Earnings call transcript Q1 2023

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Operator

Thank you for standing by. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Integer Holdings Corporation First Quarter 2023 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. instructions]. [Operator you. Thank

you Senn, Mr. may Andrew begin.

Andrew Senn

Executive everyone. and us, morning, me and are and Chief for Vice Garland, conference joining to Integer's today Chief President Dziedzic, you Financial welcome Joe and first President With Jason Executive Good call. Thank Officer; quarter Officer. earnings XXXX

and we for indicated. the today reminder, the reflect a As data consolidated the periods results discuss results Integer of

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

today's the results of on reconciliation measures, non-GAAP press factors appendix trending of the these filings could presentation, Integer.net. our Please available to our a For note presentation please differ schedules, today's risk refer Please that cause for that company's financial statements. to to earnings at are SEC and materially. discussion release, a today's the actual refer which forward-looking the includes website of

On Jason Joe closing will the an then and open guidance. full-year the his will results up remarks, we'll opening quarter XXXX then update XXXX, today's comments, for will questions. provide his financial provide back to for and our first our call, and provide on come call review Joe

that, With it Joe. to turn over I'll

Joe Dziedzic

Thank thank the today. everyone you for you, call joining to and Andrew,

more Benchmark, and from are and coverage excited by of analysts, KeyBanc investors. excited to opportunity sell-side We are potential appreciate reach analysts Integer. on addition In who have welcome all from Piper sell-side the to Bank and initiated Sandler we America, recently the to coverage the

all organically, lines. the strong In delivered we across year-over-year grew first quarter, product with Sales strong double-digit growth results. XX%

year. income sales operating nearly operating points income of basis compared as adjusted percentage adjusted XX%, a generating of XX Our grew to last expansion

of expected, the second shipments delayed from by recovery quarter the half were primarily First driven year. stronger we the sales than last of

turnover, overall. high on caught largely labor sales note, a single-digit positive reduce are growth challenging this headcount levels to are On chain Although deliver largely our year. sales, need remains we our the those continuing supply direct to and at up we delayed environment the we on organic

We our full-year are reiterating outlook.

X%, our the in which organic expect to above XXX be the about X% serve. rate is We markets we basis sales points growth to growth

grow We year-over-year. XX% to expect income operating adjusted to XX%

We year-over-year million, Integer, strategy above-market in expansion free a is implementing sustained The our in in guidance margin we to strong because XXXX demand chain It remains a incredibly environment. an confirming are now of at cash producing $XX remains increase. and million and exciting developed $XX sales also began flow time strong. what challenging supply XXXX, is growth projected

needed concentrated making have to growth, of around a end new that our we associates a our patients. for world am for markets. difference customers pipeline and grateful are making sustained deliver the for and the investments delivering strong products We in are faster-growing I

Jason. the I’ll now to call turn over

Jason Garland

I'll and you acquisition XXXX and results, outlook. an and organically, Aran again XXXX a our with more $XXX thank differences. of the Sales morning, details Thank and you, first XX% million on growth joining a Good today's Joe. provide We quarter year-over-year XX% update excludes of our first on currency provide everyone, impact discussion. for XXXX of financial delivered reported which started quarter. strong basis, the on

been growth XXXX. all includes of delivering half indicative supplier across and the sales second strength constrained of the impact that lines, demand in Our product products is of delays have continued by

remains challenging. recover did the supply these we Although delays, environment chain

year, adjusted per have and higher $X.XX and $X.XX With compared vascular year-over-year the deliver first up our supplier margin delivery last sales of on to progress share, of we customer the offset products in earnings $XX diluted or net year the increase of income able to previous for or delivered from versus up lines markets XX% and on interest $XX last at adjusted million, expansion. from and double-digit four to line were we XX% demand, We rates, from product challenges. impact $XX XX% all million an strong income recovery up such Adjusted operating the of XXXX, strong $XX quarter first adjusted the made The or compared grew due ago. million continued million of In year, first We EBITDA, XX%. XXXX. key quarter, all cardio year-over-year delivered executed as and in product demand sales guidewires. to a growth quarter was

