Integer Holdings Corp (ITGR) 2024 Q3 法說會逐字稿

Hello and welcome to the Integer Holdings Corporation third quarter, 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad.

您好，歡迎參加 Integer Holdings Corporation 2024 年第三季財報電話會議。所有線路均已靜音，以防止任何背景噪音。演講者發言後，將進行問答環節。如果您想在此期間提問，只需按下電話鍵盤上的星號一即可。

I would now like to turn the conference over to Andrew Senn, Senior Vice President of Strategy Business Development and Investor Relations. You may begin.

我現在想將會議交給策略業務開發和投資者關係高級副總裁安德魯·森恩 (Andrew Senn)。你可以開始了。

Good morning everyone. Thank you for joining us and welcome to Integer's third quarter, 2024 earnings conference call with me today are Joe W. Dziedzic, President and Chief Executive Officer and Diron Smith, Executive Vice President and Chief Financial Officer.

大家早安。感謝您加入我們，並歡迎今天與我一起參加 Integer 2024 年第三季度收益電話會議的有總裁兼首席執行官 Joe W. Dziedzic 和執行副總裁兼首席財務官 Diron Smith。

As a reminder, the results and the data we discuss today reflect the consolidated results of Integer for the periods indicated except for cash flow measures. Prior period amounts have been recast to exclude the electrochem business consistent with US GAAP continuing operations presentation. Unless otherwise stated, all results and comparisons are presented on a continuing operations basis.

提醒一下，我們今天討論的結果和數據反映了 Integer 在所示期間（現金流量指標除外）的綜合結果。前期金額已根據美國公認會計原則持續經營業務報告進行了重新調整，以排除電化學業務。除非另有說明，所有結果和比較均以持續經營為基礎提供。

In the appendix of today's presentation, we have provided supplemental information which will help you update your financial models to reflect the impact of discontinued operations.

在今天簡報的附錄中，我們提供了補充信息，這將幫助您更新財務模型以反映已終止營運的影響。

During our call, we will discuss some non-GAAP financial measures. For reconciliation of non GAAP financial measures, please refer to the appendix of today's presentation, today's earnings press release and the trending schedules which are available on our website at Integer.net.

在電話會議中，我們將討論一些非公認會計準則財務指標。有關非 GAAP 財務指標的調節，請參閱今天簡報的附錄、今天的收益新聞稿以及我們網站 Integer.net 上提供的趨勢表。

Please note that today's presentation includes forward-looking statements.

請注意，今天的演示包含前瞻性陳述。

Please refer to the company's SEC filings for a discussion of the risk factors that could cause our actual results to differ materially. On today's call, Joe will provide his opening comments and Diron will then review our adjusted financial results for the third quarter, 2024 and provide an update on full year 2024 outlook.

請參閱該公司向 SEC 提交的文件，以了解可能導致我們的實際結果出現重大差異的風險因素的討論。在今天的電話會議上，Joe 將發表開場評論，Diron 隨後將審查我們調整後的 2024 年第三季財務業績，並提供 2024 年全年展望的最新資訊。

Joe will come back to provide his closing remarks and then we'll open up the call for your questions. With that, I will turn the call over to Joe.

喬將回來發表結束語，然後我們將開始電話詢問您的問題。這樣，我就把電話轉給喬。

Thank you, Andrew and congrats on the new role and thank you to everyone for joining the call today this morning. In addition to our strong earnings announcement, we also announced the promotion of Payman Khales into the newly created role of Chief Operating Officer for Integer. Payman joined Integer in 2018 as President of our cardio and vascular business.

謝謝你，安德魯，恭喜你擔任新職務，並感謝大家今天早上加入電話會議。除了強勁的獲利公告外，我們還宣布晉升 Payman Khales 為 Integer 新設立的營運長。Payman 於 2018 年加入 Integer，擔任心血管業務總裁。

I'm also excited to announce that Andrew Senn will become the President of the cardiovascular business, succeeding Payman.

我還很高興地宣布安德魯·森 (Andrew Senn) 將接替佩曼 (Payman) 成為心血管業務總裁。

Andrew has been with Integer for the last 18 years and a variety of leadership roles primarily within our cardio and vascular business.

Andrew 在 Integer 工作了 18 年，主要在我們的心血管業務領域擔任過各種領導職務。

You know him currently as our investor relations, business development and strategy leader for Integer. Both Payman and Andrew have been integral leaders in the development, execution and success of our strategy. Payman and Andrew will transition into their new roles in the first quarter of 2025.

您知道他目前擔任 Integer 的投資者關係、業務開發和策略負責人。佩曼和安德魯都是我們策略的發展、執行和成功過程中不可或缺的領導者。Payman 和 Andrew 將於 2025 年第一季過渡到新角色。

In the third quarter, we delivered another quarter of strong year over year results. Sales grew 9% and our adjusted operating income grew 17%. On a year-to-date basis, sales have grown 10% and operating income is up 23% or 2.3 times the rate of sales growth.

在第三季度，我們又取得了年比強勁的業績。銷售額成長 9%，調整後營業收入成長 17%。今年迄今，銷售額成長了 10%，營業收入成長了 23%，即銷售額成長率的 2.3 倍。

We are narrowing our sales outlook to deliver 10% to 11% growth in 2024.

我們正在縮小銷售預期，預計 2024 年將實現 10% 至 11% 的成長。

We are confident in our ability to deliver strong sales growth given our high visibility to customer demand including ramping programs and high growth markets and additional guide wire capacity in Ireland.

鑑於我們對客戶需求的高度了解，包括斜坡計劃和高成長市場以及愛爾蘭的額外導絲產能，我們對實現強勁銷售成長的能力充滿信心。

In addition to this above market sales growth, we're driving margin expansion across the business.

除了高於市場的銷售成長之外，我們還在推動整個業務的利潤率擴張。

We are raising the midpoint of our full year profit and earnings per share outlook.

我們正在上調全年利潤和每股收益預期的中點。

Our manufacturing excellence initiatives are delivering operational improvements in direct labor turnover, direct material scrap reduction, lower overtime and direct labor efficiency.

我們的卓越製造計劃正在改善直接勞動力流動、減少直接材料廢料、減少加班時間和直接勞動力效率等方面的營運改善。

Combined with our strong Opex leverage, we are confident in our ability to meet our increased full year profit outlook at the midpoint of our outlook. We expect 20% adjusted operating income growth, an increase of $4 million over our prior guidance and nearly two times the rate of sales growth at midpoint.

結合我們強大的營運支出槓桿，我們有信心有能力在我們的展望中點實現全年利潤成長的預期。我們預計調整後的營業收入將成長 20%，比我們先前的指引增加 400 萬美元，幾乎是中點銷售成長率的兩倍。

We are also raising the midpoint of our adjusted earnings per share outlook to 16% year over year growth, an increase of $0.07 per share at midpoint over our prior guidance. On September 30th, we announced our entry into a definitive agreement to divest electrochem.

我們還將調整後每股收益前景的中位數上調至同比增長 16%，比我們之前的指導值中位數增加了 0.07 美元。9 月 30 日，我們宣布簽訂剝離 electrochem 的最終協議。

The divestiture of our non medical segment makes Integer a pure play medical technology company.

剝離我們的非醫療部門使 Integer 成為一家純粹的醫療技術公司。

The transaction is expected to be EPS neutral and generate $50 million in cash to support execution of our strategy.

此次交易預計將實現每股收益中性，並產生 5,000 萬美元現金以支持我們策略的執行。

The strong execution of our strategy by all Integer associates is enabling us to meet or exceed our strategic financial targets of growing sales at 200 basis points above the market, expanding adjusted operating income at 2 times the rate of sales growth and maintaining a debt leverage between 2.5 times and 3.5 times adjusted even top.

所有 Integer 員工對我們策略的有力執行使我們能夠達到或超過我們的策略財務目標，即銷售額增長高於市場 200 個基點，調整後營業收入以銷售額增長率的 2 倍擴大，並維持債務槓桿2.5倍和3.5倍調整連頂。

We believe our strategic financial objectives demonstrate differentiated results that will drive a valuation premium for our shareholders.

我們相信，我們的策略財務目標展現出差異化的結果，將為我們的股東帶來估價溢價。

I'll now turn the call over to Diron.

我現在將把電話轉給 Diron。

Thank you Joe, good morning everyone and thank you again for joining today's call as a reminder, unless otherwise noted, all results presented are on a continuing operations basis and exclude the electric and business which has been classified as a discontinued operation.

謝謝喬，大家早上好，再次感謝您參加今天的電話會議作為提醒，除非另有說明，否則提供的所有結果均基於持續經營業務，不包括已被歸類為已終止經營的電力和業務。

Knowing this is the first time you are seeing our results without the electric in business. I will first share our third quarter. Year-to-date results from continuing operations followed by the discrete third quarter, 2024 financial results. As usual, I will end with an update to our 2024 outlook through three quarters of 2024. We have delivered strong financial performance sales of $1.267 billion delivered 10% year over year growth on a reported basis and 6% on an organic basis which excludes the impact of our recent InNeuroCo and Pulse acquisitions. The strategic exit of the portable medical market and foreign currency fluctuations.

