Integer Holdings Conference Call Summary Company Overview - **Company**: Integer Holdings (NYSE: ITGR) - **Date**: March 18, 2026 - **Participants**: Payman Khales (CEO), Diron Smith (CFO), Kristen Stewart (Investor Relations) Key Points Management Transition - The transition to the new CEO has been smooth, with a strong foundation and strategy in place [3][4] - Focus areas include customer success, operational excellence, and talent development [4] Board of Directors and Governance - A cooperation agreement was reached with Irenic Capital Management, resulting in the addition of two new board members [6][7] - The board refreshment process has been ongoing, with five new members added in the last five years [6] 2026 Guidance and Market Performance - 2026 is viewed as a transition year with expected headwinds from three products that had strong growth in 2025 but are not meeting adoption expectations [10][11] - These three products contributed just under 6% of total revenues in 2025, but are expected to drop below 2% in 2026, resulting in a headwind of 300-400 basis points [13][14] - The underlying business is expected to grow at a rate of 4%-6% excluding the impact of these products [10][22] Market Growth Expectations - The company anticipates a return to market growth in the second half of 2026, with expectations of achieving 200 basis points above market growth in 2027 [12][26] - The growth rate is supported by a strong pipeline and new product launches in faster-growing markets such as neurovascular, structural heart, and electrophysiology [16][18] Margin and Cost Management - Operating margins are expected to experience pressure in Q1 2026 due to fixed cost deleveraging but are projected to improve throughout the year [28][29] - The company is focused on disciplined cost management and expects to leverage fixed costs as sales grow [28][30] Input Cost Volatility - The company does not foresee significant impacts from recent volatility in input costs, as a large portion of the supply base is in the US and there are price protections in place [32][34] Long-term Financial Objectives - Strategic financial objectives remain unchanged: to grow sales 200 basis points above market and to grow operating income at twice the rate of sales growth [36][37] Product Development and Pipeline - Product development sales have quadrupled since 2017, indicating a strong pipeline and customer relationships [50][51] - The PMA product portfolio is expected to grow at a CAGR of 15%-20% over the next 3-5 years [53] Capacity Expansion - The company is strategically expanding its capacity to avoid constraints on growth, with recent expansions in facilities in Ireland and Virginia [55][56] Market Positioning - Integer is well-positioned in the electrophysiology market, with a broad portfolio and strong pipeline [39][40] - Neuromodulation is expected to grow at a high single-digit rate, with various therapies addressing multiple conditions [61][62] Future Growth Opportunities - Renal denervation is viewed as a potential long-term growth opportunity, leveraging existing capabilities in electrophysiology [64] Conclusion - Integer Holdings is navigating through a transition year with temporary headwinds but remains optimistic about returning to growth in the latter half of 2026 and achieving above-market performance in 2027 and beyond [67]