and a tax-affected, $X quarter supported higher was In million, from by interest recent first new last rates. total first year. acquisitions. by products. expense quarter $X surgical, strong double-digit the execution neuromodulation decline We Oscor Advanced volume, in as in a neuromodulation, increased Aran demand, in XX% partially quarter the growth detail more growth and overall a operational also performance, over interest of double-digit delivered offset environment, net than strong growth price the saw color sales XXXX, exit sales Electrochem, we versus quarter with XXXX, both product partially Further XXXX. medical strong performance from surgical delivered the the rate the versus quarter appendix first provide first management and driven included to This PMA by announced approximately and XXXX of orthopedics. compared we and the and portable interest and single-digit And XX% improvements, strong by customers segments. of CRM across million ago, growth more benefited by first in of electrophysiology, portable XX% this income ramps presentation. increased sales first product $X our market is demand year advanced a driven of strong Cardiac quarter in and offset adjusted higher by million To or finally, medical orthopedics, rhythm from line with primarily of increased our segment, emerging first all incurred demand result XXXX, on multi-year due non-medical driven of and also particularly in quarter to

we basis, by sequential on However, driven by fourth $X of XXXX, interest expense our tax-affected, notes. million convertible previously quarter announced a compared the the reduced to

nominal final US first CARES year-over-year expense, payments. activities XXXX did Social is of XXXX. profile, annual Moving higher typical quarter with in interest the Act. flow had basis, The by cash we of we said, deliver Security taxes, headwinds XXXX. on less EBITDA, of first from consistent taxes and million cash, from than our operations deferred Despite operations we That Government as of the the employer driven cash $XX short-term from quarter to higher associate first part the cash from payment income and incentives $X payment adjusted lower level rebate from generated quarter primarily flow of flow million of in operating a

are were collections, the collectability the into the we which addition, first are our timing customers In we by impacted of with quarter. of These week timing. second concerns, but not working on customer improved pushed payment

a our Our million first line quarter CapEx at annual was rate spend with in the in CapEx. expected $XX of

cash a result, was As usage a of free flow $XX million.

As during our an earnings week our shared received funding to quarter we the update last of first fourth factoring totaling program tranche call, million. XXXX $XX

quarter $XX $XXX and million support by this primarily the facility driven For fund clarity, first convertible growth. related cap not our the needed million is second results, associated fees we debt the Net quarter, reported $XX to but help increased one-time will with call. total $XXX investments million in to notes, in million, the and

was our above leverage debt four-quarter just EBITDA, strategic X.Xx the our at of X.Xx end to first result, which a the net trailing As target adjusted remains our X.Xx. total range, at quarter slightly

income, We'll cash. XXXX, for now to on sales, more transition and detail providing our guidance

billion, are reiterating comments, we As to our in rate. market of Joe increase underlying year, an range is X% sales a our last to opening $X.X his billion, versus growth mentioned which outlook, X% with of XXXX above $.XXX

costs greater in increase continue manufacturing product the our direct while efficiencies on are product of development to year year. through milestone across usually evenly year, sales We be the sales remainder from generally rates of margin towards development stability lumpy weighted the the and labor expand expect product can We achievement. based incur and the through end improved to workforce development

a should expenses. in mostly adjusted grow Our reduction the product D&E sales, our development operating higher income visible from year as through

to these share of supplier $X.XX. delivery XX%, with of dynamics, XXXX more of our growth adjusted per approximately above of of X% first benefited adjusted provide growth into anticipate growth we insight of the income million, income Given an rate to and of $XX outlook, sales million from $XXX approximately to the quarter To net constraints of growth half earnings closure adjusted $XXX to second XX%, run underlying million. XX% XX%, $X.XX XX% EBITDA operating adjusted of

we begin in quarter to environment. first run sales of a the continue of as As XXXX, similar expect million, execute chain to we we rate the $XXX supply second challenging quarter

improve throughout sales. and manufacturing percent a product of adjusted of expect We higher income XXXX, we sales the improve remainder operating as achieve development to as efficiencies

affirm I our Before our cash flow also we discussion, guidance. close financial to want

we mentioned, million. announced year last estimated is being to through growth program grow program of plan for the in As the used continue capital that received strategic fund week $XX factoring an previously funding We the investments. initial approximately to million, from to total to $XX which

to between $XXX flow We to cash million generate expect from $XXX operations million.

