Integer Holdings at KeyBanc Forum: Strategic Growth and Innovation

On Wednesday, March 19, 2025, Integer Holdings Corp (NYSE: ITGR) presented at the KeyBanc Annual Health Care Forum, outlining both its strategic growth plans and challenges. The company, led by CEO Joe Dietzic, emphasized its commitment to innovation and market leadership while addressing tariff impacts and strategic divestitures.

Key Takeaways

• Integer Holdings projects organic growth of 6% to 8% for 2025, aiming to surpass market growth by at least 200 basis points.
• The company is focusing on high-growth markets, particularly electrophysiology, and expanding its product development pipeline.
• Integer is mitigating tariff impacts and enhancing financial flexibility through a convertible note offering.
• Strategic acquisitions and divestitures are reshaping Integer’s portfolio, focusing on core medical areas.

Financial Results

• Organic Growth Guidance: 6% to 8% for 2025, consistent with exceeding market growth.
• Sales Growth: Previous year saw a 7.3% organic growth; reported sales growth expected to dip in early 2025 due to exiting the Portable Medical segment.
• Operating Income: Projected growth of 11% to 16% for 2025, with full-year guidance between $315 million and $331 million.
• Interest Expense: Expected to decrease by $12 million in 2025 due to the convertible note offering.
• Tariff Impact: Estimated at $1 million to $5 million pre-tax income.

Operational Updates

• Integer Production System: Enhancements to drive manufacturing efficiencies and offset wage inflation.
• Acquisitions: Completed strategic acquisitions in precision coatings to support vertical integration.
• Capital Redeployment: $50 million from divestitures reinvested into strategic acquisitions.

Future Outlook

• Market Focus: Continued emphasis on high-growth sectors like electrophysiology.
• Vertical Integration: Expanding capabilities to simplify customer supply chains.
• Pipeline Growth: Development pipeline increased by 270% since 2018, focusing on faster-growing markets.

Q&A Highlights

• Electrophysiology Market: Integer supports various manufacturers, enhancing its market presence.
• Tariff Mitigation: Production in Mexico benefits from USMCA exemptions, reducing tariff impacts.
• Emerging Customers: Growth in PMA customers, increasing from 27 in 2020 to 39 currently.

For a detailed understanding of Integer Holdings’ strategic plans and financial outlook, please refer to the full transcript below.

Full transcript - KeyBanc Annual Health Care Forum 2025:

Brett Fishman, MedTech Analyst, KBCM: Alright. I’d like to welcome everyone to day two of the KBCM Healthcare Forum. I’m Brett Fishman, MedTech Analyst, and I’m pleased to be joined this morning by Integer Holdings, who is represented today by Joe Dietzic, the president and CEO.

I’ll start us off with questions. As always, and same as yesterday, it’s a 100% Q and A session, and anyone in the audience can feel free to submit questions in the text box below the screen and I can relay them to Joe. So maybe just getting things started, you hosted the 4Q twenty four earnings call pretty recently and gave your initial outlook for 2025. Thought that would kind of be a logical place to start. Maybe on the organic growth guidance, specifically, 6% to 8%.

If you could just unpack that a little bit and touch on what you’re looking at as some of the biggest variables, like driving low end or high end of that range?

Joe Dietzic, President and CEO, Integer Holdings: Good morning, Glenn. Thanks for having us on the call today. It’s been a great set of meetings yesterday and this morning already for having us. We provided guidance of 6% to 8% organic growth, which is right in line with our strategic objective of at least 200 basis points above the markets we’re serving. The markets we’re serving are, in our estimation, growing 4% to 6% organically.

We delivered 7.3% organic growth last year, right in line with our guidance throughout the year and our strategic objective. Every year, the the variable that drives where where we land within that range is really the ultimately the success of the new products that our customers are introducing into the end market. Our our goal is to help our customers get to market first with their therapy, so they get first mover advantage. And so the end market success of those products is ultimately what drives where we land within that range. And so we’re excited about the pipeline of new programs that we’re working with customers We had a lot of success last year with new product launches in a number of the key end markets that we’re focused on and expect to be able to deliver 6% to 8% organic growth again in 2025.

