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Core Insights - Integer (ITGR) reported quarterly earnings of $1.79 per share, exceeding the Zacks Consensus Estimate of $1.68 per share, and up from $1.43 per share a year ago, representing an earnings surprise of +6.55% [1] - The company achieved revenues of $467.69 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.41%, and an increase from $431.42 million year-over-year [2] - Integer has outperformed consensus revenue estimates in all four of the last quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.84 on revenues of $487 million, and for the current fiscal year, it is $6.38 on revenues of $1.87 billion [7] - The estimate revisions trend for Integer was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Medical - Instruments industry, to which Integer belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Sales for Q3 2025 totaled $468 million, reflecting an 8% growth on a reported basis and 7% growth organically [13][9] - Adjusted operating income increased by 14% year over year, with adjusted EPS growing 25% to $1.79 [15][9] - Year-to-date sales are up 9%, adjusted operating income is up 14%, and adjusted EPS is up 20% [30] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 15% in Q3 2025, driven by new product ramps in electrophysiology and strong demand in neurovascular [15] - Cardiac rhythm management solutions sales increased by 2% year over year, with expectations for mid-teens growth for the full year 2025 [16][17] - Neuromodulation sales growth was impacted by lower demand from select emerging customers, with expectations for low single-digit growth for the full year 2025 [17] Market Data and Key Metrics Changes - The market adoption of new electrophysiology products has been slower than anticipated, leading to a forecast reduction for 2026 [11][12] - The company expects a 3% to 4% headwind to total sales in 2026 due to the decline in three new products [11][12] - The overall market in which the company competes is growing at a steady mid-single digit rate [29] Company Strategy and Development Direction - The company remains confident in its long-term growth strategy, focusing on early design wins in high-growth markets [12][29] - A strong product development pipeline is expected to drive above-market growth in 2027 [28][29] - The company plans to continue its acquisition strategy while maintaining a leverage ratio within the targeted range of 2.5 to 3.5 times [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a reduction in the financial outlook due to unexpected changes in customer forecasts for new products [5][9] - Despite the challenges, management expressed confidence in the company's strategy and operational execution [6][12] - The company anticipates a recovery to market growth in the second half of 2026 as new product headwinds moderate [11][12] Other Important Information - The adjusted effective tax rate for Q3 2025 was 16.3%, down from 17.2% in the prior year, with expectations for the full year to be between 17% and 18% [18] - Free cash flow for Q3 was $46 million, flat compared to the prior year, with net total debt decreasing to $1,158 million [19][24] Q&A Session Summary Question: Can you elaborate on the organic growth of the rest of the portfolio? - Management indicated that without new product introductions, the rest of the portfolio is expected to grow at market rates, which is lower than the typical 6% to 8% growth [32][33] Question: What are the expected headwinds in the cardio and vascular items? - The headwinds are related to two electrophysiology products with slower market adoption than anticipated, not due to loss of market share [34][36] Question: How confident is the company in returning to market growth by Q4 2026? - Management expressed confidence due to steady backlog and customer forecasts, despite the unusual simultaneous changes in multiple products [38][39] Question: What changes will be made to the forecasting process? - The company is reflecting on its forecasting processes but maintains that its algorithm for risk-adjusting forecasts remains unchanged [90][92]

Financial Data and Key Metrics Changes - Sales for Q3 2025 totaled $468 million, reflecting an 8% growth on a reported basis and 7% growth organically [13][9] - Adjusted operating income increased by 14% year-over-year, with adjusted EPS growing by 25% to $1.79 [15][9] - For the full year 2025, the company expects sales growth between 7% and 8%, with adjusted operating income growth between 12% and 14% [20][10] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 15% in Q3 2025, driven by new product ramps and strong demand in neurovascular [15] - Cardiac rhythm management solutions sales increased by 18% year-over-year, but growth is expected to decelerate in Q4 2025 due to anticipated declines in new products [16][10] - Neuromodulation sales increased by 2% in Q3 2025, with expectations for low single-digit growth for the full year [17] Market Data and Key Metrics Changes - The company anticipates a 3% to 4% headwind to total sales in 2026 due to slower market adoption of three new products [11][25] - The portable medical exit is expected to contribute a 2% headwind to total sales in 2026 [11][25] - The overall market in which the company competes is growing at a steady mid-single digit rate [29] Company Strategy and Development Direction - The company remains confident in its long-term growth strategy, focusing on early design wins in high-growth markets [12][29] - A strong product development pipeline is expected to drive above-market growth in 2027 [28][29] - The company plans to continue its acquisition strategy while maintaining a leverage ratio within the targeted range of 2.5 to 3.5x [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged recent customer forecast changes impacting the financial outlook but expressed confidence in the long-term strategy [5][10] - The company expects a recovery to market growth in the second half of 2026 as new product headwinds moderate [11][12] - Management highlighted the unusual nature of simultaneous forecast changes from multiple customers as a significant factor affecting the outlook [59] Other Important Information - The adjusted effective tax rate for Q3 2025 was 16.3%, down from 17.2% in the prior year, with expectations for the full year to be within the range of 17%-18% [18] - The company generated $66 million of cash flow from operations in Q3 2025, with free cash flow remaining flat at $46 million [19] Q&A Session Summary Question: Can you elaborate on the organic growth of the rest of the portfolio? - Management indicated that without new product introductions, the rest of the portfolio is expected to grow at market rates, which is lower than the typical 6%-8% growth [32][33] Question: What are the expected headwinds in the cardio and vascular items? - The headwinds are related to two electrophysiology products with slower market adoption than anticipated, not due to loss of market share [34][36] Question: How confident is the company in returning to market growth by Q4 2026? - Management expressed confidence due to steady backlog and customer forecasts, despite the unusual simultaneous changes in multiple products [38][39] Question: What is the nature of the changes in the electrophysiology products? - The changes are due to customers adjusting their forecasts based on lower-than-expected market adoption rates [42][46] Question: Is the decline in neuromodulation similar to electrophysiology? - Yes, the decline is attributed to slower market adoption from emerging customers, although the overall book of business is still growing [52][57] Question: How does the company plan to manage costs in 2026? - The company will focus on operational efficiencies and disciplined cost management to navigate the expected headwinds [85][86]