we $XXX our we million total in cash to free within expected ratio As leverage $XX will and capacity increase our investment adjusted between expansions, range be X.Xx The previously and with a free invest flow between are used million. expect end shared, resulting of in cash in million net XXXX, to generated to $XX year to flow million, expenditures EBITDA. estimated to resulting as reduce capital X.Xx the our total temporarily target debt, CapEx in $XXX

the turn With to that, you. I'll Joe. Thank call back

Joe Dziedzic

with and operating year. strong had XX% XXXX, start income Thanks, up XX% Jason. growth, versus a Integer year-over-year to last sales adjusted

we deliver execute reiterating above-market to our with as We growth strategy expanding successfully are continue margins. our to outlook XXXX

they pipeline products, focused generate customers the our strong and sustain delivering growth. for to a remain shareholders. premium on capacity are have to and the We new serve We investing patients valuation this for a of in our

this to joining turn for portion will now of call Thank back our morning. call call. I for you moderator Q&A our the the our

Operator

a first KeyBanc. go Your ahead. [Operator Please Instructions] from Matthew line Mishan of from comes question

Matthew Mishan

good thank questions. Hey, taking and the morning you for

And production on and initially are seeing your your demand around like you guidance better you definitely expected? revenue a are Just expected. first of you able than are much increase meet versus you seeing same. seeing the your one mean, year to that incremental the you're kept from course was I through customers, the you schedules. demand? what XQ What what

Joe Dziedzic

see Matt. customers amount but the when we and would we're customers’ ask really thing seeing has everyone happening the that they be this seen if months, of let's because underlying industry And stronger They to of if industry, and move million for, been good earlier guided full-year demand us was placed lift marketplace that operating that's hearing it demand, say backlog need pull said, you're then the for strength And in the with we and that half we're year, And to we're demand the it that were won't on the in in would that to expect nine to the asking most up across sales. Thanks expected in that to that order, X% from in $XXX in projected, see and of seems first everyone much from quarter, second underlying to the about we potential year. The unexpected our it underlying of year. in have our the quarter? now. than have wouldn't us, obviously was and that's show organic for then that's that on to timing demand, adjust market expectations demand growth - some us our the been then on is, reflected you've that to to the than ask ourselves visibility expect that that unless unplanned what it, orders question, year, planning six We're the we seeing been to they if then for. we with in to outlook, we've the do to we given because what of to demand over that visibility customers markets see order next Integer plus different the the second X% last was

everyone were our observed And incremental the so, I the quarter? you, that's this as I with working stronger a see growth we're in the good first to wish the the but markets underlying understand industry being had because clear needs near-term, us of comes down our We got to, expected. a even long-term. becoming this answer for strong it customers obviously to about We expecting only really customers year. we're to in their upside excited visibility start prospects it's really had year, than we've the to and

Matthew Mishan

And where then the flow see were think flow-through through, through about at we just more some need your you upside hire situation the to freight, to how flow that? Joe, you the a I could guess if this and rate in need Is to or plans? should a given actually just on to it revenue, volume something is people, you Jason, expedite incremental which of higher

Joe Dziedzic

great another question. it's Yes,

organically. growth a end remember, year, where of XX% get I’ll the last So, from year We X% direct frankly, been able with, on for this adding without the at have direct we to direct X% think organic we start the the we more X% labor labor labor much had need quite labor. We've we we growth were, deliver to that maybe can because sales last hire year. to

more than ship. hired needed we so, more or could last And we year, actually than we

our becomes more invest that proficient challenging of they're chain direct capacity like to without continued creates And and we out more workforce, to the and be the to we'd volume at having get work some what without we with labor footprint, through add workforce feel as with existing environment, able and so, more the that supply more. doing, existing having

