INVESTOR PRESENTATION. February 2012

Transcription

1 INVESTOR PRESENTATION February

2 FORWARD-LOOKING STATEMENTS We will be making forward-looking statements during today s presentation. Please refer to the appendix of this presentation and our most recent SEC filings for more information and cautionary language surrounding these statements. 2

3 Greatbatch will be the definitive leader in critical technologies by infusing integrity, innovation and operational excellence into the medical device and commercial markets. 3

4 Grow & Diversify Revenue Base Broaden Customer Base Leverage Cross-Selling Opportunities Accelerate Growth in New Markets Drive Operating Performance Experienced Management Team Organizational Integration & Consolidation Lean Manufacturing & Six Sigma Deliver Innovative Solutions Medical Device Initiatives Proprietary Technologies In-house Capabilities and Expertise 4

5 GREATBATCH TODAY NYSE: GB (IPO 2000) Founded 1970 Corporate Headquarters in Clarence, NY $560 Million Diversified Revenue Base Global Footprint Over 3,000 Dedicated Associates 5

6 OPTIMIZED & DIVERSIFIED Optimized Re-capitalized Expanded Re-optimized 6

7 STRONG RELATIONSHIPS WITH VALUED PARTNERS 7

8 GREATBATCH MEDICAL Markets Served: Cardiac Rhythm Management/ Neuromodulation Vascular Access Orthopaedic Key Capabilities: Established Partnerships Operational Excellence Quality & Regulatory Innovation 8

9 CARDIAC RHTHYM MANAGEMENT / NEURO 95% of all pulse generators implanted worldwide contain one or more Greatbatch Medical components Power Systems Feedthroughs EMI Filters Enclosures Device Headers Leads 9

10 ORTHOPAEDIC Reamers Instruments & Handles Talent Acquisition Investment & Consolidation Cases & Trays Research & Development Infrastructure Operational Excellence Lean-Sigma Implants 10

11 Global Supply Chain Partners Fully Consolidated Manufacturing & Technology Base Corporate HQ, Clarence, NY Alden, NY Plymouth, MN Minneapolis, MN Consolidated Operations Investment & Consolidation Allen County, IN Orvin, SW Columbia City, IN Corgemont, SW uality Systems & GMP Compliance Continuous Improvement Lean-Sigma Raynham, MA Tijuana, MX Indianapolis, IN Chaumont, FR Orthopaedic Design Centers European Design Center Warsaw, IN Design Center 11

12 VASCULAR ACCESS Introducers Steerable Catheters & Sheaths Implant Tools 12

13 ELECTROCHEM SOLUTIONS Providing innovative solutions in markets where failure is not an option. Key Capabilities: Innovative Technologies Market Leadership Strong Partnerships 13

14 ELECTROCHEM SOLUTIONS Primary Batteries Secondary Batteries Charging Solutions Wireless Sensing Aerospace Military Energy Portable Medical 14

15 MICRO POWER ACQUISITION Strategic Benefits: Highly complementary to Electrochem Further diversifies revenue (portable medical, secondary) Quality, innovative technologies and market leadership Deal Terms: $60 million net cash + assumption of debt and transaction payments Closed in December Micro Power full year revenue ~$70 million Excluding acquisition charges, neutral to earnings in 2011 & 2012 and accretive thereafter 15

16 QiG GROUP Empowers the creative design, development and speed to market of new medical devices in strategic markets that utilize and complement the inherent strengths of Greatbatch 16

17 STRATEGIC EVOLUTION Evolution of Greatbatch s Medical Device Strategy Enclosure Assemblies Filters Capacitors Precision Parts Components Enclosures Coatings Feedthroughs Batteries Filtered Feedthroughs Sub- Assemblies Shield Assemblies Partial Device Systems Device Systems Battery Packs Molded Headers Market Size / Value Added Capabilities 17

18 QiG PIPELINE COMMERCIALIZATION Investment Mechanism Current Number Inception to Approval Regulatory Approval Means of Commercialization Potential Impact to Greatbatch Strategic Investments Years 510k PMA Portfolio company seeks strategic buyer One time gain & manufacturing revenues OEM Customer Discrete Projects > Years 3 5 Years 510k CE Mark PMA CE Mark Existing OEM customer Manufacturing revenues Medical Device Incubation Years PMA CE Mark Seek distribution partner or strategic buyer License fees Sale of Newco Manufacturing revenues 18