Brett Fishman, MedTech Analyst, KBCM: All right. Great. And just specific to 1Q twenty twenty five current quarter, facing a little bit of a challenging comp of 9% and I think you guys alluded to a bit of a calendar headwind maybe with the leap year situation. What should investors expect to see in 1Q when you report earnings? And then how would you expect the cadence of growth to build from there?

Joe Dietzic, President and CEO, Integer Holdings: So, we tried to be, as specific as we could about what we expected the top line to be. And and to your point, it really is, there’s a couple fewer manufacturing days for us in our first quarter of twenty five versus first quarter of twenty twenty four. And and for us, you know, we we carry very little finished goods. If you look at our finished goods inventory at the end of any quarter, it’s, you know, $10.10 to $12,000,000. And and the only reason we even have that is because it either wasn’t finished packaging or just didn’t get picked up at at the end of the quarter.

So any anything that we build, we we ship to to customers. We’re we’re we’re a build to order, not a build to stock kind of model. And so the guidance we gave was we expected first quarter to look similar to the full year, which we guided to 8% to 10% on a reported basis, less those two days, which is about 3%. Looks like that’s pretty much where the sell side landed in consensus or pretty close to that. What we’d also highlighted is the portable medical exit that we announced about three plus years ago.

That’s about thirty to thirty five million dollars of nominal sales decline in 2025 that’s already included in our guidance, so that’s been fully factored in. That’s much more heavily weighted to the first half. So about two thirds of that decline will happen in the first half of twenty twenty five. So we tried to convey that when you look at reported results reported sales growth for the first half, you should expect that to be a little lower than the second because of the probable medical exit. But obviously, what that means is if the first quarter is a little bit lower for the number of days, it evens out over the course of the year, the balances out the number of days and it ends up just being the one day from the leap year.

So it’s kind of a push for the latter quarters to be a little bit higher. So we would expect the second half to have higher reported sales than the first half, principally driven by that Portable Medical exit.

Brett Fishman, MedTech Analyst, KBCM: It makes a lot of sense. And just maybe turning a little bit to profitability, the outlook also includes an adjusted operating income growth range of 11% to 16%, just very respectable. But just would note a little bit below what we would consider to be your ambitious target of growing op income at two times the rate of sales. So what are you looking at as the key moving pieces holding you back from achieving that target this year? And just like generally speaking, when you think about op income at two times the rate of sales, is there a little bit of consideration when you have more inorganic revenue that it gets more challenging to hit that kind of ratio?

Joe Dietzic, President and CEO, Integer Holdings: Yeah. Great question. First, thanks for acknowledging that, growing profit twice as fast as sales is ambitious. We said when we launched our strategy, we said we want to demonstrate sustained outperformance and that starts with organically growing faster than the markets we’re serving while expanding margins. And so we did set what we feel is a really aggressive goal that we achieved last year with 20% operating profit growth on 10% sales growth.

We continue to invest in the business for the long haul. We’re making investments in acquisition, integration and the diligence process that it’s an important part of our strategy for the long term. So as we continue to make those investments, as we continue to execute the Integer production system to drive those manufacturing efficiencies, which helps us to offset any wage inflation that we incur on an annual basis and any other of the investments that we want to make in the business. We typically start the year somewhere in that 1.4 to 1.6 times profit growth compared to sales growth and feel that that’s the right place to start. And then throughout the year, as we continue to execute on the Integer production system and drive those efficiencies, we work to then increase our profitability and either reinvest that in the business if we see near term opportunities there or the need to or let that flow through to operating income.

So the goal is the same. The goal is to drive profit growth twice as fast as sales, but at a minimum, we have to be expanding margins and we expect to be able to get that margin expansion, both some from gross margin, where the manufacturing excellent strategy will contribute to that. But we also want to get leverage on SG and A and R and D. And we might be a little unique then compared to maybe some of our customers that you look at their R and D expense. We can actually do more R and D development work for our customers and actually have a lower R and D expense line because our customers are paying us to do that development work.

So the scenario for us of doing more development work, which is the fuel for organic growth, yet having a lower R and D expense, is unique, we think, and something to just be aware of as you think about how we get leverage on LSG and A and R and D.

Brett Fishman, MedTech Analyst, KBCM: Yes. No, that’s definitely a good point. Similarly, just on the guidance question that’s come up a lot is just around the potential impact of tariffs. I think you had an opportunity to touch on that a little bit a couple weeks ago, but maybe just reframe how you’re currently thinking about tariffs and the impact versus your current guidance?

