Integer Holdings Corp
For the period ended Dec 31, 2024. Filed Feb 20, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 20, 2025
ITGR$126.56-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-20.
0001114483-24-000034
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-20.
0001114483-25-000034
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 154 previous paragraphs and 181 current paragraphs.
81 unchanged; 51 reworded; 27 added; 17 removed; 5 previous and 22 current paragraphs rearranged.
Tables are not compared: 11 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
•Divestiture and market exit
Current report
Integer Holdings Corporation is one of the largest medical device contract development and manufacturing organizations in the world, serving the cardiac rhythm management, neuromodulation, and cardio and vascular markets. As a strategic partner of choice to medical device companies and OEMs, we are committed to enhancing the lives of patients worldwide by providing innovative, high-quality products and solutions.
Current report
We operate our business in one segment and derive our revenues from three product lines: Cardio & Vascular, Cardiac Rhythm Management & Neuromodulation and Other Markets. Prior to the divestiture of Electrochem, we operated in two reportable segments: Medical and Non-Medical.
Current report
We selectively evaluate acquisitions as a means to acquire additional technology or manufacturing capabilities to expand our product offering in our key existing growth markets. Consistent with our tuck-in acquisition strategy, since the beginning of 2022 we have completed the following acquisitions, including those that impact the comparability of our results between periods:
Current report
Subsequent to the end of the 2024, on January 7, 2025, we acquired substantially all of the assets and assumed certain liabilities of certain subsidiaries of Katahdin Industries, Inc., including its main operating subsidiary, Precision Coating LLC (collectively “Precision”). Prior to the acquisition, Precision was a privately-held manufacturer specializing in high value surface coating technology platforms, including fluoropolymer, anodic coatings, ion treatment solutions and laser processing. Based in Massachusetts, Precision has additional locations in the New England area and an additional facility in Costa Rica. The acquisition of Precision increased our service offerings to include differentiated and proprietary coatings capabilities that position us to better meet customers’ evolving needs. Given the January 7, 2025 closing date of the acquisition, Precision’s results are not included in this MD&A and the disclosures included herein. Refer to Note 21, “Subsequent Events,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” of this report for additional information about the acquisition of Precision.
Current report
Divestiture and Market Exit
Current report
On October 31, 2024, we completed the sale of our wholly-owned subsidiary Electrochem Solutions, Inc. (“Electrochem”) for a total purchase price of $50.0 million in cash, subject to customary working capital adjustments. Electrochem, which focused on nonmedical applications for the energy, military and environmental sectors, represented substantially all of the assets and operations in our previously reported Non-Medical reporting segment. Subsequently to the divestiture of Electrochem, we operate in one reportable segment.
Current report
As a result of the Electrochem divestiture, the results of operations of the Electrochem business have been classified as discontinued operations for all periods presented. Intersegment sales to Electrochem that were previously eliminated in consolidation have been treated as third-party sales and are included in sales from continuing operations as we will continue to supply the Electrochem business with certain specified products following its divestiture. Prior period amounts have been reclassified to conform to the continuing operations reporting presentation.
Current report
Income (loss) from discontinued operations, net of tax, was a loss of $1.2 million for 2024, which represented the results of operations of Electrochem for ten months prior to its divestiture on October 31, 2024 and a pre-tax gain on sale of discontinued operations of $0.8 million. During 2023, we recognized income from discontinued operations of $1.5 million, which represented the results of operations of Electrochem for the full year in 2023. During 2022, we recognized income from discontinued operations of $6.6 million, which included Electrochem results for the full year in 2022 and $1.0 million of income from a portion of our AS&O product line that we sold in 2018.
Current report
•Interest expense for 2024 increased by $5.1 million, primarily due to higher average debt outstanding, partially offset by a decrease in losses from extinguishment of debt.
Current report
During the fourth quarter of 2024, we began referring to our “Advanced Surgical, Orthopedics & Portable Medical” product line as the “Other Markets” product line, to better capture the evolving nature of our products and ongoing strategic focus. The name change has no impact on financial information previously reported.
Current report
Cardio & Vascular (“C&V”) sales for 2024 increased $113.2 million, or 14%, in comparison to 2023. The increase in C&V sales for 2024 was driven by strong growth across targeted C&V markets, driven by electrophysiology, structural heart, and the InNeuroCo and Pulse acquisitions.
Current report
Other Markets sales for 2024 were flat in comparison to 2023, as the decline in Portable Medical from the multi-year exit announced in 2022 was offset by the Pulse acquisition.
Current report
(a)Compensation and benefits increased primarily due to annual merit increases and an increase in headcount related to the recent Pulse and InNeuroCo acquisitions.
Current report
During 2024, contractual interest expense primarily increased due to higher average debt outstanding. The higher average debt balance outstanding is primarily the result of borrowings on our Revolving Credit Facility to fund the Pulse and InNeuroCo acquisitions.
Current report
Sales
Current report
Gross Profit
Current report
SG&A Expenses
Current report
RD&E
Current report
Interest Expense
Current report
Loss on Equity Investments, Net
Current report
Other (Income) Loss, Net
Current report
Provision for Income Taxes
Current report
Sources of Liquidity
Current report
(1) Excludes assets held for sale at December 31, 2023.
