Slide 1: 2Q20 Earnings Conference Call
2Q20 Earnings Conference Call July 30, 2020 ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 1
Slide 2: Integer Holdings Corporation Second Quarter 2020 Earnings Conference Call
Integer Holdings Corporation Second Quarter 2020 Earnings Conference Call 9 a.m. Eastern Time, July 30, 2020 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 http://investor.integer.net Offi
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 • COVID-19 Update • Financial Results • Product Line Review • Cash Flow, Liquidity and Cost Management • Wrap Up • Q&A ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 4
Slide 5: Opening Remarks
Opening Remarks
Slide 6: 2Q20 Summary
2Q20 Summary Essential business, Leading during COVID-19 associate safety • Operating in a new normal … associate safety measures in place measures in place to • Increased agility to respond to changing customer demand deliver critical products • Positioned to continue investing in strategy througho
Slide 7: COVID-19 Update
COVID-19 Update
Slide 8: COVID-19 Impact and Integer's Response
COVID-19 Impact and Integer’s Response • 2Q industry decline estimated at 30% to 40% vs. last year in aggregate Our view of the • Estimated industry procedure volumes exiting 2Q at 80-90% pre-COVID Industry impact • Expect industry decline of 10% to 20% in 3Q and 5% to 15% in 4Q vs. last year … rece
Slide 9: Potential COVID-19 Impact on Industry Sales
Potential COVID-19 Impact on Industry Sales Industry run rate Industry upper bound (unchanged from prior view) Industry sales Current view Prior view Industry lower bound (unchanged from prior view) 1Q20 2Q20 3Q20 4Q20 1Q21 ✓ Industry sales current view vs. prior view: • Steeper decline & recovery d
Slide 10: COVID-19 Impact and Integer's Response
COVID-19 Impact and Integer’s Response • 2Q industry decline estimated at 30% to 40% vs. last year in aggregate Our view of the • Estimated industry procedure volumes exiting 2Q at 80-90% pre-COVID Industry impact • Expect industry decline of 10% to 20% in 3Q and 5% to 15% in 4Q vs. last year … rece
Slide 11: Potential COVID-19 Impact on Integer Sales
Potential COVID-19 Impact on Integer Sales Industry run rate Industry upper bound (unchanged from prior view) Integer sales Current view Prior view Industry lower bound (unchanged from prior view) 1Q20 2Q20 3Q20 4Q20 1Q21 ✓ Integer sales current view vs. prior view: • Slightly earlier decline, but n
Slide 12: Potential COVID-19 Impact on Integer vs. Industry
Potential COVID-19 Impact on Integer vs. Industry Integer sales Industry run rate Industry upper bound (unchanged from prior view) Industry sales Industry lower bound (unchanged from prior view) 1Q20 2Q20 3Q20 4Q20 1Q21 ✓ 2Q Integer sales decline is better than industry by ~10 percentage points ✓ Ex
Slide 13: COVID-19 Impact and Integer's Response
COVID-19 Impact and Integer’s Response • 2Q industry decline estimated at 30% to 40% vs. last year in aggregate Our view of the • Estimated industry procedure volumes exiting 2Q at 80-90% pre-COVID Industry impact • Expect industry decline of 10% to 20% in 3Q and 5% to 15% in 4Q vs. last year … rece
Slide 14: Financial Results
Financial Results
Slide 15: 2Q20 Adjusted Financial Results
2Q20 Adjusted Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted Operating Income Adjusted Net Income % Change (24)% (65)% (74)% Adjusted EBITDA Adjusted EPS $75 $33 $1.23 $0.32 (1) Refer to the appendix of this presentation for a reconciliation of Adjusted Operating Incom
Slide 16: Balanced Cost Management Response to Temporary COVID-19 Sales Reduction
Balanced Cost Management Response to Temporary COVID-19 Sales Reduction Alignment to P&L Costs Sales Reduction Management Approach Material Mostly ✓ Reduce purchases to align to production & product mix ✓ Align labor with demand (furloughs, temp shutdowns); Direct Labor Mostly considering unemployme
Slide 17: 2Q20 Adjusted Net Income
2Q20 Adjusted Net Income(1) ($ in millions, except per share amounts) COVID-19 volume / $41 deleverage $3 $0 $10 $(33) $(0) 2Q19 Operational FX Interest Tax Rate 2Q20 Drivers Adj. $1.23 $(1.00) $(0.00) $0.09 $0.00 $0.32 EPS (1) Refer to the appendix of this presentation for a reconciliation of Adjus