要知道，這是您第一次在沒有電力的情況下看到我們的結果。我將首先分享我們的第三季。持續經營業務的年初至今業績以及 2024 年第三季的獨立財務業績。像往常一樣，我將更新我們對 2024 年三個季度的 2024 年展望。我們的財務表現強勁，銷售額達 12.67 億美元，報告年增 10%，有機成長 6%（不包括我們最近收購 InNeuroCo 和 Pulse 的影響）。便攜式醫療市場的策略退出與外匯波動。

We delivered $266 million of adjusted ebita up $48 million compared to the prior year or an increase of 22%. Adjusted operating income grew 23% versus last year 2.3 times the rate of sales growth as we continue to make progress on our year over year margin expansion.

我們實現了 2.66 億美元的調整後稅前利潤，比前一年增加了 4,800 萬美元，增幅為 22%。隨著我們繼續在同比利潤率擴張方面取得進展，調整後營業收入比去年增長了 23%，是銷售成長率的 2.3 倍。

Third quarter, year-to-date adjusted operating income as a percent of sales was 16.5% which represents approximately 177 basis points of improvement versus a year ago, reflecting the continued improvement in manufacturing efficiency and operating expense leverage. Adjusted net income for the third quarter 2024 year-to-date is $133 million delivering $3.87 of adjusted earnings per share, up $0.67 or 21% from a year ago. In the third quarter of 2024 we again delivered strong financial results, sales of $431 million delivered 9% year over year growth on a reported basis and 4% on an organic basis.

第三季度，年初至今調整後營業收入佔銷售額的百分比為 16.5%，比去年同期提高約 177 個基點，反映出製造效率和營業費用槓桿率的持續改善。年初至今，2024 年第三季調整後淨利為 1.33 億美元，調整後每股收益為 3.87 美元，比去年同期成長 0.67 美元，即 21%。2024 年第三季度，我們再次取得了強勁的財務業績，銷售額達 4.31 億美元，報告年增 9%，有機成長 4%。

We delivered $96 million of adjusted ebita up $15 million compared to the prior year or an increase of 18%., while adjusted operating income grew 17% versus last year or 2 times the rate of sales growth. As we continue to make progress on our year over year margin expansion, third quarter, 2024 adjusted operating income as a percent of sales improved by 126 basis points to 17.5%. Adjusted net income for the third quarter of 2024 is $50 million delivering $1.43 of adjusted earnings per share, up $0.14 or 11% from the third quarter 2023. Both C&V and CRM&N product lines continue to deliver above market sales growth on a trailing four quarter basis.

我們實現了 9,600 萬美元的調整後稅前利潤，比去年增加了 1,500 萬美元，成長了 18%，而調整後的營業收入比去年增長了 17%，是銷售成長率的 2 倍。隨著我們在同比利潤率擴張方面繼續取得進展，2024 年第三季調整後營業收入佔銷售額的百分比提高了 126 個基點，達到 17.5%。2024 年第三季調整後淨利為 5,000 萬美元，調整後每股收益為 1.43 美元，比 2023 年第三季成長 0.14 美元，即 11%。C&V 和 CRM&N 產品線在過去四個季度的基礎上繼續實現高於市場的銷售成長。

The cardio and vascular product line trailing four quarter sales increased 15% year over year. C&D growth is driven by above market growth across all markets. New product ramps in electrophysiology and structural heart and the InNeuroCo and Pulse acquisitions. Cardiac rhythm management and neuromodulation trailing four quarter sales increased 7% year over year, driven by double digit neuromodulation growth from emerging PMA customers and normalized low single digit growth and cardiac rhythm management.

心血管產品線過去四個季度的銷售額年增 15%。C&D 的成長是由所有市場高於市場的成長所推動的。電生理學和結構心臟領域的新產品不斷湧現，並收購了 InNeuroCo 和 Pulse。受新興 PMA 客戶兩位數神經調節成長以及正常化的低個位數成長和心律管理的推動，心律管理和神經調節四個季度的銷售額同比增長 7%。

Further product line details are included in the appendix of the presentation which can be found on our website at Integer.net on a third quarter, 2024 year-to-date basis, we delivered $25 million more adjusted net income than we did in the first three quarters of 2023.

更多產品線詳細資訊包含在簡報的附錄中，可以在我們的網站 Integer.net 上找到，截至 2024 年第三季度，我們的調整後淨利潤比第一季度增加了 2500 萬美元2023 年的四分之三。

Strong sales acquisition performance and operational improvements which include improving manufacturing efficiencies and operating cost leverage delivered $32 million of the increase. This was partially offset by higher interest expense of approximately $7 million.

強勁的銷售業績和營運改善（包括提高製造效率和營運成本槓桿）帶來了 3,200 萬美元的成長。這被約 700 萬美元的較高利息支出部分抵消。

The year-to-date increase in interest expense is primarily due to a higher average debt balance during the period driven by the previously discussed acquisitions of InNeuroCo and Pulse technologies.

年初至今利息支出的增加主要是由於先前討論的 InNeuroCo 和 Pulse 技術收購導致平均債務餘額增加。

Our year-to-date adjusted effective tax rate was 18.7% for 2024. Consistent with the same period a year ago, increases in the effective tax rate are primarily due to the pillar 2, 15% global minimum tax and impact of the Malaysian tax holiday extradition. Fully all set by discrete items such as higher research tax credits and other tax planning initiatives.

2024 年年初至今調整後的有效稅率為 18.7%。與去年同期一致，有效稅率的增加主要是由於支柱2、15%的全球最低稅率以及馬來西亞免稅期引渡的影響。完全由離散項目（例如更高的研究稅收抵免和其他稅務規劃措施）設定。

Historical GAAP and non GAAP cash flow measures have not been adjusted to remove electrochem consistent with the applicable GAAP presentation on the statement of cash flows leverage. Also a non GAAP measure has similarly not been adjusted in the third quarter. 2024 we generated $72 million of cash flow from operations, up $9 million from a year ago and up $24 million from the prior quarter.

歷史 GAAP 和非 GAAP 現金流量指標尚未根據現金流量槓桿表中適用的 GAAP 表述進行調整以刪除電化學。第三季的非公認會計準則指標也同樣沒有調整。 2024 年，我們的營運現金流量為 7,200 萬美元，比去年同期增加 900 萬美元，比上一季增加 2,400 萬美元。

This strong performance was driven by improved operational execution, primarily from higher sales, improved margins and continued management of working capital.

這一強勁業績的推動因素是營運執行力的提高，主要來自銷售額的增加、利潤率的提高和營運資本的持續管理。

In the third quarter, we generated $46 million of free cash flow, inclusive of $26 million of capital expenditures.

第三季度，我們產生了 4,600 萬美元的自由現金流，其中包括 2,600 萬美元的資本支出。

On a year-to-date basis, we have generated $142 million in cash flow from operations. A 14% increase versus a year ago.

年初至今，我們的營運現金流已達 1.42 億美元。與一年前相比增加了 14%。

Strong cash flow from operations has supported $86 million of year-to-date investments in capital expenditures resulting in year-to-date free cash flow of $56 million, an increase of 33% compared to the same period last year.

強勁的營運現金流支持了年初至今 8,600 萬美元的資本支出投資，導致年初至今的自由現金流達到 5,600 萬美元，比去年同期成長了 33%。

Net total debt is $1.055 billion at the end of the third quarter, 2024 which is a $41 million reduction compared to the second quarter ending balance. As a result, our net total debt leverage at the end of the third quarter was 3.0 times trailing four quarter adjusted EBITA which is at the midpoint of our strategic target range of 2.5 times to 3.5 times.

截至 2024 年第三季末，淨債務總額為 10.55 億美元，比第二季期末餘額減少 4,100 萬美元。因此，第三季末我們的淨總負債槓桿率為 3.0 倍，較去年第四季調整後的 EBITA 為 3.0 倍，處於我們策略目標範圍 2.5 倍至 3.5 倍的中點。

As Joe mentioned earlier, we are narrowing our 2024 sales outlook and raising the midpoint of our 2024 profit and earnings per share outlook with strong year-to-date margin performance from execution on our manufacturing excellence initiatives. We have increased confidence and are raising the adjusted operating income outlook by $4 million at the midpoint.

正如 Joe 之前提到的，我們正在縮小 2024 年的銷售前景，並提高 2024 年利潤和每股收益前景的中點，因為我們執行卓越製造計劃，年初至今利潤率表現強勁。我們信心增強，並將調整後營業收入前景中位數上調 400 萬美元。

We expect to deliver sales in the range of $1.770 billion to $1.727 billion, an increase of 10% to 11% versus last year on an organic basis. We expect sales growth of 7% to 8% which is approximately 200 basis points above our underlying market growth rate estimate of 4% to 6%.

我們預計銷售額將在 17.70 億美元至 17.27 億美元之間，較去年有機成長 10% 至 11%。我們預計銷售成長率為 7% 至 8%，比我們估計的 4% 至 6% 的基本市場成長率高出約 200 個基點。

In addition to our organic growth, we expect in InNeuroCo and Pulse acquisitions, partially all set by the portable medical market exit to contribute approximately 3% in organic growth.

