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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 _____________________________________________________________ 
FORM 10-Q
 _____________________________________________________________ 
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 29, 2023
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission File Number 1-16137
 _____________________________________________________________ 
itgrlogo20190925a07.jpg
INTEGER HOLDINGS CORPORATION
(Exact name of Registrant as specified in its charter)
 _____________________________________________________________ 
Delaware 16-1531026
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
5830 Granite Parkway,Suite 1150Plano,Texas 75024
(Address of principal executive offices) (Zip Code)
(214) 618-5243
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareITGRNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒     No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒  Accelerated filer☐Non-accelerated filer☐
Smaller reporting company☐  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.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
The number of shares outstanding of the Company’s common stock, $0.001 par value per share, as of October 20, 2023 was: 33,326,647 shares.


INTEGER HOLDINGS CORPORATION
Form 10-Q
For the Quarterly Period Ended September 29, 2023
TABLE OF CONTENTS

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PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTEGER HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands except share and per share data)September 29,
2023		December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents$32,142 $24,272 
Accounts receivable, net of provision for credit losses of $0.4 million and $0.3 million, respectively
226,327 224,325 
Inventories232,158 208,766 
Refundable income taxes4,832 2,003 
Contract assets86,637 71,927 
Prepaid expenses and other current assets27,248 27,005 
Total current assets609,344 558,298 
Property, plant and equipment, net364,283 317,243 
Goodwill979,886 982,192 
Other intangible assets, net779,115 819,889 
Deferred income taxes6,398 6,247 
Operating lease assets67,418 74,809 
Financing lease assets8,352 8,852 
Other long-term assets24,553 26,856 
Total assets$2,839,349 $2,794,386 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$— $18,188 
Accounts payable108,351 110,780 
Income taxes payable2,282 10,923 
Operating lease liabilities9,977 10,362 
Accrued expenses and other current liabilities82,491 73,499 
Total current liabilities203,101 223,752 
Long-term debt941,383 907,073 
Deferred income taxes151,386 160,671 
Operating lease liabilities57,325 64,049 
Financing lease liabilities7,488 8,006 
Other long-term liabilities15,317 13,379 
Total liabilities1,376,000 1,376,930 
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.001 par value; 100,000,000 shares authorized; 33,326,647 and 33,169,778 shares issued and outstanding, respectively
33 33 
Additional paid-in capital721,283 731,393 
Retained earnings744,994 680,701 
Accumulated other comprehensive income (loss)(2,961)5,329 
Total stockholders’ equity1,463,349 1,417,456 
Total liabilities and stockholders’ equity$2,839,349 $2,794,386 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INTEGER HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS) (Unaudited)
 Three Months EndedNine Months Ended
(in thousands except per share data)September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Sales$404,693 $342,680 $1,183,522 $1,003,673 
Cost of sales299,137 255,962 875,489 742,583 
Gross profit105,556 86,718 308,033 261,090 
Operating expenses:
Selling, general and administrative42,102 38,195 129,815 119,541 
Research, development and engineering14,539 16,123 50,514 47,077 
Restructuring and other charges840 3,142 3,887 10,010 
Total operating expenses57,481 57,460 184,216 176,628 
Operating income48,075 29,258 123,817 84,462 
Interest expense11,967 10,676 40,680 24,417 
Loss on equity investments3,451 2,887 3,472 5,611 
Other (gain) loss, net580 (1,300)1,699 (932)
Income before taxes 32,077 16,995 77,966 55,366 
Provision for income taxes4,820 938 13,673 7,106 
Net income$27,257 $16,057 $64,293 $48,260 
Earnings per share:
Basic$0.82 $0.48 $1.93 $1.46 
Diluted$0.81 $0.48 $1.91 $1.45 
Weighted average shares outstanding:
Basic33,346 33,145 33,305 33,116 
Diluted33,774 33,336 33,679 33,329 
Comprehensive Income (Loss)
Net income$27,257 $16,057 $64,293 $48,260 
Other comprehensive loss:
Foreign currency translation loss(12,370)(29,364)(7,346)(64,525)
Change in fair value of cash flow hedges, net of tax(2,761)45 (944)2,732 
Other comprehensive loss, net(15,131)(29,319)(8,290)(61,793)
Comprehensive income (loss), net$12,126 $(13,262)$56,003 $(13,533)
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INTEGER HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 Nine Months Ended
(in thousands)September 29,
2023		September 30,
2022
Cash flows from operating activities:
Net income$64,293 $48,260 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization73,116 68,645 
Debt related charges included in interest expense7,126 1,445 
Inventory step-up amortization— 798 
Stock-based compensation17,099 15,973 
Non-cash lease expense8,124 8,179 
Non-cash loss on equity investments3,472 5,611 
Contingent consideration fair value adjustment(526)— 
Other non-cash (gains) losses(734)3,373 
Deferred income taxes(5)(969)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable(58)(33,496)
Inventories(25,785)(59,036)
Prepaid expenses and other assets(1,473)(1,255)
Contract assets(14,863)(7,698)
Accounts payable(869)25,524 
Accrued expenses and other liabilities7,401 (6,012)
Income taxes(11,692)(4,563)
Net cash provided by operating activities124,626 64,779 
Cash flows from investing activities:
Acquisition of property, plant and equipment(82,885)(43,098)
Proceeds from sale of property, plant and equipment100 636 
Acquisitions, net of cash acquired— (126,636)
Net cash used in investing activities(82,785)(169,098)
Cash flows from financing activities:
Principal payments of term loans(415,938)(11,437)
Proceeds from issuance of convertible notes, net of discount486,250 — 
Proceeds from revolving credit facility294,603 160,000 
Payments of revolving credit facility(353,993)(39,000)
Purchase of capped calls(35,000)— 
Payment of debt issuance costs(2,181)— 
Proceeds from the exercise of stock options2,303 — 
Tax withholdings related to net share settlements of restricted stock unit awards(3,067)(2,073)
Contingent consideration payments(7,660)(493)
Principal payments on finance leases(854)(585)
Net cash (used in) provided by financing activities(35,537)106,412 
