Integer Holdings Posts Strong Q3 Sales, But New Product Adoption Slows

TL;DR

**ITGR's Q3 sales look good, but the forward guidance on new product adoption is a red flag; expect some near-term volatility as the market digests slower growth prospects.**

AI Summary

Integer Holdings Corp (ITGR) reported a robust increase in sales for the third quarter and first nine months of 2025, with total sales rising by $36.3 million (8.4%) to $467.7 million and $114.5 million (9.0%) to $1.38 billion, respectively, compared to the same periods in 2024. This growth was primarily fueled by strong demand, new product ramps, and contributions from recent acquisitions like Precision Coating LLC and VSi Parylene. Net income from continuing operations for the third quarter of 2025 increased by 9.4% to $39.7 million, or $1.11 per diluted share, up from $36.3 million, or $1.01 per diluted share, in Q3 2024. However, net income for the first nine months of 2025 decreased to $54.2 million, or $1.52 per diluted share, from $88.1 million, or $2.49 per diluted share, in the prior year, largely due to a $46.7 million debt conversion inducement expense related to the 2028 Convertible Notes exchange. The company updated its sales outlook for 2025, anticipating lower-than-expected demand for select emerging customers' products and a decline in sales for three new products (two electrophysiology, one neuromodulation) in 2026 due to slower market adoption. Integer Holdings also completed the Portable Medical Exit in Q4 2025 and divested Electrochem Solutions, Inc. in October 2024.

Why It Matters

Integer Holdings' strong sales growth in Q3 2025, driven by acquisitions and new product ramps, signals robust operational execution in a competitive medical device market. However, the revised sales outlook for 2025 and 2026, citing lower-than-anticipated demand for new products and emerging customers, introduces uncertainty for investors. This could impact future revenue streams and market share, especially as competitors vie for dominance in the cardiac rhythm management, neuromodulation, and cardio and vascular sectors. Employees and customers might see shifts in product focus and resource allocation as the company adapts to market adoption rates, while the broader market will watch how this medical device giant navigates product lifecycle challenges.

Risk Assessment

Risk Level: medium — The risk level is medium due to the updated sales outlook for 2025 and 2026, specifically mentioning lower than anticipated demand for select emerging customers' products and an expected decline in sales for three new products (two electrophysiology, one neuromodulation) in 2026. This indicates potential future revenue headwinds despite strong Q3 2025 performance, as the market adoption of these products has been lower than anticipated.

Analyst Insight

Investors should closely monitor Integer Holdings' upcoming earnings calls for further details on the specific impact of the revised sales outlook and the company's strategies to accelerate new product adoption. Consider holding off on new positions until there's clearer guidance on how the company plans to mitigate the anticipated sales decline in 2026 for key new products.

Financial Highlights

revenue

$467.7 million

operating Margin

14.9%

net Income

$39.7 million

eps

$1.11

revenue Growth

+8.4%

Revenue Breakdown

Key Numbers

• $467.7 million — Total sales for Q3 2025 (Increased by $36.3 million (8.4%) from Q3 2024)
• $1.38 billion — Total sales for first nine months of 2025 (Increased by $114.5 million (9.0%) from first nine months of 2024)
• $39.7 million — Income from continuing operations for Q3 2025 (Increased by $3.4 million (9.4%) from Q3 2024)
• $1.11 — Diluted EPS from continuing operations for Q3 2025 (Increased from $1.01 in Q3 2024)
• $54.2 million — Income from continuing operations for first nine months of 2025 (Decreased from $88.1 million in first nine months of 2024)
• $1.52 — Diluted EPS from continuing operations for first nine months of 2025 (Decreased from $2.49 in first nine months of 2024)
• $46.7 million — Debt conversion inducement expense (Recognized in Q1 2025 related to 2028 Convertible Notes exchange)
• $1.0 billion — Aggregate principal amount of 2030 Convertible Notes issued (Issued on March 18, 2025)
• 35,038,426 shares — Common stock outstanding (As of October 17, 2025)
• 15.0% — Cardio & Vascular sales growth for Q3 2025 (Increased by $36.1 million to $277.1 million)

