Hello, and welcome to the Integer Holdings Corporation Third Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions] I would now like to turn the conference over to Andrew Senn, Senior Vice President of Strategy, Business Development and Investor Relations. You may begin.

Good morning, everyone. Thank you for joining us, and welcome to Integer's third quarter 2024 earnings conference call. With me today are Joe Dziedzic, President and Chief Executive Officer; and Diron Smith, Executive Vice President and Chief Financial Officer. As a reminder, the results and the data we discuss today reflect the consolidated results of Integer for the periods indicated. Except for cash flow measures prior period amounts have been recast to exclude the Electrochem business, consistent with US GAAP continuing operations presentation. Unless otherwise stated all results and comparisons are presented on a continuing operations basis. In the appendix of today's presentation we have provided supplemental information which will help you update your financial models to reflect the impact of discontinued operations. During our call, we will discuss some non-GAAP financial measures. For reconciliation of non-GAAP financial measures, please refer to the appendix of today's presentation, today's earnings press release and the trending schedules, which are available on our website at integer.net. Please note that today's presentation includes forward-looking statements. Please refer to the company's SEC filings for a discussion of the risk factors that could cause our actual results to differ materially. On today's call, Joe will provide his opening comments and Diron will then review our adjusted financial results for the third quarter 2024 and provide an update on full year 2024 outlook. Joe will come back to provide his closing remarks, and then we'll open up the call for your questions. With that, I'll turn the call over to Joe.

Thank you, Andrew, and congrats on the new role, and thank you to everyone for joining the call today. This morning, in addition to our strong earnings announcement, we also announced the promotion of Payman Khales into the newly created role of Chief Operating Officer for Integer. Payman joined integer in 2018 as President of our Cardio & Vascular business. I'm also excited to announce that Andrew Senn will become the President of the Cardio & Vascular business succeeding Payman. Andrew been with Integer for the last 18 years in a variety of leadership roles, primarily within our Cardio & Vascular business. You know him currently as our Investor Relations, Business Development and Strategy Leader for Integer. Both Payman and Andrew have been integral leaders in the development, execution and success of our strategy. Payman and Andrew will transition into their new roles in the first quarter of 2025. In the third quarter, we delivered another quarter of strong year-over-year results. Sales grew 9% and our adjusted operating income grew 17%. On a year-to-date basis, sales have grown 10% and operating income is up 23%, or 2.3 times the rate of sales growth. We are narrowing our sales outlook to deliver 10% to 11% growth in 2024. We are confident in our ability to deliver strong sales growth, given our high visibility to customer demand, including ramping programs in high growth markets and additional guidewire capacity in Ireland. In addition to this above-market sales growth, we are driving margin expansion across the business. We are raising the midpoint of our full year profit and earnings per share outlook. Our manufacturing excellence initiatives are delivering operational improvements in direct labor turnover, direct material scrap reduction, lower overtime and direct labor efficiency. Combined with our strong OpEx leverage, we are confident in…

Thank you, Joe. Good morning, everyone, and thank you again for joining today's call. As a reminder, unless otherwise noted, all results presented are on a continuing operations basis and exclude the Electrochem business, which has been classified as a discontinued operation. Knowing this is the first time we were seeing our results without the business, I will first share our third quarter year-to-date results from continuing operations, followed by the discrete third quarter 2024 financial results. As usual, I will end with an update to our 2024 outlook. Through three quarters of 2024, we have delivered strong financial performance. Sales of $1.267 billion delivered 10% year-over-year growth on a reported basis and 6% on an organic basis, which excludes the impact of our recent InNeuroCo and Pulse acquisitions, the strategic exit of the portable medical market and foreign currency fluctuations. We delivered $266 million of adjusted EBITDA, up $48 million compared to the prior year or an increase of 22%. Adjusted operating income grew 23% versus last year, 2.3 times the rate of sales growth as we continue to make progress on our year-over-year margin expansion. Third quarter year-to-date adjusted operating income as a percent of sales was 16.5%, which represents approximately 177 basis points of improvement versus a year ago, reflecting the continued improvement in manufacturing efficiency and operating expense leverage. Adjusted net income for the third quarter 2024 year-to-date is $133 million, delivering $3.87 of adjusted earnings per share, up $0.67 or 21% from a year ago. In the third quarter of 2024, we again delivered strong financial results. Sales of $431 million delivered 9% year-over-year growth on a reported basis and 4% on an organic basis. We delivered $96 million of adjusted EBITDA, up $15 million compared to the prior year or an increase of 18%,…

