Integer (ITGR) 25 Jul 242024 Q2 Earnings call transcript

Hello and welcome to the Q2 2024 Integer Holdings Corporation Earnings Call. [Operator Instructions] I would now like to turn the conference over to Andrew Senn, Senior Vice President, Strategy, Business Development and Investor Relations.

You may begin.

Good morning, everyone. Thank you for joining us, and welcome to Integer's Second Quarter 2024 Earnings Conference Call. Joe Executive and Financial Vice are and Executive Officer. today Smith, Diron President me Dziedzic, Chief President Officer; With and Chief

today As data of results the for reflect discuss Integer indicated. a results the periods and the consolidated reminder, we the

discuss will non-GAAP financial we call, measures. our some During

For a our schedules, trending measures, which available on non-GAAP these at please appendix integer.net. the the to reconciliation release presentation, today's and of website of today's financial refer earnings press are

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

an call, Joe year XXXX on Joe today's results the and adjusted then our will opening comments outlook. financial your provide up to open come and Diron call provide will for remarks, the On for of his questions. update provide review we'll quarter closing our will full then second back his and XXXX

I to With that, call over Joe. will turn the

Andrew, as and grew earnings basis the year. income call, Thank Sales margins by the work results. operating appreciate we coverage last are investors of for In which initiated X. to Oppenheimer and points grew second strong patients have analysts serve. of call of and to brings XX%, that compared last doing associates more analysts year-over-year to quarter, for our our from the our expanding delivered great and thank we coverage, the business our customers XXX research adjusted while sell-side that and quarter X%, everyone another operating you, our We total Since Truist it number today. you gives the to the exposure all joining our

XX% per In share year-over-year. addition, our adjusted earnings grew

profit We our full year outlook. are raising

first our full adjusted material Our manufacturing XX% outlook, strong outlook. operational operating income direct year to Combined meet At are on the our labor turnover delivering expect efficiency. are our in production, increased midpoint growth. with direct growth improvements our XX% OpEx confident excellence in half leverage, ability of overtime labor lower scrap sales and we direct initiatives profit we

are and in strong We our pipeline growth of tuck-in in our markets and markets capacity am for continued time our acquisition grateful customer high delivering programs of additional customers our end difference development coming for high-growth are strategy. to sales I strong programs our deliver around associates margins It demand. expanding confident making at guidewire given including faster-growing our world a execution is in an online visibility in given Ireland. ramping Integer that for patients. the exciting to and ability

I'll now over Diron. turn to the call

XXXX Thank today's our you, call. you Good on second provide then quarter more XXXX thank provide on and an joining everyone, for update morning, again details our first results and I'll financial Joe. outlook.

quarter strong our continued second XXXX We with financial performance. momentum

Sales of Pulse market impact the an delivered on year-over-year delivered year organic prior on the growth an and basis. the continue of to million InNeuroCo we versus the our fluctuations. expansion. year-over-year basis Adjusted more as income XX% on and the to compared growth operating $XX X% excludes or We margin Xx portable currency our $XXX recent X% and grew million sales $XX year, make of of up EBITDA, than adjusted rate increase of progress exit of foreign medical a which strategic acquisitions, reported million XX%. last

product second the XXXX approximately quarter year-over-year $XX XXXX. line sales a continued XX.X%, basis was our of Second XXX $X.XX a represents in XXXX for growth of year X-quarter delivering C&V sales, which and $X.XX share, the from represent net or strong ago. adjusted trailing approximately second on XXXX. versus of total the improvement basis of per operating XX% percent of of up income is Adjusted XX% CRM&N income quarter second of which sales, quarter quarter million, as adjusted points a earnings

XX% X XX% in CRM is Rhythm InNeuroCo sales can Pulse found high Vascular heart trailing PMA quarter growth X at and in D&V Management year-over-year. and new of integer.net. presentation, sales neuromodulation year-over-year, details Further line, growth from ramps electrophysiology product Cardiac Cardio and growth driven trailing double-digit quarter by and the product emerging appendix structural website increased across our and on acquisitions. the driven by be For the line & increased Neuromodulations all included double-digit customers. product single-digit markets, which growth are

primarily quarter improvements did by quarter In This operating we exchange. Strong $XX higher using second slightly million. include delivered capacity. interest net leverage of year. approximately quarter by operational higher by the due debt Technologies cost sales higher slightly total favorable period, and a adjusted basis, available approximately manufacturing tax Pulse expense offset million the we second balance XXXX. a and second a was tax-effected furthered partially adjusted XXXX, discussed and delivered revolver improved higher million rate million in is than last which interest totaling $X effective income and XXXX, foreign than the to our $X driven the during acquisitions previously On versus more average InNeuroCo expense $X adjusted This was efficiencies

the prior for Our the rate effective XX.X% adjusted quarter tax to year. was of second in compared XX.X% XXXX