Joe Dietzic, President and CEO, Integer Holdings: Certainly. So our estimation of the impact of the the tariffs and and I’ll be specific, the 25% tariff on imports into The US from Canada, China, and the and and Mexico. Canada and China are are negligible for us, in terms of an impact. It’s really Mexico, where we have three manufacturing facilities. We we have two in Tijuana.

They’re two different facilities run by the by the same management team. They’re they’re physically co located. We have a we have a manufacturing facility in Juarez, so just across the border from El Paso. These are set up as maquiladoras, which, is a structure that allows you to bring material from The US into Mexico, process it, bring it back into The US. And if if there is a tariff or duty or taxes, you only pay on the value add, that’s the the historical structure.

With these latest tariffs, that was actually excluded in the Maquiladora structure, does not bring the same benefit. So we’ve made we’ve already implemented operational changes to minimize and mitigate a meaningful amount of the tariffs for both our customers and for ourselves. So our estimate is is 1 to $5,000,000 of pretax income impact from tariffs in 02/2025. The goal is zero and that that’s what we’re driving to. But the 1 to 5,000,000 is based upon the the current structure of the 25% import tariffs.

And and we’ll we’ll continue we continue to work on that to drive that to as close to zero as we can make it. We we just just to frame that maybe in the context of our full year guidance, our full year guidance for operating income was was $315,000,000 to $331,000,000 So a $16,000,000 range. So we view this $1,000,000 to $5,000,000 potential tariff impact as very much within that $16,000,000 range of of guidance we provided.

Brett Fishman, MedTech Analyst, KBCM: That’s super helpful. Good to hear as well. And then the other recent topic that’s come up and might have an impact on current year guide was the closing of your convertible note you announced last night an upsized offering. Maybe just first walk through the strategic rationale behind the refinancing moves that you made and then the expected impact to EPS as compared to the prior guidance?

Joe Dietzic, President and CEO, Integer Holdings: So maybe at the highest level, our objective was to create capacity on our revolver within our capital structure to be able to continue executing our strategy. We also saw the opportunity to meaningfully increase the percentage of our debt that’s at a very low sub 2% interest rate, thereby reducing twenty twenty five interest expense and our expected interest expense going forward. So, it’s EPS accretive, but it started off with well, strategically, we wanted to have the revolver freed up to be able to continue executing our strategy. So, when we issued the convert, the previous convert in early twenty twenty three, those those bonds were in the money. And because they were in the money, the bondholders had the option to call those bonds.

Now it would be a very poor economic decision to call the bonds because they’re worth more trading in in the in the in the in the secondary market. And so even though it’s highly remote that they would have, we had to, as a public company, have $500,000,000 of available credit capacity, to protect against that. And so that was tying up $500,000,000 of our revolver, which we would rather have available to continue executing our strategy. And so, the strategy started with, let’s create that capacity. Then when we evaluated the market, we saw the opportunity to lower the interest rate we were already paying.

So we went from two and an eighth on the previous bond that we were able to repurchase the majority of 74 or five or five ish percent of that was repurchased. So we lowered that from two and a quarter down to one one point eight seven five percent interest, so 50 basis points reduction. But we also increased the proportion or the percentage of our debt that’s now sub 2%. And so we we paid off the revolver balance that we had from the acquisitions over this year. We paid off part of the term loan a balance, and and and and those were those were at about 5.9% floating rate.

So we went from roughly 6% down to sub 2%. And so we we’ve accomplished our goal strategically of creating that revolver capacity to keep executing our strategy. I’ll reiterate, we remain very committed to our two and a half to three and a half times leverage. So doing this doesn’t change anything about our strategy or how we’re executing our strategy, just create that capacity. And while doing all of this, we’re able to reduce our 2025 estimated interest expense by about $12,000,000 And so that that’s that’s just a little more than three quarters of the year.

So when you annualize that, it’s a it’s a bigger number. And so we’re we’re excited about creating that capacity strategically on the revolver, excited to have a very high percentage of our of our debt balance, sub 2% interest rates, and lowering interest costs and increasing EPS in 2025.

Brett Fishman, MedTech Analyst, KBCM: Alright. Great. I’m getting just a couple of questions from the audience. I’ll ask one here, since it’s a little bit related to the setup for this year. Are you seeing a margin benefit from the divestiture of non medical in 2025 relative to 2024?