Key Players & Entities

• Integer Holdings Corporation (company) — Registrant and medical device contract development and manufacturing organization
• Precision Coating LLC (company) — Acquired privately-held manufacturer specializing in high value surface coating technology platforms
• VSi Parylene (company) — Acquired privately-held full-service provider of parylene coating solutions
• Electrochem Solutions, Inc. (company) — Divested wholly-owned subsidiary focused on nonmedical applications
• New York Stock Exchange (regulator) — Exchange where ITGR Common Stock is registered
• SEC (regulator) — Securities and Exchange Commission
• Bloomberg (company) — Financial news and data provider

FAQ

Risk Factors

• Customer Concentration [medium — operational]: The company is dependent upon a limited number of customers, which can lead to significant revenue fluctuations if demand from these key customers changes.
• Supply Chain Dependence [medium — operational]: Reliance on third-party suppliers for raw materials, key products, and subcomponents creates vulnerability to disruptions, impacting manufacturing operations and delivery schedules.
• Macroeconomic and Geopolitical Uncertainty [high — operational]: Global factors such as supply chain disruptions, inflation, elevated interest rates, and geopolitical conflicts (e.g., Russia-Ukraine, Middle East) can materially affect operations through increased borrowing costs, labor shortages, and delayed customer orders.
• New Product Adoption Challenges [medium — strategic]: Slower-than-anticipated market adoption for three new products (two electrophysiology, one neuromodulation) is expected to lead to sales declines in 2026, indicating potential challenges in new product development and market penetration.
• Significant Indebtedness [high — financial]: The company carries a significant amount of outstanding indebtedness, and must remain compliant with covenants under its Senior Secured Credit Facilities, posing a risk to liquidity and financial flexibility.
• Convertible Note Risks [medium — financial]: The conditional conversion feature of the 2028 and 2030 Convertible Notes can adversely impact liquidity, and conversion of the 2028 notes can dilute existing shareholders.
• Quality Control and Reputation [medium — operational]: Potential for harm to the company's reputation and competitive advantage exists due to quality problems related to its products, necessitating stringent quality control measures.
• Information Technology and Cybersecurity [medium — operational]: Dependence on information technology systems makes the company vulnerable to cyber-attacks and other failures, which could disrupt operations and compromise data.

Industry Context

Integer Holdings Corp operates as a leading medical device contract development and manufacturing organization (CDMO) within the highly competitive healthcare industry. Key markets include cardiac rhythm management, neuromodulation, and cardio and vascular. The industry is characterized by intense competition, rapid technological advancements, and stringent regulatory requirements, necessitating continuous innovation and strategic partnerships with medical device companies and OEMs.

Regulatory Implications

As a medical device manufacturer, Integer Holdings Corp is subject to rigorous regulatory oversight, primarily from the FDA. The company's ability to obtain Pre-Market Approval (PMA) for new products and maintain compliance with quality and manufacturing standards is critical. Any quality issues or failures in regulatory compliance could lead to significant penalties, product recalls, and damage to reputation.

What Investors Should Do

1. Monitor new product ramp-up and market adoption closely.
2. Assess the impact of acquisitions on profitability and integration.
3. Track debt levels and covenant compliance.
4. Evaluate the company's response to macroeconomic and geopolitical risks.

Key Dates

• 2025-03-18: Issuance of $1.0 billion in 1.875% Convertible Senior Notes due 2030 — Increases long-term debt but provides capital for operations and strategic initiatives.
• 2025-01-07: Acquisition of Precision Coating LLC — Expands service offerings with high-value surface coating technologies.
• 2025-02-28: Acquisition of Vertical Solutions, Inc. (VSi Parylene) — Enhances capabilities in specialized parylene coating solutions for medical devices.
• 2024-10-31: Completion of Electrochem Solutions, Inc. divestiture — Exited non-medical applications business, classifying results as discontinued operations.
• 2025-Q4: Expected completion of Portable Medical Exit — Final sales and market exit from the portable medical market to enhance profitability and reallocate capacity.
• 2025-Q1: Recognition of $46.7 million debt conversion inducement expense — Related to the partial exchange of 2028 Convertible Notes, impacting net income for the nine-month period.

Glossary

OEMs

Original Equipment Manufacturers, companies that produce goods used in another company's end product. (Integer Holdings Corp acts as a strategic partner to OEMs in the medical device industry.)

PMA

Pre-Market Approval, a process by which the U.S. Food and Drug Administration (FDA) reviews the safety and effectiveness of medical devices before they can be marketed. (New products from emerging customers with PMA products are experiencing slower market adoption.)

