~ Strong start to the year with 1Q24 financial results ~~ Reiterate 2024 financial outlook ~ PLANO, Texas, April 25, 2024 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR) today announced results for the three months ended March 29, 2024. First Quarter 2024 Highlights (compared to First Quarter 2023, except as noted) Sales increased 10% to $415 million, with organic growth of 6%. GAAP net income increased $7 million to $21 million, an increase of 57%. Non-GAAP adjusted net income increased $10 million to $39 million, an increase of 33%. GAAP operating income increased $5 million to $39 million, an increase of 15%. Non-GAAP adjusted operating income increased $13 million to $63 million, an increase of 26%. GAAP diluted EPS increased $0.20 per share to $0.59 per share. Non-GAAP adjusted EPS increased $0.27 per share to $1.14 per share. Adjusted EBITDA increased $15 million to $81 million, an increase of 22%. From the end of 2023, total debt increased $181 million to $1.141 billion and net total debt increased $162 million to $1.112 billion, primarily to finance the acquisition of Pulse Technologies, resulting in a leverage ratio of 3.4 times adjusted EBITDA as of March 29, 2024. "Integer started the year strong with first quarter 2024 sales growing 10% versus a year ago and adjusted operating income growing 26%, more than two and a half times the rate of sales growth." said Joseph Dziedzic, Integer's president and CEO.   "We continue to expect 2024 sales growth of 9% to 11% and adjusted operating income growth of 13% to 20% in 2024, as we execute our strategy and expand margins throughout the year." Discussion of Product Line First Quarter 2024 Sales Cardio & Vascular sales increased 16% in the first quarter 2024 compared to the first quarter 2023, driven by continued strong demand across all markets, new product ramps in electrophysiology and structural heart, and the InNeuroCo and Pulse acquisitions. Cardiac Rhythm Management & Neuromodulation sales increased 8% in the first quarter 2024 compared to the first quarter 2023, with strong growth in emerging Neuromodulation customers with PMA (pre-market approval) products and strong demand in Cardiac Rhythm Management. Advanced Surgical, Orthopedics & Portable Medical sales increased 4% in the first quarter 2024 compared to the first quarter 2023, driven by growth of Advanced Surgical and Orthopedics, partially offset by decline in Portable Medical from execution of the planned multi-year exit announced in 2022. Electrochem sales decreased in the first quarter 2024 compared to the first quarter 2023, returning to a normalized run-rate after previously higher sales from the supply chain recovery. 2024 Outlook(a) (dollars in millions, except per share amounts)   GAAP   Non-GAAP(b)     As Reported   Change from Prior Year   Adjusted   Change from Prior Year Sales   $1,735 to $1,770   9% to 11%   N/A   N/A Operating income   $202 to $220   20% to 31%   $272 to $290   13% to 20% EBITDA   N/A   N/A   $355 to $375   15% to 21% Net income   $115 to $130   27% to 43%   $171 to $185   8% to 18% Diluted earnings per share   $3.30 to $3.71   23% to 38%   $5.01 to $5.43   7% to 16% Cash flow from operating activities   $185 to $205   3% to 14%   N/A   N/A   (a)  Except as described below, further reconciliations by line item to the closest corresponding GAAP financial measure for Adjusted operating income, Adjusted EBITDA, Adjusted net income and Adjusted Earnings per Share ("EPS"), included in our "2024 Outlook" above, and Adjusted total interest expense, Adjusted effective tax rate and Leverage ratio in "Supplemental Financial Information" below, are not available without unreasonable efforts on a forward-looking basis due to the high variability, complexity and visibility of the charges excluded from these non-GAAP financial measures. (b)  Adjusted operating income for 2024 consists of GAAP operating income, excluding items such as amortization of intangible assets, restructuring and restructuring-related charges, and acquisition and integration costs, totaling approximately $71 million, pre-tax. Adjusted net income and Adjusted EPS for 2024 consist of GAAP net income and diluted EPS, excluding items such as amortization of intangible assets, restructuring and restructuring-related charges, acquisition and integration costs, and gain or loss on equity investments totaling approximately $71 million, pre-tax. The after-tax impact of these items is estimated to be approximately $56 million, or approximately $1.63 per diluted share. Adjusted EPS is calculated using Adjusted weighted average shares. Adjusted EBITDA is expected to consist of Adjusted net income, excluding items such as depreciation, interest, stock-based compensation and taxes totaling approximately $184 million to $190 million. Please see "Notes Regarding Non-GAAP Financial Information" for additional information regarding our use of non-GAAP financial