Slide 1: 3Q20 Earnings Conference Call
3Q20 Earnings Conference Call October 29, 2020 ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 1
Slide 2: Third Quarter 2020 Earnings Conference Call
Integer Holdings Corporation Third Quarter 2020 Earnings Conference Call 9 a.m. Eastern Time, October 29, 2020 Speakers: • A webcast of today’s call can be accessed in the “Investor Relations” section of the Joe Dziedzic Company’s website: President and Chief Executive http://investor.integer.net Of
Slide 3: Presentation of Financial Information & Forward-Looking Statements
Presentation of Financial Information & Forward-Looking Statements Important Information This presentation contains summarized information concerning Integer Holdings Corporation (the “Company”) and its business, operations, financial performance and trends. The historical financial and operating da
Slide 4: Agenda
Agenda • Opening Remarks • Financial Results • Cash Flow and Liquidity • Outlook • COVID-19 Update • Emerging Customers Update • Wrap-up • Q&A ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 4
Slide 5: Opening Remarks
Opening Remarks
Slide 6: 3Q20 Summary
3Q20 Summary Associate safety Executing strategy through COVID-19 measures in place to • Manufacturing excellence strategic imperative continues to deliver deliver critical products • Protecting investments in strategy … R&D, capabilities, talent 3Q sales as expected 3Q Financial Results and profit
Slide 7: Financial Results
Financial Results
Slide 8: 3Q20 Adjusted Financial Results
3Q20 Adjusted Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted Operating Income Adjusted Net Income % Change (22)% (57)% (58)% Adjusted EBITDA Adjusted EPS $69 $37 $1.20 $0.50 (1) Refer to the appendix of this presentation for a reconciliation of Adjusted Operating Incom
Slide 9: 3Q20 Adjusted Net Income
3Q20 Adjusted Net Income(1) ($ in millions, except per share amounts) COVID-19 volume / $40 deleverage $5 $17 $2 $(29) $(1) 3Q19 Operational FX Interest Tax Rate 3Q20 Drivers Adj. $1.20 $(0.88) $(0.04) $0.07 $0.15 $0.50 EPS (1) Refer to the appendix of this presentation for a reconciliation of Adjus
Slide 10: Cash Flow and Liquidity
Cash Flow and Liquidity
Slide 11: Cash Flow & Leverage
Cash Flow & Leverage ($ in millions) Cash Flow From Ops Free Cash Flow (1) 3Q20 Highlights • Strong 3Q cash flow, despite impact of lower 2Q sales due to COVID • Continuing Capex investments through 2020 to support strategy … some delays from COVID-19 • $23 million reduction in net total debt from s
Slide 12: Continuing financial strength to manage pandemic and grow long-term
Continuing financial strength to mange pandemic and grow long-term ~$271 as of Oct 15 $230 $243 ($ in millions) $207 $206 • Continued liquidity growth $23 $143 from 3Q cash flow Available Revolver 1• • Revolver repayment: $120 $168 Ample liquidity Capacity $193 $206 $100 million in 3Q and $28 Cash-o
Slide 13: Outlook
Outlook
Slide 14: 4Q20 Outlook
4Q20 Outlook ($ in millions) Sales Adjusted Operating Income % of Sales vLY % 4% (24)% (22)% (17) - (22)% • $20 to $35 improvement in 4Q20 vs 3Q20 • Expect margin rates to continue to expand • Next 90 days backlog at ~90% of pre-COVID with volume recovery • 4Q20 versus 4Q19: • Continued traction on
Slide 15: 2021 vs 2019 Sales Comparability
2021 vs 2019 Sales Comparability Same unit volume, excluding Nuvectra/Fewer days/Electrochem ($ in millions) Comparability adjustments ~10% vs ‘20 Sales $1,258 $(17) $(10) $(23) Non $58 $(38) $1,170 +/- TBD medical $35 Nuvectra Fewer Electrochem Two years Industry bankruptcy days (non-medical) – nor
Slide 16: COVID-19 Update
COVID-19 Update
Slide 17: COVID-19 Impact and Integer's Response
COVID-19 Impact and Integer’s Response COVID impact timing Expect Integer sales to match the COVID impact on industry differences • Improved visibility to Integer sales correlation to Med Device OEM’s • Integer sales higher than industry in 1H20 … lower in 2H20 • Expect convergence sometime during 1
Slide 18: Potential COVID-19 Impact on Integer vs. Industry
Potential COVID-19 Impact on Integer vs. Industry 1Q20 2Q20 3Q20 4Q20 1Q21 Integer sales Industry upper bound Industry run rate (at market growth) Industry lower bound Industry sales Sales change vs. 2019 (%) and bridge between Industry and Integer 1Q20 2Q20 3Q20 4Q20 Full Year 2020 Industry ~(6)% ~
Slide 19: Emerging customers update
Emerging customers update
Slide 20: Comprehensive Capabilities to Enable Emerging Customers' Innovative Therapies
Comprehensive Capabilities to Enable Emerging Customers’ Innovative Therapies Leading Active Implantable Device Expertise Indications Supported Finished Leads Set Screws Header & Header & Lead Adaptors Chronic Pain Sub-assemblies & Blocks Leads & Hypertension Electrodes Feedthrough Sleep Apnea Assem
Slide 21: Strong Development Pipeline with Five Emerging Customers in Product Introduction Phase
Strong Development Pipeline with Five Emerging Customers in Product Introduction Phase Product Development Through “Product Introduction” Customer Sales Launch Process 15 ~$40 million # of Customers in each phase ~$20 million 5 ~$10 million 3 3 1 Product 2018 2020 2022 Development Clinical Regulator
Slide 22: Wrap Up
Wrap Up
Slide 23: How We Continue to Lead
How We Continue to Lead Integer ✓ Executing strategy through COVID-19 • Take care of Associates, who take care of Customers • Manufacturing excellence strategic imperative continues to deliver • Protecting investments in strategy … R&D, capabilities, talent ✓ Financial strength • Profit and margin r
Slide 24: Questions?
