Slides
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46thAnnual Raymond James Institutional Investors ConferenceJoseph DziedzicPresident and CEOMarch 5, 2025
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Raymond James Conference |March 5, 2025 | Page 2 Presentation of Financial Information & Forward-Looking StatementsImportant InformationThis presentation contains summarized information concerning Integer Holdings Corporation (the “Company”) and its business, operations, financial performance and trends. The historical financial and operating data contained herein reflect the consolidated results of the Company for the periods indicated. No representation is made that the information in this presentation is complete. For additional financial and business-related information, as well as information regarding business and product line trends, see the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the U.S. Securities and Exchange Commission (the “SEC”), as well as other reports filed with the SEC from time-to-time. Such reports are or will be available in the investor relations section of our corporate website (investor.integer.net) and the SEC’s website (www.sec.gov). The contents of either website are not incorporated by reference into this presentation. Non-GAAP Financial Measures. This presentation includes financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) as well as other financial measures referred to as non-GAAP. These non-GAAP financial measures are not calculated in accordance with GAAP and are not meant to be considered in isolation from or as a substitute for the information prepared in accordance with GAAP. For reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures, please refer to the appendix to this presentation, as well as the earnings press release associated with this period and the trending schedules, both of which can be found in the investor relations section of our corporate website (investor.integer.net).Forward Looking Statements. Some of the statements contained in this presentation whether written or oral may be “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 2025 outlook, including as to future sales, cash flows, expenses, indebtedness outstanding, and profitability; future development and expected growth of our business and industry; our ability to execute our 2025 outlook, including our business model and our business strategy; our ability to complete and integrate current or future acquisitions; 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 “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “projects,” “sustain,” or “continue” or variations or the negative of these terms or other comparable terminology. These statements are based on the Company’s current expectations and speak only as of date of this presentation. The Company’s actual results could differ materially from those stated or implied by such forward-looking statements. Except as required by law, the Company assumes no obligation to update forward-looking information, including information in this presentation, to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects or otherwise.Continuing Operations. During the fourth quarter of 2024 the Company completed the divestiture of its Electrochem business (“Electrochem”), which was classified as a discontinued operation beginning in the third quarter of 2024. The results in this presentation are presented on a continuing operations basis and, as a result, except for cash flow measures exclude the results of Electrochem.
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Raymond James Conference |March 5, 2025 | Page 3 Strategy Overview
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Raymond James Conference |March 5, 2025 | Page 4 Leading Medical Contract Development and Manufacturing Outsourcer $1.7B2024Sales ~11,000IntegerAssociates 17Manufacturing Facilities 9R&DCentersOur vision is to enhance the lives of patients worldwide by being ourcustomers’ partner of choice for innovative technologies and servicesThe above represent year-end 2024 statistics; Sales by product line percentages do not add up to 100% due to rounding55% 38% 6%Cardio & VascularCardiac Rhythm Management & NeuromodulationOther MarketsSales by Product Line