Effect of foreign currency exchange rates on cash and cash equivalents1,566 209 
Net increase in cash and cash equivalents7,870 2,302 
Cash and cash equivalents, beginning of period24,272 17,885 
Cash and cash equivalents, end of period$32,142 $20,187 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INTEGER HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
 Three Months EndedNine Months Ended
(in thousands)September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Total stockholders’ equity, beginning balance$1,445,655 $1,363,451 $1,417,456 $1,354,697 
Common stock and additional paid-in capital
Balance, beginning of period715,748 722,208 731,426 713,183 
Stock awards exercised or vested72 (147)(959)(2,073)
Stock-based compensation5,496 5,022 17,099 15,973 
Capped calls related to the issuance of convertible notes, net of tax— — (26,250)— 
Balance, end of period721,316 727,083 721,316 727,083 
Retained earnings
Balance, beginning of period717,737 646,527 680,701 614,324 
Net income27,257 16,057 64,293 48,260 
Balance, end of period744,994 662,584 744,994 662,584 
Accumulated other comprehensive income (loss)
Balance, beginning of period12,170 (5,284)5,329 27,190 
Other comprehensive loss(15,131)(29,319)(8,290)(61,793)
Balance, end of period(2,961)(34,603)(2,961)(34,603)
Total stockholders’ equity, ending balance$1,463,349 $1,355,064 $1,463,349 $1,355,064 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(1.)    BASIS OF PRESENTATION
Integer Holdings Corporation (together with its consolidated subsidiaries, “Integer” or the “Company”) is a publicly-traded corporation listed on the New York Stock Exchange under the symbol “ITGR.” Integer is a medical device outsource manufacturer serving the cardiac rhythm management, neuromodulation, orthopedics, vascular, advanced surgical and portable medical markets. The Company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition to medical technologies, the Company develops batteries for high-end niche applications in the energy, military, and environmental markets. The Company’s customers include large multi-national original equipment manufacturers (“OEMs”) and their affiliated subsidiaries.
The accompanying condensed consolidated financial statements are presented in accordance with the rules and regulations of the United States ("U.S.") Securities and Exchange Commission ("SEC") and do not include all of the disclosures normally required by U.S. generally accepted accounting principles (“U.S. GAAP”) as contained in the Company’s Annual Report on Form 10-K. Accordingly, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of the Company for the periods presented. The results for interim periods are not necessarily indicative of results or trends that may be expected for the fiscal year as a whole. The condensed consolidated financial statements were prepared using U.S. GAAP, which require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, certain components of equity, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates.
The third quarter and first nine months of 2023 ended on September 29 and consisted of 91 days and 272 days, respectively. The third quarter and first nine months of 2022 ended on September 30 and consisted of 91 days and 273 days, respectively.
Trade Accounts Receivable - Factoring Arrangements
During the first nine months of 2023, the Company entered into receivable factoring arrangements, pursuant to which certain receivables may be sold to financial institutions without recourse in exchange for cash. Transactions under the receivables factoring arrangements are accounted for as sales under ASC 860, Transfers and Servicing of Financial Assets, with the sold receivables removed from the Company’s balance sheet. Under these arrangements, the Company does not maintain any beneficial interest in the receivables sold. Once sold, the receivables are no longer available to satisfy creditors in the event of bankruptcy. Sale proceeds are reflected in Cash flows from operating activities on the Condensed Consolidated Statements of Cash Flows. Factoring fees are recorded in Selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). During the three and nine months ended September 29, 2023, the Company sold, without recourse, accounts receivable of $47.1 million and $97.4 million, respectively. Factoring fees were $0.3 million and $0.7 million for the three and nine months ended September 29, 2023, respectively.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all Accounting Standard Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). The Company evaluated all recent accounting pronouncements issued, including those that are currently effective, and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company. There have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, that are of significance, or potential significance, to the Company.
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(2.)    BUSINESS ACQUISITIONS
On April 6, 2022, the Company acquired 100% of the equity interests of Connemara Biomedical Holdings Teoranta, including its operating subsidiaries Aran Biomedical and Proxy Biomedical (collectively “Aran”), a recognized leader in proprietary medical textiles, high precision biomaterial coverings and coatings as well as advanced metal and polymer braiding. Aran delivers development and manufacturing solutions for implantable medical devices. Consistent with the Company’s strategy, the combination with Aran further increases Integer’s ability to offer complete solutions for complex delivery and therapeutic devices in high growth cardiovascular markets such as structural heart, neurovascular, peripheral vascular, and endovascular as well as general surgery. The Company funded the purchase price with borrowings under its Revolving Credit Facility. Aran is included in the Company’s Medical segment.
The total consideration transferred was $141.3 million, which includes an initial cash payment of $133.9 million ($129.3 million net of cash acquired) and $7.4 million in estimated fair value of contingent consideration. The contingent consideration represents the estimated fair value of the Company’s obligation, under the purchase agreement, to make additional payments of up to €10 million ($10.9 million at the exchange rate as of April 6, 2022) based on Aran’s achievement of 2022 revenue growth milestones. The earn-out period ended on December 31, 2022 and, in accordance with the terms of the share purchase agreement, full payment was made in April 2023. See Note 13 “Financial Instruments and Fair Value Measurements” for additional information related to the fair value measurement of the contingent consideration.