Questions? ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 24
Slide 25: Appendix
APPENDIX
Slide 26: Product Line Review
Product Line Review
Slide 27: Year-over-Year Sales Trend
Year-over-Year Sales Trend(1) Trailing 4 Quarters Cardio & Vascular Integer – Trailing 4 Quarters Cardiac & Neuromodulation Advanced Surgical, Orthopedic & Portable Medical Electrochem (Non-Medical) (1) Excludes impact from changes in foreign currency exchange rates and acquisition ITGR: 3Q20 Earnin
Slide 28: Cardio & Vascular
Cardio & Vascular Offering a full-range of products and services for catheter-based interventional vascular devices and a suite of supply chain solutions to support the development and manufacturing of complex components, sub-assemblies and finished devices Quarterly Adjusted Sales Change(1) Steerab
Slide 29: CRM & Neuromodulation
CRM & Neuromodulation Providing technology solutions for the active implantable medical device industry by partnering with customers to bring high-quality products to established and emerging markets – from initial concept through high-volume manufacturing Quarterly Adjusted Sales Change(1) Pulse Ge
Slide 30: Advanced Surgical, Orthopedics & Portable Medical
Advanced Surgical, Orthopedics & Portable Medical Offering a broad portfolio of power solutions and technologies to Portable Medical markets and supporting the divested AS&O product line Quarterly Adjusted Sales Change(1) Orthopedic Implants & Electrosurgical Li-Ion Battery Core Battery Instruments
Slide 31: Electrochem
Electrochem Enhancing lives worldwide by providing superior power solutions that enable the success and advancement of our customers’ critical applications Quarterly Adjusted Sales Change(1) Battery Cells Battery Packs Battery Chargers • 3Q20 declined by approximately $6 million, driven by a severe
Slide 32: Historical Financial Results
Historical Financial Results(1) ($ in millions, except per share amounts) (2) Adjusted Sales Adjusted EPS Organic Adjusted EPS(3) $0.98 $0.89 $0.66 $1.01 $1.10 $1.04 $1.00 $1.23 $1.19 $1.26 $1.23 $0.30 $0.53 $0.01 $(0.02) $(0.01) $313 $326 $328 $301 $292 $305 $303 $315 $314 $304 $(0.05) $285 $240 $2
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Income from Continuing Operations and Diluted EPS Reconciliation – QTD ($ in thousands, except per share amounts) ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 33
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation Income from Continuing Operations and Diluted EPS Reconciliation – YTD ($ in thousands, except per share amounts) ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 34
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation 3Q20 Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 35
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation YTD Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 36
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Reconciliation ($ in thousands) ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 37
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation Organic Growth Rates Reconciliation (% Change) ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 38
Slide 39: Capitalization
Capitalization ($ in millions) 10/02/20 Original 10/02/20 As Reported Rate Rate Cash & Cash Equivalents $ 100 $200M Revolver [Due 2022] $ 50 L + 325 L + 225 TLA [Due 2022] $ 239 L + 325 L + 225 TLB [Due 2022] $ 558 L + 425 L + 250 Total Principal Amount of Debt Outstanding $ 847 (1) Deferred Fees an
Slide 40: Contact Information
Contact Information Tony Borowicz SVP, Strategy, Business Development & Investor Relations Integer Tony.Borowicz@Integer.net (O) 716.759.5809 www.integer.net ITGR: 3Q20 Earnings Conference Call / October 29, 2020 / Page 40