Welcome, everyone to the Second Quarter 2014 Greatbatch Incorporated Conference Call. Before we begin, I would like to read the Safe Harbor statement. This presentation and our press release contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. These risks and uncertainties are described in the Company’s Annual Report on Form 10-K. The statements are based upon Greatbatch Incorporated current expectations and actual results could differ materially from those stated or implied. The Company assumes no obligations to update forward-looking information included in this conference call to reflect changed assumptions to the conference or unanticipated events or changes in future operating results, financial conditions, or prospects. I would like to remind everybody that this conference is being recorded for replay purposes. I would now like to turn the call over to today’s host, Vice President of Finance and Treasurer, Betsy Cowell. Please proceed.

Thank you, Derrick. Hello, everyone and thank you for joining us today for our second quarter 2014 earnings call. With us on the call are Thomas J. Hook, President and Chief Executive Officer and Michael Dinkins, Executive Vice President and Chief Financial Officer. In terms of today’s agenda, Tom will start us off with an overview of the results of the second quarter, remarks on the product lines and a mid-year strategic update. Michael will then provide additional comments on the 2014 second quarter and first half financial results and discuss our 2014 guidance. We will then open the call up to Q&A. As we have done in the past, we are including slide visuals to accompany this presentation, which you can access on our website, www.greatbatch.com. Now, let me turn the call over to Tom Hook.

Thank you, Betsy and good afternoon to all of you who are joining the call today. Our second quarter revenues of $172.1 million were consistent with the prior year. However, on a year-to-date basis, we generated 8% organic constant currency growth. As expected, our vascular and orthopedic product lines were the key drivers, delivering 25% and 12% organic constant currency growth versus the second quarter of 2013 respectively. I will provide more insight on the sales performance drivers later in the presentation. Our operating leverage continues to improve as we move through the year with second quarter adjusted operating income improving 7% and totaling $23.8 million. Adjusted diluted earnings per share totaled $0.60. Also, a 7% increase when compared to the same period in 2013. Cash flows from operations totaled $19.5 million versus the prior year usage of $1 million driven by the improvement in net income, improved management of working capital and last year, we had an estimated tax payment of $11.5 million related to our convertible debt. Now I would like to provide some comments relative to our various product lines. cardiac rhythm management, neuromodulation sales of $80 million or 4% below the comparable quarter of 2013 and inline with our expectations following the strong 23% organic growth in the first quarter. At a rolling four quarter basis, our organic growth is 11%, which indicates that we continue to outperform the market growth. Our growth is driven by feedthroughs and shield assemblies growth in high-single-digit, which is consistent with first quarter performance. We experienced softer battery in lead sales attributable to the timing of customer shipments and the initial impact associated with the end of life for two legacy products. We have factored these end-of-life products into our guidance and had plenty of advance notice from our customers.…

Thanks Tom and good afternoon everyone. I'm very pleased to be on the call today to provide an overview of our second quarter and first half 2014 performance. I'm going to cover a few slides and we refer everyone to our press release we issued earlier today for more details regarding our financial performance. On Slide 12, we have some key financial data for the quarter. I want to highlight a few key items that show the financial footprint of our strategy. Although on this slide, you see zero percent organic growth, our year-to-date organic growth was 8% inline with our total year target of delivering at least 5% organic growth on an annual basis. As we have often stated, our revenue growth from quarter-to-quarter can vary quite a bit, which is why we focus on a rolling four quarter measurement and year-to-date growth performance. I will now discuss the second quarter earnings referencing Slide 13, which provides the key drivers of the 7% improvement in our adjusted diluted earnings per share performance to $0.60 for the second quarter. 75% of the improvement comes from an improvement in our gross margins as we deliver 34% gross margin for the quarter, which is 60 basis points improvement from prior year. This improvement is driven by ongoing productivity efforts and lower performance based compensation, which more than offsets volume-based price concessions provided to our customers in exchange for long-term agreements. On a year-to-date basis, our performance-based compensation is in line with prior year. In other words, the favorable performance based compensation advantage is due to timing. Our first quarter performance based compensation was recorded in line with our strong performance, so a smaller adjustment was need to the second quarter of 2014 versus the second quarter of 2013 adjustment. Operating expenses accounted…

(Operator Instructions) And our first question will be from the line of Matthew Mishan, KeyBanc. Matthew I. Mishan – KeyBanc Capital Markets Inc.: Yes, good afternoon. Thank you for taking my questions.