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Raymond James Conference |March 5, 2025 | Page 5 The Integer Platform – Focused, Scaled and Vertically Integrated• Strategic, solutions-oriented partner to the leading vascular and active implantable medical device OEMs and well-funded emerging innovators• Innovative technologies and complex manufacturing capabilities enable early customer engagement and vertically-integrated solutions across the full device lifecycle from concepting through scaled production• Focused end market presence in the fastest-growing therapeutic areas with purpose-built capability portfolio to deliver vertically integrated services• Well-invested operations with integrated systems supported by 40+ dedicated commercial associates and ~1,000 multi-disciplinary engineers• ~11,000 associates across 17 global manufacturing and 9 R&D sites strategically located in med tech hotbeds and cost-advantaged geographies Integer OverviewVertically Integrated CapabilitiesDesign and DevelopmentRapidPrototypingComplex ComponentsInnovative TechnologiesMarket Ready ProductsFinished Devices ~500 R&D and Design Associates Moving Ideas to Manufactured SolutionsLeveraging Internally Developed Equipment and Processes Quick Market Access and Differentiated Performance Across a Broad PortfolioQuick-Turn Production Services Enable Early Product Lifecycle EngagementProprietary Batteries, Textiles, Feedthroughs, Coatingsand Electrode RingsVertically Integrated Manufacturing Capabilities Delivering Quality at Scale
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Raymond James Conference |March 5, 2025 | Page 6 Integer Investment Thesis Resilient Business ModelSustainable mid-single-digit growth industryBreadth of product portfolioProprietary technology, long development cycle, high switching costs & regulatory~70% sales under multi-year agreementsFavorable outsourcing trendsWorld-class research & development capabilitiesStrategic tuck-in acquisitionsLeadership capability:– Selection, development, evaluation, successionPerformance excellence:– Engagement, assessment, organization effectivenessDiverse & InclusiveTrack record of delivering sustainable profitable growthStrong cash generationDisciplined capital allocation Compelling Strategy for GrowthPerformance CultureFinancial Strength • Sales growth 200 basis points above market• Operating profit 2x sales growth rate• Debt leverage2.5x – 3.5x1231Strategy Financial Objectives CUSTOMERS Sales Force ExcellenceMarket Focused InnovationManufacturing Excellence Business Process Excellence COSTS CULTURELeadership Capability Performance Excellence
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Raymond James Conference |March 5, 2025 | Page 7 Integer's Strategy Journey2017 2018 2019 2020 2021 2022 2023 2024+Portfolio Strategy LaunchedDivested AS&O Additional Operational Strategies LaunchedGrowth Teams FormedAcquisitions: Strategy Developed Executing strategy to deliver sustained outperformance Product Line Strategies LaunchedCapability & Capacity Expansion Initiated Partial Portable Medical ExitPortfolio StrategyProduct Line StrategiesPortfolio Strategy Galway Dominican Republic New Ross Divested Electrochem Operational Strategy COVID Impact and Macro Challenges Margin ExpansionMargin Expansion Manufacturing Excellence Launched Pure-play medical device strategy Structural HeartElectrophysiologyCardiology & Vascular AccessNeuromodulationNeuro & Peripheral VascularC&VCRM&N Cardiac Rhythm ManagementCUSTOMERS COSTS CULTUREHow We Achieve Excellence In Everything We Do
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Raymond James Conference |March 5, 2025 | Page 8 Growth Teams Drive Product Line StrategiesGrowth TeamStructureStructured and disciplined product line strategy processOne of the broadest and deepest product offering in the medical device outsourcing industry C&VCRM&NStructural HeartNeuro & Peripheral VascularElectrophysiologyCardiology & Vascular AccessCardiac Rhythm ManagementNeuromodulation Dedicated, cross-functional teams responsible for strategy and accountable for growthUnderstanding of target markets, products, customers, competitors, and geographiesEstablish value propositions to target customer product roadmaps and grow base businessAllocate investments in capabilities, talent, and capacity to execute strategyOwn oversight of strategy execution and delivery of resultsStructured and disciplined product line strategy process to deliver sustained growth
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Raymond James Conference |March 5, 2025 | Page 9 C&V Targeted Market Strategy to Drive Sustained Growth Technology MaturityLow HighInterventional CardiologyRenal DenervationPulsed Field AblationBubble Size Signifies Approx. End Market SizeStructural HeartNeurovascularPeripheral VascularInteger Investment FocusGrowth CurveStructural Heart~$16 billion 2025 Market, LDD ‘25 – ‘29E CAGR Transcatheter Delivery Systems & Implants Ablation CathetersAdvanced DiagnosticsNeurovascular~$4 billion 2025 Market, HSD ‘25 – ‘29E CAGR Aspiration CathetersThrombectomy DevicesTarget Growth Markets(1)Renal Denervation< $1 billion 2025 Market, DD ‘25 – ‘29E CAGRRenal Denervation Catheters Electro-physiologyElectrophysiology~$12 billion 2025 Market, Mid-teens ‘25 – ‘29E CAGRAccess DevicesLDD = low double-digit HSD = high single-digit DD = double-digit (1)Market sizes and expected growth rates are management estimates based on industry reports and internal analyses.