The cost of the acquisition was allocated to the assets acquired and liabilities assumed based upon their estimated fair value at the date of the acquisition. The following table summarizes the final fair values of the assets acquired and liabilities assumed (in thousands):
Fair value of net assets acquired
Current assets$9,319 
Property, plant and equipment4,151 
Goodwill68,460 
Definite-lived intangible assets71,485 
Operating lease assets3,505 
Other noncurrent assets1,354 
Current liabilities(4,370)
Operating lease liabilities(3,258)
Other noncurrent liabilities(9,377)
Fair value of net assets acquired$141,269 
Pro Forma (unaudited) disclosures
The following table presents (in thousands) unaudited pro forma results of operations for the three and nine months ended September 30, 2022 as if Aran had been included in the Company’s financial results as of the beginning of fiscal year 2021, through the date of acquisition. The pro forma results include the historical results of operations of the Company and Aran, as well as adjustments for additional amortization of the assets acquired, additional interest expense related to the financing of the transactions and other transactional adjustments. The pro forma results do not include efficiencies, cost reductions or synergies expected to result from the acquisition. These pro forma results do not purport to be indicative of the results that would have been obtained, or to be a projection of results that may be obtained in the future.
Three Months Ended
September 30, 2022
Nine Months Ended
September 30, 2022
Sales$342,680 $1,009,036 
Net income16,057 50,285 
Acquisition costs
Direct costs of this acquisition were not material for the three and nine months ended September 29, 2023. During the three and nine months ended September 30, 2022, direct costs of the Aran acquisition of $0.1 million and $2.4 million were expensed as incurred and included in Restructuring and other charges in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(3.)    SUPPLEMENTAL CASH FLOW INFORMATION
The following is supplemental information relating to the Condensed Consolidated Statements of Cash Flows (in thousands):
Nine Months Ended
September 29,
2023		September 30,
2022
Noncash investing and financing activities:
Property, plant and equipment purchases included in accounts payable$11,806 $4,992 
Supplemental lease disclosures:
Assets acquired under operating leases912 11,817 
(4.)    INVENTORIES
Inventories comprise the following (in thousands):
September 29,
2023		December 31,
2022
Raw materials$102,866 $98,640 
Work-in-process110,080 98,188 
Finished goods19,212 11,938 
Total$232,158 $208,766 
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(5.)     GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
The changes in the carrying amount of goodwill by reportable segment for the nine months ended September 29, 2023 were as follows (in thousands):
MedicalNon- MedicalTotal
December 31, 2022$965,192 $17,000 $982,192 
Foreign currency translation(2,306)— (2,306)
September 29, 2023$962,886 $17,000 $979,886 
Intangible Assets
Intangible assets comprise the following (in thousands):
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
September 29, 2023
Definite-lived:
Purchased technology and patents$283,384 $(190,583)$92,801 
Customer lists823,690 (241,879)581,811 
Amortizing tradenames and other20,974 (6,759)14,215 
Total amortizing intangible assets$1,128,048 $(439,221)$688,827 
Indefinite-lived:
Trademarks and tradenames$90,288 
December 31, 2022
Definite-lived:
Purchased technology and patents$283,929 $(178,844)$105,085 
Customer lists825,634 (216,546)609,088 
Amortizing tradenames and other21,028 (5,600)15,428 
Total amortizing intangible assets$1,130,591 $(400,990)$729,601 
Indefinite-lived:
Trademarks and tradenames$90,288 
Aggregate intangible asset amortization expense comprises the following (in thousands):
 Three Months EndedNine Months Ended
 September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Cost of sales$4,037 $3,980 $12,051 $11,662 
Selling, general and administrative expenses9,068 8,146 27,085 24,353 
Total intangible asset amortization expense$13,105 $12,126 $39,136 $36,015 
Estimated future intangible asset amortization expense based on the carrying value as of September 29, 2023 is as follows (in thousands):
Remainder of 20232024202520262027After 2027
Amortization Expense$13,179 $51,436 $50,631 $48,800 $45,860 $478,921 
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(6.)     DEBT
Long-term debt comprises the following (in thousands):
 September 29, 2023December 31, 2022
Principal AmountUnamortizedDiscounts and Issuance CostsNet Carrying AmountPrincipal AmountUnamortizedDiscounts and Issuance CostsNet Carrying Amount
Senior Secured Credit Facilities:
Revolving credit facilities$81,247 $— $81,247 $140,300 $— $140,300 
Term loan A375,000 (1,776)373,224 455,313 (2,172)453,141 
Term loan B— — — 335,625 (3,805)331,820 
Convertible Senior Notes due 2028500,000 (13,088)486,912 — — — 
Total$956,247 $(14,864)$941,383 $931,238 $(5,977)$925,261 
Current portion of long-term debt— (18,188)
Long-term debt$941,383 $907,073 
Senior Secured Credit Facilities
On September 2, 2021, the Company entered into a credit agreement (the “2021 Credit Agreement”), governing the Company’s senior secured credit facilities (the “Senior Secured Credit Facilities”). As of December 31, 2022, the Senior Secured Credit Facilities consisted of a five-year $400 million revolving credit facility (the “Revolving Credit Facility”), a five-year “term A” loan (the “TLA Facility”) and a seven-year “term B” loan (the “TLB Facility” and, together with the TLA Facility, the “Term Loan Facilities”). The TLB Facility was issued at a 0.50% discount.
