Integer Holdings Corp (ITGR) 2011 Q4 法說會逐字稿

Welcome, everyone, to the fourth-quarter 2011 Greatbatch Incorporated conference call. Before we begin, I would like to read the Safe Harbor statement. This presentation and our press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These risks and uncertainties are described in the Company's annual report on Form 10-K. The statements are based upon Greatbatch Incorporated's current expectations, and actual results could differ materially from those stated or implied. The Company assumes no obligation to update forward-looking information included in this conference call to reflect change, assumptions, the occurrence of unanticipated events, or changes in future operating results, financial conditions, or prospects. I would now like to turn the call over to today's host, Corporate Controller and Treasurer, Mr. Marco Benedetti. Please proceed.

Hello, everyone, and thank you for joining us for 2011 fourth-quarter earnings call. With us today are Thomas J. Hook, President and Chief Executive Officer, and Thomas J. Mazza, Senior Vice President and Chief Financial Officer. In terms of today's agenda, Tom Hook will start us off with a few brief comments regarding our fourth-quarter results and will then provide an overview of our 2011 accomplishments and strategic focus going forward. After that, Tom Mazza will review our financial results and guidance for 2012. We will then open up the call to Q&A. As we have done in the past, we are including slide visuals that go along with this presentation, which you can access on our website at www.Greatbatch.com. With that, let me now turn the call over to Tom Hook.

Thank you, Marco, and welcome all of you who are listening to our call today. We are pleased to be able to share with you our results for the fourth quarter, which mark the completion of a successful year for Greatbatch. For the quarter, revenue was $141.7 million, which represented an increase of 6% over the prior year. This increase was driven by our diversification strategy and included 28% Vascular Access and 27% Electrochem organic growth, which offset a 2% decline in Cardiac Rhythm Management. Also noteworthy was that the current-quarter revenue included approximately $3 million of medical device sales and $2.5 million from the acquisition of Micro Power electronics, which we completed in December.

The strong revenue growth did not translate into increased operating profitability during the quarter, as our results result continued to reflect the pricing and mix pressures we are experiencing, as well as our increased spend in connection with our medical device strategy, which impacted both SG&A and RD&E. However, we continue to make significant progress in developing complete medical devices for our customers, which I will highlight for you in more detail in just a few moments. These medical devices will be one of our growth drivers in the future and are critical to the long-term success of our Company. Despite these pressures in our profitability, we were still able to generate solid diluted earnings per share growth for the year, which was up 11% on an adjusted basis and was ahead of the guidance that we provided at the beginning of the year.

I would now like to devote the remainder of my prepared remarks to reviewing some of the highlights for 2011 and provide some commentary for our strategic focus going forward. Little over five years ago, we embarked on a three-prong strategy to elevate the growth and profitability of the Company. This included growing and diversifying revenue, driving operating performance, and delivering innovative solutions to our customers. This past year highlights the importance of these imperatives, which came together to help us to achieve our solid operating results, despite the global head winds, which don't appear to be subsiding anytime soon.

With regards to growing and diversifying our revenue, despite a pronounced slowdown in the global cardiac rhythm management market, we were able to grow total Company revenue 7%, or 5% on a constant-currency basis. This growth was a direct result of the product lines we acquired back in 2007 and 2008, as well as the medical device initiatives that we completed over the last four years. More specifically, on a constant- currency basis for 2011, our Vascular Access, Orthopaedics, and Electrochem product lines increased 19%, 11%, and 9% respectively, significant growth by any standard. As a result, CRM revenue accounted for just 53% of total sales during 2011, and now the addition of Micro Power to our Electrochem business is expected to contribute less than 50% of our revenue in 2012. This is a significant shift from the 90% level in 2004 when I joined the Company. Furthermore, as we continue to grow these non-CRM product lines, both organically and through targeted acquisitions and with the commercialization of our medical device pipeline over the next several years, we expect that our concentration in CRM markets will continue to diminish, with an ultimate goal of having CRM accounts only one-third of our revenue within the next five years.