Thanks, Diron. We are successfully executing our strategy to deliver a very strong 2024 outlook after a strong 2023. Over these two years combined, we expect to grow sales 29% and grow adjusted operating income 56% at the midpoint of outlook. We are successfully executing our growth strategy, both organically and inorganically to meet our strategic financial objectives for sales growth, margin expansion and debt leverage. We are confident this sustained level of performance will produce a premium valuation for our shareholders. We will now turn the call over to our moderator for the Q&A portion of the call.

[Operator Instructions] Your first question comes from the line of Brett Fishbin with KeyBanc. Your line is open.

Hey guys, good morning and thanks so much for taking the questions. Just wanted to start off briefly on the organic growth trend. And I was just wondering, you talked a lot about some of the year-to-date trends and then the implied 4Q exit rate. But maybe just specifically for the third-quarter, if you could just touch on a little bit of the deceleration that we saw to 4.3% relative to the 7% year-to-date, and what you think might have drove that? Thank you.

Great. Good morning, Brett. Thanks for the question. So, I'll start with to your highlights, 6% organic year-to-date and our guidance is 7% to 8% organic for the full year, which is up slightly from our original guidance at the beginning of the year where we said 6% to 8%, so the bottom end on the organic has come up a little bit. And we had highlighted what we expected to happen throughout the year and the biggest driver of the third quarter at 4%. The biggest driver is as we expected based on our order book and the ordering patterns that we saw at the beginning of the year, CRM, CRM was down versus the trend line that we had in the first half of the year. And we expected that because we could see that in the demand based upon the order book that we have. We would have been a little higher. We were 4% organic for the quarter, it would have been more like 5%, but we had a little bit of an impact from the Hurricane Helene in -- that happened at the end of the quarter for us. We had to shut down our facility in Florida and the Dominican Republic to protect our associates. That had a little bit of an impact. It wasn't a material or meaningful impact, but we would have been -- we would have been 5% organic growth. The C&V segment would have been about 7%, a little higher than the reported 6% organic growth. So when we look at the quarter, it's really what we expected in terms of all the moving parts. We had said on our February -- our fourth quarter earnings call back in February, beginning of this year that our order pattern showed that CRM would normalize in the second half of the year from an ordering and shipments perspective. And that's what happened. So our neuromodulation business continued to perform very strongly. We saw continued growth there in the emerging PMA customers. In fact, the $100 million to $120 million that we had guided the year to for those emerging PMA customers are actually tracking to the high end of that range. And we have strong shipments in the fourth quarter for those emerging PMA customers. So we feel great about the fourth quarter outlook and the guidance.

All right. Thanks for the color. And then just wanted to ask one quick follow up and congratulations to Andrew and Payman on the new roles. And was just curious if you can maybe give a little bit more background around maybe the impetus for some of those changes and how you think the new team can build on some of the existing initiatives under this new structure? Thanks again.

Yeah. So it's really about continuing to execute our strategy and to outperform on a sustainable basis as we get bigger and continue to grow the size of the business. So it's really about executing the strategy and continuing to meet or exceed our financial objectives of sales growth above the market organically and operating profit 2x. Payman and Andrew have been integral parts of the strategy for not only the C&V business, but the whole company because different leaders have ownership over enterprise wide elements of our strategy. And Andrew and Payman have been here since the beginning of the strategy in 2018. Payman joined the company in early '18. Andrew has been with the company much longer, but he's been in the C&V business. During Payman's tenure leading the Cardio & Vascular business, we've almost doubled the sales for Cardio & Vascular, we’re up over 90% since Payman stepped into that leadership role. Andrew has been in the Cardio & Vascular business for his entire career with Integer. He's done everything from lead R&D to sales to marketing. You know him more recently as the enterprise-wide leader for the strategy process for M&A and Investor Relations. They both know our customers and the industry incredibly well. So this is really about accelerating the execution of our strategy and giving two highly successful leaders broader responsibilities to help us continue to deliver for our customers and then ultimately for shareholders.