19 QiG BUSINESS MODEL Sales & Distribution by OEM Partners Concept Detailed Design Verification & Validation Regulatory Device Manufacturing Quality Assurance Sterilize Pack QiG Group Medical device development QiG Focuses On Niche markets License or Technology Sale Dedicated research & development Proven device-level experience World renowned physician partners Innovative system design Concentrated regulatory risk Intellectual property VALUE REALIZATION 19

20 QiG S FOCUS MARKETS CARDIOVASCULAR NEUROMODULATION ORTHOPAEDIC 20

21 QiG PIPELINE COMMERCIALIZATION Stimulation Leads Bi-directional guiding sheath Venous Introducer Arterial Introducer MRI Conditional Lead Spinal Cord Stimulator

22 Indication: Spinal Cord Stimulation for the treatment of chronic pain of the trunk and limbs 22

23 QiG DRIVES IMPROVED REVENUE GROWTH 23

24 INVESTMENT CONSIDERATIONS Well-diversified company providing innovative component and device solutions to four large markets Established partnerships with leading medical technology and commercial OEMs Strategic initiatives underway to enhance competitive position and to improve operational efficiencies Medical device initiative to raise profitability and growth profile of the Company Solid capital structure and robust cash flow generator 24

25 THANK YOU STRATEGY AND VISION 25

26 APPENDIX STRATEGY AND VISION 26

27 FORWARD-LOOKING STATEMENTS Some of the statements made in the presentation whether written or oral may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of Securities Exchange Act of 1934, as amended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as may, will, should, could, expects, intends, plans, anticipates, believes, estimates, predicts, potential or continue or the negative of these terms or other comparable terminology. These statements are based on the company s current expectations. The company s actual results could differ materially from those stated or implied in such forward-looking statements. The company assumes no obligations to update forward-looking information, including information in this presentation, to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects. 27

28 2011 FINANCIAL HIGHLIGHTS Strong financial performance YTD 9 month revenue $427.1 million with adjusted EPS of $1.29 FY11 guidance range Revenue $550 to $570 million (3% to 7% increase) Adjusted EPS $1.60 to $1.70 (6% to 13% increase) Robust free cash flow ($58 million - 9 months) used to Fund RD&E Consolidation and expansion initiatives Pay down debt See appendix for reconciliation to GAAP 28

29 THIRD QUARTER 2011 FINANCIAL RESULTS 29

30 GAAP RECONCILIATION 30

31 GAAP RECONCILIATION 31

32 FREE CASH FLOW & DEBT REDUCTION 32

33 R&D AND ADJUSTED OPERATING INCOME TRENDS 16% R&D as a % of Sales Adjusted Operating Margin 14% 12% 10% 8% 6% E 2012E 2013E 2014E 33

34 DIVERSIFIED PORTFOLIO APPROACH Investment Mechanism Partner Risk Level Return Potential Strategic Investment Entrepreneur/ Early Stage Company Moderate Moderate to High OEM Customer Discrete Projects OEM Customers Low Moderate (Capitated) Medical Device Incubation Clinicians (KOLs) High High 34

35 QiG TIMELINE Formed QiG Group LLC Created Neuromodulation portfolio 40 R&D professionals Increased size of QiG to 120 R&D professionals Approximately $20mm in R&D is directed toward device development Gain from strategic investment in Intelect Medical Sales & clinical use of first Cardiovascular products Investor Day meeting Early st Newco formed, Algostim Created Cardiovascular portfolio FDA clearance received on first Cardiovascular products

36 ESTABLISHED QUALITY & REGULATORY COMPETENCIES Leverage Greatbatch s existing infrastructure Legacy of superior quality & reliability Effective global regulatory processes Regulatory Affairs Quality Systems Design Assurance Product Reliability 36

37 ROBUST IP PORTFOLIO GREATBATCH 444 Patents 381 Foreign patents 657 Patents pending Internally generated intellectual property QiG GROUP Targeted patent activity at therapy, product, and device level NEWCO Access to GB Portfolio Non-exclusive Opportunity for exclusive license in therapy CLINICIAN IP Held exclusively within applicable Newco 37

38 38 38 QiG PIPELINE OPPORTUNITIES Intelect Medical Algostim OAB Sleep Apnea DBS Chronic Pain Obesity Headache Antithrombotic Radial Access Sheath OptiSeal Valved Introducer Transseptal Steerable Sheaths MRI Transcatheter Valve Repair Antimicrobial coatings Disease Monitoring Obesity Neuromodulation Cardiovascular Orthopaedic TBD TBD MIS Disposable Sensors Modular System Spine Implant