Financial Data and Key Metrics Changes - Sales for Q3 2025 totaled $468 million, reflecting an 8% growth on a reported basis and 7% growth organically [12][8] - Adjusted operating income increased by 14% year over year, with adjusted EPS growing by 25% to $1.79 [13][8] - For the full year 2025, the company expects sales growth between 7% and 8%, with adjusted operating income growth between 12% and 14% and adjusted EPS growth between 19% and 21% [22][18] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 15% in Q3 2025, driven by new product ramps in electrophysiology and strong demand in neurovascular [13] - Cardiac rhythm management solutions sales increased by 18% year over year, but growth is expected to decelerate in Q4 2025 and into 2026 due to lower demand from select emerging customers [14][15] - Neuromodulation sales increased by 2% in Q3 2025, with expectations for low single-digit growth for the full year 2025 [15] Market Data and Key Metrics Changes - The company anticipates a 3% to 4% headwind to total company sales in 2026 due to slower market adoption of three new products [10][25] - The portable medical exit is expected to contribute a 2% headwind to total sales in 2026 [10][24] - The overall market for the company's products is growing at a steady mid-single-digit rate [27] Company Strategy and Development Direction - The company remains confident in its long-term growth strategy, focusing on early design wins in high-growth markets [11][27] - A strong product development pipeline is expected to drive above-market growth in 2027 [11][27] - The company plans to continue its acquisition strategy while maintaining a leverage ratio within the targeted range of 2.5 to 3.5 times [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a reduction in the financial outlook due to unexpected changes in customer demand for new products [4][8] - Despite the challenges, management expressed confidence in the company's strategy and operational execution over the long term [5][11] - The company expects to return to growth in the second half of 2026 as new product headwinds moderate [10][68] Other Important Information - Adjusted net income for Q3 2025 was $63 million, up 27% year over year, driven by operational improvements and lower interest expenses [16][13] - The adjusted effective tax rate improved to 16.3% for Q3 2025, down from 17.2% in the prior year [16] - Free cash flow for Q3 2025 was $46 million, flat compared to the prior year [17] Q&A Session Summary Question: Early 2026 outlook and organic growth - Management explained that the rest of the portfolio is expected to grow at market rates without new product introductions, which are causing headwinds [32][33] Question: Nature of expected headwinds in cardio and vascular - The headwinds are related to two electrophysiology products with lower than anticipated market adoption [34][35] Question: Visibility into market growth recovery - Management indicated that the backlog remains steady, providing good visibility into future performance [36] Question: Specifics on electrophysiology products - Two electrophysiology products are experiencing lower market adoption than expected, impacting forecasts for 2026 [40][41] Question: Neuromodulation product dynamics - Similar dynamics are observed in neuromodulation, with some customers not seeing the anticipated market adoption [45][47] Question: Unusual nature of multiple customer forecast changes - Management confirmed that this situation is unusual and not expected to recur, as it involves multiple products and customers [49][77] Question: Potential for recapturing volume with other customers - Management expressed confidence in returning to growth due to new product launches scheduled for 2026 and 2027 [67][68]