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Raymond James Conference |March 5, 2025 | Page 10 CRM&N Targeted Market Strategy to Drive Sustained Growth Leadless Pacemaker & ICM ~$2 billion 2025 MarketLDD ’25 – ’29E CAGR Neuromodulation ~$10 billion 2025 MarketHSD ’25 – ’29E CAGR Implantable Leads Implantable Pulse GeneratorsTarget Growth Markets(1)Leadless Pacemakers Implantable Cardiac Monitors Bubble Size Signifies Approx.End Market SizeIntegerInvestment Focus EpilepsySleepApnea Emerging TherapiesParkinson'sIncontinenceNeuromodulationLeadless PacemakersVentricular AssistCardiacMonitoringCRMTechnology MaturityLowHighLDD = low double-digit HSD = high single-digit ConventionalCRMPain Mgmt.(SCS)Cochlear (1)Market sizes and expected growth rates are management estimates based on industry reports and internal analyses.
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Raymond James Conference |March 5, 2025 | Page 11 Growth Starts with Product DevelopmentStrategy delivering mix shift tohigh-growth marketsProduct development sales+270% since strategy launch 2017 2021Development Sales Mix2024~80%~50%Emerging /GrowthMature2017 20242021Development Sales~20%~50%~80%~20%Strategy focused on being designed into our customers’ products in high-growth markets
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Raymond James Conference |March 5, 2025 | Page 12 Strong Pipeline of Emerging Customers with PMA (Premarket Approval) ProductsProduct introduction & launched customer sales 2018Actual~$102020Actual19 2022Actual~$20~$50DevelopmentClinicalProduct IntroductionLaunched since 20209146# of Customers currently in each phase (Year End 2024) Development pipeline contributing to sustainable above-market growth Product development throughlaunch process 2024Actual~$125($ in millions) Regulatory3 to 5 Year Outlook 15% - 20% CAGR
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Raymond James Conference |March 5, 2025 | Page 13 Capacity & Capability to Continue Acquisition StrategyAnnual AcquisitionCapacity $350 - $400Organic growth and acquired EBITDAAnnual Free Cash FlowFunding SourcesAcquisition Criteria+ Differentiated CapabilitiesGrowth Market FocusHigh Medical ConcentrationAccretive Margin ProfileRevenue GrowthScalable Team & Infrastructure $350 - $400 million of annual acquisition capacity … maintaining 2.5x - 3.5x leverage ($ in millions)
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Raymond James Conference |March 5, 2025 | Page 14 Executing Targeted Inorganic Growth Strategy Six Acquisitions in Last 3+ YearsOct 2023Apr 2022 NeurovascularAspiration cathetersBalloon guide cathetersRadial access cathetersSteerable microcathetersThrombectomy cathetersEndovascularNeurovascularPeripheral vascularStructural heart Jan 2024 CRM - Leadless pacingElectrophysiologyNeuromodulationPeripheral vascularStructural heart - Heart pumps Generating ~$240 million of annualized sales with accretive margins Dec 2021ElectrophysiologyNeuromodulationPeripheral vascular Structural heart Jan/Feb 2025 ElectrophysiologyEndoscopyNeurovascularOrthopedicsSurgical - RoboticsUrology
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Raymond James Conference |March 5, 2025 | Page 1510% 2024 Future Executing Organic & Inorganic Sales Growth Strategy… … to deliver high single-digit / low double-digit sales growth 2016 2019Integer Sales Growth at Market RateSustained Above-Market Growth LDD = low double-digit HSD = high single-digit
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Raymond James Conference |March 5, 2025 | Page 16 Financial Overview & Outlook
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Raymond James Conference |March 5, 2025 | Page 17 2024 Financial Results(1)($ in millions, except per share amounts) % Change $4.61 10% 20% 18%19% $5.30 $361$303$1,556$1,717$237$285$156$184Sales Adj. EBITDA Adj. Operating Income Adj. Net Income Adjusted EPSOrganic Sales Change: 7%20232024202320242023202420232024(1)Organic Sales Change, Adjusted EBITDA, Adjusted Operating Income, Adjusted Net Income, and Adjusted EPS are non-GAAP financial measures; refer to “Non-GAAP Financial Measures” in the Appendix
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Raymond James Conference |March 5, 2025 | Page 18 2025 Full Year Outlook(1) $1,846 - $1,880$1,717$361$401 - $422$315 - $331$285$208 - $221$184$5.30 $5.84 - $6.20Adjusted EPS 8% - 10% 11% - 16% 13% - 20%11% - 17% Organic Sales Change: 6% - 8% % Change 20242025Outlook20242025Outlook20242025Outlook20242025Outlook ($ in millions, except per share amounts) (1)Organic Sales Change, Adjusted EBITDA, Adjusted Operating Income, Adjusted Net Income, and Adjusted EPSare non-GAAP financial measures; refer to “Non-GAAP Financial Measures” in the Appendix Sales Adj. EBITDA Adj. Operating Income Adj. Net Income
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Raymond James Conference |March 5, 2025 | Page 19 2025 Cash Flow Outlook(1,2) Net Total DebtCash Flow From Ops Free Cash FlowLeverage$110 - $130$954CAPEX$110 - $120$120$100$60$205$180$105$9503.1x2.6x202320242025Outlook202320242025OutlookYE23YE24YE25OutlookYE23YE24YE25Outlook2.5x - 3.5x$225 - $245$1,030 - $1,050($ in millions)Target: 2.5x - 3.5x (1)Free Cash Flow, Net Total Debt and Leverage are non-GAAP financial measures; refer to “Non-GAAP Financial Measures” in the Appendix.(2)Previously reported cash flow and leverage measures are not recast to exclude the results of the Electrochem business, which is a discontinued operation.
