Q4 2021 Integer Holdings Corp Earnings Call

[music].

Speaker 1: Good morning. My name is Joseph, and I will be your conference operator today. At this time, I would like to welcome to everyone to the Integer Holdings Corporation Q4 2021 earnings call.

Good morning, My name is Joseph and I will be your conference operator today at this time I would like to welcome everyone to the integer Holdings Corporation Q4 2021 earnings call.

All lines have been placed on mute to prevent background noise as a speaker after the speaker remarks.

Speaker 1: All lines have been placed on mute to prevent background noise. After the speaker remarks, there will be a question.

There will be a question and answer session.

Speaker 1: If you would like to ask a question during this time, simply press star 1 on the telephone keypad. If you would like to withdraw your question, press star 1 again.

You'd like to ask a question. During this time simply press star one on the telephone keypad, if you'd like to withdraw your question Press Star one again.

Thank you.

Speaker 1: I would like to now turn the conference over to Senior Vice President of Investor Relations, Anthony Borowics. Please go ahead.

I would like to now turn the conference over to senior Vice President President of Investor Relations Anthony borrowings. Please go ahead.

Speaker 2: Good morning, everyone. Thank you for joining us and welcome to Integers fourth quarter 2021 earnings conference call. With me today are Joe Deetsic, President and Chief Executive Officer and Jason Garland, Executive Vice President and Chief Financial Officer.

Good morning, everyone. Thank you for joining us and welcome to <unk>.

Fourth quarter 2021 earnings conference call with me today are Joe Dziedzic, President and Chief Executive Officer, and Jason Garland, Executive Vice President and Chief Financial Officer.

Speaker 2: As a reminder, the results and data we discussed today reflect the consolidated results of integer for the periods indicated.

As a reminder, the <unk>.

And data we discuss today reflect the consolidated results of integer for the periods indicated.

Speaker 2: During our call, we will discuss some non-GAAP measures. For reconciliation of these non-GAAP 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.

During our call we will discuss some non-GAAP measures a reconciliation of these non-GAAP measures. Please refer to the appendix of today's presentation today's earnings press release, and trending schedules, which are available on our website.

Yes.

Speaker 2: Please note that today's presentation includes forward-looking statements. Please refer to the company's SEC filings for discussion of the risk factors that could cause our actual results of different material.

Please note that today's presentation includes forward looking statements. Please refer to the company's SEC filings for a discussion of the risk factors that could cause our actual results to differ materially.

Speaker 2: On today's call, Joe will provide his opening comments and a timely update to Integers portfolio and product line strategies along with our progress towards achieving above market sales growth.

On today's call Joe will provide his opening comments and a timely update introduced portfolio and product line strategies, along with our progress towards achieving above market sales growth.

Speaker 2: Jason will then review our adjusted financial results for the fourth quarter and total year 2021, provide additional insight on our product line performance, and share our full year 2022 guidance.

Jason will then review our adjusted financial results for the fourth quarter and total year 2021 provide additional insight on our product line performance and share our full year 2022 guidance.

Speaker 2: Joe will come back to provide his closing remarks, and then we'll open up the call for your questions. With that, I'll turn the call over to Joe.

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.

Speaker 2: Thank you, Tony, and thanks to everyone for joining the call today, especially the integer associates who have continued to develop and manufacture products for our customers so they can provide life-saving and life-enhancing products for patients around the globe during these challenging times.

Thank you Tony.

Thanks to everyone for joining the call today, especially the integer associates, we have continued to develop and manufacture products for our customers. So they can provide lifesaving and life enhancing products for patients around the globe. During these challenging times.

Integer delivered strong fourth quarter and full year results sales grew 16% in the quarter and 14% for the full year.

Speaker 2: Sales grew 16% in the quarter and 14% for the full year. Earnings per share grew 39% in the quarter and 47% for the full year.

Earnings per share grew 39% in the quarter and 47% for the full year.

Speaker 2: Even with these strong results, we experienced about 200 basis points of unfavorable gross margin impact from the labor and supply chain environment, most of which we believe are temporary.

Even with these strong results, we experienced about 200 basis points of unfavorable gross margin impact from the labor and supply chain environment, most of which we believe are temporary.

Speaker 2: We closed the acquisition of Oscorp in December and are well underway with integrating our businesses to deliver a broader and deeper product offering to our customers.

We closed the acquisition of <unk> in December and are well underway with integrating our businesses to deliver a broader and deeper product offering to our customers.

Speaker 2: We have continued to execute our structured and disciplined process to accelerate top-line growth and drive bottom-line outperformance.

We have continued to execute our structured and disciplined process to accelerate top line growth and drive bottom line outperformance.

Speaker 2: Today I will share a detailed review of our portfolio and product line strategies and provide an update on the great progress we are making.

I will share a detailed review of our portfolio and product line strategies and provide an update on the great progress we are making.

Speaker 2: In 2022, we expect to deliver double digit sales and profit growth at the midpoint of our guidance.

In 2022, and we expect to deliver double digit sales and profit growth at the midpoint of our guidance.

Speaker 2: despite the continuation of a challenging labor and supply chain environment.

Despite the continuation of a challenging labor and supply chain environment.

We entered your investment thesis summarizes why we believe <unk> is executing a clear and compelling strategy to sustainably outperform.

Speaker 2: The integer investment thesis summarizes why we believe integer is executing a clear and compelling strategy to sustainably outperform.

Speaker 2: Our portfolio strategy and product line strategies define how we win in the markets we serve.

Our portfolio strategy and product line strategies defined how we win in the markets we serve.

Speaker 2: Our operational strategy defines how we achieve excellence in everything we do, and our values define how we engage with each other.

Our operational strategy defines how we achieve excellence in everything we do and our values define how we engage with each other.

Speaker 2: The bottom of this slide articulates the industry and integer fundamentals that create a resilient business model.

The bottom of this slide articulates the industry and into your fundamentals that create a resilient business model.

Speaker 2: the elements of our strategy to generate sales growth, and the structured approach we've taken to develop a performance culture. Our financial objective...

The elements of our strategy to generate sales growth and the structured approach we've taken to develop a performance culture.

Our financial objectives are clear and measurable everything we do in the company is anchored to this strategy, which is why we share every quarter.

Speaker 2: Everything we do in the company is anchored to this strategy, which is why we share it every quarter. So let's look at some of the important milestones we have achieved on our strategy journey.

So let's look at some of the important milestones we have achieved on our strategy journey.

Speaker 2: We started in March of 2017 by performing our portfolio review and developing the overall integer strategy.

We started in March of 2017 by performing a portfolio review and developing the overall integer strategy.

Speaker 2: We launched the portfolio strategy in January of 2018, and within six months executed the divestiture of our ASNO business for $600 million.

We launched the portfolio strategy in January of 2018, and within six months executed the divestiture of our <unk> business for $600 million.

Speaker 2: As a further evolution of our portfolio strategy, we just initiated in the fourth quarter of last year the partial exit of the portable medical business, which I'll discuss in more detail.

As a further evolution of our portfolio strategy, we just initiated in the fourth quarter of last year. The partial exit of the portable medical business, which I'll discuss in more detail on the next slide.

Speaker 2: As highlighted in the middle section, we formally launched our operational strategy in the second half of 2018, starting with Manufacturing Excellence, then followed by the other five...

As highlighted in the Middle section, we formally launched our operational strategy in the second half of 2018, starting with manufacturing excellence.

Then followed by the other five strategic imperatives.

Speaker 2: We saw immediate impact for manufacturing excellence as margins expanded during 2018 and 2019.

We saw immediate impact for manufacturing excellence as margins expanded during 2018 and 2019.

Speaker 2: Not surprisingly, the pandemic and the current labor and supply chain constraints have created a margin rate head.

Not surprisingly the pandemic and the current labor and supply chain constraints have created a margin rate headwinds.

We're confident our strategy and operational excellence will overcome these headwinds over time.

Speaker 2: We're confident our strategy and operational excellence will overcome these headwinds over time.

Speaker 2: The bottom row highlights the progression we have made in our product line strategies, which define how we will win in the markets we serve. These strategies were defined by what we call the bottom row.

The bottom row highlights the progression we have made in our product line strategies, which define how we will win in the markets we serve.

These strategies were defined by what we call growth teams the growth teams own the product line strategies in all respects.

Speaker 2: The growth teams own the product line strategies in all respects.

Speaker 2: These teams were launched in the fourth quarter of 2018 and began developing and executing their specific strategies during 2019.

These teams were launched in the fourth quarter of 2018 and began developing and executing their specific strategies during 2019.

Speaker 2: The investments we've made, both organically and inorganically, have been driven by the product line strategy.

The investments we've made both organically and Inorganically had been driven by our product line strategies.

Speaker 2: The growth teams are executing a structured and disciplined process to deliver accelerated sales growth.

The growth teams are executing a structured and disciplined process to deliver accelerated sales growth.

Let's cover an update on our portfolio strategy.

Speaker 2: Our portable medical product line sales have been flat for the past four years.

Our portable medical product line sales have been flat for the past four years.

Speaker 2: We've highlighted a few of the many markets we serve with rechargeable battery packs, power supplies and chargers.

We've highlighted a few of the many markets, we serve with rechargeable battery packs power supplies and Chargers.

Speaker 2: The market and product dynamics are generally unfavorable, as there is a limited amount of technology differentiation in what is primarily an assembly business with high source material content.

The market and product dynamics are generally unfavorable.

There is a limited amount of technology differentiation and when it is primarily in our assembly business with high source material content.

Speaker 2: Given these dynamics, we communicated to certain customers during the fourth quarter of last year that we were exiting all but two of the markets we serve in this product line.

