KKR to buy Integer Holdings (NYSE: ITGR) in $5.7B all-cash deal
Rhea-AI Filing Summary
Integer Holdings Corporation reported softer second-quarter 2026 results while agreeing to be acquired by KKR in an all-cash deal. Sales were $464 million, down 2.6% year over year, with organic sales down 1.5%. GAAP operating income fell to $35 million, down 42%, and GAAP income from continuing operations declined to $24 million, with diluted EPS of $0.69, down 34%.
Non-GAAP performance was more stable: adjusted operating income was $73 million (down 10%), adjusted net income was $55 million (essentially flat), adjusted EPS rose to $1.60 (up 3%), and adjusted EBITDA was $95 million (down 4%). Cardio & Vascular sales decreased 2%, Cardiac Rhythm Management & Neuromodulation grew 1%, and Other Markets declined 43% primarily due to the Portable Medical exit.
Total debt increased to $1.238 billion, with non-GAAP net total debt of $1.236 billion and a leverage ratio of 3.2x adjusted EBITDA. An affiliate of investment funds managed by KKR agreed to acquire all outstanding Integer shares in a transaction valued at an enterprise value of $5.7 billion, with stockholders to receive $127 per share in cash. In light of the pending transaction, Integer withdrew its financial outlook and canceled its previously scheduled earnings call and webcast.
Positive
- Definitive all-cash acquisition by KKR values Integer at an enterprise value of $5.7 billion, with stockholders to receive $127 per share in cash for all outstanding shares.
Negative
- GAAP profitability declined sharply, with operating income down 41.8% to $34.5 million, income from continuing operations down 36.2% to $23.6 million, and diluted EPS down 33.7% to $0.69 versus Q2 2025.
- Leverage increased, as total debt rose to $1.238 billion and non-GAAP net total debt to $1.236 billion, resulting in a leverage ratio of 3.2x adjusted EBITDA as of July 3, 2026.
- Standalone outlook withdrawn, as Integer rescinded its previously issued financial guidance and will not host its planned earnings call due to the pending KKR transaction.
Filing Explained
The proposed acquisition remains pending: the filing identifies stockholder and regulatory approvals, along with other conditions, that must be satisfied before Integer shares are exchanged for
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
organic sales change financial
debt conversion inducement expense financial
capped call contracts financial
Strategic Review financial
leverage ratio financial
Earnings Snapshot
Given the pending KKR transaction, Integer withdrew its previously issued financial outlook and will not host its previously scheduled earnings conference call and webcast.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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What are the terms of KKR’s planned acquisition of Integer Holdings (ITGR)?
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
_________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported):
_______________________________
(Exact name of registrant as specified in its charter)
_______________________________
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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(Registrant's telephone number, including area code)
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_______________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
On August 3, 2026, Integer Holdings Corporation issued a press release announcing its results for its second quarter ended July 3, 2026. A copy of the release is furnished with this report as Exhibit 99.1 and is incorporated by reference into this Item 2.02.
The information contained in this report under Item 2.02 is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information contained in this report under Item 2.02 shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
(d) Exhibits
| Exhibit Number | Description of Exhibit | |
| 99.1 | Press Release dated August 3, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INTEGER HOLDINGS CORPORATION | ||
| Date: August 3, 2026 | By: | /s/ Diron Smith |
| Diron Smith | ||
| Executive Vice President and Chief Financial Officer | ||
EXHIBIT 99.1
Integer Holdings Corporation Reports Second Quarter 2026 Results
PLANO, Texas, Aug. 03, 2026 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR) today announced results for the three months ended July 3, 2026.
Second Quarter 2026 Highlights (compared to Second Quarter 2025, except as noted)
- Sales decreased 2.6% to $464 million. Organic sales decreased 1.5%.
- GAAP operating income from continuing operations totaled $35 million, a decrease of $25 million or 42%. Non-GAAP adjusted operating income totaled $73 million, a decrease of $8 million or 10%.
- GAAP income from continuing operations totaled $24 million, a decrease of $13 million or 36%. Non-GAAP adjusted net income totaled $55 million, a decrease of $0.1 million or 0%.
- GAAP diluted EPS income from continuing operations totaled $0.69, a decrease of $0.35 or 34%. Non-GAAP adjusted EPS totaled $1.60, an increase of $0.05 or 3%.
- Adjusted EBITDA totaled $95 million, a decrease of $4 million or 4%.
- From the end of 2025, total debt increased $53 million to $1.238 billion and Non-GAAP net total debt increased $46 million to $1.236
billion, resulting in a leverage ratio of 3.2 times adjusted EBITDA as of July 3, 2026.
In a separate press release issued today, Integer and KKR announced they have entered into a definitive agreement under which an affiliate of investment funds managed by KKR will acquire all of the outstanding shares of Integer in an all-cash transaction valued at an enterprise value of $5.7 billion. Under the terms of the agreement, Integer stockholders will receive $127 per share in cash.
Given the pending transaction, Integer is withdrawing its previously issued financial outlook and will not host its previously scheduled earnings conference call and webcast scheduled for Thursday, August 6, 2026.
