Integer Holdings Corp (ITGR)

Integer Holdings Corporation is one of the world’s largest medical device contract development and manufacturing organizations (CDMOs), serving the Cardio and Vascular, Neuromodulation, and Cardiac Rhythm Management markets. The company’s primary customers include large, multi-national original equipment manufacturers (OEMs) and their affiliated subsidiaries. The CDMO industry has traditionally been highly fragmented amongst several hundred companies, many of which have limited manufacturing capabilities and limited sales and marketing expertise. Very few companies offer the scope of manufacturing capabilities and services that Integer provides to medical device companies. The company competes against different companies depending on the type of product or service offered or the geographic area served, and also faces competition from existing and prospective customers that employ in-house capabilities to produce some of the products it provides. Competitive advantage is generally based on reputation, quality, delivery, responsiveness, breadth of capabilities including design and engineering support, price, customer relationships, and increasingly the ability to provide complete supply chain solutions rather than only producing and providing individual components.

Integer’s primary competitors are not named individually in the filing, but the company notes that it competes against suppliers with different subsets of its manufacturing capabilities, suppliers that concentrate in niche markets, and suppliers that have, are developing, or may in the future develop broad manufacturing capabilities and related services. The company’s brands include Greatbatch Medical and Lake Region Medical. During 2025, three customers—Abbott Laboratories, Boston Scientific, and Medtronic—were each in excess of 10% of total sales and collectively accounted for 49% ¹ of total sales. The company believes that the diversification of its sales among various subsidiaries and market segments with those three customers reduces its exposure to negative developments with any one customer. As of December 31, 2025, the company owned 731 ² patents, including both U.S. and foreign patents, and has license rights to a number of other patents.

Integer generates revenue by designing, developing, and manufacturing components, subassemblies, assemblies, and finished medical devices for OEM customers. The company operates its business in one reportable segment and derives its revenues from three principal product lines: Cardio & Vascular, Cardiac Rhythm Management & Neuromodulation, and Other Markets. With limited exceptions, the company sells its products directly to its customers, including large, multi-national OEMs and their affiliated subsidiaries. In 2025, approximately 53% ³ of products sold were shipped to locations in the United States. Contracts with customers can include rebates and tiered pricing arrangements based on predetermined volume levels, in which higher volume levels typically have lower pricing, or specific prices are offered to customers in exchange for increased volume levels and/or longer contract terms. Typically, contracts specify minimum order quantities and lead times. Firm backlog orders at December 31, 2025 were approximately $675 million ⁴, with the majority expected to be shipped within one year.

The Cardio & Vascular product line leverages a global footprint to produce a full range of components, subassemblies, and finished devices used in interventional cardiology, structural heart, heart failure, peripheral vascular, neurovascular, interventional oncology, electrophysiology, vascular access, infusion therapy, hemodialysis, urology, and gastroenterology procedures. Key products include coronary stents, balloon catheters, atherectomy devices, imaging and sensing devices, chronic total occlusion solutions, guidewires, introducer sheaths, vascular closure devices, steerable sheaths and delivery catheters, implants used in transcatheter aortic valve replacement, stent grafts, embolic protection devices, micro guidewires, micro and access catheters, aspiration catheters, stent retrievers, embolization coils, flow diverters, diagnostic and mapping catheters, ablation catheters, steerable transseptal sheaths, vascular access guidewires, stylets, valved/non-valved peelable and micro introducers, ureteral access sheaths, dilation devices, retrieval devices, ureteral stents, biopsy forceps, endoscopes, dilatation devices, snares, wire-formed and polymer stents, stent delivery systems, and RF ablation devices. Core areas of technical expertise include laser-cut hypotubes, catheter shafts, integrated hub assemblies, pad printing, tip shaping, hydrophobic and hydrophilic coatings, complex machining, and sensor integration. For 2025, Cardio & Vascular sales were $1,107,084,000 ⁵, an increase of 16.6% ⁶ compared to 2024, driven by strong growth from new product ramps in electrophysiology, contributions from acquisitions, and strong demand in neurovascular. Cardio & Vascular sales for 2025 included $58.7 million ⁷ of aggregate sales attributable to the 2025 acquisitions.