And if so, can you directionally frame, like, how much of a benefit that might be?

Joe Dietzic, President and CEO, Integer Holdings: Sure. So the non medical business margin rate at the operating margin was similar to the company, so not a meaningful change. It was about 50 I’m sorry, it was about $3,534,000,000 dollars in sales is what we divested. So from a margin rate standpoint, it was not a meaningful impact. It’s also a relatively small dollar amount.

The divestiture was really more about strategically becoming just a pure play medical device company. We were able to sell it for $50,000,000 And you saw we were able to redeploy that $50,000,000 to two, what we think were strategic and important acquisitions that added additional capabilities. This is the coatings as a service acquisitions we closed in January and February of this year. So I would think of that divestiture as, not impactful to kind of margin rates or to the, you know, the overall trajectory of the company, but really a redeployment of capital into pure play medical and we redeployed that into the acquisitions that we did earlier this year.

Brett Fishman, MedTech Analyst, KBCM: Got it. I’m going to shift the conversation a little bit like longer term. Getting a couple of different questions here on EP and PFA. So I’m going to kind of merge them. And really the nature of the questions is you have a very diversified portfolio and you’ve framed total end market growth in the range of 4% to 6%.

So just thinking about the acceleration that we’ve seen in electrophysiology specifically tied to PFA market, is that maybe contributing to a little bit of a higher end market CAGR or is there opportunity to or for that end market to help shift the total weighted average market growth for Integer or is it not sizable enough at this point?

Joe Dietzic, President and CEO, Integer Holdings: Yeah. It’s a great question. So, you know, we when we come up with the weighted average market growth rate for Integer, we’re waiting that based upon our sales across the whole company. And so electrophysiology is a is an important impactful part of our portfolio, but it’s also still, not a a small piece of the portfolio. It’s one of the pieces of the portfolio growing growing very fast.

So individually, stand alone, the electrophysiology and market growth does increase the weighted average market growth rate, but it’s back to looking at the the whole portfolio and and how that whole portfolio is performing. And we still estimate that in aggregate, the end markets we’re serving are growing 4% to 6%. But to answer your question, yes, electrophysiology, it does end market growth does help increase the WAMGR. Over time as we continue to execute on the development programs where 80% of our development programs are in those faster growing end markets, it absolutely should increase the the WAMGR, for for the markets that we’re serving and and thereby increasing ultimately our our our sales into those markets.

Brett Fishman, MedTech Analyst, KBCM: We’ve spoken a lot about that growth strategy and how you define faster growing end markets, which four or five different markets are included in that bucket. Do you have directionally a sense of how much of the Integer portfolio falls into any of those higher growth markets on a combined basis at this point and maybe how that’s trended over the past couple of years?

Joe Dietzic, President and CEO, Integer Holdings: So we haven’t disclosed that percentage. It absolutely has increased and it is increasing the the weighted average market growth rate. And we’ve modeled that out over the next five years. Every year, we do a long range forecast. And so we have our model of how the WAMGR shifts over time.

And as we continue to execute on 80% of our development pipeline in those faster growing end markets, when those turn into manufacturing sales, it absolutely increases the WAMGR. And and I’m I’m excited for the day where I can tell you that that the underlying market growth rate is faster than four to 6% because, that that then translates into ultimately faster growth for Integer.

Brett Fishman, MedTech Analyst, KBCM: Not asking for a specific year or or time, but how close might we be to integer, like, redefining market growth at 5% to 7%?

Joe Dietzic, President and CEO, Integer Holdings: We’re working on it. We’re excited for the day to come when we can definitively say that we’ve shifted to a higher weighted average market growth rate. We’re higher in the range than we were when we started in 2018. That’s for sure. In 2018, we didn’t have the size of the development pipeline.

We highlighted a month or so ago, a month and a half ago on our fourth quarter earnings call that our development pipeline is up 270% since we launched this strategy and we’ve shifted the mix to being 80% in those faster growing end markets. So we have definitely seen, kind of where we would peg kind of, if you calculated a specific number within that range, the average has moved up. We still use the range because in any given year, you’ve got markets moving, at different rates in in different ways. And so we we feel like that that range allows for the imperfection of actually quantifying every end market. You know, we we come up with that by studying our customers end market sales.

