Integer Holdings Corporation (ITGR - Free Report) delivered adjusted earnings per share (“EPS”) of 99 cents in the fourth quarter of 2021, which improved 39.4% year over year. The figure surpassed the Zacks Consensus Estimate by 3.1%.
The adjustments include expenses related to the amortization of intangibles, among others.
GAAP EPS for the quarter was 60 cents a share, reflecting an uptick of 27.7% year over year.
Full-year adjusted EPS was $4.08, reflecting a 47.3% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 0.7%.
Revenues in Detail
Integer Holdings registered revenues of $313 million in the fourth quarter, up 16.4% year over year. The figure surpassed the Zacks Consensus Estimate by 1.4%.
Organically, revenues increased 14.9%.
Robust performances by both segments of the company drove the top line.
Full-year revenues were $1.22 billion, reflecting a 13.8% improvement from the year-ago period. The metric was in line with the Zacks Consensus Estimate.
Segmental Analysis
Integer Holdings operates through two segments — Medical Sales and Non-Medical Sales.
Medical Sales reported revenues of $301.9 million, up 15.8% year over year on a reported and 14.3% on an organic basis.
Medical Sales has three product lines — Advanced Surgical, Orthopedics and Portable Medical (AS&O); Cardio & Vascular; and Cardiac & Neuromodulation.
Integer Holdings’ AS&O business includes sales under supply agreement with the acquirer of the divested AS&O product line. Revenues amounted to $26.7 million in the quarter, down 10.4% year over year both on a reported and on an organic basis. Per management, the downside was due to a decline in demand for COVID-related ventilator and patient monitoring components’ sales.
Revenues at the Cardio & Vascular business totaled $163.4 million, up 19.2% from the prior-year quarter on a reported basis and 17.6% organically. The business recorded strong double-digit year-over-year sales improvement in the quarter across all Cardio & Vascular markets, with particular strength in the neurovascular market despite end-market demand fluctuations and supply-chain constraints.
Revenues at the Cardiac & Neuromodulation business were $111.9 million, up 19.2% year over year on a reported and 17.3% on an organic basis. The business recorded strong year-over-year sales across all markets, with both Cardiac Rhythm Management and Neuromodulation increasing in double digits despite end-market demand fluctuations and supply-chain constraints.
Revenues at the Non-Medical Sales segment totaled $11.1 million, up 33.6% year over year, both on a reported and an organic basis. Sales at the Electrochem product line, a part of the Non-Medical segment, improved 34% on the back of the continued recovery of the energy market.
Margin Analysis
Integer Holdings generated gross profit of $81.9 million in the fourth quarter, up 11.8% year over year. However, gross margin in the reported quarter contracted 107 basis points (bps) to 26.2%.
Selling, general and administrative expenses were $36.3 million, up 3.5% year over year. Research, development and engineering costs were $12.7 million in the quarter, up 20.3% year over year. Adjusted operating expenses of $49 million increased 7.4% year over year.
Adjusted operating profit totaled $32.9 million, reflecting a 19.1% uptick from the prior-year quarter. Adjusted operating margin in the fourth quarter expanded 24 bps to 10.5%.
Financial Position
Integer Holdings exited full-year 2021 with cash and cash equivalents of $17.9 million compared with $49.2 million at the end of 2020. Total debt (including current portion) at the end of 2021 was $828.1 million compared with $731.3 million at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $156.7 million compared with $181.3 million a year ago.
2022 Guidance
Integer Holdings has initiated its financial outlook for 2022.
For 2022, the company expects revenues to be in the range of $1,340-$1,365 million, reflecting an improvement of 10-12% from the 2021 reported figure. The Zacks Consensus Estimate for the same is pegged at $1.35 billion.
Organically, revenues are expected to increase by 5-7%.
The company expects full-year adjusted EPS in the band of $4.35-$4.65, indicating an uptick of 7-14% from the 2021 reported figure. The Zacks Consensus Estimate for the same is pegged at $4.65, which matches the upper end of Integer Holdings’ outlook.
For first-quarter 2022, the company projects its sales to be similar to the fourth quarter of 2021, which might be constrained by pandemic-led impacts on labor and supply chain.
Our Take
Integer Holdings exited the fourth quarter with better-than-expected results. Strong top- and bottom-line performances are impressive. Robust segmental performances, along with strength in majority of the product lines, are encouraging. Continued business recovery despite the U.S. labor constraints and global supply-chain disruptions is encouraging. Expansion of adjusted operating margin also bodes well for the stock. Management’s expectations of a strong sales growth in the first quarter of 2022 raise our optimism.
Integer Holdings continued to witness weak performance across its AS&O product line in the quarter under review. Contraction of gross margin also does not bode well.
Zacks Rank and Stocks to Consider
Integer Holdings currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Baxter International Inc. (BAX - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
Baxter, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate by 0.9%. Revenues of $3.51 billion outpaced the consensus mark by 4.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Baxter has an estimated long-term growth rate of 9.5%. BAX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 9.1%.
West Pharmaceutical reported fourth-quarter 2021 adjusted EPS of $2.04, which surpassed the Zacks Consensus Estimate by 6.3%. Fourth-quarter revenues of $730.8 million outpaced the Zacks Consensus Estimate by 3.1%. It currently carries a Zacks Rank #2.
West Pharmaceutical has an estimated long-term growth rate of 27.6%. WST’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 26.3%.
Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #2.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%.
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Integer Holdings Corporation (ITGR - Free Report) delivered adjusted earnings per share (“EPS”) of 99 cents in the fourth quarter of 2021, which improved 39.4% year over year. The figure surpassed the Zacks Consensus Estimate by 3.1%.
The adjustments include expenses related to the amortization of intangibles, among others.