We turnover. labor significant seen a direct in improvement also have our very

are everybody. about our think fourth to factors. attribute that levels of turnover. actually that well. in quarter We suppliers year. saw sites to of it for manufacturing would in of continue. I last We third as quarter pre-COVID been improved trend direct see back a quarter We number versus a that's labor have challenge We a I significantly the our

I changes think of we teams our made have great done in we onboard, plant leadership They've job a our how engaging how train. workforce.

broader process, ideally the I we've better in think who market suited many are to of then through in And the the has work I environment. gotten markets. improved labor at associates identifying manufacturing interview think the

those in to ability proficient give going of up all the generating more it's meet factors, the but show our improvement will which to think the margins. they what continued demand, also workforce in at is efficient I So, get efficiencies, turnover, us increasing our and gross ultimately to capacity while do,

So, excited we’re that. Supply about challenging. chain remains

group a suppliers. is but fewer towards persistently we delayed think we supply seeing what We're We're suppliers improve, taking there pretty from some remains approach pragmatic We’re expect issues. chain. a what of seeing

issues ultimately I in some we're think process. We instances, also are seeing that new come - to from to identifying efficiency. in and training who they're some their the quality seeing also suppliers some disruption more also we're leads in start workforce early that But

(indiscernible) chain, what higher than forecasting both the capacity to have if on and and we're but So, stronger demand feel approach the expecting, deliver and we is that. to supply we we're workforce

Matthew Mishan

questions, of the Excellent. ask some Okay. I'll you Thank guys let taking for more. the some and new

Operator

America. Please from Your the Bank next of with comes Craig question go line of Bijou ahead.

Craig Bijou

is year. on you the start manage Wanted that question, a to can expecting the and for I But volume thoughts what guys, do and deal add how you current guys become get if you Hey when plan above with need if demand I follow side, worsens could mean, you're strong to demand thanks the you obviously these to capacity. do of is I it's I the of nimble, if a M&A has be on maybe that your you the congrats guess appreciate was customers, to capacity? taking infrastructure. just how some people, a have a any strong on bit add issues where quality point, underlying your and and there it? to questions, point Or very it pervasive, follow-up does I asking or and a guess, surprise to a on remained more other chain with some procedure to part a your of up where guess, supply

Joe Dziedzic

you. X%. sales to workers, Addressing question, added for work welcome. year labor Craig, it only up more the last We opportunity we we workforce with direct forward about so associates, you with, coverage And XX% grew Great thank maybe and Craig. I’ll picking question, to and your frame look

you training chain the by of magnitude well So, gives were environment, as level inefficiencies turnover idea and that required. as of that caused supply the the the an of the

And that's and you level, grew X% if macro of projected more I X% kind your if X% grow to only capacity so, And mean, people, workforce. you XX% just sales I added X%. with we're year, this to

to - order be you labor that more direct add So, a in how workforce don't can you really X%. need X% to able get to see to to lot

because due The a chain on overtime, been other worked overtime and we've associates. thing of have planning and on we're challenges the very lot reducing we focused this supply training year, the is that to of

training workforce turnover because increased just the I Instead And but and lower if and add stability, we order we’re the and meet only so, demand, capacity. I capability a in we're pretty not overtime also and it's becoming supply of environment, and to overtime capacity, where that very being think is reducing mean, the in we to positive possible increases. maintain have more demand our chain very proficient I think efficiencies, could think impactful. also where maybe applicable, even very, I proficiency pragmatic. flex. overtime, of the with to surge

environment what in We’re assuming for foreseeable persists supply chain the we're is the future.