Your next question comes from the line of Craig Bijou with Bank of America. Please go ahead.

Good morning, guys. Thanks for taking the questions. So I wanted to start. Can you guys just go over the growth trends of your EP business over the last couple of quarters? And then when we think about PFA, I guess, I want to ask directly if your expected benefit from PFA products, if that's changed at all as of the end of Q3? And I asked because I think investors are looking to see and maybe see some acceleration in that C&V business given the launch of the products today and then the expected launch in -- coming in '25. So maybe if you could just kind of talk about the EP business, PFA and then kind of frame how investors should be thinking about potential contribution from that emerging market?

Thanks for the question, Craig. I'll start with, we remain incredibly excited about PFA as a therapy and a technology and what it can do for patients and we're excited to be part of what's happening in the industry with this -- the growth of PFA. Our view and outlook hasn't changed. In fact, it continues to get better with every passing new clinical study and announcement of progress across the industry on -- it seems like every participant coming out with another evolution of their therapy and getting closer and closer to having more and more products in the market to deliver this new innovative therapy. For us, I'll highlight electrophysiology is an important part of our business, but it's one of many. It's one of our four targeted growth markets. And then even then within electrophysiology, I think we've talked a lot about how we play across the full procedure. Everything from access with guide -- introduce those guidewires, the transseptal crossing as well as the diagnostic catheters that help perform the mapping and then to the ablation therapy itself where pulsed field ablation specifically comes into play. So, electrophysiology is an exciting high growth market. We are highly vertically integrated. We have a very strong position and footprint across the full procedure. And we expect it to continue growing and we expect to be a strong participant. And so our outlook hasn't changed every day. I think it just gets -- it gets brighter and brighter with the industry's progress. But I'll just highlight, it's one of many growth factors for us and I would not expect any one product or end market to be the single biggest driver or materially change the company outlook. So it's in our guidance. As we continue to work with customers on their new product rollouts, we continue to factor that into our outlook. Our electrophysiology business continues to outperform the market. We track our customers' reported sales by end market. We then look at our sales by those end markets and we're still growing 1.5-ish times the end market growth rate on a trailing four quarter basis and we expect that to continue to accelerate as more-and-more products come to market.

Great. Thanks, Joe. And if I can also ask on the acceleration in organic growth expected in Q4, and understand, there's a number of moving pieces. So you're getting rid of Electrochem, portable medicals is coming out. So maybe if you can just help us understand expectations for acceleration -- organic growth acceleration by segment, so C&V, CRM&N and then even the advanced surgical. Just kind of want to get a sense for where that organic growth is going to accelerate?

Sure. So, when you look at fourth quarter, it will be a little different from a split between organic and reported than the first three quarters. So in the first three quarters, you had roughly 400 basis points of difference between reported and organic. In the fourth quarter, there's very little net inorganic in the quarter. One of the acquisitions rolls off its rolling 12 months, and becomes organic. And then the other acquisition is offset by portable medical coming down in the fourth quarter. So when you look at that fourth quarter guidance number, think of that as both reported and organic in the quarter. So that will be a little nuance there as you stare at organic and inorganic split. So 4Q reported and organic are roughly the same number, same percentage in the fourth quarter. And we do expect to see continued improvement or acceleration in the growth rate in Cardio and Vascular because of the new products that continue to ramp-in that segment. And then on the CRM and neuro, we do expect the neuro sales to be stronger in the fourth quarter, in particular from the emerging customer PMA. I commented earlier that $100 million to $120 million range of emerging PMA customers. We expect to be at the high end of that. And there's a slightly higher percentage of those sales in the fourth quarter relative to a normal 25% for any given quarter because of the ramp plans and the commercialization plans of those customers. These are orders that we had visibility to at the beginning of the year because Neuromod in particular, we have very long vis -- long order patterns and very good visibility, multiple quarters out. So we've seen this all year and this was our expectation for the flow of that demand. So and to your question on the advanced surgical and ortho, we do have portable medical coming down, which will be an inorganic decline and on an organic basis that's a very small piece of our business that functions more flattish in the trendline.

