ITGR - Earnings call 4 2023 | Integer Holdings Corporation

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Operator

Hello, and welcome to the Q4 2023 Integer Holdings Corporation Earnings Call. [Operator Instructions]. I will now turn the conference over to Andrew Senn, Senior Vice President, Strategy and Business Development and Investor Relations. Please go ahead.

Andrew Senn

Good morning, everyone. us, Call. to joining XXXX Fourth for Conference Earnings you and Integer's welcome Quarter Thank today Joe and me Diron With are Smith, Officer; Chief Executive and Executive Vice President Chief Officer. Dziedzic, Financial President and

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

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

statements. our presentation includes risk refer today's our materially. On his SEC company's and comments filings sustain could our for full and which on and Joe the Integer to XXXX open financial press the that For back a of come forward-looking today's appendix will website reconciliation actual how the to Please of release the Please followed call, to refer and an the then strategy, to review note we'll then closing of differ will provide available these will quarter call Inger's provide Joe. year Joe update overview for his please that, today's non-GAAP the the to discussion are trending adjusted by integer.net. of results an on cause call remarks, at schedules, for full today's our above-market I results XXXX turn over Diron financial earnings and provide all measures, that growth. will questions. With outlook. year will fourth factors presentation, opening

Joseph Dziedzic

our operating stronger operating above for year. points. income target adjusted sales rate thank over everyone of at were fourth We margin you expanding grew rate growth X.Xx joining and market Xx. We the the up Adjusted and a Andrew, at to by approaching were sales XX% by XX%, XXXX quarter full while XXX of call to a rate you, strategic even operating grow XXXX. significantly the basis strong income Thank able grew had sales an and today.

of to X% growth continue income an XX% in adjusted to operating of strong XXXX outlook growth sales and with this expect performance We XX% XX%. to

XXXX Technologies which sales further above-market continues execute micromachining like deliver sustained We are in Pulse capabilities in our in and January pumps. sustaining X, growth heart pipeline our Integer structural heart beyond. We markets and to acquired high-growth strengthens outperformance. confident electrophysiology, deepens strategy our and to precision on

product above-market is Our mix portfolio position the continue which as differentiation of shift higher planned. Portable and line, product for technology our growth our to proceeding business strategies previously as line The us sustained has to markets. exit limited growth low growth of Medical and announced we

make capacity operational investments growth. have organic and to inorganic environments meaningfully organization to margins. strategy capabilities chain targeted expand to execute and continue our in our and have and We our we The to improved, refocused labor enable supply

of tuck-in the year, InNeuroCo Pulse Healthcare During our acquisition the this announced acquisition publicly of adding Conference Technologies JPMorgan months. Technologies, Integer's XX customers. we strengthened our fourth capabilities for while in Aran differentiated high-growth The Biomedical, and position markets have acquisitions in earlier Pulse Oscor,

simplify and Our acquisitions supply help vertical customers our consolidate further chains. and our strategy integration their

X Quakertown, and and equally leading acquisitions January components aligned businesses. Integer I and in differentiated in of million family. margins. forward these critical product that meaningful we capabilities $XXX perfectly strategy. These for accretive XXx strengthens Pulse generate or with strategy. us shift be acquired They're for to We been delivering We supplier and Aran our developed in to in a machining the additional markets. look just capabilities strategic sustained for adjusted approximately Pennsylvania Integer sustained based XXXX, addition with product over In EBITDA results welcome micro approximately portfolio on growth. teams is earnout to medtech neurocompulse deepens an generated after to Integer's XXx strategic are and structured high-growth These products, our Oscor and critical relationships, multiple Integer growth to and the will a these growth. successful line the disciplined XXXX, $XX Pulse been and the precision pipeline our outperformance. and pipeline long-standing growth of strong a on paid structured annualized has to our benefits, to to focused the process disciplined million, profit and XXXX contributors ensure formed has being OEMs. X, integrate as our sales strategies sales were strategy $XXX with as to with talented organization Technologies benefit. associates customer potential market-focused XXX continue across and million net revenue Pulse in products the value the further considering on in and than less aligned development present high-growth pipeline our XXXX We markets, have investments along tax our trailing in have executed XXXX. positions to Integer's above-market excellent This markets expand teams a approach achieving high-growth

highest all continue highlight customers the on manufacturing the breadth greatest our the and the and with and integration. The of same Integer capabilities C&V footprint and We capabilities to of of uniquely areas positioned investment of deep life of clinical products is the product capacity. unmet the the global our customers products, phases slide investing in in areas growth bottom continued cycle because technology, markets, are invest vertical to serve need. across our markets where