Slide 18: Product Line Review
Product Line Review
Slide 19: Year-over-Year Sales Trend
Year-over-Year Sales Trend(1) Trailing 4 Quarters Cardio & Vascular Integer – Trailing 4 Quarters Cardiac & Neuromodulation Advanced Surgical, Orthopedic & Portable Medical Electrochem (Non-Medical) (1) Excludes impact from changes in foreign currency exchange rates and acquisition ITGR: 2Q20 Earnin
Slide 20: 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 Adjusted Sales Change(1) Steerab
Slide 21: 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 Adjusted Sales Change(1) Pulse Ge
Slide 22: 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 Adjusted Sales Change(1) Orthopedic Implants & Electrosurgical Li-Ion Battery Core Battery Instruments
Slide 23: Electrochem
Electrochem Enhancing lives worldwide by providing superior power solutions that enable the success and advancement of our customers’ critical applications Quarterly Adjusted Sales Change(1) Battery Cells Battery Packs Battery Chargers • 2Q20 declined by approximately $8 million, driven by a severe
Slide 24: Cash Flow, Liquidity and Cost Management
Cash Flow, Liquidity and Cost Management
Slide 25: Cash Flow & Leverage
Cash Flow & Leverage ($ in millions) Cash Flow From Ops Free Cash Flow (1) 2Q20 Highlights • 2Q cash flow reflects pre- COVID-19 1Q sales collections • Expect lower 3Q cash flow due to lower 2Q sales • Continued Capex investments to support Net Total Debt Leverage (2) strategy with some delays Chang
Slide 26: Financial Strength to Execute Our Strategy
Financial Strength to Execute Our Strategy ($ in millions) Available liquidity Bank covenant amendment update $230 $207 $206 $206 $23 ✓ Increased covenant leverage from $8 Available 4.0x to 4.75x from 3Q20 to 2Q21 Revolver $168 $193 Capacity $198 $206 Cash-on-hand $14 $37 ✓ Additional 0.5x for eligi
Slide 27: Wrap Up
Wrap Up
Slide 28: How We Continue to Lead
How We Continue to Lead Integer ✓ Take care of Associates, who take care of Customers ✓ Manage COVID-19 uncertainty … new normal • Increased agility to respond to changing customer demand • Adjusting costs related to expected temporary volume decline ✓ Maintain focus on executing our strategy • Manu
Slide 29: Questions?
Questions? ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 29
Slide 30: Appendix
APPENDIX ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 30
Slide 31: Historical Financial Results
Historical Financial Results(1) ($ in millions, except per share amounts) (2) Adjusted Sales Adjusted EPS Organic Adjusted EPS(3) $0.91 $0.98 $0.89 $0.66 $1.01 $1.10 $1.04 $1.00 $1.23 $1.19 $1.26 $1.23 $0.30 $313 $326 $328 $301 $292 $305 $303 $315 $314 $304 $(0.02) $(0.01) $280 $285 $240 $(0.05) $(0
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation Income from Continuing Operations and Diluted EPS Reconciliation – QTD ($ in thousands, except per share amounts) ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 32
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Income from Continuing Operations and Diluted EPS Reconciliation – YTD ($ in thousands, except per share amounts) ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 33
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2Q20 Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 34
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation YTD Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 35
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA and Adjusted EBITDA Reconciliation ($ in thousands) ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 36
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation Organic Growth Rates Reconciliation (% Change) ITGR: 2Q20 Earnings Conference Call / July 30, 2020 / Page 37
Slide 38: Capitalization
Capitalization ($ in millions) 07/03/20 Original 07/03/20 As Reported Rate Rate Cash & Cash Equivalents $ 206 $200M Revolver [Due 2022] $ 170 L + 325 L + 200 TLA [Due 2022] $ 248 L + 325 L + 200 TLB [Due 2022] $ 558 L + 425 L + 250 Total Principal Amount of Debt Outstanding $ 977 (1) Deferred Fees a
Slide 39: 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: 2Q20 Earnings Conference Call / July 30, 2020 / Page 39