Slide 1: 2Q19 Earnings Conference Call
2Q19 Earnings Conference Call August 1, 2019 ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 1
Slide 2: Presentation of Financial Information & Forward-Looking Statements
Presentation of Financial Information & Forward-Looking Statements Historical financial and operating data in this presentation reflect the consolidated results of Integer for the periods indicated. This presentation includes financial information prepared in accordance with accounting principles ge
Slide 3: Agenda
Agenda • Opening Comments • Financial Results • Product Line Review • 2019 Outlook • Question & Answer Period ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 3
Slide 4: Opening Comments
Opening Comments ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 4
Slide 5: Second Quarter Financial Highlights
Second Quarter Financial Highlights 2Q Financial Results Integer delivered • Organic revenue increased 1% over record 2Q18, as expected improved profitability on flat revenue • Strong organic profit leverage ‒ Adjusted EBITDA +9% ‒ Adjusted Net Income +22% Continued deleveraging • Cash Flow / Debt ‒
Slide 6: Financial Results
Financial Results
Slide 7: 2Q19 Adjusted Financial Results
2Q19 Adjusted Financial Results(1) ($ in millions, except per share amounts) Adjusted Sales Adjusted EBITDA Adjusted Net Income (2) (3) (3) 1% organic 9% organic 22% organic % Growth 0% reported 6% reported 17% reported Reported $41 $75 $313 $314 $71 $35 Adj. Reported $1.06 $1.23 EPS FX $1.01 $1.23
Slide 8: 2Q19 Adjusted Net Income
2Q19 Adjusted Net Income ($ in millions, except per share amounts) Adj. $1.06 $0.15 $(0.05) $0.04 $0.02 $1.23 EPS ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 8
Slide 9: Product Line Review
Product Line Review
Slide 10: Year-over-Year Sales Growth Continues
Year-over-Year Sales Growth Continues(1) Trailing 4 Quarters Cardio & Vascular Integer – Trailing 4 Quarters 2Q18 3Q18 4Q18 1Q19 2Q19 Cardiac & Neuromodulation Advanced Surgical, Orthopedic & Portable Medical Non-Medical (Electrochem) (1) Excludes impact from changes in foreign currency exchange rat
Slide 11: Cardio & Vascular
Cardio & Vascular Offering a full-range of products and services for catheter-based interventional vascular devices and a suite of supply chain solutions to support the development and manufacturing of complex components, sub-assemblies and finished devices Organic Quarterly Y-o-Y Growth Steerable S
Slide 12: CRM & Neuromodulation
CRM & Neuromodulation Providing technology solutions for the active implantable medical device industry by partnering with customers to bring high-quality products to established and emerging markets – from initial concept through to high-volume manufacturing Organic Quarterly Y-o-Y Growth % Change
Slide 13: Advanced Surgical Orthopedics & Portable Medical
Advanced Surgical Orthopedics & Portable Medical Offering a broad portfolio of power solutions and technologies to Portable Medical markets and supporting our divested AS&O business Organic Quarterly Y-o-Y Growth % Change Orthopedic Implants & Electrosurgical Li-Ion Battery Core Battery Instruments
Slide 14: Electrochem
Electrochem Enhancing lives worldwide by providing superior power solutions that enable the success and advancement of our customers’ critical applications Organic Quarterly Y-o-Y Growth % Change 0% Battery Cells Battery Packs Battery Chargers • 2Q growth driven by energy market demand and increased
Slide 15: 2019 Outlook
2019 Outlook
Slide 16: 2019 Outlook
2019 Outlook ($ in millions except per share amounts) Adjusted Sales Adjusted EBITDA Adjusted EPS Growth % 4% - 5.5% 7% - 10% 12% - 17% $1,265 - $1,280 $277 - $285 $4.25 - $4.45 $1,213 $259 $3.80 Prior Guidance $1,265 - $1,280 $275 - $283 $4.15 - $4.35 ITGR: 2Q19 Earnings Conference Call / August 1,
Slide 17: 2019 Cash Flow Outlook