Our and XXXX product high-growth traded in C&V end development growth markets. these

products of Very in bottom component Integer Integer of companies depth cardiac that CRM&N able highlight have to intellectual and high-volume of high-growth both our The the technology development the XXXX. within We positioned rhythm own components offers invest including of cardiac to rhythm on our the development even the subsegments innovation. these to decades vertically be integrating the while fewer to design most also from management breadth slide and is technologically other with bring the full areas that emerging customers, continue to and capabilities serve uniquely our to management. in offer property high-growth design, few traditional neuromodulation customers. differentiated contributed and the manufacturing capabilities of advanced growth also the that products, neuromodulation our

Our partners our pipeline the concentrated is markets. Integer to customers bring product we development with for medical service throughout to product technologies innovative cycle. end development this paid high-growth in same and are market, the

phase, and life-saving development growth indicators of accelerated are The ramp rate As sales benefits life-enhancing for products the of product developed growth. from leading above-market sustained and growth. enter the manufacturing to being amount the products and market are introduced the sales Integer market sales

which developed programs new in and products. into XXX% pipeline XXXX, being increased grown of our designed strategy our means we our have sales development product Our has significantly, novel are since customers' we

of will continue level growth. sustained development We are that confident to above-market the revenue deliver current

sales to XX% We a target development of on our mature development high-growth sustainable the rate currently continued have more markets, opportunities product in markets. strategically growth in with remaining basis. markets in our high-growth accelerate are to XX%

growth relatively believe they and growth continue XX% cycle accelerate of balance the XX% benefits in appropriate is mature is long. customers The markets sustaining for to high the We mature development the industry and to products our deliver sales rate our mix to Integer. while our our

sales level So it necessary above-market to the achieve sustain development is product for a program of growth. to and mix milestone us meaningful

call the and on customers. We to fourth PMA the primarily highly are first are of We bring and product, excited our for neuromodulation earnings third on to this emerging single XXXX. emerging novel market. slide customers update time in PMA share presented annual our These quarter therapies innovative

above-market many products product in and working been the of slide XXXX. to for and are generated side introduction our pipeline years, actual investing launched XXXX in have XXXX, side each the a product PMA shows customers of advancement left-hand are we this The customers of We right-hand of growth. in number is the sales sales of process. The these highlights or programs key contributor with this at since for X the either phase who development XXXX the

are projection success above-market have market year growth. in novel the million is sales products is demonstrates $XXX second and that sustained high-growth these which the of This the $XXX We contribute result for range strong our increasing of million, to pipeline to the consecutive of our a so. done we to therapies XXXX

consistently pipeline, have capabilities addition rate are tuck-in our In accretive our sales we to we to acquisitions our and growth execute enhance just that can that demonstrated and organic margins. profit

and We companies pursue that are criteria. have relative very disciplined to we our acquisition remained in targeted the

and We to founder-led continue cultivate relationships a pipeline privately robust of owned with businesses.

to rate growth on I These XXX annual our key get in product an in adjusted have X%. demonstrated and confident. product maintaining which Integer development, We to XXX X.Xx leverage acquisitions growth our growing deploying development a of highlighted are $XXX high-growth the growth by how the of $XXX million about can and was basis products XXX%, is continue strategy, which implementation of confident strategy strategic inorganic on XX% designed reinforce to high-growth of EBITDA. Prior at by portfolio to X.Xx we development to with in markets. our [ is million our customers is And we sales points to metrics markets, market basis growth of while our starts remain sales why for ] add debt development to of focused

deliver pipeline have basis organic growth above to points organic sustained market. We the the XXX

high-growth has strategy we customers can better and breadth markets. serve capability, so acquisition in depth added Our our significant

pipeline and provided to and Our acceleration. recent acquisitions added have organic sales also our profit

XXX add XXX basis of points to Going forward, annually acquisitions. to we from expect growth

markets. strategy, focused grow digit provider fastest-growing single and pipeline call Integer customers sales of is end services. I'll that of XXXX double most results we our technologies combined our and Our has for we going strong can generated with in over medical innovative vertically product forward. a development sustainably to partner and turn to being low investments vision customers' us in our accomplish and the strategy inorganic have helped to Diron. now choice confidence integrated the the its launched gives This organic high digit The producing