Got it. Thanks for taking the questions, guys.

Thank you.

Your next question comes from the line of Rich Newitter with Truist Securities. Please go ahead.

Hi, excuse me. Thanks for taking the questions. A couple from me. I guess just one, you mentioned the hurricane impact in the third quarter. I guess, is that going to have any lingering impact into the fourth quarter. What divisions if there were specific ones were more impacted there? And that segues into just my additional question on CRM and neuro, was it that division? And if not, just a little more color on why that was so soft at least relative to our expectations and seemingly consensus expectations? Thanks.

Sure. So thanks for the question, Rich. The first answer is, it's mostly cardio and vascular coming out of the Florida facility and the Dominican Republic facility. The lingering impact will likely be cost, because of having to shut down and then ramp back up and then run some overtime to catch-up on the few days, two or three days that we had to shut down. So in the fourth quarter, we would expect to incur a little bit more cost. It was a small impact, but it was at the end of the quarter. And so you have really no time to react when it was the last few days of the third quarter. So that's on the hurricane impact. Fortunately, all of our associates are safe and that the impact was far less than what was expected from that particular hurricane. On the cardiac rhythm management, neuromod question, I'll go back to what we said at the beginning of the year-on our fourth quarter earnings call, back in February, we looked at our order patterns that we saw from customers given our order book and we could see that the demand for CRM products was less than the second half, which I would not point to or indicate necessarily has anything to do with the broader market trends because you look at the market trends, some of the CRM participants had pretty strong growth, some had a little bit lower-growth. But I don't know what I would point to it necessarily a market trend. I would look at this and say, this is how customers were planning to run their facilities and the demand they placed on us across the year. We saw that at the beginning of the year. We said on our earnings call that we expected CRM to normalize in the second half, which meant be at a lower run-rate than it had been in the first half and in 2023. That played out like we expected that it would. We've got the fourth quarter baked -- expectation out of that order pattern baked into our guidance. I mean, we're sitting here now. We're in the end of the fourth week of the quarter. We've got nine weeks to go and we've got really good visibility to the rest of the year. So we feel really good about the top line guidance that we've given and the split by segment that we guided to in our product line summary slides in the appendix of the presentation.

Great. Maybe just one last one. Joe, any selling day considerations we should be thinking about in 3Q and/or coming up in 4Q?

Nothing significant. There might be plus or minus. I'd have to ask Diron. Internally, that's not something that we notice once -- we went through a calendar year back in -- a calendar year for our reporting back, I think it was 2020. I think it was calendar year -- no, it's actually the end of 2019, we went to a calendar year. So for the year, it all washes out. We had been on a fiscal year, which I think it was every six or seven years, we'd have an extra week. But we're on a calendar year basis, so there might be a day or two. But for how our business operates, we don't see that as a meaningful impact.

Thank you. Thanks for the question.

Your next question comes from the line of Joanne Wuensch with Citi. Please go ahead.

Good morning, and thank you for taking the question. I know we're a little early on this, but can you provide any commentary for how you're thinking about 2025?

