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spk00: Again, my name is Savannah and I will be your conference operator for today. At this time, I would like to welcome everyone to the Integer Holdings Corporation first quarter 2022 earnings call. All lines will insist on mute to prevent any background noise. And after the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, please press star one. If you would like to withdraw your question, please press star one again. Thank you. And I would now like to turn the conference over to Tony Borowitz. Please go ahead.
spk04: Good morning, everyone. Thank you for joining us, and welcome to Integer's first quarter 2022 earnings conference call. With me today are Joe Disick, President and Chief Executive Officer, and Jason Garland, Executive Vice President and Chief Financial Officer. As a reminder, the results and data we discussed today reflect the consolidated results of Integer for the periods indicated. During our call, we will discuss some non-GAAP measures For reconciliation of these non-GAAP 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 more detail on the recently announced acquisition of Aaron Biomedical. Jason will then review our adjusted financial results for the first quarter of 2022, provide additional insight on our product line performance, and review our full year 2022 guidance. 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.
spk06: Thank you, Tony, and thanks to everyone for joining the call today, especially the Integer associates who have continued to deliver for our customers during these dynamic times while also remaining focused on executing our strategy. Our first quarter results were consistent with our expectations when we provided full-year guidance on our last earnings call. We told investors that we expected our first quarter sales to be about the same as the fourth quarter of last year, they were within $2 million of that guidance. We did not provide profit guidance for the first quarter, but I can share that we delivered the exact adjusted operating income we were projecting, which was $39 million. We've shared on prior calls that we have good visibility to the demand from customers for the current quarter, and we believe we continue to demonstrate that with our guidance. The first quarter sales were about flat organically on a year-over-year basis, largely due to the high January COVID-related absenteeism and supply chain constraints. This was incorporated into our guidance for both the first quarter and the full year. Our adjusted operating income declined 16% year over year as we grew our direct labor associates 10% and invested in training and overtime to ramp up to meet the growing demand from our customers. We also increased inventory in the first quarter by about $20 million to support our sales growth for the remainder of the year. We feel our staffing and inventory levels are well positioned to deliver approximately double-digit sales growth in the second quarter and the rest of the year, while also improving gross margins through the remainder of the year. We are excited that Arum Biomedical joined Integer earlier this month, and we're confident that together we can deliver even more innovation for our customers. We updated our 2022 financial guidance to include Aaron's sales and profit. Our two recent acquisitions have added differentiated capabilities in high growth markets, while also adding approximately $90 million of annualized sales at accretive growth rates. I'm excited to share more about Aaron Biomedical on the next few slides. On April 6th, we acquired Aaron Biomedical, an industry leader in biomaterial technologies used in cardiovascular implants. We're excited to welcome their 130 associates to Integer and add Aaron's proprietary technologies to Integer's portfolio of innovative solutions. This acquisition is accretive to sales growth and gross margin and fits perfectly with our strategy to offer end-to-end differentiated capabilities in high-growth markets. Erin was a privately owned medical device outsourcer located in the medical device hub of Galway, Ireland, and has been serving leading medical device companies for over 20 years. Their focus has been on developing highly differentiated capabilities that are designed into customers' implanted devices. Aaron is a fast-growing business with 17 million of sales in 2021 and a strong development pipeline of new products, which gives us confidence in our projection they will grow 20% to 30% annually over at least the next few years. Erin's differentiated capabilities in proprietary medical textiles, high-precision biomaterial coverings and coatings, and advanced braiding solutions, combined with Integra's broad capabilities, will expand our offering to provide end-to-end solutions for access devices, delivery systems, and implants for complex medical devices. We believe this combination creates the most comprehensive outsourced offering in our targeted high-growth end markets. With Aaron's strong sales pipeline, the acquisition deal model includes limited commercial synergies, but we are confident our combined offering will deliver upside to the model. We paid 120 million euros with an earn out of up to another 10 million euros for meeting 2022 sales targets. Our leverage will rise above our target range for one quarter, but we expect to be back within that range by the third quarter of this year. From a return perspective, we expect ARIN to be EPS accretive in 2023 and our return on invested capital for the acquisition to be greater than our weighted average cost of capital by year five. During our last earnings call, we highlighted how we serve our customers across the entire product life cycle for each of the markets we serve. The emerging phase through growth and into the maturity phase. We also shared how we are focusing our investments on the procedures that are receiving the most innovation funding by our customers and should therefore generate accelerated growth. The green circles on this chart highlight the markets where Aaron's differentiated capabilities are focused and where we see significant opportunity to accelerate our growth together. On the right side of the slide, we've highlighted more detail than usual to demonstrate the markets, procedures, and specific products that Aaron has the capabilities to deliver in these high-growth markets. The focus on structural heart, neurovascular, and peripheral vascular is by design and demonstrates Aaron's alignment with the strategy we have been executing. Aaron and Integer together create a more comprehensive outsourced offering to enable our customers' innovation in our targeted high-growth markets. I'll offer one more example of how Aaron and Integer together create what we believe is one of the broadest portfolios of access devices, delivery systems, and implants for our customers in the medical device outsourced market. This slide is an example of a structural heart device where Integer can now provide all of the outsourced components and sub-assemblies. This same value proposition applies to other complex devices in high-growth markets like neurovascular and peripheral vascular. Thanks to Aaron, Integer can now offer customers full end-to-end capabilities on high-growth cardiovascular devices. I'll now hand the call over to Jason.