Given these dynamics, we communicated to certain customers during the fourth quarter of last year that we were exiting all but two of the markets. We serve in this product line.

Speaker 2: We are working closely with these customers to support the transition of these products to other suppliers.

We are working closely with these customers to support the transition of these products to other suppliers and it will take three to four years to complete this transition due to the quality and regulatory requirements.

Speaker 2: And it will take three to four years to complete this transition due to the quality and regulatory requirements.

Speaker 2: So even though we're exiting $40 million of sales, we do not expect to see a decline in these sales until around 2026.

So even though we're exiting $40 million of sales, we do not expect to see a decline in these sales until around 2026.

Speaker 2: We are retaining approximately $30 million of sales in the heart failure and cochlear application markets, where technology differentiation and higher growth rates make these products and markets more attractive.

We are retaining approximately $30 million of sales in the heart failure, and cochlear application markets, where technology differentiation and higher growth rates make these products and markets more attractive.

Speaker 2: And they closely align with the battery expertise and active implantable device technologies of our CRM and N product line.

And they are closely aligned with the battery expertise and active implantable device technologies of our CRM and in product lines.

Speaker 2: We expect this exit to be margin accretive for reducing overhead and raising prices as we consolidate these products into the CRMNN product line.

We expect this exit to be margin accretive from reducing overhead and raising prices as we consolidate these products into the CRM and end product line.

Speaker 2: Another important benefit is that we will be able to reallocate the manufacturing capacity in this Tijuana facility to more profitable growth going forward.

Another important benefit is that we won't be able to reallocate the manufacturing capacity in this tijuana facility to more profitable growth going forward.

Speaker 2: To summarize, we are exiting 40 million in sales over the next four years while improving margins and reallocating low-cost manufacturing space to higher margin growth.

To summarize we are exiting $40 billion in sales over the next four years, while improving margins and reallocating low cost manufacturing space to higher margin growth.

Speaker 2: This is a great example of how we will continue to evaluate our portfolio for opportunities to create more value.

This is a great example of how we will continue to evaluate our portfolio for opportunities to create more value.

Speaker 2: We have talked a lot over the past several years about our operational strategic comparatives, with a focus on how we've been implementing manufacturing excellence to drive margin expansion.

We have talked a lot over the past several years about our operational strategic imperatives with a focus on how we have been implementing manufacturing excellence to drive margin expansion.

Speaker 2: We have not spent as much time discussing our growth teams and our product line strategies. There are two reasons for this. First is we just highlighted on the timeline, we launched manufacturing excellence much earlier than our product line strategies. And second, the manufacturing excellence strategy was able to positively impact the financial results much faster than the product line strategy decisions Little UNESCOBaby earlier this year entitled Community ActionforAll July 21, 2011 Richard EnglishThis is retrieve

We have not been just much time discussing our growth teams and our product line strategies. There are two reasons for this first as we just highlighted on the timeline, we launched manufacturing excellence much earlier than our product line strategies and second the manufacturing excellence strategy was able to positively impact our financial results much fat.

Foster than a product line strategy decisions and actions.

Speaker 2: Our Manufacturing Excellence Planning started in early 2018, launched in the middle of 2018, and began to have an immediate impact on margin expansion.

Our manufacturing excellence planning started in early 2018 launched in the middle of 2018 and began to have an immediate impact on margin expansion.

Contrasting that with our growth teams, which were formed in late 2018 and began developing and executing the strategies during 2019.

Speaker 2: Contrasting that with our growth teams, which were formed in late 2018 and began developing and executing their strategies during 2019.

Speaker 2: Another important variable impacting the timing of developing and executing our strategy is getting the right leaders in place.

Another important variable impacting the timing of developing and executing our strategy is getting the right leaders in place.

Speaker 2: The leaders who have joined integer since 2018 have very intentionally aligned to specific elements of our strategy.

The leaders who have joined integer since 2018 have very intentionally aligned to specific elements of our strategy.

So let's cover with the growth teams do they.

Speaker 2: They are organized around the end markets we serve, and they follow a very structured and disciplined process.

We're organized around the end markets, we serve and they follow a very structured and disciplined process.

Speaker 2: Many organizations call this process product management. We like the term growth teams because it starts with the goal in mind, which is growth.

Many organizations call. This process product management, we like to term growth teams because it starts with the goal in mind, which is growth.

Speaker 2: The middle of the slide summarizes the process they follow, which I think you'll find very logical and clear.

The middle of the slide summarizes the process, they follow which I think youll find very logical and clear.

Speaker 2: They own understanding our markets, products, customers, and competitors. They own developing and executing the strategies that will deliver above market profitable growth.

They own understanding our markets products customers and competitors and they are in developing and executing the strategies that will deliver above market profitable growth <unk>.

Speaker 2: including identifying what capabilities and investments are needed to win.

Including identifying what capabilities and investments are needed to win.

Speaker 2: These teams ultimately enable us to maintain and capitalize on the broadest and deepest product offering in the medical device outsourcing industry to deliver sustained growth.

These teams ultimately enable us to maintain and capitalize on the broadest and deepest product offering and the medical device outsourcing industry to deliver sustained growth.

This slide summarizes the work of our cardiovascular focused gross teams and we have the same slide for cardiac rhythm management and one for Neuromodulation.

Speaker 2: This slide summarizes the work of our cardio and vascular focused growth teams. And we have the same slide for cardiac rhythm management and one for neuromodulation.

This paints a picture of where the end markets are in their growth curve and how they compare in size on a relative basis.

Speaker 2: This paints a picture of where the end markets are in their growth curve and how they compare in size on a relative basis.

Speaker 2: The curve represents the growth rate of the end market, which is slower during the emerging and mature phases of the technology maturity timeline.

<unk> represents the growth rate of the end market, which is slower during the emerging and mature phases of the technology maturity timeline.

Speaker 2: The size of the bubbles represents the current estimated end market size.

Size of the bubble represents the current estimated and market size.

Speaker 2: The horizontal axis represents the technology maturity of the products in the end market, which range from emerging to growth to mature.

The horizontal axis represents the technology maturity of the products in the end market, which range from emerging to growth to mature.

Speaker 2: integer is uniquely positioned to serve our customers at each phase of the technology maturity timeline.

Integer is uniquely positioned to serve our customers at each phase of the technology maturity timeline.

Speaker 2: During the emerging phase, we have the expertise, proprietary technology, and design and development capability to de-risk emerging products from concept all the way to commercialization.

The emerging phase, we have the expertise proprietary technology and design and development capability to de risk emerging products from concept all the way to commercialization.

Speaker 2: During the growth phase, we can accelerate the speed to market through collaborative product design and development, leveraging our quick turn capability and manufacturing capacity to deliver seamless transitions to scaled production.

During the growth phase, we can accelerate the speed to market through collaborative product design and development, leveraging our quick turn capability and manufacturing capacity to deliver seamless transitions to scaled production.

Speaker 2: And during the mature phase, we bring vertical integration that simplifies our customer supply chains, reduces the number of suppliers they must work with, and lowers their costs.

And during the mature phase, we bring vertical integration that simplifies our customer supply chains reduces the number of suppliers they must work with and lowers their cost.

Speaker 2: Because of our deep technology, breadth of capability and products, global manufacturing footprint and strategic focus, we can serve our customers across all phases of the technology maturity timeline. A truly unique customer value proposition that differentiates and...

Because of our deep technology breadth of capability and products global manufacturing footprint and strategic focus we can serve our customers across all phases of the technology maturity timeline.

A truly unique customer value proposition that differentiates integer.

The blue box in the middle of the slide that encompasses pulsed field ablation structural heart neurovascular electrophysiology and parts of peripheral vascular shows the markets that are receiving a disproportionate share of our customers' investments to address significant unmet patient needs.

Speaker 2: The blue box in the middle of the slide that encompasses pulse field ablation, structural heart, neurovascular, electrophysiology, and parts of peripheral vascular shows the markets that are receiving a disproportionate share of our customers' investments to address significant unmet patient needs.

Speaker 2: We have aligned our strategy with our customers to focus our investments on additional capabilities and capacity in these faster growing in market.

We've aligned our strategy with our customers to focus our investments on additional capabilities and capacity in these faster growing end markets. We are excited to be able to enable our customers to bring life saving and life enhancing products to market faster than our competitors.

Speaker 2: We're excited to be able to enable our customers to bring life-saving and life-enhancing products to market faster than our competitors.

Speaker 2: Let's drill down into the three fastest growing markets from the cardiovascular growth curve. Structural heart, electrophysiology, and neurobastics.

Let's drill down into the three fastest growing markets from the cardio vascular growth curve structural heart electrophysiology and neurovascular and cover the actions we've taken to expand our ability to serve our customers and thereby accelerate our growth.

Speaker 2: and cover the actions we've taken to expand our ability to serve our customers and thereby accelerate our growth.

Speaker 2: All three of these markets are growing high single digit or low double.

All three of these markets are growing high single digit or low double digits.

Speaker 2: They are multi-billion dollar end markets for our customers with significant opportunity for us to serve as an outsourced partner for both components and finished devices for these medical procedures.

They are multibillion dollar end markets for our customers with significant opportunity for us to serve as an outsourced partner for both components and finished devices for these medical procedures.

Speaker 2: Our growth teams understand the technology in the devices and how that technology is evolving.

Our growth teams understand the technology and the devices and how that technology is evolving.

Speaker 2: They've identified where integer has leading technology and where we have gaps, which led directly to the actions highlighted in the middle column.

We have identified where integer at leading technology, and where we have gaps which led directly to the actions highlighted in the middle column.

Speaker 2: We have invested in critical capabilities such as laser cutting, coatings, and complex braiding that enable us to vertically integrate and accelerate the speed of development for our customers.