Amendments to the 2021 Credit Agreement
On January 30, 2023, the Company entered into a first amendment (the “First Amendment”) to the 2021 Credit Agreement to, among other things: (i) permit the Company to issue the notes (described below under 2028 Convertible Notes and Related Capped Call Transactions) and incur indebtedness thereunder in an aggregate principal amount of up to $600 million at any time outstanding; (ii) permit the Company to enter into bond hedge and capped call transactions; (iii) permit the Company to issue call options, warrants or purchase rights relating to the Company’s common stock; provided, in each case, that the terms of any such transaction are customary for transactions of such type.
On February 15, 2023, the Company entered into a second amendment (the “Second Amendment”) to the 2021 Credit Agreement to, among other things: (i) increase the maximum borrowing capacity under the Revolving Credit Facility by $100 million from $400 million to $500 million, (ii) extend the maturity date for both the Revolving Credit Facility and the TLA Facility to February 15, 2028, (iii) allow for borrowings by the Company under the Revolving Credit Facility denominated in Euros, subject to a sublimit equal to 50% of the maximum borrowing capacity under the Revolving Credit Facility, (iv) replace the London Interbank Offered Rate (“LIBOR”) based reference interest rate option with a forward-looking term rate based on the secured overnight financing rate (“SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term SOFR”), and (v) add carveouts to certain negative covenants included within the 2021 Credit Agreement to permit the expansion of capacity in Ireland by the Company and incur indebtedness related thereto.
The information provided below reflects the First Amendment and Second Amendment (collectively the “2023 Amendments”) described above. Details of our Long-term debt as of December 31, 2022 can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Revolving Credit Facility
The Revolving Credit Facility matures on February 15, 2028. As of September 29, 2023, the Company had available borrowing capacity on the Revolving Credit Facility of $415.3 million after giving effect to $81.2 million of outstanding borrowings and $3.5 million of outstanding standby letters of credit. Borrowings under the Revolving Credit Facility will bear interest at a rate of Adjusted Term SOFR, in relation to any loan in U.S. dollars, and the Euro Interbank Offered Rate (“EURIBOR”), in relation to any loan in Euros, plus a margin based on the Company’s Secured Net Leverage Ratio (as defined in the Senior Secured Credit Facilities agreement). In addition, the Company is required to pay a commitment fee on the unused portion of the Revolving Credit Facility, which will range between 0.15% and 0.25%, depending on the Company’s Secured Net Leverage Ratio. As of September 29, 2023, the weighted average interest rate on outstanding borrowings under the Revolving Credit Facility was 6.47% and the commitment fee on the unused portion of the Revolving Credit Facility was 0.18%.
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(6.)     DEBT (Continued)
Term Loan Facilities
The TLA Facility matures on February 15, 2028, and requires quarterly installments. The quarterly principal installments under the TLA Facility increase over the term of the loan. The interest rate terms for the TLA Facility are the same as those above for the Revolving Credit Facility borrowings in U.S. dollars. As of September 29, 2023, the interest rate on the TLA Facility was 6.92%.
In February 2023, the Company used a portion of the proceeds from its notes offering (see 2028 Convertible Senior Notes and Related Capped Call Transactions) to settle in full principal and interest due under the TLB Facility.
Deferred Debt Issuance Costs and Discounts
Debt issuance costs are either deferred and amortized over the term of the associated debt or expensed as incurred. In connection with the 2023 Amendments, the Company incurred and capitalized an aggregate of $1.0 million of debt issuance costs.
In connection with the 2023 Amendments, for each separate debt instrument on a lender by lender basis, in accordance with ASC 470-50, Debt Modifications and Extinguishment, the Company performed an assessment of whether the transaction was deemed to be new debt, a modification of existing debt, or an extinguishment of existing debt.
Based on this assessment, $3.8 million of unamortized deferred debt issuance costs related to the Revolving Credit Facility and TLA Facility were deemed to be related to the issuance of new debt, or the modification of existing debt, and therefore will continue to be deferred and amortized over the term of the associated debt. The remaining $0.6 million of unamortized deferred debt issuance costs related to the Revolving Credit Facility and TLA Facility were deemed to be related to the extinguishment of debt and were expensed and included in Interest expense during the nine months ended September 29, 2023. Additionally, in connection with the full repayment of the TLB Facility and prepayments of portions of the TLA Facility, the Company incurred a $3.9 million loss on extinguishment of debt from the write-off of the remaining deferred debt issuance costs and original issue discount, which were expensed and included in Interest expense during the nine months ended September 29, 2023.
Covenants
The Senior Secured Credit Facilities agreement contains customary terms and conditions, including representations and warranties and affirmative and negative covenants, as well as financial covenants for the benefit of the lenders under the Revolving Credit Facility and the TLA Facility, which require that (i) the Company maintain a Total Net Leverage Ratio not to exceed 5.00:1.00, subject to increase in certain circumstances following qualified acquisitions, but shall not exceed 5.50:1.00 and (ii) the Company maintain an interest coverage ratio of at least 2.50:1.00. As of September 29, 2023, the Company was in compliance with these financial covenants.
Contractual maturities under the Senior Secured Credit Facilities for the remainder of 2023 and through maturity, excluding any discounts or premiums, as of September 29, 2023 are as follows (in thousands):
Remainder of 20232024202520262027After 2027
Future minimum principal payments$— $— $10,000 $27,500 $30,000 $888,747 
2028 Convertible Senior Notes and Related Capped Call Transactions
In February of 2023, the Company issued $500 million aggregate principal amount of Convertible Senior Notes due in 2028 (“2028 Notes”) in a private offering, which aggregate principal amount included the exercise in full of the initial purchasers’ option to purchase up to an additional $65 million principal amount of the 2028 Notes. The 2028 Notes mature on February 15, 2028 and bear interest at a fixed rate of 2.125% per annum, payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2023. The total net proceeds from the issuance of the 2028 Notes (which includes the additional proceeds from the purchasers’ option), after deducting initial purchasers' discounts and commissions and debt issuance costs, were approximately $485 million.