The Cardiac Rhythm Management & Neuromodulation product line offers design, development and manufacturing capabilities for components, sub-assemblies, assemblies, and finished medical device systems for the cardiac rhythm management (CRM) and neuromodulation (Neuro) markets. CRM products include implantable pacemakers, implantable cardioverter defibrillators (ICDs), insertable cardiac monitors (ICMs), implantable cardiac pacing and defibrillation leads, and heart failure therapies such as ventricular assist devices and cardiac resynchronization devices (CRT-P and CRT-D). The company’s portfolio includes components, sub-assemblies, and assemblies for active implantable pulse generators (IPGs), implanted sensing and stimulation leads, accessories, or external instruments, with leadership positions in battery, capacitor, and feedthrough technology, including filtered feedthroughs. The company is also a supplier of medical stamped components, and shallow and deep draw casings and assemblies. Neuro products include implantable spinal cord stimulators for chronic pain, sacral nerve stimulators for incontinence, deep brain stimulators for movement disorders, and other IMDs to treat psychiatric disorders, sleep disorders and hearing loss, as well as emerging applications such as implanted bioelectronic devices. The company offers Xcellion lithium-ion rechargeable batteries, QMR and CFx non-rechargeable batteries, feedthroughs, device enclosures, machined components and lead components and sub-assemblies. For 2025, Cardiac Rhythm Management & Neuromodulation sales were $668,803,000 ⁸, an increase of 1.2% ⁹ compared to 2024, with Cardiac Rhythm Management and Neuromodulation growing at market, offset by the planned decline of an early spinal cord stimulation neuromodulation finished implantable pulse generator (non-emerging) customer announced in 2020. Other Markets sales for 2025 were $77,750,000 ¹⁰, a decrease of 26.9% ¹¹ compared to 2024, driven by the decline in Portable Medical from the multi-year exit announced in 2022. Other Markets include minimally invasive surgery, general surgery, orthopedics, and Portable Medical, which includes customized rechargeable batteries and chargers to power medical devices across multiple clinical markets including patient monitoring, ventilators, portable defibrillators, portable ultrasound and X-Ray machines. The company initiated plans to exit the portable medical market in 2021 and currently expects Portable Medical sales to wind down with the final sales and market exit occurring in 2026 ¹².

On January 7, 2025, the company acquired substantially all of the assets and assumed certain liabilities of certain subsidiaries of Katahdin Industries, Inc., including its main operating subsidiary, Precision Coating LLC, for total consideration transferred of $153.5 million ¹³, including contingent consideration, working capital and other purchase price adjustments. On February 28, 2025, the company acquired substantially all of the assets and assumed certain liabilities of Vertical Solutions, Inc., d/b/a VSi Parylene, for total consideration transferred of $24.0 million ¹⁴, including shares of Integer’s common stock with a fair value of $4.0 million ¹⁵, contingent consideration, working capital and other purchase price adjustments. On December 4, 2025, the company acquired certain assets of Biocoat Incorporated for total consideration transferred of $15.0 million ¹⁶, including contingent consideration, working capital and other purchase price adjustments. On March 18, 2025, the company issued $1.0 billion ¹⁷ in aggregate principal amount of 1.875% Convertible Senior Notes due in 2030, with total net proceeds of $976.1 million ¹⁸. The company used $71.0 million ¹⁹ of the net proceeds to fund the cost of entering into capped call transactions relating to the 2030 Convertible Notes, and used a portion of the remaining net proceeds to exchange $383.7 million ²⁰ in aggregate principal amount of its outstanding 2.125% Convertible Senior Notes due in 2028 for an aggregate cash exchange consideration of $384.4 million ²¹ in cash and 1,553,806 ²² shares of common stock. Contemporaneously with the Note Exchange Transactions, the company terminated a portion of the capped call transactions related to the 2028 Convertible Notes and received 436,963 ²³ shares of common stock. On November 4, 2025, the Board of Directors approved a share repurchase program authorizing the repurchase of up to $200.0 million ²⁴ of common stock. During 2025, the company repurchased 698,356 ²⁵ shares of common stock for a total of $50.0 million ²⁶. As of December 31, 2025, approximately $150 million ²⁷ remained available under the program. On February 19, 2026, the company entered into an accelerated share repurchase agreement to repurchase approximately $50.0 million ²⁸ of common stock.