And, unfortunately, not everybody reports everything in the same buckets, and so there’s a little bit of art that goes into that, with the science.

Brett Fishman, MedTech Analyst, KBCM: Alright. I had one more question come in. This is a pretty quick one. Are you guys included in The US MCA exemptions in context of the Mexico tariffs?

Joe Dietzic, President and CEO, Integer Holdings: We absolutely have a meaningful part of our production in Mexico that is eligible for USMCA exemption. Yes. That’s been incorporated into the $1,000,000 to $5,000,000 estimate. But maybe I’ll add the follow-up, the potential follow-up question. If USMCA is no longer applicable, it’s currently scheduled to expire April 2, We we stand by our 1 to $5,000,000 estimate.

It it does not change the the estimated impact on Integer.

Brett Fishman, MedTech Analyst, KBCM: So one to five with the information we know. And if that were to be extended, you know, we start pushing that maybe a little bit lower into the range. If not, maybe a little bit higher. And then we’ll see what happens there.

Joe Dietzic, President and CEO, Integer Holdings: Fair. That’s fair.

Brett Fishman, MedTech Analyst, KBCM: Alright. And then, you know, back to the four q call, we always look forward to the year end calls because you typically give, like, a much broader update around the growth strategy. And like one metric that definitely has stood out is and you’ve alluded to it, the 270% increase in production development sales. And just wondering like how material this production development revenue has become for Integer and what have been the biggest drivers of that 270% increase that we’ve seen?

Joe Dietzic, President and CEO, Integer Holdings: Yeah. We talk a lot about it because it is the foundation of our strategy shift. Our strategy shift back in 2018 was to focus on getting designed into the end markets where our customers were innovating, the markets where there’s unmet or underserved patients, the markets where when our customers develop a new therapy, they’re expanding the total available market. They’re increasing the number of patients served, which is what’s enabling our customers to grow faster in those markets. And so our strategy was shift was to get designed into new programs that are entering the market, help our customers by offering our vertically integrated solution of capabilities and global manufacturing footprint to help them get to market faster so that they get first mover advantage and that they expand the number of patients that are served.

Because at the end of the day, we all have a vision and a mission of helping patients improve their lives. And so, it’s foundational to our strategy and it’s why we often start with that. And the 270% increase is what’s enabled us to increase the shots on goal. And then, you know, highlighting the quality of those shots, which is really targeting the markets that are getting that innovation. So, you know, a big shift was we said, well, what are the markets that are most attractive and why and which are the markets that are not?

And you’ve seen us, manage our portfolio. The exits that we’ve done have been very intentional. The Advanced Surgical and Orthopedic divestiture in 2018 was we didn’t see the technology differentiation. The margins reflected that lack of differentiation. The portable medical exit, same thing.

There wasn’t enough technology differentiation there. So we exited that just in a slightly different manner. And then the electric end business, non medical and reallocating the capital that was tied up in that business to reallocate that into the faster growing end markets. And so the strategy of what are the markets we wanna focus on and being very intentional about the ones we don’t, and then getting designed into those those markets. We’ve been doing that.

And the reason I believe we’ve had that success is the clarity of focus as well as the understanding of where’s the value added in the manufacturing process, where’s the value added in the design development. And we’ve been adding those capabilities both organically and inorganically. And recent acquisitions are great examples of how we’ve taken a capability coatings, which we had, and expanded it by buying companies, two companies that have the ability to formulate their own coatings and then offer that as a service. And so, I would just reinforce every every action you see us take is very much aligned with that strategy of getting designed in to the faster growing end markets where there’s innovation and bringing differentiated vertically integrated capabilities to our customers to help them win in the marketplace.

Brett Fishman, MedTech Analyst, KBCM: And then the next step following production revenue, you also have reported metrics around actual pipeline products that are moving through different stages of development. Maybe just talk a little bit about the premarket approval process and like where you stand with some of those updates. And then just specifically, where are you seeing the most activity in regards to these PMA projects?

Joe Dietzic, President and CEO, Integer Holdings: So the emerging PMA customers, which we started showing that slide back in 2020, for the first time, February. And what what I highlight you you referenced the different phases of of of the development. We had we had 27 customers that were in one of those five phases of development when we shared that slide for the first time in third quarter twenty twenty. When we shared it a a month and a half ago, we have 39 customers. So we’ve offered 27 to 39 customers, which which reinforces the shots on goal that we’re taking.