Convertible Senior Notes

A type of bond that can be converted into a predetermined amount of the issuer's equity at certain times. (Integer Holdings has issued 2028 and 2030 Convertible Notes, which have implications for debt, equity dilution, and liquidity.)

Discontinued Operations

A component of a business that has been sold, disposed of, or is classified as held for sale, and whose operations will not continue. (The Electrochem Solutions, Inc. business is classified as discontinued operations following its sale.)

Contract Development and Manufacturing Organization (CDMO)

A company that provides services for drug development and manufacturing to pharmaceutical and biotechnology companies. (Integer Holdings Corp is described as one of the largest medical device CDMOs globally.)

Year-Over-Year Comparison

Integer Holdings Corp reported an 8.4% increase in total sales for Q3 2025 ($467.7 million) compared to the prior year, driven by strong demand and acquisitions. However, net income from continuing operations for the first nine months of 2025 decreased significantly to $54.2 million from $88.1 million in 2024, largely due to a $46.7 million debt conversion inducement expense. Operating expenses as a percentage of sales saw a slight increase for the nine-month period (15.2% vs. 15.1%), while Q3 operating expenses as a percentage of sales decreased (14.9% vs. 15.2%). Interest expense decreased due to lower rates, partially offset by higher debt balances.

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value per share ITGR New York Stock
• $1.0 billion — nsactions On March 18, 2025, we issued $1.0 billion in aggregate principal amount of 1.875%
• $976.1 million — mmissions and debt issuance costs, were $976.1 million. We used $71.0 million of the net proce
• $71.0 million — nce costs, were $976.1 million. We used $71.0 million of the net proceeds from the offering t
• $383.7 million — the 2030 Convertible Notes to exchange $383.7 million in aggregate principal amount of our ou
• $384.4 million — ggregate cash exchange consideration of $384.4 million in cash and 1,553,806 shares of Common
• $46.7 million — onversion and, as a result, we recorded $46.7 million during the three months ended March 28,
• $39.7 m — arter and first nine months of 2025 was $39.7 million, or $1.11 per diluted share, and
• $1.11 — ne months of 2025 was $39.7 million, or $1.11 per diluted share, and $54.2 million, o
• $54.2 m — illion, or $1.11 per diluted share, and $54.2 million, or $1.52 per diluted share, resp
• $1.52 — er diluted share, and $54.2 million, or $1.52 per diluted share, respectively, compar
• $36.3 m — iluted share, respectively, compared to $36.3 million, or $1.01 per diluted share, and
• $1.01 — ectively, compared to $36.3 million, or $1.01 per diluted share, and $88.1 million, o
• $88.1 m — illion, or $1.01 per diluted share, and $88.1 million, or $2.49 per diluted share for t
• $2.49 — er diluted share, and $88.1 million, or $2.49 per diluted share for the third quarter

Filing Documents

• itgr-20250926.htm (10-Q/A) — 357KB
• a2025q3ex311a.htm (EX-31.1) — 17KB
• a2025q3ex312a.htm (EX-31.2) — 17KB
• a2025q3ex321a.htm (EX-32.1) — 9KB
• itgr-20250926_g1.jpg (GRAPHIC) — 76KB
• 0001114483-25-000136.txt ( ) — 763KB
• itgr-20250926.xsd (EX-101.SCH) — 2KB
• itgr-20250926_lab.xml (EX-101.LAB) — 29KB
• itgr-20250926_pre.xml (EX-101.PRE) — 17KB
• itgr-20250926_htm.xml (XML) — 5KB

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Quarterly Report on Form 10-Q should be read in conjunction with the disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition, please read this section in conjunction with our Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements contained herein. Cautionary Note Regarding Forward-Looking Statements Some statements contained in this report 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, 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 ability to execute our business model and our business strategy; the timing for final sales of our Portable Medical products; having available sufficient cash and borrowing capacity to meet working capital, debt service and capital expenditure requirements for the next twelve months; and projected contractual debt service obligations. 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 not guarantees of future performance,