Conversion and Redemption Terms of the 2028 Notes
Each $1,000 principal amount of the 2028 Notes is initially convertible into 11.4681 shares of the Company’s common stock (the “2028 Conversion Option”), which is equivalent to an initial conversion price of approximately $87.20 per share of common stock, subject to standard anti-dilutive adjustments and adjustments upon the occurrence of specified events. The initial conversion price represents a premium of approximately 32.5% to the $65.81 per share closing price of the Company’s common stock on January 31, 2023.
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INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(6.)     DEBT (Continued)
The 2028 Notes are convertible, in multiples of $1,000 principal amount, at the option of the holders prior to the close of business on the business day immediately preceding November 15, 2027, only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2023 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “Measurement Period”) in which the trading price (as defined in the Indenture governing the 2028 Notes) per $1,000 principal amount of the 2028 Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate in effect on each such trading day; (3) if the Company calls any or all of the 2028 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after November 15, 2027 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of their 2028 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.
Upon conversion, the 2028 Notes will be settled in cash up to the aggregate principal amount of the 2028 Notes to be converted, and in cash, shares of the Company’s common stock or a combination thereof, at the Company’s option, in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 2028 Notes being converted. If the Company undergoes a fundamental change (as defined in the indenture governing the 2028 Notes), subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their 2028 Notes, in principal amounts of $1,000 or a multiple thereof, at a fundamental change repurchase price equal to 100% of the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. In addition, following certain corporate events or if the Company issues a notice of redemption, it will, under certain circumstances, increase the conversion rate for holders who elect to convert their notes in connection with such corporate event or during the relevant redemption period.
As of September 29, 2023, the conditions allowing holders of the Convertible Notes to convert had not been met and, therefore, the Convertible Notes are classified as a long-term liability on the Condensed Consolidated Balance Sheets at September 29, 2023.
The Company may not redeem the 2028 Notes prior to February 20, 2026. The Company may redeem for cash all or any portion of the 2028 Notes, at its option, on or after February 20, 2026 and prior to February 15, 2028, if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending not more than two trading days immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2028 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the 2028 Notes.
Seniority of the 2028 Notes
The 2028 Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2028 Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.
Indenture
The Company issued the Notes pursuant to an indenture dated as of February 3, 2023 (the “Indenture”) by and between the Company and Wilmington Trust, National Association, as trustee. The Indenture provides for customary events of default, which include (subject in certain cases to grace and cure periods), among others: nonpayment of principal or interest; failure by the Company to comply with its conversion obligations upon exercise of a holder’s conversion right under the Indenture; breach of covenants or other agreements in the Indenture; defaults by the Company or any significant subsidiary (as defined in the Indenture) with respect to other indebtedness in excess of a threshold amount; failure by the Company or any significant subsidiary to pay final judgments in excess of a threshold amount; and the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to the Company or any significant subsidiary. Generally, if an event of default occurs and is continuing under the Indenture, either the Indenture trustee or the holders of at least 25% in aggregate principal amount of the

- 13 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(6.)     DEBT (Continued)
2028 Notes then outstanding may declare the principal amount plus accrued and unpaid interest on the Notes to be immediately due and payable.
Covenants
The 2028 Notes do not contain financial maintenance covenants.
Deferred Debt Issuance Costs and Discounts
The 2028 Notes are accounted for as a single liability measured at amortized cost. The discount and issuance costs related to the 2028 Notes are being amortized to interest expense over the contractual term of the 2028 Notes at an effective interest rate of 2.76%.
Fair Value of the 2028 Notes
The estimated fair value of the 2028 Notes was approximately $545 million as of September 29, 2023. The estimated fair value of the 2028 Notes was determined through consideration of quoted market prices. The fair value of the 2028 Notes are categorized in Level 2 of the fair value hierarchy.
Capped Call Transactions
In connection with the issuance of the 2028 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain financial institutions. The Capped Calls are expected generally to reduce the potential dilution to the Company’s common stock in connection with any conversion of the 2028 Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted 2028 Notes, as the case may be, with such reduction and/or offset subject to a cap based on strike price of written warrants. The initial upper strike price of the Capped Calls is $108.59 per share and is subject to certain adjustments under the terms of the Capped Calls. The Capped Calls cover, subject to anti-dilution adjustments, approximately 5.7 million shares of the Company’s common stock, the same number of shares initially underlying the 2028 Notes. For accounting purposes, the Capped Calls are separate transactions, and not integrated with the issuance of the 2028 Notes. As these transactions meet certain accounting criteria, the Capped Calls are recorded in stockholders’ equity and are not accounted for as derivatives. The 2028 Notes and the Capped Calls will be integrated for tax purposes. The accounting impact of this tax treatment results in the Capped Calls being deductible as original issue discount for tax purposes over the term of the 2028 Notes, which generates an $8.8 million deferred tax asset recognized through equity. The cost to the Company of the Capped Calls was $35 million, which was recorded, net of tax, as a reduction to additional paid-in capital.