Driving operating performance is our second strategic focus and is the cornerstone of our long-term plan to create shareholder value. The staff of our strategy is critical and without it, none of our other strategic imperatives would be possible. Without operational excellence, we would not be able to manage our growth, either through organic or acquisition, and without operational excellence, we would not have the funding resources or aptitude to design, develop, and manufacture medical devices. We have a long history of operational excellence. It is one of the core competencies of the Company. Then during 2011, we continued to make investments in our operations, more specifically near the end of the year, we began to implement a multi-faceted plan to further expand, optimize, and leverage our manufacturing infrastructure. These initiatives will take the better part of 2012 and 2013 to complete, but once finished will leave us with a more capable and cost-effective Orthopaedics business and with an infrastructure that will support the manufacturing of complete medical devices.

Innovation was another prominent focus for us in 2011. Starting with our investor day meeting in March we provided details on our three-year-old venture, the QIG Group, and along with it, announced a number of new and exciting medical devices that will accelerate our growth in the coming years. In fact, medical devices emanating from our investment in the QIG Group contributed approximately $5 million to revenues in 2011 as we began to deliver these innovative solutions to our OEM customers. Although the aggregate revenue level is still modest, it is significant in that it represents the first medical device revenues for our Company in its 40-plus year history. We continue to make strong progress on all initiatives and expect this revenue stream to continue to build meaningfully over the next several years. Moreover, as you can see from our guidance we issued today, significant growth from these devices is expected in 2012.

We are currently in various stages of production or development on 15 to 20 medical devices, either through partnerships with our OEM customers, or independently, the most significant of which is the development of a Neuromodulation platform, including a spinal cord stimulator for treatment of chronic pain of the trunk and limbs, which we introduced at our investor day as Algostim. We are now in the final stages of development of this device and are halfway through the design verification testing phase. I am pleased to report that we're on track to make the applicable regulatory submissions on this device near the end of 2012. As you can see from the information detailed on slide 8, we continue to achieve numerous milestones in the development of these devices, despite the regulatory head winds that we, as well as others in our industry, are facing. In fact, this month, we just received two additional 510(k) clearances on device products that we outlined at our investor day last March. They were for a transradio catheter sheath introducers, and a steerable delivery sheath for [AF] ablation. Sales of these devices are expected to start in the second half of 2012 and have been incorporated into the 2012 guidance that we provided in our release today.

To date, I would deem the progress we have made on all three facets of our strategy a success, especially given the macroeconomic challenges that we are facing. Our strategy has positioned our Company for higher growth and profitability over the next several years and provides us multiple levers to achieve this growth, namely organic, growth through targeted acquisitions, and growth that will come from the commercialization of our medical devices. As we continue down the strategic path of evolving our Company's strategy to include innovative medical devices, our main focus will be on these three imperatives. I look forward to updating you on the progress toward achieving these goals both in 2012 and beyond. With that, let me now turn the call over to Tom Mazza for a more detailed review of our fourth-quarter financial results.

Thanks, Tom, and good afternoon, everyone. For the call today, I am pleased to review with you our results for the fourth quarter beginning on slide 10. Fourth-quarter 2011 sales increased 6% over the prior-year period to $141.7 million, which was led by 28% Vascular Access and 44% Electrochem growth. Fourth-quarter results included the benefit of approximately $3 million from medical device sales and $2.5 million for revenue from the acquisition Micro Power in December 2011. For the year, sales increased 7% to $568.8 million and included the favorable impact of approximately $8 million from foreign currency exchange rate fluctuations. Excluding the impact of these exchange rate fluctuations, as well as the Micro Power acquisition, organic revenue growth for 2011 was 5%. This was comprised of Vascular Access growth of 19%, Orthopaedic revenue growth of 11%, and Electrochem revenue growth of 6%. Additionally, as Tom mentioned, sales for 2011 benefited from the commercialization of medical devices developed under the Greatbatch name, which added $5 million to revenue for the year.

I would like to point out that foreign currency exchange rate fluctuations only impact our Orthopaedic product line sales. Thus for all the product lines, all other product lines, the sales growth rates I am about to discuss are the same on both a reported and constant-currency basis. Looking at our CRM and Neuromodulation product lines in comparison to the prior year, sales for the fourth quarter of 2011 decreased 2% but were consistent for the full-year period. During the first half of 2011, CRM revenue included the benefit of customer inventory build and product launches, which did not recur in the second half of 2011. Additionally, CRM and Neuromodulation sales continue to be impacted by pricing pressures and the slowdown in the underlying market. As a result of these head winds, we expect CRM and Neuromodulation revenue for 2012 to be lower in the first half of 2012 but begin to rebound in the second half of the year as the CRM market stabilizes.