Summary of Integer's Earnings Call Company Overview - **Company**: Integer Holdings Corporation - **Industry**: Medical Device Manufacturing, specifically Contract Development Manufacturing Organization (CDMO) Core Points and Arguments - **Leadership Transition**: Payman Khales has been CEO for approximately five months and emphasizes a strong belief in the company's strategy and growth opportunities [4][6] - **Business Strategy**: Integer focuses on helping customers bring products to market faster, with a strong emphasis on design development and becoming the manufacturer of record [5][6] - **Growth Roadmap**: The company plans to enhance capabilities through organic growth and M&A, despite facing headwinds from three products expected to impact FY 2026 by approximately $70 million [6][13] - **Market Sensitivity**: Integer has a resilient business model that has effectively navigated macroeconomic challenges, including tariffs and geopolitical tensions, with no significant exposure to the Middle East [9][12] - **Product Adoption Issues**: The decline in sales for three products in 2026 is attributed to lower-than-expected market adoption rather than customer losses [14][15] Financial Performance and Projections - **Growth Expectations**: The underlying business is expected to grow at 4%-6%, with confidence in returning to above-market growth in 2027 due to product launches and easier comps in the latter half of 2026 [15][16] - **Electrophysiology Market**: Integer's electrophysiology business is strong, with expected market growth rates of 12%-14% in the U.S. and around 20% internationally [22][25] - **M&A Activity**: Integer has been active in M&A, investing $700 million since 2021, and continues to seek tuck-in acquisitions while maintaining a leverage ratio of 2.5-3.5 times [34][33] Pipeline and Product Development - **Pipeline Growth**: The total pipeline has grown by 300% since 2017, with 80% focused on faster-growing markets. The emerging customer segment with PMA products is expected to grow at a CAGR of 15%-20% over the next three to five years [37][38] - **Product Categories**: Integer has a diverse portfolio across various markets, including neuromodulation and structural heart, with a strong focus on dynamic and fast-growing segments [24][41] Capital Allocation Strategy - **Prioritization**: The company prioritizes organic growth and tuck-in acquisitions, with share repurchase as a secondary focus. A $50 million repurchase was executed in Q4 2025 [52][51] - **Margin Management**: Operating margins are expected to face pressure in the first quarter but are projected to improve throughout the year as sales increase [44][48] Additional Insights - **Market Dynamics**: The company believes the current dislocation in performance is temporary, with a robust pipeline and no structural changes to the business model [55][56] - **Investor Communication**: Integer aims to maintain transparency with investors regarding challenges and growth strategies, emphasizing the strength of its underlying business [55][56]

Core Insights - Artisan Partners' Artisan Small Cap Fund reported strong absolute returns in Q4 2025, outperforming both the Russell 2000® Growth Index and the Russell 2000® Index despite elevated volatility and shifting market sentiment [1] - The Fund's strategy focuses on investing in companies with franchise characteristics and strong earnings trajectories at reasonable valuations, with a continued emphasis on identifying profit cycles in 2026 [1] Company-Specific Insights - Integer Holdings Corporation (NYSE:ITGR) is highlighted as a medical device contract development and manufacturing company with a market capitalization of $2.9 billion [2] - The stock of Integer Holdings Corporation closed at $84.12 per share on March 16, 2026, with a one-month return of -3.99% and a 52-week loss of 31.94% [2] - Artisan Small Cap Fund exited its investment in Integer Holdings Corporation due to slower-than-expected revenue growth and lack of margin improvement, compounded by a leadership transition amid a declining profit cycle [3]

Core Viewpoint - Integer Holdings Corporation has appointed James Flanagan and Aaron Kapito as independent directors to its Board of Directors, enhancing its governance and strategic oversight as the company aims for sustainable long-term value creation [1][2]. Board Appointments - James Flanagan, former COO of PwC, brings 39 years of diversified financial and operational expertise [4]. - Aaron Kapito, co-founder of Politan Capital Management, has a strong background in investment management and serves on multiple boards [6]. Strategic Focus - The Board emphasizes the importance of the new directors' insights in executing Integer's strategic priorities and driving organic sales growth, expected to return to market levels in 2026 and exceed market levels in 2027 [2]. - Irenic Capital Management, which has invested in Integer, believes the company is well-positioned for growth in key markets and values the new directors' contributions to enhancing focus on growth and value creation [2][11]. Cooperation Agreement - A cooperation agreement between Integer and Irenic includes standard provisions such as standstill and voting rights, with details to be filed with the SEC [3]. Company Overview - Integer Holdings Corporation is a leading global medical device contract development and manufacturing organization, serving various markets including cardio and vascular, neuromodulation, and cardiac rhythm management [10]. - The company is recognized for its commitment to quality, service, and innovation, with brands like Greatbatch Medical and Lake Region Medical [10].