We have invested in critical capabilities, such as laser cutting coatings and complex braiding that enable us to vertically integrate and accelerate the speed of development for our customers.

We have developed these through both organic and inorganic investments, which offer different benefit, but ultimately give us access to a greater portion of the device for design development and manufacturing.

Speaker 2: We have developed these through both organic and inorganic investments, which offer different benefits but ultimately give us access to a greater portion of the device for design, development and manufacturing.

Speaker 2: Our success in building a pipeline of development programs for our customers has generated the need to increase capacity to support our growth in these fast-growing markets.

Our success in building our pipeline of development programs for our customers has generated the need to increase capacity to support our growth in these fast growing markets.

Speaker 2: This slide summarizes the cardiac rhythm management growth curve, and I don't think it will surprise anyone to see the largest segment of this market concentrated in the conventional CRM bubble on the far right. But there are emerging and growth products in CRM, as highlighted in the light blue box on this slide.

This slide summarizes the cardiac rhythm management growth curve and I don't think it will surprise anyone to see the largest segment of this market concentrated in the conventional CRM bubble on the far right.

But there are emerging and growth products in CRM as highlighted in the light blue box on this slide.

Speaker 2: Integra's ability to support our customers across the technology maturity curve applies to CRM as well, but is more focused on the higher technology components and sub-assemblies of these devices.

<unk> ability to support our customers across the technology maturity curve applies to CRM as well, but it's more focused on the higher technology components and sub assemblies of these devices. As the finished devices are primarily assembled by our OEM customers.

Speaker 2: as the finished devices are primarily assembled by our OEM customers.

Speaker 2: Our historically deep and differentiated component in subassembly technology that has positioned us so well in conventional CRM also positions us extremely well to serve our customers in the emerging and growth markets such as leadless pacemakers and cardiac monitoring.

Our historically deep and differentiated component and sub assembly technology that has positioned us so well in conventional CRM also positions us extremely well to serve our customers in the emerging and growth markets such as leads us pacemakers and cardiac monitoring.

Speaker 2: The neuromodulation growth curve is comprised of emerging and growth markets. Even the traditional spinal cord stimulation market is estimated to grow at high single digits from the continued innovation in this space.

The neuromodulation growth curve is comprised of emerging and growth markets, even the traditional spinal cord stimulation market is estimated to grow at high single digits from the continued innovation in this space.

Speaker 2: These markets have significantly more early stage companies than the CMV or CRM markets because of the significant number of companies that are investing to develop treatments for currently unmet or underserved patient conditions.

These markets have significantly more early stage companies tend to CMV, our CRM market because of the significant number of companies that are investing to develop treatments for currently unmet or underserved patient conditions.

Speaker 2: Institure is uniquely positioned to be able to bring the full design, development, and high volume manufacturing to these customers, while also vertically integrating the most technologically advanced components with our own intellectual property from decades of innovation.

<unk> is uniquely positioned to be able to bring the full design development and high volume manufacturing to these customers. While also vertically integrating the most technologically advanced components with our own intellectual property from decades of innovation.

Speaker 2: Very few other companies have the breadth of design and development capability, and even fewer offer the depth of component technology that integer offers to our customers.

Very few other companies have the breadth of design and development capability and even fewer offer the depth of component technology that <unk> offers to our customers.

Speaker 2: InstaSure is uniquely positioned to enable emerging companies to bring innovative therapies to market.

<unk> is uniquely positioned to enable emerging companies to bring innovative therapies to market.

The CRM and in growth markets play to the strengths of vintages technologies as they benefit from our extensive intellectual property portfolio in component technology, and our strong design and development capability for finished devices.

Speaker 2: The CRM and N growth markets play to the strengths of Integra's technologies as they benefit from our extensive intellectual property portfolio and component technology and our strong design and development capability for finished devices.

Speaker 2: We continue to strengthen our position by developing novel batteries, miniaturizing the technologies we possess, and developing platforms and designs that enable the emerging and growth products to come to market.

We continue to strengthen our position by developing novel batteries miniaturized and the technologies, we possess and developing platforms and designs that enable the emerging and growth products to come to market.

Speaker 2: We have been investing in our battery facility to add capacity to support the increased demand for neuromodulation and coplier application.

We have been investing in our battery facility to add capacity to support the increased demand for Neuromodulation and hopefully our applications are.

Speaker 2: Our Tijuana facility was the first Class III active implantable medical device manufacturing site in Mexico to receive FDA approval. This augments the significant implantable pulse generator, or IPG, manufacturing capacity already available in two other facilities.

Tijuana facility was the first class III active implantable medical device manufacturing site in Mexico to receive FDA approval.

This augments the significant implantable pulse generator or IPG manufacturing capacity already available to other facilities.

Speaker 2: We already manufacture several components for IPGs in our Tijuana facility, and this furthers our vertical integration capability for IPGs.

We already manufacture several components for IPG and our Tijuana facility and this furthers our vertical integration capability for Ipg's.

The recently completed acquisition of <unk> expands our implantable lead design and development capabilities, while adding additional low cost manufacturing of leads in the Dominican Republic.

Speaker 2: The recently completed acquisition of Oscor expands our implantable lead design and development capabilities while adding additional low-cost manufacturing of leads in the Dominican Republic.

Speaker 2: The expansion of our end-to-end capabilities, platform technologies, and capacity positions us well to accelerate our growth in these faster growing end markets.

The expansion of our end to end capabilities platform technologies and capacity positions us well to accelerate our growth in these faster growing end markets.

Speaker 2: Earlier in the presentation, I highlighted on our strategy journey that we developed our portfolio strategy in 2017 and launched our operational and product line strategies in 2018 and 2009.

Earlier in the presentation I highlighted on our strategy journey that we developed a portfolio strategy in 2017 and launched our operational and product line strategies in 2018 in 2019.

Speaker 2: At the end of 2019, less than two years into our strategy execution, we had achieved two of the three financial objectives of our strategy.

At the end of 2019 less than two years into our strategy execution. We had achieved two of the three financial objectives of our strategy.

Speaker 2: Our debt leverage was 2.9 times EBITDA, and our profit was growing twice as fast as sales.

Debt leverage was two nine times EBITDA and our profit was drilling twice as fast as sales.

Speaker 2: The third financial objective is accelerating sales to grow 200 basis points above the mark.

The third financial objective is accelerating sales to grow 200 basis points above the market.

Speaker 2: The strategy to deliver this third objective resides with our growth.

The strategy to deliver this third objective resides with our royalties.

Speaker 2: I highlighted earlier that our growth teams, who own the development and oversight of the execution of our product line strategies, were formed in late 2018 and began developing and implementing them in 2009.

Highlighted earlier that our growth teams, who on the development and oversight of the execution of our product line strategies were formed in late 2018 and began developing and implementing them in 2019.

Speaker 2: So we have been developing and implementing these strategies for less than three years. This is an important point because of how long it takes to convert new business into revenue in the income state.

So we have been developing and implementing new strategies for less than three years. This is an important point because of how long it takes to convert new business into revenue in the income statement.

Speaker 2: To help investors understand the time it takes to convert new business into sales and income statement, we developed this slide to summarize the approximate cycle times required for products to go through the product development phase, through the clinical or regulatory phase, and then introduce these products into the market.

To help investors understand the time it takes to convert new business into sales in the income statement. We develop this slide summarize the approximate cycle times required for products that go through the product development phase through the clinical or regulatory phase and then introduce these products into the market.

Speaker 2: It is important to highlight this process doesn't start until after integer has already won the business with customers.

It is important to highlight this process doesn't start until after integer has already won the business with customers, which has a cycle time that happens prior to what is highlighted on this slide.

Speaker 2: which has a cycle time that happens prior to what is highlighted on this slide. We broke the new revenue down in

We brought the new revenue down into three types of products.

Speaker 2: The first one is existing product transfers. These are products that are already being manufactured by either our customer or a competitor.

The first one is existing product transfers. These are products that are already being manufactured by either our customer or a competitor.

Speaker 2: These products generally require integer to develop manufacturing processes to produce the components or finish device. This generally takes somewhere between 20 and 30 seconds to produce the components.

These products generally required integer to develop manufacturing processes to produce the components or finished device.

This generally take somewhere between one to two years, then the regulatory phase when required could take up to six months.

Speaker 2: Then the regulatory phase, when required, could take up to six months, after which the manufacturer or manufacturer is restricted.

After which the manufacturing ramp starts.

Speaker 2: The entire cycle time for existing product transfers generally average somewhere between one and two and a half years.

The entire cycle time for existing product transfers generally average somewhere between one and two five years.

Speaker 2: The second type of product is a new 510K product developed with a customer.

The second type of product is a new 500 10-K product developed with the customer.

Speaker 2: This includes product development, potentially clinical and regulatory, market introduction, and then manufacturing and ramp. It is common for this entire process to take somewhere between three years and more than five years.

This includes product development potentially clinical and regulatory market introduction, and then manufacturing ramp.

It is common for this entire process that takes somewhere between three years and more than five years.

Speaker 2: The third category is new PMA, product developed with customers. This is the same process as a 510K, but the product development, clinical, and regulatory generally take much longer.

Third category is new PMA product developed with customers. This is the same processes, a five 10-K, but the product development clinical and regulatory generally take much longer.

Speaker 2: The total cycle time is generally somewhere between five and more than nine years.

The total cycle time is generally somewhere between five and more than nine years.

Speaker 2: But some products can take significantly longer, as the product development and the clinical phases can be extended or iterative to develop a device that delivers the desired therapeutic benefits, which may ultimately not achieve market acceptance.

But some products can take significantly longer as the product development and the clinical phases can be extended or iterative to develop a device that delivers the desired therapeutic benefits, which may ultimately not achieve market acceptance.