Discussion of Product Line Second Quarter 2026 Sales
- Cardio & Vascular sales decreased 2% to $280 million in the second quarter 2026 compared to the second quarter 2025, reflecting the previously communicated impact from the two new Electrophysiology products.
- Cardiac Rhythm Management & Neuromodulation sales increased 1% to $174 million in the second quarter 2026 compared to the second quarter 2025. Growth was partially offset by the previously communicated impact from the one new Neuromodulation product.
- Other Markets sales totaled $10 million in the second quarter 2026, compared to $18 million in the second quarter 2025, primarily
due to the Portable Medical exit.
Summary Financial Results
(dollars in thousands, except per share data)
| Three Months Ended | Six Months Ended | ||||||||||||||||
| July
3, 2026 |
June
27, 2025 |
QTD Change | July
3, 2026 |
June
27, 2025 |
YTD Change | ||||||||||||
| Operating income | $ | 34,528 | $ | 59,338 | (41.8 | )% | $ | 66,397 | $ | 108,890 | (39.0 | )% | |||||
| Income from continuing operations | $ | 23,605 | $ | 37,009 | (36.2 | )% | $ | 40,111 | $ | 14,544 | 175.8 | % | |||||
| Diluted EPS from continuing operations | $ | 0.69 | $ | 1.04 | (33.7 | )% | $ | 1.17 | $ | 0.41 | 185.4 | % | |||||
| EBITDA(a) | $ | 67,964 | $ | 87,636 | (22.4 | )% | $ | 133,060 | $ | 119,274 | 11.6 | % | |||||
| Adjusted EBITDA(a) | $ | 94,939 | $ | 98,951 | (4.1 | )% | $ | 180,000 | $ | 190,460 | (5.5 | )% | |||||
| Adjusted operating income(a) | $ | 72,991 | $ | 81,266 | (10.2 | )% | $ | 134,044 | $ | 152,189 | (11.9 | )% | |||||
| Adjusted net income(a) | $ | 54,707 | $ | 54,818 | (0.2 | )% | $ | 96,002 | $ | 100,756 | (4.7 | )% | |||||
| Adjusted EPS(a) | $ | 1.60 | $ | 1.55 | 3.2 | % | $ | 2.80 | $ | 2.85 | (1.8 | )% | |||||
(a) EBITDA, adjusted EBITDA, Adjusted operating income, Adjusted net income, and Adjusted EPS are non-GAAP financial measures. Please see “Notes Regarding Non-GAAP Financial Information” for additional information regarding our use of non-GAAP financial measures. Refer to Tables A, B and C at the end of this release for reconciliations of adjusted amounts to the closest corresponding GAAP financial measures.
Summary Product Line Results
(dollars in thousands)
| Three Months Ended | |||||||||||
| July
3, 2026 |
June
27, 2025 |
QTD Change | Organic Change(a) | ||||||||
| Product Line Sales | |||||||||||
| Cardio & Vascular | $ | 280,308 | $ | 286,855 | (2.3 | )% | (2.5 | )% | |||
| Cardiac Rhythm Management & Neuromodulation | 173,712 | 171,998 | 1.0 | % | 1.0 | % | |||||
| Other Markets | 10,090 | 17,641 | (42.8 | )% | (13.5 | )% | |||||
| Total Sales | $ | 464,110 | $ | 476,494 | (2.6 | )% | (1.5 | )% | |||
| Six Months Ended | |||||||||||
| July
3, 2026 |
June
27, 2025 |
YTD Change | Organic Change(a) | ||||||||
| Product Line Sales | |||||||||||
| Cardio & Vascular | $ | 542,041 | $ | 545,726 | (0.7 | )% | (1.5 | )% | |||
| Cardiac Rhythm Management & Neuromodulation | 341,976 | 332,343 | 2.9 | % | 2.9 | % | |||||
| Other Markets | 19,673 | 35,817 | (45.1 | )% | (12.4 | )% | |||||
| Total Sales | $ | 903,690 | $ | 913,886 | (1.1 | )% | (0.1 | )% | |||
(a) Organic sales change is a non-GAAP financial measure. Please see “Notes Regarding Non-GAAP Financial Information” for additional information regarding our use of non-GAAP financial measures and refer to Table D at the end of this release for a reconciliation of these amounts to the closest corresponding GAAP financial measures.
About Integer®
Integer Holdings Corporation (NYSE: ITGR) is one of the
largest medical device contract development and manufacturing organizations (CDMOs) in the world, serving the cardio and vascular, neuromodulation,
and cardiac rhythm management markets. As a strategic partner of choice, we advance the goals of our medical device customers through
industry-leading engineering and manufacturing, with a relentless commitment to quality, service, and innovation. The company's brands
include Greatbatch Medical® and Lake Region Medical®. Additional information
is available at www.integer.net.
Investor Relations:
Kristen Stewart
551-337-3973
kristen.stewart@integer.net
Notes Regarding Non-GAAP Financial Information
|In addition to our results reported in accordance
with generally accepted accounting principles in the United States of America (“GAAP”), we provide adjusted net income, adjusted
EPS, earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted operating income,
and organic sales change. Unless otherwise indicated, all financial metrics presented reflect continuing operations only.