Fourth-quarter and full-year 2011 sales for our Vascular Access product line increased 28% and 19%, respectively, over the prior-year periods. These increases were primarily attributable to growth in the underlying market and market share gains. Additionally, Vascular Access revenue included approximately $2 million for the quarter and $4 million for the full year, of medical device sales that were developed under the Greatbatch name. I should point out that approximately $1 million of device sales for 2011 was included within the Neuromodulation revenue line. For 2012, we expect sales of medical devices of up to $15 million, with the majority of that revenue being realized in the second half of the year.

In comparison to the prior year, Orthopaedic product line sales increased 3% and 18%, respectively, for the fourth-quarter and full-year periods. Full-year 2011 Orthopaedic sales included the favorable impact of approximately $8 million from foreign currency exchange rate fluctuations. These exchange rate fluctuations did not have a material impact on our fourth-quarter revenue. On a constant-currency basis, Orthopaedic sales for 2011 were up 11% over the prior-year period. These increases were a direct result of the investments made over the last several years to expand capabilities, shorten lead times, and improve quality and on-time delivery. Even though we have made significant improvements in these areas and gaining market share, organic growth in 2012 will remain challenging, given the weakness in the underlying markets and global economic head winds.

Turning now to our Electrochem segment. Fourth-quarter 2011 sales for Electrochem increased 44% in comparison to the prior year and were up 9% for the full year. Fourth-quarter 2011 sales for Electrochem included $2.5 million of additional revenue for the Micro Power acquisition completed in December. Excluding the revenue provided by Micro Power, fourth-quarter and full-year sales increased 27% and 6%, respectively. During 2011, Electrochem revenue varied from quarter to quarter due to the timing of various customer inventory [pulls]. For the full year, the organic revenue growth in Electrochem was due to our increased investment in sales and marketing, which resulted in market share gains and several new customer contracts, as well as continued strength in the energy markets.

As you can see from slide 11, gross profit of $44.7 million for the fourth quarter of 2011 was consistent with the comparable 2010 period. For the full year, gross profit increased $6.8 million to $180.4 million. Fourth-quarter 2011 cost of sales includes $0.2 million of acquisition-related inventory step-up amortization. Excluding this amortization, gross profit as a percentage of sales was 31.7% for both the fourth-quarter and full-year 2011, compared to 33.4% and 32.5% for the same periods of 2010, respectively. This decrease in gross profit margin was primarily due to price concessions given to our larger OEM customers near the end of 2010 in exchange for long-term contracts, an increase in performance-based compensation, and a lower mix of a higher-margin CRM revenue.

Selling, general, and administrative expenses increased to $18.6 million, or 13.1% of sales, for the fourth quarter of 2011, compared to $15.3 million, or 11.5% of sales, for the same period of 2010. For the year, SG&A costs were $72.5 million, or 12.8% of sales, versus $64.5 million, or 12.1% of sales for 2010. SG&A expenses for the quarter and full year increased primarily due to higher legal and regulatory consulting costs incurred in connection with our medical device initiatives, higher performance-based compensation, and the negative impact of strengthening foreign currencies on the cost of our international operations in comparison to the prior year. Additionally, SG&A for the fourth quarter of 2011 included approximately $400,000 of costs related to the operations of Micro Power. The increase in SG&A related to our medical device strategy impacted the quarter by $1.6 million and $4 million for the year and primarily related to consulting fees paid to outside contractors, who are providing technical expertise on both our device projects, as well as legal fees incurred in connection with the numerous patent filings that we are generating.

Net research, development, and engineering costs for the fourth quarter were $12.8 million, or 9% of sales, compared to $11.4 million, or 8.6% of sales for the corresponding 2010 period. For the full year, net RD&E totaled $45.5 million, or 8% of sales, versus $45 million, or 8.4% of sales, for 2010. As expected, during 2011, we continued to invest resources in developing complete medical devices for our OEM customers. Total costs incurred in connection with these initiatives during the fourth quarter of 2011 was $6.7 million and $23.3 million for the year. This included $2.3 million for the quarter and $5.1 million for the year of design verification testing costs related to the QIG Group's development of a Neuromodulation platform. When combined with the SG&A expenses just discussed, total costs incurred in connection with our medical device initiatives totaled $29 million in 2011 versus $22 million in 2010. Partially offsetting these RD&E increases was a higher level of customer cost reimbursements of $700,000 for the quarter and $2.4 million for the year. As most of you are aware, these cost reimbursements can vary significantly from period to period due to the timing of the achievement of milestones on development projects.

