ITGR - Earnings call transcript Q2 2020 | Integer Holdings Corporation

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Integer Holdings LLC Q2 2020 earnings call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. Instructions]. [Operator like President conference of now Borowicz, to hand Vice Senior Investor to would over the Tony I Relations. Thank you. Please go ahead.

Tony Borowicz

Thank results quarter call. the press Good to replay, along webcast everyone. you copy us the joining morning, the of a and live we release presentation, available be of indicated. will and Integer's reflect discuss and second call section results today XXXX website. The conference for corporate The on our of the consolidated with earnings periods earnings and is being the data for welcome Integer Investor Relations

During some we our call, will non-GAAP measures. discuss

For today's non-GAAP presentation a financial measures, of notes the the of the appendix earnings these reconciliation and today's statement please of in see release.

statements. filings that company's to forward-looking As results Please our refer for discussion factors risk a differ SEC reminder, could the cause to of actual the presentation a today's materially. includes

his over your provide up turn will to closing financial strong it costs provide this how Joining and back remarks and call and President and new our me cash will Joe call, are come to open an COVID-XX and are we call On discuss and At comments his will Officer. for position. provide President Chief Joe impacting our for our review final Joe is the comments. we this point, results Garland, to how how results managing quarter today's will the quarter, Jason normal. his discuss on second on our on we update in Chief Financial the opening Executive discuss Jason Executive are managing Officer Dziedzic, business questions. and Joe for I will Vice

Joe Dziedzic

of start to into who the for call been and I our our environment at ensuring Tony beginning associates to priority. products last by customers the you day. pandemic call today. everyone place, in our pandemic want to our creating our joining safe quarter, every and we what said safety manufacturing a able need reiterating be associates to thanks the have Thank for this By are patients operations day manufacturing during are every top their continues our protocols on focus coming

Sounds of who take customers. of care care your simple, your associates take

we in we environment, that have social are we to executing normal so new it this stay as possible, Now operating focused as distanced our make worked can strategy. on

in and a normal have We agility increasing a this as that has our been of needs to during cadence customers changing adjust be market as to step and found demand. the one the this is rhythm dynamic our period. can process One production

closely intense continuing We implementation The are team working with on remotely. meet production of of the Integer their continue strategy, to many work has needs creative our lean our focus with our implement in an operational excellence, strategic also manufacturing during the pandemic, customers system very our as to their imperative. been to while experts

expected. disclosed that projected We our our our impact device I XX% following better medical the as were we cover though we COVID-XX. were the focused April. complete, second down what does of early we earnings believe worse in and down detail believed May, point And And XX%. as were sales second new on XX% it April would first decline, execution be even reflect that which slides. COVID, sales not on will this quarter normal than now operating approximately everything sales our quarter more quarter is full call is sales the of industry the than and not we are impact of to do. reflect in the strategy the achieve the excellence second On this in We full is did quarter down remain

to been variable sales temporary because significantly to we pandemic Our take decline as our approach expected has sales the and cost the declined from adjust infrastructure. out with not expected profits the

costs match volumes significant variable our returns. see solid to worked and in was expected to earnings adjust as sales. as we benefited Also, a back margin lower We fully strategy. as second from first our expected, higher contraction to cash profit second and insulated as quarter the rate come partially execute preserve the expect volume our the we to flow We quarter from to cash the our collections decline the quarter infrastructure

outlook second for half. the to our Turning

it we the what quantitative We second third are providing to are transparent lower be or point, possible we relatively but To to be even to as expect how slightly quarter market, correlates perhaps similar the going as not the quarter. expect guidance. on and we that than

compared our below and expect second quarter collections. customers. has run remain taken and pre-COVID information marketplace in hearing effort to manage in to and is to fact of the lower half the we team sales backlog flow first I and for a We and deliver the expect that of will levels. total improving, qualitative The XXXX, cash of trend in proud to sales cash second in well the but third ingenuity as half quarter second rate middle view environment supports order and second our outlook. half to from reduce the third our as the positive We see are somewhere the fourth the this the quarter am improvement demonstrated team It agility new in the has quarter, sequential would the