Diron Smith

year-over-year results our joining Integer and growth note, basis year quarter portable strategic you, a important quarter XXXX our thank while and provide We are our currency acquisition, our discussion. exit strong on ended of today's impacted XX% Joe. fourth XX, the of sales and organic Good the basis quarter provide year everyone, of of is full on the of high reported includes results at XXXX morning, year excludes fourth XXXX fluctuations. an results million, the which financial acquisition and X% Pulse and and full quarter details delivered outlook by you With InNeuroCo $XXX and outlook. market more the acquisition. outlook. sales delivered I'll foreign impact October the for our on end medical this adjusted fourth Technologies, again Thank not to fourth It XXXX

environment. We chain delivered last customer performance and million compared EBITDA, year. markets continued Our million demand the the XX%. XX% prior of growth an sales adjusted ongoing $XX targeted $XX the also supply increased of operating reflects to our year in Adjusted improvements versus up or strong increase across income the

We $X.XX performance or we driven Sales the adjusted income strong With was on $X.XXX earnings strong were prior margin in trailing by margin in a the and a continue the basis or to prior our the gained to XX% share, and $X.XX up financial touch at income income the operating strong year-over-year $XXX year-over-year XXXX. compared operating of the quarter a moments. Taking make the chain. growth delivered XXXX. CRM&N was our our income Compared volume year-over-year from of high EBITDA results point XX.X%, expansion. XX% billion or $XXX net continued earnings basis were and year prior of in a improvement adjusted income supply XX% $XXX on which to product We progress XXXX last net look million, quarter, year, at our XX% sales, fourth few With will from the from million, percent at adjusted XX per we is adjusted growth in outlook. year-over-year improvement XX% year. fourth or to adjusted our $X.XX full of on Adjusted fourth $XX a a of quarter delivered and year, diluted up increase CMV diluted X-quarter per closer line increased delivered share, end leverage up I organically. the versus efficiencies $X.XX million in sales of XX% as gross $XX expansion, the net adjusted earnings million adjusted million, of year. up

we quarter growth year-over-year customers details integer.net. To and XX% For across our and X million due higher trailing by effective Cardiac the costs the XXXX debt higher and or improvements delivered product our the XXXX to to in exchange on year. overall are product rates. was with by compared $XX by CRM $X increased included was Strong million & on interest performance, total Vascular convertible share, sales Cardio line per and $XX to improvements. presentation sales interest approximately million improvements. $X.XX double-digit line, well million provide by Rhythm by balance last and notes This tax all of appendix of website $XX driven $XX taxes. from issued strong XXXX. higher as X markets. higher chain is This year-over-year. than XX% growth equivalent supply foreign from increased million emerging expense driven demand, driven customer and color a chain trailing income adjusted was growth double-digit interest the net adjusted increased quarter Management operational offset sales We partially in acquisition strong first of Neuromodulations which affected C&V neuromodulation associated incurred our year combination demand of Further double-digit in more This as supply full at performance quarter with

adjusted the year. prior XX.X% was full the tax Our for year XXXX XX.X% rate to compared in effective

last our in holiday. of the described is year rate compared the to quarter's effective higher tax primary adjusted tax prior driver expiration Malaysian As earnings the of XX-year the call,

of holiday to operating the volumes the adjusted increase For of XX% driven activities strong XX%. tax XXXX in between sales XXXX. conversion delivered of legislation rate flow, We to fourth equates XX% from Pillar tax this cash establishing generated a In basis, to of effect Malaysian This expect recently margins. to million increase with in quarter of full operations. cash inclusive our flow by million effective quarter, mostly effective minimum is improving performance a income a another cash strong XXXX, expiration. enacted On Europe in by $XX we fourth tax million of cash be of quarter expenditures. X XX% the $XX we and from of in the residual and $XX This high the free $XXX was driven capital year million flow versus rate

quarter million our third debt in $XX year debt million $XXX decreases previous end the fourth $XX and line quarter InNeuroCo quarter XXXX, strategic X adjusted range cash fund partially X.Xx X.Xx full reflects of to an at million quarter $XX and of flow $XXX of with acquisition outlook $X is EBITDA, another reflects an our was is earn-out the trailing end expenditures, million of in total at ending fourth within leverage million compared of debt the at target for of free fourth Net which balance. of payments XXXX. acquisitions, on capital offset which other Our for ended of throughout from the our quarter to the the total million down by XXXX in year. Net $XX increase This increase million.

profit to year margins. outlook, growth for above-market summarized cash. our reflects detail and strategy earlier, transition more deliver outlook The expanding with will sustained on as sales, XXXX, now to our We providing full

