Shares of Integer Holdings Corporation (ITGR Quick QuoteITGR - Free Report) , formerly known as Greatbatch Inc. (GB), plunged 30.2% to close at $22.21 on Jul 29, following the company’s second quarter of 2016 results. However, shares recovered 3.2% to close at $22.91 on Aug 1, after the company’s synergy expectations impressed the investors.

Integer reported adjusted earnings of 56 cents per share in the second quarter of 2016, which slumped 23.3% from the year-ago quarter and also missed the Zacks Consensus Estimate of 74 cents.

During the quarter, Greatbatch Inc. (GB) renamed it as Integer Holdings and started trading under the symbol “ITGR”. Notably, the company completed Nuvectra spin-off on Mar 14. The second quarter of 2016 results excludes Nuvectra figures but includes the results from Lake Region Medical (acquired in Oct 2015).

After adjusting for these effects (comparable basis), adjusted earnings declined 38% from the year-ago quarter.
 
Revenues surged 8% year over year to $348.4 million. On a comparable basis, sales declined 8% year over year in the reported quarter.
 

Quarter Details

Post the Lake Region Medical acquisition, Integer realigned its product line into four categories – (1) Advanced Surgical, Orthopedics and Portable Medical, (2) Cardio and Vascular, (3) Cardiac/Neuromodulation, and (4) Electrochem.

Advanced Surgical, Orthopedics, and Portable Medical includes the legacy Greatbatch Orthopedics and Portable Medical product line in addition to the legacy Lake Region Medical Advanced Surgical product line. On a comparable basis and at cc, sales decreased 4% to $104.3 million owing to a backlog in sales to one specific Portable Medical customer.

Cardio and Vascular includes the Vascular product line and the Lake Region Medical Cardio and Vascular sales. On a comparable basis and at cc, sales were flat at $144.2 million. The decline can be primarily attributed to inventory adjustments at a specific customer.

Cardiac/Neuromodulation products include the legacy Greatbatch Cardiac/Neuromodulation segment and QiG in addition to the legacy Lake Region Medical Cardiac/Neuromodulation segment. On a comparable basis and at cc, sales declined 16% to $91.6 million primarily due to lower orders and contractual price reductions partially counterbalanced by higher neuromodulation sales growth.
 

Electrochem includes the legacy Greatbatch Energy, Military and Environmental product lines. On a comparable basis and at cc, sales plunged 41% to $9.8 million, primarily due to the continued impact of the slowdown in the energy markets, which has caused customers to reduce drilling, pipeline inspection and exploration volumes.

Adjusted EBITDA margin (on a comparable basis) contracted 140 bps to 19.8% in the reported quarter.

Guidance

Integer expects revenues for the remainder of 2016 to be in the range of $350 million to $360 million per quarter, essentially flat to last year and an increase of approximately 4% compared to the average quarterly revenues for the first half of 2016.

Revenues are predicted to be in the range of $1.375 billion to $1.395 billion on an adjusted comparable basis. Adjusted earnings is expected to be in the range of $2.60--$2.75 per share for the full-year 2016.

Adjusted EBITDA is likely to be in the range of $295 million -- $305 million. For the full-year, management expects to achieve approximately $30 million in synergies, which is better than $25 million annual synergy target.

Integer expects to significantly exceed its $60 million annual run rate synergy target for 2018.

Zacks Rank & Key Picks

Currently, Integer carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the industry include Cepheid and Masimo Corp. (MASI Quick QuoteMASI - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy).

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