And and and we’re taking those in in those those higher growth end markets within the neuromodulation space. And whether it’s an application in maybe an emerging spinal cord stim therapy or sleep apnea or DBS or Parkinson’s. I mean, there’s a wide range of therapies being developed there. You know, and we’ve shown how we’ve grown from in 2018, ’10 million of sales doubled it by 2020 to to 20,000,000, more than doubled it by 2022 to 50 and and 125,000,000 last year. So you see the results of those customers moving through the development, rate clinical regulatory phase and into market introduction.

And and we’ve not we’re now out there with a 15% to 20% growth rate. We felt like given that now it’s a and now it’s a and it’s a sizable piece of business at $125,000,000 and 15% to 20% growth is is still gonna gonna outgrow the end markets, which are more in the high single digit kind of in aggregate. So we’re excited about the pipeline of customers. We continue to increase the pipeline of customers that we’re working with up to 39 now in one of those five phases. And it gives us confidence that we can continue to grow above the at a faster rate than the markets.

Brett Fishman, MedTech Analyst, KBCM: Yes. And just following up on that, I imagine it’s challenging enough to set annual guidance with existing products much less things that are maybe years away from reaching the market. So just curious like how you kind of get to that 15% to 20% outlook. And just wondering like if things go well, maybe like, how you think about upside against against that range?

Joe Dietzic, President and CEO, Integer Holdings: Yeah. So we we always, you know, our customers always give us their view of of what their growth rate’s gonna be. And, you know, most of the time, they’re they’re thinking that every product is good every product is gonna be a a grand slam and is gonna be gonna take meaningful market share. We we we have a lot of experience in in new product introductions, supporting our customers in launching programs. And so we we always put some factor of a risk adjustment on that when we’re thinking about where this could go.

But when it gets down to, you know, the actual, we need to build a certain amount of product and the customer’s bringing, you know, they’re hiring a sales force or they’re expanding the jurisdictions where where the the product is approved. That’s when we get down to, well, if we’re gonna invest and add resources and add equipment, then then we we get we get very tight on on the demand and what our customers are gonna buy in the in the in the near term and in these particular products. I’ll say near term is six to twelve to eighteen months based upon the investments that that we have to make. So I’d say in the near term, we’ve got we’ve got really good visibility based on our customers’ commitments and and the investments they’re making in their business to grow their business. Over the longer term, it really just comes down to the success of those therapies in the marketplace.

If if they help patients the way they’re expected to and they’re expanding the patient population that’s being served, that’s what’s gonna give us the opportunity to grow with our customers. And and if we’re helping our customers succeed and win in the marketplace, then we’re earning the right to grow with them, and that’s how we think about it.

Brett Fishman, MedTech Analyst, KBCM: And then we talked a little bit about PFA a moment ago and, you know, contribution from the EP market to your weighted average market growth. There’s another question that comes up a lot is about what manufacturers you’re most tied to in that market. And I know that’s a little bit of a challenge since you can’t speak about specific customers one by one. So So maybe just like asking a little bit of a different way. Can you just qualitatively discuss how agnostic you are to potential changes in market share in PFA as more new products reach the market?

And just wondering, is there like a major difference for Integer depending on who captures the most incremental share going forward?

Joe Dietzic, President and CEO, Integer Holdings: I’ll start by just reiterating that we support multiple steps of the procedure, whether it’s access, transeptal crossing or diagnostics or the ablation step itself. We’ve been serving this market for a very, very long time. We have highly vertically integrated capabilities. We can do everything from components to finished devices. And we do, and we serve the industry in a wide range of ways.

And we are agnostic to how we’re helping customers, or whose device it is. We believe we have the capability to help everyone in the industry, for accelerate the introduction of pulse field ablation and and EP more broadly. At the end of the day, it’s it’s electrophysiology is no different than any of the other end markets we serve. We have different amounts of content on different customers’ devices. And so so the direct answer is it it always matters, who who wins in terms of the content we have.