Core Insights - The 13D Activist Fund focuses on companies targeted by shareholder activists and reported a Q4 2025 return of 0.40%, underperforming the Russell 2000 Index which returned 2.19% [1] - Year-to-date, the Fund's return was 3.06% compared to the Index's 12.81% [1] - Despite challenges in beating market-weighted indexes, shareholder activism is on the rise [1] Company Overview: Integer Holdings Corporation - Integer Holdings Corporation (NYSE:ITGR) is a medical device contract development and manufacturing company with a market capitalization of $2.893 billion [2] - The stock closed at $85.23 per share on March 05, 2026, with a one-month return of -3.99% and a 52-week loss of 31.94% [2] - Integer is the largest publicly traded pure play medical device CDMO, specializing in cardiovascular and neuromodulation applications [3] Market Position and Challenges - Integer acts as an outsourced design and development partner for OEMs like Medtronic, Boston Scientific, and J&J, which creates a competitive moat due to high regulatory barriers [3] - Despite its strong market position, Integer's share price has declined over 40% year-to-date [3]

Integer Holdings Corporation (NYSE: ITGR) FY Conference Summary Company Overview - Integer is a leading medical device contract development and manufacturing organization, serving large MedTech companies and emerging customers globally [2][3] - In 2025, Integer reported revenues of approximately $1.85 billion, with 60% from cardiovascular business and 36% from cardiac rhythm management [3][5] Core Business Insights - Integer operates as a one-stop shop for customers, providing a deep breadth of products and vertical integration to simplify supply chains and enhance margins [4][5] - The company has a proven track record of performance, executing a strategy over the past eight to nine years that positions it well within the MedTech ecosystem [5][6] Growth Markets and Strategies - Key growth markets include electrophysiology, structural heart, neurovascular, and neuromodulation, with a focus on building critical capabilities through dedicated growth teams [8][9] - Investments in rapid prototyping and complex manufacturing capabilities are aimed at helping customers bring products to market faster [10][11] - Integer maintains a healthy pipeline of acquisition targets to enhance capabilities and vertical integration [12] Financial Performance and Outlook - Integer has experienced a 12% CAGR from 2022 to 2025, with adjusted operating income expanding by nearly 400 basis points [24] - For 2026, the company anticipates flat to 3% organic growth, with adjusted EBITDA expected to range from -3% to +3% due to headwinds from three specific products [26][27] - The company expects to return to above-market performance in 2027, with a target of 200 basis points above market growth [25][30] Customer Relationships and Market Position - Integer works with approximately 40 emerging innovators, particularly in the neuromodulation space, with expectations of high teens CAGR growth in this segment [20][21] - The company emphasizes customer success as a key focus area, recognizing that operational excellence and leadership development are critical for long-term growth [21][22] Capital Management and M&A Strategy - Integer has a disciplined capital management approach, prioritizing organic investments and targeted tuck-in acquisitions, with a $200 million share repurchase program authorized [22][23][48] - The M&A landscape remains robust, with a strong pipeline of opportunities in the markets of interest [50][51] Key Challenges and Market Dynamics - The company faces headwinds from three products that are expected to impact performance in 2026, but these are not due to competitive losses [36][37] - The electrophysiology market is expected to grow in the mid-teens despite these challenges, supported by a strong portfolio and exposure to PFA technology [43][44] Conclusion - Integer Holdings Corporation has built a strong business with a robust pipeline and a commitment to customer success, expecting to navigate current challenges and return to above-market performance in the coming years [30][52]

Core Viewpoint - The Law Offices of Frank R. Cruz is investigating potential claims against the board of directors of Integer Holdings Corporation regarding possible breaches of fiduciary duties to shareholders [1] Group 1: Company Performance - On October 23, 2025, Integer Holdings Corporation reduced its full-year 2025 sales guidance to a range of $1.840 billion to $1.854 billion, which is below prior expectations [1]