Speaker 2: The chart in the top right of this slide demonstrates that integer generates revenue throughout the entire site.

The chart on the top right of this slide demonstrates that <unk> generates revenue throughout the entire cycle.

Speaker 2: So revenue from process or product development is for the engineering work and is generally the lowest amount of revenue in the site.

The revenue from process for product development is for the engineering work and is generally the lowest amount of revenue in the cycle.

Speaker 2: The clinical or regulatory phase includes components or devices needed to perform the SSA trials to gain approval of the product and usually generates more revenue than the process or product development.

The clinical or regulatory phase includes components or devices needed to perform the SSA trials to gain approval of the product and usually generate more revenue than the processor product development space.

Speaker 2: Once market introduction starts and we move into manufacturing ramp, we experience significant growth in revenues until we reach market penetration, at which point we grow with the market and market share changes of our customers.

Once market introduction starts and we move into manufacturing ramp we experienced significant growth in revenues until we reach market penetration at which point, we grow with the market and market share changes of our customer.

Speaker 2: The importance of this slide is to demonstrate the time it takes to convert new business into revenues at manufacturing ramp.

The importance of this slide is to demonstrate the time it takes to convert new business into revenues at manufacturing ramp.

Speaker 2: It also illustrates the resiliency of our business model because a combination of Integers proprietary technologies, a long development cycle, and a substantial regulatory approval process leads to high switching costs for our customers.

It also illustrates the resiliency of our business model because the combination of vintages proprietary technologies, a long development cycle and a substantial regulatory approval process leads to high switching costs for our customers.

Speaker 2: I suspect you might be thinking, well, that's interesting enough, but when will sales grow 200 basis points above the mark?

I suspect you might be thinking well, that's interesting enough, but windmill sales drove 200 basis points above the market.

Speaker 2: The short answer is we're getting closer, but we're not ready to provide a specific date.

The short answer is we're getting closer, but we're not ready to provide a specific date.

Speaker 2: But there are several leading indicators that we are tracking to measure the success of our product line strategies and understand when sales will accelerate.

But there are several leading indicators that we are tracking to measure the success of our product line strategies and understand when sales will accelerate.

Speaker 2: Let's start by looking at the new PMA products we are developing with customers, which have the longest cycle time.

Let's start by looking at the new PMA products, we are developing with customers, which have the longest cycle time.

This is an update from a slide we shared on our third quarter 2020 earnings call and demonstrates that we have a strong pipeline of customers moving through the product development to launch process.

Speaker 2: This is an update from a slide we shared on our 3rd quarter 2020.

Speaker 2: and demonstrates that we have a strong pipeline of customers moving through the product development to launch processes.

Speaker 2: This slide only covers emerging customers and does not include the components or devices we are working on with larger, more established OEMs.

This slide only covers emerging customers and does not include the components are devices. We are working on with larger more established Oems. These.

Speaker 2: These customers are primarily in the neurolodulation markets and have generally followed the new business timelines shared on the prior slide.

These customers are primarily in the Neuromodulation markets and are generally followed the new business timelines shared on the prior slide.

Speaker 2: We have highlighted the changes on the left-hand side of this slide as more customers have moved into product introduction and into the launch phase.

We have highlighted the changes on the left hand side of this slide as more customers are moved into product introduction and into the launch phase.

Speaker 2: On the right hand side, we achieved the estimated sales of approximately $20 million during 2020. And our 2022 estimate of $40 million of sales is still on track.

On the right hand side, we achieved the estimated sales of approximately $20 million during 2020, and our 2022 estimate of $40 million of sales is still on track.

Speaker 2: We are adding a new estimate for 2024 that projects these customers growing to somewhere between $60 and $80 billion, with possibly more depending upon the success of their product once.

We are adding a new estimate for 2020 for that project these customers growing to somewhere between 60 and $80 million with possibly more depending upon the success of their product launches.

Speaker 2: This slide demonstrates that we've been working this strong pipeline for many years, and we are entering a phase where we will see revenue acceleration from the manufacturing ramp phase for these customers.

This slide demonstrates that we've been working this strong pipeline for many years and we are entering a phase where we will see revenue acceleration from the manufacturing ramp phase for these customers.

Accelerating growth starts with product development.

Speaker 2: So we have a rigorous process to target the opportunities that have the strongest market potential.

So we have a rigorous process to target the opportunities that have the strongest market potential.

Speaker 2: Let's look at some additional in-process metrics that we believe demonstrate our significant progress towards accelerating our revenue growth.

Let's look at some additional in process metrics that we believe demonstrate our significant progress towards accelerating our revenue growth.

Speaker 2: We have grown our development revenue by 150% over the last four years. This is measuring actual revenue in 2021 compared to actual revenue in 2017.

We have grown our development revenue by 150% over the last four years. This is measuring actual revenue in 2021 compared to actual revenue in 2017.

Speaker 2: We have also added 54% more R&D resources to support this revenue growth.

We have also added 54% more R&D resources to support this revenue growth.

Speaker 2: We believe this is an important measure of the volume we're adding to the pipeline to drive accelerated growth. Another important measure is the quality of the revenue we're developing.

We believe this is an important measure of the volume, we're adding to the pipeline to drive accelerated growth and.

Another important measure is the quality of the revenue we're developing.

Speaker 2: Our product line strategies have very clearly targeted faster growth markets, the ones we define as emerging or growing on the growth.

Our product line strategies have very clearly targeted faster growth markets the ones, we define as emerging or growing on the growth curve.

Speaker 2: We have shifted the mix to significantly more emerging and growing markets in 2021 compared to 2007.

We have shifted the mix to significantly more emerging and growing markets in 2021 compared to 2017. So not only have we increased the volume of development revenue, but we've also shifted the mix too.

Speaker 2: So not only have we increased the volume of development revenue, but we've also shifted the mix too. This gives us confidence in our ability to deliver on our third financial objective of growing sales 200 basis points faster than the mark.

This gives us confidence in our ability to deliver on our third financial objective of growing sales 200 basis points faster than the market.

Okay.

Speaker 2: As we prepare for accelerated growth from the development opportunities highlighted in our leading indicators, we have been investing to both fuel and fulfill this growth.

As we prepare for accelerated growth from the development opportunities highlighted in our leading indicators, we have been investing to both fuel and fulfill this growth.

Speaker 2: We have increased our growth cap x by 60% over the last four years, holding approximately $100 million.

We have increased our growth capex by 60% over the last four years totaling approximately $100 million.

Speaker 2: We've also added 32% more capacity, primarily through acquisitions and some targeted expansions of existing facilities.

We have also added 32% more capacity, primarily through acquisitions and some targeted expansions of existing facilities.

Speaker 2: We also have plans to reallocate space in our Tijuana facility related to the partial exit of our portable medical product line discussed earlier.

We also have plans to reallocate space in our Tijuana facility related to the partial exit of our portable medical product line discussed earlier.

Speaker 2: We're also building a greenfield facility in Galway to support growth in the fast-growing structural art and neurovascular markets based on the development projects underway.

We're also building a greenfield facility in Galway to support growth in the fast growing structural heart and neurovascular markets based on the development projects underway.

In summary, we have been executing product line strategy since 2019 to maximize our unique position to serve customers across the entire product lifecycle.

Speaker 2: In summary, we have been executing product line strategies since 2019 to maximize our unique position to serve customers across the entire product life cycle.

Speaker 2: We have been focusing our investments on faster growing in markets in a very structured and disciplined manner.

We have been focusing our investments on faster growing end markets and a very structured and disciplined manner. The.

Speaker 2: The execution of our strategy and the in-process metrics we are tracking give us confidence in our ability to deliver on our financial objective of accelerating revenue growth to 200 basis points above the markets we serve.

The execution of our strategy in the in process metrics, we are tracking give us confidence in our ability to deliver on our financial objective of accelerating revenue growth to 200 basis points above the markets we serve.

I will now hand, the call over to Jason.

Speaker 3: Thanks, Joe. Good morning, everyone. Thank you again for joining our call. I'll provide more details on our fourth quarter and full year 2021 adjusted financial results.

Thanks, Joe and good morning, everyone and thank you again for joining our call I will provide more details on our fourth quarter and full year 2021 adjusted financial results.

Speaker 3: summarize our product line sales trends, and conclude with our expectations for 2022.

Summarize our product line sales trends and conclude with our expectations for 2022.

Speaker 3: Starting with our fourth quarter results, at $313 million, our sales delivered strong growth over last year, up $44 million, or 16%. And that included $5 million of sales from one month of $rinying Canal to start their multi- Human productivity

Starting with our fourth quarter results.

At $313 million or sales delivered strong growth over last year up $44 million or 16% and that included $5 million of sales from one month to baas four <unk>.

Speaker 3: Organic sales growth, which excludes the impact of the acquisition and currency differences, is 15% higher than last year.

Organic sales growth, which excludes the impact of the acquisition and currency differences is 15% higher than last year.

Speaker 3: Our adjusted EBITDA was $58 million of $9 million compared to last year, an increase of 19%. An adjusted operating income was up 16% versus prior year.

Our adjusted EBITDA was $58 million up $9 million compared to last year, an increase of 19% and adjusted operating income was up 16% versus prior year.

Speaker 3: With adjusted net income at $33 million, we delivered 99 cents of adjusted diluted earnings per share of 28 cents or 39% from the fourth quarter of 2020.

With adjusted net income of $33 million, we delivered 99% of adjusted diluted earnings per share up 28, or 39% from the third quarter of 2020.

Speaker 3: Our fourth quarter results represent another quarter of strong financial performance versus last year.

Our fourth quarter results represent another quarter of strong financial performance versus last year.