Deferred Debt Issuance Costs and Discounts
The change in deferred debt issuance costs related to the Company’s Revolving Credit Facility is as follows (in thousands):
December 31, 2022$2,387 
Financing costs incurred579 
Write-off of deferred debt issuance costs(260)
Amortization during the period(401)
September 29, 2023$2,305 
The change in unamortized discount and deferred debt issuance costs related to the Term Loan Facilities and 2028 Convertible Senior Notes is as follows (in thousands):
Deferred Debt Issuance CostsUnamortized DiscountTotal
December 31, 2022$4,569 $1,408 $5,977 
Financing costs incurred1,602 13,750 15,352 
Write-off of deferred debt issuance costs and unamortized discount(2,867)(1,391)(4,258)
Amortization during the period(492)(1,715)(2,207)
September 29, 2023$2,812 $12,052 $14,864 

- 14 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(7.)     STOCK-BASED COMPENSATION
The Company maintains certain stock-based compensation plans that were approved by the Company’s stockholders and are administered by the Board of Directors (the “Board”) or the Compensation and Organization Committee of the Board. The stock-based compensation plans provide for the granting of stock options, restricted stock awards, performance awards, time-based restricted stock units (“RSUs”), performance-based RSUs (“PRSUs”), stock appreciation rights and stock bonuses to employees, non-employee directors, consultants, and service providers.
Stock-based Compensation Expense
The classification of stock-based compensation expense was as follows (in thousands):
 Three Months EndedNine Months Ended
 September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Cost of sales$865 $749 $3,127 $2,355 
Selling, general and administrative4,367 3,710 12,917 11,563 
Research, development and engineering250 209 978 872 
Restructuring and other charges14 354 77 1,183 
Total stock-based compensation expense$5,496 $5,022 $17,099 $15,973 
Stock Options
The following table summarizes the Company’s stock option activity for the nine month period ended September 29, 2023:
Number of
Stock
Options		Weighted
Average
Exercise
Price		Weighted
Average
Remaining
Contractual
Life
(In Years)		Aggregate
Intrinsic
Value
(In Millions)
Outstanding at December 31, 2022240,622 $38.51 
Exercised(82,533)35.00 
Outstanding and exercisable at September 29, 2023158,089 $40.35 3.2$6.0 
Time-Based Restricted Stock Units
Most RSUs granted to employees during the nine months ended September 29, 2023 vest over a period of three years from the grant date, subject to the recipient’s continuous service to the Company. RSUs are issued to members of the Board as a portion of their annual retainer and vest quarterly over a period of one year. The grant-date fair value of all RSUs is equal to the closing market price of Integer common stock on the date of grant.
The following table summarizes RSU activity for the nine month period ended September 29, 2023:
Time-Vested
Activity		Weighted
Average
Grant Date Fair Value
Nonvested at December 31, 2022291,929 $77.58 
Granted231,604 75.77 
Vested(110,674)79.00 
Forfeited(45,748)72.12 
Nonvested at September 29, 2023367,111 $76.69 
- 15 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(7.)     STOCK-BASED COMPENSATION (Continued)
Performance-Based Restricted Stock Units
For the Company’s PRSUs, in addition to service conditions, the ultimate number of shares to be earned depends on the achievement of financial and market-based performance conditions over three year performance periods. The financial performance conditions are based on the Company’s sales targets. The market-based performance conditions are based on the Company’s achievement of a relative total shareholder return performance requirement, on a percentile basis, compared to a defined group of peer companies, or contingent upon achieving specified stock price milestones over a five year performance period.
The following table summarizes PRSU activity for the nine month period ended September 29, 2023:
Performance-
Vested
Activity		Weighted
Average
Grant Date Fair Value
Nonvested at December 31, 2022263,906 $90.29 
Granted105,757 74.32 
Vested(24,427)107.26 
Forfeited(62,396)83.39 
Nonvested at September 29, 2023282,840 $84.38 
The Company uses a Monte Carlo simulation model to determine the grant-date fair value of awards with market-based performance conditions. The grant-date fair value of all other PRSUs is equal to the closing market price of Integer common stock on the date of grant. The weighted average fair value and assumptions used to value the PRSU awards granted with market-based performance conditions are as follows:
 Nine Months Ended
 September 29,
2023		September 30,
2022
Weighted average fair value$74.29 $97.58 
Risk-free interest rate3.79 %1.58 %
Expected volatility46 %42 %
Expected life (in years)3.03.9
Expected dividend yield— %— %
The valuation of the market-based PRSUs granted during 2023 and 2022 also reflects a weighted average illiquidity discount of 11.23% and 9.25%, respectively, related to the six-month period that recipients are restricted from selling, transferring, pledging or assigning the underlying shares, in the event of vesting.
- 16 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(8.)     RESTRUCTURING AND OTHER CHARGES
The Company continuously evaluates the business and identifies opportunities to realign its resources to better serve its customers and markets, improve operational efficiency and capabilities, and lower its operating costs or improve profitability. To realize the benefits associated with these opportunities, the Company undertakes restructuring-type activities to transform its business. The Company incurs costs associated with these activities, which primarily include exit and disposal costs and other costs directly related to the restructuring initiative. Exit and disposal costs (“restructuring charges”) are expensed as incurred in accordance with ASC 420, Exit or Disposal Cost Obligations, and are classified within Restructuring and other charges, while other costs directly related to the restructuring initiatives (“restructuring-related charges”) are classified within Cost of sales, Selling, general and administrative, and Research, development and engineering expenses in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
In addition, from time to time, the Company incurs costs associated with acquiring and integrating businesses, and certain other general expenses, including asset impairments. The Company classifies costs associated with these items within Restructuring and other charges in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
Restructuring and other charges comprise the following (in thousands):
 Three Months EndedNine Months Ended
 September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Restructuring charges$35 $1,919 $2,035 $3,017 
Acquisition and integration costs
777 597 1,715 5,866 
Other general expenses28 626 137 1,127 
Total restructuring and other charges
$840 $3,142 $3,887 $10,010 
The following table comprises restructuring and restructuring-related charges by classification in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands):
 Three Months EndedNine Months Ended
 September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Restructuring charges:
Restructuring and other charges
$35 $1,919 $2,035 $3,017 
Restructuring-related expenses(a):
Cost of sales404 455 1,097 789 
Selling, general and administrative243 563 1,830 1,265 
Research, development and engineering21 321 662 824 
Total restructuring and restructuring-related charges
$703 $3,258 $5,624 $5,895 
__________
(a) Restructuring-related expenses primarily include retention bonuses and consulting expenses.