Pillar effect tax member by rate primarily the effective driven slightly as year the adoption well compared minimum by residual the expiration. higher establishing framework effective the rate tax states, Malaysian to OECD of XX% tax of the a as the was X of Our adjusted holiday recent prior EU

and Year-over-year, by the receivable factoring operational flow we primarily In This $XX we approximately from the execution, accounts higher $XX million offset not repeat. approximately that was more improved XXXX, quarter second million million from from in sales margins. cash of XXXX second quarter of did generated cash generated operations. $XX

the was capital second was expenditures. In $XX second Ireland. year. XXXX, to in flow XXXX total, than support in million executed of lower continued the As investments, in quarter previously $X organic the cash capacity from our investing mentioned, prior we factoring And quarter investments operations million our

Our half invested have track on CapEx our second year in is approximately to In for in for spend the investments are the higher be the $XX year capacity half as Irish expected to million of our we expected million full complete. $XX lower XXXX, profile CapEx the CapEx expenditures the is and $XXX million. investment to first nearly

The XXXX. resulting free million, net quarter the to reduce was quarter by which compared improved $XX million second $XX which cash flow primarily first in to of the used total was debt,

X.Xx. As total at of range second a our end our within of trailing EBITDA, is to was net target which X.Xx debt the leverage adjusted quarter fourth strategic quarter the result, X.Xx

reiterating the XXXX strong and outlook XXXX our performance million. our our sales half increased from margin we by As income on profit With raising initiatives, operating outlook. range confidence Joe are manufacturing adjusted raising $X mentioned earlier, in have first we execution

Starting to $X.XXX organic with we X%. year, $X.XXX XXX XX% to to sales X%, underlying sales, rate to growth an above X% with continue our is billion estimate increase X% of versus market the growth range of expect basis deliver points billion, of in last to of which to X%

acquisitions, we growth. offset In the expect addition to contribute market organic in by to medical our portal organic the partially InNeuroCo and X% exit growth, Pulse

with million, which are outlook million $XXX $XXX EBITDA by to XX% up year-over-year XX% to a from guidance our of reflects growth. now range XX% our growth raising million. We adjusted of $X previous to XX% on

XX% sales operating to of million, outlook operating income between and income basis million year-over-year At Adjusted $X to as our $XXX XX% XX%. by a of to and outlook between of is income of million $XXX EPS our to $X.XX adjusted This grow XXXX. XXXX million year-over-year. a raising XX% X% year are million $XXX income expect to previous adjusted the $X.XX, be to be is We delivers percent growth year-over-year an X% the full growth $XXX is to reflecting and million, between adjusted compared which net operating from expected which of XXX is XX%. adjusted up reflecting $XXX growth midpoint, guidance XX%, points expected and expected to

into This to outlook offset and XX% the improvement dilution shares shares an from adjusted to effective average XX%. adjusted be projected of our an estimated is is adjusted XX.X initial XX%, dilutive between down by outstanding weighted rate, assumes million of of which Our notes. convertible tax outlook EPS effect taking in account XX%

of We higher be of Ireland result sales customer the from XXXX in and our new of second half XXXX to as product PMA first a emerging than expect the guidewire capacity half expansion increased ramps, growth.

expect increase of higher a We slightly than fourth XXXX. quarter sales quarter be the third with to in quarter, second the further

cash outlook. XXXX Moving to our

million flow cash of midpoint between X% from which an outlook. represents expect $XXX to $XXX year-over-year operations at increase We million,

we for million Our continue expenditures outlook $XXX to at capacity. capabilities to $XX million and remains as invest in organic capital

to between expect As $XX and flow million $XXX free generate a cash million. we result,

million net $X.XXX to year-end which billion billion, year-over-year. $XX to XXXX million total up is our We expect $X.XXX between $XX be and debt

expect the our year X quarter range of We adjusted end to to target within our ratio with X.X X.Xx leverage EBITDA. trailing

with back And Joe. I'll you. Thank turn the to that, call

delivering We are after Thanks, believe Diron. a strong very outlook a strong we XXXX. XXXX

to X the midpoint expect XX% at operating grow sales of and these XX% years we combined, Over adjusted grow outlook. income

debt sales growth meet margin executing and to successfully leverage. strategy are We financial both objectives expansion strategic our growth our for inorganically organically and

premium are We will level of sustained valuation confident our for produce a this performance shareholders.