Adjusted net income and adjusted EPS consist of GAAP income (loss) from continuing operations and diluted EPS from continuing operations, respectively, adjusted for the following to the extent occurring during the period: (i) amortization of intangible assets, (ii) certain legal expenses; (iii) restructuring and restructuring-related charges; (iv) acquisition and integration costs; (v) other general expenses; (vi) ERP implementation, (vii) (gain) loss on equity investments; (viii) extinguishment of debt charges, (ix) debt conversion inducement expense; (x) European Union medical device regulation incremental charges; (xi) inventory step-up amortization; (xii) unusual, or infrequently occurring items; (xiii) the income tax provision (benefit) related to these adjustments and (xiv) certain tax items that are outside the normal tax provision for the period. Adjusted EPS is calculated by dividing adjusted net income by adjusted weighted average shares.
The weighted average shares used to calculate diluted EPS in accordance with GAAP includes dilution, when applicable, resulting from the potential conversion of our 2028 Convertible Notes and 2030 Convertible Notes (collectively, the “Convertible Notes”). In connection with the issuance of the Convertible Notes, we entered into capped call contracts which are expected to reduce the potential dilution on our common stock in connection with any conversion of the Convertible Notes, subject to a cap. Adjusted weighted average shares consists of GAAP weighted average shares used to calculate diluted EPS, including, when applicable, dilutive common stock equivalents that were excluded from weighted average shares used to calculate diluted EPS as their inclusion would be anti-dilutive and excluding, when applicable, dilution resulting from the potential conversion of our Convertible Notes expected to be offset by the capped call contracts.
EBITDA is calculated by adding back interest expense, provision for income taxes, depreciation expense, and amortization expense from intangible assets and financing leases, to income (loss) from continuing operations, which is the most directly comparable GAAP financial measure. Adjusted EBITDA consists of EBITDA plus adding back stock-based compensation and the same adjustments as listed above except for items (i), (viii), (xiii) and (xiv). Adjusted operating income consists of operating income adjusted for the same items listed above except for items (vii), (viii), (ix), (xiii) and (xiv).
Organic sales change is reported sales growth adjusted to remove the impact of foreign currency, the contribution of acquisitions and the strategic exit of the Portable Medical market. To calculate the impact of foreign currency on sales growth rates, we convert any sale made in a foreign currency by converting current period sales into prior period sales using the exchange rate in effect at that time and then compare the two, negating any effect foreign currency had on our transactional revenue. For contribution of acquisitions, we exclude the impact on the growth rate attributable to the contribution of acquisitions in all periods where there were no comparable sales. For the strategic exit of the Portable Medical market, we exclude the impact on the growth rate attributable to Portable Medical sales for all periods presented.
We believe that the presentation of adjusted net income, adjusted EPS, EBITDA, adjusted EBITDA, adjusted operating income, and organic sales change, provides important supplemental information to management and investors seeking to understand the financial and business trends relating to our financial condition and results of operations. In addition to the performance measures identified above, we believe that net total debt and leverage ratio provide meaningful measures of liquidity and a useful basis for assessing our ability to fund our activities, including the financing of acquisitions and debt repayments. Net total debt is calculated as total principal amount of debt outstanding less cash and cash equivalents. We calculate leverage ratio as net total debt divided by adjusted EBITDA for the trailing 4 quarters.
Forward-Looking Statements
Some of the statements contained in this communication and other written
and oral statements made from time to time by us and our representatives are not statements of historical or current fact. As such, they
are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created thereby under the Private Securities
Litigation Reform Act of 1995. We have based these forward-looking statements on our current expectations, and these statements are subject
to known and unknown risks, uncertainties and assumptions. Forward-looking statements include, but are not limited to, statements relating
to: our goals, plans, and strategic initiatives; long-term growth prospects; maximizing value for our stockholders; and other events,
conditions or developments that will or may occur in the future; and timing of any of the foregoing. You can identify forward-looking
statements by terminology such as “may,” “will,” “should,” “could,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,”
“projects,” “forecast,” “outlook,” “assume,” “potential” or “continue”
or variations or the negative counterparts of these terms or other comparable terminology. These statements are only predictions and are
no guarantee of future performance, and investors should not place undue reliance on forward-looking statements as predictive of future
results. Actual events or results may differ materially from those stated or implied by these forward-looking statements. In evaluating
these statements and our prospects, you should carefully consider the factors set forth below. All forward-looking statements attributable
to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary factors and to others contained throughout
this communication.
Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements regarding the transactions contemplated by the Agreement and Plan of Merger, by and among Integer Holdings Corporation (the “Company”), Armstrong Parent, Inc. (“Buyer”) and Armstrong Bidco, Inc. (the “Transaction”). All such forward-looking statements are based upon current plans, estimates, expectations, opportunities and ambitions that are subject to risks, uncertainties, assumptions, and other important factors, many of which are beyond the control of the Company, that could cause actual results to differ materially from those expressed in such forward-looking statements. Key factors that could cause actual results to differ materially include, but are not limited to, the expected timing and likelihood of completion of the Transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals; the occurrence of any event, change or other circumstances that could give rise to the termination of the Transaction; the possibility that the Company’s stockholders may not approve the Transaction; the risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all; risks related to disruption of management time from ongoing business operations due to the Transaction; the risk that any announcements relating to the Transaction could have adverse effects on the market price of the Company’s common stock; the risk that the Transaction and its announcement could have an adverse effect on the parties’ business relationships and business generally, including the ability of the Company to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers, and on their operating results and businesses generally; the risk of unforeseen or unknown liabilities; customer, stockholder, regulatory and other stakeholder approvals and support; the risk of unexpected future capital expenditures; the risk of potential litigation relating to the Transaction that could be instituted against the Company or its directors and/or officers; the risk associated with third-party contracts containing material consent, anti-assignment, transfer or other provisions that may be related to the Transaction which are not waived or otherwise satisfactorily resolved; significant costs, or expenses incurred in connection with the Transaction; the Buyer’s ability to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Transaction; certain restrictions contained in the Agreement and Plan of Merger that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the risk of various events that could disrupt operations, including pandemics, epidemics or other public health crises or severe weather (such as droughts, floods, avalanches and earthquakes), cybersecurity attacks, security threats and governmental response to them, and technological changes; the risks of labor disputes, changes in labor costs and labor difficulties; and the risks resulting from other effects of industry, market, economic, legal or legislative, political or regulatory conditions outside of the Company’s control. All such factors are difficult to predict and are beyond our control, including those detailed in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the Securities Exchange Commission (the “SEC”) on February 23, 2026 (the “Form 10-K”), quarterly reports on Form 10-Q and other documents subsequently filed by the Company with the SEC. The Company’s forward-looking statements are based on assumptions that the Company believes to be reasonable but that may not prove to be accurate. Other unpredictable or factors not discussed in this communication could also have material adverse effects on forward-looking statements. The Company does not assume an obligation to update any forward-looking statements, except as required by applicable law. These forward-looking statements speak only as of the date hereof.
| Condensed Consolidated Balance Sheets - Unaudited | |||||||
| (in thousands) | |||||||
| July
3, 2026 |
December
31, 2025 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 21,375 | $ | 17,161 | |||
| Accounts receivable, net | 338,729 | 346,079 | |||||
| Inventories | 288,058 | 253,739 | |||||
| Contract assets | 119,024 | 112,546 | |||||
| Prepaid expenses and other current assets | 43,449 | 40,572 | |||||
| Total current assets | 810,635 | 770,097 | |||||
| Property, plant and equipment, net | 532,340 | 536,427 | |||||
| Goodwill | 1,104,651 | 1,110,908 | |||||
| Other intangible assets, net | 788,841 | 825,435 | |||||
| Deferred income taxes | 9,014 | 8,994 | |||||
| Operating lease assets | 82,574 | 98,437 | |||||
| Financing lease assets | 56,429 | 37,109 | |||||
| Other long-term assets | 39,113 | 23,170 | |||||
| Total assets | $ | 3,423,597 | $ | 3,410,577 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 111,850 | $ | 113,130 | |||
| Operating lease liabilities | 8,209 | 9,099 | |||||