say quite frankly, tangibly getting quantities, can in yes, on-time delivery, full we until frankly, spec. quite And we're better and

deliveries on to there. then still quite more that fully opportunity dealing That'll So, having supplier and I the capacity use us quality frankly because material, that schedules. not that with time create realign we're to allows think there's are

improving. think indicates improvement chain chain and supply improves there potential I as there's is supply So, market broader

picture, us, a make picture serve who difference. that micro does and it's it's suppliers unique the own doesn't the our macro have or We not

first what than in from sales really, on higher the were the for up guided of quarter, maybe challenges. we that the supply about sales able million was The to of other $XX we last quarter, to year I would half we highlight our thing had had kind the chain where and first is catch were second

deliver able surge a indicator of some that's were first so, to on good quarter. that And we the capacity in

I but training gives So, answer, moving and we given surge feel that of proficiency, lot there, like some your think of I now the the summarize improved us there's workforce and maybe to have parts capacity. a

in better, it on not capacity. We have just assumed if say additional that us gives that pragmatically, chain, get And I better maybe does supply would meaningful counting get to way. we're a

So, will to meet the we how couple years the labor customers’ have out supply environments. we way that of figure our last chain in needs throughout same with the and

Craig Bijou

about helpful. guys, Got Very if in I provide looking ’XX, years. through that number, price, take see contributed a And the you the I ability you then apologize I your the just I you quarter, in and if if talk environment then pricing much in maybe remarks, if growth out know missed but for the and it to don't disclose at you just how ‘XX, prepared to price some how we can ask, don't started the it. as ‘XX specific durable sales even

Joe Dziedzic

Sure.

we And to So, that positive. historically of some that's is and as wage we the material that's we back can we our X% been inflation were low, that middle maybe pricing. X% in year. of down. typical able year, historically X% really to have incurred, starting were down, pass to far we've see, about contrast is we the the been because through it importance price price And that ‘XX. Last XXXX, and positive It’s this that as - price but of

reason it's us price successful impacts We've began in customers, passing that think increase that pass the you designed don't to XXXX. way hear XXXX. in negotiated our more increases. cost margins with through the we because I And highlighting it is and through to really some we as of is it So, the the of been cover at

work with cover that's them. customers then then our on experiencing environment been And able customers those improving margins. of share got to We efficiencies as we frankly, of work both because why we And cost. think part us that with pressures. us in this really They're they've we've prices quite that aren't willing to raising to have inflationary impact to see the It's our can expand to of been on necessarily go operations. our

and strategic that to we've of the And think think the we pass is of is we so, price have some we why able spirit partnership agreements pressures. this been long-term through the have of those and inflationary we

ideal you that an X% And the we so, and for changes bit is either it we think neutral-ish, historic to we're customers synergies down. we we're our around question think about, forward full model. somewhere In XX% going that our - the that's be. we some of increase. labor it? in to also it'll together quarter can that's now sharing round back to in it's inflation kind working drive durable a growth and organic But when we a is ultimately meaningful be structure get going believe given go X% an focus place environment change from look think to a and not up. success We that the year. our of flattish. growth meaningful how in meaningful it'll get and to make as years, with efficiencies. your can to on in and at with their really any It's that year, have first And then years customers to And well, enabling other the round long not But we levels, to be that an price as we Maybe

so, inflationary and for ability pass we’re pricing in pressures through the about to able then a excited be us. ‘XX being environment those And looking neutral-ish forward to

Craig Bijou

and questions to look Great. very the ongoing for forward discussion. Thanks the helpful. taking

Joe Dziedzic

Craig. Great. Thanks again picking coverage. up for you, Thank

Operator

comes line Dantoin with ahead. of Piper Your Please go Phillip next from the question Sandler.