Speaker 3: Again, our 2021 reported financial results include one month of off-

Again, our 2021 reported financial results include one month of <unk> for our full year sales were $1.221 billion, an increase of $148 million compared to the prior year, which is a strong increase of 14% or 13% organically.

Speaker 3: Our full year sales were $1,221,000,000, an increase of $148,000,000 compared to the prior year which is a strong increase of 14% or 13% organically.

Adjusted EBITDA was $243 million up 28% versus last year, and adjusted operating income was $187 million up $43 million compared to the prior year, an increase of 30% or.

Speaker 3: Adjusted EBITDA was $243 million, up 28% versus last year. And adjusted operating income was $187 million, up $43 million compared to the prior year, an increase of 30%. Our adjusted net income was $136 million, and we delivered $4.08 of adjusted diluting earnings per share of $1.31 for prior year.

Our adjusted net income was $136 million and we delivered $4 eight of adjusted diluting earnings per share of $1 31 from prior year.

Speaker 3: These strong year-over-year results were achieved while overcoming an extremely difficult labor and supply chain environment.

These strong year over year results were achieved while overcoming an extremely difficult labor and supply chain environment as.

Speaker 3: As Joe mentioned, we have been committed to delivering the products needed by our customers and ultimately the patients they serve. This has required the teams working a great deal of overtime to cover labor gaps.

As Joe mentioned, we have been committed to delivering the products needed by our customers and ultimately the patients. They serve this has required the team's working a great deal of over time to cover labor gaps instead.

Speaker 3: incentivizing associates and new hires, incurring significant training costs, managing the inefficiencies of redirecting production to match material availability, and incurring inflation costs in our supply chain.

Advising associates and new hires.

<unk> significant training cost managing the inefficiencies of redirecting production to match material availability and incurring inflation cost in our supply chain. We estimate these additional costs contributed to approximately 200 basis points of erosion in our gross margins for the full year.

Speaker 3: We estimate these additional costs contributed to approximately 200 basis points of erosion in our gross margin for the full year. The constraints were more significant in the third and fourth quarters and as a result the gross margin impact was more pronounced in the second half of 2021.

The constraints were more significant in the third and fourth quarters and as a result, the gross margin impact was more pronounced in the second half of 2021.

Speaker 3: The good news is that we believe the majority of these incremental costs are temporary in nature and will subside. That said, we do expect these incremental costs to remain through at least the first half of 2020.

The good news is that we believe the majority of these incremental costs are temporary in nature and will subside that said, we do expect these incremental costs to remain through at least the first half of 2022.

Speaker 3: We are proud of InstaGIR's dedicated associates for continuing to deliver product during these dynamic times.

We are proud of integers dedicated associates for continuing to deliver product during these dynamic times.

To provide more color on our full year 2021, adjusted net income, we increased $44 million compared to 2020.

Speaker 3: To provide more color on our full year 2021 adjusted net income, we increased $44 million compared to 2020.

Speaker 3: We delivered $38 million of operational improvement as compared to last year, driven by our sales volume returning to pre-pandemic levels, and by our manufacturing and supply chain team doing an excellent job of accelerating production to meet demand from industry recovery and new product introduction.

We delivered $38 million of operational improvement as compared to last year, driven by our sales volume returning to pre pandemic levels and by our manufacturing and supply chain teams do an excellent job of accelerating production to meet demand from industry recovery and new product introductions.

Speaker 3: Well, of course, managing through the labor and supply chain headwinds that began primarily in the second half of the year.

While of course, managing through the labor and supply chain headwinds that began primarily in the second half of the year.

Speaker 3: In addition, FX was favorable, contributing $1 million in improvement versus 2020. Lower adjusted interest expense delivered a $9 million improvement in adjusted net income compared to last year, driven by our continued focus on debt repayment and the savings captured with our debt refinancing in the third quarter.

In addition, FX was favorable contributing $1 million an improvement versus 2020.

Lower adjusted interest expense delivered a $9 million improvement in adjusted net income compared to last year, driven by our continued focus on debt repayment and the savings cash with our debt refinancing in the third quarter.

Speaker 3: Our adjusted effective tax rate was 15% for the full year 2021. While this is a very favorable rate, we saw a year-over-year headwind of $4 million due to the adjusted effective tax rate in 2020 being 12.2%.

Our adjusted effective tax rate was 15% for the full year 2021, while this is a very favorable rate we saw year over year headwind of $4 million due to the adjusted effective tax rate in 2020 being 12, 2%.

Speaker 3: You may recall that 2020 benefited from the rate impact of lower pandemic driven pre-tax income.

May recall that 2020 benefited from the rate impact of lower pandemic, driven pretax income as well as from several significant discrete items recorded in 2020 related to the favorable impact of final tax reform regulation and our tax planning strategy discreet items in 2012.

Speaker 3: as well as from several significant discrete items recorded in 2020 related to the favorable impact of final tax reform regulations and our tax plan strategy.

Speaker 3: Discrete items in 2021 were also favorable, but not as significant as the prior year.

One were also favorable but not as significant as the prior year.

Speaker 3: For 2022, we expect our adjusted effective tax rate to be between 16 to 17.5 percent as we expect lower benefits from tax return closures and deductions from stock-based compensation.

2022, we expect our adjusted effective tax rate to be between 16% to 17, 5% as we expect lower benefits from tax return closures and deductions from stock based compensation.

We continued a strong conversion of and constant cash in the fourth quarter generating $39 million in cash flow from operating activity.

Speaker 3: We continued a strong conversion of income to cash in the fourth quarter, generating $39 million in cash flow from operating at $2.5 million.

Speaker 3: We generated $16 million of free cash flow, inclusive of $23 million of capital expenditures in the fourth quarter, in line with our total year guidance of $50 to $60 million.

We generated $16 million of free cash flow inclusive of $23 million of capital expenditures in the fourth quarter in line with our total year guidance of $50 million to $60 million.

Speaker 3: As Joe shared with you earlier, we continue to ensure we are making focused investments to fuel and fulfill growth consistent with our product line strategy.

As Joe shared with you earlier, we continue to ensure we are making focused investments to fuel and fulfill growth consistent with our product line strategies.

Speaker 3: Net total debt increased $206 million to $818 million, which includes the impact of $220 million in new borrowings to fund the acquisition of Austin.

Net total debt increased $206 million to $818 million, which includes the impact of $220 million and new borrowings to fund the acquisition of encore, excluding the new borrowings our net total debt reduction was $14 million in the fourth quarter.

Speaker 3: excluding the new borrowing. Our net total debt reduction was $14 million in the fourth.

Speaker 3: Our debt leverage at the end of the fourth quarter was 3.4 times adjusted EBITDA. This leverage ratio includes the impact of the new borrowings to fund the Oscar acquisition while remaining within our target ratio range.

Our debt leverage at the end of the fourth quarter was three four times adjusted EBITDA. This leverage ratio includes the impact of the new borrowings to fund the <unk> acquisition, while remaining within our targeted ratio range.

I will now transition to a discussion of our product line sales. Please note that these product line sales are consistent with the product classifications, we have used historically and do not yet include the product line reporting changes associated with the portable medical update Joe shared earlier I will close with a summary of the.

Speaker 3: We'll now transition to a discussion of our product line sales. Please note that these product line sales are consistent with the product classifications we have used historically and do not yet include the product line reporting changes associated with the portable medical update Joe shared earlier. I will close with a summary of the impact of this portfolio update on our product line reporting and some additional improvements we are making at the end of this section.

Impact of this portfolio update on our product line reporting and some additional improvements we are making at the end of this session.

Speaker 3: So I-29 reflects trailing four quarter reported sales year over year change.

Slide 29 reflects trailing four quarter reported sales year over year changes through the first quarter of 2021, our sales were significantly impacted by the Covid pandemic the trend reversed in the second quarter of 2021 and continue to improve in the third and fourth quarters.

Speaker 3: Through the first quarter of 2021, our sales were significantly impacted by the COVID pandemic. The trend reversed in the second quarter of 2021 and continued to improve in the third and fourth quarters as reflected in the significant increase in our trailing four-quarter sales growth rate.

As reflected in the significant increase in our trailing four quarter sales growth rates.

Speaker 3: I'll also note that we added an indication of the percentage of sales that each product line contributes to total integer. This should provide additional insight on the impact each has on our total growth rate.

I'll also note that we added an indication of the percentage of sales that each product line contribute to total integer. This should provide additional insight on the impact each has on our total growth rate.

Beginning with our first product line cardio and vascular sales were up 19% in the fourth quarter compared to the fourth quarter of 2020 the.

Speaker 3: Beginning with our first product line, cardio and vascular sales were up 19% in the fourth quarter compared to the fourth quarter of 2020. The fourth quarter growth was driven by double digit sales increases across all cardio and vascular markets, with the neurovascular market delivering particularly strong year-over-year growth despite supply chain constraints. Trailing fourth quarter sales grew 10% year-over-year in the fourth quarter.

Fourth quarter growth was driven by double digit sales increases across all cardio and vascular markets with the neurovascular market, delivering particularly strong year over year growth. Despite supply chain constraints trailing four quarter sales grew 10% year over year in the fourth quarter.

Moving the cardiac rhythm management and Neuromodulation sales grew 19% in the fourth quarter, but both cardiac rhythm management and Neuromodulation markets, increasing double digits, again, overcoming and market demand fluctuations and supply chain challenges.

Speaker 3: Moving to cardiac rhythm management and neuromodulation, failed through 19% in the fourth quarter, with both cardiac rhythm management and neuromodulation markets increasing double digits, again, overcoming end-market demand fluctuations and supply chain challenges.

Speaker 3: Trailing four-quarter sales continued with strong year-over-year growth of 29%.

Trailing four quarter sales continued with strong year over year growth up 29%.

