Integer Holdings Corporation · NYSE:ITGR
Integer — Q3 2021 Earnings Presentation
40 slides from Integer's earnings presentation, Oct 28, 2021
Slide 1: 3Q21 Earnings Conference Call
3Q21 Earnings Conference Call October 28, 2021 ITGR: 3Q21 Earnings Conference Call / October 28, 2021 / Page 1
Slide 2: Third Quarter 2021 Earnings Conference Call
Integer Holdings Corporation Third Quarter 2021 Earnings Conference Call 9 a.m. Eastern Time, October 28, 2021 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 •
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 • Strategic Investments • Financial Results • Refinancing Update • Product Line Review • 2021 Outlook • Wrap-up • Q&A ITGR: 3Q21 Earnings Conference Call / October 28, 2021 / Page 4
Slide 5: Opening Remarks
Opening Remarks
Slide 6: Summary
Summary 3Q21 Financial Results Strong year-over-year sales and profit • Strong year-over-year increase: increase ‒ Sales up $70 million, +30% vs. 3Q20 ‒ Adjusted operating income up $22 million, +86% vs. 3Q20 Improved debt • Strong cash flow and debt management: leverage ratio to 2.6x, ‒ Improved de
Slide 7: Strategic Investments
Strategic Investments
Slide 8: Integer to Acquire Oscor, Inc.
Integer to Acquire Oscor, Inc. ✓ Signed agreement to acquire Oscor … targeted to close in December (1) ✓ Excited to welcome ~900 associates to the Integer family upon closure ✓ 100% medical business, trusted brand serving Integer’s end-markets ✓ Expansive portfolio of proprietary IP and manufacturin
Slide 9: Compelling Rationale, Expect 2022 EPS Accretion
Compelling Rationale, Expect 2022 EPS Accretion • Private, owner-operated company headquartered in Florida Oscor • ~40 years in medical technology development & manufacturing Highlights • $57 million 2020 sales … historically high-single-digit sales growth • Expands cardiovascular access & delivery
Slide 10: Combination Delivers for Customers & Shareholders
Combination Delivers for Customers & Shareholders Integer leadership What Brings + Extensive offering in guiding sheaths Broader steerable Cardio & and introducers sheath & Vascular + Expanded presence in structural heart, introducer product electrophysiology, peripheral vascular offering Broad lead
Slide 11: Capacity & Capability to Continue Acquisition Strategy
Capacity & Capability to Continue Acquisition Strategy ($ in millions) Annual Framework Acquisition Capacity ✓ Our strategy is to use our capacity to execute acquisitions while maintaining debt leverage target $200 - $250 Funding Sources ✓ Operational strategic imperatives reached Annual Free a leve
Slide 12: Building Innovation & Manufacturing Facility in Ireland
Building Innovation & Manufacturing Facility in Ireland ✓ Ireland is home to 300+ med-tech companies Artist rendition, for illustration purposes only including Integer’s largest customers ✓ Focused on the fastest growing end markets … Structural Heart, Neurovascular ✓ Manufacturing and R&D co-locati
Slide 13: Financial Results
Financial Results
Slide 14: 3Q21 Financial Results
3Q21 Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted Operating Income Adjusted Net Income % Change 30% 86% 109% $47 $306 $35 $236 $25 $17 Adjusted EBITDA Adjusted EPS $37 $60 $0.50 $1.05 (1) Refer to the appendix of this presentation for a reconciliation of Adjusted Ope
Slide 15: 3Q21 Adjusted Net Income
3Q21 Adjusted Net Income(1) ($ in millions, except per share amounts) $3 $24 $1 $35 $(10) $17 3Q20 Operational FX Interest Tax Rate 3Q21 Drivers Adj EPS $0.50 $0.71 $0.03 $0.09 $(0.29) $1.05 (1) Refer to the appendix of this presentation for a reconciliation of Adjusted Net Income and Adjusted EPS t
Slide 16: Cash Flow & Leverage Ratio
Cash Flow & Leverage Ratio(1) ($ in millions) Cash Flow From Ops Free Cash Flow Highlights $29 ✓ Strong cash flow from ops AVX $29 AVX $42 ✓ Completed refinancing $30 ✓ Lowest leverage ratio since 4Q15 Lake Region acquisition Net Total Debt ✓ Continued investments in Leverage strategy … expect $50-$
Slide 17: Refinancing Update
Refinancing Update
Slide 18: Refinancing Completed in 3Q 2021
Refinancing Completed in 3Q 2021 ($ in millions, except per share amounts) Debt Profile Highlights & Benefits Effective Interest 4.3% ✓ Expect annualized EPS up by ~$0.15 (2) Rate (1) 3.1% 400 ✓ Reduced borrowing costs by ~120bps Revolver size 200 Total Debt Outstanding ✓ Upsized revolver to support
Slide 19: Product Line Review