measures. Supplemental Financial Information (dollars in millions) 2024Outlook   2023Actual Depreciation and amortization $105 to $115   $97  Adjusted total interest expense(a) $56 to $61   $49  Stock-based compensation $24 to $27   $23  Restructuring, acquisition and other charges(b) $15 to $20   $22  Adjusted effective tax rate(c) 19.0% to 21.0%    17.7% Leverage ratio(d) 2.5x to 3.5x   3.1x Capital expenditures(d) $90 to $110   $120  Cash income tax payments $43 to $47   $30    (a)  Adjusted total interest expense refers to our expected full-year GAAP interest expense, expected to range from $56 million to $61 million for 2024, adjusted to remove the full-year impact of charges associated with the accelerated write-off of debt discounts and deferred issuance costs (loss on extinguishment of debt) included in GAAP interest expense, if any. Adjusted total interest expense of $48.9 million for 2023 consists of GAAP interest expense of $53.4 million less $4.5 million of losses from the extinguishment of debt. (b)  Restructuring, acquisition and other charges consists of restructuring and restructuring-related charges, acquisition and integration costs, other general expenses and incremental costs of complying with the new European Union medical device regulations. (c)  Adjusted effective tax rate refers to our full-year GAAP effective tax rate, expected to range from 19.0% to 21.0% for 2024, adjusted to reflect the full-year impact of the items that are excluded in providing adjusted net income and certain other identified items. Adjusted effective tax rate of 17.7% for 2023 consists of GAAP effective tax rate of 15.5% adjusted to reflect the impact on the income tax provision related to Non-GAAP adjustments. (d)  Please see "Notes Regarding Non-GAAP Financial Information" for additional information regarding leverage ratio. Capital expenditures is calculated as cash used to acquire property, plant, and equipment (PP&E) less cash proceeds from the sale of PP&E. Summary Financial Results(dollars in thousands, except per share data)   Three Months Ended   March 29,2024   March 31,2023   QTD Change Operating income $ 39,277   $ 34,166   15.0 % Net income $ 20,508   $ 13,065   57.0 % Diluted EPS $ 0.59   $ 0.39   51.3 %             EBITDA(a) $ 65,385   $ 57,377   14.0 % Adjusted EBITDA(a) $ 81,238   $ 66,345   22.4 % Adjusted operating income(a) $ 62,875   $ 49,862   26.1 % Adjusted net income(a) $ 38,667   $ 29,060   33.1 % Adjusted EPS(a) $ 1.14   $ 0.87   31.0 %   (a)   EBITDA, Adjusted EBITDA, Adjusted operating income, Adjusted net income, and Adjusted EPS are non-GAAP financial measures. Please see "Notes Regarding Non-GAAP Financial Information" for additional information regarding our use of non-GAAP financial measures. Refer to Tables A, B and C at the end of this release for reconciliations of adjusted amounts to the closest corresponding GAAP financial measures. Summary Product Line Results(dollars in thousands)   Three Months Ended   March 29,2024   March 31,2023   QTD Change   Organic Change(a) Medical Sales               Cardio & Vascular $ 221,836   $ 191,203   16.0  %   9.3  % Cardiac Rhythm Management & Neuromodulation   156,257     145,139   7.7  %   6.9  % Advanced Surgical, Orthopedics & Portable Medical   29,121     27,924   4.3  %   21.4  % Total Medical Sales   407,214     364,266   11.8  %   8.6  % Non-Medical Sales   7,591     14,519   (47.7 )%   (47.7 )% Total Sales $ 414,805   $ 378,785   9.5  %   6.4  %   (a)  Organic sales change is a non-GAAP financial measure. Please see "Notes Regarding Non-GAAP Financial Information" for additional information regarding our use of non-GAAP financial measures and refer to Table D at the end of this release for a reconciliation of these amounts. Conference Call InformationThe Company will host a conference call on Thursday, April 25, 2024, at 8 a.m. CT / 9 a.m. ET to discuss these results. The scheduled conference call will be webcast live and is accessible through our website at investor.integer.net or by dialing (888) 330-3567 (U.S.) or (646) 960-0842 (outside U.S.) and the conference ID is 9252310. The call will be archived on the Company's website. An earnings call slide presentation containing supplemental information about the Company's results will be posted to our website at investor.integer.net prior to the conference call and will be referenced during the conference call. From time to time, the Company posts information that may be of interest to investors on its website at investor.integer.net. To automatically receive Integer financial news by email, please visit investor.integer.net and subscribe to email alerts. About Integer®Integer Holdings Corporation (NYSE:ITGR) is one of the largest medical device contract development and manufacturing organizations (CDMO) in the world, serving the cardiac rhythm management, neuromodulation, and cardio and vascular markets. As a strategic partner of choice to medical