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

of Capital Brett Your first KeyBanc the Instructions] [Operator from line question comes Fishbin Markets. with

the Cardio in then there think one Vascular just more in just type expect if to that detail off & the there segment, could curious bit We a that start some was appreciate decline sequential I moving of if And impacting provide again, can wanted growth cases given here segment. challenging moving in were, looking of I quarter? into XH. just very definitely little comparisons, but on any investors the around should ahead, pieces recovery you you organic

for the question. thanks Brett,

with on we're was last quarter reported basis, year product X-quarter and if at in quarter look up the starting line XX%. start I'll you basis, sales the a XX%, up cardiovascular trailing was So rolling

I'll year, And for You call we're expecting & the X%. growth for for X%. growth full high out was the growth noted Cardio organic single-digit of the first Vascular organic quarter CMV. organic

we at business I look the about X-quarter life customers wish wish think you plans when manufacturing perfectly our linear, but not. on rolling were So basis. they're I a linear, the and were pieces,

although past number, we the business, look if the market to best it. way And X.Xx you quarters, growth X-quarter rolling our at the so the is think basis rate. our it's at don't we specific look report growing electrophysiology at X And

rate, we've really there business guidewire our has under-indexed to we're in those also twice growing you of heart growth our at business. a heart the market almost piece And overall very think also been more is is look very and that structural remained TAVR, strongly, and If growth focused our tricuspid, are lower in our recognizing slightly mitral that structural I clear sales, we're a and strong.

So at single-digit look and when X-quarter at continue strong growth full see growth we year, to historically, organic a rolling reported a XX. we cardiovascular is we see the very the expect product we to when expect teens on for be double look basis, in high line low for the on we Slide cardiovascular digit, at basis, which call provided guidance slides we mid-teens, to that it, to the on low

All right. A quick follow-up.

the positive just the we're quarter. wide. for guidance looking now to some it's really operating the income But progression of fairly op by On still margin last impressed range, compared the at exiting closer to implies and full a side, X.Xx multiple year growth at quarter X.Xx this

margin driving at multiple what you range? as versus low of the end to the end curious was -- just expansion the in this high factors of sorry, biggest year, the point think or I swing So the

year. We We million. start our $XXX to very at first a have I'll X% were half doing look That Margins We to rate the XX% would do growth a backlog better growth gives for book from half. strong Sure. still still it's we the first We're well, guided us a in we said or in little visibility. with tremendous the exactly close what second X.X% -- quarter. sales at we sales. We're order perspective.

line. top didn't full through to We update Strong range. slightly to year. year we've outlook be -- So We're higher. updated upgraded halfway visibility the the the the

We to expand in ability to continue our margins. have confidence

have past, the do environment very at to thing beyond supply point. So it's we're feel moment, profit which we updating we're we we great. been when -- guidance this We about the felt things the -- like was chain variability disruptions. have the think that right in stable supply is chain caused like the a at that

on us direct our to Our and turnover continues focus gain labor continue our improvements our initiatives to and increase improve traction, the is to the which excellence what manufacturing confidence outlook. profit operational gave

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

a about if down I It areas expectations, expecting number was drill revenue the that about if ask but number, get below wanted that bit expectations. And visibility your & half -- to in below. know half below to And wanted to segment talk I talk then second business second segment. your you're Cardio little were of acceleration kind that Vascular deeper maybe what when you into it growth in high was of maybe to on Street the specifically? it the single-digit that for just came your

guidance. great cardiovascular Sure. with I'll book we quarter. and our quarter, the us Rhythm of in confidence have first and second our our business was to in start the the And with that deliver to given visibility ability the Cardiac our for second matter, order rest expectations on gives line Management in half the

look particular some first emerging products some of like -- within build, look X-quarter I might what I is. we I there, -- manufacturing customers at we recognizing linear they have to said, the linear ship what in segment, a ran we plants most a but results So the there rolling don't, quarter Electrophysiology fashion, customers' sites. it basis. dialogue and We customers' around exuberance were our around a and and manufacturing after wish excitement at Cardiovascular demand of their appreciate we been perfectly

in upon mostly dependent our the building determines sales what term. we're it's recognizing So sole that they're short sourced.

