Integer Holdings Corporation

First quarter 2026 sales were $440 million, up 0.5% reported and up 1.3% organically versus last year. Adjusted EBITDA was $85 million, down $7 million or 7% year over year; adjusted operating margin was 13.9%, down 230 basis points; adjusted net income was $41 million, down 10%; and adjusted EPS was $1.20, down 8%. For the full year 2026, management now expects reported sales of $1.805 billion to $1.835 billion, organic sales flat to down 1%, adjusted EBITDA of $375 million to $399 million, adjusted operating income of $285 million to $305 million, adjusted net income of $200 million to $220 million, and adjusted EPS of $5.83 to $6.40. They also expect cash from operations of $185 million to $205 million, capex of $95 million to $105 million, and free cash flow of $85 million to $105 million.

Payman Khales said Q1 was in line with February guidance and framed 2026 as a transition year because of temporary product headwinds, especially in electrophysiology and from the portable medical exit. He emphasized that the EP market remains attractive and that the company is well positioned with strong customer relationships, a broad portfolio, and a robust pipeline. He also said the board’s strategic review is being driven by heightened external interest, but reiterated confidence in the stand-alone strategy and in Integer’s long-term goal of growing above market.

Diron Smith walked through the quarter as a mostly expected step-down: $440 million in sales, $85 million in adjusted EBITDA, 13.9% adjusted operating margin, $41 million in adjusted net income, and $1.20 adjusted EPS. He cited lower fixed-cost absorption as the main margin drag, noted interest expense was $4 million lower year over year, and said the company completed $50 million share repurchases in both Q4 2025 and Q1 2026. Cash from operations was $25 million, capex was $24 million, free cash flow was $1 million, and net total debt was $1.264 billion with leverage at 3.2x trailing 4-quarter adjusted EBITDA. For 2026, he lowered the sales and profit outlooks, cut cash from operations guidance to $185 million to $205 million, kept capex at $95 million to $105 million, and said year-end net total debt is expected at $1.185 billion to $1.205 billion within the 2.5x to 3.5x leverage target.

Analysts focused on the second EP forecast cut, asking whether it reflected market slowdown, inventory digestion, or product-specific issues. Management said it was not the previously discussed products, not in-sourcing, and not a loss of contract; rather, customers adjusted forecasts as the EP market normalizes after the PFA-driven surge, with the impact expected to be temporary and mainly in the second half of 2026. Questions also pressed on why the strategic review is happening now, and management answered that heightened recent interest and a fiduciary duty to maximize shareholder value made this an appropriate time to explore alternatives, including the possibility that remaining independent is the best outcome. Analysts further asked about EP wallet share, cost flexibility, and inflation; management said EP remains a strong portfolio, cost actions are becoming more aggressive but should not impair 2027 growth, and inflation is manageable.