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Questions? Questions?
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Appendix
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Raymond James Conference |March 5, 2025 | Page 22 Capitalization(1)($ in millions) (1)Net Total Debt, Adjusted EBITDA and Leverage Ratio are non-GAAP financial measures; refer to “Non-GAAP Financial Measures” in the Appendix. 12/31/24 12/31/24As Reported RateCash & Cash Equivalents 47$ USD Denominated Revolver [Due 2028] 126$ SOFR + 150EUR Denominated Revolver [Due 2028] -$ EURIBOR + 150TLA [Due 2028] 375$ SOFR + 150Convertible Bonds [Due 2028] 500$ 2.125% fixedTotal Principal Amount of Debt Outstanding 1,001$ Deferred Fees and OID (11)$ Total Debt (Principal Amount of Debt Outstanding Less Deferred Fees and Discounts) 990$ Net Total Debt (Total Principal Amount of Debt Outstanding Less Cash)(1)954$ Continuing Operations StatisticsTrailing 4 Quarter Adjusted EBITDA(1)361$ Trailing 4 Quarter Cash Interest Expense 53$ Trailing 4 Quarter Capital Expenditures 105$ Credit StatisticsLeverage Ratio(1): Net Total Debt / Trailing 4 Quarter Adjusted EBITDA2.6x
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New Revenue Generation Cycle Times Product Development 2 – 3 yearsClinical / Regulatory 0.5 – 1 yearMarket Intro.~1 yearBegin Manufacturing RampInteger is uniquely positioned to serve customers and generate revenue across the entire development cycleNew 510k Products (Class II) Developed w/ CustomersProduct Development 3 – 5 yearsClinical / Regulatory 1 – 3 yearsMarket Intro.~1 yearBegin Manufacturing Ramp Process Dev 1 – 2 yearsReg0 – 6monthsBegin Manufacturing RampExisting Product Transfers1 – 2+ Years3 – 5+ YearsNew PMA Products (Class III) Developed w/ Customers Time to Manufacturing Ramp 5 – 9+ Years
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Non-GAAP Financial Measures
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Raymond James Conference |March 5, 2025 | Page 25 Non-GAAP Financial MeasuresThis presentation may contain the non-GAAP financial measures defined in the table below. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the financial schedules accompanying the earnings release or the Trending Schedules posted on the Investor Relations section of the Company’s website at investor.integer.net. Reconciliations by line item to the closest corresponding GAAP financial measure for forward-looking non-GAAP financial measures are not available without unreasonable efforts due to the high variability, complexity and visibility of the charges excluded from these non-GAAP financial measures.Non-GAAP Financial Measure Definitions:Calculated by adding back amortization of intangible assets, restructuring and restructuring-related charges, acquisition and integration related costs, other general expenses, (gain) loss on equity investments, extinguishment of debt charges, European Union medical device regulation incremental charges, other adjustments, inventory step-up amortization, the income tax provision (benefit) related to these adjustments, and certain tax items that are outside the normal provision for the period, to net income.Adjusted net incomeThe 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 of 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.Adjusted weighted average sharesCalculated by dividing Adjusted net income by Adjusted weighted average shares. The per share impact of Non-GAAP adjustments to arrive at Adjusted EPS is calculated by dividing the dollar amount of the respective Non-GAAP adjustment by Adjusted weighted average shares.Adjusted EPSCalculated by adding back amortization of intangible assets, restructuring and restructuring-related charges, acquisition and integration related costs, other general expenses, European Union medical device regulation incremental charges, other adjustments, and inventory step-up amortization to operating income. Adjusted Operating Income % of Sales is calculated by dividing Adjusted Operating Income by Sales.Adjusted operating income and Adjusted operating income % of salesOrganic 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 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.Organic sales changeCalculated 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 