Hey, Matt. Matthew I. Mishan – KeyBanc Capital Markets Inc.: Hi. On the cardiac neuromodulation side, I think last quarter you talked about some inventory buildup of some of your customers. Do you think you've seen the full payback there in this quarter or could that drop for a bit?

I think in certain product lines within CRM, we'll see some inventory builds come back in, but they'll be offset by some of the legacy products phasing out. So that will be push pull effect of the overall number. So again, we know we're still growing when you look at the smooth quarter-over-quarter data, which is what we look at most of the time, but because we don’t have proactive visibility to the inventory builds ahead of time, it's hard to predict those. So what time period they'll come over is probably the balance of the year and the legacy products will probably also phase out of the balance of the year and the two things will offset each others somewhat. So, but it's hard to forecast it precisely. Matthew I. Mishan – KeyBanc Capital Markets Inc.: Okay. And I guess you answered the other question on the end of life impacted so it's kind of initial it should continue ongoing for the next several quarters?

Yes, typically what you can expect is, is that our new product lines come in, as they get launched there is inventory build. And then legacy products as they're ramping up be phased out and most of the time the new product introduction in the legacy product are linked and in this case the legacy products are disconnected the legacy products are different. In other words, they're different products, and different systems than the products we've won on new systems. So they are a little bit disjointed, but they're happening at the same time over the balance of the year timeframe. So even though they are disconnected they are still happening over the next two to three quarter of time. Matthew I. Mishan – KeyBanc Capital Markets Inc.: All right. And on the margin side really nice quarter there. I was just curious what changed this quarter from the previous couple of quarters. I mean sales are relatively flat versus where you are at in the first quarter and you were able to get a 100 basis point improvement sequentially. So what's changed there?

Just across the Board as you know, we have the spirit of continuous improvement across the company in every single facility we run whether it's a manufacturing facility it or administrator research facility. So we are through our cost reduction initiatives that we've announced last year, we're getting full year effects of those operating expenses and then on the plant four as where we've done consolidation products and the transitions have been completed and are getting more stabilized operations after a year. We're just operating the plants more effectively and efficiently. So we are bringing out the benefits of prior investments and as you know because of the investments that we've announced where we're going to consolidate several more manufacturing facilities, we're just on the beginning side of taking more cost out in rejuvenating that loop again for another time and we expect the same type of trajectory for benefits on those projects as well. So the simple answer is over the last year, we continue to sell operations down in ring out progressive continuous improvement benefits based on investments we've made over the past three years and it continues to work display the flat revenue on a year-over-year in the quarter. Matthew I. Mishan – KeyBanc Capital Markets Inc.: And can you – congratulations on getting the CE Mark approval for Algovita. Can you walk through what you're doing with that product over the next five months or six months, while you are still waiting for U.S. approval?

We have our plans in our Algovita for Europe, however continuing to evaluate partnership opportunities and we are planning for a limited release of the product in the clinical environments for first in human work and we haven't publicly announced what those plans are yet, but plan to do so in the future conference calls most likely on the third quarter conference call. But right now we're just executing, bringing it out to partners, it will help us bring it to market for the initial clinical studies in Europe. Matthew I. Mishan – KeyBanc Capital Markets Inc.: Okay. And last question from me then on I'll jump back in the queue. What’s like the net debt level creep in lower here, how are you thinking about use of cash going forward and maybe talk a little bit all that timing as well?

And I am say I'll let Mike chime in here, but strategically we're still obviously investing in these operating investments for consolidations as one of our strategic moves we view on other conference calls is to invest in targeted investments and acquisitions that fit our current scope and strategy product lines and then the excess cash we will obviously judiciously used to retire the debt that we have. Mike?

But we are very trying toward the fact that our debt level is low and the cash building on our balance sheet and it will be a topic of discussion with our Board in the near-term and will provide more guidance in terms of what we will do as we come out of those discussions. Matthew I. Mishan – KeyBanc Capital Markets Inc.: All right, great. Thanks guys.