GAAP operating income for the fourth-quarter and full-year 2011 was $12.5 million and $61.7 million, respectively, compared to $24.5 million and $69 million for the respective periods of 2010. During the fourth quarter of 2010, the Company recognized a $9.5 million gain from the settlement on the lawsuit related to its Electrochem subsidiary. Additionally, full-year 2011 results reflect a $4.2 million gain from the sale of one of the Company's cost method investments. Adjusted operating income, which excludes these gains, as well as other charges, was $15.7 million and $67.6 million for the fourth-quarter and year-ended December 30, 2011, compared to $17.8 million and $64.9 million for the comparable 2010 periods. I would like to refer you to the appendix of today's presentation for a reconciliation of adjusted amounts to GAAP.

2011 fourth-quarter and full-year effective tax rates were 34.1% and 31.6%, respectively, compared to 32.6% and 32.8% for the same periods of 2010. For 2012, we currently expect the GAAP effective tax rate to approximate the statutory rate of 35% due to the expiration of the R&D tax credits at the end of 2011. The net result of the above is that GAAP diluted earnings per share for the fourth quarter and full year were $0.24 and $1.40 per share, respectively, compared to $0.59 and $1.40 per share for the respective 2010 periods. Similar to operating income, fourth-quarter 2010 and full-year 2011 periods include the impact of the Electrochem litigation charge and cost method investment gains. Adjusted diluted earnings per share for the fourth-quarter and full-year 2011 were $0.39 and $1.68 per share, respectively, compared to $0.46 and $1.51 per share for the corresponding 2010 period. Cash flows from operations for the fourth quarter of 2011 were approximately $31 million and $90 million for the full year. During 2011, we used this strong cash generation to repay $40 million of long-term debt. However, in order to partially fund the Micro Power acquisition, we borrowed an additional $45 million under our revolving credit facility near end of the year.

Moving on to 2012 guidance, as you can see from slide 13, our current expectation is that 2012 sales will be between $645 million and $665 million. This guidance assumes that our CRM and Neuromodulation will be slightly negative to flat for the year, and our Vascular Access revenue will grow between 10% and 20% bolstered by the launch of several new systems and device projects. We are also assuming that our Orthopaedic and Electrochem product line revenue will continue their moderate growth rates, that is, between 5% and 15% for Orthopaedics and approximately 5% for Electrochem. Given the underlying weakness in the healthcare markets, as well as the tough comparables versus the first and second quarters of 2011, we currently expect revenue for the Greatbatch Medical for the first half of 2012 to be below the 2011 levels but rebounding the second half of the year as healthcare markets stabilize and begin to recover.

Consistent with prior years, we are also providing guidance with regards to our adjusted operating margin, which for 2012 we expect will be between 11.5% and 12.5% of sales. This guidance reflects our assumption that our net RD&E spend will remain at 8.5% to 9% of sales. The net result of the above is that we expect 2012 adjusted diluted earnings per share to be between $1.75 and $1.85 per share. This would equate to an increase of between 4% and 10% over 2011 adjusted diluted earnings per share. In summary, we are very pleased with our results for 2011. Despite the challenges that our markets and macroeconomic environment presented, we were still able to exceed our revenue and adjusted EPS targets set at the beginning of the year and are poised for additional growth in 2012. Our operations continue to generate significant cash flow, which allows us to execute on our strategic initiatives and will continue to drive our growth in the future. With that, let me turn the call back over to the moderator to take questions.

(Operator instructions)

Brooks West, Piper

Hi, guys. Can you hear me?

Yes.

Thanks for taking the question. Tom, I wanted to ask on organic versus overall revenue for next year, what is your -- or what would your dollar amount be for an organic range? Or said another way, what's the contribution of I guess primarily the Micro Power acquisition?

Brooks, this is Tom Mazza. The percentages we've quoted are really done on a pro forma basis assuming we had Micro Power for the full year. And that's shown within the -- so basically, we're seeing 5% growth on the combined Electrochem entities. All the other growth rates we've quoted there are organic growth rates.

Okay, but on a dollar amount, isn't Micro Power contributing about $60 million, $70 million next year --?

Yes, the starting number is about $65 million to $67 million for Micro Power.