Current report
During 2023, we issued $500 million aggregate principal amount of notes. The 2028 Convertible Notes mature on February 15, 2028 and bear interest at a fixed rate of 2.125% per annum. The conditions allowing holders of the 2028 Convertible Notes to convert the 2028 Convertible Notes were met as of June 30, 2024 and, thereafter, continued to be met as of December 31, 2024, in each instance due to the trading price of our common stock exceeding 130% of the 2028 Convertible Notes conversion price on at least 20 out of the 30 consecutive trading days prior to such date. Therefore, the 2028 Convertible Notes became eligible for conversion at the option of the holders beginning on July 1, 2024 and will continue to be eligible for conversion through March 31, 2025. Any determination regarding the convertibility of the 2028 Convertible Notes during future periods will be made in accordance with the terms of the indenture governing the 2028 Convertible Notes. If a conversion request occurs, we have the intent and ability to refinance the amounts that may become due with respect to the 2028 Convertible Notes using available borrowing capacity under the Revolving Credit Facility. As such, the obligations associated with the 2028 Convertible Notes continue to be classified as a long-term liability on the Consolidated Balance Sheets as of December 31, 2024.
Current report
Due to the divestiture of our Non-Medical segment, which also historically represented the Non-Medical reporting unit, we considered the goodwill attributable to our Non-Medical reporting unit for impairment at the time the assets and liabilities were reclassified as held-for-sale and concluded there was no indication of impairment as the cash consideration received exceeded the carrying value of the net assets.
Removed paragraphs (17)
Previous report
•Portable medical exit
Previous report
Integer Holdings Corporation is one of the largest MDO manufacturers in the world serving the cardiac rhythm management, neuromodulation, orthopedics, vascular and advanced surgical markets. We also develop batteries for high-end niche applications in the non-medical energy, military, and environmental markets. Our vision is to enhance the lives of patients worldwide by being our customers’ partner of choice for innovative technologies and services.
Previous report
We organize our business into two reportable segments, Medical and Non-Medical, and derive our revenues from four principal product lines. The Medical segment includes the Cardio & Vascular, Cardiac Rhythm Management & Neuromodulation and Advanced Surgical, Orthopedics & Portable Medical product lines and the Non-Medical segment comprises the Electrochem product line. For more information on our segments, please refer to Note 18, “Segment and Geographic Information,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data” of this report.
Previous report
Portable Medical Exit
Previous report
During 2018, we sold a portion of our Advanced Surgical, Orthopedics & Portable Medical product line. As a result, for all periods presented, financial results of the divested product line are classified as discontinued operations. All results and information presented exclude discontinued operations unless otherwise noted.
Previous report
There was no activity from discontinued operations during 2023. During 2022, we recognized income from discontinued operations of $1.0 million or $0.03 per diluted share. During 2021, we recognized income from discontinued operations of $3.8 million or $0.11 per diluted share.
Previous report
Financial Overview
Previous report
•Interest expense for 2023 increased by $14.7 million, due to higher interest rates, higher average debt outstanding and higher losses from extinguishment of debt.
Previous report
•Sales for 2022 increased 13% to $1.376 billion primarily from the Oscor acquisition and continued product demand recovery from the impacts of the COVID-19 pandemic.
Previous report
•Gross profit for 2022 increased $22.0 million or 7%, primarily from higher sales volume, partially offset by increased cost of sales resulting from labor and supply constraints.
Previous report
•Interest expense for 2022 increased by $7.0 million, due to higher interest rates and average debt outstanding.
Previous report
Total 2023 sales increased 16% to $1.597 billion in comparison to 2022. The most significant drivers of this increase were as follows:
Previous report
Non-Medical sales for 2023 decreased $3.2 million or 7% in comparison to 2022, as sales returned to a normalized run-rate in the second half of 2023 following previously higher sales from the supply chain recovery. Foreign currency exchange rate fluctuations did not have a material impact on Non-Medical sales for 2023.
Previous report
Restructuring and Other Charges
Previous report
During the first quarter of 2023, we issued $500 million aggregate principal amount of notes. The 2028 Convertible Notes mature on February 15, 2028 and bear interest at a fixed rate of 2.125% per annum. The total net proceeds from the issuance of the 2028 Convertible Notes, after deducting initial purchasers' discounts and commissions and debt issuance costs, were approximately $485 million. We used the net proceeds from the issuance of the 2028 Convertible Notes to settle in full principal and interest due of $336.1 million under the Term Loan B Facility, pay down principal and interest due of $113.9 million under the Revolving Credit Facility, to pay related fees and expenses, and to pay the cost of the capped calls related to the issuance of our 2028 Convertible Notes.
Previous report
The increase in net income adjusted for non-cash items such as depreciation and amortization is primarily from higher sales volume partially offset by higher interest expense. The increase associated with changes in operating assets and liabilities is primarily related to less accounts receivable, inventory and accounts payable growth. Accounts receivable benefited from new factoring arrangements entered into during 2023 that accelerated accounts receivable collections. Factoring activity on accounts receivable provided an increase of approximately $30 million in cash generated from operating activities during 2023. Inventory growth was elevated in 2022 from investments to support growth and protect against supply chain risk, while accounts payable yielded less benefit to cash flow in 2023 from the timing of supplier payments and lower inventory growth.
Previous report
We elected to bypass the qualitative assessment and performed a quantitative analysis for our Non-Medical reporting unit. Resulting from the quantitative analysis, the fair value exceeded the carrying value of the Non-Medical reporting unit by approximately 11%. We do not believe that any of our reporting units are at risk for impairment. However, changes to the factors considered above could affect the estimated fair value of one or more of our reporting units and could result in a goodwill impairment charge in a future period. We may be unaware of one or more significant factors that, if we had been aware of, would cause our conclusion to change, which could result in a goodwill impairment charge in a future period.
Reworded paragraphs (51)
Previous wording
Global economic challenges, including the impact of the military conflicts between Russia and Ukraineand between Israel and Hamas, severe and sustained inflation, a rising interest rate environment, fluctuations in global currencies, and supply chain disruptions may continue to cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and product line, but specific impacts to our business include increased borrowing costs, labor shortages, disruptions in the supply chain, delayed or reduced customer orders and sales, and delays in shipments to and from certain countries. We monitor economic conditions closely. In response to reductions in revenue, we can take actions to align our cost structure with changes in demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions and other developments.