X get of going we're most most the time, the what the over do, quarter which So why representative. view is demand we market think is we rolling is to whatever

and by surprised of line much I geography Again, -- not the in I'll sales. quarter Slide presentation, So medical to which lays put the second sales year. we it nonmedical very our the We're were in with sales. XX out

our basis, full line half at expectation with in very actual look are first the much C&V with sorry, for that's guidance you an our growth in -- growth sales I'm for rate, the expectations. when line are organically our CRM&N and and organic up So year organic medical for in on year medical. year our very full much X%

at possession look We expansion. Ross we in talked investments New now made as about we Ireland of we've second So that facility. the half, a lot our have

because have more So more we're we building now guidewires capacity.

in expect the the that growth We to fuel of second year. half additional

scenario that you We start in based and are have These to products I'll that structural heart programs upon with something are already a and and and volume plans. programs the production. expect into number are might ramping with of production that contrast to customer in production a and now electrophysiology are where the demand something ramp ramping go is

when at And third our the up in ability step second half of confident in so look to quarter. the we're we the the growth year,

to our for within XX% middle quarter with That higher of the X% second guidance much us is year. our full third organic third compared X% the slightly right and very continued X% the year. sales increase would for nominal in to the in So to fourth quarter of the put from to range the growth growth

on top operating we bottom better the a is line why is profit increased line, which expected on second us the little guidance. quarter So for the as

PFA, Very lot answer. talked it. guys Got as talked you And we've thorough tailwind. a and about know I it have a about

I wanted specific a ask here. So to question

making guys your forward. are that about level from in-sourcing have wanted product So what's PFA PFA to gauge tailwind you're that, doesn't players. as about for a potential in-sourcing I and these guess disrupts to that moving that know not in visibility the manufacturing. mean the of But number manufacturing, be talking of they're that I that talked necessarily companies the that, going players about And their talking or those I concern space, you

on. we've our devices times shared shared -- -- in in we've we with development industry. cycle long shared start the the We've time over customers how processes I'll support that are the So the with our

And long, so in development been in the for because or next near term X X, the that actually in when manufacturing ramping we're or manufacturing. about have talking in it's they're in and/or year programs those and sales

customers that most visibility grow the And very product continued long on conversation we're And so to pipeline. point we've lead products we is, have to our important to for times I'll manufacture to our there -- going the make. they what and development

visibility to it. demand strong customers' then the is order that ramping And for strong are us because our the to lines very and what to ramp programs, into visibility their introducing looking us that gives continue the support on have us to We pipeline to customers very incredible with time give because and especially plans. book that products visibility marketplace

to have we new So strong product introduction. visibility very

and with products. close I'll visibility programs on new product multiyear -- we So development

customers what versus we And so factor of that guidance. components know understand our and and we into insourcing outsourcing, our devices these are

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

push think should to it sorry to have category the you little Joe, the exposure about growth dramatic? side, it next direct over on be of the but do PFA that a years, several bit we as it

we diagnostics It's PFA come think back expect therapy And absolutely not handful to the as only be at a tailwind. we about talked times. and I visibility, what strong we've needles. ablation to that the It's don't very on we're I ones a to strong I'll one to on, the would we but company. that and procedure will pipeline, meaningfully which PFA, of have able the or industry. in full so program crossing say, we no have itself, the and materially we're our sees also get total visibility access multi-generation it's do that the know of Integer yes, and the participate I we're to commentary one and and the transseptal therapy development the to guiding the because plans, our reflecting working know part going I'm and ones dramatic characterize I drive business which on product is

that. it content number all if than to benefit PFA, able with grow, And the have those that. devices we so from ones. of as electrophysiology accelerates we'll elements the some speaking, of procedures higher And PFA, of procedures, in participate we're on a overall Generally other

we that. so benefit from And

I above basis. continued the being markets would an Integer's expect to and that serve So organic meaningful absolutely growth on important of grow it part . able to organic we be an

the Very half -- talk year. know on you Got X-year tougher softer half this the back little in about into up this the that. can aggregate, it. the then cardiovascular, are But And you said back basis, ramp, back And I visibility half of I in pop is on what's today the and of back Appreciate helpful. got. just you've the a in is what tripped everybody a a that's QX little bit tours up stack back think half. to comps

QX if getting So Ireland -- back point just to is think hey, performance know things bit it's versus or what stack attainable half to could I you comfort you on performance. people specifically is the so that, I other X-year of a don't give to based skepticism little the

Well, for with -- and basis. the high let be growth the first for at me said start reported half, half single-digit we first X.X% we'd we're

between very you how organic, demand. visibility break and organic got that customer down strong to So we've

almost $XXX order million We a have book.