spk07: Thank you, Joe. Good morning. Thank you again for joining our call. I'll provide more details on our first quarter 2022 adjusted financial results, summarize our product line sales trends, and conclude with our 2022 outlook, which has been updated to reflect the impact of our Aaron acquisition. First quarter sales were consistent with our fourth quarter 2021 earnings guidance, and first quarter adjusted operating income was consistent with our expectations, both of which included the negative impact caused by high January and February absenteeism due to the COVID-19 surge and from ongoing supply chain constraints. In the first quarter, our sales were $311 million, delivering 7% growth over the first quarter of last year. Organic sales growth, which excludes $19 million of first quarter sales for Oscor and currency differences, is 1% higher than the first quarter of last year. Gross margins in the first quarter were consistent with those realized in the third and fourth quarters of 2021, though there was a decline versus first quarter 2021, a period not impacted by the same supply chain and labor constraints. We continued to face direct labor headwinds caused by higher than normal overtime, inefficiencies from delayed material, as well as high training costs and the incremental salaries for the associates we are hiring to support growth through the rest of 2022. As Joe mentioned, direct labor associates are up 10% versus the first quarter of 2021, with half of that increase in the last three months, as we've continued to get better traction on hiring. Having the resources and inventory needed, coupled with strong demand, gives us confidence in our ability to grow in the second quarter. Furthermore, we entered the second quarter of 2022 with our highest order backlog in company history. We are well positioned to deliver approximately double-digit sales growth for the remainder of the year. The higher top-line growth is expected to drive improved operating leverage and margin benefits from the reduction of inefficiencies and training costs. Operating expense, including SG&A and RD&E, grew year over year primarily due to the addition of OSCOR, which was acquired in December 2021, as well as our annual salary increases. We expect SG&A expense to increase marginally from 1Q22 for the remainder of the year due to timing of incentive compensation expense, the 2022 annual salary increase, and investments in operational strategic imperatives. As discussed in our last earnings call, we continue to increase our support of product development programs that will drive revenue growth in our focused markets. In addition to OSCOR, the year-over-year first quarter RD&E expense increase was driven by higher resources to support the growth in these customer programs. We expect quarterly RD&E expense to remain at about this level for the remainder of the year. Our adjusted EBITDA in the quarter was $54 million, down $7 million compared to last year, a decrease of 11%. And adjusted operating income was $39 million, a decline of 16% versus the prior year. With adjusted net income at $26 million, we delivered 78 cents of adjusted diluted earnings per share, down 19 cents or 19% from the first quarter of 2021. To provide more color on the adjusted net income, the first quarter decreased $6 million compared to the first quarter of 2021, primarily driven by the impact from the headwind created by supply chain constraints and high direct labor absenteeism from the January COVID-19 surge, partially offset by the addition of OSCOR on a year-over-year basis. FX was slightly unfavorable versus 2021, while lower adjusted interest expense delivered a $2 million improvement in adjusted net income compared to last year, driven by our continued focus on debt repayment and the savings captured with our debt refinancing in the third quarter of 2021. Our adjusted effective tax rate was 20.2% in the first quarter. This created a year-over-year headwind of $1 million due to the adjusted effective tax rate in 2021 being 16.3%. The first quarter of 2021 benefited from a favorable discrete item related to stock-based compensation, while the same discrete item in the first quarter of 2022 was unfavorable, accounting for 300 basis points of the total year-over-year ETR headwind. For the full year 2022, we expect our adjusted effective tax rate to be between 16% to 17.5%. We generated $18 million in cash flow from operating activities in the quarter and generated $8 million in free cash flow, inclusive of $10 million of capital expenditures in the first quarter. This includes approximately $20 million increase in inventory to ensure we are positioned to meet customer demand and deliver sales growth in the second quarter and the second half, as well as our typical first quarter cash flows for associated short-term incentives and customer rebate payments. Additionally, given the high absenteeism in January and February and the supply chain constraints mentioned, sales were delayed into the latter part of the first quarter, impacting the timing of collection. Despite these headwinds, net total debt decreased $7 million to $811 million, and our debt leverage at the end of the first quarter was 3.4 times trailing four-quarter adjusted EBITDA within our target ratio range. We will now transition to a discussion of our product line sales. Please note these product line sales include the product line reporting changes