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties that arise from time to time are described in Item 1A "Risk Factors" of our Annual Report on Form 10-K and in our other periodic filings with the SEC and include the following: operational risks, such as our dependence upon a limited number of customers; pricing pressures and contractual pricing restraints we face from customers; our reliance on third-party suppliers for raw materials, key products and subcomponents; interruptions in our manufacturing operations; uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally; our ability to attract, train and retain a sufficient number of qualified associates to maintain and grow our business; the potential for harm to our reputation and competitive advantage caused by quality problems related to our products; our dependence upon our information technology systems and our ability to prevent cyber-attacks and other failures; global climate change and the emphasis on Environmental, Social and Governance matters by various stakeholders; our dependence upon our senior management team and key technical personnel; and consolidation in the healthcare industry resulting in greater competition; strategic risks, such as the intense competition we face and our ability to successfully market our products; our ability to respond to changes in technology; our ability to develop new products and expand into new geographic and product markets; and our ability to successfully identify, make and integrate acquisitions to expand and develop our business in accordance with expectations; financial and indebtedness risks, such as our ability to accurately forecast future performance based on oper

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Our Business Integer Holdings Corporation is one of the largest medical device contract development and manufacturing organizations in the world, serving the cardiac rhythm management, neuromodulation, and cardio and vascular markets. As a strategic partner of choice to medical device companies and original equipment manufacturers ("OEMs"), we are committed to enhancing the lives of patients worldwide by providing innovative, high-quality products and solutions. We operate our business in one segment and derive our revenues from three product lines: Cardio & Vascular, Cardiac Rhythm Management & Neuromodulation, and Other Markets. The third quarter and first nine months of 2025 ended on September 26 and consisted of 91 days and 269 days, respectively. The third quarter and first nine months of 2024 ended on September 27 and consisted of 91 days and 271 days, respectively. Sales Outlook We recently updated our sales outlook for 2025, primarily to reflect lower than anticipated demand for select emerging customers' products. In addition, based on recent customer updates, we expect sales of three new products to decline in 2026, two electrophysiology products and one neuromodulation product from an emerging customer with PMA (pre-market approval) products. We believe the magnitude of these changes on multiple products at the same time is highly unusual. The market adoption of these products has been lower than anticipated. Impact of Global Events Our future results of operations and liquidity could be materially adversely affected by uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, elevated interest rates, disruptions in the commodities' markets as a result of the conflict between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran, and the introduction of or changes in tariffs or trade bar

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Business Acquisitions We selectively evaluate acquisitions as a means to acquire additional technology or manufacturing capabilities to expand our product offering in our key existing growth markets. On January 7, 2025, we acquired substantially all of the assets and assumed certain liabilities of certain subsidiaries of Katahdin Industries, Inc., including its main operating subsidiary, Precision Coating LLC (collectively "Precision"). Prior to the acquisition, Precision was a privately-held manufacturer specializing in high value surface coating technology platforms, including fluoropolymer, anodic coatings, ion treatment solutions and laser processing. Based in Massachusetts, Precision has additional locations in the New England area and an additional facility in Costa Rica. On February 28, 2025, we acquired substantially all of the assets and assumed certain liabilities of Vertical Solutions, Inc., d/b/a VSi Parylene ("VSi"). Headquartered in Colorado, prior to the acquisition, VSi was a privately-held full-service provider of parylene coating solutions, primarily focused on complex medical device applications. Consistent with our tuck-in acquisition strategy, the acquisitions of Precision and VSi further increase our service offerings to include differentiated and proprietary coatings capabilities that position us to better meet customers' evolving needs. Refer to Note 2, "Business Acquisitions" of the Notes to Condensed Consolidated Financial Statements contained in Item 1 of this report for additional information about these acquisitions. Market Exit During 2022, we announced plans to exit our portable medical market (the "Portable Medical Exit") to enhance profitability and reallocate manufacturing capacity to support growth. Since that time, we have been working closely with impacted customers to support the transition of these products to other suppliers. Due to quality and regulatory requirements, we expected i