I’d love to say we have a % with everybody. That’s just not realistic. And so it it it certainly does matter, but we feel we are well positioned to continue to support the the electrophysiology market growth. We’re well positioned to help our customers continue to evolve the therapy, specifically, pulse field ablation and that it’s a tailwind for us. We’ve been outgrowing the market and we expect to continue to outgrow the market in electrophysiology.

Brett Fishman, MedTech Analyst, KBCM: All right. That’s super helpful. So maybe switching gears just a little bit in our last five minutes or so to M and A topics. You’ve completed a couple deals, in the recent months, precision coding and BSI. Just maybe taking a step back, just talk a little bit about why those were the best opportunities for Integer and what they bring to the platform that you guys didn’t currently have.

Joe Dietzic, President and CEO, Integer Holdings: So we we we have we’ve talked we talked a few minutes ago about the development pipeline, and and we we talked about the strategy of getting designed into our our customers, most important, fastest growing products. So it it’s really the the acquisitions are really about what capabilities can we add that allow us to further vertically integrate. And by vertically integrating, what we’re effectively doing is we’re simplifying our customer supply chain. We’re making their job easier because Integer can can perform can deliver more for them under one roof. We we we you heard every one of our customers talk about wanting to work with fewer suppliers.

They wanna work with bigger, more capable, suppliers that can do more for them. And at the end of the day, they wanna get to market as fast as possible. And and what they’re great at is developing therapies and commercializing those therapies. Yes. They they can be great at manufacturing too, but they’d much rather allocate their capital into those those other end markets or or into into therapy development commercialization.

So for us, as we look at the capabilities that allow us to vertically integrate, we have a list of them and we’ve been studying those those potential acquisition targets for a long time. And almost every acquisition that we do, we’ve known them for a very long time. In this case, we we are actually a customer for for precision coatings, and so we know them very well. We do a significant amount of coatings ourselves where where we’re applying coatings, but we’re applying them to products that we are manufacturing. So we know coating as a process very, very well.

What these acquisitions bring to us is the ability to develop and formulate proprietary coatings, customized coatings for our customers’ applications, which which we don’t do. Today, we don’t actually develop or formulate the coating. VSI and Precision Coatings, they do that. They also offer the coating as a service. So other people ship their products to them.

They coat those products and ship them back. So this gives us the the opportunity to further vertically integrate, further offer a customized, coating solution to our customers. And and and we can then serve the customer in whatever way they want. If they want us to build the product and coat it and then and then assemble it and and ship them a finished product, we can do that, which we do today. If they want us to take their product, coat that, maybe then incorporate that into a sub assembly or a finished device, we can do that.

So we view this as expanding the offering that we have for our customers, simplify their supply chain, bring more proprietary capabilities to bear to help them get to market fastest. We’re excited about these two acquisitions and the growth that they can bring to us. They’re EPS accretive day one. We highlighted that on the call. They’re accretive from a larger rate standpoint, and we see significant opportunities with the recent acquisitions.

Alright.

Brett Fishman, MedTech Analyst, KBCM: I’m just gonna ask one more question on M and A, and then I’ll let you conclude with any other remarks that you wanna leave the audience with as we wrap up here. A lot of your recent deals have been logically beefing up your vertical integration in cardio and vascular. Makes a lot of sense. Just curious if you’ve thought at all about maybe expanding the purview or breadth of focus from potential acquisitions to additional high growth markets that you’re not currently in or in a material way? And if not, what it would take for you to start thinking about, like, looking a little bit, like, further out?

Joe Dietzic, President and CEO, Integer Holdings: Sure. A definitive answer is, we absolutely think about it. We absolutely study it as part of our strategy process. Right now, we’re very happy with the end markets we’re serving and feel that there is substantial amount of growth potential there still, and that we’re very focused on ensuring that we continue to add capabilities and we serve, help our customers get to market first and help them win. And we feel like the markets we’re in today and that we’re serving, which we’ve been very focused on since 2018 are the right markets and that they can continue to support us or enable us to outgrow the markets that we’re serving while continuously expanding margins.

So we’re happy with the markets we’re in. We do continuously evaluate what other options there are, but right now, there’s no plan to move into a different space or different end market.

Brett Fishman, MedTech Analyst, KBCM: Alright. Well, thank you so much, Joe. It was a great conversation. Thank you to everyone in the audience for attending and listening in.

Joe Dietzic, President and CEO, Integer Holdings: Thanks,

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