discussed in our earnings conference call in February of this year. As a reminder, this includes the move of active implantable medical device components into CRM&N and neuromodulation from the ASNO and portable medical product line, as well as the move of access and delivery products associated with CRM and neuromodulation procedures to the CRM N and N from their prior alignment within cardiovascular. Trailing four-quarter reported sales continued to improve year-over-year in the first quarter of 2022, as reflected by the increase in our growth rates across all four product lines. Beginning with our first product line, cardio and vascular sales were up 13% in the first quarter compared to the first quarter of 2021. Despite direct labor absenteeism and supply chain constraints, the first quarter growth was driven by strong demand, particularly in the neurovascular market and growth in our structural heart product development revenue. Trailing four-quarter sales continued strong year-over-year growth, up 20%, with an underlying double-digit growth across all cardio and vascular markets. Moving to cardiac rhythm management and neuromodulation, Sales grew 1% in the first quarter, as the sales growth from the recently acquired Oscor was offset by higher direct labor absenteeism and supply chain constraints for primarily long-league components, while customer demand remained strong. Trailing four-quarter sales continued strong year-over-year growth, up 27%. Moving to our advanced surgical, orthopedic, and portable medical product line, our first quarter sales declined 2% versus the prior year, driven by decreased demand for ventilator and patient monitoring components that peaked last year during the pandemic. Trailing four-quarter sales declined 9% year-over-year due to a decline in advanced surgical and orthopedics, And as previously noted, a decline in portable medical driven by lower demand for COVID-related components. Finally, we'll wrap up the product line discussion with Electrochem, our non-medical segment. First quarter sales increased 18% despite negative impacts from supply chain constraints, lifted by continued improvement in the energy markets. Trailing four-quarter sales grew 21% year-over-year, also driven by the recovering energy market. We'll now transition to our updated expectations for 2022. Starting with sales, We are increasing our outlook to reflect the impact of the recent acquisition of Aaron Biomedical, and we now expect sales to be in the range of $1,356,000,000 to $1,381,000,000, an increase of 11% to 13% compared to 2021. This includes $16 million of projected Aaron sales for the remaining nine months of 2022, which have been added to our sales guidance range. On an organic basis, we still expect sales to grow 5% to 7% compared to 2021. We expect the second quarter of 2022 to grow approximately double digits sequentially versus the first quarter with our direct labor and inventory well positioned to deliver on increasing customer demand. Further, we expect sales growth in the second half of the year to continue to grow approximately double-digit, as we believe our ability to manage supply chain challenges will continue to improve, and we will realize the impact of growth from new product introductions. Having just discussed the sales outlook, I'll focus on the updates for the rest of the P&L, which, like sales, now incorporates the contribution from Aaron. Adding $3 million of adjusted EBITDA from ARIN, we expect 2022 adjusted EBITDA to be between $273 million and $285 million, which is 12% to 17% year-over-year growth. We expect 2022 adjusted operating income to be between $203 million to $250 million, reflecting growth of 9% to 15% and includes $2 million from ARIN. As discussed earlier, the adjusted EBITDA and adjusted operating income growth rates assume an improvement in margin rates starting in the second quarter and continuing in the second half from volume leverage and the reduction of inefficiencies in training costs. It also reflects the OPEX run rates for the remainder of 2022 that I described during the discussion in the first quarter results. Adjusted EPS is expected to be between $4.32 and the $4.62, reflecting growth of 6% to 13%. This assumes an adjusted effective tax rate between 16% to 17.5% unchanged from our previous outlook. We have updated our adjusted interest expense to be between $28 and $32 million, which incorporates the incremental interest expense for financing the ARIN acquisition. As I close, We expect strong cash generation between $158 million to $173 million in cash flow from operations and between $88 million to $103 million in free cash flow, both updated for the impact of Aaron. Consistent with our strategy, we are maintaining our outlook on capital expenditures as we continue to invest in the business to drive growth. We expect to spend between $65 million and $75 million, which is an increase in the run rate over our prior year's spending. We expect to reduce net total debt by $83 million to $98 million and expect to end the year with our leverage ratio between 3.0 to 3.2 times adjusted EBITDA within our target range of 2.5 to 3.5 times adjusted EBITDA. Although we anticipate slightly exceeding our target range in the second quarter of 2022 due to the area acquisition, we expect to be back within our targeted leverage range by the end of the third quarter of 2022. With that, I'll turn the call back to Joe. Thank you.