We range year. sales in to to of be expect XX% the an versus XXXX billion $X.XXX increase billion, of $X.XXX to last X%

medical outlook exit. is and organic of partially above offset X% basis the which X% X% InNeuroCo Our plus our to our XXX market from reflects by X%, X% growth Pulse inorganic to rate portable growth growth estimate underlying acquisitions, of points

of is $XXX reflecting income debt reflecting is our between XX% XXXX, and for the This XXXX million primarily to adjusted rate year-over-year to end growth high between outlook higher EPS XX% is income acquisitions XX%, our support XX%. of XX% XX%. growth of And between to between sales a delivers to This due the is $X.XX, million Our InNeuroCo and million of expected an Pulse of adjusted million, million, and expected and X% XX% to higher at to compared expect to growth be XXXX million, year-over-year. $XXX to assumes adjusted be expense $XXX outlook. Adjusted outlook tax and which and net rate effective $XXX a we $XXX $X.XX to technologies. and between interest growth adjusted balance an EBITDA growth X% $XXX operating which X.Xx XX%

first year-over-year, PMA grow second digit high and sales product the expect quarter single acceleration fourth with new through We customer quarter growth. the in emerging in sequential from quarter XXXX the to introductions sales of

We in quarter. also the development anticipate at for our typical product quarterly is levels its quarter trend in its highest revenue, lowest generally levels which at first and fourth the

of attrition percent as pre-pandemic debt to for to cash like revenue. To levels operating financial development trend net quarterly generation adjusted summarize income a would XXXX. labor our and improved flow our total expand direct expect throughout We to product chain, close significantly the XXXX supply I our returning a sales projection typical for discussion, from and

an $XXX outlook. flow cash at from expect $XXX to million, million X% which increase of operations between We year-over-year represents midpoint

outlook $XXX to our than invest expenditures in this and at on capabilities capital highest $XX in continue million as capacity. XXXX. lower $XX midpoint, average organic Our XXXX the is was for capital expenditures million we million to investments At is as its capacity spending

billion, result, Pulse XXXX total million As approximate we year-end Inclusive of our our million expect generate which in expect $XX free this billion year-over-year. million year, of $XXX be $XX net debt January between million. we to between million of cash $X.XXX a is to flow and Technologies $XXX acquisition up and $XX $X.XXX to

call Thank and the that, X end leverage X.Xx I'll X.Xx We the target expect quarter ratio with to adjusted our within Joe. back turn you. trailing EBITDA. With our year range of to

Joseph Dziedzic

full delivered sales XXXX XX% income XXXX. adjusted XX% by operating strong with very a improving Diron. up Thanks, and We year over

sales our as results is with and income. both to an demonstrate adjusted XXXX we sales on XX% outlook over operating organically a inorganically the of in execution focused continue our and performance for to create We moderator producing expanding shareholders. I of strategy, strategy our now will expect this to in the of XX% XX% turn increase premium The strong executing remain Q&A with a margins. to continue above-market call to valuation growth portion to the We growth call. our for X%

Operator

Instructions]. [Operator

Your first question Fishbin comes with from Markets. of the Capital line Brett KeyBanc

Brett Fishbin

tough Just around wanted a to of if off point the XXXX with philosophy guidance. moving you just the one really context thinking exiting elevated then revenue book you're in billion And quickly the walk comparisons X% starting $X pieces of range start for how a in balancing could X% last through growth? on organic year? order just still to the Maybe then but around the very XXXX and bit of

Joseph Dziedzic

for question. Great. Brett, thanks the

as us we gives our sales, XXXX. So at development the XXXX look organic with ramping great new to programs product X% is visibility into X% are that that pipeline in consistent

the from the up ramps year 'XX pick 'XX in and and they of progresses. XXXX growth is Some in as started that

in strategic And for we've so confident to us been being and objective, X% that, X% organic exactly is about think do and elevated we're talking our X%. market that. XXXX to Maybe longer-term XXXX be of to what in X% end as a able the below correlate growth to was more of XXXX growth average. the We would was outlook similar kind market to we think

allows gives into visibility able the that's requesting what customers orders of rolling ramping we being term from order give to top do 'XX, customers to over And in The basis million they of of with gives at the us to question confidence that. And to hand X%. of what kind XX the a to book, a a and as growth in industry half of into and that normal plant produce manufacturing on tremendous X% that $XXX plan us so a your products what near which on beyond the assuming the are about are new plant, look the $XXX kind to book. second X% that's us where of tell XX-month us manufacturing And they us kind year. planning X% months, we're us on order both for out million next the they're