$65 million to $67 million. Okay, thanks.

Okay?

And then can you call out the spend associated with QIG in 2012?

Yes, we can.

It'll be in the range of -- it's in the [gaining] numbers, but in the range of $35 million.

$35 million. Okay. (multiple speakers) And one more if I could. The ICD guys are cautiously optimistic that the market's going to stabilize in calendar Q2 after we anniversary the DOJ investigation. If that's the case, shouldn't you guys front run that a little bit as a supplier? Thanks.

Brooks, thanks for the question. Is I think obviously, you tend to obviously look at a little bit longer runway on the year, because we have a significant amount of safety stock between us and customers for testing purposes. I don't think we really end up seeing the quarter-to-quarter perturbations if there is a stabilization or recovery as dramatically. I think they're a little bit more drawn out. So our expectation would be as we're kind of, again, probably for the fourth year in a row, planning on fairly flat CRM growth in the market and planning for that operationally so we align our productivity initiatives and not have a lot of push-through on volume. And then we'll look at any stabilization or recovery to that as an upside, and then we'll wait for the actual signals to come in with our first-quarter results or second-quarter results to validate that. But right now, we're really not expecting it or planning on it. But clearly, obviously, we're anxious to be able to see that come through and see somewhat of a recovery or stabilization in the market. But right now, we wouldn't really feel comfortable giving any type of indication of our visibility to that, because we don't really have good visibility on it.

Okay. Thanks for taking the questions, guys.

Charles Croson, Sidoti & Company.

Hi guys, how's it going?

Good.

Good, Charles.

Hey, so a quick couple questions here. First one, just kind of housekeeping. On that $15 million to $20 million adjustment you were talking about, can you kind of break that down further, and I guess, and more state where that's going to hit in 2012?

Are you talking about the other operating expense?

Yes. The $15 million to $20 million in a adjustments.

To be quite honest with you, we're starting these projects now. The Orthopaedics projects are well underway in the implementation, so I expect it to be fairly evenly spread over the year. You know, right now, we're estimating approximately $5 million of that is non-cash charge. And that'll determine at the point in time where we no longer utilize the assets or we determine that we need to write them off.

Okay, that's helpful. Then another one quick housekeeping one. Any idea on debt repayments for the year?

No. I mean, we've got a lot of things we're looking at, so I don't have any idea on debt repayment is currently.

And then just one last one. Can you kind of comment on the NeuroNexus acquisition and is this -- could this kind of augment the launch of the Algostim? Is that kind of what I was reading through on the conference call there?

Sure, Charles. This is Tom Hook. On your debt question, I prefer to just pay off the revolver debt as early as possible in the year and just keep leveraging the strong cash flows that we've been showing operationally. So we would hope even though we drew on the revolver for the Micro Power acquisition is to retire that very early in the year just by strong operating cash flows, like we've been able to generate last year. NeuroNexus, we're very excited about the NeuroNexus, as well as the Micro Power deals. They add significantly capability to us, both operationally and technically. NeuroNexus does have a very successful electrode product line that they sell into animal-research applications that we picked up.

And one of the significant attractions of that acquisition is in working with Dr. Daryl Kipke, who's the general manager of that business, has been to apply those thin film electrode technologies into technologies that are used for human use. There's a couple dozen highly skilled people that are at NeuroNexus that comprise that team plan prominently in both our subsequent generations of our Neuromodulation platforms, as well as derivations of the current-generation products like Algostim to provide advanced features on them. So they -- we wouldn't hold up commercialization of the first generation of Algostim technologies, but we definitely would be adding to it with other features that would include some of the technical characteristics that the NeuroNexus intellectual property provide us.

We'll share where we're going to be, as we are in most QIG projects, we kind of keep a lot of that -- those ideas and innovations under the covers until we're ready to talk about them. But the NeuroNexus successes around electrode designs for applications that range from animal research all the way through applicability into humans is -- some of that information is already public, and we're going to aggressively build off on that. We're excited to have that team, just like we're really excited to have the Micro Power team and the capabilities it brings to the Electrochem business that're -- both of them are really nice acquisitions for us to add capabilities and an operating expansion from a revenue and income standpoint. And we look forward to consolidating those, and NeuroNexus is going to consolidate to the QIG Group and Micro Power consolidating the Electrochem group. And then as we do it normally through tightening integration and consolidation, we'll drive profitability to cash flows after we finish those programs up.