spk06: Thanks, Jason. Integer is uniquely positioned to serve our customers across all phases of their product life cycles. We continue to add differentiated capabilities both organically and inorganically while delivering for our customers. Our disciplined and structured product line strategies have positioned us well to accelerate our sales growth rate while expanding margins. We are confident we will deliver on our financial objectives because of the performance culture we have created. I'll wrap up by reiterating that our first quarter results were consistent with our expectations and with our financial guidance. We updated our four-year guidance for the acquisition of Aaron Biomedical, and we believe our staffing and inventory levels position us well to deliver approximately double-digit growth in the second quarter and the rest of the year. We continue to execute our strategy by adding differentiated capabilities in high-growth markets that enable us to deliver more comprehensive solutions to our customers. We believe our strategy focused on innovation and excellent service will accelerate our growth with customers by enabling their success. I'll close by providing an example of how this strategy is paying dividends. We have been a strong partner to Nevro for many years, starting back in 2008 with the design and development of their high-frequency spinal cord stimulation implantable pulse generator and supporting them through regulatory approval into high-volume manufacturing. Nevro's success ultimately led them to decide to insource the assembly of their IPG, but they wanted a partner to provide a second source for business continuity. I am happy to announce that we have signed a multi-year supply agreement with Nevro to be their sole outsourced manufacturer on their next generation platform, including annual volume commitments. We will continue to be their sole source for their current generation product. We have also agreed to further vertically integrate Integer components into the Nevro IPG for both Integer and Nevro's manufactured product. We believe this partnership demonstrates the success of serving our customers with differentiated technology and service and is how we plan to continue fulfilling our vision of being our customer's partner of choice. Thank you for joining our call this morning. I will now turn the call back to our moderator for the Q&A portion of our call.
spk00: And as a reminder, that is star 1 if you would like to ask a question. We will pause for a moment to compile the Q&A roster. And our first question will come from with KeyBank. Please go ahead. Actually, good morning.
spk03: So, Joe, as you think about your outlook today versus a couple of months ago, are you more or less confident in the visibility to that outlook? And then the second part of that, are there any components or raw materials that are particularly challenging at this point that could cause some uncertainty as you go through the summer?