Brett Fishbin

of All right. on some revenue. maybe product comments following the Great. around And just up then new

to where maybe You A in there a for product by you're year, helpful. approximately seeing which $XX see upside Was was the million. great outlook just really additional terms did little areas. curious increase color bit this extra little would of be

Joseph Dziedzic

Sure.

looking is question to specific forward 'XX. to or Your 'XX

Brett Fishbin

million estimate guidance just upside at you where XXXX product No, year. of last million just the additional were relative looking to new $XXX revenue, prior of the to seeing $XXX the

Joseph Dziedzic

with referring products. you're Yes, customers PMA the emerging to

Brett Fishbin

Yes, exactly.

Joseph Dziedzic

Okay. Great. Yes.

about XXX growth 'XX of level delivered in points base. basis we from versus Integer customer So this XXXX total

year us -- it confidence by see on in another because ramps XXXX said we'd million. increasing million that million you $XX the $XX again see it's if doing success kind increased linear, we we million And the can in progression, million. manufacturing $XX marketplace. you of we last were this although the year triangulate $XX linear marketplace, are to progression to did million And demand year by demand in that it grow $XX million. XXXX to now not and the chart, based products so previously that strong in given perfectly from And million We $XXX gives confidence that, the the to a the seeing last of million $XXX we from $XXX right have actually XXXX. bottom $XX customers from ahead $XX increased it of and we the the towards upon their We're to customers of million had to

into mostly of patients. these supporting difference their the these making we're cord just novel stim. for therapies not And that launch spinal marketplace I'll a are are So highlight,

emerging growth. in these other unmet we're see that meeting neuromodulation that our their customers are therapies these are excited of in sales support and and a success need, lot So so patient to you

Operator

Do any questions, you have further Brett?

Brett Fishbin

I can could more. there else to ask X in go I ask Otherwise, if back X is or anyone waiting queue questions.

Operator

ahead. Go

Brett Fishbin

quick All starting margins. around range a the just about How operating right. for follow-up Sure.

bit the than seems compared X.Xx below I so midpoint target. little growth rate, the to or sales long-term around which better bit think the I was at a year, still little a last calculating but

it then the how you seeing? be into the target continues? see whether progressing a And And a opportunity year you as key see maybe might Xx early, bit but So around those headwinds toward continue you're pushing some to still little that just little XXXX.

Joseph Dziedzic

Brett. Yes, great question,

is talked Your labor growing just are turnover operating at math getting that same X.Xx pandemic. when to were And now inefficiencies years, level for we had driven that manufacturing -- pre disruption what We work the that profit improves the supply At we last in sales. it could correct. about rate like the the growth improves labor direct back the and we've X turnover then that we the direct experienced over we reason felt midpoint, chain out by is those of of is disruptions.

excited labor but better, And levels. and now XXXX that our 'XX XXXX, that back -- and the we -- quarter January, were direct slightly XXXX. quarter so I'm to say of is first actually quarter 'XX to The the we in better month exited every turnover into got continued in line trend above fourth fourth has and positive

take some out from that experienced turnover, the we It to gives that us we've us immediately. inefficiencies the And work can it so happen won't out. directly time will confidence but that that work

us those We manufacturing that and going to in have continuously different But initiatives the to we the momentum year, that deliver XXXX. improve number that a operations -- into throughout of expect efficiencies. gives

objective the operating profit rate. the growth sales long-term Our time remains absolutely growth Xx

in the we -- it way lowest saw We is early we entered it, and on the the thing measure measuring of continued supply we or disruption in last throughout mid-XXXX. in I'll chain. lowest supply improvement chain started other highlight XXXX measure year, since The with

margins So as say, the long-term I twice as remains we fast to throughout we efficiencies profit those at get would year watch year, least improve objective as our expect sales. getting and throughout the growing

Brett Fishbin

you then headwinds cost then starting around the a bit of But to a a similar bit. which of lines, right, there's little is subside these was pricing, in some bit which of sense. past. positive flip know XXXX, I in And modest to a a growth the than ton of little All different little kind makes along have side also

positive for in at cost neutral cool little of more thoughts be on those the continue past? a curious XXXX to can if least your headwinds pricing some here or to be than a as start just So bit still down lever