Current wording
Our future results of operations and liquidity could be materially adversely affected by uncertainty surrounding macroeconomic and geopolitical factors in the U.S. and globally characterized by the supply chain environment, inflationary pressure, elevated interest rates, disruptions in the commodities’ markets as a result of the conflict between Russia and Ukraine and conflicts in the Middle East, including Israel and Iran, and the introduction of or changes in tariffs or trade barriers. The impact of these issues on our business will vary by geographic market and product line, but specific impacts to our business include increased borrowing costs, labor shortages, disruptions in the supply chain, delayed or reduced customer orders and sales, delays in shipments to and from certain countries and potential increased expenses resulting from tariffs or other trade barriers. We monitor economic conditions closely. In response to reductions in revenue, we can take actions to align our cost structure with changes in demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions and other developments.
Previous wording
Subsequent to the end of the 2023, on January 5, 2024, we acquired 100% of the equity interests of Pulse Technologies, Inc. (“Pulse”). Prior to the acquisition, Pulse was a privately-held technology, engineering and contract manufacturing company focused on complex micro machining of medical device components for high growth structural heart, heart pump, electrophysiology, leadless pacing, and neuromodulation markets. Based in Pennsylvania, Pulse also provides proprietary advanced technologies, including Hierarchical Surface Restructuring (HSRTM), Scratch-Free Surface Finishes, and Titanium Nitride Coatings. Consistent with our tuck-in acquisition strategy, the acquisition of Pulse further increases our end-to-end development capabilities and manufacturing footprint in targeted growth markets and provides customers with expanded capabilities, capacity and resources to accelerate products’ time to market. Given the January 5, 2024 closing date of the acquisition, Pulse results are not included in this MD&A and the disclosures included herein. Refer to Note 21, “Subsequent Events,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data” of this report for additional information about the acquisition of Pulse.
Current wording
On January 5, 2024, we acquired Pulse, a privately-held technology, engineering and contract manufacturing company focused on complex micro machining of medical device components for high growth structural heart, heart pump, electrophysiology, leadless pacing, and neuromodulation markets. Pulse also provides proprietary advanced technologies, including hierarchical surface restructuring (HSRTM), scratch-free surface finishes, and titanium nitride coatings. The acquisition of Pulse further increased our end-to-end development capabilities and manufacturing footprint in targeted growth markets and provides customers with expanded capabilities, capacity and resources to accelerate the time to market for customer products.
Previous wording
Effective as of October 1, 2023, we acquired substantially all of the assets and assumed certain liabilities of InNeuroCo, Inc.(“InNeuroCo”). InNeuroCo is a recognized leader in neurovascular catheter innovation with strong development and manufacturing capabilities. InNeuroCo’s expertise and highly differentiated neurovascular catheter innovation complements our existing capabilities and market focus. Consistent with our strategy, the addition of InNeuroCo further increases our ability to provide enhanced solutions to our customers in the neurovascular catheter space.
Current wording
On October 1, 2023, we acquired substantially all of the assets and assumed certain liabilities of InNeuroCo, a recognized leader in neurovascular catheter innovation with strong development and manufacturing capabilities. InNeuroCo’s expertise and highly differentiated neurovascular catheter innovation complements our existing capabilities and market focus. Consistent with our strategy, the addition of InNeuroCo further increased our ability to provide enhanced solutions to our customers in the neurovascular catheter space.
Previous wording
On April 6, 2022, we acquired 100% of the outstanding equity interests of Connemara Biomedical Holdings Teoranta, including its operating subsidiaries Aran Biomedical and Proxy Biomedical (collectively “Aran”). A recognized leader in proprietary medical textiles, high precision biomaterial coverings and coatings as well as advanced metal and polymer braiding, Aran delivers development and manufacturing solutions for implantable medical devices. Consistent with our strategy, the acquisition of Aran further increases our ability to offer complete solutions for complex delivery and therapeutic devices in high growth cardiovascular markets such as structural heart, neurovascular, peripheral vascular, and endovascular as well as general surgery.
Current wording
On April 6, 2022, we acquired Aran, a recognized leader in proprietary medical textiles, high precision biomaterial coverings and coatings as well as advanced metal and polymer braiding, Aran delivers development and manufacturing solutions for implantable medical devices. The acquisition of Aran further increased our ability to offer complete solutions for complex delivery and therapeutic devices in high growth cardiovascular markets such as structural heart, neurovascular, peripheral vascular, and endovascular as well as general surgery.
Previous wording
Refer to Note 2, “Business Acquisitions,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data” of this report for additional information about the acquisition of InNeuroCo and Aran.
Current wording
Refer to Note 2, “Business Acquisitions,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” of this report for additional information about the acquisitions of Pulse, InNeuroCo and Aran.
Previous wording
During the fourth quarter of 2021, we initiated plans to exit our portable medical market to enhance profitability and reallocate manufacturing capacity to support growth. Since that time, we have been working closely with impacted customers to support the transition of these products to other suppliers. Due to quality and regulatory requirements, we expected it would take three to four years to complete this transition. Our AS&O product line sales, which includes Portable Medical sales, increased 12% and 9% in 2022 and 2023, respectively, when compared to the previous year, driven by increases in Portable Medical sales. We attribute the increase in Portable Medical sales to the higher demand created when we announced the exit of that market. We currently expect Portable Medical sales to begin to wind down with the final sales and market exit occurring in 2025.