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Overview Income from continuing operations for the third quarter and first nine months of 2025 was $39.7 million, or $1.11 per diluted share, and $54.2 million, or $1.52 per diluted share, respectively, compared to $36.3 million, or $1.01 per diluted share, and $88.1 million, or $2.49 per diluted share for the third quarter and first nine months of 2024, respectively. These variances are primarily the result of the following: Sales for the third quarter and first nine months of 2025 increased $36.3 million and $114.5 million, respectively, when compared to the same periods in 2024, driven by strong demand, new product ramps, growth from emerging customers with PMA (premarket approval) products and contributions from our recent acquisitions. Gross profit for the third quarter and first nine months of 2025 increased $9.6 million and $33.4 million, respectively, primarily from higher sales volume, efficiencies gained from the continued improvement in the supply chain, and contributions from our recent acquisitions. Operating expenses for the third quarter and first nine months of 2025 increased $11.2 million and $19.3 million, respectively, when compared to the same periods in 2024, primarily due to higher SG&A expenses. Operating expenses as a percentage of sales were 14.9% and 13.6% for the third quarters of 2025 and 2024, respectively, and 15.2% and 15.1% for the first nine months of 2025 and 2024, respectively. Interest expense for the third quarter and first nine months of 2025 decreased $5.2 million and $9.2 million, respectively, compared to the same periods in 2024, primarily due to lower interest rates on our outstanding borrowings, partially offset by higher average debt balance outstanding and higher losses from extinguishment of debt. During the third quarter and first nine months of 2025 we recognized net gains from our equity investments of $0.1 million and $0.2 million, respectively, compared to net

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Our Financial Results The following table presents selected financial information derived from our Condensed Consolidated Financial Statements, contained in Item 1 of this report, for the periods presented (dollars in thousands, except per share). Three Months Ended September 26, September 27, Change 2025 2024 $ % Product Line Sales: Cardio & Vascular $ 277,149 $ 241,009 $ 36,140 15.0 % Cardiac Rhythm Management & Neuromodulation 169,156 165,094 4,062 2.5 % Other Markets 21,386 25,314 (3,928) (15.5) % Total sales 467,691 431,417 36,274 8.4 % Cost of sales 341,531 314,849 26,682 8.5 % Gross profit 126,160 116,568 9,592 8.2 % Gross profit as a % of sales 27.0 % 27.0 % Operating expenses: Selling, general and administrative ("SG&A") 50,451 44,820 5,631 12.6 % SG&A as a % of sales 10.8 % 10.4 % Research, development and engineering ("RD&E") 10,949 11,923 (974) (8.2) % RD&E as a % of sales 2.3 % 2.8 % Restructuring and other charges 8,321 1,814 6,507 NM Total operating expenses 69,721 58,557 11,164 19.1 % Operating income 56,439 58,011 (1,572) (2.7) % Operating expense as a % of sales 14.9 % 13.6 % Operating income as a % of sales 12.1 % 13.4 % Interest expense 9,367 14,577 (5,210) (35.7) % Gain on equity investments (50) (906) 856 (94.5) % Other loss, net 1,130 916 214 NM Income from continuing operations before taxes 45,992 43,424 2,568 5.9 % Provision for income taxes 6,314 7,142 (828) (11.6) % Effective tax rate 13.7 % 16.4 % Income from continuing operations $ 39,678 $ 36,282 $ 3,396 9.4 % Income from continuing operations as a % of sales 8.5 % 8.4 % Diluted earnings per share from continuing operations $ 1.11 $ 1.01 $ 0.10 9.9 % NM - Calculated change not meaningful. - 6 - INTEGER HOLDINGS CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Nine Months Ended September 26, September 27, Change 2025 2024 $ % Product Line Sales: Cardio & Vascular $ 822,875 $ 694,278 $ 128,597 18.5 % Cardiac Rhythm Management & Neuromodulation 501,499 490,086 11,413 2.3 % Other Markets 57,203 82,735 (25,532) (30.9) % Total Sales 1,381,577 1,267,099 114,478 9.0 % Cost of sales 1,005,947 924,881 81,066 8.8 % Gross profit 375,630 342,218 33,412 9.8 % Gross profit as a % of sales 27.2 % 27.0 % Operating expenses: SG&A 154,534 137,734 16,800 12.2 % SG&A as a % of sales 11.2 % 10.9 % RD&E 39,390 42,811 (3,421) (8.0) % RD&E as a % of sales 2.9 % 3.4 % Restructuring and other charges 16,377 10,467 5,910 56.5 % Total operating expenses 210,301 191,012 19,289 10.1 % Operating income 165,329 151,206 14,123 9.3 % Operating expense as a % of sales 15.2 % 15.1 % Operating income as a % of sales 12.0 % 11.9 % Interest expense 33,926 43,140 (9,214) (21.4) % Gain on equity investments (223) (2,035) 1,812 (89.0) % Other loss, net 53,037 1,796 51,241 NM Income from continuing operations before taxes 78,589 108,305 (29,716) (27.4) % Provision for income taxes 24,367 20,225 4,142 20.5 % Effective tax rate 31.0 % 18.7 % Income from continuing operations $ 54,222 $ 88,080 $ (33,858) (38.4) % Income from continuing operations as a % of sales 3.9 % 7.0 % Diluted earnings per share from continuing operations $ 1.52 $ 2.49 $ (0.97) (39.0) % NM - Calculated change not meaningful. - 7 - INTEGER HOLDINGS CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS Product Line Sales For the third quarter and first nine months of 2025, Cardio & Vascular ("C&V") sales increased $36.1 million, or 15%, and $128.6 million, or 19%, respectively, versus the comparable 2024 periods. The increases in C&V sales for the third quarter and first nine months of 2025 were driven by new product ramps in electrophysiology, acquisitions, and strong customer demand in neurovascular. C&V sales for the third quarter and first nine months of 2025 included $14.9 million and $42.1 million, respectively, of aggregate sales from the recent Precision and VSi acquisitions. Foreign currency exchange rate fluctuations increased C&V sales for the third quarter and first nine months of 2025 by $0.8 million and $1.2 million, in comparison to the 2024 periods, primarily due to U.S. dollar fluctuations relative to the Euro. For the third quarter and first nine months of 2025, Cardiac Rhythm Management & Neuromodulation ("CRM&N") sales increased $4.1 million, or 2%, and $11.4 million, or 2%, respectively, versus the comparable 2024 periods, driven by strong growth in emerging neuromodulation customers with PMA (pre-market approval) products, normalized cardiac rhythm management growth, and the final quarters of the planned decline of an early spinal cord stimulation neuromodulation finished implantable pulse generator (non-emerging) customer, announced in 2020. Foreign currency exchange rate fluctuations did not have a material impact on CRM&N sales during the third quarter and first nine months of 2025 in comparison to 2024. Other Markets sales for the third quarter and first nine months of 2025 decreased $3.9 million, or 16%, and decreased $25.5 million or 31%, respectively, versus the comparable 2024 periods, driven by execution of the Portable Medical Exit. Foreign currency exchange rate fluctuations did not have a material impact on Other Markets sales during the third quarter and first nine months of 2025 in compa

