Slide 1: 1Q22 Earnings Conference Call
1Q22 Earnings Conference Call April 28, 2022 ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 1
Slide 2: First Quarter 2022 Earnings Conference Call
Integer Holdings Corporation First Quarter 2022 Earnings Conference Call 9 a.m. Eastern Time, April 28, 2022 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 investor.integer.net 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 Remarks • Aran Biomedical Acquisition • Financial Results • Product Line Review • 2022 Outlook • Wrap-up • Q&A ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 4
Slide 5: Opening Remarks
Opening Remarks
Slide 6: Summary
Summary 1Q22 financial results consistent with expectations 1Q22 sales and • Sales up 7% vs. 1Q21 from Oscor acquisition, ~flat organically profit consistent with due to January COVID absenteeism and supply chain constraints expectations • Adjusted operating income down (16)% vs. 1Q21 ‒ 1Q22 gross m
Slide 7: Aran Biomedical Acquisition
Aran Biomedical Acquisition
Slide 8: Integer Acquired Aran Biomedical
Integer Acquired Aran Biomedical Signed and closed acquisition of Aran Biomedical on April 6, 2022 (2Q22) Brings highly-differentiated, proprietary biomaterial technologies for implantable cardiovascular devices Excited to welcome ~130 associates to the Integer team Trusted development and m
Slide 9: Compelling Rationale & Alignment to Growth Strategy
Compelling Rationale & Alignment to Growth Strategy • Private MDO located in the medical device hub of Galway, Ireland Aran • ~20 years in medical technology development & manufacturing Highlights • 2021 sales of $17 million … expect 20%+ average annual growth rate over at least the next few years •
Slide 10: Aran Brings Differentiated Capabilities
Aran Brings Differentiated Capabilities From Integer 4Q21 earnings presentation: Markets & Products: Structural Heart LAAC implant coverings & coatings TAVR valve skirts & valve frame covers Aran TMVR/TTVR implant coverings & coatings Focus TMVr clip & annuloplasty ring covers Covered deli
Slide 11: Integer+Aran Creates Comprehensive Structural Heart Device Offering
Integer+Aran Creates Comprehensive Structural Heart Device Offering: Access, Delivery System & Implant Example: Structural Heart Device Implant Textiles and Coverings Structural Heart Access Guidewire Complex Delivery System Assembly & Molding Laser Cut & Complex Delivery Braided Implant System Fram
Slide 12: Financial Results
Financial Results
Slide 13: 1Q22 Financial Results
1Q22 Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adj. Operating Income Adjusted Net Income % Change 7% (11)% (16)% (19)% $311 $61 $290 $54 $46 $39 $32 $26 Adjusted EPS Organic Sales Change: 1% $0.97 $0.78 (1) Refer to the appendix of this presentation for a r
Slide 14: 1Q22 Adjusted Net Income
1Q22 Adjusted Net Income(1) ($ in millions, except per share amounts) (1) Refer to the appendix of this presentation for a reconciliation of Adjusted Net Income and Adjusted EPS to the most directly comparable GAAP measure ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 14
Slide 15: Cash Flow & Leverage Ratio
Cash Flow & Leverage Ratio(1) ($ in millions) Cash Flow From Ops Free Cash Flow Highlights $29 Slower cash flow growth due AVX to inventory build to support $29 AVX accelerated sales in 2Q22 $42 and the second-half of 2022 $30 $10 million capex spend in 1Q22 … on-track to full-year guidance of $
Slide 16: Product Line Review
Product Line Review
Slide 17: Year-over-Year Sales Trend, Trailing Quarters
Year-over-Year Sales Trend, Trailing 4 Quarters % of Sales Cardio & Vascular Integer 49% Cardiac & Neuromodulation 41% Advanced Surgical, Orthopedic & Portable Medical 7% Electrochem (Non-Medical) 3% ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 17
Slide 18: 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 Sales ($ in millions) Steerable