I'd say we continue to focus on executing our strategic objectives -- financial strategic objectives of organic growth, 200 basis points above the market. We had said at beginning of this year, we thought 2024 was going to be a normal market growth relative to '23, which was above normal. And based upon what we've seen in the market, we think that has played out to be a very normal kind of organic growth year for the industry. I have no reason at this point to believe 2025 is going to be any different than that. So we remain focused on delivering on our strategic objectives, of sales growing at least 200 basis points organically above the market and operating profit twice as fast -- growing twice as fast as sales. And I'll just highlight, we'll also be down at the low end of our leverage range by the end of this year. We shared that on our cash flow update where leverage at the end of the year is expected to be 2.6 times to 2.7 times EBITDA.

Thank you. And just to confirm what you're currently seeing in terms of your market growth that you think you'll be growing 200 basis points faster?

That's not our guidance, that's our objective. We'll provide formal guidance in February on our fourth quarter earnings call.

Okay. Thank you so much.

Thanks, Joanne.

Your next question comes from the line of Matthew O'Brien with Piper Sandler. Please go ahead. Matthew O’Brien: Good morning. Thanks for taking the questions. Maybe just sticking on Q4 for a second, and before I do that, just congratulations to Payman and Andrew. But sticking on Q4, it does look like a little bit of a decel in terms of the two year stack. So I'm just curious, is that entirely CRM? Is there any of the hurricane impact there that would cause that slowdown or is it just you guys being somewhat conservative?

Sure. I may not be tracking the two year stack. At midpoint, we see -- we see sales growth of about 11%, operating profit in that same order of magnitude. So we think for the fourth quarter, we see strong sales growth based upon the new products we are rolling out and supporting in C&V and the neuromod acceleration of the emerging customer PMA. And so we feel good about that, given that we are sitting here four weeks into the quarter with nine to go. In the fourth quarter last year, thinking about the comps, fourth quarter last year was the highest quarter of the year. It was over $400 million of sales and the prior quarters were well below $300 million and it was also the highest profitability of the year. It was 16.7% AOI margin rate last year compared to the full year was 15.2%. So you see the quarterly improvement. So on a year-over-year basis, fourth quarter is the toughest comp. And if you look at our guidance for the fourth-quarter, the midpoint from a profitability standpoint is the average operating margin rate for year-to-date. So we think the fourth quarter guidance is very consistent with year-to-date. And I'll take this opportunity to highlight, on a year-to-date basis, our operating margin's up 180 basis points year-over-year. We're at 16.5%, operating margin rate year-to-date. That compares to 14.7% last year and that's 100 bps from gross margin. So we are expanding gross margins, which has been a big focus for us this year, in particular coming out of -- coming out of all of the pandemic disruption and we're very focused on getting margin expansion and gross margin. But we're also getting 80 basis points of leverage on OpEx. So we're pleased with the progress we're making both in gross margin and getting operating leverage. So I'm sorry if I didn't answer your question, but I'll take another shot at it. Matthew O’Brien: No, Joe, that's perfect. Appreciate that. And then in the -- just to continue to follow-up on Craig's questions, but in your electrophysiology business, I'm just curious, just given the shift we've seen so quickly to PFA, are you guys feeling any kind of inventory work down on the traditional energy products, be it cryo or RF that's kind of even weighing a little bit on that part of your business? And then at some point, is that really, I guess moves to the side, you start to really see some of the PFA contribution to the business. Is that a dynamic that we should consider at all? Thank you.

So we haven't seen any measurable meaningful shift or change. Obviously, I think everybody believes cryo is going to be impacted over time by pulse field ablation coming out. And so we are assuming and factoring in the kind of the broader industry expectation on cryo decline. But in the other -- the other application is we continue to see strong demand. Our customers continue to be very optimistic about the broader electrophysiology marketplace. And given our broad footprint and participation across the full procedure, and given our significant vertical integration, we think we're incredibly well-positioned to support the industry during this transition and help our customers bring products to-market as fast as we all can on a safe -- safe basis. So we remain excited and don't -- haven't seen any meaningful shift beyond what you're hearing and seeing in the -- in the broader industry. And as we look at electrophysiology, given our broad footprint and vertical integration, we see it as a net tailwind for the company for sure. Matthew O’Brien: Got it. And sorry, can I sneak in one more?