in and range excluding XX% diabetes second were medical in provide levels surge recent reduction We their the that medical their segment exiting in in interpreting me infections the prior device to But they second device how reported XX% volumes part during a declined sales. industry their decline products. the sales, We across we on the pre-COVID COVID results. how are device XX% Abbott range impacting Scientific XX% our the decline of trends volume reported the XX% the in Boston sales southern U.S. quarter. a are estimate of Johnson Johnson & an and of of to was industry believe the reported the update Let quarter. procedure a medical in mid-XX%

quarter which decline and recovered critical neuromodulation as view rate first than but quarter, the the such we neighborhood nine, higher current to to steeper structural saw more beginning experienced more light originally in projected, whereas failure the blue. our On better presented heart was results, of exit procedures, line, at blue more it the the you during of slightly the see quarter leading in cases the XX%. of view call of a Some declines market earnings compared second slide elective dark The quarter the our shown also is in heart, depicted second later we of quickly in the rate.

industry below during sales at fourth Although is third volumes certain somewhere the quarter the impact pre-COVID to geographies. XX%. We the levels by third we sometime the in estimate than of and for we we below are the COVID first the this sales the starting COVID our XXXX. U.S. quarter quarter higher XX% pre-COVID as several quarter, but we of in expect see our surge was that the the has market impacted expect XX% procedures the second cases, to improvement COVID between a better we levels. view, run on flattening the cases rate, further elective in X% at will reasons Integer, points quarter XX% in decline. a to in quarter When from difference a look estimate market decline. industry prior surge approximately decline percentage There Similar return the still industry Barring pre-COVID expect during to of that XX levels medical

the second rate XX has we going to will market response began meaningful note we of they think a level earlier, The started the the see is orders, more the early beginning Some impact the in little how with reaction view change the reverse and respond, whereas We point of meaningful until the of slower. year. did growth But that our returning in to July. typical quarter and view. be to the fully favorability and when that our the was versus anticipate to did Slide The customers pace the curve current half in what second June market of variation decline the decline pretty changed It sales overall to reacted percentage the bottom bottom thought and quarter was customer of our compared the second at curve market our now converging times Integer and early expect the they to customers a we be of the shows We the in to range but on growth. in was we responded expected. magnitude for slightly the wide times. with XXXX June. blend of in prior of the XX other growth reduce of important April reductions. There changes not was

into good supports backlog for visibility is our this curve. backlog have but XX We July the cannot especially the days, quarter, It updated change demand mean almost order doesn't pretty during customer complete. since the order next third

is quarter Given bottom be our about to our given slight now expect backlog, second same quarter. the as the we lower curve current a early quarter, third sales of to the bias the in third with

by and the events resulting that SKU brings takeaway the sales. XX. a the point our second to Integer sales of procedure the is The This impact decline. key medical percentage current order industry change both Turning changes, that to this each in the by than together into in translate of Integer A of better Integer the industry level and that us slide the view it on were customers. because on This customers, the about industry understand for device, communicate operations versus own to not and takes percentage the of at XX response then change, is market acknowledgment occur a but our to in interpret the lag criticism it time time generates an our of favorability that points in SKU. takes time their impact XX form manufacturing of the then sequence quarter

to in reverse the remainder fourth quarter. We in with most second the the of the the quarter third coming in will the industry and half, expect favorability this adjustment

How with decline. predict are variable reversal Our our the with actively the but managing We align assessment ability current managing? our suggests. is view analysis that is precision we are to limited, this backlog volume the our expenses and qualitative to order

have the and ample strategy pandemic. execute We prolonged protect now company the bolt-on acquisition our to investments to turn review strategy, while to positioned against carry financial over to out continue and our company strategic I results. liquidity call the will our to a Jason the with safeguarding

Jason Garland

ability our you second an provide to as quarter update for continue throughout joining we to will provide actions everyone strategy and morning to and on I Good highlights the our as XXXX on Joe. more have you pandemic. the taken well call. financials enhance our Thank our thank investing our execute again adjusted liquidity