measure.Earnings before interest, taxes, depreciation and amortization (“EBITDA”)EBITDA plus stock-based compensation, restructuring and restructuring-related charges, acquisition and integration related costs, other general expenses, (gain) loss on equity investments, European Union medical device regulation incremental charges, other adjustments, and inventory step-up amortization.Adjusted EBITDADefined as GAAP total interest expense less accelerated write-offs of debt discounts and deferred issuance costs (loss on extinguishment of debt).Adjusted total interest expenseCalculated by subtracting from the effective interest rate on borrowings the impact of losses on extinguishment of debt.Adjusted effective interest rate on borrowingsTotal principal amount of debt outstanding less cash and cash equivalents.Net total debtNet Total Debt divided by Adjusted EBITDA for the trailing 4 quarters. Leverage ratio differs from total net leverage ratio used in our bank covenants. See the Trending Schedules located in the Investor Relations section of the Company’s website at investor.integer.net for Total net leverage ratio prepared in accordance with the Senior Secured Credit Facilities.Leverage ratio (also Leverage or Debt Leverage)Net cash provided by operating activities (as stated in our Statement of Cash Flows) reduced by capital expenditures (acquisition of property, plant, and equipment (PP&E), net of proceeds from sale of PP&E).Free cash flowCalculated by adding or subtracting from the GAAP effective tax rate the impact of Non-GAAP adjustments, expressed as a percentage, to arrive at Adjusted Net Income.Adjusted effective tax rate
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Raymond James Conference |March 5, 2025 | Page 26 Non-GAAP ReconciliationAdjusted Net Income and Diluted EPS from Continuing Operations Reconciliations($ in thousands, except per share amounts) Year Ended December 31, 2024 2023 Pre-Tax Net of Tax Per Diluted Share(a) Pre-Tax Net of Tax Per Diluted Share Income from continuing operations (GAAP) $ 147,563 $ 121,053 $ 3.40 $ 105,382 $ 89,143 $ 2.64 Adjustments(b): Amortization of intangible assets 54,614 43,964 1.27 52,191 41,250 1.22 Certain legal expenses (SG&A)(c) 1,139 900 0.03 — — — Restructuring and restructuring-related charges(d) 7,255 5,774 0.17 9,949 8,332 0.25 Acquisition and integration costs(e) 8,941 7,091 0.20 3,444 2,606 0.08 Other general expenses (gains)(f) (805) (521) (0.02) 2,110 1,437 0.04 Loss on equity investments(g) 780 616 0.02 5,691 4,496 0.13 Loss on extinguishment of debt(h) — — — 4,518 3,569 0.11 Medical device regulations(i) 948 749 0.02 1,605 1,268 0.04 Other adjustments(j) 3,256 2,572 0.07 3,415 2,698 0.08 Inventory step-up amortization (COS)(k) 1,056 834 0.02 590 466 0.01 Tax adjustments(l) — 656 0.02 — 365 0.01 Impact of capped call option contracts(m) — — 0.09 — — — Adjusted net income (Non-GAAP) $ 224,747 $ 183,688 $ 5.30 $ 188,895 $ 155,630 $ 4.61 Weighted average shares for diluted EPS (GAAP) 35,649 33,758 Less: 2028 Convertible Notes capped call options impact (999) — Adjusted weighted average shares (non-GAAP) 34,650 33,758 (a) – (m) defined on page 27
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Raymond James Conference |March 5, 2025 | Page 27 Non-GAAP ReconciliationAdjusted Net Income and Diluted EPS from Continuing Operations Reconciliations($ in thousands, except per share amounts)(a) Income from continuing operations (GAAP) per diluted share amounts are calculated in accordance with GAAP using weighted average shares for diluted EPS. The per share amounts for the adjustments in the table above and adjusted net income are calculated using adjusted weighted average shares.