Slide 1: 4Q21 Earnings Conference Call
4Q21 Earnings Conference Call February 17, 2022 ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 1
Slide 2: Fourth Quarter and Full-Year 2021 Earnings Conference Call
Integer Holdings Corporation Fourth Quarter and Full-Year 2021 Earnings Conference Call 9 a.m. Eastern Time, February 17, 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.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 • Accelerating Sales Growth to 200 bps Above the Market • Financial Results • Product Line Review • 2022 Outlook • Wrap-up • Q&A ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 4
Slide 5: Opening Remarks
Opening Remarks
Slide 6: Summary
Summary 4Q21 Financial Results Strong growth in year- over-year sales and • Sales up 16% vs. 4Q20 … adjusted EPS up 39% vs. 4Q20 profit in 4Q21 and • Closed acquisition of Oscor FY21 Full Year 2021 Financial Results • Sales up 14% and adjusted EPS up 47% vs. 2020 Completed acquisition of Oscor Inc.
Slide 7: Strategy Update
Strategy Update
Slide 8: 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 9: Integer's Strategy Journey
Integer’s Strategy Journey 2017 2018 2019 2020 2021 2022 Portfolio Divested AS&O Strategy Strategy Developed Portfolio Strategy Launched Initiated Partial Portable Medical Exit Operational Strategy Manufacturing Excellence Launched Margin COVID Expansion Impact Additional Operational Strategies Laun
Slide 10: Portable Medical Product Line Strategy Update
Portable Medical Product Line Strategy Update ($ in millions) Product Line Overview Dynamics Actions Sales Market Dynamics ✓ Exiting ~$40 million of sales $71 $70 $71 $69 • Many competitors − Supporting customers through • Limited technology 2025+ differentiation / No IP − Finalizing last time buys
Slide 11: 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 12: Cardio & Vascular Markets
Cardio & Vascular Markets Product Line Strategy Delivers Customer Value & Growth Across Product Lifecycles Integer Interventional Investment Focus Cardiology Peripheral Vascular Electro- physiology Neurovascular Pulsed Structural Field Heart Renal Ablation Bubble Size Signifies Growth Denervation Ap
Slide 13: C&V Investments Target High Growth
C&V Investments Target High Growth Investments in Capacity Investments Target High Growth Markets & Products Capabilities to Support Growth Structural Heart Organic $8 billion 2021 Market, 14% ’21 – ’25 CAGR Galway ✓ Laser Cutting ✓ Coatings Transcatheter Delivery Systems & Implants Juarez ✓ Cathete
Slide 14: Cardiac Rhythm Management Markets
Cardiac Rhythm Management Markets Product Line Strategy Delivers Customer Value & Growth Across Product Lifecycles Integer Conventional Investment Focus CRM Cardiac Monitoring Single- Ventricular Dual- Chamber Assist Chamber Leadless Leadless CRM CRM Bubble Size Signifies Growth Approx. End Market S
Slide 15: Neuromodulation Markets
Neuromodulation Markets Product Line Strategy Delivers Customer Value & Growth Across Product Lifecycles Integer Investment Focus Pain Mgmt. (SCS) Epilepsy Cochlear Incontinence Parkinson's Sleep Pain Mgmt. Apnea (Emerging) Bubble Size Signifies Growth Approx. End Market Size Curve Low Technology Ma
Slide 16: CRM&N Investments Target High Growth
CRM&N Investments Target High Growth Investments in Capacity Investments Target High Growth Markets & Products Capabilities to Support Growth Leadless Pacemaker and ICM Organic $1.6 billion 2021 Market, 13% ’21 – ‘25 CAGR ✓ Novel batteries Brooklyn Park ✓ Miniaturized technologies Alden ✓ Microelect
Slide 17: Accelerating Sales Growth to 200 bps Above the Market
Accelerating Sales Growth to 200 bps Above the Market
Slide 18: New Revenue Generation Cycle Times
