Integer Amends Its Senior Secured Credit Facility To Continue Strategy Execution Throughout The Pandemic

Rhea-AI Summary

Integer Holdings Corporation (NYSE: ITGR) announced a successful amendment to its senior secured credit facility amid the COVID-19 pandemic. This precautionary measure aims to enhance liquidity and support ongoing strategic investments and acquisitions. The amendment adjusts the covenant net leverage ratio from 4.00 to 1.00 to 4.75 to 1.00 for the period from Q3 2020 to Q2 2021, before stepping down to 4.50 to 1.00 for one quarter. The company will incur advanced and deferred amendment fees to consenting lenders as part of this arrangement, showcasing strong lender support.

Positive

• Amendment to senior secured credit facility provides enhanced liquidity.
• Increased covenant net leverage ratio allows for continued acquisitions.
• Broad support from senior lenders demonstrates confidence in strategy.

Negative

• Amendment may indicate underlying financial pressures due to pandemic.
• Increased leverage may concern investors regarding debt management.

PLANO, Texas, July 14, 2020 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (“Integer”) (NYSE: ITGR) is pleased to announce that it has successfully completed an amendment to its senior secured credit facility as a precautionary step during the COVID-19 pandemic.

Jason Garland, EVP & CFO said, “This covenant amendment enhances our ability to continue investing to execute our strategy throughout the pandemic, through continued bolt-on acquisitions and the execution of our operational strategic imperatives.  We appreciate the broad support of our senior lenders and the confidence they have shown in our business strategy.”

Integer expects to maintain compliance with its covenant net leverage ratio and requested a covenant modification as a precautionary measure to provide additional cushion to allow for continued bolt-on M&A activity and protect against a prolonged pandemic.  The net leverage ratio was increased from the existing ratio of 4.00 to 1.00 to 4.75 to 1.00 for the period beginning with the third fiscal quarter of 2020 through the second fiscal quarter of 2021.  In the third fiscal quarter of 2021, the covenant steps down to 4.50 to 1.00 for one quarter until it reverts to the existing ratio through maturity.  Additionally, Integer added a common credit facility feature, where its net leverage ratio can be increased by 0.50 for up to four consecutive quarters commencing in any fiscal quarter in which Integer consummates an acquisition with a $40 million or greater purchase price.

In connection with the amendment, Integer agreed to pay each consenting lender an advanced amendment fee of 0.1% of the borrowing capacity on the Revolver and Term loan A on the amendment effective date.  It will also pay the consenting lenders a deferred amendment fee, payable in installments of 0.03125% of the outstanding Revolver and Term loan A each quarter through maturity, for any quarter Integer’s covenant net leverage ratio equals or exceeds 3.00 to 1.00.

About Integer^®
Integer Holdings Corporation (NYSE: ITGR) is one of the largest medical device outsource (MDO) manufacturers in the world serving the cardiac, neuromodulation, vascular, portable medical, advanced surgical and orthopedics markets. The company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition, it develops batteries for high-end niche applications in energy, military, and environmental markets.  Greatbatch Medical®, Lake Region Medical™ and Electrochem® comprise the company’s brands.  Additional information is available at www.integer.net.

Forward-Looking Statements
Some of the statements contained in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including the statements relating to our expectation of continued compliance with covenants and the benefits of the amendment. You can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or variations or the negative of these terms or other comparable terminology. These statements are only predictions and actual events or results may differ materially from those stated or implied by these forward-looking statements.  In evaluating these statements, you should carefully consider a number of factors, including, but not limited to, the following factors: the duration, scope and impact of the COVID-19 pandemic, the risk that our expectation regarding the continued compliance with covenants and the benefits of the amendment is incorrect; and other risks and uncertainties that arise from time to time and are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the SEC.  Except as may be required by law, we assume no obligation to update forward-looking statements in this press release, whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

Investor Relations:
Tony Borowicz
tony.borowicz@integer.net
716.759.5809

Media Relations:
Kelly Butler
kelly.butler@integer.net
214.618.4216

FAQ

What is the significance of Integer's credit facility amendment on July 14, 2020?

The amendment enhances Integer's liquidity and supports ongoing strategic investments during the COVID-19 pandemic.

How does the amendment affect Integer's financial covenants?

The net leverage ratio was increased from 4.00 to 1.00 to 4.75 to 1.00 for a specified period to provide more financial flexibility.

What fees are associated with the credit facility amendment for Integer?

Integer will pay advanced and deferred amendment fees to consenting lenders based on the borrowing capacity.

What factors led to Integer's decision to amend its credit facility?

The amendment was a precautionary step to prepare for risks associated with the prolonged COVID-19 pandemic.