As decreased Joe second were $XX XX% to on adjusted our reported results operating EBITDA Sales highlighted, a XX% million, adjusted by XX% quarter decreased basis. million and decreased $XXX COVID-XX. impacted by significantly income to

more include all managing As in performance a now income, reminder, operating costs business. believe adjusted as comprehensively we reflects our we the this operating metric in

to see We measures. show will that EBITDA you those can so continue

Finally, share support per diluted infrastructure executing of we the $X.XX. in reported post-COVID million strategy. our net of decline to a the continue profit $XX XX% and income, maintaining decrease sales decline earnings a while of the The adjusted declining direct and rapid result to is return of volume adjusted

showed cost second to The working the may are variable levels most distancing next help we to are and taking to increases. social a volume slide quarter We costs new believe approach we to the to on profitability the from during income adjusting We manage anticipate pandemic familiar, look perspective. will our reductions. our and COVID to quarter in share mitigate be costs it as the challenging quarter earnings related provide color more call we it first the second

our variable working reduce sales by the cost necessary material in labor reduction matching to suppliers taking appropriately with and input. reduction reductions are to We volume

we fixed. Our activities to indirect actively implementing labor and But reduce tied in measures to cases, closely production. most more variable are overhead and are less

and programs constant. we our costs are to support remain infrastructure. expect In our general, to continue for facility We improvement maintaining continuous fixed

believe spending, discretionary controlling decline are to we continued first the sales noted and temporary. call, the as we are We maintaining be quarter but as in could SG&A earnings RD&E we

temporary the significant, required execute Considering the we have strategic approach, we this committed margin of long resource a rates but be strategy. contraction our to While to, again, clear remain want temporary additions, non-critical we talent stopped of to term of that anticipate sales. we reduction addition on

cost be excellence improve through We By impact well bridge meaningful net year. expect sales to manufacturing protecting infrastructure believe positioned strategic readily down the of areas contributed sales margins XX% business year-over-year to $XX on in driving the a process drivers we with reduction apparent bucket as income like post-COVID-XX. and COVID last our in operational million adjusted as our to pandemic, lean is investment our versus no increase. The change

rate The rate turn tax line growth. expense $X.XX Our by in of impact review now our were management foreign quarter. to and lowered $X exchange product interest second of interest our a and will sales contributed effective million negligible I results. of the

reminder, may As how end-of-life programs launches, quarter, XX organic rate. this of anomalies we in versus slide customer the is believe and as and which a trailing more our an performing individual meaningful adjusted are inventory actions. We looking reflects product a market four-quarter sales such at sales indicator contain management trend

the all we sales our our best XX% we negatively the this were almost is we performance. view C&V insight continue this impacted believe provide COVID-XX across Structural said, our trends. where will And by growth the impacted are way significantly down programs. as skewed. Sales consequently to the see of into lines presentation markets. customer a return to more Cardio The the quarter. been leaving best our by heart our has was rate growth by still & normal second were in in when to we organic it Vascular sales That pandemic to continued and environment, analysis development Our performance driven exception product remains

our the The quarter, product were rhythm organic with the neuromodulation in Cardiac second to line in the both next management Moving by impacted product cardiac significantly XX% Neuromodulation pandemic. down and & line. sales

for product Please Additionally, neuromodulation Surgical, part Advanced agreements prior Viant & of the a headwind Viant. in offset increased line line. final shown year-over-year Nuvectra's patient was versus recall by Sales quarter from AS&O The today XXXX, product million by supply second by in Portable includes under with our impacted driven shows line. segment. demand X% sales partially July Medical Medical our Orthopedics and Slide acquired our XX $X declined the Portable monitoring bankruptcy. in medical components pandemic, year the the ventilator of product

for non-medical we to structure. severe summarizes which and this second our cost pandemic. to the decline market anticipate in market this fallout led in the downturn XX take reductions slide our adjust unit products implemented quarter, Electrochem, from in the XX% be driven the Electrochem segment reduced declined and furloughs could segment. the We prolonged, Electrochem business demand Finally, our force of COVID-XX in by sales energy our new us demand to actions rightsize In April, to market environment. and