除了我們的有機成長之外，我們預計 InNeuroCo 和 Pulse 的收購（部分由便攜式醫療市場退出決定）將貢獻約 3% 的有機成長。

We are raising our adjusted operating income outlook by $4 million at midpoint and expect 2024 adjusted operating income to be between $280 million and $288 million dollars million, reflecting year over year growth of 18% to 22%. At $284 million which is the midpoint adjusted operating income as a percent of sales is expected to grow 133 basis points compared to the full year 2023. Adjusted EBITA is expected to be between $358 million and $368 million, an increase of 18% to 21% compared to the prior year, similar to the adjusted operating income growth rate. Adjusted net income is expected to be between $181 million and $188 million reflecting a year over year growth of 16 %to 21%, up from our previous outlook of 12% to 21%.

我們將調整後營業收入預期中點上調 400 萬美元，預計 2024 年調整後營業收入將在 2.8 億美元至 2.88 億美元之間，年增 18% 至 22%。調整後營業收入佔銷售額的中點百分比為 2.84 億美元，預計與 2023 年全年相比將成長 133 個基點。調整後的 EBITA 預計在 3.58 億美元至 3.68 億美元之間，較上年增長 18% 至 21%，與調整後的營業收入增長率類似。調整後淨利潤預計在 1.81 億美元至 1.88 億美元之間，年增 16% 至 21%，高於我們先前預期的 12% 至 21%。

This delivers an expected adjusted EPS outlook between $5.24 and $5.43 which is growth of 14% to 18% year over year.

這使得調整後每股收益預期在 5.24 美元至 5.43 美元之間，年增 14% 至 18%。

Our updated adjusted EPS outlook reflects an increase versus our prior outlook of $0.07 per share at midpoint.

我們更新後的調整後每股盈餘預期較先前每股 0.07 美元的中點預期有所增加。

Our outlook assumes adjusted weighted average shares outstanding of $34.6 million shares taking into account estimated dilutive effect of the convertible notes based upon recent stock price performance.

我們的展望假設調整後加權平均已發行股數為 3,460 萬美元，並考慮到根據近期股價表現估計的可轉換票據的稀釋效應。

This solution is offset by an improvement in our adjusted operating income and improvements in our expected 2024 effective tax rate which is projected to be between 18% and 19%, down from our previous outlook of 18% to 20%. With above market sales growth and operational improvements from our manufacturing excellence initiatives. We have confidence in tightening our sales outlook and raising the midpoint of our adjusted operating income as a percent of sales since our guidance issued in July, which has been revised to exclude the impact from electric him. We have increased our adjusted operating income as a percent of sales by 20 basis points to 16.5%, now off 133 basis points versus 2023. As we begin the fourth quarter of 2024, we expect sales to increase versus the third quarter driven by new product ramps, increased skywire capacity and growth from emerging customers. With premarket approval products full year organic sales of 7% to 8% would imply 4th quarter organic growth of 11% and midpoint of our outlook.

該解決方案被我們調整後營業收入的改善和我們預期的 2024 年有效稅率的改善所抵消，預計有效稅率預計在 18% 至 19% 之間，低於我們先前預期的 18% 至 20%。我們的卓越製造計劃帶來了高於市場的銷售成長和營運改善。自 7 月發布指導以來，我們有信心收緊銷售前景，並提高調整後營業收入佔銷售額的中點，該指導已進行修訂以排除電動車的影響。我們將調整後營業收入佔銷售額的百分比提高了 20 個基點，達到 16.5%，與 2023 年相比減少了 133 個基點。隨著 2024 年第四季的開始，我們預計在新產品增加、Skywire 產能增加和新興客戶成長的推動下，銷售額將較第三季有所成長。如果產品上市前獲得批准，全年有機銷售額將達到 7% 至 8%，這意味著第四季度的有機成長將達到 11%，也是我們預期的中位數。

Moving to our 2024 cash outlook, we expect cash flow from operations between $195 million to $205 million which represents an 11% year over year increase at midpoint of outlook. Up from our previous outlook of 8% at the midpoint.

展望 2024 年現金前景，我們預期營運現金流在 1.95 億美元至 2.05 億美元之間，預計中位數年增 11%。高於我們先前預期的 8% 中點。

Our outlook for capital expenditures is $100 million to $110 million as we continue to invest in organic capabilities and capacity. As a result, we expect to generate free cash flow between $90 million to $100 million dollars million.

隨著我們繼續投資於有機能力和產能，我們的資本支出前景為 1 億至 1.1 億美元。因此，我們預計將產生 9,000 萬至 1 億美元的自由現金流。

We expect our 2024 year end net total debt to be between$970 million and $980 million. Versus our previous outlook, this represents a $45 million reduction at midpoint which is driven by the expected proceeds from the sale of electric and before the end of October. We expect to end the year with a leverage ratio between 2.6 times and 2.7 times trailing four quarter adjusted EBITA. Well, within our target range of 2.5 times and 3.5 times.

我們預計 2024 年底淨債務總額將在 9.7 億美元至 9.8 億美元之間。與我們先前的預期相比，這意味著中點將減少 4,500 萬美元，這是由 10 月底之前電力銷售的預期收益所推動的。我們預計到今年年底，槓桿率將達到四個季度調整後 EBITA 的 2.6 倍至 2.7 倍。嗯，在我們2.5倍和3.5倍的目標範圍內。

With that, I'll turn the call back to Joe and thank you.

這樣，我會將電話轉回給喬並表示感謝。

Thanks Diron.

謝謝迪隆。

We are successfully executing our strategy to deliver a very strong 2024 outlook after a strong 2023 over these two years combined, we expect to grow sales 29% and grow adjusted operating income 56% at the midpoint of outlook.

我們正在成功執行我們的策略，繼兩年強勁的 2023 年之後，我們將在 2024 年實現非常強勁的前景，我們預計銷售額將成長 29%，調整後的營業收入將成長 56%。

We are successfully executing our growth strategy both organically and inorganically to meet our strategic financial objectives for sales growth margin, expansion and debt leverage. We are confident this sustained level of performance will produce a premium valuation for our shareholders.

我們正在成功地有機和無機地執行我們的成長策略，以實現我們的銷售成長利潤、擴張和債務槓桿的策略財務目標。我們相信，這種持續的業績水準將為我們的股東帶來溢價估值。

We will now turn the call over to our moderator for the Q&A portion of the call.

現在，我們將把電話轉交給主持人進行電話問答部分。

Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you wish to withdraw your question, please press star one again.

謝謝。如果您想提問，請按電話鍵盤上的星號一。如果您想撤回您的問題，請再次按星號一。

Please ensure that your phone is not on mute when called upon. Thank you.

請確保您的電話在接到電話時未處於靜音狀態。謝謝。

Your first question comes from the line of Brett Fishbin with KeyBanc. Your line is open.

你的第一個問題來自 Brett Fishbin 和 KeyBanc 的路線。您的線路已開通。

Hey guys, good morning and thanks so much for taking the questions. I just wanted to start off briefly on the organic growth trend. And was just wondering, you know, you talked a lot about some of the year-to-date trends and then the implied 4Q exit rate, but maybe just specifically for the third quarter. If you could just touch on a little bit of the deceleration that we saw to 4.3% relative to the 7% year-to-date and what you think might have drove that. Thank you.

大家好，早安，非常感謝您提出問題。我只想簡單地介紹一下有機成長趨勢。我只是想知道，你知道，你談論了很多今年迄今為止的趨勢，然後是隱含的第四季度退出率，但可能只是專門針對第三季度。您能否簡單談談我們所看到的 4.3%（相對於今年迄今的 7%）的減速，以及您認為可能導致這種情況的原因。謝謝。

Great. Good morning Brett. Thanks for the question. So I'll, I'll start with to, to your highlights, 6% organic year-to-date. And our guidance is 7% to 8% organic for the full year, which is up slightly from our original guidance at the beginning of the year where we said 6% to 8%. So the bottom end on the organic has come up a little bit. And we, we had highlighted that what what we expected to happen throughout the year. And the biggest driver of the third quarter at 4%. The biggest driver is as we expected based on our order book and the, the ordering patterns that we saw at the beginning of the year, CRM. CRM was down versus the trend line that we had had in the first half of the year. We expected that because we could see that in the demand based upon the, the order book that we have, we would have been a little higher. We were 4% for the for the organic for the quarter would have been more like 5% but we had a little bit of an impact from the hurricane Helene and that happened at the end of the quarter. For us, we had to shut down our facility in Florida and the Dominican Republic to protect our associates that had a little bit of an impact. It wasn't a material or meaningful impact, but we would have been, we would have been 5% organic growth. The CMV segment would have been about 7% a little higher than, than the reported 6% of organic growth. So when we look at the quarter, it's, it's really what we expected in terms of the, all the moving parts. We had said on our February, our fourth quarter earnings call back in February beginning of this year that our order patterns showed that CRM would normalize into the in the second half of the year from an ordering and shipments perspective and, and that's what happened. So our neuromodulation business continued to perform very strongly. We, we saw continued growth there in the emerging PMA customers and in fact, the $100 million and $120 million that we had guided the year to for those emerging PMA customers are actually tracking to the high end of that range. And, and we, we have a strong, strong shipments in the fourth quarter for, for those emerging PMA customers. So we, we feel great about the fourth quarter outlook and the guidance.

