Financial Data and Key Metrics Changes - For the full year 2025, sales increased by 8% on a reported basis and over 6% organically, with adjusted operating income rising by 13% [4][24] - Adjusted EPS for 2025 increased by 21%, reflecting higher sales and improved profitability [4][24] - In Q4 2025, sales totaled $472 million, reflecting 5% growth on a reported basis and 2% growth organically [22] - Adjusted operating margin expanded by 74 basis points to 17.6% in Q4 2025, driven by improvements in gross margin [22][23] Business Line Data and Key Metrics Changes - Cardio and vascular sales increased by 11% to $284 million in Q4 2025, driven by acquisitions and strong demand in neurovascular [24] - Cardiac rhythm management and neuromodulation sales decreased by 2% to $167 million in Q4 2025, primarily due to lower demand from select emerging customers [25] - For the full year 2025, cardio and vascular sales increased by 17% on a trailing four-quarter basis, while CRM&N sales increased by 1% [25] Market Data and Key Metrics Changes - The medical device market remains attractive, with expected growth in mid-single digits for targeted markets such as cardiovascular and neuromodulation [10][11] - The company expects organic sales to be flat to up 3% in 2026, with a 3%-4% headwind from three new products due to lower-than-expected market adoption [5][29] Company Strategy and Development Direction - The company focuses on investing in differentiated capabilities and partnering with customers early in the design and development stages of new products [11][12] - A robust and diversified product development pipeline is oriented towards high-growth markets, with expectations of returning to above-market organic growth in 2027 [10][36] - The company maintains a disciplined approach to capital management, balancing organic investments and tuck-in acquisitions to support growth objectives [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to return to 200 basis points above-market organic growth in 2027, despite expected temporary headwinds in 2026 [6][36] - The fundamentals of the business are strong, with a focus on executing a disciplined growth strategy and continuous improvement initiatives [6][17] Other Important Information - The company repurchased $50 million of common stock in Q4 2025 and announced an accelerated share repurchase program for an additional $50 million [4][5] - Adjusted effective tax rate for the full year 2025 was 17.2%, down from 18.3% in the prior year, reflecting tax benefits from R&D investments [27] Q&A Session Summary Question: Guidance on top line and the decision to lower the high end of the preliminary range - Management clarified that the adjustment was not related to specific dynamics in January but was more about rounding [38][39] Question: Return to operating income growth above sales growth in 2027 - Management indicated that they expect margin expansion in the second half of 2026 and a return to above-market growth in 2027 [40][41] Question: Contribution from new products and their performance expectations - Management confirmed that the portfolio of products is expected to grow at a 15%-20% CAGR over the next 3-5 years, with good visibility on launch dates and expected revenues [42][45] Question: Changes in guidance and customer forecasts - Management stated that there are no specific changes to customer forecasts, and the guidance aligns with previous expectations [48][49] Question: Increase in Days Sales Outstanding (DSO) - Management explained that the increase in DSO was due to a decision to limit accounts receivable factoring in Q4 to maintain financial flexibility [50][51] Question: Operating margin and gross margin expectations - Management discussed the challenges of absorbing fixed costs in Q1 due to lower sales numbers and expected improvements in operating margin throughout the year [55][59]