New Revenue Generation Cycle Times Time to Manufacturing Integer Revenue Profile Across Cycle Ramp Existing Product Transfers Process Reg Begin Dev 0 – 6 Manufacturing 1 – 2+ 1 – 2 years months Ramp Years New 510k Products (Class II) Developed w/ Customers Development → Clinical→ Manufacturing Ramp
Slide 19: Strong Pipeline of Emerging Customers with PMA Products
Strong Pipeline of Emerging Customers with PMA Products Time to Manufacturing Update to emerging customers slide from 3Q20 earnings presentation: Ramp Existing Product Transfers Process Reg Begin Dev 0-6 1 – 2+ Manufacturing 2024 Outlook 1 – 2 years months RampYears $60 - $80+ million 7 ✓ 6 1 ✓ 3 Ne
Slide 20: Growth Starts with Product Development
Growth Starts with Product Development Time to Manufacturing Ramp Leading indicators of growth: Existing Product Transfers Product Development revenue Strategy delivering mix shift Process Reg Begin +150% over last 4 years to high-growth markets Dev 0-6 Manufacturing 1 – 2+ – 1 – 22years 1 yrs Mo’s
Slide 21: Development Growth Drives Capacity Increases
Development Growth Drives Capacity Increases Time to Manufacturing Ramp Investing to fuel and fulfill growth: Existing Products Transfers Significant increase in Capacity to Process Reg Begin “Growth” capex (1) support growth Dev 0-6 Manufacturing 1 – 2+ 1 – 2 years months Ramp Years $100 million ov
Slide 22: How We Will Accelerate Growth Above Market
How We Will Accelerate Growth Above Market Concentrate our Execute structured, Utilize our unique investment in disciplined process to position to win across faster growing drive sustained product lifecycle end-markets outperformance ✓ Accelerate time to market ✓ Deploy R&D resources to ✓ Growth tea
Slide 23: Financial Results
Financial Results
Slide 24: 4Q21 Financial Results
4Q21 Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adj. Operating Income Adjusted Net Income % Change 16% 19% 16% 41% $313 $58 $49 $269 $44 $38 $33 $23 Adjusted EPS $0.71 $0.99 (1) Refer to the appendix of this presentation for a reconciliation of Adjusted Oper
Slide 25: 2021 Financial Results
2021 Financial Results(1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adj. Operating Income Adjusted Net Income % Change 14% 28% 30% 48% $1,221 $243 $1,073 $190 $187 $144 $136 $92 Adjusted EPS $2.77 $4.08 (1) Refer to the appendix of this presentation for a reconciliation of Adju
Slide 26: 2021 Adjusted Net Income
2021 Adjusted Net Income(1) ($ 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: 4Q21 Earnings Conference Call / February 17, 2022 / Page 26
Slide 27: 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 ✓ Total year capex of $53 $30 million, in line with guidance ✓ Reduced net total debt by $91 million, excluding the impact of $220 million new Net Total Debt Lev
Slide 28: Product Line Review
Product Line Review
Slide 29: Year-over-Year Sales Trend, Trailing 4 Quarters
Year-over-Year Sales Trend, Trailing 4 Quarters % of Sales Cardio & Vascular Integer 51% Cardiac & Neuromodulation 37% Advanced Surgical, Orthopedic & Portable Medical 9% Electrochem (Non-Medical) 3% ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 29
Slide 30: Cardio & Vascular
Cardio & Vascular Offering a full-range of products and services for catheter-based interventional vascular devices and a suite of supply chain solutions to support the development and manufacturing of complex components, sub-assemblies and finished devices Reported Quarterly Sales ($ in millions) S
Slide 31: 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 32: 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 33: 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 • 4Q21 sales increased approximately $3 million vs. 4Q20,
Slide 34: Product Line Classification Realignment
