Integer at 2025 Truist Securities MedTech Conference: Strategic Growth Outlook

Integer Holdings Corp (NYSE:ITGR) presented its strategic vision at the 2025 Truist Securities MedTech Conference on Tuesday, 17 June 2025. The company outlined its growth strategy, leadership transition, and performance in key market segments. While the leadership transition presents challenges, the focus on core markets and innovation is expected to drive continued growth.

Key Takeaways

• Integer plans to grow 200 basis points above market growth, targeting 4-6% market growth.
• Leadership transition announced as Peyman succeeds Joe as CEO in October.
• Emphasis on electrophysiology, structural heart, neurovascular, and neuromodulation markets.
• Integer’s backlog is expected to decrease from $728 million to around $600 million by year-end.
• The company aims to grow profits at twice the rate of sales growth.

Financial Results

• Growth Target: Integer aims to exceed market growth by 200 basis points, with markets growing at 4-6%.
• Profitability: The company targets profit growth at double the rate of sales growth.
• CNV Business: Mid-teens growth expected for the CNV business.
• Development Work: Development work for customers has increased by 270% since 2017.
• Backlog: A decrease in backlog from $728 million to approximately $600 million is anticipated by year-end.

Operational Updates

• Growth Teams: Focused on electrophysiology, structural heart, neurovascular, and neuromodulation.
• Manufacturing: Continuous improvements through the Integer Production System, emphasizing efficiency.
• M&A Strategy: Tuck-in acquisitions to enhance capabilities, including the acquisition of Inuraco.
• EP Market Participation: Significant involvement in electrophysiology, especially in Pulse Field Ablation (PFA).

Future Outlook

• Growth Strategy: Continued focus on innovation, vertical integration, and strategic acquisitions.
• WAMGR: Expected increase in Weighted Average Market Growth Rate as sales shift to faster-growing segments.
• EP Market Growth: The electrophysiology market is projected to double to $20 billion over five years.
• Neuromodulation: Anticipated growth at twice the market rate through emerging PMA programs.
• Backlog Visibility: Current backlog offers visibility for upcoming quarters.

Q&A Highlights

• PFA Exposure: Broad participation with key industry players, though specific relationships are confidential.
• Structural Heart Focus: Indexed towards mitral and tricuspid valve therapies, which grow faster than TAVR.
• Neurovascular Expertise: Inuraco acquisition adds expertise in ischemic stroke and intracranial aneurysm therapies.
• CRM and Neuromodulation: Growth in neuromodulation expected through PMA programs, leveraging CRM technologies.
• Backlog Drivers: Decrease due to exiting the Portal Medical business and normalizing guidewire orders.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 2025 Truist Securities MedTech Conference:

Peyman: at a time, But

Fred: thank you, both of you, for being here and really looking forward to the discussion. And anyone in the audience has questions, please feel free to raise your hand. We’ll try to get your question in. So I’m gonna direct this to both of you, but maybe, know, Joe, any initial comments to start us off, timing of the the kind of the rain pass, you know, why don’t we just start there and then we can get into the business?

Joe, CEO, Integer: Certainly. So well, I’m excited because I’m retiring at the October. Payment will be taken over as CEO at the October. He’s I I I think most investors probably know Payment. You certainly know the results of what he and he’s done during his time at Integer running the cardiovascular business Since early twenty eighteen, three of our four targeted growth markets are in cardiovascular.

The all of our acquisitions have been underneath payments business. I I believe and the board believes he’s already now CEO and so the the six months that we have during this transition are to to get payment exposed to the public company CEO activities like these meetings. I’ve been trying to shield him from those activities, so he can focus on driving sales and and profit growth and taking care of customers. He’ll now have to spend a little bit of time doing other things like that, but excited for that and then I’ll be around until the March as an advisor consultant for anything that Peyman and the board and the company might need.

Fred: Great, and you know, Peyman, anything that you’ve been obviously part of the formation of the firm’s goals and strategy and so this is almost like a question I’m setting you up for. But anything that you envision doing differently, anything about the targets, goals, strategy that you think can be improved or not or you know, how would however you’d like to answer that question?