- 17 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(8.)     RESTRUCTURING AND OTHER CHARGES (Continued)
Restructuring programs
Operational excellence
The Company’s operational excellence initiatives mainly consist of costs associated with executing on its sales force, manufacturing, business process and performance excellence operational strategic imperatives. These projects focus on changing the Company’s organizational structure to match product line growth strategies and customer needs, transitioning its manufacturing process into a competitive advantage and standardizing and optimizing its business processes.
Strategic reorganization and alignment
The Company’s strategic reorganization and alignment initiatives primarily include those that align resources with market conditions and the Company’s strategic direction in order to enhance the profitability of its portfolio of products.
Manufacturing alignment to support growth
The Company’s manufacturing alignment to support growth initiatives are designed to reduce costs and improve operating efficiencies by relocating certain manufacturing operations.
The following table summarizes the activity for restructuring reserves (in thousands):
Operational
excellence		Strategic reorganization and alignmentManufacturing alignment to support growthTotal
December 31, 2022$232 $2,134 $— $2,366 
Charges incurred, net of reversals735 989 311 2,035 
Cash payments(869)(2,610)— (3,479)
September 29, 2023$98 $513 $311 $922 
Acquisition and integration
Acquisition and integration costs primarily consist of professional fees and other costs related to business acquisitions. During the nine months ended September 29, 2023, acquisition and integration costs of $1.7 million included expenses primarily related to the integration of Oscor and Aran. During the nine months ended September 30, 2022, acquisition and integration costs of $5.9 million included expenses primarily related to the acquisitions of Oscor and Aran. Acquisition and integration costs for the nine months ended September 29, 2023 and September 30, 2022, included a benefit of $0.5 million and $0.3 million, respectively, to adjust the fair value of acquisition-related contingent consideration liabilities. See Note 13 “Financial Instruments and Fair Value Measurements” for additional information related to the fair value measurement of the contingent consideration.
Other general expenses
During the nine months ended September 29, 2023 and September 30, 2022, the Company recorded expenses related to other initiatives not described above, which relate primarily to integration and operational initiatives to reduce future costs and improve efficiencies.
- 18 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(9.)    INCOME TAXES
The income tax provision for interim periods is determined using an estimate of the annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the estimate of the annual effective tax rate is updated, and if the estimated effective tax rate changes, a cumulative adjustment is made. There is a potential for volatility of the effective tax rate due to several factors, including discrete items, changes in the mix and amount of pre-tax income and the jurisdictions to which it relates, changes in tax laws and foreign tax holidays, business reorganizations, settlements with taxing authorities and foreign currency fluctuations. In addition, the Company continues to explore tax planning opportunities that may have a material impact on its effective tax rate.
The Company’s effective tax rate for the third quarter of 2023 was 15.0% on $32.1 million of income before taxes compared to 5.5% on $17.0 million of income before taxes for the same period in 2022. The Company’s effective tax rate for the nine months ended September 29, 2023 was 17.5% on $78.0 million of income before taxes compared to 12.8% on $55.4 million of income before taxes for the same period of 2022. The difference between the Company’s effective tax rates and the U.S. federal statutory income tax rate of 21% for the third quarter and first nine months of 2023 and 2022 is due principally to the net impact of the Company’s earnings outside the U.S., which are generally taxed at rates that differ from the U.S federal rate, the Global Intangible Low-Taxed Income (“GILTI”) tax, the Foreign Derived Intangible Income (“FDII”) deduction, the availability of tax credits, and the recognition of certain discrete tax items. For the third quarter and first nine months of 2023, the Company recorded discrete tax benefits of $0.8 million and $0.4 million, respectively. For the third quarter and first nine months of 2022, the Company recorded discrete tax benefits of $0.7 million and $0.2 million, respectively. The discrete tax benefits for the third quarter and first nine months of 2023 is predominately related to favorable return to provision adjustments attributable to the 2022 U.S. tax return. The remainder of the discrete tax amounts relate predominately to excess tax benefits recognized upon vesting of RSUs during those periods partially offset by tax expense from shortfalls recorded for the forfeiture of certain PRSUs, as well as unfavorable return to provision adjustments attributable to certain foreign tax returns for the 2022 tax year. The discrete tax benefits for the third quarter and first nine months of 2022 are predominately related to favorable return to provision adjustments attributable to the 2021 tax year. The remainder of the discrete tax benefits predominately relate to excess tax benefits recognized upon vesting of RSUs during those periods and/or tax shortfalls recorded for the forfeiture of certain PRSUs.
Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts reflected in the financial statements. As of September 29, 2023, the Company had unrecognized tax benefits of approximately $8.1 million, of which approximately $8.0 million would favorably impact the effective tax rate, net of federal benefit on state issues, if recognized. As of September 29, 2023, the Company believes it is reasonably possible that a reduction of approximately $1.9 million of the balance of unrecognized tax benefits may occur within the next 12 months as a result of various statute expirations, audit closures, and/or tax settlements.
(10.)    COMMITMENTS AND CONTINGENCIES
Contingent Consideration Arrangements
The Company records contingent consideration liabilities related to the earn-out provisions for certain acquisitions. See Note 13 “Financial Instruments and Fair Value Measurements” for additional information.
