Integer -ITGR Stock Declines Following Q4 Earnings Miss, Gross Margin Contract

Core Viewpoint - Integer Holdings Corporation (ITGR) reported mixed financial results for the fourth quarter of 2024, with adjusted earnings per share (EPS) slightly missing estimates, while revenues exceeded expectations, indicating strong performance in most product lines despite some challenges in Other Markets [1][3][16]. Financial Performance - Adjusted EPS for Q4 2024 was $1.43, a 1.4% increase year over year, but missed the Zacks Consensus Estimate by 2.1% [1] - GAAP EPS for the quarter was 91 cents, reflecting a 15.2% year-over-year improvement [2] - Full-year 2024 EPS was$ 5.30, up 14.9% from 2023, but lagged the Zacks Consensus Estimate by 0.6% [2] Revenue Analysis - Q4 2024 revenues reached $449.5 million, an 11.1% increase year over year, surpassing the Zacks Consensus Estimate by 0.8% [3] - Organic revenue growth for Q4 was 10.6% [3] - Full-year 2024 revenues totaled$ 1.72 billion, reflecting a 10.3% increase from 2023, aligning with the Zacks Consensus Estimate [3] Segment Performance - Cardio and Vascular (C&V) revenues were $255.3 million, up 14.7% year over year [7] - Cardiac Rhythm Management & Neuromodulation (CRM&N) revenues were$ 170.5 million, up 11.3% year over year [8] - Other Markets revenues were $23.7 million, down 17.3% year over year, attributed to the planned exit from Portable Medical [9] Margin and Expense Analysis - Gross profit for Q4 was$ 116.8 million, a 6.6% increase year over year, but gross margin contracted to 25.9% [10] - Selling, general and administrative expenses rose to $47.5 million, up 4.8% year over year [11] - Adjusted operating profit was$ 58.7 million, reflecting a 14.6% increase year over year, with adjusted operating margin expanding to 13.1% [11] Financial Position - Cash and cash equivalents at the end of 2024 were $46.5 million, up from$ 23.7 million at the end of 2023 [12] - Total debt increased to $990.2 million from$ 959.9 million at the end of 2023 [12] - Cumulative net cash flow from operating activities was $205.2 million, compared to$ 180.2 million a year ago [12] Future Guidance - For 2025, the company expects revenues between $1.846 billion and$ 1.880 billion, indicating an 8-10% improvement from 2024 [13] - Full-year adjusted EPS is projected to be in the range of $5.84-$ 6.20, representing a 10-17% increase from 2024 [13] Strategic Developments - The company continues to execute its strategy by launching new products and expanding capabilities, including the acquisition of Precision Coating and a definitive agreement to acquire VSi Parylene [15] - Management has rebranded its Advanced Surgical, Orthopedics & Portable Medical product line to Other Markets to better reflect its strategic focus [6]