Peyman: Yeah, great question and good to meet all of you. It’s good to be here. So look, you kind of alluded to, I’ve been part of the team, the leadership team at Integer for quite some time. I joined Integer in early twenty eighteen and and I’ve been working with Joe and the rest of the leadership team to develop the strategy, develop and execute the strategy that we have in place. So I believe in that strategy.

I mean, you’ve seen the results of that strategy. It’s working. We set out to to really focus, you know, going back to 2017, 2018, really brought, you know, laser focus to those core markets that we want to be successful in and that and and that where where most of the innovation happens and and it’s a that that they’re vibrant spaces. So so so we created a structure that we call the growth teams. You know, and these growth teams are a group of highly experienced and talented, you know, marketing, product management, r and d, and and operational folks that that really focus on those specific growth markets.

They they they develop, refine, and execute the strategy. And and that’s really allowed us to be very focused on those on those core markets. You know, the The capabilities that we have built have allowed us to develop a very strong pipeline of products that we have been launching in recent years. And that’s what’s really contributed to us being able to outgrow the market. You know, we said our target is to grow the market at 200 bps and we’ve been delivering that.

So I believe in the strategy, I very much intend to continue that just in terms of growth. For profitability, we said that we want to grow the rate of profit growth at 2x the sales growth. That too is something that I believe in and I believe as a target we can drive to and aspire to through the execution of what we call the Integer Production System. We we obviously have made tuck in acquisitions, you know, that’s been part of our strategy. I very much plan to continue doing that.

That’s a core element of our strategy to build to continue building critical capabilities that then also drive and fuel the growth that we have, all the while staying within the leverage of 2.5x to 3.5x that we’ve talked

Fred: Great. Maybe just to start us off on the business side a little bit more. You have a growth algorithm that’s been working for you. Your end markets are, I think you said, four to six, right? And you intend to and have been generally growing 200 basis points above those end markets.

Can you just walk us through the sub segments? What’s falling in the four to six? And where kind of you have the most visibility over the next call it twelve to twenty four months on your ability to grow above those end markets?

Joe, CEO, Integer: Sure. Well, maybe I’ll start the high level growth algorithm, what gives us confidence in our ability to outgrow the markets, which is our stated strategy, really is the strategy, the process, the people. And the strategy is to get designed into our customers’ most important programs that are bringing innovative therapies to the marketplace to treat patients who are either untreated or undertreated. And so we’re going where the innovation in the industry is and which is being defined by our customers and where they’re innovating. And so everything we do and everything the growth teams that Peyman talked about are doing is to understand where is that innovation, where is their unmet patient need.

Our customers are the one defining that because they’re the ones developing the therapy. And what we’re doing is ensuring that we’re identifying and building capabilities, vertically integrating them, be able to help our customers bring those therapies to the market and bring it to the market quickly so that they can get first mover advantage. At a macro level, that’s the strategy piece. The process pieces or the gross is the growth team, a process that Peyman talked about that didn’t exist prior to twenty seventeen, twenty eighteen timeframe. We weren’t as clear and focused in our strategy of getting designed in and we weren’t as focused on the four targeted growth markets, which is something we did in twenty seventeen, twenty eighteen timeframe.

You’ve heard us talk about these electrophysiology, structural heart, neurovascular, neuromodulation. Those are the fastest growing markets where the industry is innovating the most. And we’re working to support and enable the industry holistically to bring those therapies to the marketplace. And so, you know, some evidence that we’ve used to track our progress in doing that is, since 2017, we’ve increased the amount of development work we’re doing for our customers by 270%. We’ve been updating investors every year in

Fred: That’s alright, Drew. That’s the PMA

Joe, CEO, Integer: That is all the development work. So think of it as the revenues that we’re generating from the customers are paying us to do development work to get designed into their products. So that’s a 270 percent increase in the amount of development work since from 2017 to 02/2024. So that was 2024 actual against 02/2017. 2017 is kind of the pre strategy year.

2018 was the first year of the strategy implementation.

Fred: That’s inclusive of, but not only the PMA

Joe, CEO, Integer: Correct. It includes the emerging customer PMA, but it also includes everything else in the business. So that’s one measure. We think of it as kind of shots on goal or 270% more. And then there’s a quality of those shots on goal and we measure that by what percent of that development work is being done in those faster growing end markets where the innovation in the industry is occurring, and 80% of those of that development work is being done in markets that are growing above the market average.