Joseph Dziedzic

just was was of inflation partnership wage and Pricing 'XX, customers. Sure. collaborative our very which in a some with sharing and really a positive the manner. slight material

to with assuming be upon our we XXXX flattish, and we customers. pricing in agreements forward based beyond, that's we're and and what As look expect XXXX our to modeling

Brett Fishbin

know And and Got deal one, the completed folks being integration how it's I thinking InNeuroCo pretty recent. early, acquisition, last that be the Right. Pulse just of little for the you in deal, about it. a should just context then process also bit but

planning level that you're this or like for prioritizing some of looking key success maybe how the Just you're of year. integration and you're marks of hurdles just

Joseph Dziedzic

immediately customers, reaction found it and have enables customers reception us and were scalability to capabilities can the to Those They we customer programs into with [indiscernible] we for those find because them. to smaller synergies efficient The to more So number that about tuck-ins. ways team to vertical a of their it We And us a our from gives were as on more already -- very excited that customers we soon working that customers. and And do the smaller already capabilities see and even sharing for us started great bring with acquisitions key our commercial is synergies. to also these we because both integration a more companies be operating innovative And are great bring. and. great practices differentiation point best teams low is best as those on do integrate we commercial the practices into the already the capabilities it closed, we acquisitions. positive ways and capacity talking those is about cost. we have are sales the and shared both of entrepreneurial thing already to of

simplify were some the that, we're us sharing they're their our of do to last XX practices them number customers because supply X the and reduces us, and the excited is help months and to in continue with they're suppliers so of them see great. And And to happy acquisitions their chain. excited X, consolidate which for also, by

Operator

with comes line Your of Sandler. O'Brien the next Matthew question from Piper

Matthew O'Brien

down at of bit Joe, as up thinking little I just curious don't a because normalized year. good. of the this to due bit. it's up Maybe, organic tough morning, still you to although last little terms the question mentioned look the this business? comp stock opening outlook follow built are on for we're in I'm I hearing I'm growth And was year, just know it's the more a probably Brett's if very environment in, what's a volumes because buffer

strong. where supply New product launches, areas has better in really as guys are gotten And there's well. ones you then some big obviously,

top just the you're I'm little some guided. where of performance better versus buffers So in the that you've be bit organic a there potentially could line on building wondering, how just

Joseph Dziedzic

on the price, that executing out. figure strategy our delivering keep our let you We're financial to and going objectives. on I'll one stock just Certainly,

visibility we that book therapies million order the $XXX In have growth, terms novel of great the customers success the XXXX they're with their to our to are because having of marketplace. bringing

what that deliver is so to the out And always we ensure view we balanced on ability we this a think has that can come with growth.

forecast XX-month our have We customers. from rolling

we think think, as than market so we And which this higher X% again, look growth, will be at to we X%. is XXXX, the

the and get delivering is basis to growth organic additional our points can get beyond. 'XX synergies and excited about the think least XXX at later and on that and above, we So acquisitions we're we commercial we when 'XX our

to XXXX, into get we're first this view the year on like the quarter. and balanced execute excited really and feel we is a So of

Matthew O'Brien

can areas? have that there [ then Got tricuspid to you were question. several I And areas new specifically, Or you getting, you And participate had the if over strengthening able into the then been get acquisitions, just an this from are expand area been before? are ] in that you then have recently. existing one approvals been where there's final next years? Is And to some it.

Joseph Dziedzic

Certainly.

So one leading of tech great med is they're with these serving well. the synergies acquisitions OEMs as the

where them is and for faster customers own enables has technologies example position excited them ramp them. and and our deepens The that know it our exposure to us scale and move It one space. they're well pumps ability development. for capacity design trust to for to the capabilities areas, broader our the Integer area maybe an them couple So so know with this a to gotten them customers. our and that Pulse being of more in with And

So team. on excited and about technologies having we're InNeuroCo Pulse the both the

Matthew O'Brien

question and permanent last congrats Diron title. And the it. Got on for

that what Just top seeing just don't I the expense the interest to the of if from just the just maybe especially know on that. you bottom pretty just broad get year, end what deleveraging makes about is specifically, statement income that a which low to in end, it line, we're the sense but end the that's then range. Can low you of high talk but range, you range? gets could And the earlier

Diron Smith

Yes.

to net referring you're adjusted clarify, income. to Just the

Matthew O'Brien

numbers. That's EPS The right.