So we the created the quarter pandemic. COVID-XX suspended to guidance by in uncertainty the due first

the stronger. We only providing not enhance, to are financial to committed actions regarding but we communication continue position Integer and to make taking our transparent to continue are

are increasing quarter Our liquidity we second cushion, and the leverage to has covenant improvements with in our we made grown in have the well strategy. executing debt our continue positioned

$XX flow debt, In free which including our revolver. to minus we second and we the million we the the investing $XX flow. the were is higher third million, our CapEx committed the in as quarter million pandemic. remain base. our the in activities cash quarter, year sales in we second quarter quarter, increased quarter prior the solid lower quarter, from in by net Cash in quarter $XX $XX collect cash quarter generated flow the our in aided on million the sales cash cash operating hand, be flow spend to That our in cash collections compared from liquidity on means Our second impacted which first that the on was lower were strategy. lowered second second by strong which in by also debt not COVID-XX will as in total as in paying

how four-quarter we ratio X.X executing to pandemic our with times given the the begin, leverage throughout our pandemic. trailing COVID-XX EBITDA allows strength increased would reviewing financial To our liquidity. the debt continue close to strategy EBITDA quarter. lower impact like adjusted Our us our the as to in of second is adjusted I increased

revolver million we prolonged on protect the a $XXX As the against illiquidity a in event our pandemic. drawdown executed early financial potential of market quarter, in second reminder, to

against to million we view of pandemic. with protection million on the and insurance continue prudent $XXX cash We last At in inexpensive had total this $XXX a quarter. close million in an quarter, as hand the liquidity, $XX up prolonged from

during have remainder of second continue We and albeit strong historically flows levels for cash at positive generated of lower flows cash year. to the the we expect half generating the XXXX,

increase Additionally, to from XXXX XXXX. we to to month worked times quarter times third X announced our that with early leverage group X.XX second bank covenant in our from the quarter we

We the for X.XX We increase support. transaction. to of times upon flexibility a M&A make investments broad added believe the to provides group protection Joe. believe of you. ability we post We additional ability positioned afford thank an and well their prolonged covenant maintain bank want stronger are pandemic our cost. I to this and execution our will that, minimal to financials the will back us eligible also us With COVID-XX. that leverage Thank withstand call We critical the our turn strong for to

Joe Dziedzic

Jason. you Thank

on to continue times. associates with during of a care these priority Integer We uncertain taking our lead

need build quality products, that our manufacturing throughout need pandemic. to customers day patients every for associates They continue the they the where have products time. and and on are Our ensuring them delivering they highest

the and our experience during product pandemic. We continue engineering expanded to development have strong demand team in

including activity customer pipeline outsourcing also robust, sales remains Our opportunities.

as We agility customers respond normal the increasing changes the are of our each to to by needs changing and the marketplace. our new day approaching in the volume

strategy. our executing on focused remaining are We

while The accelerating normal, excellence, force execution creative but a strategy with we our call differentiated for of sense and continue we will for back now extremely production are make customers. and we the the that our is continue of to to and in impact implementing to call you were deliver back real return when morning. sales leadership our sales investments Q&A imperative our urgency. working to been executing operational pandemic system, so products growth Thank have joining the strategic turn pandemic to significant, this forward The the in remotely the of our operator through the on despite is we on remain to necessary pre-COVID. our focused experts we COVID on the lean portion. Our trajectory volumes move capabilities Integer the I

Operator

Instructions]. [Operator

comes with Our line question of first the from Matthew Mishan KeyBanc.