And so that’s where we get inherent tailwinds based upon the the products that we’re getting designed into.

Fred: And interestingly too, you get to increase your exposure to the fastest growing pieces of that, right? So, you know, there’s there’s and and M and A has played a role in that, but so is your internal development. Maybe talk a little bit about, you know, how much control you have over the the growth of the end markets that you’re in, your WAMGR. Right. And and how should we think of your WAMGR increasing as a potential catalyst for growing?

Joe, CEO, Integer: Sure. Yeah. So we we’ve modeled out the the change changing composition of our sales as we grow faster in these four targeted growth markets and the WAMGR absolutely does increase. Obviously, in any one year, the percentage change is small, but cumulatively over time it does grow and and it increases the the end market growth rates of that four to 6% that we serve. But as we continue to ensure those shots on goal are 80 plus percent in those faster growing markets, that just keeps compounding over time.

And and that that’s what we started back in 2018. We know everyone knows in this industry the development cycles can be long, you know, for maybe a five ten ks program, it can be three to five years for a pre market approval program, five to nine or even ten plus years from start to finish, which is why it’s important that we started the strategy of getting designed in back in 2018. So we’re now in year seven or eight of of focusing on getting designed in and we have a pipeline of programs that are coming into the marketplace that is the fuel for that for that sustained above market growth.

Fred: Yeah. Maybe you can just tell us why you’re particularly well positioned in this with where you sit in the supply chain to pursue a kind of M and A strategy. Why are you uniquely positioned? What’s the it seems like a fragmented market still, the cottage industry of more family owned businesses to roll up. But is it as simple as that?

Or what else can you tell us about why that M and A strategy is potentially you’re uniquely positioned to

Peyman: Yeah. Me take that. So let me maybe just just a little bit of a context, you know, about, you know, how we target m and a, right, and and and how do they come about. So so the acquisitions that we’ve made are all a direct result of the the work that our growth teams have done. What our growth teams have been doing is that they’ve been identifying what are those critical capabilities that we need to be really successful in the four growth markets that we’ve identified.

So so so then, you know, we we take those capabilities and then go we find, you know, potential targets that could that could fit the criteria. And those are typically tuck ins, right? You know, we look at those those specific capabilities. So now coming a little bit to your question. So so it it takes it takes time and it takes years to kind of foster those relationships with these.

These are, generally speaking, smaller businesses that have those those critical capabilities, but they’re founder led. Your question was what makes us unique? And they see Integer as a company just because of our track record. We made a lot of acquisitions for the years. They see Integer as a company that that buys businesses and and invests in them to grow them.

And that’s know, these are people that have that have put their blood, sweat and tears in in developing their businesses. They care about their employees. They care about the communities that they serve. And they care about the success of the company in general. We don’t buy companies and slash SG and A they want and try to get cost synergies.

We obviously look for cost synergies, but we buy them so that we can get growth synergies and commercial synergies, right? And, you know, while we work on the operational. So so this gives us a little bit of a unique advantage in that, you know, when we say, hey, we’re going to invest in the businesses, there’s some credibility there. And and look, the acquisitions that we’ve made, including the two most recent ones at the beginning of the year, I mean, we’ve been talking to these companies, one of them in particular for better part of five, six years, right? Just to foster those relationships and that all helps in the process.

Fred: Yeah. That’s helpful. Thank you, Peyman. Maybe just digging deeper into the segment, C and D. That had a very impressive 11% organic growth rate, I think, in the first quarter.

I would love to just hear you talk through what’s sustainable kind of that low to mid teens growth rate that I think you’ve been talking about for this the outlook for that business for some time. Can you just maybe build that up for us? I know electrophysiology is a big piece of it, but build that up for us.

Peyman: Yes, let me take that. So C and B, three of the four growth markets that we have electrophysiology, structural heart and vascular, RNA and cardiovascular in the C and B business. So and we’ve been building pipeline, as I mentioned earlier, in those segments. Let me just highlight something. We talked about this business growing at low double digits.

