
Outsource Device Manufacturer Integer Holdings Corporation Reports Strong 3Q23 and Guide; Positive Leading Indicator for Industry Cardiology and Neuromodulation Markets
Integer Holdings Corporation an outsource manufacturer for the medical device industry has released its results for the third quarter of 2023 with an 18% increase in sales, totaling $405 million. Analysts had been expecting $376.7 million in the quarter.
The company reported robust sales growth across its key product lines. Cardio & Vascular sales increased by 23%. Cardiac Rhythm Management & Neuromodulation sales also exhibited significant growth, with a 22% increase, driven by strong demand and double-digit growth from emerging customers. Advanced Surgical, Orthopedics & Portable Medical sales declined by 13%, as this segment executed the planned multi-year Portable Medical exit announced in 2022. Electrochem sales decreased by 25%, returning to a normalized run-rate after previous higher sales from the supply chain recovery. The company noted that pipeline of development programs increased 230% over the last five years.
The company highlighted its recent acquisition of certain assets of InNeuroCo, Inc. The acquisition, which closed on October 1, 2023, is expected to immediately benefit the company’s earnings per share. InNeuroCo brings deep design expertise and manufacturing capabilities in high-growth neurovascular catheters primarily used in the treatment of ischemic stroke and intracranial aneurysms. The acquisition involved a purchase price of $42 million, with additional considerations contingent on specific revenue targets being achieved through 2027. InNeuroCo is expected to achieve sales of approximately $25 million in 2023, with a positive margin profile. Consequently, Integer paid 1.7x sales for the assets.
The company demonstrated strong profitability growth. Non-GAAP adjusted operating income increased by $18 million to $64 million, marking a 39% increase. Non-GAAP adjusted EPS increased by $0.32 per share, reaching $1.27 per share. Street forecasts called for adjusted earnings of $1.10. Adjusted EBITDA showed significant growth, increasing by $18 million to $81 million, demonstrating a substantial 28% rise.
The company guidance for 2023 includes a sales range of $1.575 to $1.595 billion, reflecting a growth of 14% to 16%. EBITDA is expected to reach $302 to $310 million, representing an 18% to 21% increase. Adjusted EPS is projected to be $4.47 to $4.67, indicating a 15% to 20% increase. Cash flow from operating activities is estimated to reach $185 to $205 million, reflecting a substantial 59% to 76% growth.
Dziedzic, Integer’s President and CEO, expressed his satisfaction with the company’s third-quarter performance, stating, “As we continue to see strong customer demand across our targeted growth markets, we are increasing our full-year sales outlook to 15% growth at the midpoint. Additionally, we are raising our adjusted operating income outlook to 25% growth at the midpoint.”