Thank you. Thanks Matt.

Your next question comes from the line of Charles Haff with Craig-Hallum. Charles Haff – Craig-Hallum Capital Group LLC: Hi, everybody. Thanks for taking my questions. Couple of questions for you here on vascular, you said you had two times the product offerings this quarter. Can you talk a little bit about the vascular product offerings, how many you have and if all of the products are – that were recall there had ship holds have now been cleared?

Yes. Charles, you're right. The catheter offerings growth doubled in the quarter and you're correct, some of the products that we had recalled voluntarily we have to reintroduce back into the marketplace and as expected, they are seeing very good uptake which is driving the growth and we expect that following the launch of that in the positive reception that we've received, we expected that growth momentum will continue throughout the remainder of the year. It's specifically being driven by those products that we had launches and then recalled and then reengineered the inspection and remediated the processes and now they're back on the market again, opposed the remediation and we're seeing very good success with them and we have a lot more confidence that in the customer advising form us has a lot more confidence in driving their volume. And we expect the volume to continue to grow because of the solid product line. Charles Haff – Craig-Hallum Capital Group LLC: Okay. And if I look back at last year, your second half of 2013 comps are pretty weak, because of the recalled products I guess, and not a lot of new product flow. Now that you have those issues cleared up should we assume the second half of this year will probably be higher from a growth rate perspective be higher than the first half both this year?

I would just say in general, from a Vascular product line perspective, you can expect to see the momentum continuing that we build in the first half of 2014. What that math looks like, compared to the numbers of 2013 it will fallout whereas its at, but I think you just see the momentum continuing to grow at a double-digit growth rate and obviously then our intention is to continue to push on the catheter product offerings in the future as we relocate those operations down into our Mexico operations to be able to pick up margin advantages and actually increase the capacity of our plant. So we can continue to maintain that growth rate in the out years as well. So, I do expect that Vascular would be a double-digit growth for us beyond 2014 as well. Charles Haff – Craig-Hallum Capital Group LLC: Okay, thanks for that and then a couple questions for Mike. In terms of the leverage Mike, you're now about two times on the leverage side. Have you done any analysis or do you have any opinions on where the optimal leverage for this business should be?

I tend to believe that an optimal level would be somewhere like 2.5 to three and therefore, as I mentioned earlier, we are very aware of the fact that we’re below that and continue to generate a fair amount of cash. And as Tom indicated with our continuous improvement, we're hoping that we can continue to widen margins, all that means that we will have to make a decision about what we do with the excess cash. We continue to be active and looking for acquisitions that make sense for the company strategically. and that's one option that we will continue to explore along with other options that we discussed with our Board. Charles Haff – Craig-Hallum Capital Group LLC: Okay.

And one clarification Charles is that as we mentioned acquisitions of both Matt question and yours is, I want to reiterate that those that are listening on the call is we want to do acquisitions at a reasonable price. We're not going to – just because we have favorable cash flows and a leverage position that’s advantageous, we're not going to reach to do deals at prices that don't make sense. Charles Haff – Craig-Hallum Capital Group LLC: Okay. Yes. I appreciate the discipline there and Mike on operating cash so you have about $25 million generated in the first half, where do you think the second half should shake out relative to the first half, should it be a lot higher, should we be taking above $50 million here, $60 million. I mean what kind of help could you give us on that?

I think it will be comparable to the first half with the addition of the fact that there is about a $20 million bonus payment that we make in March and we won't be making in the second half. So you should add that to the run rate of the first half. So it actually would be a little bit higher. Charles Haff – Craig-Hallum Capital Group LLC: So we could end up closer to 70 for the full-year are you saying?

I would hope we would be at that number or better. Charles Haff – Craig-Hallum Capital Group LLC: That would be terrific. And I think I had one more. On the sales and marketing expenses, so that could queue by about $0.03 in the first quarter $0.05 in the second quarter how do you see that. Is that kind of flattening off here or do you still see acceleration in the sales and marketing expense as we go through the year?