device companies and OEMs, the Company is committed to enhancing the lives of patients worldwide by providing innovative, high-quality products and solutions. The Company's brands include Greatbatch Medical®, Lake Region Medical® and Electrochem®. Additional information is available at www.integer.net. Investor Relations:Andrew Notes Regarding Non-GAAP Financial InformationIn addition to our results reported in accordance with generally accepted accounting principles in the United States of America ("GAAP"), we provide adjusted net income, adjusted EPS, earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted EBITDA, adjusted operating income, and organic sales change. Adjusted net income and adjusted EPS consist of GAAP net income and diluted EPS, respectively, adjusted for the following to the extent occurring during the period: (i) amortization of intangible assets, (ii) restructuring and restructuring-related charges; (iii) acquisition and integration related costs; (iv) other general expenses; (v) (gain) loss on equity investments; (vi) extinguishment of debt charges; (vii) European Union medical device regulation incremental charges; (viii) inventory step-up amortization; (ix) unusual, or infrequently occurring items; (x) the income tax provision (benefit) related to these adjustments and (xi) certain tax items that are outside the normal tax provision for the period. Adjusted EPS is calculated by dividing adjusted net income by Adjusted weighted average shares. The weighted average shares used to calculate diluted EPS in accordance with GAAP includes dilution, when applicable, resulting from the potential conversion of our 2.125% Convertible Senior Notes due 2028 (the "2028 Convertible Notes"). In connection with the issuance of the 2028 Convertible Notes, we entered into capped call contracts which are expected to reduce the potential dilution on our common stock in connection with any conversion of the 2028 Convertible Notes, subject to a cap. Adjusted weighted average shares consists of GAAP weighted average shares used to calculate diluted EPS, excluding, when applicable, dilution resulting from the potential conversion of our 2028 Convertible Notes expected to be offset by the capped call contracts. EBITDA is calculated by adding back interest expense, provision for income taxes, depreciation expense, and amortization expense from intangible assets and financing leases, to net income, which is the most directly comparable GAAP financial measure. Adjusted EBITDA consists of EBITDA plus adding back stock-based compensation and the same adjustments as listed above except for items (i), (vi), (x) and (xi). Adjusted operating income consists of operating income adjusted for the same items listed above except for items (v), (vi), (x) and (xi). Organic sales change is reported sales growth adjusted to remove the impact of foreign currency, the contribution of acquisitions and the strategic exit of the Portable Medical market. To calculate the impact of foreign currency on sales growth rates, we convert any sale made in a foreign currency by converting current period sales into prior period sales using the exchange rate in effect at that time and then compare the two, negating any effect foreign currency had on our transactional revenue. For contribution of acquisitions, we exclude the impact on the growth rate attributable to the contribution of acquisitions in all periods where there were no comparable sales. For the strategic exit of the Portable Medical market, we exclude the impact on the growth rate attributable to Portable Medical sales for all periods presented. We believe that the presentation of adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, adjusted operating income, and organic sales change, provides important supplemental information to management and investors seeking to understand the financial and business trends relating to our financial condition and results of operations. In addition to the performance measures identified above, we believe that net total debt and leverage ratio provide meaningful measures of liquidity and a useful basis for assessing our ability to fund our activities, including the financing of acquisitions and debt repayments. Net total debt is calculated as total principal amount of debt outstanding less cash and cash equivalents. We calculate leverage ratio as net total debt divided by adjusted EBITDA for the trailing 4 quarters. Forward-Looking StatementsSome of the statements contained in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements relating to: our 2024 outlook including future sales, expenses, and profitability; our ability to execute our business model and our business strategy; having available sufficient cash and borrowing capacity to meet working capital, debt service and capital expenditure requirements for the next twelve months; projected capital spending; and other events, conditions or developments that will or may occur in the future. You can identify forward-looking statements by terminology such as "outlook," "projected," "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "project," or "continue" or variations or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those stated or implied by these forward-looking statements. In evaluating these statements and our prospects, you should carefully consider the factors set forth below. Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties that arise from time to time are described in Item 1A, "Risk Factors" of our Annual Report on Form 10-K and in our other periodic filings with the SEC and include the following: operational risks, such as our dependence upon a limited number of customers; pricing pressures and contractual pricing restraints we face from customers; our reliance on third-party suppliers for raw materials, key products and subcomponents; interruptions in our manufacturing operations; our ability to attract, train and retain a sufficient number of qualified associates to maintain and grow our business; the potential for harm to our reputation and competitive advantage caused by quality problems related to our products; our dependence upon our information technology systems and our ability to prevent cyber-attacks and other failures; global climate change and the emphasis on Environmental, Social and Governance matters by various stakeholders; our dependence upon our senior management team and key technical personnel; our energy market revenues' dependence on conditions in the historically volatile oil and natural gas industries; and consolidation in the healthcare industry resulting in greater competition; strategic risks, such as the intense competition we face and our ability to successfully market our products; our ability to respond to changes in technology; our ability to develop new products and expand into new geographic and product markets; and our ability to successfully identify, make and integrate acquisitions to expand and develop our business in accordance with expectations; financial and indebtedness risks, such as our ability to accurately forecast future performance based on operating results that often fluctuate; our significant amount of outstanding indebtedness and our ability to remain in compliance with financial and other covenants under the credit agreement governing our Senior Secured Credit Facilities; economic and credit market uncertainties that could interrupt our access to capital markets, borrowings or financial transactions; the conditional conversion feature of the 2028 Convertible Notes adversely impacting our liquidity, the conversion of our 2028 Convertible Notes, if it were to occur, diluting ownership interests of existing holders of our common stock; the counterparty risk associated with our capped call transaction; the counter financial and market risks related to our international operations and sales; our complex international tax profile; and our ability to realize the full value of our intangible assets; legal and compliance risks, such as regulatory issues resulting from product complaints, recalls or regulatory audits; the potential of becoming subject to product liability or intellectual property claims; our ability to protect our intellectual property and proprietary rights; our ability to comply with customer-driven policies and third-party standards or certification requirements; our ability to obtain and/or retain necessary licenses from third parties for new technologies; our ability and the cost to comply with environmental regulations; legal and regulatory risks from our international operations; the fact that the healthcare industry is highly regulated and subject to various regulatory changes; and our business being indirectly subject to healthcare industry cost containment measures that could result in reduced sales of our products; and other risks and uncertainties that arise from time to time. Except as may be required by law, we assume no obligation to update forward-looking statements in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise. Condensed Consolidated Balance Sheets - Unaudited (in thousands)       March 29,2024   December 31, 2023 ASSETS       Current assets:       Cash and cash equivalents $ 42,156   $ 23,674 Accounts receivable, net   237,154     238,277 Inventories   262,869     239,716 Refundable income taxes   2,848     1,998 Contract assets   90,873     85,871 Prepaid expenses and other current assets   32,673     28,132 Total current assets   668,573     617,668 Property, plant and equipment, net   448,712     407,954 Goodwill   1,043,876     1,011,007 Other intangible assets, net   828,854     783,146 Deferred income taxes   7,026     7,001 Operating lease assets   83,243     81,632 Financing lease assets   12,630     11,828 Other long-term assets   23,095     22,417 Total assets $ 3,116,009   $