Your open. line is

Matthew Mishan

thank Joe, questions. And taking of Great. some the for and the you commentary between market clarify sales. your just I to want sales

I consistent back So with about you quarter in pretty last XQ? trends had it they of sure industry forward stronger in trough sales from and you think clear communicating customer that very Where is did outlook. call. call approached to you you for back I April quarter it's the were to Integer the this Integer? where your What how not higher anticipated are June change have that am May, from than captured when were apply

Joe Dziedzic

results both quarter showed quarter our well as where Well, up it current we third as fourth in land. and Matt, of second in view the think our will

the it's and the magnitude month appears And clearly, of more saw call, or didn't we What earnings XX% of we down been XX% our or specific been was, April. the third quantitative communications order month call what revenue guidance earnings April. all guidance provide have for we down the the now about industry on of think of in were we XX%, previous I in in by second conveyed on our communicated quarter. to

much down in we the we have April So weren't lag the industry expected month we that that we knew and the described. of as as

production to way as the what We have best industry could. at the order to knew look communicating us, were the would orders quarter changes we assess take were didn't changes impact into it translate in be. what plans the our for it the that with And that We portray of but we correlating to were translate and is think I our time their then tried clearly as backlog this our us. were to studying then lag. declining. and market customers and into sales sales We to that we So that second going to customers knew know

points. would what diabetes wouldn't second we would percent happened expected time the clear. and upon it's knew med fully the correlate that little order have down our and we is quarter XX%, at than we with sales that at this And late as Abbott, The were I is market. thinking. were what this the down based sometime out. at see order in be the We our XX% because and backlog J&J just expected but there So higher lag. say But business And device was for was look a very That we when that our the lower orders. we bottom the lag industry example, down lag industry lag of we that pattern evident. our studied we in to expected we to actual what XQ from we be their very It's dynamic to And think precise clear. customers we of our we in hit to in what percentage based XX But or dependent their trough, have be bit in you and and has the were look is April, magnitude and XX-plus to played love as we sales, Abbott it the excluding XX%. XX%. trying lag can't on shifted expect down everybody about upon curve,

weeks, three backlog decline. backlog the that In a portraying. have of with declined or we backlog in that's June, In our our months the April May, first was much grow with during and consistent July, our wasn't decrease. are we way seen sales Our the flat. increase There curve commensurate

because were than I guess view to just because reflection why we the an don't the expectation our industry, a answer industry lag. different industry view we of I are So it's have with the correlating against a

Matthew Mishan

Yes.

is, actually I what XQ think accurately like up, XX% down down. in you think that could I you And upon had think, then of thinking I I have communicated XQ probably what XQ orders. down for it that it came your than based XX%, were some sum and internal to modeled, looks expectations reflected don't XQ. when better think actually been customer I

Joe Dziedzic

If and down Yes. that order said was we time, did down because XX% April had industry of we of to and knew not I about April. the quarter, first communications that go XX% full magnitude reflect were impact at there in indications the being back COVID

about not confident business And of in XX points. than win I to volumes that relative the we better convey sales industry, with what we the So continue we to And XX% has is, knew XX% we wasn't second tried industry convey than is it to worse is number. with curve April the the for down XX points the our being full to the would second Integer percentage that sales of Everything were think our impact about tried industry actual percentage for the a XQ. would But thing be late us in and to and unwind. first while upon this the just to based order the in we the being quarter right order magnitude. we an kind in think second This that is, But I which mid expected I It's quarter shifted quarter the the pattern. half range.- of am customers. XX%. on means, be of to XQ, a portray bottom precise

be market as up, back of reflection go down the this the during reflection come market. to volumes a And during are the a going dynamic, We are we and pandemic. of

time production and We into this market the their on translate that in change that translate the to customers takes upon are demand absorb in just based lag have to for going a it changes into us. impact,

we a a with of just reflection lag. So are market the

Matthew Mishan

Okay.

other recovery? think Have talking forecast account this into take all Or about how in the to factoring unemployment? that's and are are starting are like forward, at some Coronavirus you they your fair. the seeing conversations had very about are point? some moving customers just When the you they factors, I broader XQ

Joe Dziedzic

Yes. Great question.

built as I federal that high as near in do time have another with underlying What it CARES I orders unemployment, in government believe that uncertainty. customers think stimulus they be. am some I and is has the of of project term term the the recognizing degree customers confident factored impact can near them. what given we the everyone reaction more our Act for assumption for could impact package in that takes or the of much have potentially

time that's think a We practical determine closer for going visibility But fourth it's good months, they will August, perspective, really be all our to the you come three customers what on get factored what three our see beyond to do out, months next September what to When months. upon two, dependent demand they for quarter have see in. six nine I is demand from looking period. really that pretty us.