Product Line Review
Slide 20: Year-over-Year Sales Trend
Year-over-Year Sales Trend(1) Trailing 4 Quarters Cardio & Vascular Integer Cardiac & Neuromodulation Advanced Surgical, Orthopedic & Portable Medical Electrochem (Non-Medical) (1) Excludes impact from changes in foreign currency exchange rates and acquisition ITGR: 3Q21 Earnings Conference Call / O
Slide 21: Cardio & Vascular
Cardio & Vascular Offering a full-range of products and services for catheter-based interventional vascular devices and a suite of supply chain solutions to support the development and manufacturing of complex components, sub-assemblies and finished devices Reported Quarterly Sales ($ in millions) S
Slide 22: 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 Reported Quarterly Sales ($ in millions) Pu
Slide 23: 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 Reported Quarterly Sales ($ in millions) Orthopedic Implants & Electrosurgical Li-Ion Battery Core Battery Instru
Slide 24: Electrochem
Electrochem Enhancing lives worldwide by providing superior power solutions that enable the success and advancement of our customers’ critical applications Reported Quarterly Sales ($ in millions) Battery Cells Battery Packs Battery Chargers • 3Q21 increased approximately $1 million vs. 3Q20, as the
Slide 25: 2021 Outlook
2021 Outlook
Slide 26: 2021 Sales Outlook
2021 Sales Outlook (1) ($ in millions) 12% - 14% vs. 2020 2021 Sales Outlook $1,200 $1,205 $1,175 to to • Increased low-end of the full year $1,160 to to $1,220 $1,220 outlook by $5 million $1,200 $1,205 • 3Q actual sales at $306 million, in line with prior outlook of slightly $1,073 below 2Q • Expe
Slide 27: 2021 Full-Year Outlook
2021 Full-Year Outlook (1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adj. Operating Income Adjusted Net Income % Change 12% - 14% 29% - 34% 29% - 36% 41% - 50% $1,205 - $1,220 $245 - $255 $1,073 $185 - $195 $190 $144 $130 - $138 $92 Adjusted EPS $2.77 $3.90 - $4.15 ANI $122 - $
Slide 28: 2021 Cash Flow Outlook
2021 Cash Flow Outlook (1) ($ in millions) Cash Flow From Ops Free Cash Flow Net Total Debt Reduction Leverage CAPEX $48 $50 - $55 $181 $47 $165 $29 $150 - $170 AVX $135 3.6x $152 $123 $117 $29 AVX $90 - $110 $95 - $115 $104 2.9x $106 Target 2.5x - 3.5x 2019 2020 2021 2019 2020 2021 2019 2020 2021 O
Slide 29: Wrap-up
Wrap-up
Slide 30: 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 Growth Strategy Culture Strength ✓ Sustainable mid-single-digit ✓ ~70%
Slide 31: Wrap-up
Wrap-up ✓ Strong 3Q21 financial results • Sales up +30% vs 3Q20, adjusted operating income up +86% vs. 3Q20 • Strong cash flow … lowest leverage since Lake Region acquisition • Refinanced debt … expect to increase annualized EPS by $0.15 ✓ Improved 2021 outlook(1) … raised guidance • Sales: $1,205 -
Slide 32: Questions?
Questions? ITGR: 3Q21 Earnings Conference Call / October 28, 2021 / Page 32
Slide 33: Appendix
APPENDIX
Slide 34: 2021 Outlook (excludes impact of Oscor acquisition)
2021 Outlook (excludes impact of Oscor acquisition) (a) ITGR: 3Q21 Earnings Conference Call / October 28, 2021 / Page 34
Slide 35: Historical Financial Results
Historical Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted EPS $326 $328 $315 $314 $312 $306 $304 $290 $269 $240 $236 Adjusted EPS, as reported (1) Refer to the appendix of this presentation for a reconciliation of Adjusted EPS to the most directly comparable GAAP measu
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation 3Q21 Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 3Q21 Earnings Conference Call / October 28, 2021 / Page 36
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation YTD Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 3Q21 Earnings Conference Call / October 28, 2021 / Page 37
Slide 38: Capitalization
Capitalization ($ in millions) 10/01/21 Original 10/01/21 As Reported Rate Rate Cash & Cash Equivalents $ 25 $400M Revolver [Due 2026] $ 37 L + 175 L + 175 TLA [Due 2026] $ 250 L + 175 L + 175 TLB [Due 2028] $ 350 L + 250 L + 250 Total Principal Amount of Debt Outstanding $ 637 (2) Deferred Fees and
Slide 39: Notes
Notes Non-GAAP Financial Measures This presentation may contain the non-GAAP financial measures defined 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 release and
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: 3Q21 Earnings Conference Call / October 28, 2021 / Page 40