Diron Smith

just EPS, wanted confirm. on Yes, I to Yes. Okay.

we're primarily InNeuroCo to expense, interest expense, and So that's and related $X the up about interest midpoint acquisitions on of million Pulse.

another percentage year-over-year. the minimum X tax about That's holiday expired Pillar up rate than we're additional tax So One of million then rate interest expense, some about less related debt. in Malaysian in expiration adjusted tax look about a is primarily is tax XXXX. And tax That's the just points. impact. when rate, that rate point then the that drives reduction and on point-ish $XX down pay at on to points global our you X then and our II the

other there's of points impact other be rate. would some then kind mix jurisdictional of a of tax carryover And And little the the so on residual bit that.

drivers those So points the X primary related are EPS. to the

Operator

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

Craig Bijou

spent to we about customer a So I just lot work 'XX talking inventory want start, down. of

question of rest. put to your customers at But a normal are more apologize again, level. kind patterns it inventory it this So maybe I like to sounds we can getting for but do order asking

wanted that of to that if there kind in your hear to normal a perspective. be true, from and So is thoughts just is, and year fact, going 'XX

Joseph Dziedzic

Yes, be that it question. wouldn't earnings an without call Craig,

thank So you.

with So this. maybe I'll start

end average. when given market capacity Our And the we more fast in procedure question in X markets. products. look orders years. overall that with customers to you us saw staffing maybe submarkets And was sole-source at normal different pattern growth end we for therapies support serving close kind shortages to is observe pretty coming that if in it out a the the looks XXXX medical And many because and nice and view market work where they customers with or when look we're in averages in so and of get our We the -- any customers over high. above pretty and could orders good first can of that we order and allocate work furious was XXXX our to to to is thing were the comprehensively back closely volumes. trend year nature. customers were like so years And higher than different on below We average of XXXX meaningfully the X view of a many was like hospital

we We're adjusting into and do we last so earnings we in send out that locations, aligned we call to ordering guidance. were both typical maybe oftentimes shared the order on adjustments, our about would holistically. customers -- not quarter think supplier. And that on to most supplier of third some that seeing what inventory we management for I of was the quarter part, shipped we seeing the able inventory what some summer. things some were they the was kind to of call, that earnings incorporated letters normal, patterns characterize had those saw we maybe what mass, customers in saw said as but the of And more year-end [indiscernible] we markets. I the talk more were we third when end

and really with And I longer-term months at given we've in got So think it quarter. our visibility those next have. order third our to the least fourth adjustments orders beyond book, the was of even some we X in good were quarter, our

that all we provided we got for quarter. and baked on the year both all full we We've provided and factored qualitative that that confident color the the first in in. we're that So the into guidance, guidance our

Craig Bijou

higher for customers. I on emerging the to follow wanted Got guidance it. up

the specifics, I missed million. the if this, sorry And $XX but what's to driving that raise

So better higher was for is what those through 'XX expecting outperformance 'XX? you products? versus Or a expectations -- that for were it

Joseph Dziedzic

customers -- I in failure determine are a the or or on those success these the the the the mean nature Yes. sales. presentation failure in success very It's great growth our question. will Slide of marketplace that those XX shows in the

they this our make best we risk for And adjust product to we've we in so of of we from look, that forecast because customers and risk for got Well, got IPG the sure because to going can to forecast they've they most XX-plus the that -- know plan that they're development customers. aggressive doing years adjust hit lead kind sales the that have. neuromodulation do

X what in it conservative. $XX to you and million to in because year to And proved is see overly success XXXX stronger when did -- marketplace the $XX the at were can fourth to quite were XXXX, that the saying we knowledge so of we away. more what than that, quarter We we we growth be pattern frankly, be And still $XXX of million 'XX, of here. And $XX got said of million. seeing one and adjustment you're was risk-adjusted seeing you're fourth going end look years end risk we

about I success said commented customers' for seeing the our was versus growth earlier XXX We points And in these those marketplace. basis customers. -- Integer 'XX 'XX that now we're so from

can $XXX the $XXX marketplace it's our midpoint do $XX gave to the million. confidence math adjustment We're the to us risk million $XXX extrapolate. and raise of the success of to conservative. the ahead and the you which of proved products million ultimately, But So in million,

Craig Bijou

from That's one modeling for acquisitions. And sounds in a It guys new contribution of decent Got helpful. last like me. it. you are amount

smaller And for to some the get pricing of is that valuation sense or on those wanted for you acquisitions there deals? guess. I done? many deals the how I market So Are end your expectations guys, to be