Core Insights - Irenic Capital Management LP disclosed a new position in Integer Holdings, acquiring 1,263,663 shares valued at approximately $99.11 million [1][2] Company Overview - Integer Holdings is a leading contract manufacturer in the medical device industry, providing a diverse portfolio of products and technologies to global OEMs [6] - The company specializes in manufacturing medical devices and components for various applications, including cardiology, neuromodulation, orthopedics, vascular, and advanced surgical markets [8] Financial Performance - As of February 17, 2026, Integer Holdings had a market capitalization of $3.07 billion, with a revenue of $1.83 billion and a net income of $86.90 million for the trailing twelve months [4] - The company reported an 8% sales growth in 2025, reaching $1.85 billion, and a 21% adjusted EPS growth to $6.40 [7] - The fourth quarter adjusted EPS increased by 23% to $1.76 [7] Stock Performance - Shares of Integer Holdings were priced at $87.66, reflecting a 37.9% decline over the past year, underperforming the S&P 500 by 49.75 percentage points [7] Investment Implications - The new position by Irenic Capital Management represents 13.7% of their equity assets, indicating a significant but not dominant allocation [10] - Long-term investors are advised to focus on organic growth in Cardio and Vascular sectors, maintaining debt discipline, and executing against the near-term outlook [11]

Core Insights - Integer Holdings Corporation reported a strong performance for the full year 2025, with sales reaching $1.854 billion, an 8% increase year-over-year, and adjusted net income rising 23% to $226 million, leading to an adjusted EPS of $6.40, up 21% [2][6] Financial Performance - The company achieved operational improvements contributing $30 million to earnings growth, with interest expenses down by $14 million year-over-year, adding $0.33 per share after tax [1] - Adjusted EBITDA for the full year was $402 million, reflecting a 12% increase, while adjusted operating margin improved to 17.3%, up 76 basis points [2] - For the fourth quarter, sales were reported at $472 million, a 5% increase, with adjusted net income at $62 million, up 22%, and adjusted EPS at $1.76, up 23% [3][4] Segment Performance - In the Cardio & Vascular segment, fourth-quarter sales increased by 11% to $284 million, driven by acquisitions and strong demand in neurovascular [8] - Conversely, the Cardiac Rhythm Management & Neuromodulation segment saw a 2% decline in fourth-quarter sales to $167 million, primarily due to reduced demand in neuromodulation [9] Capital Management - The company repurchased $50 million of common stock in the fourth quarter and plans to initiate an accelerated share repurchase of approximately $50 million, reflecting confidence in its financial position and strategy [5] - Integer generated $196 million in cash flow from operations for the year, with free cash flow of $105 million, up $5 million from the previous year [7] 2026 Outlook - Integer expects reported sales for 2026 to range from $1.826 billion to $1.876 billion, with organic sales projected to be flat to up 3%, facing headwinds from three new products due to lower-than-expected market adoption [11][12] - The company anticipates adjusted EBITDA between $391 million and $415 million, with adjusted EPS guidance of $6.29 to $6.78 [13] - Management expects organic sales to decline in the first half of 2026 before returning to market growth in the second half [14] Future Growth Prospects - Management expressed confidence in returning to above-market organic growth in 2027, supported by a strong development pipeline and new product launches expected in the latter half of 2026 [17]