Matthew Mishan

Okay. been term? for the to some had long was a the relationship margin, steeper making we decremental in than And with Can have modeled. the you your little might think, the you the of in investments that quarter through I All then right. customers quarter the help strengthen talk

Joe Dziedzic

Absolutely.

start gross The includes will because in profit maintenance, this can't I the the we publish the includes overhead, plant, equipment. every manufacturing operations. gross infrastructure the So our see profit, which the fixed the you cost building with, itself, in

need majority meaningful distancing we think of I reported be that's time variable and When in is social is this amount the were do company to at the of that. our We drop cost time deterioration to variable cost. the variable the you have cost slight cost to in the is, some more being our variable in the variable the we It's change. volume saw sales variable some our to even need we profit you I react Obviously gross we every adjust cost think able and which or match and seen that in overall, really sales, hard fixed in that have your meaningful cost the a quarter, variable you variable the to fixed margin, decline. what in But adjust the we worked to look sales to had infrastructure, profit the margin, what and implementing at we to decline. pretty decline. a at look plants, effective drove able overhead, inefficiencies profit So matching

why with a the sales as is. do during viewed a pandemic, to we were you you a investments this growth continue faced that decision that fixed our when big grow when cost, we maybe leverage six nine, it's temporary executing it and And as and is your XX-month strategy so of is to which going what The decline to the decline, get were, was as see now we is, to the why that because growth like and things being far on reverse top decremental play accomplishing made everyone thus two-thirds in the that But important. the our agreements. that were We margin about of multiyear get going is other business on question you under long investing conscious side, to succeeded we with customers, so we of game. we continue our the what made, that's have have

our of meaningful with amount We have customers. a opportunities

grow. with quote to volume Our we opportunities at when our look the and continues the have commercial activity, of amount you customers,

team We talked in leadership place and last call on sales the new added salespeople. we processes putting have I about the the there. are

continues Our development to R&D That we the doing demand grow. with work grow. new continues to activities, are customers, program of

somewhere robust visible to visible. that during recovers, because the the market of because more become support They have development is today And not adding work We once we pipeline growth our been the in are didn't we We to that relationships pandemic allow get and that and the to those to will have multiyear else growth. pandemic, we agreements gives great because the but want really go build optimism. those future opportunities. very engineers are worked hit customers, on hard and pause the us confident with

the another we at $X we our take the that long million, expense have so long come able And reflects game. but million, decided would in been might consciously play executing which margins. have of We $X strategy play have of million chose the to of the out, some and to game, cost to $X

Matthew Mishan

is I apologies questions. thinking behind And this changes thanks that the And of continuity to the and my or potentially coming will Are jump about the my this how does follow-up question. making a redundancy Excellent. impact business for customers this? is to all me. last And taking that industry? your around And back, guys just out changes and

Joe Dziedzic

No worries, questions. Matt. Thank you for the

and make making infrastructure unquestioned have, believe how their I do investments they themselves, they think the it's And this that that what we opportunities creates? they pandemic relooking asking customers are of at manufacturing take What are are are and at the those what this? do offs advantage our that want seeing are infrastructure they own they to trade opportunities. and in looking

done outsourcing cash will what's are call, the grow the too and into way I where environment to more accelerate. it in-sourcing, outsourcing indications have look are, There's we continue at an about constrained. that opportunities. think we continuity seen question, There COVID more most thinking their was that's it in those thought us And time, in early and important I was customers to to was investments that what On Business for as going indication. capital they last is fact, have and are is We want asked decisions? at COVID. opportunity important that an it our strategic

But where other the going it's that's happening we pent-up I even back capacity, think a it's in and ramp questions, in get side of demand when up, the we the Thanks as the see Matt. concern. market at excess to especially important, we and the for environment more be on there's the growth the moment. less

Operator

Jim Company. is question next with Sidoti & Sidoti Our from

is line open. Your

Jim Sidoti

Good morning. you hear Can me?