偉大的。早安，布雷特。謝謝你的提問。因此，我首先要強調的是，今年迄今為止，有機比例為 6%。我們的全年有機有機率指引為 7% 至 8%，略高於年初我們所說的 6% 至 8% 的原始指引。所以有機物的底端已經上升了一點。我們強調了我們預計全年會發生什麼。第三季最大的推動因素為 4%。最大的推動力正如我們根據我們的訂單簿和年初看到的訂購模式 CRM 所預期的那樣。與上半年的趨勢線相比，CRM 有所下降。我們預計，因為我們可以看到，根據我們現有的訂單，我們的需求會更高一些。我們的有機率是 4%，本季的有機率應該是 5%，但我們受到了颶風海倫的影響，而這發生在本季末。對我們來說，我們不得不關閉在佛羅裡達州和多明尼加共和國的工廠，以保護我們的員工，這造成了一些影響。這不是實質的或有意義的影響，但我們本來可以，我們本來可以實現 5% 的有機成長。CMV 細分市場的有機成長約為 7%，略高於報告的 6%。因此，當我們審視本季時，所有活動部分確實符合我們的預期。我們曾在今年 2 月初的第四季財報電話會議上表示，我們的訂單模式顯示，從訂購和出貨的角度來看，CRM 將在下半年正常化，而事實就是如此。因此，我們的神經調節業務持續表現強勁。我們看到新興 PMA 客戶的持續成長，事實上，我們今年為這些新興 PMA 客戶指導的 1 億美元和 1.2 億美元實際上正在接近該範圍的高端。而且，對於那些新興的 PMA 客戶，我們在第四季度的出貨量非常強勁。因此，我們對第四季度的前景和指導感到非常滿意。

All right, thanks for the color and then just wanted to ask one quick follow up and congratulations to Andrew and Payman on the new roles and was just curious if you could maybe give a little bit more background around maybe the impetus for some of those changes. And you know, how you think the new team can build on some of the existing initiatives under this new structure? Thanks again. Yeah.

好吧，謝謝你的顏色，然後只是想問一個快速跟進，並祝賀安德魯和佩曼的新角色，我只是好奇你是否可以提供更多背景知識，也許是其中一些變化的推動力。您知道，您認為新團隊如何在新架構下的一些現有舉措的基礎上繼續發展？再次感謝。是的。

So it's really, it's really about continuing to execute our strategy and, and to outperform on a sustainable basis as, as we get bigger and continue to grow the size of the business. So it's really about executing the strategy and continuing to, to, to meet or exceed our financial objectives of sales growth above the market, organically operating profit. Payman and Andrew have been integral parts of, of the strategy for not only the CMV business but the whole company because different leaders have, have ownership over enterprise wide elements of our strategy and Andrew and Payman have been here since the beginning of the strategy. In 2018, Payman joined the company in early '18. Andrew's been with the company much longer, but he's been in the CMV business. During Payman's tenure, leading the, the cardio and vascular business. We've almost doubled the sales for cardiovascular. We're up over 90%, since Payman stepped into that leadership role, Andrew's been in the cardiovascular business for his entire career with, with Integer. He's, he's done everything from lead R&D to sales, to marketing you, you know, him more more recently as the enterprise wide leader for the strategy process for M&A and investor relations. They, they both know our customers and the industry incredibly well. So this is really about accelerating the execution of our strategy and giving two highly successful leaders broader responsibilities to help us continue to deliver for our customers and then ultimately for shareholders,

所以，這實際上是關於繼續執行我們的策略，並隨著我們不斷壯大並繼續擴大業務規模，在可持續的基礎上超越。因此，這實際上是關於執行策略並繼續、達到或超過我們的銷售成長高於市場的財務目標，有機營運利潤。Payman 和 Andrew 不僅是 CMV 業務策略的組成部分，而且是整個公司策略的組成部分，因為不同的領導者對我們策略的企業範圍要素擁有所有權，並且 Andrew 和 Payman 自該策略開始以來就一直在這裡。2018年，Payman於18年初加入公司。Andrew 在公司工作的時間要長得多，但他一直從事 CMV 業務。佩曼任職期間，領導心血管業務。我們的心血管產品銷售額幾乎翻了一番。自從 Payman 擔任領導職務以來，我們的股價上漲了 90% 以上，Andrew 的整個職業生涯都在 Integer 的心血管業務中度過。他做了從主導研發到銷售再到行銷的所有工作，你知道，他最近作為企業併購和投資者關係策略流程的領導者。他們非常了解我們的客戶和行業。因此，這實際上是為了加快我們策略的執行，並賦予兩位非常成功的領導者更廣泛的責任，以幫助我們繼續為客戶提供服務，最終為股東提供服務，

Your next question comes from the line of Craig Bijou with Bank of America. Please go ahead.

你的下一個問題來自美國銀行的 Craig Bijou。請繼續。

Good morning guys. Thanks for taking the questions. So I wanted to start. Can you guys just go over the the growth trends of, of your EP business over the last couple of quarters? And then, you know, when you, when we think about PFA I, I guess I want to ask directly if you know your expected benefit from, you know, PFA products, if, if that's changed at all, you know, you know, as of the end of Q3. And you know, I asked because I think investors are looking to see and maybe see some acceleration in that C&B business given, you know, the the launch of the products today and then the expected launch in coming in '25. So maybe if you could just kind of talk about the EP business PFA and then, you know, kind of frame how investors should be thinking about, you know, potential contribution from that emerging market.

早安，夥計們。感謝您提出問題。所以我想開始。可以簡單介紹一下你們的EP業務在過去幾季的成長趨勢嗎？然後，你知道，當你，當我們考慮 PFA I 時，我想我想直接問你是否知道 PFA 產品的預期收益，如果，如果這有任何改變，你知道，你知道，截至第三季末。你知道，我問這個問題是因為我認為投資者希望看到並可能看到 C&B 業務的加速發展，因為今天推出了產品，預計將在 25 年推出。因此，也許您可以談談 EP 業務 PFA，然後，您知道，建立一個投資者應該如何思考新興市場的潛在貢獻的框架。

Thanks for the question, Craig, I'll start with, we remain incredibly excited about PFA as a therapy and a technology and what it, what it can do for patients. And we're excited to be part of what's happening in the industry with, with this, this the growth of, of PFA. Our, our view and outlook hasn't changed. In fact, it, it continues to get better with, with every passing new clinical study and an announcement of progress across the industry on. It seems like every participant coming out with another evolution of their, their therapy and getting closer and closer to having more and more products in the market to deliver this, this new innovative therapy. For, for, for us, I'll highlight electrophysiology is an important part of our business, but it's one of, of many, it's one of our four targeted growth markets and, and, and then even then within electrophysiology, I think we've talked a lot about how we play across the, the full procedure, everything from access with guide introducers, guide wires the trans crossing as well as the diagnostic catheters that, that help perform the mapping and then to the ablation therapy itself where pulse field ablation specifically comes into play. So, electrophysiology is an exciting high growth market. We are highly vertically integrated. We have a very strong position and footprint across the the full procedure and, and, and, and, and we expect it to continue growing and we expect it to be a strong participant. And So our outlook hasn't changed every day. I think it, it just gets, it gets brighter and brighter with the industry's progress. But I'll just highlight, it's, it's one of many growth factors for us and I would not expect any one product or in market to be the single biggest driver or materially change the the company outlook. So it's in our guidance as, as we continue to work with customers on their, their new product rollouts, we can we will we continue to factor that into our outlook. Our electrophysiology business continues to outperform the market. You know, we track, we track our customers reported sales by end market. We then look at our sales by those end markets and we're still growing 1.5 ish times the the end market growth rate on a trailing four quarter basis. And we expect that to continue to accelerate as more and more products come to market.

感謝克雷格提出的問題，首先，我們對 PFA 作為一種療法和技術以及它能為患者做些什麼感到非常興奮。我們很高興能夠參與產業正在發生的事情，並伴隨著 PFA 的發展。我們的觀點和展望沒有改變。事實上，隨著每項新的臨床研究的通過以及整個行業的進展公告，它都在不斷變得更好。似乎每個參與者都提出了他們的療法的另一種演變，並且越來越接近市場上有越來越多的產品來提供這種新的創新療法。對於，對於，對我們來說，我要強調電生理學是我們業務的重要組成部分，但它是眾多目標之一，它是我們的四個目標成長市場之一，而且，甚至在電生理學領域，我認為我們我們已經討論了很多關於我們如何完成整個過程的內容，從引導導引器的進入、跨交叉的引導線以及幫助執行標測的診斷導管，然後到消融治療本身，其中脈衝場消融特別發揮作用。因此，電生理學是一個令人興奮的高成長市場。我們是高度垂直整合的。我們在整個程序中擁有非常強大的地位和足跡，我們期望它繼續成長，我們期望它成為一個強大的參與者。所以我們的觀點並沒有每天改變。我認為，隨著行業的進步，它會變得越來越光明。但我只想強調，這是我們的眾多成長因素之一，我不希望任何一種產品或市場成為最大的推動因素或實質改變公司的前景。因此，這是我們的指導方針，隨著我們繼續與客戶合作推出新產品，我們將繼續將這一點納入我們的前景中。我們的電生理學業務繼續跑贏大盤。你知道，我們追蹤我們的客戶報告的終端市場銷售情況。然後我們看看這些終端市場的銷售額，在過去四個季度的基礎上，我們的成長率仍然是終端市場成長率的 1.5 倍左右。我們預計，隨著越來越多的產品進入市場，這一趨勢將繼續加速。

Great, thanks Joe and if I can also ask on the acceleration in organic growth expected in in Q4 and understand you know, there's a, there's a number of moving pieces. So you, you're getting rid of electrochem. Portable medical is is coming out. So maybe if you can just help us understand expectations for, you know, acceleration organic growth acceleration by by segment, you know, so C&V, CRM&N and then and then even the advanced surgical just just kind of want to get a sense for where that organic growth is, is going to accelerate.