| Accrued expenses and other current liabilities | 97,082 | 109,812 | |||||
| Total current liabilities | 217,141 | 232,041 | |||||
| Long-term debt | 1,237,883 | 1,185,179 | |||||
| Deferred income taxes | 114,747 | 116,327 | |||||
| Operating lease liabilities | 67,143 | 81,899 | |||||
| Financing lease liabilities | 51,296 | 28,578 | |||||
| Other long-term liabilities | 16,638 | 19,910 | |||||
| Total liabilities | 1,704,848 | 1,663,934 | |||||
| Stockholders’ equity: | |||||||
| Common stock | 35 | 35 | |||||
| Additional paid-in capital | 756,545 | 771,223 | |||||
| Treasury stock | (110,734 | ) | (76,872 | ) | |||
| Retained earnings | 1,034,166 | 994,055 | |||||
| Accumulated other comprehensive income | 38,737 | 58,202 | |||||
| Total stockholders’ equity | 1,718,749 | 1,746,643 | |||||
| Total liabilities and stockholders’ equity | $ | 3,423,597 | $ | 3,410,577 | |||
| Condensed Consolidated Statements of Operations - Unaudited | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
| July
3, 2026 |
June
27, 2025 |
July
3, 2026 |
June
27, 2025 | ||||||||||
| Sales | $ | 464,110 | $ | 476,494 | $ | 903,690 | $ | 913,886 | |||||
| Cost of sales | 351,168 | 347,342 | 681,153 | 664,416 | |||||||||
| Gross profit | 112,942 | 129,152 | 222,537 | 249,470 | |||||||||
| Operating expenses: | |||||||||||||
| Selling, general and administrative | 57,699 | 52,923 | 116,410 | 104,083 | |||||||||
| Research, development and engineering | 11,278 | 14,240 | 27,521 | 28,441 | |||||||||
| Restructuring and other charges | 9,437 | 2,651 | 12,209 | 8,056 | |||||||||
| Total operating expenses | 78,414 | 69,814 | 156,140 | 140,580 | |||||||||
| Operating income | 34,528 | 59,338 | 66,397 | 108,890 | |||||||||
| Interest expense | 10,135 | 9,754 | 19,869 | 24,559 | |||||||||
| (Gain) loss on equity investments | (42 | ) | 8 | 1,426 | (173 | ) | |||||||
| Other loss, net | 1,144 | 3,980 | 1,460 | 51,907 | |||||||||
| Income from continuing operations before taxes | 23,291 | 45,596 | 43,642 | 32,597 | |||||||||
| Provision (benefit) for income taxes | (314 | ) | 8,587 | 3,531 | 18,053 | ||||||||
| Income from continuing operations | 23,605 | 37,009 | 40,111 | 14,544 | |||||||||
| Loss from discontinued operations, net of tax | — | — | — | (22 | ) | ||||||||
| Net income | $ | 23,605 | $ | 37,009 | $ | 40,111 | $ | 14,522 | |||||
| Basic earnings per share: | |||||||||||||
| Income from continuing operations | $ | 0.69 | $ | 1.06 | $ | 1.17 | $ | 0.42 | |||||
| Loss from discontinued operations | $ | — | $ | — | $ | — | $ | — | |||||
| Basic earnings per share | $ | 0.69 | $ | 1.06 | $ | 1.17 | $ | 0.42 | |||||
| Diluted earnings per share: | |||||||||||||
| Income from continuing operations | $ | 0.69 | $ | 1.04 | $ | 1.17 | $ | 0.41 | |||||
| Loss from discontinued operations | $ | — | $ | — | $ | — | $ | — | |||||
| Diluted earnings per share | $ | 0.69 | $ | 1.04 | $ | 1.17 | $ | 0.41 | |||||
| Weighted average shares outstanding: | |||||||||||||
| Basic | 34,010 | 35,035 | 34,146 | 34,488 | |||||||||
| Diluted | 34,145 | 35,713 | 34,290 | 35,830 | |||||||||
| Condensed Consolidated Statements of Cash Flows - Unaudited | |||||||
| (in thousands) | |||||||
| Six Months Ended | |||||||
| July
3, 2026 |
June
27, 2025 | ||||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 40,111 | $ | 14,522 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 69,549 | 62,118 | |||||
| Debt related charges included in interest expense | 3,263 | 3,627 | |||||
| Debt conversion inducement expense | — | 46,681 | |||||
| Stock-based compensation | 12,045 | 12,536 | |||||
| Non-cash fixed asset impairment | 5,893 | — | |||||
| Non-cash lease expense | 4,876 | 5,000 | |||||
| Non-cash (gains) losses on equity investments | 1,426 | (173 | ) | ||||
| Contingent consideration fair value adjustment | (1,179 | ) | (309 | ) | |||
| Other non-cash losses | 2,077 | 3,143 | |||||
| Deferred income taxes | 18 | 3,942 | |||||
| Gain on sale of discontinued operations | — | (46 | ) | ||||
| Changes in operating assets and liabilities, net of acquisitions: | |||||||
| Accounts receivable | 7,959 | (41,014 | ) | ||||
| Inventories | (36,751 | ) | (14,509 | ) | |||
| Prepaid expenses and other assets | (2,247 | ) | 71 | ||||
| Contract assets | (6,762 | ) | 1,800 | ||||
| Accounts payable | 5,591 | 11,561 | |||||
| Accrued expenses and other liabilities | (11,761 | ) | (23,312 | ) | |||
| Income taxes payable | (9,678 | ) | (10,500 | ) | |||
| Net cash provided by operating activities | 84,430 | 75,138 | |||||
| Cash flows from investing activities: | |||||||
| Acquisition of property, plant and equipment | (46,651 | ) | (44,219 | ) | |||
| Purchase of equity and other investments, net of distributions | (14,043 | ) | — | ||||
| Acquisitions, net | — | (170,872 | ) | ||||
| Other investing activities | 108 | 97 | |||||
| Net cash used in investing activities | (60,586 | ) | (214,994 | ) | |||