Joseph Dziedzic

a we -- acquisitions. be continues to do a the a these there The acquisitions team in of identify of tuck-in to unique acquisition we phenomenal very robust identifying marketplace very for in job to opportunities So is pipeline we're us. able tuck-in think position

and working to may where technology oftentimes as We or that big not programs. and customers us supplier they acquisition the design capability, most enough opportunities partnering these development or say and some don't well. the are much important might of us to a look they working and we actually targets a love to but customers to suggest on too the be on they're risk their in want or take they to on them they're high-growth come scale smaller product at

we bring and targets themselves the seen what from commercial of invest Sometimes done heard other acquisitions entrepreneurs companies they from with we've we We other and they've that synergies. grow who've know network that business. actually costs founder-led get because

vertical the the impact their the them accelerate we their in of the in and business. invest and marketplace helps growth integration with they're So accelerate business. just We patients. having

excited they're So that. about

relative it's market the of we possible to a get same an diligencing customers in years pretty And X they're doing of then integrating. we've the there at we about us entrepreneurs but muscle for same the a think, able when made more be been earnout ownership, care oftentimes, the progress operational also, your work, we've acquisitions, everybody others to excited are commercial of And synergies already highest are they serving fair And we're that well, get that InNeuroCo we'll bring the those over about price, price get outperform that return. couple got if synergies operational fair And of and commercial get make think start they pricing, companies think of wants a who they day position we the we've lots put of they easy. and And to because decisions. lot and already We've with and And able price, price acquisitions process course, these pretty built in a them. things these a in we and a We're that first quick to So unique can founder-led lets identify these tuck-in to question them. on so Pulse pursuing opportunities the and the great in

so as And same They're question, serving the they're growth then markets us. also markets. -- your maybe same higher the targeting end

our criteria following the discipline acquisitions. strategic for which -- is great they're So it's fits,

Operator

Instructions]. [Operator

Your Joanne Citi. line comes next with the Wuensch question of from

Joanne Wuensch

we XX the this about to the through back right points if from way? the expansion, running model I'm mostly business basis looks is between have way a margin, is then? think the right world? And if pre-pandemic Or so, much and of about like it looking curious go operating somewhere so margin since if coming just margins As just my you the sort I'm to and that of at gross changed model, has operating XX

Joseph Dziedzic

I'm or quarter Joanne, your sorry. forecast, to fourth specific was question

Joanne Wuensch

XXXX sorry. for No,

Joseph Dziedzic

That's okay. XXXX.

earlier We're basis operating So operating XXXX commented at midpoint rate. profit think still that X.Xx I That's midpoint growing twice at on as fast. the the income points XX as profit growth fast XXXX that's driving was the sales our guidance. up that adjusted it were towards growing as

more do biggest guidance. with driver that so we margin the referencing pandemic, attrition than confident before and their this the turnover kind where that our XX of to of to And half those sites is and and pre-pandemic that the work that we'll going experienced labor of levels disruptions with pre-pandemic. chain we're sales we're or had that pre-pandemic We're XXXX throughout in of And back good growth heavily were basis to inefficiencies the margins the expansion, is We'll And midpoint now, we is is news XXXX. that we even and get above-market direct the keep back better. and exceed improving XXXX. our throughout has is confident the that And below the to still pre-pandemic. from slightly to supply back -- out points we

Joanne Wuensch

math of Or should did is the in it fourth it Is probably My do to sections in I'm the second better neuromod, a doing looking we with about of CRM quarter, sort correctly, one other? segments comp the thinking segment if X question somewhat else be the at issue? my has X than something and

Joseph Dziedzic

Sure.

during is with shortages back growth reverting saw We revert and we pandemic in some management bit strongly very very while grow PMA it's fewer talked Management a to grown on continues in Neuromod, the were driven digit, procedures -- continues early to Cardiac point, our actually to rhythm by staffing quarter fourth cardiac We management PMA and historical cardiac you're XXXX. Neuromodulation think 'XX. strong Neuromod at therapies seeing level, back a part And levels. with stem, our historical hospitals more what neuro has view the of throughout little the emerging a in emerging going call. single that So the customers to strongly Rhythm its about we've grow there at by on a low -- this primarily customers. XXXX. And very with strong more spinal the cord and to very in is the emerging other

Operator

I this are remarks. will further turn closing time. at the call Andrew questions no There for to

Andrew Senn

Great. today. Thank call you, everyone, for joining the

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

Operator

you We for conference today's concludes thank call. joining. This

now may your You disconnect lines.

Integer (ITGR) 15 Feb 242023 Q4 Earnings call transcript