Integer Holdings Corporation Reports Third Quarter 2020 Results

10/29/20

PLANO, Texas, Oct. 29, 2020 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR), a leading medical device outsource manufacturer, today announced results for the three and nine months ended October 2, 2020. Unless otherwise stated, all results and comparisons are from continuing operations.

Executing strategy through the COVID-19 pandemic

  • Throughout the pandemic, Integer associates continue to deliver critical products that customers and patients rely on every day.
  • Integer’s Manufacturing Excellence strategic imperative continues to deliver results during COVID-19.
  • Integer continues to invest in its product line and operational strategy to create long-term value, including manufacturing capabilities and R&D resources.

Third Quarter 2020 Highlights (compared to Third Quarter 2019)

  • The impact of COVID-19 on the third quarter 2020 financial results was consistent with Integer’s second quarter 2020 earnings communication.
  • Sales declined $68 million to $236 million, a decrease of 22%.
  • GAAP income was $30 million, a decrease of 1%. Non-GAAP adjusted income declined $23 million to $17 million, a decrease of 58%.
  • Adjusted EBITDA declined $33 million to $37 million, a decrease of 47%.
  • GAAP diluted EPS was $0.92 per share for both periods. Non-GAAP adjusted diluted EPS decreased $0.70 per share to $0.50 per share, a decrease of 58%.
  • Net total debt decreased $23 million from the end of the second quarter 2020 to $747 million.
  • The third quarter 2020 GAAP results include a pre-tax gain of $28 million, resulting in an after-tax impact of $0.67 per diluted share from a patent litigation judgment affirmed by the United States Court of Appeals in Integer’s favor, which are excluded from non-GAAP adjusted results.
  • On October 15, 2020 Integer received cash from the patent litigation judgment and paid down an additional $28 million of debt.

Fourth Quarter Outlook

  • Sales are projected to be $20 million to $35 million higher than the third quarter 2020.
  • Given the $28 million pre-tax patent litigation judgment gain in the third quarter 2020, GAAP operating income margin is expected to decline in the fourth quarter 2020.
  • Adjusted Operating Income margin is projected to be 200 to 300 basis points higher than the third quarter 2020.

“Our third quarter results demonstrate improved profitability versus the second quarter, and we expect the fourth quarter to be even stronger, as sales begin to recover from the pandemic and the profit margin rate recovery accelerates”, said Joseph Dziedzic, Integer’s president and chief executive officer. “Our Manufacturing Excellence strategic imperative continues to deliver strong operational and financial results. We remain focused on executing our strategy and making the necessary investments to be our customers’ partner of choice and deliver our financial objectives.”

Discussion of Product Line Third Quarter 2020 Sales (compared to Third Quarter 2019)

  • Cardio & Vascular sales decreased 16%. Sales were negatively impacted by the COVID-19 pandemic and a blend of our customers’ responses across nearly all C&V markets.
  • Cardiac & Neuromodulation sales decreased 32%. CRM and Neuromodulation declined commensurate with the COVID-19 pandemic impact and a blend of our customers’ responses. Additionally, the fourth quarter 2019 Nuvectra bankruptcy created a $3 million headwind.
  • Advanced Surgical, Orthopedics & Portable Medical includes sales to the acquirer of our AS&O product line, Viant, under supply agreements entered into as part of the divestiture. Sales declined 12% driven by the COVID-19 pandemic impact and a blend of our customers’ responses. Portable Medical remained stable while Orthopedics and Advanced Surgical declined.
  • Electrochem sales declined 42% driven by a severe decline in the energy market and demand fall-out from the COVID-19 pandemic.

About Integer®

Integer Holdings Corporation (NYSE: ITGR) is one of the largest medical device outsource (MDO) manufacturers in the world serving the cardiac, neuromodulation, vascular, portable medical and orthopedics markets. The Company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition, the Company develops batteries for high-end niche applications in energy, military, and environmental markets. The Company's brands include Greatbatch Medical®, Lake Region Medical® and Electrochem®. Additional information is available at www.integer.net.

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