ITGR

Integer is a high-quality, scaled medical-device contract developer/manufacturer in cardio & vascular, CRM and neuromodulation, and the operating engine is intact: revenue compounded from $1.22B (FY2021) to $1.85B (FY2025), up 8.0% in FY2025, with gross profit +9.0% and operating income +6.3%. The headline that net income fell 14.3% to $103M and diluted EPS dropped 14.0% to $2.89 looks alarming, but the MD&A makes clear much of it is non-operational: the March 2025 issuance of $1.0B of 2030 convertible notes and the exchange of the 2028 notes produced a $46.7M induced-conversion charge booked in 'Other loss, net' in FY2025. Operating margin of 11.9% and growing operating income say the business itself did not deteriorate — the per-share line did, partly for one-time reasons.

That said, this is structurally a thin-margin, capital-intensive contract manufacturer, not a high-return franchise: gross margin is only 27.0%, net margin 5.5%, and ROE just 5.9%. The balance sheet has loosened — long-term debt rose 20.9% to $1.19B, cash collapsed 63.1% to a slim $17.2M, and liabilities/equity sits at 0.95x — though current assets ($770M) comfortably cover current liabilities ($232M) and operating cash flow ($196M) against $91M capex leaves real free cash flow. Concentration is a genuine risk the 10-K flags directly: the top three customers were ~49% of FY2025 revenue, with explicit pricing pressure and many supply agreements lacking minimum-purchase commitments.