2019 Cash Flow Outlook ($ in millions) Cash Flow From Ops Free Cash Flow(1) Debt Payments Leverage(2) $700 $548 $160 - $170 $110 - $120 $105 - $115 Target 2.5x - 3.5x $67 - $77 Divestiture Proceeds Accelerated Repayment Required Repayment Prior $160 - $170 $110 - $120 $105 - $115 2.5x - 3.5x Guidanc
Slide 18: Summary
Summary
Slide 19: Focused Strategy to Drive Long-term Growth
Focused Strategy to Drive Long-term Growth Portfolio Strategy Operational Strategy: How we win Strategic Imperatives in the markets we serve How we achieve excellence in everything we do Invest to Grow Cardio & Vascular Neuromodulation Electrochem Portable Medical Protect & Preserve Cardiac Rhythm M
Slide 20: Summary
Summary Financial Execution • 2Q: sales as expected, profit slightly better • Full year outlook: profit guidance increased Strategy • Strong Manufacturing Excellence execution • Culture Strategic Imperatives gaining momentum • Growth Teams deepening product line strategies • Solid acquisition pipeli
Slide 21: Q&A
Q&A ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 21
Slide 22: Appendix
APPENDIX ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 22
Slide 23: Cash Flow & Leverage
Cash Flow & Leverage Cash Flow From Ops Free Cash Flow (1) ($ in millions) ($ in millions) 2019 2Q Highlights • Cash flows in line with expectations • Reduced leverage ratio to 3.1 times adjusted EBITDA • No significant maturities Debt Payments Leverage (2) ($ in millions) until 2021; well within $5
Slide 24: Historical Financial Results
Historical Financial Results (1) ($ in millions except per share amounts) (2) Adjusted Sales Adjusted EPS Organic Adjusted EPS(3) $0.58 $0.91 $0.98 $0.89 $0.66 $1.01 $1.10 $1.04 $1.00 $1.23 $313 $315 $314 $301 $305 $303 $285 $292 $280 $265 $(0.05) Impact of foreign currency reported in other gain or
Slide 25: 2019 Full-Year Outlook Supplemental Items Affecting Cash Flow
2019 Full-Year Outlook Supplemental Items Affecting Cash Flow ($ in millions, except per share amounts) ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 25
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Income from Continuing Operations and Diluted EPS Reconciliation – QTD ($ in thousands, except per share amounts) See the Footnotes to this table on Slide 27 of this presentation ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 26
Slide 27: Footnotes to Non-GAAP Reconciliation
Footnotes to Non-GAAP Reconciliation ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 27
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2Q19 Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) 2019 2018 GAAP Adjustments Non-GAAP Non-GAAP Debt / Other investment Adjusted Adjusted Continuing Amortization of IP related operating related Cont
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation YTD Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) 2019 2018 GAAP Adjustments Non-GAAP Non-GAAP Debt / Other investment Adjusted Adjusted Continuing Amortization of IP related operating related Conti
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Reconciliation ($ in thousands) ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 30
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation Organic Sales Growth Rate Reconciliation (% Change) ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 31
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2019 Full-Year Outlook(a) ($ in millions, except per share amounts) ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 32
Slide 33: Capitalization
Capitalization ($ in millions) 06/28/19 Original 06/30/18 12/28/19 06/28/19 As Reported Rate Rate Rate Rate Cash & Cash Equivalents $ 16 $200M Revolver [Due 2020] $ 10 L + 325 L + 325 L + 250 L + 250 TLA [Due 2021] $ 286 L + 325 L + 325 L + 250 L + 250 TLB [Due 2022] $ 580 L + 425 L + 325 L + 300 L
Slide 34: Contact Information
Contact Information Tony Borowicz SVP, Strategy, Corporate Development & Investor Relations Integer Tony.Borowicz@Integer.net (O) 716.759.5809 www.integer.net ITGR: 2Q19 Earnings Conference Call / August 1, 2019 / Page 34