Current wording
During 2022, we announced plans to exit our portable medical market (the “Portable Medical Exit”) to enhance profitability and reallocate manufacturing capacity to support growth. Since that time, we have been working closely with impacted customers to support the transition of these products to other suppliers. Due to quality and regulatory requirements, we expected it would take three to four years to complete this transition. We currently expect Portable Medical sales to begin to wind down with the final sales and market exit occurring in 2025. Portable Medical sales are included in our Other Markets product line sales.
Previous wording
Refer to Note 20, “Discontinued Operations,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data” of this report for additional information.
Current wording
All results and information presented exclude discontinued operations unless otherwise noted. Refer to Note 3, “Discontinued Operations” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” of this report for additional information on the divestiture of Electrochem.
Previous wording
The following discussion is a comparison between results for the years ended December 31, 2023 and 2022. For a discussion of our results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on February 21, 2023.
Current wording
The following discussion is a comparison between results for the years ended December 31, 2024 and 2023.
Previous wording
Income from continuing operations for 2023 was $90.7 million or $2.69 per diluted share compared to $65.4 million or $1.96 per diluted share for 2022. These variances are primarily the result of the following:
Current wording
Income from continuing operations for 2024 was $121.1 million or $3.40 per diluted share compared to $89.1 million or $2.64 per diluted share for 2023. These variances are primarily the result of the following:
Previous wording
•Sales for 2023 increased 16% to $1.597 billion, driven by our Medical product lines with strong demand, new product ramps, growth from emerging customers with PMA (premarket approval) products and supply chain improvements.
Current wording
•Sales for 2024 increased 10% to $1.717 billion, driven by strong demand, new product ramps, growth from emerging customers with PMA (premarket approval) products and contributions from our recent acquisitions.
Previous wording
•Gross profit for 2023 increased $59.3 million or 17%, primarily from higher sales volume leverage and efficiencies gained from the continued improvement in the supply chain.
Current wording
•Gross profit for 2024 increased $49.1 million, or 12%, primarily from higher sales volume leverage, efficiencies gained from the continued improvement in the supply chain and contributions from our recent acquisitions.
Previous wording
•Operating expenses for 2023 increased by $13.3 million compared to 2022, primarily due to higher labor costs and amortization expense, partially offset by lower restructuring and other charges.
Current wording
•Operating expenses for 2024 increased by $4.2 million compared to 2023, due to higher SG&A and Restructuring and other charges, partially offset by lower RD&E costs.
Previous wording
•We recognized net losses on equity investments of $5.7 million and $7.6 million during 2023 and 2022, respectively. Gains and losses on equity investments are generally unpredictable in nature.
Current wording
•We recognized net losses on equity investments of $0.8 million and $5.7 million during 2024 and 2023, respectively. Gains and losses on equity investments are generally unpredictable in nature.
Previous wording
•Other (income) loss, net for 2022 and 2021 was income of $0.9 million and $0.1 million, respectively, primarily due to fluctuations in foreign currency gains and losses in the respective periods.
Current wording
•Other (income) loss, net for 2024 and 2023 were losses of $3.5 million and $1.0 million, respectively, primarily due to fluctuations in foreign currency gains and losses in the respective periods.
Previous wording
•We recorded provisions for income taxes of $16.6 million and $10.6 million for 2023 and 2022, respectively. The changes in income tax were primarily due to relative changes in pre-tax income and the impact of discrete tax items.
Current wording
•We recorded provisions for income taxes of $26.5 million and $16.2 million for 2024 and 2023, respectively. The changes in income tax were primarily due to relative changes in pre-tax income and the impact of discrete tax items.
Previous wording
(b)Depreciation and amortization expense increased due to amortization of intangible assets from the Aran and Oscor customer list intangible assets.
Current wording
(b)Depreciation and amortization expense increased due to amortization of intangible assets from the Pulse and InNeuroCo customer list intangible assets.
Previous wording
RD&E expenses for 2023 and 2022 were $63.8 million and $60.9 million, respectively. The increase in RD&E expenses for 2023 compared to 2022 was primarily due to higher labor costs attributed to annual merit increases and higher incentive compensation. RD&E expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations.
Current wording
RD&E expenses for 2024 and 2023 were $53.4 million and $62.0 million, respectively. The decrease in RD&E expenses for 2024 compared to 2023 was primarily due to lower labor costs and the timing of program milestone achievements for customer funded programs. RD&E expenses are influenced by the number and timing of in-process projects and labor hours and other costs associated with these projects. Our research and development initiatives continue to emphasize new product development, product improvements, and the development of new technological platform innovations.
Previous wording
(a)Restructuring charges for 2023 and 2022 primarily consist of costs associated with our strategic reorganization and alignment and manufacturing alignment to support growth initiatives. Included in restructuring charges for 2023 are $3.6 million in costs related to the relocation and closure of our R&D facility in Israel.
Current wording
(a)Restructuring charges for 2024 and 2023 primarily consisted of costs associated with our strategic reorganization and alignment and manufacturing alignment to support growth initiatives. Included in restructuring charges for 2023 are $3.6 million in costs related to the relocation and closure of our R&D facility in Israel.
Previous wording
(b)Amount for 2023 primarily includes acquisition expenses related to the InNeuroCo and Pulse (complete in January 2024) acquisitions, and integration expenses related to the Aran and Oscor acquisitions. Amount for 2022 primarily includes expenses related to the Aran and Oscor acquisitions. The 2023 and 2022 amounts also include a benefit of $0.7 million and expense of $3.1 million, respectively, related to adjustments to the fair value of acquisition-related contingent consideration liabilities. See Note 17, “Financial Instruments and Fair Value Measurements,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data” of this report for additional information related to the fair value measurement of the contingent consideration.