Total sales for 2025 were $1,853,637,000 ²⁹, an increase of 8.0% ³⁰ compared to $1,716,596,000 ³¹ in 2024. Gross profit for 2025 was $500,386,000 ³², compared to $459,014,000 ³³ in 2024, with gross margin of 27.0% ³⁴ versus 26.7% ³⁵ in the prior year. Operating income for 2025 was $221,264,000 ³⁶, compared to $208,238,000 ³⁷ in 2024, with operating margin of 11.9% ³⁸ versus 12.1% ³⁹ in the prior year. Income from continuing operations for 2025 was $102,830,000 ⁴⁰, or $2.89 ⁴¹ per diluted share, compared to $121,053,000 ⁴², or $3.40 ⁴³ per diluted share, for 2024. Net income for 2025 was $102,808,000 ⁴⁴, compared to $119,896,000 ⁴⁵ in 2024. Cash provided by operating activities for 2025 was $196,148,000 ⁴⁶, compared to $205,205,000 ⁴⁷ in 2024.

The company expects 2026 sales growth to be impacted by lower sales related to three new products due to lower than anticipated market adoption, and believes the magnitude of these changes on multiple products at the same time is highly unusual. The company expects 2026 capital expenditures to approximate between $95 million ⁴⁸ to $105 million ⁴⁹, with a significant portion related to additional upgrades of manufacturing facilities, as well as for manufacturing equipment to support productivity initiatives and information technology systems.

The company’s Cardio & Vascular product line has active projects in structural heart delivery systems subassemblies, structural heart delivery accessories, components for structural heart implants, electrophysiology catheters, accessories and subassemblies, peripheral vascular catheters and guidewires, neurovascular therapies to prevent hemorrhagic and ischemic stroke, enhanced access introducers, gastrointestinal scope components, fractional flow reserve guidewire subassemblies, sensor-enabled guidewires, and oncology catheters. Technology investments are being made to enable customer catheter, delivery system, introducer, guidewire, and implant development programs in core Cardio & Vascular markets. The Cardiac Rhythm Management & Neuromodulation product line has active projects to develop custom batteries, filtered feedthroughs, high voltage capacitors and finished device solutions including both leads and IPG systems that reduce the size and cost, while improving performance, for cardiac and neuromodulation devices.

The company’s inorganic strategy will be primarily focused on strategic “tuck-in” acquisitions that will supplement its existing product portfolio. The company expects to continue to engage in business development activities and technology licensing arrangements to support growth in its key existing growth markets. The company believes it has the scale and global presence, supported by world-class engineering, manufacturing, and quality capabilities, to capture opportunities, drive sales growth, and expand margins over the long-term.