太好了，謝謝喬，我是否還可以詢問第四季度預計有機增長的加速情況，並且您知道，有很多變化。所以你，你正在擺脫電化學。便攜式醫療即將問世。因此，也許如果您能幫助我們了解對各細分市場加速有機增長的期望，那麼 C&V、CRM&N，然後甚至是高級手術只是想了解一下在哪裡有機增長將會加速。

Sure. So when you look at fourth quarter, it'll be a little different from a split between organic and reported that than the first three quarters. So in the first three quarters, you had roughly 400 basis points of difference between reported and and organic. In the fourth quarter, there's very little net in organic in the quarter, one of the acquisitions rolls off, it's, it's rolling '12 months and becomes organic and and then the other is offset by, by portable medical coming down in the fourth quarter. So when you look at that fourth quarter, guidance number, think of that as both reported and organic in in the quarter. So that that'll be a little, a little newu on there as you, as you stare at organic and inorganic split. So 4Q reported and organic are roughly the same, same number, same percentage in the fourth quarter. And, and we, we do expect to see continued improvement or acceleration in the growth rate and cardiovascular because of the new products that, that continue to ramp in that segment. And then on the CRM and neuro, we do expect the neuro sales to be stronger in the fourth quarter, in particular, from the emerging customer PMA. i commented earlier that that $100 million to $120 million range of emerging PMA customers, we expect to be at the high end of that. And, and there's a slightly higher percentage of those sales in the fourth quarter relative to a normal 25% for any given quarter because of the ramp plans and the commercialization plans of those customers. These are orders that we had visibility to at the beginning of the year because neuromod in particular, we, we have very long vis long order patterns and very good visibility, multiple quarters out. So we, we've seen this all year and this was our expectation for the flow of, of that demand. So and, and to, to your, to your question on, on the advanced surgical and, and Ortho we, we do have portable medical coming down which, which will be an in inorganic decline and, and on an on an organic basis, that's a very small piece of our business that, that functions more flattish in and in the long in the trend line.

當然。因此，當你觀察第四季時，你會發現有機數據和報告數據之間的劃分與前三個季度略有不同。因此，在前三個季度，報告數據和有機數據之間存在約 400 個基點的差異。在第四季度，該季度的有機淨收益非常少，其中一項收購在 12 個月內滾動並變得有機，然後另一項收購被第四季度便攜式醫療的下降所抵消。因此，當您查看第四季度的指導數字時，請將其視為該季度的報告數據和有機數據。所以，當你盯著有機和無機的分裂時，這會有點新。因此，第四季度的報告和有機報告大致相同，數字相同，百分比相同。而且，我們確實預計，由於新產品在該領域的持續成長，成長率和心血管疾病將持續改善或加速。然後在 CRM 和神經網路方面，我們確實預計第四季度的神經網路銷售將會更加強勁，特別是來自新興客戶 PMA 的銷售。我之前評論說，新興 PMA 客戶的價值在 1 億至 1.2 億美元之間，我們預計將處於該客戶的高端。而且，由於這些客戶的成長計劃和商業化計劃，第四季度的銷售額百分比相對於任何特定季度的正常 25% 略高。這些是我們在年初就可以看到的訂單，因為特別是 Neuromod，我們有非常長的訂單模式和非常好的可見性，已經有多個季度了。所以我們一整年都看到了這種情況，這是我們對需求流量的預期。所以，對於你的問題，關於先進的外科手術，以及我們，我們確實有便攜式醫療，這將是無機衰退，並且在有機基礎上，這是我們業務的一小部分，在趨勢線中和長期趨勢線中的功能更加平坦。

Got it. Thanks for taking the questions guys.

知道了。感謝你們提出問題。

Thank you.

謝謝。

Your next question, my apologies. Your next question comes from the line of RichNewitter with Truist Securities. Please go ahead.

你的下一個問題，我很抱歉。您的下一個問題來自 RichNewitter 和 Truist Securities 的線路。請繼續。

Hi, excuse me. Thanks for taking the questions. A couple for me, I guess just, just one you mentioned the hurricane impact in, in the third quarter, I guess, is that going to have any lingering impact into the fourth quarter? What, what divisions if there were specific ones were more impacted there? And and that segues into just my additional question on CRM and Neuro. Was it that division? And if not, just a little more color on, on why that is so soft, at least relative to to our expectations and seemingly consensus expectations. Thanks.

嗨，對不起。感謝您提出問題。對我來說，我想只是您提到的颶風影響，在第三季度，我想這會對第四季度產生任何揮之不去的影響嗎？如果有具體的部門，哪些部門受到的影響較大？這就引出了我關於 CRM 和 Neuro 的附加問題。是那個部門嗎？如果沒有，請多加一點色彩，說明為什麼如此疲軟，至少相對於我們的期望和看似一致的期望。謝謝。

Sure. So, thanks. Thanks for the question Rich. The first answer is it's mostly cardio and vascular coming out of the, the Florida facility and the Dominican Republic facility. The, the, the, the lingering impact will likely be cost because of having to shut down and then ramp back up and, and, and then run some overtime to, to catch up on, on the, the few days, two or three days that we had to shut down. So in the fourth quarter, we would expect to incur a little bit more cost. It was a small impact but it, but it was at the end of the quarter. And so you have really no time to react when it was the last few days of the third quarter. So that, that, that's on, on the hurricane impact. Fortunately, all of our associates are safe. And that the impact was far less than, than what was expected from, from that particular hurricane. On the, on this cardiac rhythm management neuromod question, I'll, I'll go back to what we said at the beginning of the year on our fourth quarter earnings call back in February you know, we, we looked at our order patterns that we saw from customers, given our order book and we could see that the demand for CRM products was less than the second half, which I would not point to or indicate necessarily has anything to do with the broader market trends because you look at the market trends. You know, some, some of the CRM participants had pretty strong growth, some had a little bit lower growth, but I, I don't know what I would point to it necessarily a market trend. I would look at this and say this is how customers were, were planning to run their facilities and the demand they placed on us across the year. We saw that at the beginning of the year, we said on our earnings call that we expected CRM to normalize in the second half, which meant be it a lower, lower run rate than it had been in the first half. And in 2023, that played out like we expected that it would we've got the fourth quarter baked expectation out of that order pattern baked into our guidance. I mean, we're sitting here now we're in the, the end of the fourth week of the quarter. We've got nine weeks to go and we've got really good visibility to the rest of the year. So we feel really good about the, the top line guidance that we've given and, and the split by, by segment that we guided to in our product line summary slides in the appendix of the presentation.

當然。所以，謝謝。感謝里奇的提問。第一個答案是，大部分心臟和血管產品來自佛羅裡達工廠和多明尼加共和國工廠。揮之不去的影響可能是成本，因為必須關閉然後再恢復，然後加班才能趕上幾天，兩三天我們不得不關閉的日子。因此，在第四季度，我們預計會產生更多的成本。這是一個很小的影響，但它是在季度末。所以當第三季的最後幾天你真的沒有時間反應。所以，這就是颶風的影響。幸運的是，我們所有的同事都很安全。這場颶風的影響遠小於預期。關於這個心律管理神經模式問題，我會，我會回到我們年初在二月份第四季度收益電話會議上所說的話，你知道，我們，我們研究了我們的訂單模式我們從客戶那裡看到，考慮到我們的訂單，我們可以看到對CRM 產品的需求低於下半年，我不會指出或表明這與更廣泛的市場趨勢有任何關係，因為你會看看市場趨勢。你知道，有些 CRM 參與者的成長相​​當強勁，有些的成長則稍低一些，但我不知道我會指出這必然是市場趨勢。我會看看這一點，並說這就是客戶的情況、他們計劃運營他們的設施以及他們全年對我們提出的要求。我們看到，在今年年初，我們在財報電話會議上表示，我們預計 CRM 將在下半年正常化，這意味著它的運作率將低於上半年。到 2023 年，情況正如我們預期的那樣，我們將把第四季度的預期從訂單模式中納入我們的指導中。我的意思是，我們現在正處於本季第四週的結尾。距離我們還有九週的時間，我們對今年剩餘時間的情況有很好的了解。因此，我們對我們提供的首要指導以及我們在簡報附錄中的產品線摘要幻燈片中所指導的細分市場感到非常滿意。

Great. Maybe just one last one. Joe, any, any selling day considerations we should be thinking about in 3Q and, or coming up in 4Q.