And then for us that includes mid double digits mid teens, excuse me. So we clarified that, right, in a subsequent conversation that we had in April. So we said that we believe the the the CNV business can grow at mid teens, you know, at mid teens this year, just to just kind of talk about the numbers in general. But but we we are we we have had a very strong presence in electrophysiology for many, many years, You know, long before PFA was a thing. We’ve we participated in participated not only in all the legacy ablation technologies, but also the whole procedure.

I mean, if you think about a typical procedure, I mean, you first have to access the body, you have to navigate it, you know, with guide wires and sheets and and transseptal crossings, and then you need you need mapping devices for diagnostics, and then the ablation itself. We participated across the procedure, and we have content, you know, at different levels with different leaders in the industry, anywhere from high value components to subassemblies, in some cases finished, you know, finished devices. So so when you think about EP in particular, what’s happening in the industry with PF8, it says it’s creating a lot of momentum in the industry, but also by extension to us just because we’ve had such a strong presence in that in that industry for years. So so so we believe that that is a contributor to and that’s a tailwind for us in terms of growth. In structural heart and neurovascular, those are smaller businesses that we’ve been working on for years to build to build pipeline and capabilities.

We are less in structural heart, are less indexed in TAVR, but we are more indexed towards mitral and tricuspid. And and neurovascular is also another area where we see growth potential and we’ve been building a lot of capabilities. So those two are smaller from smaller bases that are growing, you know, through our pipeline and EP is a larger base that’s that’s also growing. So it gives us tailwind.

Fred: So on the EP side, obviously, PFA is the big new product category there. You know, I think over the years there’s been different levels of understanding of how you can tap into and benefit from that specifically. There’s clearly an overall acceleration in the EP market and you’re benefiting from that and you say that you are and will continue to grow above the EP market. But can you can you talk to us a little bit about how you’re exposed specifically to PSA, especially as we start to see more players coming into the market beyond Boston?

Peyman: Yeah, let me let me take that as well. So without being specific, which I’m sure you understand, our OEM customers do not want us to talk about or they don’t want the markets to know who’s making the products for them. So so I’m sure you appreciate that. So so I’ll be a little bit less specific. But but but given just maybe some statistics, you you talked about the market growth in general.

So some players in the industry, you know, recently mentioned that they believe that the EP market in general, you know, double in size over the next five years to 20,000,000,000. That’s a total addressable market for the OEM. So obviously, that creates a lot of momentum and tailwind. And just for a company like us that participates in that, that’s incredibly helpful. Then talking about

Fred: Can I sorry?

Peyman: Of

Fred: course. I mean, that includes price and right? There’s a certain component of

Peyman: That’s a total, absolutely.

Fred: Where you you potentially don’t have the same kind of tap in potential as your your your customers. So but but I guess what you’re saying is even still, there’s still Absolutely. There’s more than price to double, right? Yeah. Okay.

Peyman: Absolutely. I mean, that that when the when the market is projected, at least according to some of these key OEMs to double, of course, an element of the rest, but even if you take that out, I mean, there there’s a lot of there’s a lot of momentum in this space. So, so obviously that itself creates opportunity for us. And, and secondarily, we we just given the breadth of our capabilities and the level of vertical integration, this creates a unique competitive advantage to us to be able to participate with the largest OEMs, right, at a different level. Because we can we can manufacture a bigger part of their devices for them just because we’re vertically integrated.

We can make different components, you know, we can make subassemblies that are different manufacturing facilities. And instead of them having to deal with, say, two, three, four suppliers, they can just deal with one. And they’re all looking to consolidate, you know, their supply base. So obviously that gives us a, you know, competitive edge just because of our breadth, scale, capabilities, which is very, very important.

Fred: As we, you know, one of the things that struck me when I launched on coverage last year was just how you can participate in growth markets without being overly reliant on, you know, a specific player, right? And PFA seems like it’s just a great example of that. I know you’re not gonna say who or where you’re specifically involved on, you know, in the supply chain, but we’re getting to a point now where there’s gonna be multiple players and everyone’s gonna effectively be there. Can we assume on some level, whether, you know, it’s the sheath or some portion

Joe, CEO, Integer: of

Fred: the supply chain that you’re involved with every major player in this growing category?

Peyman: It’s fair to say that we have broad participation with the key players in the industry Yes.