| Cash flows from financing activities: | |||||||
| Principal payments of long-term debt | — | (657,693 | ) | ||||
| Proceeds from issuance of convertible notes, net of discount | — | 977,500 | |||||
| Proceeds from revolving credit facility | 207,600 | 257,000 | |||||
| Payments of revolving credit facility | (157,600 | ) | (373,000 | ) | |||
| Purchase of capped calls | — | (71,000 | ) | ||||
| Payment of debt issuance costs | (38 | ) | (1,266 | ) | |||
| Proceeds from the exercise of stock options | — | 3,644 | |||||
| Tax withholdings related to net share settlements of restricted stock unit awards | (10,299 | ) | (16,707 | ) | |||
| Repurchases of common stock | (50,000 | ) | — | ||||
| Principal payments on finance leases | (4,256 | ) | (2,596 | ) | |||
| Other financing activities | (5,162 | ) | 107 | ||||
| Net cash provided by (used in) financing activities | (19,755 | ) | 115,989 | ||||
| Effect of foreign currency exchange rates on cash and cash equivalents | 125 | 459 | |||||
| Net increase (decrease) in cash and cash equivalents | 4,214 | (23,408 | ) | ||||
| Cash and cash equivalents, beginning of period | 17,161 | 46,543 | |||||
| Cash and cash equivalents, end of period | $ | 21,375 | $ | 23,135 | |||
Table A: Adjusted Net Income and Diluted EPS from Continuing Operations Reconciliations
(in thousands,
except per share amounts)
| Three Months Ended | |||||||||||||||||||||
| July 3, 2026 | June 27, 2025 | ||||||||||||||||||||
| Pre-Tax | Net of Tax | Per Diluted Share(a) |
Pre-Tax | Net of Tax | Per Diluted Share(a) | ||||||||||||||||
| Income from continuing operations (GAAP) | $ | 23,291 | $ | 23,605 | $ | 0.69 | $ | 45,596 | $ | 37,009 | $ | 1.04 | |||||||||
| Adjustments(b): | |||||||||||||||||||||
| Amortization of intangible assets | 15,973 | 12,897 | 0.38 | 16,120 | 12,978 | 0.37 | |||||||||||||||
| Certain legal expenses (SG&A)(c) | 1,931 | 1,525 | 0.04 | 9 | 6 | — | |||||||||||||||
| Restructuring and restructuring-related charges(d) | 4,397 | 3,212 | 0.09 | 2,575 | 2,049 | 0.06 | |||||||||||||||
| Acquisition and integration costs(e) | 173 | 141 | — | 2,007 | 1,596 | 0.04 | |||||||||||||||
| Other general expenses(f) | 7,423 | 6,297 | 0.18 | 7 | 7 | — | |||||||||||||||
| ERP implementation(g) | 4,921 | 3,887 | 0.11 | — | — | — | |||||||||||||||
| (Gain) loss on equity investments(h) | (42 | ) | (33 | ) | — | 8 | 6 | — | |||||||||||||
| Loss on extinguishment of debt(i) | — | — | — | 130 | 103 | — | |||||||||||||||
| Medical device regulations(j) | 44 | 35 | — | 262 | 207 | 0.01 | |||||||||||||||
| Other adjustments(k) | 3,601 | 2,845 | 0.08 | 948 | 750 | 0.02 | |||||||||||||||
| Tax adjustments(l) | — | 296 | 0.01 | — | 107 | — | |||||||||||||||
| Adjusted net income (non-GAAP) | $ | 61,712 | $ | 54,707 | $ | 1.60 | $ | 67,662 | $ | 54,818 | $ | 1.55 | |||||||||
| Six Months Ended | |||||||||||||||||||||
| July 3, 2026 | June 27, 2025 | ||||||||||||||||||||
| Pre-Tax | Net of Tax | Per Diluted Share(a) |
Pre-Tax | Net of Tax | Per Diluted Share(a) | ||||||||||||||||
| Income from continuing operations (GAAP) | $ | 43,642 | $ | 40,111 | $ | 1.17 | $ | 32,597 | $ | 14,544 | $ | 0.41 | |||||||||
| Adjustments(b): | |||||||||||||||||||||
| Amortization of intangible assets | 31,967 | 25,820 | 0.75 | 30,971 | 24,927 | 0.71 | |||||||||||||||
| Certain legal expenses (SG&A)(c) | 2,139 | 1,689 | 0.05 | 111 | 87 | — | |||||||||||||||
| Restructuring and restructuring-related charges(d) | 6,245 | 4,672 | 0.14 | 3,677 | 2,938 | 0.08 | |||||||||||||||
| Acquisition and integration costs(e) | 1,615 | 1,284 | 0.04 | 6,749 | 5,347 | 0.15 | |||||||||||||||
| Other general expenses(f) | 8,146 | 6,868 | 0.20 | 6 | 6 | — | |||||||||||||||
| ERP implementation(g) | 8,274 | 6,536 | 0.19 | — | — | — | |||||||||||||||
| (Gain) loss on equity investments(h) | 1,426 | 1,126 | 0.03 | (173 | ) | (137 | ) | — | |||||||||||||
| Loss on extinguishment of debt(i) | — | — | — | 867 | 685 | 0.02 | |||||||||||||||
| Debt conversion inducement expense(m) | — | — | — | 46,681 | 46,681 | 1.32 | |||||||||||||||
| Medical device regulations(j) | 344 | 272 | 0.01 | 512 | 404 | 0.01 | |||||||||||||||
| Other adjustments(k) | 8,917 | 7,045 | 0.21 | 1,273 | 1,006 | 0.03 | |||||||||||||||
| Tax adjustments(l) | — | 579 | 0.02 | — | 4,268 | 0.12 | |||||||||||||||
| Adjusted net income (Non-GAAP) | $ | 112,715 | $ | 96,002 | $ | 2.80 | $ | 123,271 | $ | 100,756 | $ | 2.85 | |||||||||
(a) Income from continuing operations (GAAP) per diluted share amounts are calculated in accordance with GAAP using weighted average shares for diluted EPS. The per share amounts for the adjustments in the table above and adjusted net income are calculated using adjusted weighted average shares. The following table provides a reconciliation from GAAP weighted average shares for diluted EPS to non-GAAP adjusted weighted average shares.