Financial Data and Key Metrics Changes - Sales for Q3 2025 totaled $468 million, reflecting an 8% growth on a reported basis and 7% growth organically [18] - Adjusted operating income increased by 14% year-over-year, with adjusted earnings per share (EPS) growing by 25% to $1.79 [13][20] - For the full year 2025, the company expects reported sales to be in the range of $1.84 billion to $1.85 billion, reflecting growth of 7% to 8% [25] Business Line Data and Key Metrics Changes - Cardio and Vascular sales increased by 15% in Q3 2025, driven by new product ramps in electrophysiology and strong demand in neurovascular [21] - Cardiac Rhythm Management and Neuromodulation sales grew by 2% year-over-year in Q3 2025, with expectations for low single-digit growth for the full year [22] - Adjusted net income for Q3 2025 was $63 million, up 27% year-over-year, driven by operational improvements and lower interest expenses [23][24] Market Data and Key Metrics Changes - The company anticipates a 3% to 4% headwind to total company sales in 2026 due to slower market adoption of three new products [15][32] - The expected organic sales growth for 2026 is flat to up 4%, with reported sales expected to decline by 2% to increase by 2% [16][31] Company Strategy and Development Direction - The company remains confident in its long-term growth strategy, focusing on early design wins in high-growth markets [17][35] - A strong product development pipeline is expected to drive above-market organic sales growth in 2027 [34] - The company plans to continue its tuck-in acquisition strategy while maintaining a leverage ratio within the targeted range of 2.5 to 3.5 times [36] Management Comments on Operating Environment and Future Outlook - Management acknowledged recent customer forecast changes impacting the financial outlook but expressed confidence in the long-term strategy [6][8] - The company expects a recovery to market growth in the second half of 2026 as new product headwinds moderate [16][17] - Management emphasized that the recent forecast changes are unusual and not expected to recur [108] Other Important Information - The adjusted effective tax rate for 2025 is expected to be between 17% and 18%, an improvement from previous guidance [24] - The company generated $66 million in cash flow from operations in Q3 2025, with free cash flow remaining flat at $46 million [24] Q&A Session Summary Question: Can you elaborate on the organic growth expectations for the rest of the portfolio? - Management indicated that without new product introductions, the rest of the portfolio is expected to grow at market rates, which is typically 6% to 8% [40] Question: What are the expected headwinds for Cardio and Vascular products? - The headwinds are related to two electrophysiology products with slower-than-anticipated market adoption, impacting growth forecasts [45][46] Question: How confident is the company in returning to market growth in the second half of 2026? - Management expressed confidence due to steady backlog and customer forecasts, despite recent changes [47][49] Question: Were the changes in forecasts known prior to Q3? - Management confirmed that the changes were not known until Q3, which is unusual for multiple products to experience significant forecast changes simultaneously [53][108] Question: Is the decline in neuromodulation sales similar to that in electrophysiology? - Yes, the decline is attributed to slower market adoption among select customers, similar to the dynamics seen in electrophysiology [61][66] Question: How does the company plan to manage profitability in 2026? - The company plans to focus on cost management and operational efficiencies to maintain profitability despite expected sales challenges [98]

Integer Holdings Corporation Third Quarter 2025 Earnings Conference Call October 23, 2025 Integer Holdings Corporation Third Quarter 2025 Earnings Conference Call 9 a.m. Eastern Time, October 23, 2025 Management Attendees: Payman Khales President and CEO Elect Diron Smith Executive Vice President, Chief Financial Officer Sanjiv Arora Senior Vice President, Strategy, Business Development & Investor Relations Non-GAAP Financial Measures. This presentation includes financial information prepared in accordance ...