Yes. Matthew O’Brien: The big -- the big R&D cut in the quarter, why was that? And is that anything to be cautious about in terms of '25 or '26 in terms of investment there? I don't know if there was an adjustment that I missed in the release. Thanks.

No adjustments. It's a great question. So first off, we didn't cut R&D, but nominally, we continue to spend more in R&D. What you're seeing there is higher levels of reimbursement or maybe long term given your thought -- your understanding of reimbursement for our customers. Higher levels of our customers paying us to do development work for them in the discrete third quarter compared to other quarters. I think in the last couple of years, you've heard us talk about how to think about our development revenues. The R&D line is impacted by our development revenues. The cost for our development activity is very flat quarter-to-quarter throughout the year because it's primarily R&D engineers doing work. So they're on the payroll 365 days a year. When we get revenue -- when we generate revenues or get paid by our customers is connected to achieving milestones on those different development programs. And in previous years, what we saw was a pattern of more revenues later in the year, in particular in the fourth quarter as we and our customers work to hit milestones within the year and stay on-track. We have been very focused on levelized -- normalizing or leveling that out across the year. And I think I commented on last quarter's call that this year in particular, we've been seeing a much, much more level loaded revenues for that kind of work. And what you're highlighting here is actually in the third quarter, we actually saw more revenues in the third quarter for that kind of work than the other quarters. And so that's the biggest driver of the R&D expense being down. It's because of revenues, not because of reducing cost. And so now we're expecting fourth quarter to be a more normal average for the year as compared to prior years where fourth quarter might have been a very strong revenue quarter for the development revenues. So thanks for highlighting that because it was important I explained that. We didn't lower any cost. We actually just generated more revenues for the work we're doing. Matthew O’Brien: Very helpful. Thank you.

[Operator Instructions] Your next question comes from the line of Kristen Stewart with CL King. Please go-ahead.

Hi, thanks for taking the question. I was wondering if you could just give a little bit more detail on gross margins in the quarter. What drove kind of the increase? And then how should we think about it going forward just from a sustainability perspective of the increase year-to-year, and whether or not you can get back to that 31% pre-COVID level and if there's any time horizon associated with that achievement?

Great. Thanks for the question. We absolutely expect to get back to the 2019%, 31% gross margins and then we expect to build on that. We don't plan to stop at 31%. But we have made tremendous progress year-to-date, up 100 basis points year-over-year. It's really a function of recovering, getting back some of the inefficiencies that we incurred from supply chain disruption and the direct labor turnover. Our supply chain is very, very stable at this point. The team has done a good job of managing that. And then on the direct labor turnover, at the company total, we're below where we were pre-pandemic, which is great. We're very focused on engagement with our direct labor associates and we're getting really good traction on our manufacturing excellence initiative and the work we're doing with associates to provide them with tools and Kaizen events and lean -- implementing lean processes. And we see continued significant opportunity, whether it's in direct material scrap reduction or reducing over time because of how we load the plants or in driving greater direct labor efficiency. There's automation opportunities still. And so now that the teams -- the plant management teams can really get back to focusing on driving those individual projects, many of them are small projects that compound over time, we're starting to see the financial benefits of the hard work the team has been doing. And we expect that to continue and excited for the progress that the team is making. So we absolutely expect to continue growing operating profit twice as fast as sales. The sales growth rate is our objective and we would expect that to come from both expanding gross margins while also continuing to get leverage on the operating expense. And so right now, we're 180 basis points at the operating margin rate level above last year on a year-to-date basis and that's 100 basis points from gross margin, 80 from OpEx and that's a good mix that we'll keep driving going forward.

And then as your leverage is coming down, I was wondering if you could just give us an update on how you're thinking about M&A?