Product Line Classification Realignment ($ in millions) 2021 Sales by Product Line What is changing? Change Integer $1,221 $1,221 - • Shift of certain products between product Electrochem $38 $38 - lines, to better align with end markets ASO & $87 Portable Medical $110 $(23) − Active implantable med
Slide 35: 2022 Outlook
2022 Outlook
Slide 36: 2022 Sales Outlook
2022 Sales Outlook ($ in millions) 10% - 12% vs 2021 $1,340 - $1,365 Full year • 10% - 12% year-over-year growth … 5% - 7% organic $1,221 • Oscor ~$66 million … continued high single-digit growth Quarterly profile • Expect 1Q22 sales to be similar to 4Q21, constrained by COVID surge impact on labor
Slide 37: 2022 Full-Year Outlook
2022 Full-Year Outlook(1) ($ in millions, except per share amounts) Sales Adjusted EBITDA Adj. Operating Income Adjusted Net Income % Change 10% - 12% 11% - 16% 7% - 14% 7% - 15% $1,340 - $1,365 $270 - $282 $1,221 $243 $201 - $213 $187 $146 - $156 $136 Organic Change: 5% - 7% Adjusted EPS $4.08 $4.3
Slide 38: 2022 Cash Flow Outlook
2022 Cash Flow Outlook(1) ($ in millions) Cash Flow From Ops Free Cash Flow Net Total Debt Reduction Leverage (excluding $220M new debt in 2021) CAPEX $65 - $75 $181 $47 $53 $29 $160 - $175 AVX $157 $135 3.6x $152 $123 $29 3.4x AVX $104 Target $90 - $105 2.5x - 3.5x $106 $91 $85 - $100 2020 2021 202
Slide 39: Wrap-up
Wrap-up
Slide 40: Wrap-up
Wrap-up ✓ Strong 4Q21 and full year financial results • Sales up 16% vs. 4Q20 … adjusted EPS up 39% vs. 4Q20 • Full year sales up 14% and adjusted EPS up 47% vs. 2020 • Completed acquisition of Oscor • Generated $157 million cash flow from operations in the full year ✓ 2022 outlook • Sales $1,340 -
Slide 41: Integer Investment Thesis
Integer Investment Thesis Strategy Financial Objectives •1 Sales growth 200 basis points above market •2 Operating profit 2x sales growth rate •3 Debt leverage 2.5x – 3.5x Resilient Compelling Performance Financial Business Model Strategy for Growth Culture Strength ✓ Sustainable mid-single-digit ✓
Slide 42: Questions?
Questions? ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 42
Slide 43: Appendix
APPENDIX
Slide 44: 2022 Outlook
2022 Outlook(a) ($ in millions, except per share amounts) ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 44
Slide 45: 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 46: Non-GAAP Reconciliation: 4Q21
Non-GAAP Reconciliation 4Q21 Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 46
Slide 47: Non-GAAP Reconciliation: 2021
Non-GAAP Reconciliation 2021 Income from Continuing Operations and Diluted EPS Reconciliation – Detailed View ($ in thousands, except per share amounts) ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 47
Slide 48: Capitalization
Capitalization ($ in millions) 12/31/21 12/31/21 As Reported Rate Cash & Cash Equivalents $ 18 $400M Revolver [Due 2026] $ 19 L + 125 TLA [Due 2026] $ 467 L + 125 TLB [Due 2028] $ 349 L + 250 Total Principal Amount of Debt Outstanding $ 835 (2) Deferred Fees and OID $ (7) Total Debt (Total Principal
Slide 49: 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 or th
Slide 50: New Product Line Reporting
New Product Line Reporting
Slide 51: Cardio & Vascular (New classification)
Cardio & Vascular (New classification) 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
Slide 52: CRM & Neuromodulation (New classification)
CRM & Neuromodulation (New classification) 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
Slide 53: Advanced Surgical, Orthopedics & Portable Medical (New classification)
Advanced Surgical, Orthopedics & Portable Medical (New classification) 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 Ba
Slide 54: Contact Information
Contact Information Tony Borowicz Senior Vice President, Investor Relations Tony.Borowicz@Integer.net (O) 716.759.5809 www.integer.net ITGR: 4Q21 Earnings Conference Call / February 17, 2022 / Page 54