As a reminder, the advanced surgical orthopedics and portable medical product line includes sales under supply agreement to the acquirer of our divested <unk> product line. In addition to our portable medical sales as reported historically.

Speaker 3: As a reminder, the advanced surgical, orthopedics, and portable medical product line includes sales under supply agreement to the acquirer of our divested ASNO product line, in addition to our portable medical sales as reported historically. Fourth quarter sales declined 10% versus the prior year, mostly due to the decreased demand for ventilator and patient monitoring components that peaked last year during the pandemic.

Fourth quarter sales declined 10% versus the prior year, mostly due to the decreased demand for ventilator and patient monitoring components that peaks last year during the pandemic.

Speaker 3: Trailing four-quarter sales declined 10% year-over-year due to the decline in advanced surgical and orthopedics and, as previously noted, a decline in portable medical driven by the lower demand for COVID-related ventilators and patient monitor.

Trailing four quarter sales declined 10% year over year due to the decline in advanced surgical and orthopedics and as previously noted a decline in portable medical driven by the lower demand for Covid related ventilators and patient monitoring components.

Finally, wrapping up with electric count our non medical segment fourth quarter sales increased 34% as we continue to see improvement in the energy market that began a recovery in the first half of 2021 trailing four quarter sales grew 8% year over year as I just mentioned a few.

Speaker 3: Finally, wrapping up with Electra Chem, our non-medical segment. Fourth quarter sales increased 34% as we continued to see improvement in the energy market that began a recovery in the first half of 2021, trailing fourth quarter sales grew 8% year over year. As I just mentioned a few moments ago, I wanted to share changes we are making in our product line sales classification as we move into 2022. Here are two changes.

<unk> I wanted to share changes, we are making in our product line sales classifications as we move into 2022. There are two changes first consistent with our discussion on portable medical we will move active implantable medical device components into CRM and then from their current alignment in the <unk>.

Speaker 3: First, consistent with our discussion on portable medical, we will move active implantable medical device components into CRMNN from their current alignment in the ASNO and portable medical product lines.

<unk> and portable medical product line.

Speaker 3: Second, we are moving access and delivery products associated with CRM and neuromodulation procedures in the CRMNN product line from their current alignment with cardio and vascular

Second we are moving access and delivery products associated with CRM, and Neuromodulation procedures, and the CRM and end product line from their current alignment with cardio and vascular.

Speaker 3: We're making these changes because we believe these new product line classifications are better aligned to our end market and our product line strategy.

We are making these changes because we believe these new product line classifications are better aligned to our end markets and our product line strategies.

Speaker 3: Again, the preceding slides just reviewed do not reflect these changes and we will begin using this alignment in the first quarter of 2022. However, in the appendix of this presentation, we have provided a version of these product line slides using the new realigned product line classifications. We're hopeful this provides a clear and clear view of the new product line classifications.

Again, the preceding slides just reviewed do not reflect these changes and we will begin using this alignment in the first quarter of 2022. However in the appendix of this presentation. We have provided a version of these product lines slide using the new realigned product line classifications. We are hopeful this provides a.

Clear and smooth transition.

Speaker 3: We now like to talk about our expectations for 2020.

We'd now like to talk about our expectations for 2022.

As summarized earlier, we expect 2022 sales, including $66 million a box score to be in the range of $1 $340 million to $1 billion $365 million, an increase of 10% to 12% compared to 2021.

Speaker 3: As summarized earlier, we expect 2022 sales, including $66 million of Oscorp, to be in the range of $1,340,000,000 to $1,365,000,000, an increase of 10-12% compared to 2021. On an organic basis, we expect sales to grow 5-7% compared to 2020.

On an organic basis, we expect sales to grow 5% to 7% compared to 2025.

Speaker 3: We see strengthening demand as evidenced by our firm backlog orders, which have grown meaningfully since the end of 2020. However, the difficult labor and supply chain environment continues to impact our sales, and we expect the first quarter of 2022 to be similar to the fourth quarter of 2021.

We see strengthening demand as evidenced by our firm backlog orders, which have grown meaningfully since the end of 2020.

The difficult labor and supply chain environment continues to impact our sales and we expect the first quarter of 2022 to be similar to the fourth quarter of 2021.

Speaker 3: We expect the second quarter of 2022 to be sequentially better than the first quarter, as we believe the impacts from both the COVID surge in January and supply chain volatility will improve.

We expect the second quarter of 2022 to be sequentially better than the first quarter.

As we believe the impacts from both the Covid surge in January and supply chain volatility will improve.

Speaker 3: We expect sales growth in the second half of the year to steadily improve as we believe labor and supply chain challenges will subside and we will realize the impact of growth from new product in traderaaa.

We expect sales growth in the second half of the year to steadily improve as we believe labor and supply chain challenges will subside and we will realize the impact of growth from new product introductions.

Speaker 3: Following the sales range we just discussed, we expect 2022 adjusted EBITDA to be between $270 million to $282 million, which is 11 to 16% year-over-year growth. This includes an estimated $12 million of EBITDA for all sales.

Following the sales range. We just discussed we expect 2022, adjusted EBITDA to be between $270 million to $282 million, which is 11% to 16% year over year growth. This includes an estimated $12 million of EBA.

<unk> for Encore, we expect 2022, adjusted operating income to be between $201 million to $230 million, reflecting growth of 7% to 14%.

Speaker 3: We expect 2022 adjusted operating income to be between $201 million to $213 million, reflecting growth of 7% to 14%.

Speaker 3: These growth rates incorporate the continuation of cost pressures associated with labor and supply chain challenges through the first half of the year.

These growth rates incorporate the continuation of cost pressures associated with labor and supply chain challenges through the first half of the year.

Speaker 3: Adjusted EPS is expected to be between $4.35 to $4.65, reflecting growth of 7 to 14 percent.

Adjusted EPS is expected to be between $4 35.

The $4 65.

Collecting growth of 7% to 14%.

Speaker 3: This assumes an adjusted effective tax rate between 16 to 17.5%, as mentioned earlier, and assumes our adjusted interest expense to be between $24 to $28 million.

This assumes an adjusted effective tax rate between 16% to 17, 5% as mentioned earlier and assumes our adjusted interest expense to be between $24 million to $28 million.

As I close.

Speaker 3: We anticipate another strong year of cash flow, generating between $160 million to $175 million in cash flow from operations.

We anticipate another strong year of cash flow generating between $160 million to $175 million in cash flow from operations and between 90 million to $105 million of free cash flow.

Speaker 3: and between 90 million to 105 million of free cash flow.

Speaker 3: Consistent with our strategy, we are increasing and concentrating our investments in the business to drive growth and we expect to spend between $65 million to $75 million on capital expenditures which is an increase in the run rate of our prior year spending.

Distant with our strategy, we are increasing and concentrating our investments in the business to drive growth and we expect to spend between $65 million to $75 million on capital expenditures, which is an increase in the run rate of our prior year spending.

Speaker 3: We expect to reduce net total debt $85 to $100 million and expect to be at the end of the year within our target leverage ratio of 2.5 to 3.5 times adjusted EVA dough. With that, I'll turn the call back to Joe. Thank you.

We expect to reduce net total debt $85 million to $100 million and expect to be at the end of the year within our target leverage ratio of two five to three five times adjusted EBITDA with that I'll turn the call back to Joe. Thank you.

Speaker 2: Thank you, Jason. We delivered a strong 2021 coming off the depths of the pandemic. We expect to grow 2022 revenues and profit, low double digits at the midpoint of our guidance as we manage to both labor and supply chain constraints.

Thank you, Jason we delivered a strong 2021 coming off the depths of the pandemic, we expect to grow 2022 revenues and profit low double digits at the midpoint of our guidance as we manage through both labor and supply chain constraints.

Speaker 2: integer is uniquely positioned to serve our customers across all phases of their product life cycle.

Integer is uniquely positioned to serve our customers across all phases of their product life cycles through the execution of our product line strategies, we have demonstrated progress by increasing customer development program revenue by 150% and shifting the mix of these programs to 80% higher growth markets.

Speaker 2: Through the execution of our product line strategies, we have demonstrated progress by increasing customer development program revenue by 150% and shifting the mix of these programs to 80% higher growth mark.

We have a strong pipeline of emerging customers with PMA products that is expected to grow from $20 million in 2000 $20 million to $40 million this year and to between 60 and $80 million in 2024, I remain confident in our strategy and our associates and our ability to earn a valuation premium for our shareholders.

Speaker 2: We have a strong pipeline of emerging customers with PMA products that is expected to grow from 20 million in 2020 to 40 million dollars this year and to between 60 and 80 million dollars in 2020.

Speaker 2: I remain confident in our strategy and our associates and our ability to earn a valuation premium for our shareholders.

Speaker 2: Thank you for joining our call this morning. I will now turn the call back to our moderator for the Q&A portion of our call.

Thank you for joining our call. This morning, I will now turn the call back to our moderator for the Q&A portion of our call.

At this time I would like to remind everyone in order to ask a question Press Star and then the number one on your telephone keypad.

Speaker 1: At this time, I would like to remind everyone in order to ask a question, press star and then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

For just a moment to compile the Q&A roster.

Speaker 1: Your first question comes from the line of Matt Michon.

Your first question comes from the line of Matt must Sean.

Sure.

I'll open.

Speaker 4: Hey guys, this is Brett Fishman on today for Matt. Just wanted to start off on the supply chain issues. Can you provide some more color from a revenue perspective on how the current situation is impacting trends, just given lower than ideal inventory levels at some of your customers? And then as a follow up, does this dynamic add to a potential backlog into 2H22 and 23? Thank you.

Hey, guys. This is Brett theres been on today for Matt just wanted to start off on the supply chain issues.

