of the year, outperforming the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is $1.33 on revenues of $440.88 million, and for the current fiscal year, it is $6.01 on revenues of $1.85 billion [7] - The Medical - Instruments industry, to which Integer belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Fourth quarter 2024 sales increased by 11% to $449 million, with GAAP income from continuing operations rising 23% to $33 million[6] - Full year 2024 sales reached $1.717 billion, a 10% increase year-over-year, with GAAP income from continuing operations up 36% to $121 million[6] - Adjusted net income for 2025 is projected to be between $221 million and $242 million, a 20% increase year-over-year[10] - Adjusted net income for Q4 2024 was $61,016,000, representing a 8.3% increase from $56,139,000 in Q4 2023[40] - For the year ended December 31, 2024, adjusted net income was $224,747,000, up from $188,895,000 in 2023[40] - Basic earnings per share for 2024 was $3.57, up 31.2% from $2.72 in 2023[36] - Diluted EPS for Q4 2024 was $1.43, compared to $1.41 in Q4 2023, reflecting a 1.4% increase[40] Sales Growth - Integer expects sales growth of 8% to 10% in 2025, with adjusted operating income projected to grow 11% to 16%[8] - Cardio & Vascular sales increased by 15% in Q4 2024 compared to Q4 2023, driven by new product ramps and acquisitions[11] - Total sales growth for Q4 2024 was reported at 11.1%, with organic sales change at 10.6% after excluding foreign currency impacts and acquisitions[57] - Cardio & Vascular segment experienced a QTD sales growth of 14.7%, while Cardiac Rhythm Management & Neuromodulation grew by 11.3%[57] - The Cardio & Vascular segment showed a year-to-date sales growth of 13.5%, while Cardiac Rhythm Management & Neuromodulation grew by 7.8%[57] - Other Markets segment reported a year-to-date sales change of -4.8%[57] Acquisitions - The acquisition of Precision Coating was completed for approximately $152 million, with expected sales of $52 million in 2025[6] - Integer signed a purchase agreement to acquire VSi Parylene for approximately $28 million, anticipating sales of $7 million in 2025[6] Debt and Liquidity - Total debt increased to $990 million, with a leverage ratio of 2.6 times adjusted EBITDA as of December 31, 2024[6] - Long-term debt stood at $980,153,000 in 2024, slightly up from $959,925,000 in 2023, indicating a stable debt position[34] - Cash and cash equivalents rose significantly to $46,543,000 in 2024, up from $23,674,000 in 2023, indicating improved liquidity[34] - Cash flow from operating activities generated $205 million in 2024, with expectations for $245 million in 2025[6] - Net Total Debt (Non-GAAP) as of December 31, 2024, was $954,451 thousand, slightly up from $950,326 thousand in 2023[58] - Total principal amount of debt outstanding increased to $1,000,994 thousand in 2024 from $974,000 thousand in 2023[58] Operating Performance - Gross profit for the year ended December 31, 2024, was $459,014 thousand, up 12.0% from $409,889 thousand in 2023[36] - Operating income increased to $208,238 thousand for the year 2024, representing a 27.5% rise compared to $163,323 thousand in 2023[36] - Operating income for Q4 2024 was $57,032,000, up 31% from $43,532,000 in Q4 2023[53] - EBITDA for Q4 2024 reached $81,419,000, a 21.8% increase from $66,810,000 in Q4 2023[54] Expenses and Charges - Research and development expenses decreased to $53,425 thousand in 2024 from $61,967 thousand in 2023, a decline of 13.4%[36] - The company incurred interest expenses of $56,374 thousand for the year 2024, an increase from $51,275 thousand in 2023[36] - Restructuring charges for Q4 2024 were $1,517,000, down from $4,787,000 in Q4 2023[53] - Acquisition and integration costs for Q4 2024 totaled $533,000, compared to $1,729,000 in Q4 2023[53] - Stock-based compensation expense for the year was $24,449 thousand, compared to $23,035 thousand in the previous year[55] - Restructuring and restructuring-related charges totaled $7,255 thousand for the year, down from $9,949 thousand[55] - Loss on equity investments was reported at $780 thousand for the year, a decrease from $5,691 thousand[55] Assets and Equity - Total assets increased to $3,077,971,000 in 2024 from $2,942,653,000 in 2023, representing a growth of approximately 4.6%[34] - Total current assets increased to $671,119,000 in 2024, compared to $617,668,000 in 2023, reflecting a growth of about 8.6%[34] - Retained earnings increased to $891,247,000 in 2024 from $771,351,000 in 2023, showing a growth of approximately 15.5%[35] - The company reported a total stockholders' equity of $1,619,215,000 in 2024, up from $1,519,042,000 in 2023, reflecting a growth of about 6.6%[35] Forward-Looking Statements - Forward-looking statements indicate expectations for 2025 sales and profitability, with a focus on maintaining leverage targets post-acquisitions[31]

~ Strong 4Q and Full Year sales and profit increase versus last year ~ ~ Expect 8% to 10% sales growth in 2025 with expanding margins ~ PLANO, Texas, Feb. 20, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR), a leading contract development and manufacturing organization, today announced results for the three and twelve months ended December 31, 2024. Unless otherwise stated, all results and comparisons are from continuing operations. Fourth Quarter 2024 Financial Results (compared to fourt ...

PLANO, Texas, Feb. 18, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR), a leading global medical device contract development and manufacturing organization (CDMO), today announced participation at the following upcoming investor conferences. Integer will participate at the 2025 Raymond James & Associates' 46th Annual Institutional Investor Conference, to be held March 3-5, 2025, in Orlando, Florida. Integer President and Chief Executive Officer Joseph Dziedzic is scheduled to present on We ...

PLANO, Texas, Feb. 18, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE: ITGR), a leading global medical device contract development and manufacturing organization (CDMO), today announced participation at the following upcoming investor conferences. Integer will participate at the 2025 Raymond James & Associates’ 46th Annual Institutional Investor Conference, to be held March 3-5, 2025, in Orlando, Florida. Integer President and Chief Executive Officer Joseph Dziedzic is scheduled to present on W ...

PLANO, Texas, Feb. 03, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR), a leading global medical device contract development and manufacturing organization (CDMO), will join innovators and industry leaders around the world in exhibiting at MD&M West, Feb. 4 – 6, 2025, at the Anaheim Convention Center in Anaheim, California. Integer welcomes visitors to booth #1439 to learn more about the company's commitment to customers as their partner of choice in enhancing the lives of patients through ...

~ Attendees Invited to Visit Integer at Booth #1439 ~PLANO, Texas, Feb. 03, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE: ITGR), a leading global medical device contract development and manufacturing organization (CDMO), will join innovators and industry leaders around the world in exhibiting at MD&M West, Feb. 4 – 6, 2025, at the Anaheim Convention Center in Anaheim, California. Integer welcomes visitors to booth #1439 to learn more about the company’s commitment to customers as their partne ...

~ Attendees Invited to Visit Integer at Booth #213 ~PLANO, Texas, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE: ITGR), one of the largest medical device contract development and manufacturing organizations (CDMO) in the world, will join global medtech leaders and innovators in exhibiting at the North American Neuromodulation Society (NANS) Annual Meeting in Orlando, Florida, from Jan. 30 – Feb. 1, 2025. NANS attendees are invited to visit booth #213 to learn more about how Integer ca ...