$ITGR earnings report

Integer reported weaker third-quarter operating results. Sales were $449,661 (in thousands), down 3.9%, and organic sales decreased 2.2%. The sales decline was concentrated in Cardio & Vascular, which decreased 5.1%, and Other Markets, which decreased 49.7%. Cardiac Rhythm Management & Neuromodulation grew 3.9%, but that growth did not offset declines in the other product lines.

Profitability declined more sharply than sales. Gross profit was $101,561 (in thousands), compared with $126,160 (in thousands), while total operating expenses increased to $73,352 (in thousands) from $69,721 (in thousands). GAAP operating income declined 50.0% to $28,209 (in thousands), and adjusted operating income declined 22.8% to $66,290 (in thousands). GAAP income from continuing operations was $14,978 (in thousands), down 62.3%, and adjusted net income was $46,140 (in thousands), down 26.9%.

The release identifies both demand and portfolio factors. Cardio & Vascular reflected the previously communicated impact from two new Electrophysiology products, while Cardiac Rhythm Management & Neuromodulation growth was partially offset by the impact from one new Neuromodulation product. Other Markets was affected by the Portable Medical exit. Reported results also included ERP implementation costs, fixed asset impairment charges, termination benefits and strategic review and Transaction costs.

For the nine months ended October 2, 2026, sales decreased 2.0% and organic sales decreased 0.8%. GAAP operating income decreased 42.8%, adjusted operating income decreased 15.9%, adjusted EBITDA decreased 9.6%, and adjusted EPS decreased 10.8%. Net cash provided by operating activities was $121,061 (in thousands), compared with $140,733 (in thousands), and acquisition of property, plant and equipment was $(67,181) (in thousands).

Capital allocation included $(50,000) (in thousands) of common-stock repurchases during the nine months ended October 2, 2026. Cash and cash equivalents were $14,135 (in thousands), while Net Total Debt was $1,223,149 (in thousands) and leverage was 3.3 times adjusted EBITDA. The Company is not providing a financial outlook because of its pending acquisition by an affiliate of investment funds managed by KKR. The Transaction is anticipated to close by the end of 2026, subject to remaining customary closing conditions and required regulatory approvals.

Integer reported a softer second quarter, with total sales of $ 464,110 declining (2.6 )% year over year and organic sales declining (1.5 )%. Cardio & Vascular, the largest reported product line, declined (2.3 )% to $ 280,308. The release attributed this result to the previously communicated impact from two new Electrophysiology products. Cardiac Rhythm Management & Neuromodulation was the sole product line with growth, rising 1.0 % to $ 173,712, although its growth was partially offset by the impact from one new Neuromodulation product.

Other Markets was the principal reported area of weakness, with sales declining (42.8 )% to $ 10,090, primarily due to the Portable Medical exit. For the six months ended July 3, 2026, total sales were $ 903,690, down (1.1 )%, while organic sales change was (0.1 )%. Six-month Cardiac Rhythm Management & Neuromodulation sales increased 2.9 %, while Cardio & Vascular sales declined (0.7 )% and Other Markets sales declined (45.1 )%.

Profitability weakened more sharply under GAAP than under the company's adjusted measures. GAAP operating income declined (41.8 )% to $ 34,528 and income from continuing operations declined (36.2 )% to $ 23,605. Adjusted operating income declined (10.2 )% to $ 72,991 and adjusted EBITDA declined (4.1 )% to $ 94,939. Adjusted net income was nearly unchanged at $ 54,707, while adjusted EPS increased 3.2 % to $ 1.60.

The balance-sheet update showed total debt increased $53 million from the end of 2025 to $1.238 billion. Non-GAAP net total debt increased $46 million to $1.236 billion, and the leverage ratio was 3.2 times adjusted EBITDA as of July 3, 2026. The release did not report operating cash flow, free cash flow, cash and cash equivalents, dividends, or share repurchases.

The earnings outlook is superseded by the announced transaction. Integer and KKR entered into a definitive agreement for an affiliate of investment funds managed by KKR to acquire all outstanding shares in an all-cash transaction valued at an enterprise value of $5.7 billion. Stockholders are to receive $127 per share in cash. Given the pending transaction, Integer withdrew its previously issued financial outlook and cancelled its previously scheduled earnings conference call and webcast.