MANAGEMENT'S DISCUSSION AND ANALYSIS

MANAGEMENT'S DISCUSSION AND ANALYSIS SG&A Expenses Changes to SG&A expenses from the prior year periods were due to the following (in thousands): Three Months Ended September 26, 2025 September 27, 2024 Change Compensation and benefits (a) $ 25,108 $ 23,379 $ 1,729 Depreciation and amortization expense (b) 12,831 10,061 2,770 Professional fees (c) 4,841 4,189 652 Contract services (d) 4,498 3,573 925 Travel and entertainment 573 486 87 Bank fees and charges 1,141 905 236 All other SG&A 1,459 2,227 (768) Total SG&A expense $ 50,451 $ 44,820 $ 5,631 Nine Months Ended September 26, 2025 September 27, 2024 Change Compensation and benefits (a) $ 80,522 $ 72,311 $ 8,211 Depreciation and amortization expense (b) 37,316 32,025 5,291 Professional fees (c) 12,641 11,694 947 Contract services (d) 12,565 10,464 2,101 Travel and entertainment 2,554 2,069 485 Bank fees and charges 2,886 2,594 292 All other SG&A 6,050 6,577 (527) Total SG&A expense $ 154,534 $ 137,734 $ 16,800 __________ (a) Compensation and benefits increased primarily due to annual merit increases and an increase in headcount related to the recent Precision and VSi acquisitions. (b) Depreciation and amortization expense increased due to amortization of customer list intangible assets related to recent acquisitions. (c) Professional fees increased due to higher legal and consulting fees. (d) Contract services expense increased primarily due to higher software costs from information technology enhancements. RD&E RD&E expense for the third quarter and first nine months of 2025 was $10.9 million and $39.4 million, respectively, compared to $11.9 million and $42.8 million, respectively, for the third quarter and first nine months of 2024. The decrease in RD&E expens

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