Current wording
(b)Amount for 2024 primarily includes acquisition expenses of $5.5 million, primarily related to the Pulse and Precision Coating (completed in January 2025) acquisitions, and integration expenses of $3.4 million, primarily related to the InNeuroCo and Pulse acquisitions. Amount for 2023 primarily includes acquisition expenses of $0.7 million, primarily related to the InNeuroCo and Pulse acquisitions, and integration expenses of $2.8 million, primarily related to the Aran and Oscor acquisitions. The 2024 and 2023 acquisition amounts are net of benefits of $3.6 million and $0.7 million, respectively, related to adjustments to the fair value of acquisition-related contingent consideration liabilities. See Note 18, “Financial Instruments and Fair Value Measurements,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” of this report for additional information related to the fair value measurement of the contingent consideration.
Previous wording
Interest expense relates primarily to borrowings made under our Senior Secured Credit Facilities, which consist of a five-year $500 million revolving credit facility (the “Revolving Credit Facility”) and a five-year “term A” loan (the “TLA Facility”), and $500 million aggregate principal amount of the 2028 Convertible Notes.
Current wording
Interest expense relates primarily to borrowings made under our Senior Secured Credit Facilities, which consist of a five-year $800 million revolving credit facility (the “Revolving Credit Facility”) and a five-year “term A” loan (the “TLA Facility”), and our 2028 Convertible Notes.
Previous wording
Other components of interest expense on borrowings include gains and losses on interest rate swaps and non-cash amortization and write-off (losses from extinguishment of debt) of deferred debt issuance costs and original issue discount. Interest rate swap includes realized (gains) losses on our interest rate swap contract, which fluctuate depending on the spread between the rate swap contract fixed rate and senior secured credit facility floating rate. Our outstanding interest rate swap matured as of June 30, 2023. Amortization of deferred debt issuance costs and original issue discount increased during 2023 compared to 2022 as a result of higher unamortized balances related to new debt. The losses from extinguishment of debt during 2023 were related to prepayments of portions of the TLA Facility and full repayment of our Term Loan B facility in connection with issuance of the 2028 Notes.
Current wording
Other components of interest expense on borrowings include gains on an interest rate swap contract and non-cash amortization and write-off (losses from extinguishment of debt) of deferred debt issuance costs and original issue discount. Gain on interest rate swap includes realized gains on an interest rate swap contract which matured as of June 30, 2023. Amortization of deferred debt issuance costs and original issue discount increased during 2024 compared to the same periods in 2023 as a result of higher unamortized balances related to new debt. The losses from extinguishment of debt during 2023 were related to prepayments of portions of the TLA Facility and full repayment of our Term Loan B facility in connection with issuance of the 2028 Convertible Notes.
Previous wording
As of December 31, 2023 and 2022, approximately 51% and 11%, respectively, of our principal amount of debt are fixed rate borrowings or have been converted to fixed-rate borrowings with an interest rate swap. During February 2023, we strategically replaced about half of our variable rate debt with fixed rate debt through the issuance of the 2028 Convertible Notes at a fixed rate of 2.125% and paying down our highest rate variable debt, the Term Loan B facility, and a portion of our Revolving Credit Facility. These transactions are expected to mitigate increased borrowing costs and result in a more balanced mix of fixed and floating rates to help protect against interest rate exposure. We may enter into interest rate swap agreements in the future in order to reduce our exposure to fluctuations in floating rates.
Current wording
As of December 31, 2024 and 2023, approximately 50% of our principal amount of debt were fixed rate borrowings.
Previous wording
During 2023 and 2022, we recognized net losses of $5.7 million and $7.6 million, respectively, on our equity investments. Gains and losses on equity investments are generally unpredictable in nature. During 2023, we recognized impairment charges of $5.2 million related to investments in our non-marketable equity securities. The residual losses for 2023 and 2022 relate to our share of equity method investee gains/losses, including unrealized appreciation and depreciation of the underlying interests of the investee. As of December 31, 2023 and December 31, 2022, the carrying value of our equity investments was $8.2 million and $13.9 million, respectively. See Note 17, “Financial Instruments and Fair Value Measurements,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data” of this report for further details regarding these investments.
Current wording
During 2024 and 2023, we recognized net losses of $0.8 million and $5.7 million, respectively, on our equity investments. Gains and losses on equity investments are generally unpredictable in nature. During 2024 and 2023, we recognized impairment charges of $0.2 million and $5.2 million, respectively, related to investments in our non-marketable equity securities. The residual losses for 2024 and 2023 relate to our share of equity method investee gains/losses, including unrealized appreciation and depreciation of the underlying interests of the investee. As of December 31, 2024 and December 31, 2023, the carrying value of our equity investments was $7.4 million and $8.2 million, respectively. See Note 18, “Financial Instruments and Fair Value Measurements,” of the Notes to Consolidated Financial Statements contained in Item 8, “Financial Statements and Supplementary Data,” of this report for further details regarding these investments.
Previous wording
Other (income) loss, net for 2023 were losses of $1.0 million compared to income of $0.9 million in 2022. Other (income) loss, net primarily includes gains/losses from the impact of exchange rates on transactions denominated in foreign currencies. Our foreign currency transaction gains/losses are based primarily on fluctuations of the U.S. dollar relative to the Euro, Mexican peso, Uruguayan peso, Malaysian ringgits or Dominican peso.
Current wording
Other (income) loss, net for 2024 and 2023 were net losses of $3.5 million and $1.0 million, respectively. Other (income) loss, net primarily includes gains/losses from the impact of exchange rates on transactions denominated in foreign currencies. Our foreign currency transaction gains/losses are based primarily on fluctuations of the U.S. dollar relative to the Euro, Mexican peso, Uruguayan peso, Malaysian ringgits or Dominican peso.