A be building the business. now second look those a even clear We than in for We're specific higher. sales we because -- sales. quarter possession. part we we the we nominally facility at X.X expect that the we the guidewire second I tried We've know little little when that predicting have the orders business, our sales talked strong from meaningful of reasons of so the Irish And then be be fourth guidewires. a years, customers. is our good that half been We think pieces steps is to that quarter last demand We up more of the to expect we've know online bit. third quarter, level understand to higher at reasonably

of programs and a are that also our that's production But particular, structural emerging so customers, in And we it. in have also are in electrophysiology, part ramping. There PMA heart neuromodulation. mostly in programs

our go sales the demand ramping customer did they're into the numbers production These half, us on programs production. So and the hit gives up in quarter. this and and as that's based it's confidence to not as second are ability profitability, and to in step well we half what second which increase they going

comes from Truist. question of next Your Newitter the with line Richard

there. level. what like outlook to a follow-up. hear customers OEM from end downward any just flows anything patterns I to start at or And Would market intermediate love your their curves have Has respect their kind changed revisions a higher kind down upwards Maybe their to that to of demand or longer-term look then color little to of with you? ordering any

has. have of start in higher exit beyond, order on. components expecting future, out guidewires given $XXX almost down. out customers capacity would given We further meaningful seen and here continue longer 'XX book order your it order the when change some book it look to the come think to to orders due and I to portable They the any into place continued to you into down tremendous We frame that expectations high down coming it in that our visibility. of a further connected of expect customer we order come we I'll business, the market, strength the question that to expected demand not book the sitting were have some term. there with of million to the that book, sooner for mean gives orders to our because I are medical ask than about material in come book the I to growth. order points are customers little that continued still us in elements much strong or place And expectation advance

rates of growth come in going order I at line to the the book. they've much very customers down remain order the to their anything, I optimistic very, the think look look with we continued. things exciting and book in optimism. the I about the were some expected bringing continue to would I most we than entering order what given our order that have what And If be the programs overall very marketplace. So they're the little to might point in And patterns year higher show our knew market this that and year book expected a at

making just everything more you're relative year And And acceleration Okay. reiterating half expected least second or at the is to weighted the little -- the outlook, it way that's little a Street. sounds trending sure maybe your weighted then you full like internally. a reason organic

So the I'm $XXX of calibrated half cadence roughly that reach just I curious, internal on with within a right second outlook that million XQ for little revenue $XXX about sure that pacing guess we're appropriately kind on and your is million expectations? of XQ. just to make more

our a nominally bit third fourth quarter. So quarter view than sales higher higher third And than is is little quarter. is second quarter then

see that kind So continued of we trajectory.

year at talking And was you XXXX, third second third and step-up. between If XXXX, million $X an last then quarter sales. fourth million in and of there between of a I'm $X quarter, step-up look

And folks organic kind X% I our it about So as our XX%. in sales. the well. to nonmedical. nonmedical would first nonmedical -- shows your continued we Slide year half, I medical only expect to it's XX in progressed, ask to the of total happen the was ask down business, XXXX presentation, The I which comment to that's growth, would But of in what stare grow would as and at guess

the year. a does drag and -- growth in little half it's only X%, of create creates bit organic on the even a the it though that second of So normalizes

Medical, and allows growth But in nonmedical your the full lift. organic year-over-year, X% into Medical as total see that's year. first down to rate the second was being what much if in you half, expect the half growth organic we the won't for you look So which at

of and organic the you're to then looking half second to in growth percent important the I at an focus when organic perform to impact And and that X-ish has half. thing half. continues less by Medical that's So quarter-by-quarter then the at growth nonmedical on think point an

what on that? up you is maybe out that the in confidence like for So the increased nonmedical it sounds track, acceleration what relying just I and you're that on right really called Can Great. just the backlog. just you follow is and of because Medical on in have the it's

term The our sales the guidance X.X%. Well, for depending reported year on in I the half XX%. I guess mean, is to were X% acceleration. first

a growth the It step-up So emerging in neuromodulation. electrophysiology, a basis, there ramping is from second coming But third, in there highlighted sales PMA a medical is the a in step-up so well. quarter. rate. fourth was structural I heart, last slight on as year-over-year third step-up customer year the from to programs to