Gross margin for 2025 increased 30 basis points ⁵⁰ compared to 2024, and the company expects gross margin to fluctuate over time depending on factors including the average sales price of products and services and transaction volume growth. The company continuously evaluates its business and identifies opportunities to realign resources to better serve customers and markets, improve operational efficiency and capabilities, and lower operating costs. In 2025, the company commenced a Global Manufacturing Alignment initiative designed to leverage its global footprint and scale to consolidate certain operations, estimating aggregate pre-tax charges of between approximately $25 million ⁵¹ and $30 million ⁵², the majority of which are expected to be cash expenditures. In 2023, the company commenced a Research and Product Development Alignment initiative to consolidate certain research and product development operations, estimating aggregate pre-tax charges of between approximately $7 million ⁵³ and $8 million ⁵⁴. In 2022, the company initiated plans to relocate manufacturing of certain products, estimating aggregate pre-tax charges of between approximately $6 million ⁵⁵ and $7 million ⁵⁶.

The company’s manufacturing and engineering services include design, testing, component manufacture, and device manufacture, as well as regulatory and clinical services including product registration, clinical evaluations, and post-market surveillance. The company has integrated its proprietary technologies in its own products and those of its customers, with flexible, high productivity manufacturing capabilities spanning sites across the U.S., Mexico, Uruguay, Ireland, Malaysia, Costa Rica and the Dominican Republic. As of December 31, 2025, the company operated 21 ⁵⁷ facilities in the U.S., 3 ⁵⁸ in Mexico, 3 ⁵⁹ in Ireland, and one facility each in the Dominican Republic, Uruguay, Malaysia, China, Costa Rica and Switzerland. Of these facilities, 26 ⁶⁰ were leased and 7 ⁶¹ were owned. The company occupies approximately 2.3 million ⁶² square feet of manufacturing and RD&E space worldwide. The company expects 2026 capital expenditures to approximate between $95 million ⁶³ to $105 million ⁶⁴.

Research, development and engineering (RD&E) expenses for 2025 were $49,499,000 ⁶⁵, compared to $53,425,000 ⁶⁶ in 2024. The company’s scientists, engineers and technicians focus on developing new products, improving and enhancing existing products, and expanding the use of products in new or tangential applications. The company also engages outside research institutions for unique technology projects. Capital expenditures for 2025 totaled $91.0 million ⁶⁷, compared to $105.4 million ⁶⁸ in 2024 and $119.9 million ⁶⁹ in 2023. On November 4, 2025, the Board of Directors approved a share repurchase program authorizing the repurchase of up to $200.0 million ⁷⁰ of common stock. As of December 31, 2025, approximately $150 million ⁷¹ remained available under the program. On February 19, 2026, the company entered into an accelerated share repurchase agreement to repurchase approximately $50.0 million ⁷² of common stock. The company has not paid cash dividends in the past and does not anticipate paying any cash dividends in the foreseeable future.

The company’s future results of operations and liquidity could be materially adversely affected by uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, changes in interest rates, disruptions in the commodities’ markets or in supply chain as a result of wars in Ukraine and the Middle East, and the tensions in Asia relating to China and Taiwan, and the introduction of or changes in tariffs or trade barriers. Specific impacts to the business may include increased borrowing costs, labor shortages, disruptions in the supply chain, delayed or reduced customer orders and sales, delays in shipments to and from certain countries and potential increased expenses resulting from tariffs or other trade barriers. The company expects 2026 sales growth to be impacted by lower sales related to three new products due to lower than anticipated market adoption, and believes the magnitude of these changes on multiple products at the same time is highly unusual.

The company is subject to pricing pressures from customers and contractual pricing constraints, and has reduced prices for some customers in recent years, expecting customer pressure for continued price reductions in future periods. The company relies on third-party suppliers for raw materials, key products, subcomponents, and services, and the supply and price of raw materials has been and may continue to be susceptible to fluctuations due to transportation issues, government regulations, price controls, industry bans, wars in Ukraine and the Middle East, increased tensions in Asia relating to China and Taiwan, changing geopolitical conditions, tariffs, worldwide economic conditions or other unforeseen circumstances. The company’s sales outside the U.S., which accounted for approximately 47% ⁷³ of sales for 2025, and its operations in Europe, Asia, Mexico, South America, Central America and the Caribbean are subject to a number of risks and potential costs, including changes in foreign economic conditions or regulatory requirements, exchange controls, currency restrictions and changes in foreign currency exchange rates, trade protection measures including tariffs, work force instability and differing labor regulations, political and economic instability, and transportation delays or interruptions.