Previous wording
The impact of foreign currency exchange rates on transactions denominated in foreign currencies included in Other (income) loss, net for 2023 were net losses of $1.0 million and net gains of $1.1 million for 2022. We continually monitor our foreign currency exposures and seek to take steps to mitigate these risks. However, fluctuations in foreign currency exchange rates could have a significant impact, positive or negative, on our financial results in the future.
Current wording
The impact of foreign currency exchange rates on transactions denominated in foreign currencies included in Other (income) loss, net for 2024 and 2023 were net losses of $3.2 million and $1.0 million, respectively. We continually monitor our foreign currency exposures and seek to take steps to mitigate these risks. However, fluctuations in foreign currency exchange rates could have a significant impact, positive or negative, on our financial results in the future.
Previous wording
Our effective tax rate for 2023 differs from the U.S. federal statutory tax rate of 21% due principally to the estimated impact of Federal Tax Credits (including R&D credits and Foreign tax credits), stock-based compensation windfalls, and the impact of earnings realized in foreign jurisdictions with statutory rates that are different than the U.S. federal statutory rate. These benefits are partially offset by the impact of U.S. taxes on foreign earnings, including the GILTI provision which requires us to include foreign subsidiary earnings in excess of a deemed return on a foreign subsidiary’s tangible assets in our U.S. income tax return. The U.S. tax on foreign earnings is reflected net of a statutory deduction of 50% of the GILTI inclusion (subject to limitations based on U.S. taxable income, if any) and net of FDII that provides a 37.5% deduction to domestic companies for certain foreign sales and services income. The primary foreign jurisdictions in which we operate and the statutory tax rate for each respective jurisdiction include Switzerland (22%), Mexico (30%), Uruguay (25%), Ireland (12.5%) and Malaysia (24%). We have previously operated in Malaysia under a tax holiday. We met the conditions of the Malaysian tax holiday and the holiday expired in accordance with its original terms on April 30, 2023. Our manufacturing operations in the Dominican Republic operate under a free trade zone agreement through March 2034.
Current wording
Our effective tax rate for 2024 differs from the U.S. federal statutory tax rate of 21% due principally to the estimated impact of Federal Tax Credits (including R&D credits and Foreign tax credits), stock-based compensation and the impact of earnings realized in foreign jurisdictions with statutory rates that are different than the U.S. federal statutory rate. These benefits are partially offset by the impact of the OECD Pillar II Global Minimum Tax enacted on January 1, 2024, and the impact of U.S. taxes on foreign earnings, including the GILTI provision which requires us to include foreign subsidiary earnings in excess of a deemed return on a foreign subsidiary’s tangible assets in our U.S. income tax return. The U.S. tax on foreign earnings is reflected net of a statutory deduction of 50% of the GILTI inclusion (subject to limitations based on U.S. taxable income, if any) and net of FDII that provides a 37.5% deduction to domestic companies for certain foreign sales and services income. The primary foreign jurisdictions in which we operate and the statutory tax rate for each respective jurisdiction include Switzerland (22%), Mexico (30%), Uruguay (25%), Ireland (12.5%) and Malaysia (24%). We have previously operated in Malaysia under a tax holiday. We met the conditions of the Malaysian tax holiday and the holiday expired in accordance with its original terms on April 30, 2023. Our manufacturing operations in the Dominican Republic operate under a free trade zone agreement through March 2034.
Previous wording
It is reasonably possible that a reduction of approximately $0.6 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations and/or audit settlements. As of December 31, 2023, approximately $6.4 million of unrecognized tax benefits would favorably impact the effective tax rate (net of federal impact on state issues), if recognized.
Current wording
It is reasonably possible that a reduction of approximately $4.0 million of the balance of unrecognized tax benefits may occur within the next twelve months as a result of the lapse of the statute of limitations and/or audit settlements. As of December 31, 2024, approximately $6.1 million of unrecognized tax benefits would favorably impact the effective tax rate (net of federal impact on state issues), if recognized.
Previous wording
On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework. The effective dates are January 1, 2024, and January 1, 2025 for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries.
Current wording
On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the OECD Pillar Two Framework. The effective dates are January 1, 2024, and January 1, 2025 for different aspects of the directive. Our 2024 provision for income taxes includes the impact of the Pillar Two 15% Global Minimum Tax, with an enactment date of January 1, 2024. A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries.
Previous wording
Cardio & Vascular (“C&V”) sales for 2023 increased $136.9 million or 20% in comparison to 2022. The increase in C&V sales for 2023 was driven by strong demand, acquisition performance and supply chain improvements, with double-digit growth across all C&V markets. Foreign currency exchange rate fluctuations increased C&V sales for 2023 by $1.2 million.
Current wording
C&V sales for 2023 increased $136.9 million or 20% in comparison to 2022. The increase in C&V sales for 2023 was driven by strong demand, acquisition performance and supply chain improvements, with double-digit growth across all C&V markets. Foreign currency exchange rate fluctuations increased C&V sales for 2023 by $1.2 million.
Previous wording
Cardiac Rhythm Management & Neuromodulation (“CRM&N”) sales for 2023 increased $78.0 million or 15% in comparison to 2022. CRM&N sales for 2023 were driven by double-digit CRM growth from strong customer demand, double-digit Neuromodulation growth from emerging customers, and supply chain improvements. Foreign currency exchange rate fluctuations did not have a material impact on CRM&N sales for 2023.
Current wording
CRM&N sales for 2023 increased $78.5 million or 15% in comparison to 2022. CRM&N sales for 2023 were driven by double-digit CRM growth from strong customer demand, double-digit Neuromodulation growth from emerging customers, and supply chain improvements.