Medical And basis. so X%. that to in growth the a the the sales to year-over-year highlighting the that on Medical will maintain half the for maintain first a grow the the have half. It just to nominally, of obviously I'm organic year, for expect that is we less maintain growth is second rate of or rest drag.

improve the the organic programs. ramping the half. because the Medical new And programs, so second into roll second But of in total growth to we Integer in gets as better the continues a little the half

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

acquisitions was stronger you have then little It you're looking was acquisitions been could just the feeling how bit I ahead, looks from an general. on like us in provide in M&A And a contribution the just the going? how wondering quarter. update if about

Sure. Great.

we've of cycle operational Pulse part the had able the of growth had top question, acquisitions from we've slightly able that would The the to the -- We're even business commercial line good that been really for share, half. programs portfolio. operational get we thanks strong over it's them. the Kristen. that They're technologies they synergies We've to top able be identify well. given takes little and been there. be So because doing and we're a and synergies. what getting for is modeled longer organic, ideas to been They've not organic faster, the InNeuroCo had good able learn but the and have first The growth are in line can excited ideas or the margin time. expect we've to get but time improvement growing synergies to ahead very both we of had to

happy So to both for we're and commercial continue with very to operational synergies. exciting and them grow the acquisitions

perspective, active M&A been overall. an a half From pretty first it's

you But larger our X.Xx If know to number happened, have historical with debt maybe the us you that the maintain some at X.X look average. to allow we're dollar industry acquisitions tuck-in of that to leverage. on acquisitions compared acquisitions focused

pipeline to continue of very robust opportunities. a have We

Our done the this our X.X $XXX the X.X acquisitions sitting at of of end highlight is I'll last second the while debt quarter. leverage in we've at years, worth leverage at -- maintaining X.X debt million at almost point.

to we're accretive reiterating have markets or very that looking to accretive a for an growth accretive to past able clear and of be generate on paydown those when but EBITDA want we're a got our much margins to curate continue nurture debt, rate for. we a to We've the and for aligned progresses. are size we our transact, And acquisition to year forward continue paydown So pipeline growth have acquisitions front, capital and able an the be the to for in do, do to want available clear identify that growth capacity, more going and or for get been to path as -- increase that strategy. year our able the acquisitions within that acquisitions with identify path we've robust our accretive looking more fit sell that choose and the are acquisitions tuck-ins when we targeted don't to more to does or progresses, expect to they margins. rate excited And very as just looking

of Your with Suraj next question from line Kalia Oppenheimer. comes the

first specifics, So Joe, question. for you and reflected. Pulse far all has is about sorry a know PFA belaboring this I give been asked multipart can but lot Obviously,

time the of overnight. whole happen that levels right, does just them the necessary, point that it's in-source they start to frame. quality completely it you and if how not the for to take a But to terms could that. characterize growth Vascular, incremental about of of my PFA? in to how the X% would should get second contribution Joe, in-source part we or be, in from client think so Joe, So wants the we a Cardio And going much right, are time program, the of if from & question, get even organic

Sure.

schedules the occurs C&V. second our and by that were book This So the surprises -- manufacturing does. I just expected wish plans The wish And There as for very I have no were was our customers' in high maybe I'll I customers' X% great organic it the that quarter. exist, that. would we us us. point to that we didn't lumpiness growth in C&V perfectly gives production but organic in linear. in much order reiterate on growth visibility. single-digit expect of

reported. X C&V guidance business low We've growing digit, it, to If the you of given at XX at -- the double low look quarters, XX% call at trailing is mid-teens.