Okay. All right. Thanks a lot, Tom, for that detailed answer there. And guys, thanks again, and congrats.

Thank you.

Thanks.

(Operator instructions)

Jamar Ismail,

Hi, guys. I have a couple questions for you. The first one is on your Orthopaedic business, can you give any more color on the trends that you're seeing underlying that business? In 2011, the first two quarters were stronger than the second two, and should we see that same seasonality in 2012?

Sure. This is Tom Hook again. As I think -- we look at 2011, there's two forms of I think growth in Orthopaedics. Is one is kind of growing with the trends of the market and the OEMs, which tended to be strong the beginning of 2011 and then weakened as the course of the year went along. And then because we're a fairly small player in Orthopaedics, we obviously have our own sales tempo that we've been able to create by working hard to win business with customers. So you can see, certainly, the effect. And obviously, you've seen some of the competitors in Orthopaedics announce the results already, is the year in 2011 definitely from a market perspective tended to do what I will call tail off in 2011, and we tailed off with it. But we were still able to maintain some stability, because we're still have been successful picking up projects in Orthopaedics, and we kind of offset some of that market decline. I think the story in 2012 is going to be a little bit flipped upside down.

I think we'll see the stabilization that's already started to occur in the first half of the year, and I believe, as you can see from our guidance, is some of that market is going to come back in second half. And also, we're just going to continue to execute on programs for our customers. And the underlying that is the investments we've made in our Indianapolis facility and have completed. We'll be moving into our Fort Wayne facility that's half finished, under construction. We'll move into the second half of this year. And we also have plans to consolidate our European operations that we provided a little info on. All those will help us build capabilities and pick up business. So I think the two factors that I'd like to think our ability to pick up projects is kind of a -- we're going to really build that capability and hence steadily build that type of business with our key customers. But the market's going to have definitely some of its ups and downs.

And then the last thing I'll point out, which is not a factor yet in Orthopaedics, is in the QIG Group, we have an active Neuromodulation and an active cardiovascular funnel. We do not yet have an active Orthopaedics funnel, and we will not start that until we finish the operating investments in Greatbatch Medical. Even though that won't help us in 2013, when we look out several years from now, innovating on the medical device level in Orthopaedics and providing those solutions out to our OEM customers on a partnership basis will also provide us a longer-term growth driver to Ortho like we are trying to do in Neuromod and Cardiovascular. So, hopefully that helps.

Okay. So just the follow up and be clear, are we looking at the low 30s level for Ortho, at least in the first quarter, and then build from there?

Yes, we're really not going to give quarterly guidance. I think the comparables for the first quarter and the first half, as we said overall, are going to be difficult. Because as Tom mentioned, there was a building in the market there. But there was also a significant amount of product launches in the first half of last year --

Okay.

Which we quoted. So yes, the comparables for the first half are difficult.

Okay, and then just one final question. Just the timeline you gave for some of your medical device projects at the analyst day, have there been any significant push-backs on any of those?

No, not really. We've had to do some follow-up submissions on some of the regulatory clearances we got, so it cost us another say, 30 or 60 days at most. But most part on these smaller cardiovascular products where we were cutting our teeth and kind of building our capabilities, they've come in on time or a few months late. As I think the -- as we move toward the more sophisticated products that like Algostim, I'd say we have taken a fairly conservative approach to how we're approaching the product and the data that we're collecting, so we have more robust submissions and we're more proactive at engaging in the discussions with the FDA on a proactive basis. So I'd say that we're -- there, we've embodied more flexibility into the timelines that provide us the ability to react to additional data requests. But right now, I'm still confident that on a milestone performance basis, we're going to continue the projects that we outlined at investor day to completion, including Algostim. Some time at the end of this year or early next year, we'll file that submission to the FDA, and then we'll be moving on that system. Obviously, there's many other systems past that that will have timelines in 2015.

Okay. Thanks a lot.

(Operator instructions)

And at this time, that concludes today's question-and-answer session. And I would like to turn the call back over to Marco Benedetti for any closing

Thank you. I would like to remind you both the audio portion of this call and the slide visuals will be archived on our website at Greatbatch.com and will be accessible for 30 days. Thank you everyone for joining us today.

Ladies and gentlemen, that concludes today's conference. We thank you for your participation. You may now disconnect. Have a great week.