Slide 1: 3Q19 Earnings Conference Call
3Q19 Earnings Conference Call October 31, 2019 ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 1
Slide 2: Third Quarter 2019 Earnings Conference Call
Integer Holdings Corporation Third Quarter 2019 Earnings Conference Call 9 a.m. Eastern Time, October 31, 2019 Speakers: • A webcast of today’s call can be accessed in the “Investors” section of the Company’s Joe Dziedzic website: http://investor.integer.net President and Chief Executive Officer • T
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 Comments • Financial Results • Product Line Review • 2019 Outlook • Question & Answer Period ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 4
Slide 5: Opening Comments
Opening Comments ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 5
Slide 6: Third Quarter Financial Highlights
Third Quarter Financial Highlights 3Q Financial Results Integer delivered • Sales flat improved profitability on • Adjusted EBITDA +4%, Adjusted Net Income +14% flat revenue • Paid $36 million of debt 4Q Financial Outlook Expect strong 4th Quarter • Expect double digit sales growth, up 10% to 15% •
Slide 7: Financial Results
Financial Results
Slide 8: 3Q19 Adjusted Financial Results
3Q19 Adjusted Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adjusted Net Income 0% organic(2) 1% organic(3) 9% organic(3) % Growth 0% reported 4% reported 14% reported $40 $69 $35 $305 $304 $67 Adj. Reported $1.06 $1.20 EPS FX $1.10 $1.19 Adjusted (1) Refer to
Slide 9: 3Q19 Adjusted Net Income
3Q19 Adjusted Net Income ($ in millions, except per share amounts) Adj. $1.06 $0.06 $0.05 $0.05 $(0.02) $1.20 EPS ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 9
Slide 10: Product Line Review
Product Line Review
Slide 11: Year-over-Year Sales Growth Continues
Year-over-Year Sales Growth Continues(1) Trailing 4 Quarters Cardio & Vascular Outlook 3% - 5% Integer – Trailing 4 Quarters Cardiac & Neuromodulation 4% - 7% Outlook 4% - 5.5% Advanced Surgical, Orthopedic & Portable Medical 2% - 5% Non-Medical (Electrochem) 10% - 14% (1) Excludes impact from chang
Slide 12: Cardio & Vascular
Cardio & Vascular Offering a full-range of products and services for catheter-based interventional vascular devices and a suite of supply chain solutions to support the development and manufacturing of complex components, sub-assemblies and finished devices Organic Quarterly Y-o-Y % Change Excluding
Slide 13: CRM & Neuromodulation
CRM & Neuromodulation Providing technology solutions for the active implantable medical device industry by partnering with customers to bring high-quality products to established and emerging markets – from initial concept through high-volume manufacturing Organic Quarterly Y-o-Y % Change Pulse Gene
Slide 14: Advanced Surgical, Orthopedics & Portable Medical
Advanced Surgical, Orthopedics & Portable Medical Offering a broad portfolio of power solutions and technologies to Portable Medical markets and supporting the divested AS&O product line Organic Quarterly Y-o-Y % Change Orthopedic Implants & Electrosurgical Li-Ion Battery Core Battery Instruments Ac
Slide 15: Electrochem
Electrochem Enhancing lives worldwide by providing superior power solutions that enable the success and advancement of our customers’ critical applications Organic Quarterly Y-o-Y % Change Battery Cells Battery Packs Battery Chargers • 3Q19 growth driven by energy market demand and favorable militar
Slide 16: 2019 Outlook
2019 Outlook
Slide 17: 4Q 2019 Outlook
4Q 2019 Outlook ($ in millions except per share amounts) Sales Adjusted EBITDA Adjusted EPS Growth % 10% - 15% 6% - 12% 9% - 18% $333 - $348 $72 - $76 $1.13 - $1.23 $68 $303 $1.04 ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 17
Slide 18: 2019 Full-Year Outlook
2019 Full-Year Outlook ($ in millions except per share amounts) Adjusted Sales Adjusted EBITDA Adjusted EPS Growth % 4% - 5.5% 9% - 10% 20% - 22% $1,265 - $1,280 $282 - $286 $4.55 - $4.65 $1,213 $259 $3.80 Prior Guidance $1,265 - $1,280 $277 - $285 $4.25 - $4.45 Original Guidance $1,260 - $1,280 $27