Joe Dziedzic

Good morning. Jim. Yes,

Jim Sidoti

think, So trends you the delay I the a seeing shifted only are industry, lagged as - are job, bit how, your trends basically, orders. little a same did explaining little of the the good in pretty you because to a bit right,

on You seem be will but not correctly? lowest Did sales, that profitability. that indicate be? on your that why hear would QX I to quarter And

Joe Dziedzic

in the quarter be think on the lowest if Jim, We quarter quarter's -- is quarter think second expect profitability. third third even we we likely, do are will similar, which second that

Jim Sidoti

Yes. what am I am I meant. That's sorry. sorry. I

quarter on Third not on but sales, would profitability. lowest be

Joe Dziedzic

Yes.

react implementing had from social the the part to distancing efficiency quarter, related that manufacturing the to into our in second quick continue drive excellence We savings ability some to as perspective, execute volume a had of so inefficiencies the strategy we is, cost the also And And environment. variable inefficiencies we to as declined. business. and

better on ourselves So quarter to a of and expect every linear basis. get we both the year-over-year

And so measured or we a margin expect margin the second quarter by rate perspective. to be rate the bottom profitability from a

second better think inefficiencies were in We in them third we expect managed it the but effectively. pretty There the be I to quarter. quarter, little a

me be help drive business revenue. in will it's magnitude, digit say might let single get order third there. continuous than percentages, of And are in the sales some quarter. then improvement quarter, when lower little to a the we just the low third single just And we digit in the the of second improvement So efforts we dollars quarter frame,

good here not change. not today. from almost we that's obviously, can't orders visibility the see to It's July have good are the like got talking today, we But and September complete. least and have are And are demand third At say we visibility that pretty We And picture sales we our at what really quarter. looking meaningful. feel we sitting into August got to customers.

Jim Sidoti

some what in on then more will couple did you think know quarter. And Okay. let take expense you the the over you Can debt quarters? interest next be of us

Jason Garland

Yes.

second LIBOR, expect barring about So through changes any with X.X% right real half, for average XQ. an we big we Jim. again keep are the X%, consistent that to And

Jim Sidoti

balance. X.X% So on new the

Joe Dziedzic

the down increase, stabilize. paid actually Loan debt from revolver We was the on Jim, which the we repay expect to environment continues revolver A. the Term And the drawdown, as would to

Jason Garland

Yes.

the back debt So the are revolver. million required then the also within And they end paid quarter on we of quarter, by or a the $XX payment.

quarter the and we that it even to to in And revolver some prolonged. April. increase be illiquid in quarter-over-quarter, just that, back risk But thing the point, case cash net this in drew and prudent early draw. the market of your became the within. to actually the So generated, we again, you And from we is see with paid prevent against any

So down that we look are the will situation to through likely that watching that and market half. the in at credit and that. certainly bring second we believe stabilizing continue We is balance the

Joe Dziedzic

debt Jim, went quarter the $XX in second the net down million.

cash $XX in at down when So and million the look combined, quarter. it debt you was

Jim Sidoti

Okay. the Yes. to the I cash running know used No, is business million Jason with bank. less in $XX than of

expect quarters. make changes So I some over would next couple the you to of

Joe Dziedzic

Okay.

we more We a to will level back when to normal definitely that get environment. get

Jim Sidoti

you. Thank right. All

Joe Dziedzic

Thank Jim you

Jason Garland

Jim. Thanks

Operator

further there at And no questions. this Instructions]. time, [Operator are

turn So back for the over call to Tony Borowicz now will remarks. closing I any

Tony Borowicz

is this right. our All on quarter Integer. joining call that us on replay everyone call continued and your Thank you for in available going Note website. today's to be conference for for second interest

safe, the So thank call today and That concludes stay you. everyone.

Operator

Ladies disconnect. and and for your call. today's conference concludes you this may Thank gentlemen, participation you now

Integer (ITGR) 2 Aug 202020 Q2 Earnings call transcript