Slide 1: 4Q23 Earnings Conference Call
4Q23 Earnings Conference Call February 15, 2024 ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 1
Slide 2: Fourth Quarter and Full Year 2023 Earnings Conference Call
Integer Holdings Corporation Fourth Quarter and Full Year 2023 Earnings Conference Call 9 a.m. Eastern Time, February 15, 2024 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.integ
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 • Strategy Update • Sustained Above-Market Growth • Financial Results • 2024 Outlook • Wrap-up • Q&A ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 4
Slide 5: Opening Remarks
Opening Remarks ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 5
Slide 6: Summary
Summary 2023 sales growth 4Q23 & full year 2023 financial results +16% versus 2022, • 4Q23 sales up 11% vs. 4Q22, adjusted operating income up 18% vs. 4Q22 with adj. operating • Full year sales up 16%, adjusted operating income up 26% vs. 2022 income growing 1.6X sales growth 2024 outlook: above-mar
Slide 7: Strategy Update
Strategy Update ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 7
Slide 8: Integer's Strategy Journey
Integer’s Strategy Journey 2017 2018 2019 2020 2021 2022 2023+ Portfolio Divested AS&O Strategy Strategy Developed Portfolio Strategy Launched Initiated Partial Portable Medical Exit Portfolio Capability & Capacity Expansion Product Line Growth Teams Product Line Strategies Strategy Strategies For
Slide 9: Executing Targeted Inorganic Growth Strategy
Executing Targeted Inorganic Growth Strategy Four Acquisitions in last 25 Months Jan 2024 Oct 2023 Apr 2022 Dec 2021 Electrophysiology Aspiration catheters Endovascular Electrophysiology Heart pumps Balloon guide catheters Neurovascular Neuromodulation Leadless pacing Radial acce
Slide 10: A Leader in Precision Micro Machining
a Leader in Precision Micro Machining • Stock purchase closed on January 5, 2024 Transaction • ~250 associates located in Quakertown, Pennsylvania Profile • 2023 sales of $42.5 million and adjusted EBITDA(1) of $11.0 million • Brings differentiated complex machining and manufacturing capabilities as
Slide 11: Brings Differentiated Expertise and Capabilities
Brings Differentiated Expertise and Capabilities Areas of Focus CRM & Neuromodulation: Deep brain stimulation Leadless pacing Pain management Traditional pacing Ventricular assist Cardio & Vascular: Electrophysiology (incl. PFA) Heart pumps Interventional cardiology Peripheral vasc
Slide 12: Sustained Above-Market Growth
Sustained Above-Market Growth ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 12
Slide 13: Growth Teams Drive Product Line Strategies
Growth Teams Drive Product Line Strategies Growth Team Structured and disciplined Broadest and Deepest product Structure product line strategy process offering in the Medical Device Outsourcing industry Structural Heart Dedicated, cross-functional teams responsible for strategy and accountable for g
Slide 14: C&V Targeted Market Strategy to Drive Sustained Growth
C&V Targeted Market Strategy to Drive Sustained Growth Integer Investment Interventional Focus Cardiology Peripheral Vascular Electro- physiology Neurovascular Pulsed Field Structural Renal Ablation Heart Growth Denervation Curve Heart Pumps Low Technology Maturity High Target Growth Markets Structu
Slide 15: CRM&N Targeted Market Strategy to Drive Sustained Growth
CRM&N Targeted Market Strategy to Drive Sustained Growth Integer Investment Conventional Focus Traditional Pain Mgmt. CRM Pacing (SCS) Cochlear Epilepsy Incontinence Cardiac Monitoring Neuromodulation Parkinson's Dual- Single-Chamber Leadless CRM Chamber Pain Mgmt. CRM Sleep Leadless (Emerging) Apne
Slide 16: Growth Starts with Product Development
Growth Starts with Product Development Product development sales Strategy delivering mix shift to +230% since strategy launch high-growth markets ~20% ~20% Mature ~50% ~80% ~80% ~50% 3 – 5+ Emerging / Years Growth 2017 2021 2023 2017 2021 2023 Development Sales Development Sales Mix Strategy focused
Slide 17: Strong Pipeline of Emerging Customers with PMA Products
Strong Pipeline of Emerging Customers with PMA (Premarket Approval) Products ($ in millions) Product development through Product introduction & launched launch process customer sales +$20 more than prior guidance $100 - $120 17 # of Customers currently in each phase (Year End 2023) ~$50 7 5 ~$