Slide 19: 2019 Cash Flow Outlook
2019 Cash Flow Outlook ($ in millions) Cash Flow From Ops Free Cash Flow(1) Debt Payments Leverage(2) $700 No change, $548 despite $15 million $160 - $170 acquisition $110 - $120 Target $105 - $115 2.5x - 3.5x ~2.9x $67 - $77 Divestiture Proceeds Accelerated Repayment Required Repayment Original $16
Slide 20: Summary
Summary
Slide 21: Focused Strategy to Drive Long-term Growth
Focused Strategy to Drive Long-term Growth Portfolio Strategy Operational Strategy: How we win Strategic Imperatives in the markets we serve How we achieve excellence in everything we do Invest to Grow Cardio & Vascular Neuromodulation Electrochem Portable Medical Protect & Preserve Cardiac Rhythm M
Slide 22: Summary
Summary Full Year Operational & Financial Execution • Adjusted sales up 4% to 5.5% • Adjusted EBITDA up 9% to 10% • Adjusted EPS up 20% to 22% • Year-end estimated debt leverage ~2.9x from 3.5x Strategy • Executing bolt-on acquisition strategy with acquisition of complex braiding capability for high
Slide 23: Questions?
Questions? ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 23
Slide 24: Appendix
APPENDIX ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 24
Slide 25: Cash Flow & Leverage
Cash Flow & Leverage ($ in millions) Cash Flow From Ops Free Cash Flow (1) 2019 3Q Highlights • Reduced leverage ratio to 3.0 times adjusted EBITDA • No significant maturities until 2021; well within covenants Debt Payments Leverage (2) $595 (3) $548 $40 (1) Free Cash Flow defined as Cash Flow from
Slide 26: Historical Financial Results
Historical Financial Results (1) ($ in millions except per share amounts) (2) Adjusted Sales Adjusted EPS Organic Adjusted EPS(3) $301 $313 $315 $314 $304 $0.58 $0.91 $0.98 $0.89 $0.66 $1.01 $1.10 $1.04 $1.00 $1.23 $1.19 $305 $303 $280 $285 $292 $265 $(0.01) $(0.05) Impact of foreign currency report
Slide 27: 2019 Full-Year Outlook Supplemental Items Affecting Cash Flow
2019 Full-Year Outlook Supplemental Items Affecting Cash Flow ($ in millions) ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 27
Slide 28: 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 page 30 of this presentation ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 28
Slide 29: Non-GAAP Reconciliation
Non-GAAP Reconciliation Income from Continuing Operations and Diluted EPS Reconciliation – YTD ($ in thousands, except per share amounts) See the Footnotes to this table on page 30 of this presentation ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 29
Slide 30: Footnotes to Non-GAAP Reconciliation
Footnotes to Non-GAAP Reconciliation ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 30
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation 3Q19 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 Certain legal operating related Cont
Slide 32: 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 Certain legal operating related Conti
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Reconciliation ($ in thousands) ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 33
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation Organic Sales Growth Rate Reconciliation (% Change) ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 34
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2019 Full-Year Outlook(a) ($ in millions, except per share amounts) ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 35
Slide 36: Capitalization
Capitalization ($ in millions) 09/27/19 Original 09/27/19 As Reported Rate Rate Cash & Cash Equivalents $15 $200M Revolver [Due 2020] $0 L + 325 L + 225 TLA [Due 2021] $277 L + 325 L + 225 TLB [Due 2022] $563 L + 425 L + 300 Total Principal Amount of Debt Outstanding $840 (1) Deferred Fees and OID (
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Reconciliation ($ in thousands) ITGR: 3Q19 Earnings Conference Call / October 31, 2019 / Page 37
Slide 38: 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: 3Q19 Earnings Conference Call / October 31, 2019 / Page 38