偉大的。也許只是最後一張。喬，我們應該在第三季和/或第四季考慮任何銷售日的考慮因素。

No, nothing significant. There might be plus or minus. I'd have to ask Diron internally. That's not something that, that we noticed once we, we went to a calendar year back in a calendar year for our reporting back, I think it was 2020. I think it was calendar year nine. No, it was actually the end of 2019, we went to a calendar year. So for the year it all washes out. We had been on a fiscal year which I think it was every six or seven years. We have an extra week. But we're on a calendar year basis. So there, there might be a day or two, but for, for how our business operates, we, we don't see that as a, as a meaningful impact.

不，沒什麼重要的。可能有正數或負數。我必須向 Diron 內部詢問。當我們回到一個日曆年進行報告時，我們並沒有註意到這一點，我認為那是 2020 年。我認為那是第九年。這不，其實已經是2019年底了，我們到了一個歷年。所以今年一切都消失了。我們的財政年度我認為是每六到七年一次。我們還有一週的時間。但我們是按日曆年計算的。因此，可能有一兩天，但對於我們業務的運作方式，我們認為這不會產生有意義的影響。

Thank you.

謝謝。

Your next, your next question comes from the line of Joanne Wuensch with City. Please go ahead.

你的下一個問題來自曼城的喬安妮‧文施 (Joanne Wuensch)。請繼續。

Good morning and thank you for taking the question. I know we're a little early on this, but can you provide any commentary for how you're thinking about 2025?

早上好，感謝您提出問題。我知道我們在這方面還為時過早，但您能否就您對 2025 年的看法發表評論？

I'd say we, we continue to focus on executing our strategic objectives, financial strategic objectives of organic growth, 200 basis points above the market. We, we had said at the beginning of this year, we thought 2024 was going to be a normal market growth relative to '23 which was above normal and based upon what we've seen in the market, we, I think that has played out to be a very normal kind of organic growth year for the industry. I have no reason at this point to believe 2025 is going to be any different than that. So we remain focused on delivering on our strategic objectives. Sales growing at least 200 basis points organically above the market and operating profit twice as fast growing twice as fast as sales. And I'll just highlight, we'll, we'll also be down at the low end of our, of our leverage range. By the end of this year. We, we shared that on our cash flow update where leverage at the end of the year is expected to be 2.6 times to 2.7 times ebitda.

我想說的是，我們繼續專注於執行我們的策略目標，即有機成長的財務策略目標，比市場高出 200 個基點。我們，我們在今年年初說過，我們認為2024 年將是一個正常的市場成長，相對於23 年來說，這是高於正常水平的，並且根據我們在市場上看到的情況，我們，我認為這已經發揮了作用對於該行業來說，這是非常正常的有機成長一年。目前我沒有理由相信 2025 年會有所不同。因此，我們仍然專注於實現我們的策略目標。銷售額成長至少高於市場 200 個基點，營業利潤成長速度是銷售額成長速度的兩倍。我要強調的是，我們也將降至槓桿範圍的低端。到今年底。我們在現金流更新中分享了這一點，預計年底的槓桿率為 EBITDA 的 2.6 倍至 2.7 倍。

Thank you and just to confirm what you're currently seeing in terms of your market growth that you think you'll be growing 200 basis points faster.

謝謝您，只是為了確認您目前所看到的市場成長情況，您認為您的成長速度將加快 200 個基點。

That's not our guidance, that's our objective. We'll provide formal guidance in February on our fourth quarter earnings call.

這不是我們的指導，這是我們的目標。我們將在二月的第四季財報電話會議上提供正式指導。

Okey dokey. Thank you so much.

好。太感謝了。

Thanks Joanne.

謝謝喬安妮。

Your next question comes from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

你的下一個問題來自馬修·奧布萊恩和派珀·桑德勒的對話。請繼續。

Good morning. Thanks for taking the questions. Maybe just sticking on Q4 for a second and before I do that, just congratulations to Payman and Andrew. But sticking on Q4, It does look like a little bit of a decel in terms of the two year stack. So I'm just curious, is that entirely CRM? Is there any any of the hurricane impact there that would cause that slow down or is it just you guys being somewhat conservative?

早安.感謝您提出問題。也許只是在第四季停留一秒鐘，在此之前，先祝賀佩曼和安德魯。但堅持第四季度，就兩年的堆疊而言，它看起來確實有點減速。所以我很好奇，這完全是 CRM 嗎？是否有任何颶風影響會導致速度減慢，或者只是你們有些保守？

Sure, I'm, I may not be tracking the two year stack at midpoint. We see, we see sales growth of about 11% operating profit in that, that same order of magnitude. So we think for the fourth quarter, we see strong sales growth based upon the, the new products we're rolling out and supporting in, in CMV and the neural mind acceleration of the emerging customer PMA. And so we feel good about that given that we're, we're sitting here four weeks into the quarter with, with nine to go. In the fourth quarter last year. Thinking about the, the comps fourth quarter last year was the, the highest quarter of the year. It was over $400 million of sales and, and the, the prior quarters were were well below $300 million, it was also the highest profitability of the year. It was 16.7%, AOI margin rate last year compared to the full year was 15.2% So you, you see the quarterly improvement. So on a year over year basis, fourth quarter is the toughest comp And if you look at our guidance for the fourth quarter, the midpoint from a profitability standpoint is the average operating marginal rate from for a year-to-date. So, we think the fourth quarter guidance is very consistent with year-to-date and I'll take this opportunity to highlight on a year-to-date basis. Our operating margins up 180 basis points year over year. We're at 16.5% operating margin rate year-to-date that compares to 14.7% last year and that's 100 bps from gross margins. So we're expanding gross margins, which has been a big focus for us this year in particular, coming out of coming out of all of the, the pandemic disruption and, and we're very focused on getting margin expansion and gross margin, but we're also getting 80 basis points of leverage on opex. So we're pleased with the progress we're making both in gross margin and ending it getting operated, operating leverage. So, I'm sorry if I didn't answer your question, but I'll take another shot at it.

當然，我可能不會在中點追蹤兩年的堆疊。我們看到，我們看到營業利潤的銷售成長約為 11%，同樣的數量級。因此，我們認為第四季度的銷售成長強勁，這是基於我們在 CMV 中推出和支援的新產品以及新興客戶 PMA 的神經思維加速。因此，我們對此感覺很好，因為我們已經坐在這裡第四週了，還有九週。去年第四季。想想看，去年第四季的業績是全年最高的季度。它的銷售額超過 4 億美元，而前幾季的銷售額遠低於 3 億美元，也是今年的最高獲利水準。是 16.7%，去年 AOI 利潤率與全年相比是 15.2% 所以你，你看到季度改善。因此，與去年同期相比，第四季度是最艱難的。因此，我們認為第四季的指導與年初至今非常一致，我將藉此機會強調年初至今的情況。我們的營業利益率年增 180 個基點。今年迄今為止，我們的營業利潤率為 16.5%，而去年為 14.7%，比毛利率高出 100 個基點。因此，我們正在擴大毛利率，這尤其是我們今年的一個重點，擺脫了所有大流行的干擾，而且我們非常注重擴大利潤率和毛利率，但我們的營運支出槓桿率也提高了 80 個基點。因此，我們對毛利率和營運槓桿的進展感到滿意。所以，如果我沒有回答你的問題，我很抱歉，但我會再試一次。

No, Joe, that was that perfect, appreciate that. And then in the, you know, just to continue to follow up on Craig's questions. But, but in the, in the electrophysiology business, I'm just curious, just given the shift we've seen so quickly to PFA. Are you guys feeling any kind of inventory work down on the traditional energy products via cryo or RF that's kind of even weighing a little bit on that part of your business. And then at some point is that really, I guess most to the side, you start to really see some of the PFA contribution to the business is that, is that a dynamic that we should consider at all? Thank you.

不，喬，那太完美了，謝謝。然後，你知道，只是繼續跟進克雷格的問題。但是，但是在電生理學領域，我只是很好奇，因為我們很快就看到了 PFA 的轉變。你們是否覺得透過低溫或射頻對傳統能源產品進行任何形式的庫存工作，這甚至對你們的這部分業務造成了一點影響？然後在某個時候，真的，我想最重要的是，你開始真正看到 PFA 對業務的一些貢獻是，這是我們應該考慮的動態嗎？謝謝。

So I we, we haven't seen any measurable, meaningful shift or change. I obviously, I think everybody believes Cryo is going to be impacted over time by pulse field ablation coming out. And, and so we are assuming and factoring in the kind of the broader industry expectation on cryo decline. But in the other applications, we we continue to see strong demand. Our customers continue to be very optimistic about about the broader electrophysiology marketplace and given our broad footprint and and participation across the the full procedure and given our, our significant vertical integration, we think we're incredibly well positioned to support the industry during this transition and help our customers bring, bring products to market as as fast as we all can on a safe basis. So we remain excited and, and don't haven't seen any meaningful shift beyond what you're hearing and seeing in the, in the broader industry and as we look at electrophysiology, given our broad footprint and vertical integration, we see it as a net tailwind for the company for sure.