Yes. Well, by the end-of-the year, we expect to be at the low end of our range, which means we've got the $250 million to $300 million capacity that we've talked about on a kind of a rolling annual basis. And so we continue to have a robust pipeline that we continuously curate. Many of the acquisitions we do, we work with those targets over multiple years, building a relationship, understanding their business, so that when they're ready and we don't get to choose when they're ready to transact. If we did, we would probably be paying a premium and we'd rather pay a fair price, fair multiple. So that pipeline continues to be curated by Andrew and his team and we would expect to continue executing our inorganic strategy over time. And the nice thing is we now have the full capacity that we target within our targeted debt leverage range.

Thanks very much.

Thank you.

Your final question comes from the line of Suraj Kalia with Oppenheimer. Please go ahead.

Good morning, Joe, Diron. Can you hear me all right?

Yes, Good morning, Suraj.

So, Diron, one question for you, and Joe, one question for you. Diron, let me start out with you. So the 1% a shortfall in organic growth because of Hurricane Helene, I guess I want to ask the question a slightly different way. Given the visibility of your customer orders from long term contracts, should we start thinking about a relative concentration in the last week of a quarter also? I mean, logic would have dictated, it would be a relatively steady cadence throughout the quarter. Maybe you can help us reconcile, Helene in the last week of September and just tie it into how you all see customer orders throughout the quarter?

Sure, Suraj. Yeah. I mean, when you look at our order pattern, there's a couple of different variables that happen. One of them is the, the normal order pattern is relatively smooth. We do about $33 million a week. And so when you look at the timing of that, most are relatively smooth. You have some that you have sterilization near the end-of-the quarter where that happens a little bit more in bulk. And when you talk about Hurricane Helene specifically, it all happened right in the last few days of the quarter. So we ended up closing our facility for about three days and that was right when things were in the process of getting packed, shipped, final sterilization. So you have a little bit of an outsized impact. Again, it ultimately is about a 1 percentage point impact to our overall organic growth that -- for that we will be caught up in the fourth quarter. And as Joe mentioned earlier, be primarily a cost pressure or a cost headwind as we kind of work through getting re-ramped up.

So we shouldn't think about -- besides the hurricane impact, normal cadence and we shouldn't start thinking about concentration towards the end of the quarter. Is that a fair way to look at it?

Yeah, yeah, correct. Not from a kind of an ongoing basis, yes, you should not think of kind of last couple of days concentration.

Fair, fair enough. Joe, one question for you. I do appreciate all the color. Joe, in terms of the comment about new structural heart products, I know you guys are talking of the tricuspid component in structural heart. Maybe if I can push you on TriClip, remind us, is it based on just minimum volumes or are there any adjustments based on price volumes? How should we think about as we roll out into Q4 and FY25? Any color you could give us would be great. Gentlemen, thank you for taking my questions.

Great. Thanks, Suraj. I can't speak to any specific individual program or individual customer, but if I just respond to your question, maybe more broadly, our agreements -- some of our agreements will in fact have some pricing based upon volume levels. We call that tiered pricing. As we hit certain volume thresholds, we drive additional synergies, efficiencies of scale. And we do in fact share some of that with our customers so that we both benefit from growth. Our goal is to enable our customer success, which means help them grow and treat more patients and grow in the market. And when we get to participate in that, we have to earn that right. When we get to participate in that, there is a sharing on some programs. And so that is -- it is a structure, a function that we have with some customers. It's very common with a new product launch where pricing may be above average in the early days because you have inefficiencies as you introduce something and ramp. You've got training of associates. Yields are not always optimal at the beginning of a new product launch. And then as you move into kind of a full scale production, and the pricing comes in line more with kind of the cost that you would expect in a full scale manufacturing line. And so there is that dynamic. But the end objective of that is really just kind of matching the inefficiencies with the pricing during that ramp phase and then as quickly as possible getting to a very efficient full scale production and a price that's very competitive and helps our customers succeed in the market.

Thank you.

This concludes the question-and-answer session. I will turn the call to Andrew for closing remarks.

Great. Thank you, everyone, for joining the call today. As always, you can access the replay of this call on our website as well as the presentation that we covered. Thank you for your interest in Integer, and that concludes today's call.

This concludes today's conference call. We thank you for joining. You may now disconnect.