Can you provide some more color from a revenue perspective on how the current situation is impacting trends just given lower than ideal inventory levels at some of your customers and then as a follow up.

Does this dynamic AD to a potential backlog into 2022 and 2000, okay. Great. Thank you.

Speaker 2: Thanks, Brad. Thanks for the question. So what we're seeing in supply chain is really our tier two, three and four suppliers who are seeing the ripple effect.

Thanks, Brad Thanks, Thanks for the question. So that's what we're seeing in supply chain is really our tier two three and four suppliers who are seeing the ripple effect.

Speaker 2: of whether it's force measures or labor shortages or tools that break or them just trying to deal with the volumes and then having struggles. I think our supply chain teams have done a phenomenal job of managing that and working to be as far in advance of that as we can. We're doing things to help our suppliers be able to supply us.

Whether its force matures or labor shortages or tools, the break or them just trying to deal with the volumes and then having struggles and we I think our supply chain teams have done a phenomenal job of managing that and work to be as far in advance of that as we can we're doing things to help help our suppliers via.

Well to supply us and ultimately enable us to continue to meet the needs of our of our customers. So that they can serve patients and the feedback we're getting from our customers is we're meeting patient needs, but we do believe that there is some inventory has been depleted at our customers thats in the in the supply chain. So we do think there is.

Speaker 2: and ultimately enable us to continue to meet the needs of our customers so that they can serve patients. And the feedback we're getting from our customers is we're meeting patient needs.

Speaker 2: But we do believe that there is some inventory that's been depleted at our customers that's in the supply chain. So we do think there's order of magnitude. It's hard to estimate, but maybe it's in the $10 to $15 million range worth of sales that maybe have been inventory depletion. And so we would expect to see some increase in future sales as that inventory gets replenished. Whether that gets replenished in the second quarter or second half is hard to tell. It'll likely be dependent upon the labor environment and the supply chain environment, but we have already incorporated that order of magnitude for inventory replenishment in our future guidance.

Order of magnitude, it's hard to it's hard to estimate, but maybe it's in the $10 million to $15 million range worth of sales that maybe have been inventory depletion and so we would expect to see some increase in future sales as that inventory gets replenished whether that gets replenished in the second quarter.

Second half is hard to tell.

It'll likely be dependent upon the labor environment in the supply chain environment, but we have already incorporated that order of magnitude or inventory replenishment in our future guidance.

Speaker 2: So that's been factored into the outlook that you see, and we provided a...

So that's been factored into the outlook that you see and we provided a qualitative assessment of the quarterly profile for the year, where we expect first quarter 2022.

Speaker 2: 2022 to look a lot like the fourth quarter of 2021. And that's really a function of the COVID surge. You know, we saw pretty significant absenteeism, particularly in Europe , in our Ireland facilities in the fourth quarter, but we saw much, much more dramatic impact from absenteeism in January from the COVID surge. I think we've heard that and seen that across all of our customers, as well as our suppliers. That was a pretty significant impact in January , which is why we think there's at least this 10 to $15 million worth of inventory depletion that's occurred in the system. So that's really our outlook. We would expect second quarter to get progressively to our honest.

Look a lot like the fourth quarter of 2021, and that's really a function of the COVID-19 surge, we saw pretty significant absenteeism, particularly in Europe in our Ireland facilities in the fourth quarter, but we saw much much more dramatic impact from absenteeism in January from the Covid.

Serge I think we've heard that and seeing that across the across all of our our customers as well as our suppliers that was a pretty significant impact in January which is why we think there is at least this $10 million to $15 million worth of inventory depletion. That's occurred in the in the system. So thats really.

Speaker 2: So that's really our outlook. We would expect second quarter to get progressively or on a sequential basis better than first quarter. And then the second half, we really expect the volume to begin to accelerate because there's very strong demand, very strong demand. As you can imagine with that level of absenteeism in the supply chain.

Our outlook, we would expect second quarter to get progressively or on a sequential basis better than first quarter and then in the second half we really expect the volume to begin to accelerate because there's very strong demand very strong demand and as you can imagine with that level of absenteeism in the supply chain challenges.

Speaker 2: challenges, when material arrives, what arrives, that that's also driving cost. And you see that reflected in the margins, both in the, particularly in the fourth quarter, but also I would expect to see that similar impact in the first quarter. And that will get progressively better as we get into the second quarter and second half of the year.

Is it.

Material arrives what arrives, but thats also driving cost and youll see that reflected in the margins both in the particularly in the fourth quarter, but also I would expect to see that similar impact in the first quarter and that will get progressively better as we get into the second quarter and second half of the year.

Speaker 4: Alright, thanks. Thanks for that caller. And then just wanted to move on to some some of the longer term elements. Given the starting point for guidance of five to 7% was a little bit above your traditional starting point for a year.

Alright, thanks, thanks for that color.

And then just wanted to move on to some some of the longer term elements given the starting point for guidance of 5% to 7% was a little bit above your traditional starting point for a year.

Is it fair to think of that as kind of a sustainable go forward organic growth rate for integer and with that kind of imply that youre about halfway to your goal of market growth plus too.

Speaker 4: Is it fair to think of that as kind of the sustainable go forward organic growth rate for integer? And would that kind of imply that you're about halfway to your goal of market growth plus two?

Speaker 2: It's a great question, Brett, and the short answer is yes to both of those. But I would add to it and say, we set our goal, which we think at the time four years ago was ambitious to say 200 basis points above the markets we serve, the growth rate. But we think that's at least the goal. We want to get at least. We want to grow sustainably faster than our markets. We pick 200 basis points because when we do that consistently, sustainably, we believe we'll be viewed as an out performer and a consistent sustainable basis that ultimately should lead to evaluation premium.

Great Great question Brad.

The short answer is yes to both of those but I would I would add to it and say we.

We set our goal, which we think at the time four years ago was ambitious to say 200 basis points above the markets. We serve the growth rate, but we think that at least with the goal that we want to get at least we want to be sustainably, we want to grow sustainably faster than our markets. We picked 200 basis points because if we.

Do that when we do that consistently sustainably, we believe will be viewed as an outperformer in a consistent sustainable basis that ultimately should lead to evaluation premium.

Speaker 2: The reason we took the time today to go through our product line strategies, give the overview of our strategy journey, is we wanted to frame for investors what our journey has been.

The reason we took the time today to go through our product line strategies give the overview of our strategy journey as we wanted to frame for investors. What our journey has been 2017, we built the portfolio. We did a portfolio analysis 2018, we started recruiting the leaders in developing the elements.

Speaker 2: In 2017, we built the portfolio, we did the portfolio analysis. 2018, we started recruiting the leaders and developing the elements in the specific actions of the strategy. It was really the end of 18, beginning of 19 that we, I would say we got into full execution mode. And so if we're in full execution mode for 19, 20, 21, we're really three years into our strategy.

And the specific actions of the strategy. It was really the end of <unk> beginning of 19 that I would say, we got into full execution mode and so if we're in full execution mode. For 19 2021, we're really three years into our strategy and we thought it was important to share with investors how to think about the revenue generation cycle times.

Speaker 2: And we thought it was important to share with investors how to think about the revenue generation cycle times. We shared that on one of the slides because it gives you some perspective on the business that we're seeing show up in sales in 2022, the new business, new product introduction that's driving the slightly faster growth, the 100 basis points faster than where we've been historically. That was business that we targeted and won back in 18 and 19 and then it took us 19, 20, 21 to go through the process or product development cycle market regulatory, market introduction and ramp. And so we're starting to see some of those strategies begin to deliver and show in our sales acceleration. And so we thought it was important to see kind of the journey, understand where we are in that journey and yes, seeing the five to seven percent growth is a step up from four to six. And it's because we have in process metrics.

We shared that on one of the slides because it gives you some perspective on the business that we're seeing show up in sales into 2022, the new business new product introduction, that's driving the slightly faster grows to 100 basis points faster than than where we've been historically that was business that we targeted in.

One back in 18, and 19 and then it took US 19 2021 to go through the process or product development cycle, Mark marketed regulatory market introduction and ramp and so we're starting to see some of those some of those strategies begin to deliver and show in our sales.

Asian, and so we thought it was important to see kind of the journey understand where we are in that journey and yes, seeing the 5% to 7% growth is a step up from four to six and it's because we have in process metrics that we're monitoring to track our progress and we think it's demonstrating that our sales are good.

Speaker 2: that we're monitoring to track our progress. And we think it's demonstrating that our sales are growing, employees to continue growing at a faster rate.

Boeing employees to continue growing at a faster rate.

Got it excellent and then lastly from me can you just provide an update on how youre seeing the M&A pipeline at this point, where you might be seeing some more opportunities and then just your overall level of optimism around the ability to deploy $200 million to $250 million. This year just based on the current landscape. Thank you.

Speaker 4: All right, excellent. And then lastly from me, could you just provide an update on how you're seeing the M&A pipeline at this point, where you might be seeing some more opportunities, and then just your overall level of optimism around the ability to deploy 200 to 250 million this year just based on the current landscape. Thank you very much.

Okay.

Speaker 2: Certainly, thank you. We've had a robust pipeline for from a number of years throughout the pandemic. We were the team was was vigilant and diligent and continuing to assess opportunities. We love the Oscar acquisition. The integration process is going incredibly well. We're more excited today than we've ever been. Now that we've gotten a chance to work more closely with our new associates and colleagues. And we see tremendous growth potential and synergies from from working together. We believe we are stronger together. When we look at the pipeline of opportunities, it's robust. You know, unfortunately, deals have a life of their own and a timing of their own that that the sellers in more control of than the buyer. But we like the opportunities we have in the pipeline. And I'll just reiterate what we're looking for is very specific capabilities that fill out our portfolio that that complete our ability to vertically integrate. We are very focused and targeted on the faster going in markets. You've heard us say this. We went through it on the growth curves, whether it's structural, hard electrophysiology or neurovascular or neuromodulation. Those are the faster going in markets where where there's unmet patient need, where our customers are disproportionately investing. And so those are the types of companies and capabilities we're looking to acquire. We feel like there's a very strong pipeline of those. And we're we're confident we can deploy that capital in a prudent, cost effective way that will help accelerate our growth and generate returns. So we're we're confident that we can execute on our capital deployment strategy. We're confident that we can execute on our capital employment strategy.

