Investor Presentation JP Morgan Conference January 2013 Greatbatch - - PowerPoint PPT Presentation

Investor Presentation

JP Morgan Conference January 2013

Greatbatch Team

Thomas J. Hook President & CEO Michael Dinkins Senior Vice President & CFO

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Forward-Looking Statements

• We will be making forward-looking

statements during today’s presentation.

• Please refer to the appendix of this

presentation and our most recent SEC filings for more information and cautionary language surrounding these statements.

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Greatbatch Today 86%

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Revenues from Medical Device Market

CRM/Neurology 47% Vascular 8% Orthopaedics 19% Portable Medical 12% Energy/Environmental 11% Other 3%

Blue Chip Customer Base

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Market-driven technologies and operational excellence in the medical device markets.

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Our Strategy Our Vision

Extend partnerships with key OEM customers beyond discrete components to include medical device systems.

Strategic Initiatives

• Identify AlgoStim commercial partner
• Commercialize non-core assets through

licensing deals

• Funding alternatives for portfolio investments
• Strategic equity investments
• Orthopaedic consolidation on schedule
• Investment in sales & marketing –

improve organic growth performance

• Continue development through focused R&D
• Differentiated power technology solutions

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Monetize QiG Investment Advance Medical Device Initiatives Leverage Capacity Core Development Technologies

Strengthening Our Core, Expanding Our Pipeline

Acquisitions

• Operating company
• Technology

Dispositions

• Technology
• Accelerate our growth
• Complement our business model
• Leverage our outstanding talent

and centers of excellence

• Gain value from technologies that

will not be commercialized

• Deepen relationships with strategic

OEMs through intellectual property

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Building Success in 2013

Teamwork Innovation Profitable Growth Accountability

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Profitable Growth 5-8%

Organic Revenue Growth 2-5% Revenue Growth

7-13%

Adjusted EPS Growth supported by operational excellence

Top Line Bottom Line Pipeline

~60bps

Adjusted Operating Margin Increase

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• Portable Medical 15-20% growth - Greater Market Share
• Vascular 7-13% growth - New Product Introduction
• Orthopaedic 8-14% organic growth on new base business

(after estimated disposition of $15M of Orthopaedic products)

Organic Growth Margin Expansion

• Orthopaedic Transition to Fort Wayne and Mexico on schedule
• Reduce R&D spend
• Targeted investment to improve core marketing sales capabilities

and build pipeline for sustained growth

Rationalize R&D

• Focus R&D spend on Algostim and Portable Medical
• Targeted acquisitions to enhance growth trajectory

Key Enablers

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2013 Assumptions

• Completion of Swiss Consolidation in Q1 2013
• No acquisitions are included although we are actively engaged

in looking for accretive deals that will improve our revenue growth performance

• Impact of R&D commercialization not included in guidance

(Algostim, MRI, Sensor)

• Medical Device Tax estimated impact on Gross Profit $1.5M to $2.5M
• Estimated 33% to 35% tax rate (includes only the 2013 benefit of the

recently reenacted R&D tax credit)

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Consolidations and organic growth driving solid operating performance.

Selected Highlights

($ in millions except for EPS)

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2011A 2012E 2013E Sales $569 $645 $660 - $680 Adjusted Operating Margin 11.9% ~11.5% 12% - 12.5% Adjusted EPS $1.68 ~$1.77 $1.90 - $2.00 Operating Cash Flows $90 $48 $85 - $95* Capex $22 $35 $20 - $25 ROIC 7.3% 7.2% 8% - 9%

*Excludes one-time impact of $30M deferred tax payment related to redemption of 2007 Convertible Debt

~11.5% 0.3% - 0.6% 0.2% - 0.4% 12%-12.5%

2012E Gross Margin Reduced Opex 2013E

Adjusted Operating Margin Expansion Opportunity

+60 bps potential over 2012

% of sales

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*Excludes one-time impact of $30M deferred tax payment related to redemption of 2007 Convertible Debt

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Strong Operating Cash Flow

~$82 $25 $20 $10 $(9) $(21) $(17) $90

2013E Adjusted Operating Income Depreciation Amortization Stock Based Comp Interest Taxes Other 2013E Operating Cash Flow

$ in millions

*Excludes one-time impact of $30M deferred tax payment related to redemption of 2007 Convertible Debt

$ in millions

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Consistent Cash Flow Drives Lower Leverage

$71.8 $76.9 $89.9 $48.0 $90.0* 2009 2010 2011 2012E 2013E

Operating Cash Flow

5 year annual average of $75M

$289.4 $220.6 $236.0 $232.0 $221.0 2009 2010 2011 2012E 2013E

• Est. debt repayment of $125M from 2009 to 2012

Total Debt

$400M Line

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Credit Available Accordion

$200M

Unused Borrowing Capacity

$161M

Cash $20M Outstanding on Converts

$198M

Outstanding on Borrowings

$41M

Credit facility matures June 2016 Will utilize Line of Credit to finance converts maturing in 2013 $361M in Dry Powder

Capacity for Growth Opportunities

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2013 Profitable Growth

Targeted acquisitions focused on returns Emphasis on continued cost efficiencies

60 bps Operating Margin Improvement

Focused use of cash

Operating Cash Flows $85M-$90M*

Capital investments focused on new product demands

Capital Spend $20M - $25M *Excludes one-time impact of $30M deferred tax payment related to redemption of 2007 Convertible Debt

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Appendix

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Some of the statements made in the presentation whether written or oral may be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of Securities Exchange Act of 1934, as amended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative

• f these terms or other comparable terminology. These statements are based on the

company’s current expectations. The company’s actual results could differ materially from those stated or implied in such forward-looking statements. The company assumes no obligations to update forward-looking information, including information in this presentation, to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects.

Forward-Looking Statements

Product Line

Preliminary 2012 Revenue (millions) Estimated 2013 Annual Growth Rate 2013 Estimated Revenue (millions)

CRM & Neuromodulation $308 0% – 2% $308 – $314 Vascular Access $53 7% – 13% $56 – $60 Orthopaedic $119 (5%) – 0% $113 – $119 Portable Medical $80 15% – 20% $92 – $96 Energy & Other $85 7% $91 – $91 Total Sales $645 2% – 5% $660 – $680

Revenue Growth

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Contact Information

Michael Dinkins Chief Financial Officer Greatbatch, Inc. 2595 Dallas Parkway Suite 310 Frisco, TX 75034 Tel: 214-618-5242 MDinkins@greatbatch.com www.greatbatch.com

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