Financial Performance - Integer Holdings Corporation reported third quarter 2025 sales of $468 million, an increase of 8% compared to the same period in 2024, with organic growth of 7%[4] - Adjusted operating income for the third quarter 2025 rose to $86 million, reflecting a 14% increase year-over-year, while GAAP operating income decreased by 3% to $56 million[4] - Adjusted diluted EPS increased by 25% to $1.79, while GAAP diluted EPS from continuing operations rose by 10% to $1.11[4] - The company expects 2025 sales to range from $1.840 billion to $1.854 billion, representing a growth of 7% to 8% compared to 2024[3] - Adjusted EBITDA for the third quarter 2025 increased by 11% to $106 million[4] - Adjusted operating income for 2025 to be between $319 million and $325 million, a growth of 12% to 14% year-over-year[3] - Sales for the three months ended September 26, 2025, reached $467,691,000, up from $431,417,000 in the prior year, indicating a growth of about 8.4%[35] - Gross profit for the nine months ended September 26, 2025, was $375,630,000, compared to $342,218,000 for the same period in 2024, representing an increase of approximately 9.8%[35] - Operating income for the three months ended September 26, 2025, was $56,439,000, slightly down from $58,011,000 in the same period last year, a decrease of about 2.7%[35] - Net income for the nine months ended September 26, 2025, was $54,200,000, a decrease from $87,193,000 for the same period in 2024, representing a decline of approximately 38%[38] - Adjusted net income for the nine months ended September 26, 2025, was $198,670,000, up from $163,882,000 in 2024, reflecting an increase of approximately 21%[41] - Diluted earnings per share (EPS) for the nine months ended September 26, 2025, was $4.64, compared to $3.87 for the same period in 2024, indicating a growth of about 20%[41] Sales and Market Performance - Cardio & Vascular sales increased by 15% in Q3 2025, driven by new product ramps and strong customer demand[5] - Other Markets sales decreased by 16% in Q3 2025, primarily due to the planned exit from portable medical markets[5] - Total sales growth for Q3 2025 was 8.4%, with an organic change of 6.6% after excluding foreign currency impacts and strategic exits[59] - Cardio & Vascular product line sales increased by 15.0% in Q3 2025, contributing significantly to overall sales growth[59] - The company reported a decrease in other markets sales by 15.5% in Q3 2025, with an organic change of 27.5%[59] Debt and Liquidity - Total debt increased by $204 million to $1.194 billion, resulting in a leverage ratio of 3.0 times adjusted EBITDA as of September 26, 2025[4] - Net total debt as of September 26, 2025, was $1.158 billion, an increase from $954.451 million as of December 31, 2024[60] - Total debt outstanding increased to $1.217 billion as of September 26, 2025, from $1.000 billion at the end of 2024[60] - The company’s net total debt was calculated as total principal amount of debt outstanding less cash and cash equivalents, which is crucial for assessing liquidity[28] - The leverage ratio, calculated as net total debt divided by adjusted EBITDA for the trailing four quarters, is a key measure for evaluating the company's ability to fund activities[28] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 26, 2025, was $140,733,000, slightly down from $141,974,000 in 2024[39] - Total cash used in investing activities increased to $235,262,000 for the nine months ended September 26, 2025, compared to $225,031,000 in 2024[39] - The company reported principal payments of long-term debt totaling $657,697,000 for the nine months ended September 26, 2025, compared to only $2,000 in the same period of 2024[39] - The company’s cash flows from financing activities provided $105,278,000 for the nine months ended September 26, 2025, compared to $95,625,000 in 2024, reflecting an increase of approximately 10%[39] Forward-Looking Statements - For 2026, the preliminary outlook indicates reported sales may decline by 2% to increase by 2%, with organic sales expected to be flat to up 4%[16] - Forward-looking statements indicate expectations for 2025 regarding future sales, cash flows, and profitability, with specific metrics to be monitored closely[30] Other Financial Metrics - Total assets as of September 26, 2025, were $3,397,310,000, an increase from $3,077,971,000 as of December 31, 2024, representing a growth of about 10.4%[34] - Total liabilities increased to $1,651,473,000 as of September 26, 2025, from $1,458,756,000 as of December 31, 2024, indicating a rise of approximately 13.2%[34] - The company wrote off a deferred tax asset of $4.1 million in Q1 2025 related to the 2028 Convertible Notes[51] - The company incurred $46,681,000 in debt conversion inducement expense during the nine months ended September 26, 2025, with no such expense reported in 2024[41] - The company reported a decrease in accounts receivable by $46,793,000 for the nine months ended September 26, 2025, compared to a decrease of $4,888,000 in 2024[38] - EBITDA for Q3 2025 was reported at $88.399 million, compared to $86.346 million in Q3 2024, indicating a growth of 2.4%[56] - Adjusted EBITDA for the nine months ended September 26, 2025, was $296.358 million, up from $265.597 million in the same period of 2024[57] - Adjusted operating income for Q3 2025 was $85.896 million, compared to $75.647 million in Q3 2024, reflecting a year-over-year increase of 16.5%[55] - The company incurred $2.749 million in restructuring charges during Q3 2025, compared to $1.916 million in Q3 2024[55]

~ Continued strong sales and profit growth in 3Q25 ~~ Updating 2025 sales and profit outlook; providing preliminary outlooks for 2026 and 2027 ~ PLANO, Texas, Oct. 23, 2025 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR) today announced results for the three months ended September 26, 2025. Third Quarter 2025 Highlights (compared to Third Quarter 2024, except as noted) Sales increased 8% to $468 million, with organic growth of 7%.GAAP operating income decreased $2 million to $56 million, a decr ...

Core Viewpoint - Integer (ITGR) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - For Integer, the increase in earnings estimates and the subsequent rating upgrade suggest an improvement in the company's underlying business, likely leading to a rise in stock price [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of "buy" and "sell" ratings, ensuring that only the top 20% of stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. Integer's Earnings Outlook - Integer is projected to earn $6.38 per share for the fiscal year ending December 2025, with no year-over-year change, but analysts have raised their estimates by 0.8% over the past three months [8].