所以，我們還沒有看到任何可衡量的、有意義的轉變或改變。顯然，我認為每個人都相信隨著時間的推移，Cryo 將受到脈衝場消融技術的影響。因此，我們假設並考慮了更廣泛的行業對低溫技術衰退的預期。但在其他應用中，我們繼續看到強勁的需求。我們的客戶仍然對更廣泛的電生理學市場非常樂觀，鑑於我們廣泛的足跡和整個過程的參與，以及我們重要的垂直整合，我們認為我們在這一轉型期間處於支持該行業的非常有利的位置並幫助我們的客戶在安全的基礎上盡快將產品推向市場。因此，我們仍然感到興奮，而且除了您在更廣泛的行業中聽到和看到的之外，沒有看到任何有意義的轉變，當我們研究電生理學時，考慮到我們廣泛的足跡和垂直整合，我們看到了這一點毫無疑問，這對公司來說是一個淨推動力。

Got it. And sorry, can I peak in one more?

知道了。抱歉，我可以再做一件事嗎？

Yes

是的

The big, the big R&D cut in the quarter. Why was that? Is that anything to be cautious about in terms of '25 or '26 in terms of investment there? I don't know if there was an adjustment that I missed in the in the release. Thanks

本季研發費用大幅削減。為什麼會這樣呢？就「25」或「26」的投資而言，有什麼需要謹慎的嗎？我不知道版本中是否有我錯過的調整。謝謝

And no adjustments. A great, it's a great question. So first off, we didn't cut R&D but nominally, we continue to spend more in R&D. What you're seeing there is higher levels of reimbursement or, or maybe the wrong term given your thought, you're understanding a reimbursement for our customers, higher levels of our customers paying us to do development work for them in the discrete third quarter compared to other quarters, I think in the last couple of years, you, you've heard us talk about how to think about our development revenues. We the R&D line is impacted by our development revenues. The cost for our development activity is very flat quarter to quarter throughout the year because it's primarily R&D engineers doing work. So they're on the payroll 365 days a year. When we get revenue, when we generate revenues get paid by our customers is connected to achieving milestones on those different development programs. And, and in previous years, what we saw was a pattern of more revenues later in the year, in particular, in the fourth quarter. As we, we and our customers work to hit milestones within the year and, and, and, and stay on track. We have been very focused on levelized, normalizing or leveling that out across the year. And I think I commented on last quarter's call that this year in particular, we, we've been seeing a much, much more level loaded revenues for, for that kind of work and, and, and what you're highlighting here is actually in the third quarter, we actually saw more revenues in the third quarter for that kind of work than, than, than the other quarters. And so that's the biggest driver of the R&D expense being down. It's because of revenues, not because of reducing cost. And, and so now we're expecting fourth quarter to be a more normal average for the year as compared to prior years where fourth quarter might have been a very strong revenue quarter for the development revenue. So that thanks for highlighting that because it was important, I explained that we didn't lower any costs we actually just generated mor revenues for the work we're doing

並且沒有任何調整。很好，這是一個很好的問題。因此，首先，我們沒有削減研發，但名義上，我們繼續在研發上投入更多資金。您所看到的是更高水平的報銷，或者考慮到您的想法可能是錯誤的術語，您理解的是對我們客戶的報銷，更高水平的客戶支付我們在離散的第三季度為他們進行開發工作與其他季度相比，我認為在過去幾年中，您，您已經聽到我們談論如何考慮我們的開發收入。我們的研發線受到開發收入的影響。我們的開發活動成本全年每季都非常平穩，因為主要是研發工程師在工作。所以他們一年 365 天都在薪資單上。當我們獲得收入時，當我們產生收入並獲得客戶付款時，這與實現這些不同開發計劃的里程碑有關。而且，在前幾年，我們看到的是今年稍後收入增加的模式，特別是在第四季度。當我們、我們和我們的客戶努力在一年內達到里程碑時，並且，並且，並且保持在正軌上。全年我們一直非常關注均衡化、正常化或均衡化。我想我對上個季度的電話會議發表了評論，特別是今年，我們看到此類工作的收入水平要高得多，而且，您在這裡強調的實際上是在第三季度，我們實際上看到這類工作的收入比其他季度要多。因此，這是研發費用下降的最大推動因素。這是因為收入，而不是因為降低成本。因此，現在我們預計第四季將是全年的平均水平，與往年相比，第四季可能是開發收入非常強勁的營收季度。因此，感謝您強調這一點，因為這很重要，我解釋說，我們並沒有降低任何成本，我們實際上只是為我們正在做的工作創造了更多收入

Very helpful. Thank you.

非常有幫助。謝謝。

Once again, ladies and gentlemen, if you have a question, it is star one on your telephone keypad.

女士們、先生們，如果您有問題，請再次點擊電話鍵盤上的星號。

Your next question comes from the line of Kristen Stewart with CL King. Please go ahead.

你的下一個問題來自克里斯汀·史都華 (Kristen Stewart) 和 CL King 的對話。請繼續。

Hi,

你好，

Thanks for taking the question. I was wondering if you could just give a little bit more detail on gross margins in the quarter. What drove kind of the increase and then how should we think about it going forward just from a sustainability perspective of the increase year to year and whether or not you can, you know, get back to that 31 Pre COVID level and if there's any time horizon associated with that achievement?

感謝您提出問題。我想知道您是否可以提供有關本季毛利率的更多詳細資訊。是什麼推動了這種增長，然後我們應該如何從逐年增長的可持續性角度來考慮它的未來，以及是否可以，你知道，回到 31 年前的水平，如果有時間的話與該成就相關的視野？

Great. Thanks for the question. We absolutely expect to get back to the 2019 31% gross margins and then we expect to build on, on that. We don't plan to stop at 31%. But we, we have made tremendous progress, year-to-date up 100 basis points year over year. it's really a function of, of recovering, getting back some of the inefficiencies that we incurred from supply chain disruption and the direct labor turnover. Our supply chain is very, very stable. At this point. The team's done a good job of managing that. And then on the direct labor turnover. At the company, company total, we're, we're below where we were pre pandemic, which is great. We're, we're very focused on engagement with our, with our direct labor associates and, and we're getting really good traction on our manufacturing excellence initiative and the work we're doing with associates to, to provide them with tools and kaizen events and lien implementing lien processes. And, and we see, we see continued significant opportunity, whether it's in direct material scrap reduction or reducing overtime because of how we load the plants or or in driving great direct labor efficiency. There's automation opportunities still. And so now that that the teams, the plant management teams can really get back to focusing on driving those individual projects. Many of them are small projects that compound over time. We're starting to see the financial benefits of of the hard work the team has been doing and, and we expect that to continue and excited for the, for the progress that the team is making. So we absolutely expect to continue growing operating profit twice as fast as sales. The sales growth rate is, is our objective. And we would expect that to come from both expanding gross margins while also continuing to get leverage on the operating expense. And so right now, we're 180 basis points at the operating margin rate level above last year on a year-to-date basis. And that's 100 basis points from gross margin, 80 basis points from Opex. And that's a, it's a good mix, that will keep driving going forward

偉大的。謝謝你的提問。我們絕對希望回到 2019 年 31% 的毛利率，然後我們希望在此基礎上再接再厲。我們不打算停留在 31%。但我們，我們已經取得了巨大的進步，今年迄今同比增長了 100 個基點。這實際上是恢復、恢復我們因供應鏈中斷和直接勞動力流動而造成的一些低效率的功能。我們的供應鏈非常非常穩定。在此刻。團隊在管理方面做得很好。然後是直接勞動力流動率。在公司，公司整體，我們低於疫情前的水平，這很好。我們非常注重與我們的直接勞工同事的互動，並且我們在卓越製造計劃以及我們與同事所做的工作中獲得了很好的牽引力，為他們提供工具改善事件和留置權實施留置權流程。而且，我們看到，我們看到了持續的重大機會，無論是直接減少材料廢料還是減少加班，因為我們如何裝載工廠或提高直接勞動效率。自動化機會仍然存在。現在，團隊、工廠管理團隊可以真正重新專注於推動這些單獨的專案。其中許多都是小項目，隨著時間的推移會變得複雜。我們開始看到團隊一直以來的辛勤工作所帶來的經濟效益，我們期望這種情況能夠繼續下去，並為團隊正在取得的進展感到興奮。因此，我們絕對預期營業利潤的成長速度是銷售額的兩倍。銷售成長率是，是我們的目標。我們預計，這將來自毛利率的擴大，同時也將繼續提高營運費用的槓桿率。因此，目前我們的營業利潤率水準較去年同期高出 180 個基點。這意味著毛利率提高了 100 個基點，營運成本提高了 80 個基點。這是一個很好的組合，將繼續推動前進

And then as your leverage is coming down, I was wondering if you could just give us an update on how you're thinking about M&A

然後，隨著您的槓桿率下降，我想知道您是否可以向我們介紹您對併購的最新看法

Yes, but, well, but by the end of the year we expect to be at the low end of our range, which means we've got the, the $250 million to $300 million capacity that, that we've talked about on, on a kind of a rolling annual basis. And, and so we, we continue to have a robust pipeline that, that we continuously curate, you know, many of the acquisitions we do. We work with those, those targets over multiple years, building a relationship, understanding their business so that when they're ready and, and you know, we, we don't, we don't get to choose when they're ready to transact. If we did, we, we would probably be paying a premium and we'd rather pay a fair, fair price, fair multiple. So that that pipeline continues to be curated by Andrew and his team. And we would expect to continue executing our inorganic strategy over time. And the nice thing is we, we now have the full capacity that we target within our, our targeted debt leverage range.