We've built a team over the course of last year and then into the beginning of this year. So those expenses for us, the team filled out, we may have a few incremental adds over the remainder of the year, but we've got the bulk of the team in place now. So as we look on the run rate going forward. It's adjusted obviously based on the performance that they post, but we’re on a run rate where we're comfortable its consistent with our guidance. When you look at the math quarter-over-quarter on a year-over-year basis. And then you would have to obviously do the math to generate what the comparables. But we're at a run rate we need to be at moving into the second half of the year but the teams fall and – it's all in place in transitioned. Charles Haff – Craig-Hallum Capital Group LLC: Okay. If I could just sneak one more in here, last one on SG&A. You had some seasonality in SG&A last year, second quarter was about $1.8 million higher than the first quarter this year, your flat second quarter versus first quarter. What should we kind of think about in terms of the seasonality of SG&A? I'm just thinking about dollar basis here. How should we be thinking about that was last year a very kind of more seasonal year and this year should be more moderate from seasonality, any help there would be appreciated?

I think last year as we built the team, we have some costs that would run through for hiring people in terms of accruing for relocation and those types of expenses. So, what you are seeing now is more of a run rate and you won't see large swings from quarter-to-quarter. Charles Haff – Craig-Hallum Capital Group LLC: Okay, great. Thank you.

Your next question is from the line of Glenn Novarro, RBC Capital Market. Julia Kaufman – RBC Capital Market LLC: Hi, guys. This is Julia Kaufman, calling in for Glenn Novarro. Just bringing the attention back to the CRM, our neuromodulation business. Can you speak to some of the unknowing trend and whether their ability and order timing was attributed not just with CRM or the neuromodulation part? Thanks.

Yes, certainly as overwhelmingly for us, the cardiac rhythm management, neuromodulation product lines for us are dominated by CRM overwhelmingly dominated. So any trends that we would see in our reported results are really driven by the five principal customers that we sell to in the CRM to Europeans and the victory in the U.S. We look at that the underlying trends, are we still – we see the same macro trends from the end market perspective where the market is stabilized. There is a return to growth still greedy as somewhat challenged tacky is growing in as Greatbatch as an innovator in a product designer in these categories, new platforms and new innovations tend to drive our business, because we get to take current technology and upgraded with the customers to drive their performance of their systems. So the way we win is on product design, we've seen still a steady win stream of product designs. That doesn't lead to legacy products being discontinued and new systems being launched. So there's a constant turnover. We securitized debt by long-term agreements that we have in place with all five of our CRM customers that are comprehensive in nature that gives us very good predictability to the products that will sell. As you know, the uncertainty is the timing and which we will sell them because we are depending on their regulatory approval timing, which is why because of that unpredictability, we use the smooth data. With the smooth data is telling us is we're winning more new deals than legacy products are being retired. So, we are growing slightly faster than the underlying market and as the underlying market continues to stabilize and return to a low growth rate, we think we’ll grow a few percentage points above that, because of our product technology wins. And that is effectively the trends that we are on in the current year that the trend we are on last year, and then the trend we expect to continue on into 2015 where CRM will be kind of a low-single-digit grower for us in that 2% to 3% range. Julia Kaufman – RBC Capital Market LLC: Great, thanks. And Great, thanks and portable medical, you've been pruning the portfolio for a few quarters now. Can you speak to how some of your new product launches will offset the negative impact from discontinuing low margin product lines for the back half of the year?