Previous wording
Advanced Surgical, Orthopedics & Portable Medical (“AS&O”) sales for 2023 increased by $8.9 million in comparison to 2022, driven by high double-digit growth in Portable Medical related to demand to support the multi-year Portable Medical exit. Foreign currency exchange rate fluctuations did not have a material impact on AS&O sales for 2023.
Current wording
Other Markets sales for 2023 increased by $8.9 million in comparison to 2022, driven by high double-digit growth in Portable Medical related to demand to support the multi-year Portable Medical exit.
Previous wording
Gross profit as a percent of sales (“Gross margin”) for 2023 increased 10 basis points compared to 2022. The improved year over year gross margin was primarily due to higher sales volume leverage and efficiencies gained from the continued improvement in the supply chain.
Current wording
Gross profit as a percent of sales (“Gross margin”) for 2023 increased 30 basis points compared to 2022. The improved year over year gross margin was primarily due to higher sales volume leverage and efficiencies gained from the continued improvement in the supply chain.
Previous wording
(c)Amounts include gains and losses in connection with the disposal of property, plant and equipment. In addition, the 2023 amount includes $2.0 million of property loss and related expenses resulting from a fire which occurred in the fourth quarter of 2023 at one of our manufacturing facilities.
Current wording
(c)Amounts include gains and losses in connection with the disposal of property, plant and equipment. In addition, the 2023 amount includes $2.0 million of property loss and related expenses resulting from property damage which occurred in the fourth quarter of 2023 at one of our manufacturing facilities.
Previous wording
During 2023, contractual interest expense has increased due to higher average debt outstanding combined with increasing applicable interest rates. The higher average debt balance outstanding is the result of incremental borrowings related to the strategic change to replace some of our variable rate debt to fixed rate through issuance of the 2028 Convertible Notes. Interest rates have continued to climb due to increases in overall market rates, partially offset by a 25 basis point decrease in the interest rate margin on our Senior Secured Credit Facilities. The decrease in the interest rate margin was effective during the second quarter of 2023 based on our secured net leverage ratio (as defined in our Senior Secured Credit Facilities).
Current wording
During 2023, contractual interest expense increased due to higher average debt outstanding combined with increasing applicable interest rates. The higher average debt balance outstanding was the result of incremental borrowings related to the strategic change to replace some of our variable rate debt to fixed rate through issuance of the 2028 Convertible Notes. Interest rates climbed due to increases in overall market rates, partially offset by a 25 basis point decrease in the interest rate margin on our Senior Secured Credit Facilities. The decrease in the interest rate margin was effective during the second quarter of 2023 based on our secured net leverage ratio.
Previous wording
During 2023 and 2022, our provision for income taxes was $16.6 million on worldwide pre-tax income of $107.3 million (effective tax rate of 15.5%) and $10.6 million on worldwide pre-tax income of $76.0 million (effective tax rate of 14.0%), respectively. The stand-alone U.S. component of the effective tax rate for 2023 reflected a $5.8 million provision on $31.0 million of pre-tax book income (effective tax rate of 18.8%) versus a $4.9 million provision on $14.4 million of pre-tax book income (effective tax rate of 34.2%) for 2022. The stand-alone International component of the effective tax rate for 2023 reflected a $10.8 million provision on $76.3 million of pre-tax book income (effective tax rate of 14.2%) versus a $5.7 million provision on $61.5 million of pre-tax book income (effective tax rate of 9.2%) for 2022.
Current wording
During 2023 and 2022, our provision for income taxes was $16.2 million on worldwide pre-tax income of $105.4 million (effective tax rate of 15.4%) and $8.9 million on worldwide pre-tax income of $68.7 million (effective tax rate of 13.0%), respectively. The stand-alone U.S. component of the effective tax rate for 2023 reflected a $5.4 million provision on $29.1 million of pre-tax book income (effective tax rate of 18.5%) versus a $3.3 million provision on $7.2 million of pre-tax book income (effective tax rate of 45.6%) for 2022. The stand-alone International component of the effective tax rate for 2023 reflected a $10.8 million provision on $76.3 million of pre-tax book income (effective tax rate of 14.2%) versus a $5.7 million provision on $61.5 million of pre-tax book income (effective tax rate of 9.2%) for 2022.
Previous wording
Our effective tax rate of 15.5% for 2023 is higher than our effective tax rate of 14.0% for 2022, primarily due to the expiration of the Malaysia Tax Holiday described below, the increase in pre-tax book income and related statutory rate differential, and the impact of non-recurring discrete tax benefits recorded in 2022 for provision to return adjustments for the 2021 tax return filed in 2022, partially offset by favorable discrete tax benefits in 2023 from the release of uncertain tax benefits related to the expiration of the statute of the 2019 tax year.
Current wording
Our effective tax rate of 15.4% for 2023 is higher than our effective tax rate of 13.0% for 2022, primarily due to the expiration of a tax holiday in Malaysia, the increase in pre-tax book income and related statutory rate differential, and the impact of non-recurring discrete tax benefits recorded in 2022 for provision to return adjustments for the 2021 tax return filed in 2022, partially offset by favorable discrete tax benefits in 2023 from the release of uncertain tax benefits related to the expiration of the statute of the 2019 tax year.
Previous wording
Cash and cash equivalents at December 31, 2023 decreased by $0.6 million from December 31, 2022, primarily as a result of cash generated by operating activities, which includes the benefit of accelerated customer collections from new factoring arrangements, partially offset by purchases of property, plant and equipment, certain assets of InNeuroCo, and net payments on long-term debt and contingent consideration.
Current wording
Cash and cash equivalents at December 31, 2024 increased by $22.9 million from December 31, 2023, primarily as a result of cash generated by operating activities, proceeds from the sale of Electrochem, and net borrowings on our Revolving Credit Facility, mostly offset by purchases of property, plant and equipment and cash paid to acquire Pulse.