Phillip Dantoin

That's the correct? us, quarter. in his is in on He as Europe for in apologies about behind at segment that and he's connection derived is commentary Matt. million, delayed from sends this the point, any million then was spread few the this segments? currently $XX worried from But a $XX particular here. totally sales I Hey, it and And his on Phil across that is appreciate that broadly or the here, all recoup you just

Joe Dziedzic

Yep. And and a to out does million look to your spots We forward with as for what last to answer you capture thank pushed well, mostly million Matt, picking question, there's few left working year. in $XX late - up a was Phillip, welcome and coverage. you. the few complete

So, mostly segment. cardiovascular it does And both almost neuromod spread the in that. capture was and it that entirely lands segments across the neuromodulation the cardiac and

that very There they still customers specific and be need we So, do supplier able glad about in the I cardiovascular working think balanced. inventory, where pockets know I to and replenish more are constraints that was leaned and to - have want answer to need product, - we’re it more to resolve probably little might where we're evenly are it the It that. side, in that's there behind think or was the that a question, to us. the heavily order get but sales to

year. versus guidance certain pushed there, where know we're sure, for that's out customers' factored year last to X% X% working guidance, been replenish replenish more with that pockets there's because customers we but inventory this we still addressed, inventories those in So, be expect need our been fully definitely they there's to into and our growth product to able that inventory. the fully to organic That's

Phillip Dantoin

grew broadly mean, with this nicely, well? compared and but is out, market, market market I neuromod, of any parse particular as to your there out even you'd is is that any speaking, said No, strong. the every bolus that doing they trying there particular Or in underlying stronger the being it helpful. both others? just to call backlog that’s are cardio markets Is you I'm just And

Joe Dziedzic

without double-digit, a electrophysiology there doubt, in underlying strength is lines submarkets every many market, saw of market. underlying were up the unquestionably, areas. in our that But product Well, the all we and in

how of almost all which it's might through the it keep of triangulate, that levels try a tell much see, customers or saw our to be that we us, meet replenish us, to to that industry may this we as inventory customers. demand try pull demand their You the well, did to saw And to from sometimes and little in because inventories. more be certainly hard And flow might to they up. to our but

And anticipated may that therefore us. had and so, not they or the may have on demand

not seeing I’ll or neuromodulation in segments. meaningful we epilepsy the to we've beyond cord sleep incontinence not have helped strength, pipeline spinal in And us able apnea of just spinal pain It's opportunities, upon of that’s to is diversify than today. management. more been spinal stem. a dependent markets way on be in it's definitely have Less various sales that or but Parkinson's, growth also across able or that. Whether just therapies, been We’re to diversify. cord our customers and all than have, cord we The It’s stem. but neuromod characterize - stem emerging less half

that from gives years emerging our We wide million had million confidence in to and customers, emerging a to XXXX. across grow. in range $XX continue that's last earnings so, grow call markets. that to for customers two our had about our to and neuro of expect on ability mostly to us that And in in bucket we $XXX therapies $XX million And of we that shared

And so, And of we kind new us electrophysiology across but for more strength, we strength have sure neuromod, as underlying board. the see the broad-based did for launches.

tremendous of Irish significant You a which industry, end growth therapies, the there. the one demand, guidewires. last where investment call double-digit our make particularly that The across just the we're see procedure demand new on in for some growth invasive our guidewires, that markets. And facilities the in minimally in we on all making announced growth of we tremendous to our points

the I last think that call that maxed facility. out last shared we year. We may on in have were we're

in the that's meaningful capacity We making And the to expand year. are this a we’re investment why way.

Phillip Dantoin

really Great. mean, I just gears Xx quickly, you've been operating income here about shifting growth. targeting And revenue

of Given income quarter how way maintained in there revenue back? but Xx you've the your of own terms yet. fully you're guidance for growth terms holding kind year kind this all expectations op close, of here, one to getting did you What's versus And of in internal not down the the go road?