spk06: Thanks, Matt. Great questions, which get at the heart of the supply chain challenges and the dynamic environment that we're all living in. And I'll start with the versus a few months ago. We actually feel even better about the rest of our year. We had the advantage of our earnings call being in mid-February. So we had a fourth quarter earnings call. So we had already experienced the dramatic decline. surge in absenteeism in January from the COVID surge, heavily in the U.S., a little bit in Europe. We also had already seen how it was tapering off in February, but still impacted February. So we were able to incorporate that impact in our first quarter expectations for revenue being flat with the fourth quarter, as well as the operating profit. I mentioned we landed right on the So in terms of thinking about where we are today versus mid-February, we actually feel a lot better about the rest of the year because we've been able to build 20 million of inventory. We added 5% more direct labor associates within the first quarter, so we're up 12%. into first quarter and into first quarter. So we got really good traction adding the direct labor that we need to fulfill on the growth in the second quarter and the rest of the year. Jason mentioned in the prepared remarks, we enter the quarter with the highest amount of orders for the quarter that we've ever had. You know, that's one of the things we measure very closely. You know, we've got really good visibility the next three, four months. And so we feel really good about the demand from customers. So we feel really good about the rest of the year, and we're glad to have the first quarter behind us because we feel like we got a lot done, even though the financial results reflect the investment in adding the headcount and the COVID surge that prevented us from shipping as much product as we would have liked. But we feel really good about where we are now for the rest of the year and being able to grow. Your next question, the components or raw materials, That's one of the areas that we continue to manage very closely. You've heard everybody in the industry talk about availability of material. We've had the same challenges. It's very disruptive to the manufacturing plant when suppliers can't ship on the date that they committed because you've got your plant built to receive the material and run those lines. And so we've been managing through that. Adding $20 million of inventory during the first quarter helps with that because it helps us to better be able to plan and schedule the plant. We feel like we're dialed into the particular materials, you know, resins being one of them. There are components that go into PCBAs that are also challenging and have long lead times. that we've been able to manage. We think we've managed pretty well within the year the impact of inflation. You've heard everybody in the industry talk about inflation. We have the advantage of last year, we launched a number of programs to drive material costs down, and we're getting the benefit of that that's helping offset some of the inflationary pressures this year. So We certainly do have components of raw materials that we're managing closely with suppliers. Their biggest issue seems to be labor, not necessarily material availability, but the labor to process it. And we feel really good about where we sit entering the second quarter and for the rest of the year to be able to deliver on our full-year guidance and growing double-digit in the second quarter and the rest of the year and hitting our guidance. We expected the first quarter results that we delivered, and we feel confident in the rest of the year.
spk03: And then the record order book that you guys are talking about, is that due to some back orders that may not have been able to be filled in the first quarter, or is that due to just a really strong recovery from your customers and positive underlying momentum in the business?
spk06: I think there's three variables. I think the strong recovery is one of them. For certain, as we look to the rest of the year, we have new products that are launching that we're ramping up and we're moving out of development and into the manufacturing sites in order to be able to ramp to our customers' product introduction. So we see that as one factor of growth. There's absolutely volume that we were planning to ship in the first quarter, but because of this COVID surge, we were not able to. Probably half the inventory we built is related to that volume, and so we enter the quarter with that volume in hand. And then there's a third variable where our customers, but we see this as well as ourselves and everybody in the industry and probably in any manufacturing environment, Everyone is placing orders further in advance to give supply chain greater visibility. We're doing that with our supply base. We're encouraging our suppliers to do it with their supply base. Our customers are doing it. So what it's doing is it's giving everybody better visibility to be able to better manage the supply chain. And we think what that does ultimately is it gives us even better visibility to the demand for the rest of the year, which increases our confidence and our guidance for the rest of the year.
spk03: Okay. And then just lastly on the guidance, is that, you know, there's obviously a lot of moving pieces, you know, over the last couple of months. Is the guidance reflective of Aaron? So the sales bump is Aaron, no change otherwise. EPS down a little bit. Is that a little dilutive because of the interest rate uprunners? Or are there some other moving pieces to be considered in there?
spk06: Certainly. So the only change in our guidance is we added Aaron. And so the change in our guidance is adding 16 of sales for Aaron, adding, um, three of EBITDA, two of AOI, and it's a few pennies dilutive on EPS because we've got the debt for the full year and we only get nine months of the income. And by the time we get to 2023, we expect ARIN to be accretive, flat to accretive to EPS. Okay. So the only change is ARIN. The only change is ARIN.
spk03: All right. Thank you very much, guys.
spk06: Thanks, Matt. Thanks, Matt.
spk00: And again, that is star one to ask a question. Our next question will come from Jim Sedoti with Sedoti and Company. Please go ahead.
spk02: Hi, good morning, and thanks for taking the questions. Can you talk a little bit about how Aaron distributed their products as a standalone company and what distribution is going to look like now that they're part of Integer?