(b) The difference between pre-tax and net of tax amounts is the estimated tax impact related to the respective adjustment. Net of tax amounts are computed using a 21% U.S. tax rate and the statutory tax rates applicable in foreign tax jurisdictions, as adjusted for the existence of net operating losses (“NOLs”). Expenses that are not deductible for tax purposes (i.e. permanent tax differences) are added back at 100%. (c) Certain legal expenses associated with non-ordinary course legal matters. (d) We initiate discrete restructuring programs primarily to realign resources to better serve our customers and markets, improve operational efficiency and capabilities, and lower operating costs or improve profitability. Depending on the program, restructuring charges may include termination benefits, contract termination, facility closure and other exit and disposal costs. Restructuring-related expenses are directly related to the program and may include retention bonuses, accelerated depreciation, consulting expense and costs to transfer manufacturing operations among our facilities. Included in restructuring charges for the fourth quarter of 2023 are $3.6 million in costs related to the relocation and closure of our R&D facility in Israel. (e) Acquisition and integration costs are incremental costs that are directly related to a business or asset acquisition. These costs may include, among other things, professional, consulting and other fees, system integration costs, and fair value adjustments relating to contingent consideration. (f) Other general expenses are discrete transactions occurring sporadically and affect period-over-period comparisons. The expenses for the 2024 and 2023 periods include gains and losses in connection with the disposal of property, plant and equipment. In addition, the 2024 and 2023 amounts include $(1.2) million and $2.0 million, respectively, of property loss (recoveries) relating to property damage which occurred in the fourth quarter of 2023 at one of our manufacturing facilities. (g) During the third quarter of 2024, we determined that an investment in our non-marketable equity securities was impaired and recorded an impairment charge of $0.2 million. During the third and fourth quarters of 2023, we determined that investments in our non-marketable equity securities were impaired and recorded impairment charges of $2.0 million and $3.3 million, respectively. The residual amounts for 2024 and 2023 reflect our share of equity method investee (gains) losses including unrealized appreciation/depreciation of the underlying interests of the investee.(h) Loss on extinguishment of debt consists of accelerated write-offs of unamortized deferred debt issuance costs and discounts which are included in interest expense. The 2023 amount represents a write-off of unamortized deferred debt issuance costs and discounts in connection with the amendments to the credit agreement governing our credit facilities, prepayments of portions of the Term Loan A Facility, and repayment in full of the Term Loan B Facility. (i) The charges represent incremental costs of complying with the new European Union medical device regulations for previously registered products and primarily include charges for contractors supporting the project and other direct third-party expenses. (j) Amount primarily relates to costs associated with certain formal strategic projects. Strategic projects primarily involve system reconfiguration to support our manufacturing excellence operational strategic imperative and investments in certain technology and platform development to align our capabilities to meet customer needs. Other adjustments for the quarter and year ended December 31, 2024 included pre-tax charges for inventory write-offs of $1.8 million related to an insolvent customer and pre-tax costs related to strategic projects of $0.4 million and $1.5 million, respectively. Other adjustments for the quarter and year ended December 31, 2023 included pre-tax leadership transition costs of $0.5 million and $1.7 million, respectively, and pre-tax costs related to strategic projects of $0.7 million and $1.7 million, respectively.(k) The accounting associated with our acquisitions require us to record inventory at its fair value, which is sometimes greater than the previous book value of inventory. The increase in inventory value is amortized to cost of sales over the period that the related inventory is sold. We exclude inventory step-up amortization from our non-GAAP financial measures because it is a non-cash expense that we do not believe is indicative of our ongoing operating results.(l) Tax adjustments predominately relate to acquired foreign tax credits, including utilization, changes to uncertain tax benefits and associated interest. (m) Represents the per share amount attributable to the reduction in dilution upon assumed exercise of the capped call option contracts.