be we excited into could start and very We sales, is specifically, that. in-sourcing heart, our about customer business. to market finish, about growing turns growing at, particular, out we're C&V it development. than in manufacturing to We tried on important it So faster time than measure the a cycle we're XXX(k) we so X from market our faster question Electrophysiology aggregate of X the your growing start market. years revenues. the a at lay programs. program, program X structural It's to years those we X segments. To to the in times from and they're what the development look X

to the so customers times. or was asked earlier outsourcing, it those And about visibility to question, insourcing lead the are

in that into. And us rates. our to we predictable to So it as the programs we're you very want growth because for in our in see gives our designed that advantage us and be huge us growth a tremendous guidance visibility

to manage when one lot market your given and PFA to getting competitive visibility comment, And ability other it's entire not towards our in-sourcing you vertical and looking outsourcing, of great can the integration of at with as our the our in growth question for at level trends And help about in them. frames, our And X the the the advantage customers just for looking customers, a is to the the to we that are And We've are got last support faster. supply we're procedure. -- overall a ours. reason excited -- see that for our we when vertical you insourcing. given chain your years. integration, and X to To look overall on time --

speak, cath question. commentary end through customers, end to if of and color you same could up from the if right? TAVR a through C&V in the you've everything obviously, if times Joe, guess terms discussions. that, to the I'm shed constraints opine customer TAVR picking Obviously, was And on lab one lot products, the you highlighting companies your so curious to in what you constraints, curious derivative about from appendage being all order your entry, yesterday on this thrown I'm any are to cath could atrial are enough. Fair of given in tangential through capital of lab. going your I left

that question particularly the months is very demand to therapies. cath their programs understand X, which coming But ahead we're to us, strong on their recognizing process touching their to demand the actual most not products, for and place on from of procedure. Yes. very part involved of constraints customers That's in exciting labs, continue a is newest, X our production high cycle, our front-end the X of that

by time they've demand the we already orders customers, are so they're into placing hospital and whatever us. demand And cath on the our from get lab constraints factored the

time that, yields. get do on on improve you yields . Suraj, really or better when yields visibility the over insight we highest the absolutely into curve question that. had and is have learning ramping the ramp a the as especially is your and a a and you we thing got program. there So a programs, as quality we to margins maybe don't learning But possible point, on launch about and ramp ramps or is ensuring new volumes we've a asked focus there typically real-time up. curve

of from next Fargo. Treybeck Your with comes the Wells question line Nathan

single down outlook in seeing to business? any CRM your about there this high is You guidance for digits. digits in you're and you the And change portfolio? talk neuromodulation Can implied brought PMA from double what low

Nathan. for the Thanks question, Great.

-- year the So at continue growth. not expecting to conversations we upon That's but beginning with said of management that CRM we CRM, book based second then what saw expect upon in specific, rates. year. to the cardiac or the half the expected neuro, based customers. we the on had to we robust we would lower the normalize And it growth order see meaning were fairly of

to just results, second quarter of strong step Abbott's If you a players got Abbott reported hundred I'll points. growth still rate. who've down look a CRM -- growth the first X point of at industry rate really basis the think I couple to from

quarter also called pacemaker X% was strong Abbott CRM growth for the markets step with we're it But that -- are their their a under still they we -- out CRM. was because lower growth than rate seeing are leadless rate. in expecting in think program. just normalizing, quarter had and down second Boston first I the specifically and very Abbott's

was I think it X% X%. to

First quarter was X% growth.

was X%. Second quarter

are -- data. that us at our look we translates at and from look So that would we We what at we look what customers to. ordering

on expect question. And for the first half do i.e., us, see the in more rates for CRM than so we half, second our your growth segment to normalize sales, the lower

and at It's were expected. very the as happening we beginning that's so we And the of what year hearing. what saw following much

$XX million That's group the for guidance XXXX. $XXX $XX to On the $XXX million of of that million. we years in year emerging million X customers. from for sales gave up of customers, PMA ago,

a back half. half, strong weighted trajectory second first half on on We're deliver very to that. those much more growth. So the very little sales are than

sales are second programs is we're So in the That's based where production, ramping marketplace. because that's with of see you'll the half into introducing in how their customers. those the they're upon forecast that output plans and products and group those some additional

to we're do higher $XXX on PMA million guided a of much to year slightly the that million of beginning trajectory to sales had that we in the $XXX at half sales customer compared and the second year. So very see emerging of to we expect deliver the the first to half,

increased you to Okay. capture extent what to EP And Can there's PFA contract but that And be, context accelerating then the growth the hearing net procedures, And from part question your just we're as ablation on non-PFA I'm premium benefit part two-part are market you cannibalizing driven PFA. for -- the that of able would second is the wondering a in economics the you just speak to business? also by price PFA. those in manufacturer. a get