Joe, CEO, Integer: Okay. That’s a good rephrasing.

Fred: Got it. And then as we kind of think about other, well, let me take a step back. PFA is one growth category. You mentioned a few others that are potentially in the early innings, like in structural heart, you’re over indexed to the faster growing emerging categories, tricuspid, mitral, a little bit less to TAVR. That actually is probably a good thing, right?

Because that’s a slower growing piece. Can you talk about in a similar fashion kind of how you are involved in the supply chains for those products? Is it a little bit more vertically integrated there than it is for PFA or it’s the same concept? And you’ll benefit more broadly from various pieces of supply chains across different companies.

Peyman: It’s more the latter. Let me explain. A key element of our strategy, as Joe talked about has been to get designed right early in the key products that our customers are talking about and they want to bring to market. So, in structural heart, just maybe covering each individually. In structural heart, we have built, we have focused on over the past many years to build and work with, you know, some key industry players in helping them bring products to market faster.

For example, I can talk about delivery systems. That’s something that we’ve been focusing on in mitral and tricuspid. And we’ve built capabilities on pipeline to be able to be successful there. It’s obviously development cycles are very long as you know very well. But that we believe that that mitral and tricuspid, you know, become more and more adopted, know, that gives us, you know, that gives us some tailwind.

Neurovascular, obviously another fast growing. We made an acquisition in this space in October of twenty twenty three, a company with an aim of Inuraco. So they are they have deep design and manufacturing expertise in neurovascularly, which is a very unique set of capabilities. If you think about just the size and the maneuverability needed, it’s very unique skill set and experience. That company has a lot of expertise, you know, specific therapies, which is ischemic stroke and intracranial aneurysm.

Those are some fast growing therapies. So, there’s expertise there. And they also have a manufacturer, which is now part of our portfolio, both radial access catheters and and also aspiration catheters. So so those are things that now we have expertise in house, which is complementary to the expertise that we have built ourselves built ourselves, and we believe that we can continue making advances in that in that that growing market.

Fred: And CRM and Neuromod, those are growing, but they’re kind of at the lower end of your divisional growth in the low to mid single digit rates. I guess, what can get the what can get that higher over time?

Joe, CEO, Integer: Well, we we know we all know cardiac rhythm management’s a large, slower slower growing segment. It’s an important segment for us because we’ve been in it for decades and and the capabilities that we have there have proven the test of time, but also the foundational capabilities that enable the neuromodulation capabilities that we have. And so the the neuromod is an emerging customer. PMA is is where we’re gonna be able to accelerate the growth. And maybe pointing to a couple of things.

We share at the end of every year the number of customers and programs that we’re working on within the emerging PMA as we’ve defined it. We’re at 39 different customers, different programs in one of the five stages as we’ve defined it of development starting with development all the way through to commercialization. Contrast that with when we shared where we were in late twenty twenty, we had 27 customers and products. So we’ve grown that 40 plus percent in the last five years. Again, pointing back to the broader strategy of getting designed into our customers’ innovation.

And what’s unique in neuromod for us is we have the underlying core technologies, whether it’s battery speed throughs cases, the lead systems. We have that capability that we developed as part of serving the cardiac with a management large established slower growing industry or marketplace. We’re applying that now in a fully vertically integrated manner in neuromodulation. So most of the customers we’re serving in our emerging PMA group as we’ve defined it, they’re single product companies that are getting funding progress on their development. We’re helping them from the initial development stages through clinical regulatory and then the commercial launch.

We can offer a fully vertically integrated on the implantable pulse generator and the lead system, we can do the complete device for them if that’s what they’re looking for and if that’s what they need. So we feel like that is an area that’s getting tremendous amounts of innovation and focus and it’s been growing very strongly for us and nicely and we’ve laid that out since 2018 and the outlook going forward we think is about 2x the underlying market growth.

Fred: I guess, as we think of those 27 customers as the base five years ago and then you’ve added more than 10 since then, do we think of that PMA portfolio kind of starting to hit a sweet spot where all those projects kind of really start to kind of show up in the numbers whether it’s now, two years out, three years out or is it really just layered? It’s a steady cadence from what we can see from the contribution from those. And I know it’s neuromod heavy, so Yep.