. : So that pruning was completed last year. It's a fact role throughout 2014, because the year-over-year comparables will draft that unprofitable business. We've done a very good job of winning new Portable Medical business and now that the facility project has been announced and it's on time we could be even more aggressive in terms of our prosecution on new business, because we know we have the operating capabilities in the 2016 timeframe to deliver against those targets. So I would expect our product development wins in Portable Medical, which has been healthy we'll continue at a healthy rate and will enables us to get that back to be double-digit revenue growth in the 2016 timeframe and those projects precipitate out. And just for your information, Portable Medical project has about a 24-month gestation period on average, because they are typically FDA or CE mark regulated devices for customers who are early in the product design process and it takes about 24-months actually for us to be shippable revenue. So product design wins have been healthy, our capabilities and operations will be where we want them to be in 2016. And we've got to manage the transition in the meantime for portable medical product lines. However, we see a really enormous market in Portable Medical and we see our capabilities meeting the match up to that and we see no shortage of opportunities to win business in that area and we are orienting the business to be able to go out and capture that and we just finish the same exercise in orthopedics, as you and after a year of pruning the orthopedic product line and then a year of moving it when we were now enjoying going on a year and a half growth in orthopedics that's in the double-digit range and we are enjoying all the return on those investments. We expect that to happen in Vascular going forward and now we expect it to happen in Portable Medical following that and I think we are on a just a very healthy trajectory we have done this before in many product lines and we have good confidence of how it's going to turn out in Portable Medical, but it will take really until the end of 2015 beginning at 2016 to be at the point we want to be. Julia Kaufman – RBC Capital Market LLC: Okay, great. And then just shifting back to the QiG Group again congratulations to Algovita, is there any additional regulatory milestones on in the U.S. before you hear about final FDA approval next year, early next year?

I really will be silent until we've been following through on the FDA processes and inspections and we will continue to do that we won’t have any milestones to announce and we expect that the timelines will be consistent with what the FDA's performance has been another neuromodulation systems. So we expect late 2015 early 2016 is the window which we would get the approval and everything is proceeding according to our plans.

Early 2015.

Excuse me early 2015, I miss spoke. Late 2014 early 2015. Thank you. Julia Kaufman – RBC Capital Market LLC: Okay.

I apologize.

Now my heart beats again. Julia Kaufman – RBC Capital Market LLC: Okay, and then is there any updates on Cardio Monex [ph] you guys had sort of presented it at your Analyst Day and so we've kind of haven’t heard any updates of that still a focus for you?

We don’t have any update on Cardio Monex program to delivery, just it’s currently an active project but we are still silent on what we are going to do forward. Julia Kaufman – RBC Capital Market LLC: Okay. Thanks again.

Well certainly can – yes.

We have a follow-up question from the line of Charles Haff, Craig-Hallum. Charles Haff – Craig-Hallum Capital Group LLC: I just wanted to spend another second on acquisitions. I appreciate your comments that you said, you're going to be very disciplined in terms of what you buy and the prices that you're willing to pay, but when you think Tom about adjacencies or tuck-ins, what might be some areas that would make sense for your business?

I think within our current strategic envelope Charles we've got plenty of targets. We've obviously done historically lot of acquisition in the cardiac rhythm management, but as you know in our other product lines which are we are a very smaller player and the market is to much larger, when you look at the markets in Orthopedics, Vascular, Portable Medical you will find a lot more targets even traditional markets like energy, military environmental, if you look at the markets, we are a very small player, the markets are large and I do believe there is products that would fit into those market categories in our manufacturing capabilities quite nicely. So they are typically smaller companies may be single or duel product line companies not large transform of acquisition as you know our strategy is targeted acquisitions. And for the entire 10-years, I have been in the company we've had active dialogues with the long list of potential targets and we don’t always control the timing of when those sometime family run companies would like to transition, but as markets have come back the med-tech industry is stabilized. I believe that there is more of an interest in exiting. Now that we're shopping in more earnest and focused and targeted deals that make sense with our strategy. We've no shortage of inventory of conversation there. It just comes down to doing what you started out within your question, which was we have to negotiate a discipline deal, because we are not going to pay just to get the deals done. I think our strategy is sound organically. We will only do deals inorganically that make sense and obviously our Algovita project, which is coming to market will provide us a nice growth opportunity into he future or a monetization event if a partner elects to buy it. So I think we don’t have to reach on M&A unreasonably. Charles Haff – Craig-Hallum Capital Group LLC: Great. Thanks for taking my question.

Welcome.

And that will conclude today’s question-and-answer session. I would like to turn the call back over to Miss. Betsy Cowell for any closing remarks.

Thank you Derrick. I would like to remind you that both the audio portion of the call as well as the visual slides will be archived on our website at www.greatbatch.com and will also be accessible for the next 30 days. Thank you everyone for joining us and have a good afternoon

Ladies and gentleman that concludes today’s conference. We thank you for your participation. You may now disconnect. Have a great day.