Integer Holdings Corp Q4 FY2024 earnings call

• Integer finished Q4 2024 with 11% sales growth on organic and reported basis. Full-year 2024 sales grew 10% and adjusted operating income grew 20%. - Completed divestiture of Portable Medical product line (limited tech differentiation, low growth) to become pure-play medical device company. - Acquired Precision Coatings for $152M in Jan 2025, expected to contribute ~$52M in 2025 with accretive margin rate. Signed definitive agreement to acquire VSI Parylene for $28M, expected to contribute ~$7M in 2025 (partial year). - Supply chain labor environments stabilized; refocused on manufacturing excellence initiatives to expand margins. - Product development sales increased 270% since 2017, with 80% in high-growth markets. Emerging PMA product sales in 2024 were ~$125M, expected to grow 15-20% CAGR over 3-5 years.

Cardio and vascular product line: Trailing four-quarter sales increased 14% year-over-year with strong growth across targeted C and V markets, driven by new product ramps in electrophysiology and structural heart and performance of the Neuroco and PULSE acquisitions. Cardiac Rhythm Management and Neuromodulation: Trailing four-quarter sales increased 8% year-over-year, driven by double-digit neuromodulation growth from emerging customers and normalized low single-digit growth in cardiac rhythm management.

• 2025 sales expected $1.846B to $1.880B (8-10% growth), organic growth 6-8%. - Adjusted EBITDA $401M to $422M (11-17% growth). - Adjusted operating income $315M to $331M (11-16% growth). - Adjusted net income $208M to $221M. - Adjusted EPS $5.84 to $6.20 (10-17% growth). - Organic growth driven by product development and acquisitions, offset by Portable Medical exit completion by end of 2025.

• Uncertainty around tariffs, particularly in Mexico where operations are maquiladoras. Impact on value-added portions of products unclear until tariff structure is defined.

Q: On cardiovascular growth potential in 2025, Diron responded cardiovascular expected to grow low double-digit, CRM/N saw strong neuromodulation in H2 2024 with CRM normalizing to low single digits.

Q: Background on Precision Coatings acquisition, Diron said coatings were on capability roadmap for long, monitored market, built relationships, and acquired when seller ready.

Q: Tariffs exposure in Mexico, Diron said operations global, shipping to various destinations, implementing mitigation plans but uncertainty makes quantification difficult.

Q: CMV growth trend, Diron said CV expected low double-digit, driven by fast-growing markets and emerging PMA.

Q: Mexico tariff impact on sales from Mexico, Diron said manufacturing global, shipping to multiple destinations, mitigation plans in place but uncertainty prevents specific quantification.

Q: Acquisition halo effect, Diron said coatings as service allows early customer engagement, vertical integration, and access to faster-growing end markets.

Q: Galway manufacturing facility benefit, Diron said benefits from customer co-development, factored into 2025 guidance.

Q: Q4 gross margin, Diron said 11% organic growth, new programs causing temporary inefficiencies, but expecting gross margin expansion and operating leverage in 2025.

Q: Renal denervation manufacturing, Diron said excited about market, leverages core capabilities, but specifics not disclosed.

Q: TNA portfolio growth sequencing, Diron said portfolio growing at 15-20% CAGR, with increasing customers and development revenues, some lumpiness in launches but overall growth.

Q: Organic vs inorganic growth reconciliation, Diron said exclude Portable Medical exit impact to see 6-8% organic growth.