Joe, CEO, Integer: Yeah. So so so it’s it’s very specifically neuromod. There’s other pre market approval activities in cardiovascular that we have we didn’t put in that that particular this the way we define this back in 02/2020. Think of it as layers. Think of it as things come in over time because it’s a funnel and we know that the the 39 that are in the funnel now, all of them won’t actually become products that commercialize in the marketplace.

And I’d have to go back and do the math, but it went from 27 to 39. There’s more churn in there than just that 12 because there are some that fall out, there’s others that come And in the early development stages when something doesn’t prove out to be viable, then it drops off and there’s other things that fill in. So think of it as we’ve been building this pipeline, this funnel over time and and we’ll continue we expect to continue to grow it. And for the therapies that truly do deliver differentiated outcomes for patients, they’re going to get the funding and they’re going to be brought And our goal is to ensure that we’re doing as much of that for those customers as we can.

And you know how sticky it is in this industry when you’re starting with customers like this who are getting funding at each phase. Once they identify that they’ve got a viable product in the marketplace, they get all the funding they need and then it’s a race to commercialization and our ability to support that ramp is also what we’re investing to ensure we can do as we continue to grow that pipeline. But the the short answer is it’ll layer in over time based upon the success of those shots on goal.

Fred: And, you know, it deserves more than two minutes of remaining time here, but the margin and profitability is arguably one of the most impressive kind of parts of the story in my view. Your algorithm includes a 1.5 to two times kind of growth rate on the bottom line versus the top line. What are the key drivers of that leveraged growth, earnings growth and anything that we should be thinking about in 2025 from a cadence standpoint as you walk through those drivers? Well, biggest driver is we manufacture products and so we have to be great at manufacturing products. We spent most

Joe, CEO, Integer: of the time here talking about innovation and talking about design and development and helping customers bring innovative new therapies to the market to treat patients who are untreated or undertreated, but we products. And so we deliver great quality to our customers. They tell us that our quality is differentiated. That was one of our goals from the outset, on time efficiently. And so we have to continue to improve in our manufacturing operations.

We’ve built out what we call the Integer Production System. It’s a lean manufacturing system that’s leveraging tried and true improving manufacturing processes, building a culture of continuous improvement at all levels of manufacturing plant. We still see tremendous opportunities to improve yields in our manufacturing process that reduces the amount of material waste in our manufacturing processes, finding ways to continuously be more efficient with our direct labor utilization. There’s opportunities in automation and collaborative robots. There’s opportunities for us as we eliminate the paper flowing through our systems using ERP manufacturing execution systems, MES systems that drive more efficiency.

And so as we look at our manufacturing footprint, we continue to see significant opportunities. We think we’ve got a great manufacturing footprint that’s co located where customers want to do design and development side by side. Those tend to be higher labor cost environments. We’ve got a great footprint in lower labor cost environments where customers can take advantage of that lower cost and transfer products there when they’re ready to.

Fred: And then just on backlog, it’s a question we sometimes get asked. I think you have $800,000,000 in backlog, but you expect that to come down through the year. Just explain why and what if anything does this signal about future demand trends?

Joe, CEO, Integer: Sure. So I would not think about book to bill as something that’s relevant for us. It’s not how to think about our backlog or order book. We were about 300,000,000 before the pandemic and we’re closer to 800,000,000 now. We were at $728,000,000 at the end of last year.

What we said is we expect that to come down to around 600,000,000 by year end. Two primary factors, the exit of the Portal Medical business we had last time buy orders that inflated the order book. So we expect that to come down. We made a big investment in our Irish facility that manufactures primarily guidewires. We had asked customers to place orders more than a year in advance, so we could manage the allocation of that capacity now that that facility is up and running, we’re not doing that.

So we know those orders are going to come down in the backlog due to that. You should look at our backlog as an indication of we’ve got really good visibility to at least the next couple of quarters, thinking about 700,000,000 to $800,000,000 of order book now, that’s a couple of quarters worth of sales. So it gives us really good visibility for at least a couple of quarters. And we’re going to even at 600, we’re double where we were pre pandemic.

Fred: Great. Thank you very much.

Joe, CEO, Integer: Great. Thanks, Fred.

Peyman: Good to be here. Thank you.

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