Management’s message emphasizes that Integer’s mission is to advance the goals of its medical device customers through industry-leading engineering and manufacturing, with a relentless commitment to quality, service, and innovation. The three key focus areas are Customer Success (Customer Experience and Impactful Innovation), Operational Excellence (Integer Operating System and Integer Production System), and Leadership Impact (Leadership Capability and Engaged Associates). Management believes the company is well-positioned within the medical device market with a robust pipeline of opportunities, and believes it has the scale and global presence, supported by world-class engineering, manufacturing, and quality capabilities, to capture these opportunities, drive sales growth, and expand margins over the long-term. Management states that in 2026, sales growth is expected to be impacted by lower sales related to three new products due to lower than anticipated market adoption, and believes the magnitude of these changes on multiple products at the same time is highly unusual. Management expects 2026 capital expenditures to approximate between $95 million ⁸⁰ to $105 million ⁸¹.

Total sales for 2025 were $1,853,637,000 ⁸² compared to $1,716,596,000 ⁸³ in 2024. Income from continuing operations was $102,830,000 ⁸⁴ for 2025 compared to $121,053,000 ⁸⁵ for 2024. Diluted earnings per share from continuing operations were $2.89 ⁸⁶ for 2025 compared to $3.40 ⁸⁷ for 2024. Operating income was $221,264,000 ⁸⁸ for 2025 compared to $208,238,000 ⁸⁹ for 2024. Gross profit was $500,386,000 ⁹⁰ for 2025 compared to $459,014,000 ⁹¹ for 2024, with gross margin of 27.0% ⁹² compared to 26.7% ⁹³. Net cash provided by operating activities was $196,148,000 ⁹⁴ for 2025 compared to $205,205,000 ⁹⁵ for 2024. As of December 31, 2025, cash and cash equivalents were $17,161,000 ⁹⁶ compared to $46,543,000 ⁹⁷ at December 31, 2024. Total debt, net of deferred debt issuance costs and unamortized discounts, was $1,185,179,000 ⁹⁸ at December 31, 2025 compared to $990,153,000 ⁹⁹ at December 31, 2024. The company recorded a $46.7 million ¹⁰⁰ debt conversion inducement expense within Other loss, net in 2025 related to the partial exchange of the 2028 Convertible Notes, which reduced headline net income. Cardio & Vascular sales for 2025 were $1,107,084,000 ¹⁰¹, Cardiac Rhythm Management & Neuromodulation sales were $668,803,000 ¹⁰², and Other Markets sales were $77,750,000 ¹⁰³.

The company depends heavily on a limited number of customers, with the top three customers collectively accounting for approximately 49% ⁷⁴ of revenues in 2025, and the loss of any large customer or a material reduction of business with that customer would harm the business. The company has significant indebtedness, with $1.2 billion ⁷⁵ in principal amount of debt outstanding at December 31, 2025, and debt service obligations estimated to be approximately $27 million ⁷⁶ for 2026, which could require a large portion of cash flow to be dedicated to servicing debt and limit flexibility. The company relies on third-party suppliers for raw materials, and there are a limited number of worldwide suppliers for several raw materials needed to manufacture products, with a disruption or delay in deliveries potentially having an adverse effect on the ability to meet commitments to customers. The company’s international operations expose it to risks including changes in foreign economic conditions, currency exchange rate fluctuations, and trade protection measures such as tariffs, with sales outside the U.S. accounting for approximately 47% ⁷⁷ of sales for 2025. The company may never realize the full value of its intangible assets, which at December 31, 2025 were $1.9 billion ⁷⁸ of goodwill and other intangible assets, representing 57% ⁷⁹ of total assets.