Slide 19: 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 Sales ($ in millions) Pulse Gener
Slide 20: 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 Sales ($ in millions) Orthopedic Implants & Electrosurgical Li-Ion Battery Core Battery Instruments Acc
Slide 21: Electrochem
Electrochem Enhancing lives worldwide by providing superior power solutions that enable the success and advancement of our customers’ critical applications Quarterly Sales ($ in millions) Battery Cells Battery Packs Battery Chargers • 1Q22 sales increased 18% vs. 1Q21 despite negative Y-o-Y % Change
Slide 22: 2022 Outlook
2022 Outlook
Slide 23: 2022 Sales Outlook
2022 Sales Outlook ($ in millions) 11% - 13% vs 2021 Full year $1,356 - $1,381 • 11% - 13% year-over-year growth … 5% - 7% organic • Inorganic sales outlook $82 million … Oscor $66 $1,221 million and Aran $16 million • 2022 outlook increased versus prior guidance for Aran acquisition Quarterly profi
Slide 24: 2022 Full-Year Outlook
2022 Full-Year Outlook(1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adj. Operating Income Adjusted Net Income % Change 11% - 13% 12% - 17% 9% - 15% 7% - 14% $1,356 - $1,381 $273 - $285 $1,221 $243 $203 - $215 $187 $145 - $155 $136 Adjusted EPS Organic Sales Change: 5% - 7% $4.0
Slide 25: 2022 Cash Flow Outlook
2022 Cash Flow Outlook(1) NTDR 80-95 ($ in millions) Cash Flow From Ops Free Cash Flow Net Total Debt Reduction Leverage (excluding acquisition debt) Target: 2.5x - 3.5x CAPEX $65 - $75 $181 $47 $53 $29 $158 - $173 AVX $157 $135 3.6x $152 $123 $29 3.4x AVX $104 3.0x - 3.2x $88 - $103 $91 (2) (3) $10
Slide 26: Wrap-up
Wrap-up
Slide 27: Integer Investment Thesis
Integer Investment Thesis Strategy Financial Objectives •1 Sales growth 200 basis points above market •2 Operating profit 2x sales growth rate •3 Debt leverage 2.5x – 3.5x Resilient Compelling Performance Financial Business Model Strategy for Growth Culture Strength Sustainable mid-single-digit
Slide 28: Wrap-up
Wrap-up 1Q22 sales and profit consistent with expectations • Sales up 7% vs 1Q21, adjusted operating income down $8 million vs 1Q21 • 1Q22 results negatively impacted by January absenteeism caused by COVID and supply chain constraints 2022 outlook updated for Aran Biomedical acquisition • Sales
Slide 29: Questions?
Questions? ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 29
Slide 30: Appendix
APPENDIX
Slide 31: 2022 Outlook (a)
2022 Outlook(a) ($ in millions, except per share amounts) ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 31
Slide 32: 2022 Outlook
2022 Outlook ($ in millions, except per share amounts) ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 32
Slide 33: Historical Financial Results
Historical Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted EPS (1) Refer to the notes in the appendix of this presentation for a reconciliation of Adjusted EPS to the most directly comparable GAAP measure; The quarterly and annual EPS numbers are calculated independentl
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation 1Q22 Net Income and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 34
Slide 35: Capitalization
Capitalization ($ in millions) (1) Non-GAAP financial measure. Refer to Notes in the appendix of this presentation. (2) Principal amount of debt outstanding, not reduced for unamortized discount and debt issuance costs ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 35
Slide 36: Notes
Notes Non-GAAP Financial Measures This presentation may contain the non-GAAP financial measures defined in the table below. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the financial schedules accompanying the earnings
Slide 37: Contact Information
Contact Information Tony Borowicz Senior Vice President, Investor Relations Tony.Borowicz@Integer.net (O) 716.759.5809 www.integer.net ITGR: 1Q22 Earnings Conference Call / April 28, 2022 / Page 37