Slide 18: Capacity & Capability to Continue Acquisition Strategy
Capacity & Capability to Continue Acquisition Strategy ($ in millions) Annual Acquisition Acquisition Criteria Capacity Growth Market Focus $250 - $300 Differentiated Capabilities Funding Sources Annual Free Revenue Growth Cash Flow + Accretive Margin Profile Organic growth and acquired EBITDA High
Slide 19: Executing Organic & Inorganic Sales Growth Strategy
Executing Organic & Inorganic Sales Growth Strategy … Sustained Above-Market Growth Integer Sales Growth at Market Rate 16% 13% 2016 2019 2022 2023 Future … to deliver high single digit / low double-digit sales growth ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 19
Slide 20: Financial Results
Financial Results ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 20
Slide 21: 4Q23 Financial Results
(1) 4Q23 Financial Results ($ in millions, except per share amounts) Sales Adj. EBITDA Adj. Operating Income Adj. Net Income % Change 11% 18% 18% 28% $413 $86 $372 $73 $68 $57 $47 $37 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 4Q22 4Q23 Adjusted EPS Organic Sales Change: 9% $1.11 $1.39 (1) Organic Sales Change,
Slide 22: 2023 Financial Results
(1) 2023 Financial Results ($ in millions, except per share amounts) Sales Adj. EBITDA Adj. Operating Income Adj. Net Income % Change 16% 21% 26% 22% $1,597 $309 $1,376 $256 $241 $192 $158 $130 2022 2023 2022 2023 2022 2023 2022 2023 Adjusted EPS Organic Sales Change: 15% $3.88 $4.67 (1) Organic Sal
Slide 23: Product Line Sales Performance Trends
Product Line Sales Performance Trends ($ in millions) Cardio & Vascular Trailing 4 quarter sales increased Trailing 4 20% year-over-year in 4Q23 with Quarter Sales double-digit growth across all C&V markets, driven by strong demand, acquisition performance and supply chain improvements Y-o-Y % Cha
Slide 24: 2023 Adjusted Net Income
(1) 2023 Adjusted Net Income ($ in millions, except per share amounts) $42 $158 $(2) $(9) $(3) $130 2022 Operational FX Interest Tax Rate 2023 Drivers Adj EPS $3.88 $1.19 $(0.05) $(0.26) $(0.09) $4.67 (1) Adjusted Net Income and Adjusted EPS are non-GAAP financial measures; refer to “Non-GAAP Financ
Slide 25: Cash Flow & Leverage Ratio
Cash Flow & Leverage Ratio(1) ($ in millions) Cash Flow From Ops Free Cash Flow Highlights Strong 4Q23 cash flow from operations, driven by sales volume $180 million full year cash flow from operations Total year capex of $120 Net Total Debt Leverage million, in-line with guidance Change vs Pr
Slide 26: 2024 Outlook
2024 Outlook ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 26
Slide 27: 2024 Full Year Outlook
(1) 2024 Full Year Outlook ($ in millions, except per share amounts) Sales Adj. EBITDA Adj. Operating Income Adj. Net Income % Change 9% - 11% 15% - 21% 13% - 20% 8% - 18% $1,735 - $1,770 $355 - $375 $1,597 $309 $272 - $290 $241 $171 - $185 $158 2023 2024 2023 2024 2023 2024 2023 2024 Outlook Outloo
Slide 28: 2024 Financial Outlook
2024 Financial Outlook ($ in millions) +91bps Full year 16.0% • 9% to 11% year-over-year reported and 6% Adj Operating to 8% organic growth Income 15.1% % of sales(1) • +91bps AOI as a % of sales improvement at +9% - 11% (at midpoint) mid-point of 2024 guidance $1,735 - $1,770 Quarterly profile $1,5
Slide 29: 2024 Cash Flow Outlook
(1) 2024 Cash Flow Outlook ($ in millions) Cash Flow From Ops Free Cash Flow Net Total Debt Leverage CAPEX $120 $185 - $205 $90 - $110 $180 $74 $1,010 - $1,030 $85 - $105 $950 $907 3.5x $116 $60 3.1x 2.5x - 3.5x $42 2022 2023 2024 2022 2023 2024 YE22 YE23 YE24 YE22 YE23 YE24 Outlook Outlook Outlook
Slide 30: Wrap-up
Wrap-up ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 30
Slide 31: Wrap-up
Wrap-up 4Q23 & full year 2023 financial results • 4Q23 sales up 11% vs. 4Q22, adjusted operating income up 18% vs. 4Q22 • Full year sales up 16%, adjusted operating income up 26% vs. 2022 2024 outlook: above-market growth with expanding margins • Sales $1,735 - $1,770 million, up 9% - 11% • Adju
Slide 32: Integer Investment Thesis
Integer Investment Thesis Strategy Financial Objectives •1 Sales growth 200 basis points above market •2 Operating profit 2x sales growth rate •3 Debt leverage 2.5x – 3.5x Resilient Compelling Performance Financial Business Model Strategy for Growth Culture Strength Sustainable mid-single-digit
Slide 33: Questions?
