Integer Holdings Corporation  reported a rickety, resilient adjusted earnings per share (EPS) of $1.39 in the fourth quarter of 2023, an impressive 25.2% improvement from the previous year. Their figure sashayed past the Zacks Consensus Estimate by 3.7%.

Delving into the details, the adjustments meld expenses related to the amortization of intangible assets and restructuring and restructuring-related charges, among other noteworthy elements.

On the GAAP front, EPS for the quarter strutted in at 78 cents, radiating an improvement of 52.9% year over year.

Revenues Exceed Expectations

Integer Holdings embellished their financial studded crown with revenues of $413.2 million in the fourth quarter, a dazzling 10.9% leap year over year. The figure outshone the Zacks Consensus Estimate by 0.3%.

Orginally, revenues spun upwards by 9.5%, signaling a strong performance.

The company’s top line was hoisted by robust Medical sales in the reported period.

Segmental Salute

Integer Holdings operates through two segments — Medical Sales and Non-Medical Sales.

Medical Sales cheered with revenues of $404.1 million, a resounding 13.3% ascent year over year on a reported and 11.9% growth organically.

The Medical Sales segment boasts three product lines — Advanced Surgical, Orthopedics & Portable Medical (AS&O); Cardio & Vascular; and Cardiac Rhythm Management (CRM) & Neuromodulation.

Meanwhile, Non-Medical segment’s revenues stood at $9.1 million, a disappointing 41.9% dip year over year on a reported and organic basis.

Margin Miracle

Integer Holdings orchestrated a ballet of numbers, securing a gross profit of $110.3 million in the fourth quarter, a striking 12.6% ascend from the previous year. Their gross margin in the reported quarter pirouetted to an expanded 26.7%.

Balancing this act, selling, general and administrative expenses pranced to $45.8 million, a daring 11.6% leap year over year, while research, development and engineering costs waltzed to $13.3 million, a graceful 4.2% decline from the previous year. Meanwhile, operating expenses gracefully sashayed to $66.7 million, a poised 9.3% increase year over year.

Financial Flourish

Integer Holdings pirouetted out of the fourth quarter of 2023 with cash and cash equivalents of $23.7 million compared with $32.1 million at the end of the third quarter. Their total long-term debt at the end of fourth-quarter 2023 was $959.9 million compared with $941.4 million at the third-quarter end.

On the cash flow stage, the company performed a gutsy move, with net cash used by operating activities at the end of fourth-quarter 2023 totaling $180.2 million against $116.5 million of cumulative net cash provided by operating activities a year ago.

Full-Years Results

Integer Holdings’ grand finale for 2023, boasted total revenues of $1.6 billion, an impressive 16.0% surge year over year. Their twisted, turned, and refined adjusted EPS for 2023 was $4.67 compared with $3.88 the previous year.

2024 Vision

Integer Holdings has donned their crystal ball for 2024, projecting revenues in the range of $1.73 billion-$1.77 billion, with a full-year adjusted EPS in the band of $5.01-$5.43, a performance worthy of a standing ovation.

Conclusion and a Whiff of the Future

Integer Holdings exited the fourth quarter of 2023 with earnings and revenues waltzing past the respective consensus estimates, showcasing the indomitable spirit of their performance benchmarked to others, to the tunes of 3.7% and 0.3%, respectively.

The solid year-over-year top-line and bottom-line performances were staggering. The Medical segment’s robust performance and strength in the majority of its product lines are a testament to overcoming challenges gracefully. The expansion of both margins tantalizes investors, beckoning them with promising prospects.

In the early days of January 2023, Integer Holdings acquired Pulse Technologies for approximately $140 million, an acquisition that can be likened to adding a finely crafted jewel to an already elegant tiara, bringing in differentiated complex machining and manufacturing capabilities as well as proprietary technologies.

On a sombre note, the decline in Non-Medical revenues was less than desirable, akin to a fumble on center stage during an otherwise exquisite performance. For investors, a potential red flag amidst an otherwise compelling act.

The Zacks Lens and Picks to Watch

Integer Holdings is presently adorned with a Zacks Rank #2 (Buy).

For those looking for other top-ranked stocks in the broader medical space, consider Universal Health Services, Cardinal Health, and Elevance Health, Inc, a trio set to take the stage and make the stock market dance.

Universal Health Services, currently a Zacks Rank #2, displays an estimated growth rate of 4.4% for 2024. With earnings consistently topping estimates over the last four quarters, averaging a 5.47% surprise, they are the stock market’s magical, elusive creature.

Cardinal Health, wrapped in the veil of a Zacks Rank #2, beckons with a long-term estimated growth rate of 15.2%. Their earnings have achieved the spectacular feat of surpassing estimates over the last four quarters, with an average surprise of 15.6%.