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Raymond James Conference |March 5, 2025 | Page 28 Non-GAAP ReconciliationAdjusted Operating Income Reconciliations($ in thousands) Year Ended December 31, 2024 2023 Operating income (GAAP) $ 208,238 $ 163,323 Adjustments: Amortization of intangible assets 54,614 52,191 Certain legal expenses 1,139 — Restructuring and restructuring-related charges 7,255 9,949 Acquisition and integration costs 8,941 3,444 Other general expenses (gains) (805) 2,110 Medical device regulations 948 1,605 Other adjustments 3,256 3,415 Inventory step-up amortization 1,056 590 Adjusted operating income (Non-GAAP) $ 284,642 $ 236,627
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Raymond James Conference |March 5, 2025 | Page 29 Non-GAAP ReconciliationEBITDA Reconciliations($ in thousands) (a) Excludes amounts included in Restructuring and restructuring-related charges.(b) Total stock-based compensation expense less amounts included in Restructuring and restructuring-related charges and Acquisition and integration costs. Year Ended December 31, 2024 2023 Income from continuing operations (GAAP) $ 121,053 $ 89,143 Interest expense 56,374 51,275 Provision for income taxes 26,510 16,239 Depreciation(a) 52,519 43,434 Amortization of intangible assets and financing leases 57,188 53,558 EBITDA (Non-GAAP) 313,644 253,649 Certain legal expenses 1,139 — Stock-based compensation(b) 24,449 23,035 Restructuring and restructuring-related charges 7,255 9,949 Acquisition and integration costs 8,941 3,444 Other general expenses (gains) (805) 2,110 Loss on equity investments 780 5,691 Medical device regulations 948 1,605 Other adjustments 3,256 3,415 Inventory step-up amortization 1,056 590 Adjusted EBITDA (Non-GAAP) $ 360,663 $ 303,488
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Raymond James Conference |March 5, 2025 | Page 30 Non-GAAP ReconciliationOrganic Sales Change Reconciliation (% Change)(a) Sales growth has been adjusted to exclude the impact of foreign currency exchange rate fluctuations, when applicable, and acquisitions and strategic exits. GAAP Reported Growth Impact of Foreign Currency(a) Impact of Strategic Exits and Acquisitions(a) Non-GAAP Organic Change YTD Change (2024 vs. 2023) Cardio & Vascular 13.5% —% 5.7% 7.8% Cardiac Rhythm Management & Neuromodulation 7.8% —% 0.9% 6.9% Other Markets —% —% (4.8)% 4.8% Total Sales 10.3% —% 3.0% 7.3%
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Raymond James Conference |March 5, 2025 | Page 31 Non-GAAP ReconciliationNet Total Debt and Leverage Ratio Reconciliation($ in thousands) (1) Net Total Debt is calculated as total principal amount of debt outstanding less cash and cash equivalents.(2) Leverage ratio, sometimes referred to as Leverage or Debt Leverage, is calculated by dividing Net Total Debt by Adjusted EBITDA for the trailing 4 quarters.(3) Previously reported leverage ratio and consequently trailing 4 quarters Adjusted EBITDA used in the leverage ratio calculation, for 2023, are not recast to exclude the results of the Electrochem business, which is a discontinued operation. 20232024Revolving credit facility 99,000$ 126,000$ Term A loan ("TLA Facility") 375,000 375,000 Term B loan ("TLB Facility") - - Convertible notes due 2028 500,000 499,994 Total principal amount of debt outstanding 974,000 1,000,994 Unamortized discount and debt issuance costs (14,075) (10,841) Total debt 959,925$ 990,153$ Total principal amount of debt outstanding 974,000$ 1,000,994$ LESS: Cash and cash equivalents (23,674) (46,543) Net Total Debt (Non-GAAP) (1)950,326$ 954,451$ Trailing 4 quarters Adjusted EBITDA(2,3)309,336$ 360,663$ Leverage ratio (Non-GAAP) (2,3)3.1 2.6
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Raymond James Conference |March 5, 2025 | Page 32 Non-GAAP ReconciliationFree Cash Flow($ in thousands)(1) Previously reported cash flow and capital expenditures, for 2023, are not recast to exclude the results of the Electrochem business, which is a discontinued operation.(2) Free cash flow is defined as Net cash provided by operating activities (as stated in our Statement of Cash Flows) reduced by capital expenditures (acquisition of property, plant, and equipment (PP&E), net of proceeds from sale of PP&E).20232024YEAR-TO-DATENet cash provided by operating activities(1)180,213 205,205 Less: Capital expenditures, net (1)(119,765) (105,318) Free cash flow (YTD) (2)60,448 99,887
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Kristen Stewart, CFADirector, Investor Relationskristen.stewart@integer.net(M) 551.337.3973www.integer.netContact Information