Questions? ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 33
Slide 34: Appendix
Appendix ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 34
Slide 35: 4Q23 Adjusted Net Income
(1) 4Q23 Adjusted Net Income ($ in millions, except per share amounts) $1 $1 $47 $9 $(0) $37 4Q22 Operational FX Interest Tax Rate 4Q23 Drivers Adj EPS $1.11 $0.23 $0.02 $0.04 $(0.01) $1.39 (1) Adjusted Net Income and Adjusted EPS are non-GAAP financial measures; refer to “Non-GAAP Financial Measure
Slide 36: 2024 Outlook
(a) 2024 Outlook ($ in millions, except per share amounts) ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 36
Slide 37: 2024 Supplemental Financial Information
2024 Supplemental Financial Information ($ in millions) ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 37
Slide 38: Historical Financial Results
(1) Historical Financial Results ($ in millions, except per share amounts) Sales Adjusted EPS (1) Adjusted EPS is a non-GAAP financial measure; refer to “Non-GAAP Financial Measures” in the Appendix. The quarterly and annual EPS numbers are calculated independently and may not sum to the total. ITGR
Slide 39: Capitalization
Capitalization(1) ($ in millions) 12/31/23 12/31/23 As Reported Rate Cash & Cash Equivalents $ 24 USD Denominated Revolver [Due 2028] $ 99 SOFR + 150 TLA [Due 2028] $ 375 SOFR + 150 Convertible Bonds [Due 2028] $ 500 2.125% fixed Total Principal Amount of Debt Outstanding $ 974 Deferred Fees and OID
Slide 40: Product Line Review
Product Line Review ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 40
Slide 41: Year-over-Year Sales Trend, Trailing 4 Quarters
Year-over-Year Sales Trend, Trailing 4 Quarters % of Sales Cardio & Vascular Integer 52% CRM & Neuromodulation 38% Advanced Surgical, Orthopedics & Portable Medical 7% Electrochem 3% ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 41
Slide 42: 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) Catheters
Slide 43: 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 44: 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 45: 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 • 4Q23 sales declined 42% year-over-year, returning to a Y-o-Y % Ch
Slide 46: Non-GAAP Financial Measures
Non-GAAP Financial Measures ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 46
Slide 47: Non-GAAP Financial Measures
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 releas
Slide 48: Non-GAAP Reconciliation
Non-GAAP Reconciliation 4Q23 Net Income and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) 2023 2022 GAAP Non-GAAP Non-GAAP Restructuring Acquisition and and Debt / Amortization restructuring- integration Other general Investment Tax (1) As Reported of intangib
Slide 49: Non-GAAP Reconciliation
Non-GAAP Reconciliation YTD Net Income and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) 2023 2022 GAAP Non-GAAP Non-GAAP Restructuring Acquisition and and Debt / Amortization restructuring- integration Other general Investment Tax (1) As Reported of intangibl
Slide 50: Contact Information
Contact Information Andrew Senn Senior Vice President, Strategy, Business Development & Investor Relations Andrew.Senn@Integer.net (O) 763.951.8312 www.integer.net ITGR: 4Q23 Earnings Conference Call / February 15, 2024 / Page 50