Market Focus and Growth Strategy - Integer Holdings Corporation focuses on higher growth medtech markets, specifically in Cardio and Vascular, Neuromodulation, and Cardiac Rhythm Management[14]. - The company aims to enhance its product offerings through strategic "tuck-in" acquisitions to support growth in key markets[46]. - The company is engaged in significant product development projects, including advancements in cardio & vascular and cardiac rhythm management technologies[55]. - The company has a robust pipeline of opportunities in the medical device market, supported by world-class engineering and manufacturing capabilities[51]. - The company is focused on continuous improvements in operational excellence to effectively meet customer needs and create stakeholder value[49]. Financial Performance and Customer Base - The company reported a firm backlog of approximately $675 million as of December 31, 2025, with most orders expected to be shipped within one year[43]. - In 2025, three customers—Abbott Laboratories, Boston Scientific, and Medtronic—accounted for 49% of total sales, each exceeding 10% of total sales[38]. - Approximately 53% of products sold in 2025 were shipped to locations in the United States, indicating a strong domestic market presence[39]. - In 2025, the top three customers accounted for approximately 49% of the company's revenues, indicating a significant dependence on a limited customer base[102]. Operational Challenges and Risks - The company is subject to stringent regulatory requirements from agencies like the FDA and the EU, impacting its product development and market access strategies[66]. - The business relies on a continuous supply of raw materials, with significant increases in costs potentially adversely affecting financial results[104]. - The company faces challenges in attracting and retaining qualified associates, which is critical for maintaining and growing the business[111]. - Quality issues with products could result in warranty claims and harm the company's reputation, potentially leading to reduced revenues[112]. - The company is exposed to legal and compliance risks, including regulatory issues and potential product liability claims[107]. Workforce and Talent Management - As of December 31, 2025, Integer employed approximately 11,000 associates, with a contingent workforce of about 400[77]. - The workforce distribution includes 43% in the U.S., 25% in Mexico, 15% in Ireland, and smaller percentages in the Dominican Republic, Uruguay, Malaysia, and other countries[81]. - Integer's total rewards program is designed to attract and retain talent, incorporating market comparisons and individual performance metrics[80]. - The company emphasizes leadership development through various programs and training, ensuring leaders are equipped to meet strategic goals[79]. - The company is focused on acquiring critical talent and engaging associates to foster a performance culture[81]. Financial Position and Debt Management - The company has $1.2 billion in principal amount of debt outstanding as of December 31, 2025, including 2.125% convertible senior notes due 2028 and 1.875% convertible senior notes due 2030[142]. - The estimated debt service obligations for 2026 are approximately $27 million, which includes interest on outstanding indebtedness[142]. - The company announced a share repurchase program authorized for up to $200 million, with approximately $150 million remaining available as of December 31, 2025[135]. - The company’s ability to repurchase shares may be limited by restrictive covenants in its debt agreements[138]. Cybersecurity and Compliance - Cybersecurity risk management is integrated into the company's overall risk management framework, with a dedicated Security, Privacy and Compliance Committee overseeing cybersecurity strategies[189]. - The Chief Information Security Officer (CISO) is responsible for managing cybersecurity risks and reports to the Audit Committee on a regular basis[195]. - The company engages third-party experts to evaluate and test cybersecurity risk management systems, ensuring alignment with industry best practices[190]. - The company has established stringent processes for overseeing cybersecurity risks associated with third-party vendors, including regular assessments and contractual obligations[191]. - The company does not believe that any current cybersecurity threats have materially affected its business strategy or financial condition, but acknowledges the increasing risks in this area[192]. Regulatory and Environmental Compliance - The company is committed to environmental compliance and is not aware of any material noncompliance with applicable environmental laws[73]. - Environmental regulations impose various controls on manufacturing processes, potentially leading to costly compliance requirements and future liabilities[179]. - The healthcare industry is highly regulated, and changes in regulations could increase compliance costs and affect product development and pricing strategies[181]. - International operations are subject to legal and regulatory risks, including increased scrutiny and enforcement of anti-corruption laws, which could impact business operations and financial condition[180]. Market Competition and Economic Factors - Consolidation in the healthcare industry is intensifying competition, which may lead to price reductions and decreased revenues for the company[119]. - The company faces intense competition from established firms and new entrants, which may limit its market share and negatively affect revenues[123]. - Economic uncertainties and inflationary pressures may increase operational costs, affecting overall financial performance[105]. - Heightened geopolitical tensions and trade restrictions could increase product costs and reduce customer demand, impacting the company's ability to market its products effectively[121]. Stock Performance and Shareholder Returns - The cumulative total stockholder return for Integer Holdings Corporation was 96.60 as of December 31, 2025, compared to 134.40 for the Russell 2000 Index[211]. - The common stock price has fluctuated between a low of $63.32 and a high of $144.36 from January 1, 2025, to February 18, 2026, indicating significant volatility[134]. - The company has not paid cash dividends in the past and does not anticipate paying any in the foreseeable future[204].