| Three Months Ended | Six Months Ended | ||||||||||
| July 03, 2026 | June 27, 2025 | July 03, 2026 | June 27, 2025 | ||||||||
| Weighted average shares for diluted EPS (GAAP) | 34,145 | 35,713 | 34,290 | 35,830 | |||||||
| Less: 2028 Convertible Notes capped call options impact | (28 | ) | (240 | ) | (13 | ) | (515 | ) | |||
| Adjusted weighted average shares (non-GAAP) | 34,117 | 35,473 | 34,277 | 35,315 | |||||||
(b) The difference between pre-tax and net of tax amounts is the estimated tax impact related to the respective
adjustment. Net of tax amounts are computed using a 21% U.S. tax rate, and the statutory tax rates applicable in foreign tax jurisdictions,
as adjusted for the existence of net operating losses (“NOLs”). Expenses that are not deductible for tax purposes (i.e. permanent
tax differences) are added back at 100%.
(c) Certain legal expenses associated with non-ordinary
course legal matters. Amounts for 2026 include $1.8 million of expense incurred in connection with the Company’s defense of a securities
class action lawsuit.
(d) We initiate discrete restructuring programs primarily to realign resources
to better serve our customers and markets, improve operational efficiency and capabilities, and lower operating costs or improve profitability.
Depending on the program, restructuring charges may include termination benefits, contract termination, facility closure and other exit
and disposal costs. Restructuring-related expenses are directly related to the program and may include retention bonuses, accelerated
depreciation, consulting expense and costs to transfer manufacturing operations among our facilities. Amounts for the second quarter and
first six months of 2026 include $1.8 million and $2.8 million, respectively, relating to our global manufacturing alignment restructuring
initiative. In addition, the second quarter of 2026 includes $2.4 million related to an organizational realignment to enhance execution
of our strategy through dedicated focus on growth and operational excellence.
(e) Acquisition and
integration costs are incremental costs that are directly related to a business or asset acquisition. These costs may include, among other
things, professional, consulting and other fees, system integration costs, and fair value adjustments relating to contingent consideration.
(f)
Other general expenses are discrete transactions occurring sporadically and affect period-over-period comparisons. The Company
recorded fixed asset impairment charges of $5.9 million during the second quarter of 2026. The impairment charges were primarily due to
revised expectations regarding the future use of certain fixed assets.
(g) These adjustments represent
direct and incremental costs incurred in connection with our implementation of a new global enterprise resource planning ("ERP") solution
and related IT transition costs. An implementation of this scale is a significant undertaking and will require substantial time and attention
of management and key employees. The associated costs do not represent normal and recurring operating expenses and will be inconsistent
in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance. Expenses for 2026
were primarily included in SG&A.
(h) Amounts reflect our share of equity method investee (gains)
losses including unrealized appreciation/depreciation of the underlying interests of the investee.
(i) Loss
on extinguishment of debt consists of accelerated write-offs of unamortized deferred debt issuance costs and discounts, which are included
in interest expense.
(j) The charges represent incremental costs of complying with European Union
medical device regulations for previously registered products and primarily include charges for contractors supporting the project and
other direct third-party expenses.
(k) Other adjustments include costs which impact period-to-period
comparability and do not represent the underlying ongoing results of our business. For 2025 and 2026, amounts include costs associated
with leadership transitions, strategic projects, a stockholder activist matter, the Strategic Review announced during the quarter, pursuant
to which we subsequently entered into the definitive agreement described elsewhere herein, and a cyber incident. Other adjustments includes
the following expenses (in millions):
| Three Months Ended | Six Months Ended | ||||||||||
| July 03, 2026 | June 27, 2025 | July 03, 2026 | June 27, 2025 | ||||||||
| Leadership transition costs | $ | 0.1 | $ | 0.7 | $ | 1.5 | $ | 0.7 | |||
| Strategic projects | 0.9 | 0.3 | 1.6 | 0.6 | |||||||
| Stockholder activist matter | 0.6 | — | 3.8 | — | |||||||
| Strategic Review | 1.3 | — | 1.3 | — | |||||||
| Cyber incident costs | 0.7 | — | 0.7 | — | |||||||
(l) Tax adjustments include changes to uncertain tax benefits and associated interest for all periods presented.
In addition, included in the amount for the first six months of 2025 is the write off a deferred tax asset for $4.1 million related to
the a portion of the unamortized original issue discount due to the partial exchange of the 2028 Convertible Notes.
(m)
Debt conversion inducement expense relates to the partial exchange of the 2028 Convertible Notes and is recorded within
Other loss, net in the Condensed Consolidated Statements of Operations.
Please see “Notes Regarding Non-GAAP Financial Information” for additional information regarding our use of non-GAAP financial measures.
