Integer Holdings (NYSE:ITGR) said today that it has scaled back some guidance for fiscal 2019 among other changes after the announcement that Nuvectra (NSDQ:NVTR) filed for Chapter 11 protection last week.
Plano, Texas-based Integer was near the top of the list among creditors with unsecured claims in the filing. The contract manufacturer, listed as Greatbatch Medical, is owed nearly $2.2 million by Nuvectra. Only Minnetronix Medical is owed more.
As a result, Integer announced that it is lowering its sales guidance by $12 million at both ends of the range and lowering its 2019 GAAP income and earnings per share guidance. However, it is not making changes to its non-GAAP adjusted EBITDA ($282 million to $286 million), adjusted income and adjusted EPS guidance ($4.55 to $4.65).
The revised GAAP income range is penciled in at $87 million to $91 million, while the updated GAAP EPS is listed as $2.65 to $2.75, according to a news release. Nuvectra’s instructions to “cease providing all products” led Integer to change its sales guidance to a range of $1.253 million to $1.268 million for 2019.
The company also estimated its Q4 2019 asset impairment charge and other costs at approximately $24 million pre-tax and said that the Nuvectra filing does not change its prior view of its 2020 sales outlook.
“Integer still expects to grow at ‘market growth rates’ in total but is reducing the impact of the neuromodulation market slow down and supply agreements to a $10 million headwind in 2020, down from a $20 million headwind outlined in its third quarter earnings call on October 31, 2019,” Integer said in the release. “Integer’s prior 2020 sales outlook had already considered the full range of potential outcomes of Nuvectra’s announced ‘strategic alternatives’ evaluation disclosed in August 2019.”
Integer also said that it plans to preserve its rights and pursue available legal remedies to recover any losses suffered as a result of Nuvectra’s filing.
ITGR shares were down nearly 2%, at $73.30 apiece, at the close of trading today.