spk06: Well, I think one of the biggest advantages of combining with Aaron is we can now vertically integrate and be even more comprehensive, have a more comprehensive offering to our customers. And one of the things we love about Aaron is more than half of their pipeline, and we were able to get very deep into their pipeline that they're working on, their development programs, which we talked a lot about Integer's development program pipeline on the last earnings call. More than half of Aaron's development pipeline is in Structural Heart, which demonstrates the differentiation that they bring to their customers. Our ability to then help Aaron ramp and scale to high volume manufacturing and vertically integrate with our offerings on Structural Heart access devices and delivery systems gives us a really comprehensive offering. We think the most comprehensive offering in the industry, and we think the combination is going to allow us to develop significant commercial synergies. We didn't bake much commercial synergies into the deal because we didn't need to. The pipeline Aaron has stood on its own and justified the deal, but we're really excited about the ability to partner and offer a more comprehensive solution to to our customers, and we think our scale and manufacturing capability will open up even more opportunities for Aaron. So we would expect to see that growth that they have now that, you know, we expect 20 to 30% growth over at least the next few years with their pipeline. We think with our combination that we can even accelerate that and build and get more integer product through to our customers with Aaron's capability.
spk02: Okay, but specific for distribution, were they using direct reps, direct salespeople, or independent reps? And how will it work now that the two companies are combined?
spk06: They had a very similar model to Integer. Their engineering teams work closely with the same customers we work with, with our customers' engineering team. Their development engineers were selling in the same manner that we are. What's different today is now they have a more comprehensive portfolio to offer customers. And we obviously are much deeper, given our size and scale, with those same customers than they are. So it will be the same go-to-market approach with the engineers talking to engineers and selling differentiated technologies and capabilities, enabling them to get their structural ARP devices, peripheral vascular, neural vascular devices to market faster.
spk02: Okay. And then a question, Jason, the R&D is up a little over $3 million. in the quarter. It sounds like it's going to stay that way. Is that primarily due to the addition of folks from Oscar, or was there something else going on?
spk07: Yeah, that's a great question, Jim. So absolutely, Oscar is a piece of that, probably about a third of the growth. The rest of it really is in line with our continued focus and investment in resources and programs. in the high-growth focus areas and markets that we've been talking about. Those resources continue to grow. You know, there's always a little bit of – we've talked about timing of customer reimbursements and how that flows through. But right now, you know, we continue to grow that revenue – the revenue side of that as well as the – the program expense, and we see that being, you know, more at that run rate that we had in 1Q for the rest of the year.
spk02: Okay. All right. Thank you. Great. Thanks, Jim.
spk00: And our next question will come from Bob Wasserman with Benchmark.
spk01: Please go ahead. Hey, thanks. Good morning. Congrats on the quarter. Just I wonder if you could provide a little more color on the NEVRO. Contract that you talked about this morning, in terms of the timing of when that move started and also the scale, will it be close to what your earlier contracts, and also whether there was any contribution in this round from either OSCOR or ARIN components?
spk06: Great. Hey, Bob, thanks for the question. So on Nevro, you know, we've been a strong partner with Nevro from their inception. And as they were looking for their second source, we think we were uniquely positioned to serve them. And so we're building their current generation device. We're working with them on their next generation device. which is what they plan to assemble their i think the latest thing they've said publicly is by late this year they expect to have their plans up and running so we'll support them as they as they go into that transition of of doing their own assembly uh we'll we'll now start providing them with additional uh components that we manufacture that'll be vertically integrated into both our assembly as well as their assembly um it's a multi-year long-term agreement There's share commitments for the components as well as volume commitments on the IPGs. We'll support them as they ramp and be there to ensure that if they need any incremental volume, additional volume over and above what they're planning to produce or as they work through assembling their IPG for the first time ever, we'll be there to support them and ensure that they have all the product that they need to meet their launch of their next generation product. and their introduction of that whenever they do get that introduced. And in terms of components, obviously, Oscar was in the first quarter results. They were in the December results last year. So on a year-over-year basis, Oscar is inorganic, and you see that in our results. They had about $19 million in sales in the first quarter. They had a very strong first quarter. It's a great start to the year. We're really excited about how well the integration is going and how well they're performing. and we expect them to continue to outperform the rest of the year. We're excited about the combination and the additional commercial synergies that we're working on already.
spk01: Okay. Great things. Thanks for the answer.
spk06: Thanks, Bob.
spk00: And with no further questions, I'd like to turn the call back to Mr. Berowitz for any additional closing remarks.
spk05: Great. Thanks, everyone, for joining the call today. The replay of this call will be available on our website as well as the presentation we just reviewed today. So look forward to taking your follow-up questions, and thank you for your interest in integer, and that does include the call for today. Thank you.
spk00: And this will conclude today's conference. Thank you for your participation, and you may now disconnect.
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