Table B: Adjusted Operating Income Reconciliations
(in thousands)
| Three Months Ended | Six Months Ended | ||||||||||
| July
3, 2026 |
June
27, 2025 |
July
3, 2026 |
June
27, 2025 | ||||||||
| Operating income (GAAP) | $ | 34,528 | $ | 59,338 | $ | 66,397 | $ | 108,890 | |||
| Adjustments: | |||||||||||
| Amortization of intangible assets | 15,973 | 16,120 | 31,967 | 30,971 | |||||||
| Certain legal expenses | 1,931 | 9 | 2,139 | 111 | |||||||
| Restructuring and restructuring-related charges | 4,397 | 2,575 | 6,245 | 3,677 | |||||||
| Acquisition and integration costs | 173 | 2,007 | 1,615 | 6,749 | |||||||
| Other general expenses | 7,423 | 7 | 8,146 | 6 | |||||||
| ERP implementation | 4,921 | — | 8,274 | — | |||||||
| Medical device regulations | 44 | 262 | 344 | 512 | |||||||
| Other adjustments | 3,601 | 948 | 8,917 | 1,273 | |||||||
| Adjusted operating income (non-GAAP) | $ | 72,991 | $ | 81,266 | $ | 134,044 | $ | 152,189 | |||
Table C: EBITDA and Adjusted EBITDA Reconciliations
(in thousands)
| Three Months Ended | Six Months Ended | ||||||||||||
| July
3, 2026 |
June
27, 2025 |
July
3, 2026 |
June
27, 2025 | ||||||||||
| Income from continuing operations (GAAP) | $ | 23,605 | $ | 37,009 | $ | 40,111 | $ | 14,544 | |||||
| Interest expense | 10,135 | 9,754 | 19,869 | 24,559 | |||||||||
| Provision (benefit) for income taxes | (314 | ) | 8,587 | 3,531 | 18,053 | ||||||||
| Depreciation(a) | 16,743 | 15,040 | 34,086 | 29,026 | |||||||||
| Amortization of intangible assets and financing leases | 17,795 | 17,246 | 35,463 | 33,092 | |||||||||
| EBITDA (non-GAAP) | 67,964 | 87,636 | 133,060 | 119,274 | |||||||||
| Stock-based compensation(b) | 4,527 | 5,499 | 9,834 | 12,350 | |||||||||
| Certain legal expenses | 1,931 | 9 | 2,139 | 111 | |||||||||
| Restructuring and restructuring-related charges | 4,397 | 2,575 | 6,245 | 3,677 | |||||||||
| Acquisition and integration costs | 173 | 2,007 | 1,615 | 6,749 | |||||||||
| Other general expenses | 7,423 | 7 | 8,146 | 6 | |||||||||
| ERP implementation | 4,921 | — | 8,274 | — | |||||||||
| (Gain) loss on equity investments | (42 | ) | 8 | 1,426 | (173 | ) | |||||||
| Debt conversion inducement expense | — | — | — | 46,681 | |||||||||
| Medical device regulations | 44 | 262 | 344 | 512 | |||||||||
| Other adjustments | 3,601 | 948 | 8,917 | 1,273 | |||||||||
| Adjusted EBITDA (non-GAAP) | $ | 94,939 | $ | 98,951 | $ | 180,000 | $ | 190,460 | |||||
(a) Excludes amounts included in Restructuring and restructuring-related charges.
(b)
Total stock-based compensation expense less amounts included in Restructuring and restructuring-related charges, ERP implementation,
and Other adjustments.
Table D: Organic Sales Change Reconciliation (% Change)
| GAAP Reported Growth | Impact of Foreign Currency(a) | Impact
of Strategic Exits and Acquisitions(a) |
Non-GAAP Organic Change | ||||
| QTD Change (2Q 2026 vs. 2Q 2025) | |||||||
| Product Line | |||||||
| Cardio & Vascular | (2.3)% | 0.1% | 0.1% | (2.5)% | |||
| Cardiac Rhythm Management & Neuromodulation | 1.0% | —% | —% | 1.0% | |||
| Other Markets | (42.8)% | —% | (29.3)% | (13.5)% | |||
| Total Sales | (2.6)% | 0.1% | (1.2)% | (1.5)% | |||
| YTD Change (6M 2026 vs. 6M 2025) | |||||||
| Product Line | |||||||
| Cardio & Vascular | (0.7)% | 0.3% | 0.5% | (1.5)% | |||
| Cardiac Rhythm Management & Neuromodulation | 2.9% | —% | —% | 2.9% | |||
| Other Markets | (45.1)% | —% | (32.7)% | (12.4)% | |||
| Total Sales | (1.1)% | 0.2% | (1.2)% | (0.1)% |
(a) Sales growth has been adjusted to exclude the impact of foreign currency exchange rate fluctuations, when applicable, and strategic exits and acquisitions.
Table E: Net Total Debt Reconciliation
(in thousands)
| July
3, 2026 |
December
31, 2025 | ||||
| Total debt | $ | 1,237,883 | $ | 1,185,179 | |
| Add: Debt discounts and deferred issuance costs included in Total debt | 19,401 | 22,105 | |||
| Total principal amount of debt outstanding | 1,257,284 | 1,207,284 | |||
| Less: Cash and cash equivalents | 21,375 | 17,161 | |||
| Net Total Debt (Non-GAAP) | $ | 1,235,909 | $ | 1,190,123 | |