Joe Dziedzic

Great question.

twice You’re is as as both to getting when turnover fast of our in year of profit fast ’XX, to XXXX, financial that were growing back objectives as continuing levels were we our achieved grow twice we to sales. we sales supply strategy, get and labor one at financial is chain previously the three profit big which impediment direct this objective. And as

we direct get And chain, do levels. twice of as need can our a then proficiency bring to our inspect. confident greater the and levels. So, our therefore the and associates, we suppliers the quarter we that's those their - normalizes We to manufacturing need normalize, sales. labor I'll below And schedule facilities back and we’re naturally is to That’ll back in supply profit stable with rest pre-COVID on pre-COVID, - facilities or to growth chain on efficiencies. say that twice when environment have supply fast of as as turnover does deliver full deliver operating at

frankly, I we growth on guidance to for really it’s last us X% forward. Quite that’s in And of XXXX going and we X% And to the picture get factors. think back year. kind XXXX those of so, October external macro that gave How level? do organic

we guided ago, X% we months seven see So, could to organic because X% that. to growth

should full-year point of confident price supply to improve how our of as those continues With the the so to get had to be you if But when fast was drives as we marketplace, volume, twice objective to have that's On as determined. see then - in an We'll play as we'll sales, we're where that that's us. markets But fast top labor strength to out. X% help twice the incremental that where profit direct down. in growing environment would that, strategic growing as sales. profit chain, to I X% underlying back

we And so, price be to now neutral-ish expect going as to get profit we for that as price it be and down, actually have twice should forward. us easier don't that to X% X% to sales fast

that lowest our amount So, the is And of XX% typically growth of quarter picture, development When it. product strong quarter product to speak markets. about maybe bigger the revenue how and we've you development kind more the and that's high in XX-XX, in the first XX% full-year, and lower growth how shifted I'll mature think markets, being has first pipeline shared but specifically. or robust from in we've our

in XX% the tripled are And revenues paying of growing work almost we've do to sales development or faster amount for. it's that development Now, markets. that customers us

you timing customer and the milestones finish in weighted natural it's first fourth our year, of the to in about It's move heavily driving to a budgets. products of over want us at year-end. the and more think And lower in both And meet the course and forward. the It's it's quarter the the when programs their those just revenues much and of to quarter. cycle so, they budgets,

fourth mostly have and we work, cost quarter quarter. a and some it's important engineers first heavier So, that's a typically lighter And the is R&D to this why material. do

not. the So, is cost recognized the revenue there, being or whether is

across sales for level-loaded company the the rate being total in in you a the margin in fourth first quarter think quarter. higher the year, lower the naturally you quarter, the quarter about cost but the more if first to of get so, naturally than And fourth

So, the that to five the years really of we bit to had enough to wasn't be impactful a I'd amount product company. wasn't five ago, development ago, three say three of big years it's but to sales there seasonality

I milestones really phenomenon to does of some, allows of seasonality, So, the development but for it’s this new us reach us of a is product dare strong programs completed to cycle the sale. - that and recognize is as gotten sales, level and get we've then it a say such when there more

improving, we're I about and pretty say, to pragmatic meeting But lot. to chain. or That's but then margin not year. improving turnover through on we'll that labor direct So, what supply - of the as and of trajectory the improve see rest on to one the happens factors, being we're expect continues with of supply counting see would I improve a improve it strong would it's chain

which are believe one basis which can we're we XXX of serve, we’re level turnover margins is sales, in now X% other higher So, pre-COVID the fast financial twice organically, we on the as with growing back progresses, profit do hopefully to to help we a of supply ‘XX, think that’ll as because as and markets chain, above is by our year the back us ‘XX, and points X% sometime and we objectives. sales

Phillip Dantoin

Well, that but our was I'll questions and of so you hop thank much so you all my taking next question, for Thank in queue. back much.

Joe Dziedzic

Great. you. Phillip, Look to forward thank working you very much coverage. for with the

Operator

the I'll I’m no turn Mr. are [Operator further this over call showing Senn. there time. to at instructions]. questions

Andrew Senn

for joining everyone, Great. call. Thank today's you,

your in of always, that concludes call. that our the Thank call can on as the as replay As and presentation just we covered. for you well interest access today's Integer, website, you this

Operator

today's And conference does conclude this call.

You disconnect. may now

Integer (ITGR) 27 Apr 232023 Q1 Earnings call transcript