Certainly thank you we've had a robust pipeline from a number of years throughout the pandemic.

The team was vigilant and diligent in continuing to assess opportunities we love the ocular acquisition and the integration process is going incredibly well, we're more excited today than we've ever been now that we've gotten a chance to work more closely with our new associates and colleagues and we see tremendous growth potential.

And synergies from from working together, we believe we are stronger together when we look at the pipeline of opportunities is robust.

Unfortunately deals have a life of their own and a timing of their own that the sellers and more control over them the buyer, but we like the opportunities we have in the pipeline.

I'll just reiterate what we're looking for is very specific capabilities that fill out our portfolio that complete our ability to vertically integrate we are very focused and targeted on the faster growing end markets you've heard US say this we went through it on the growth curves, whether it's structural heart electrophysiology our neurovascular.

Neuromodulation those are the faster growing end markets, where where there is unmet patient need where our customers are disproportionately investing and so those are the types of companies.

Companies and capabilities, we're looking to acquire we feel like there's a very strong pipeline of those and we're we're confident we can deploy that capital in a prudent cost effective way that will help accelerate our growth and generate returns so were we.

We are confident that we can execute on our capital deployment strategy.

Speaker 2: Thanks for the questions, Brett.

Thanks for the questions Brett.

Alright, thank you.

Okay.

Speaker 1: Our next question comes from the line of Jim Sidoti. Your line is open. Hi, good morning and thanks for taking...

Our next question comes from the line of Jim Sidoti Your line is open.

Hi, good morning, and thanks for taking the questions. So good morning, Jim you talked to.

Speaker 5: Good morning. So you talked about the decision to exit some of the portable medical business, and it seems to make a lot of sense.

Good morning, So you talked about the decision to exit some of the portable medical business and it seems to make a lot of sense.

Speaker 5: from a margin and growth point of view, but can you just give us a little more color why it'll take four years to exit that business?

From a margin point of view, but can you just give us a little more color why it will take four years to exit the equity.

Speaker 2: Jim, it's a great question and I would simply say it's the stickiness of medical device, highly regulated medical device products.

Jim It's a great question.

I would simply say, it's the stickiness of medical device.

Highly regulated medical device products.

Speaker 2: I'd also emphasize it's a partial exit, so of the 70 we're exiting 40, retaining 30. And so a summary is it's 40 million of products that are largely undifferentiated from a technology standpoint. We went to our customers and said, this business isn't profitable enough. We would rather redeploy all of the resources supporting this business, including freeing up manufacturing space.

I'd also emphasize it's a partial exits of the 70, we're exiting 40, retaining 30 and so.

Summary is it's $40 million of products that are largely undifferentiated from a technology standpoint, we went to our customers and said this business isn't profitable enough, we would rather redeploy.

All of the resources supporting this business, including freeing up manufacturing space for more profitable growth.

Speaker 2: for more profitable growth in a low-cost country. And those customers came back to us and said, it's gonna take a while to move that business. And two, three, in some cases four years.

Our low cost country and those customers came back to us and said, it's going to take a while to move that business.

<unk> hundred three in some cases for years and so we would look at it we look at this and say this is how all of our products are with the distinction being this is undifferentiated from a technology standpoint, and now when you. When you think about most of our business that has entered your proprietary.

Speaker 2: And so we would look at this and say, this is how all of our products are, with the distinction being this is undifferentiated from a technology standpoint. And now when you think about most of our business that has.

Speaker 2: integer proprietary technologies or manufacturing processes, the stickiness is even higher.

Technologies or manufacturing processes, the stickiness is even higher.

And so we look at this and say this is indicative or representative of the industry. We're going to support. These customers. We absolutely are we've accepted the timelines that they've given us we're getting paid for it because we're raising the prices to make sure that it's profitable and work where it is spending the resources on doing but it's going to take four years and so.

When you look at that $40 million, it's going to be there for another four years it'll be 2025 or 2026 before you begin to see any decline in those sales and quite frankly, it will also be dependent upon the ability and the effectiveness of the transfers to those suppliers. So it's out there, but the good news.

Speaker 2: In the short term, we're going to support them, serve them, and ensure that they can meet patient need, but we're also going to make this more profitable for us through the price increases and the overhead reductions. And that gives us the ability to now start planning to move business into that low-cost manufacturing location and take advantage of the growth we see elsewhere, more profitable growth in that location without any meaningful capital investment in the facility.

In the short term.

Going to support them serve them and ensure that they can meet patient needs, but we're also going to make this more profitable for us through the price increases and the overhead reductions and that gives us the ability to now start planning to move business into that low cost manufacturing location and take advantage of the growth, we see elsewhere more profitable growth in that location.

Speaker 2: cost manufacturing location and take advantage of the growth we see elsewhere, more profitable growth in that location without any meaningful capital investment in the facility. And then the other thing you spent a lot of time today talking about was the product development cycle. And you pointed out how some of these cycles can be up to five years long. So when you're in the early part of that process, how do you measure your progress? How are you sure you're on time when it's such a long development process? Yeah, it's a great question, Jim. We tried to highlight a few of those in terms of...

And without any meaningful capital investment in the facility.

Speaker 5: And then the other thing you spent a lot of time today talking about was the product development cycle. And you pointed out how some of these cycles can be up to five years long. So when you're in the early part of that process, how do you measure your progress? How are you sure you're on time when it's such a long development process?

Alright, and then.

The other thing we spent a lot of time today talking about the.

Our product development cycle.

You pointed out how some of these cycles can be up to five years as well. So when you are in the early part of the process. How do you measure your progress how do you. How are you sure you are on time.

It's such a long development process.

Speaker 2: Yeah, it's great. Great, great question, Jim. We tried to highlight a few of those in terms of the amount of product development revenue we're generating. So what we're getting paid to do development. And then we showed how we've shifted the mix to be 80% the faster growing in market. So we've been very targeted at which which what business we're winning, we've been very targeted what business we're going after. And in fact, oftentimes, it's saying no to business that's in the maybe more mature, less differentiated, less attractive markets in order to shift that mix. So we've been able to grow the volume of development work by 150% while shifting the mix to faster growth 80% is in the faster going in markets that we've been targeting. Those are our in process metrics.

Yes, it's a great great Great question, Jim We tried to highlight a few of those in terms of the amount of product development revenue, we're generating so what we're getting paid to do development and then we showed how we've shifted the mix to be 80% the faster growing end markets. So we've been very targeted at which which business we are winning.

We've been very targeted what business, we're going after and in fact.

Oftentimes, it's saying no to business Thats in there may be more mature less differentiated less attractive markets in order to shift that mix. So we've been able to grow the volume of development work by 150%, while shifting the mix to faster growth to 80% is in the faster growing end markets that we've been targeting.

Our in process metrics.

We monitor the development of the timeline of these development programs and the good news is particularly on the on the PMA customers, our PMA products with the longest cycle. We've been at this a long time, particularly in the emerging customer space and we've got a robust pipeline. We we updated the slide we shared in the third quarter of 2020 and you see we've.

Seen progression of more customers moving into product introduction and launched you'll see the progression of the sales the $10 million in 18 to 20 million in $2020 40 in 2022, and we added a new 2024 growing to 60 to 80 or even higher depending upon introduction. So these are the in process metrics that we're monitoring.

Speaker 2: So these are the end process metrics that we're monitoring. It also, you know, the new product introductions that are happening in 2022 from business that we won in 18, 19, and we spent the last three years doing the development and transfer to production. That's what's giving us the confidence is our organic growth to five to 7%, but it's what gives us confidence in our ability to hit our third financial objective of at least 200 basis points above the markets.

And also the new product introductions that are happening in 2022 from business that we won in 18 19, and we spent the last three years doing the development and transferred to production, that's what's giving us the confidence is our organic growth of 5% to 7%, but it's what gives us confidence in our ability to hit our <unk>.

Speaker 2: business that we won in 18-19 and we spent the last three years doing the development and transferred to production. That's what's giving us the confidence to raise our organic growth to 5-7%, but it's what gives us confidence in our ability to hit our third financial objective of at least 200 basis points above the markets. All right, thank you. Thanks for the question, Jim. Thanks, Jim. Again, if you would like to ask a question, press star and then the number 1 on your telephone keypad.

Financial objective of at least 200 basis points above the markets.

Yes.

Alright, thank you.

Thanks for the question Jim Thanks, Jim.

Speaker 1: Again, if you would like to ask a question, press star and then the number 1 on your telephone keypad.

Again, if you would like to ask a question press Star and then the number one on your telephone keypad.

Okay.

Speaker 1: There are no further questions at this time. Mr. Borowics, I turn the call back over to you. Great, I know we presented a lot of content today for everyone to absorb, so I want to remind you that you can find the audio replay and today's slides on our website at integer.net. So thank you for your interest in integer and that concludes the call for today.

There are no further questions at this time, Mr. <unk> I'll turn the call back over to you.

Great I know, we've presented a lot of content today for everyone to absorb so to remind you that you can find the audio replay in today's slides on our IR website.

<unk> dot net so.

So thank you for your interest in integer net.

<unk> the call for today.

Okay.

Yes.

Yes.

Okay.

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