GAAP EPS for the quarter was 60 cents a share, reflecting an uptick of 27.7% year over year.
Full-year adjusted EPS was $4.08, reflecting a 47.3% increase from the year-ago period. The metric surpassed the Zacks Consensus Estimate by 0.7%.
Revenues in Detail
Integer Holdings registered revenues of $313 million in the fourth quarter, up 16.4% year over year. The figure surpassed the Zacks Consensus Estimate by 1.4%.
Organically, revenues increased 14.9%.
Robust performances by both segments of the company drove the top line.
Full-year revenues were $1.22 billion, reflecting a 13.8% improvement from the year-ago period. The metric was in line with the Zacks Consensus Estimate.
Segmental Analysis
Integer Holdings operates through two segments — Medical Sales and Non-Medical Sales.
Medical Sales reported revenues of $301.9 million, up 15.8% year over year on a reported and 14.3% on an organic basis.
Medical Sales has three product lines — Advanced Surgical, Orthopedics and Portable Medical (AS&O); Cardio & Vascular; and Cardiac & Neuromodulation.
Integer Holdings’ AS&O business includes sales under supply agreement with the acquirer of the divested AS&O product line. Revenues amounted to $26.7 million in the quarter, down 10.4% year over year both on a reported and on an organic basis. Per management, the downside was due to a decline in demand for COVID-related ventilator and patient monitoring components’ sales.
Revenues at the Cardio & Vascular business totaled $163.4 million, up 19.2% from the prior-year quarter on a reported basis and 17.6% organically. The business recorded strong double-digit year-over-year sales improvement in the quarter across all Cardio & Vascular markets, with particular strength in the neurovascular market despite end-market demand fluctuations and supply-chain constraints.
Revenues at the Cardiac & Neuromodulation business were $111.9 million, up 19.2% year over year on a reported and 17.3% on an organic basis. The business recorded strong year-over-year sales across all markets, with both Cardiac Rhythm Management and Neuromodulation increasing in double digits despite end-market demand fluctuations and supply-chain constraints.
Revenues at the Non-Medical Sales segment totaled $11.1 million, up 33.6% year over year, both on a reported and an organic basis. Sales at the Electrochem product line, a part of the Non-Medical segment, improved 34% on the back of the continued recovery of the energy market.
Margin Analysis
Integer Holdings generated gross profit of $81.9 million in the fourth quarter, up 11.8% year over year. However, gross margin in the reported quarter contracted 107 basis points (bps) to 26.2%.
Selling, general and administrative expenses were $36.3 million, up 3.5% year over year. Research, development and engineering costs were $12.7 million in the quarter, up 20.3% year over year. Adjusted operating expenses of $49 million increased 7.4% year over year.
Adjusted operating profit totaled $32.9 million, reflecting a 19.1% uptick from the prior-year quarter. Adjusted operating margin in the fourth quarter expanded 24 bps to 10.5%.
Financial Position
Integer Holdings exited full-year 2021 with cash and cash equivalents of $17.9 million compared with $49.2 million at the end of 2020. Total debt (including current portion) at the end of 2021 was $828.1 million compared with $731.3 million at the end of 2020.
Cumulative net cash flow from operating activities at the end of 2021 was $156.7 million compared with $181.3 million a year ago.
2022 Guidance
Integer Holdings has initiated its financial outlook for 2022.
For 2022, the company expects revenues to be in the range of $1,340-$1,365 million, reflecting an improvement of 10-12% from the 2021 reported figure. The Zacks Consensus Estimate for the same is pegged at $1.35 billion.
Organically, revenues are expected to increase by 5-7%.
The company expects full-year adjusted EPS in the band of $4.35-$4.65, indicating an uptick of 7-14% from the 2021 reported figure. The Zacks Consensus Estimate for the same is pegged at $4.65, which matches the upper end of Integer Holdings’ outlook.
For first-quarter 2022, the company projects its sales to be similar to the fourth quarter of 2021, which might be constrained by pandemic-led impacts on labor and supply chain.
Our Take
Integer Holdings exited the fourth quarter with better-than-expected results. Strong top- and bottom-line performances are impressive. Robust segmental performances, along with strength in majority of the product lines, are encouraging. Continued business recovery despite the U.S. labor constraints and global supply-chain disruptions is encouraging. Expansion of adjusted operating margin also bodes well for the stock. Management’s expectations of a strong sales growth in the first quarter of 2022 raise our optimism.
Integer Holdings continued to witness weak performance across its AS&O product line in the quarter under review. Contraction of gross margin also does not bode well.
Zacks Rank and Stocks to Consider
Integer Holdings currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Baxter International Inc. (BAX - Free Report) , West Pharmaceutical Services, Inc. (WST - Free Report) and Henry Schein, Inc. (HSIC - Free Report) .
Baxter, carrying a Zacks Rank #2 (Buy), reported fourth-quarter 2021 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate by 0.9%. Revenues of $3.51 billion outpaced the consensus mark by 4.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Baxter has an estimated long-term growth rate of 9.5%. BAX’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 9.1%.
West Pharmaceutical reported fourth-quarter 2021 adjusted EPS of $2.04, which surpassed the Zacks Consensus Estimate by 6.3%. Fourth-quarter revenues of $730.8 million outpaced the Zacks Consensus Estimate by 3.1%. It currently carries a Zacks Rank #2.
West Pharmaceutical has an estimated long-term growth rate of 27.6%. WST’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 26.3%.
Henry Schein reported fourth-quarter 2021 adjusted EPS of $1.07, which surpassed the Zacks Consensus Estimate by 18.9%. Fourth-quarter revenues of $3.33 billion outpaced the Zacks Consensus Estimate by 4.7%. It currently has a Zacks Rank #2.
Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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