we're capabilities. technologies. on what of start premium I'll current and we're -- for the customers what as So similar the doing finished our price a providing device lot is is on ablation

strong us, meaningful is us. applying thing that, getting and premium to is necessarily technologies are And faster-growing with so it's flowing differentiated and a strong but portfolio okay a a great not like a price already that because therapy that's is a to this if through business our them customers for new

to our cannibalization I PFA that So across what on tailwind I we that's is to to in price from going cannibalization from is think premium the procedure aggregate. how going a of the ultimately about perspective. as multiple And net-net-net, current a accelerate the platforms, us the given participation marketplace full determine procedure for growth in therapies, believes see hard be. cannibalizing that think everyone it's But volume a

Citigroup. Joanne question of Wuensch line the final Your with comes from

is for Joanne. on This Philippe

the of I'm for us your you like And franchise. start of half Just just I time baked remind that's half 'XX, your guess of first orderly seen kind look of wondering looking change the back amount with back there you is guidance? electrophysiology could I'm what any times? any seasonality in to for And thinking have those into the 'XX, strong to lead about customers. of our if

of it our shift doing to cost seasonality last across quarters. loaded. less was back development our sales. bit the It I back-end we of second heavier was engineering talked payroll, generate revenues loaded, was about cost a engineering quarter, loaded who about really the are are In heard the is first So didn't half second answer part. for more the And relevant the that's customers There couple in the you the -- engineers we work, fairly years, half. think we but particular. how the half, more third a that there. We any actually a when profile little quarter, in is development meaningful half. so revenue the engineers, second that had second balanced isn't let the the and revenues oftentimes in they're developing product we've on in for And about used I lighter had much or part, and the more seen revenues. if to products on the me year, the used XXXX, a We the there in about XXX seasonality days first quarter, reason of from margin you had talked was them. mix fourth in the evenly first hear our

we've much which we've is actually working XXXX, been accomplishing something For a been on that. seen more profile, and balanced we've

state have half our meaningful higher from really second identifiable we already don't if or well as in more hear as production first the programs and introduced coming So -- new giving the And seasonality of capacity. if that into us slightly question, ramping you you again. couldn't being that are coming baked online could half, rate any I facility our that and is I your Irish sales second growth are part apologize,

I'm wondering how lead trying I'm to takes to problem a actually for in procedure. order No at long like it times like understand used being Yes. electrophysiology on order just devices. from all.

like the seeing you're with in first timing, from customers terms in your it's any of 'XX. just happening half cadence If change order frequently of if more

Okay.

down, two change point to When order the meaningful Lead naturally, we comes they book come lead in will, book. times order our and a expect that. I over general, times things. times in haven't of seen because which So lead do time, down we

with lead And would a down things. and to order book come of we other specific the so couple expect see times

programs improve of that synergies the to us before on of that future but of they plans approval of of like. you new clearly advance further so for over come their the you that get inventory get but customers. different well. the that X months in much into gives we the ramps ramp electrophysiology, do as even yields for In that, time customers ramp, the visibility the how X, we buildup next different then they for And waiting approaches have clarity have our new and what efficiencies more and accelerate approval want as helps visibility us. approach better X, with in terms to It look actually question to ramp, or better programs orders oftentimes earlier

what of just leverage, the you deliver the operating gives first continue leverage the half Great. you've been year? confidence at back And that to that the in year rate you of and then on the can doing half the

Sure.

our on continued our saw quarter manufacturing the in executing we that execution across excellence improvement we've operational manufacturing strong So see the facilities. to second initiatives, and first gross gave We're which half us margin year-over-year.

levels continued of we turnover We direct the the on expect improvement and occurred time, over it's and the scrap, calling had labor disruption chain inefficiencies of turnover us executing We're now after reduce we're that reducing reducing during at years We're to supply back operator really, growth level, some that in continue. efficiency of the helping our which that because waste. below what that helps the associates had the proficient prior reduce to more become scrap, doing, they're company we because to at is pandemic. pandemic, the the

year. of the margin very of It's And rest as aligned in continuing much expand the growing sales, to with profit so strategy gives margins that us for expansion. the which fast our also to leads confidence operating as twice

questions will for further time. to at remarks. you this no are There call I back turn the closing

today. call the joined who everyone and Sarah, you, Thank Great.

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