是的，但是，到今年年底，我們預計將處於我們範圍的低端，這意味著我們擁有 2.5 億至 3 億美元的產能，我們已經討論過，以每年滾動的方式進行。因此，我們繼續擁有強大的管道，我們不斷策劃我們所做的許多收購。我們與這些目標合作多年，建立關係，了解他們的業務，以便當他們準備好時，你知道，我們，我們沒有，我們在他們準備好時無法選擇進行交易。如果我們這樣做，我們可能會支付溢價，我們寧願支付公平、公平的價格、公平的倍數。因此，該管道將繼續由安德魯和他的團隊策劃。我們希望隨著時間的推移繼續執行我們的無機戰略。令人高興的是，我們現在擁有我們目標債務槓桿範圍內的全部產能。

Okay. Thanks very much.

好的。非常感謝。

Thank you.

謝謝。

Your final question comes from the line of Suraj Kalia with Oppenheimer. Please go ahead

你的最後一個問題來自蘇拉吉·卡利亞（Suraj Kalia）和奧本海默（Oppenheimer）的對話。請繼續

Morning, Joe, Diron. Can you hear me all right?

早上好，喬，迪倫。你聽得到我說話嗎？

Yes. Mornings Raj.

是的。早晨拉吉。

So Diron, one question for you and Joe, one question for you. Diron, let me start out with you. So the 1% shortfall in organic growth because of hurricane Helene, I guess I want to ask the question a slightly different way given the visibility of your customer orders from long term contracts. Should we start thinking about, you know, a relative concentration in the last week of a quartera also?

迪隆，有個問題問你和喬，有個問題問你。狄龍，讓我從你開始。因此，由於海倫颶風導致有機增長下降 1%，考慮到長期合約中客戶訂單的可見性，我想我想以稍微不同的方式提出這個問題。我們是否應該開始考慮季度最後一週的相對集中度？

I mean, logic would have dictated it would be a relatively steady cadence throughout the quarter. Maybe you can help us reconcile Helene in the last week of September.

我的意思是，從邏輯上講，整個季度的節奏將相對穩定。也許你可以幫助我們在九月的最後一周與海倫和解。

You know, and just tie it into how you'll see customer orders throughout the quarter.

您知道，只需將其與整個季度的客戶訂單連結即可。

Sure. Suraj Yeah, I mean, when you, when you look at our order pattern, there's, there's a couple of different variables that that happened. One of them is the, you know, the normal order pattern is relatively smooth. We do about $33 million a week. And so when you look at the the the the timing of that most are relatively smooth, you have some that, that you have sterilization near the end of the quarter where that happens a little bit more in bulk. And when you talk about hurricane Helene specifically, it all happened right in the last few days of the quarter. So we ended up closing our, our facility for about three days. And, and that was right when things were in the process of getting packed shipped, final sterilization. So you have a little bit of an outsized impact. Again, it it ultimately is about a 1% point impact to our overall organic growth that for that will be, will be caught up in in the fourth quarter. And as Joe mentioned earlier, be primarily a cost pressure or a cost headwind as we kind of work through getting re-ramped up.

當然。Suraj 是的，我的意思是，當你查看我們的訂單模式時，會發現發生了一些不同的變數。其中之一是，你知道，正常的訂單模式是相對順利的。我們每週的營業額約為 3300 萬美元。因此，當你看到大多數的時間安排都相對順利時，你會發現，在接近季度末的時候，你會進行消毒，這種情況會大量發生。當你具體談論颶風海倫時，這一切都發生在本季的最後幾天。所以我們最終關閉了我們的設施大約三天。而且，這正是在物品包裝運送、最後滅菌的過程中所發生的。所以你有一點巨大的影響。同樣，它最終將對我們的整體有機成長產生約 1% 的影響，這將在第四季度受到影響。正如喬之前提到的，當我們透過重新提升工作時，主要是成本壓力或成本逆風。

So we shouldn't think about, besides the hurricane impact normal cadence and we shouldn't start thinking about concentration towards the end of the quarter. Is that a fair way to look at it? Yeah.

因此，除了颶風影響正常節奏之外，我們不應該考慮在季度末集中精力。這是一個公平的看待它的方式嗎？是的。

Yeah, correct. Not, from a kind of an ongoing basis. Yes, you should not think of of kind of last couple of days concentration

是的，正確。不是，從某種持續的基礎來看。是的，你不應該想到最近幾天的注意力集中

Fair enough, Joe, one question for you. I do appreciate all the color. Joe in terms of the comment about new structural heart products. I know you guys are talking of the Tricuspid component in structural heart. Maybe if I can push you on triclip, remind us, is it based on just minimum volumes or are there any adjustments based on price volumes? How should we think about, you know, as we roll out into Q4 and, and FY '25 any color you could give us would be great gentlemen. Thank you for taking my questions.

很公平，喬，有個問題想問你。我很欣賞所有的顏色。喬關於新結構心臟產品的評論。我知道你們正在談論結構心臟中的三尖瓣組件。也許我可以在 triclip 上向您推薦，請提醒我們，它是僅基於最低交易量還是基於價格交易量進行任何調整？你知道，當我們推出第四季和 25 財年時，我們應該如何考慮，你們能給我們的任何顏色都將是偉大的先生們。感謝您回答我的問題。

Great. Thanks, Suraj. I can't speak to any specific individual program or individual customer. But if I just respond to your question maybe more broadly. Our agreements, some of our agreements will in fact have some pricing based upon volume levels. We call that tiered pricing as, as we hit certain volume thresholds, we drive additional synergies, efficiencies of scale. And, and we do in fact share some of that with, with our customers so that we, we both benefit from growth. Our goal is to enable our customers success, which means help them grow and treat more patients and, and grow in the market. And when, when we get to participate in that, we have to earn that right, when we get to participate in that there is a sharing on some programs. And so that that is it is a structure and a function that we have with, with some customers. It's very common with a new product launch where pricing may be above average in the early days because you have inefficiencies as you introduce something and ramp, you've got training of associates yields are not always optimal at the beginning of a of a new product launch. And, and then as you move into kind of a full scale production and the pricing comes in line more with kind of the the cost that you would expect in, in in a full full scale manufacturing line. And so there is there is that dynamic but the the the end objective of that is really just kind of matching the inefficiencies with the pricing during that ramp phase and then and then as quickly as possible getting to a very efficient, full scale production. And, and a price that that's very competitive and helps our customers succeed in the market.

偉大的。謝謝，蘇拉吉。我無法與任何特定的個人計劃或個人客戶交談。但如果我只是回答你的問題，也許會更廣泛。我們的協議，我們的一些協議實際上會根據數量水平制定一些定價。我們稱之為分層定價，因為當我們達到一定的銷售門檻時，我們會推動額外的協同效應和規模效率。事實上，我們確實與我們的客戶分享了其中的一些內容，以便我們雙方都能從成長中受益。我們的目標是幫助我們的客戶取得成功，這意味著幫助他們成長並治療更多患者，並在市場上成長。當我們參與其中時，我們必須贏得這種權利，當我們參與其中時，我們可以分享某些項目。這就是我們與一些客戶所擁有的結構和功能。在新產品發布過程中，早期定價可能會高於平均水平，這是很常見的，因為在推出新產品和升級時效率低下，並且對員工進行了培訓，在新產品開始時，產量並不總是最佳的發射。然後，當您進入全面生產線時，定價將更加符合您在全面生產線中所期望的成本。因此，存在這種動態，但最終目標實際上只是在斜坡階段將低效率與定價相匹配，然後儘快實現非常高效的全面生產。而且價格極具競爭力，有助於我們的客戶在市場上取得成功。

Thank you.

謝謝。

So this concludes the question and answer session. I will turn the call to Andrew for closing remarks.

問答環節到此結束。我將把電話轉給安德魯，讓其致閉幕詞。

Great. Thank you everyone for joining the call today. As always, you can access the replay of this call on our website as well as the presentation that we covered. Thank you for your interest in Integer and that concludes today's call.

偉大的。感謝大家今天加入電話會議。像往常一樣，您可以在我們的網站上觀看本次電話會議的重播以及我們報告的簡報。感謝您對 Integer 的關注，今天的電話會議到此結束。

This concludes today's conference call. We thank you for joining you. May now disconnect.

今天的電話會議到此結束。我們感謝您的加入。現在可以斷開連線。