Litigation
The Company is subject to litigation arising from time to time in the ordinary course of its business. The Company does not expect that the ultimate resolution of any pending legal actions will have a material effect on its consolidated results of operations, financial position, or cash flows. However, litigation is subject to inherent uncertainties. As such, there can be no assurance that any pending legal action, which the Company currently believes to be immaterial, will not become material in the future.
Product Warranties
The Company generally warrants that its products will meet customer specifications and will be free from defects in materials and workmanship. The product warranty liability is presented within Accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. The change in product warranty liability comprised the following (in thousands):
December 31, 2022$77 
Additions to warranty reserve, net of reversals(2)
September 29, 2023$75 
- 19 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(11.)    EARNINGS PER SHARE (“EPS”)
The following table sets forth a reconciliation of the information used in computing basic and diluted EPS (in thousands, except per share amounts):
 Three Months EndedNine Months Ended
September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
Numerator for basic and diluted EPS:
Net income$27,257 $16,057 $64,293 $48,260 
Denominator for basic and diluted EPS:
Weighted average shares outstanding - Basic33,346 33,145 33,305 33,116 
Dilutive effect of share-based awards428 191 374 213 
Weighted average shares outstanding - Diluted33,774 33,336 33,679 33,329 
Basic EPS$0.82 $0.48 $1.93 $1.46 
Diluted EPS$0.81 $0.48 $1.91 $1.45 
The diluted weighted average share calculations do not include the following securities, which are not dilutive to the EPS calculations or the performance criteria have not been met (in thousands):
 Three Months EndedNine Months Ended
September 29,
2023		September 30,
2022		September 29,
2023		September 30,
2022
RSUs— 30 1 13 
PRSUs83 162 100 164 
The dilutive effect for the Company's 2028 Notes is calculated using the if-converted method. The Company is required, pursuant to the Indenture governing the 2028 Notes, to settle the principal amount of the 2028 Notes in cash and may elect to settle the remaining conversion obligation (i.e., the stock price in excess of the conversion price) in cash, shares of the Company's common stock, or a combination thereof. Under the if-converted method, the Company includes the number of shares required to satisfy the conversion obligation, assuming all the 2028 Notes are converted. Because the average closing price of the Company's common stock for the three months ended September 29, 2023, which is used as the basis for determining the dilutive effect on earnings per share, was less than the conversion price of $87.20, all associated shares were antidilutive.
In connection with the issuance of the 2028 Notes, the Company entered into privately negotiated capped call transactions with certain financial institutions. The Capped Calls cover, subject to anti-dilution adjustments substantially similar to those in the 2028 Notes, approximately 5.7 million shares of the Company's common stock, the same number of shares initially underlying the 2028 Notes, at a strike price of approximately $108.59, subject to certain adjustments under the terms of the Capped Calls. The Capped Calls will expire upon the maturity of the 2028 Notes, subject to earlier exercise or termination. Exercise of the Capped Calls would reduce the number of shares of the Company's common stock outstanding, and therefore would be antidilutive.
See Note 6 “Debt” for additional information related to 2028 Notes and Capped Calls.
- 20 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(12.)     STOCKHOLDERS’ EQUITY
Common Stock
The following is a summary of the number of shares of common stock issued and outstanding for the nine month periods ended September 29, 2023 and September 30, 2022:
Nine Months Ended
September 29,
2023		September 30,
2022
Shares outstanding at beginning of period33,169,778 33,063,336 
Stock options exercised72,125 — 
Vesting of RSUs, net of shares withheld to cover taxes84,744 67,657 
Shares outstanding at end of period33,326,647 33,130,993 
Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) (“AOCI”) comprises the following (in thousands):
Defined
Benefit
Plan
Liability		Cash
Flow
Hedges		Foreign
Currency
Translation
Adjustment		Total
Pre-Tax
Amount		TaxNet-of-Tax
Amount
June 30, 2023$(346)$4,060 $9,174 $12,888 $(718)$12,170 
Unrealized loss on cash flow hedges— (1,534)— (1,534)321 (1,213)
Realized gain on foreign currency hedges— (1,960)— (1,960)412 (1,548)
Foreign currency translation loss— — (12,370)(12,370)— (12,370)
September 29, 2023$(346)$566 $(3,196)$(2,976)$15 $(2,961)
December 31, 2022$(346)$1,760 $4,150 $5,564 $(235)$5,329 
Unrealized gain on cash flow hedges— 4,038 — 4,038 (849)3,189 
Realized gain on foreign currency hedges— (3,970)— (3,970)834 (3,136)
Realized gain on interest rate swap hedge— (1,262)— (1,262)265 (997)
Foreign currency translation loss— — (7,346)(7,346)— (7,346)
September 29, 2023$(346)$566 $(3,196)$(2,976)$15 $(2,961)
July 1, 2022$(890)$1,110 $(5,441)$(5,221)$(63)$(5,284)
Unrealized loss on cash flow hedges— (150)— (150)32 (118)
Realized loss on foreign currency hedges— 211 — 211 (44)167 
Realized gain on interest rate swap hedge— (4)— (4)— (4)
Foreign currency translation loss— — (29,364)(29,364)— (29,364)
September 30, 2022$(890)$1,167 $(34,805)$(34,528)$(75)$(34,603)
December 31, 2021$(890)$(2,291)$29,720 $26,539 $651 $27,190 
Unrealized gain on cash flow hedges— 2,415 — 2,415 (507)1,908 
Realized gain on foreign currency hedges— (246)— (246)52 (194)
Realized loss on interest rate swap hedge— 1,289 — 1,289 (271)1,018 
Foreign currency translation loss— — (64,525)(64,525)— (64,525)
September 30, 2022$(890)$1,167 $(34,805)$(34,528)$(75)$(34,603)
- 21 -

INTEGER HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(13.)     FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments and contingent consideration. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.