Previous wording
Working capital increased by $62.2 million from December 31, 2022, or $62.8 million excluding the decrease in cash and cash equivalents. The increase in working capital, exclusive of cash and cash equivalents, primarily relates to higher sales volume and product demand which contributed to positive fluctuations in inventory, accounts receivable and contract asset balances. In addition, accelerated payments under our Senior Secured Credit Facilities further improved our working capital but was partially offset by a negative fluctuation in accrued expense from higher levels of accrued profit sharing and bonuses.
Current wording
Working capital increased by $61.4 million from December 31, 2023, or $38.6 million excluding the increase in cash and cash equivalents. The increase in working capital, exclusive of cash and cash equivalents, primarily relates to positive fluctuations in accounts receivable, inventory and contract assets. Inventory increased from higher sales volume and product demand which also contributed to the increase in contract assets and accounts receivable.
Previous wording
At December 31, 2023, $19.6 million of our cash and cash equivalents were held by foreign subsidiaries. We intend to limit our distributions from foreign subsidiaries to previously taxed income or current period earnings. If distributions are made utilizing current period earnings, we will record foreign withholding taxes in the period of the distribution.
Current wording
At December 31, 2024, $22.8 million of our cash and cash equivalents were held by foreign subsidiaries. We intend to limit our distributions from foreign subsidiaries to previously taxed income or current period earnings. If distributions are made utilizing current period earnings, we will record foreign withholding taxes in the period of the distribution.
Previous wording
As of December 31, 2023, our capital structure consists of $959.9 million of debt, net of debt discounts and deferred issuance costs, outstanding under our Senior Secured Credit Facilities and the 2028 Convertible Notes, and 33 million shares of common stock outstanding. As of December 31, 2023, we have access to $397.5 million of borrowing capacity under our Revolving Credit Facility. We are authorized to issue up to 100 million shares of common stock, of which approximately 33 million shares were issued and outstanding at December 31, 2023, and 100 million shares of preferred stock, none of which were outstanding at December 31, 2023. As of December 31, 2023, our contractual debt service obligations for 2024, consisting of interest on our outstanding debt and commitment fees on the unused portion of the Revolving Credit Facility are estimated to be approximately $44 million. Actual principal and interest payments may be higher if, for instance, the applicable interest rates on our Senior Secured Credit Facilities increase, we borrow additional amounts on our Revolving Credit Facility, or we pay principal amounts in excess of the required minimums reflected in the contractual debt service obligations above.
Current wording
As of December 31, 2024, our capital structure consisted of $990.2 million of debt, net of deferred debt issuance costs and unamortized discounts, outstanding under our Senior Secured Credit Facilities and the 2028 Convertible Notes, and 34 million shares of common stock outstanding. As of December 31, 2024, we have access to $668.7 million of borrowing capacity under our Revolving Credit Facility. We are authorized to issue up to 100 million shares of common stock, of which approximately 34 million shares were issued and outstanding at December 31, 2024, and 100 million shares of preferred stock, none of which were outstanding at December 31, 2024. As of December 31, 2024, our contractual debt service obligations for 2025, consisting of principal and interest on our outstanding debt and commitment fees on the unused portion of the Revolving Credit Facility are estimated to be approximately $52 million. Actual principal and interest payments may be higher if, for instance, the applicable interest rates on our Senior Secured Credit Facilities increase, we borrow additional amounts on our Revolving Credit Facility, or we pay principal amounts in excess of the required minimums reflected in the contractual debt service obligations above.
Showing the first 40 of 51 pairs. Open the source sections for the rest.
Rearranged current paragraphs (22)
Current report — wording carried from elsewhere
Cardiac Rhythm Management & Neuromodulation (“CRM&N”) sales for 2024 increased $47.7 million, or 8%, in comparison to 2023. CRM&N sales for 2024 were driven by double-digit neuromodulation growth from emerging customers with premarket approval products and normalized low single-digit cardiac rhythm management growth.
Current report — wording carried from elsewhere
Gross profit as a percent of sales (“Gross margin”) for 2024 increased 40 basis points compared to 2023. The improved year over year gross margin was primarily driven by higher sales volume leverage and efficiencies realized through our manufacturing excellence initiatives.
Current report — wording carried from elsewhere
(c)Professional fees increased primarily due to increased costs associated with third-party information technology services and higher legal expense related to general corporate matters.
Current report — wording carried from elsewhere
(e)The increase in bank fees and charges was driven by increased fees related to our factoring and supplier financing arrangements, primarily due to higher volume under both arrangements during 2024 compared to 2023.
Current report — wording carried from elsewhere
(c)Amounts include gains and losses in connection with the disposal of property, plant and equipment. In addition, during 2024 and 2023 we recorded $(1.2) million and $2.0 million, respectively, of property loss (recoveries) relating to property damage which occurred in the fourth quarter of 2023 at one of our manufacturing facilities.
Current report — wording carried from elsewhere
During 2024 and 2023, our provision for income taxes was $26.5 million on worldwide pre-tax income of $147.6 million (effective tax rate of 18.0%) and $16.2 million on worldwide pre-tax income of $105.4 million (effective tax rate of 15.4%), respectively. The stand-alone U.S. component of the effective tax rate for 2024 reflected a $10.5 million provision on $55.6 million of pre-tax book income (effective tax rate of 19.0%) versus a $5.4 million provision on $29.1 million of pre-tax book income (effective tax rate of 18.5%) for 2023. The stand-alone International component of the effective tax rate for 2024 reflected a $16.0 million provision on $92.0 million of pre-tax book income (effective tax rate of 17.4%) versus a $10.8 million provision on $76.3 million of pre-tax book income (effective tax rate of 14.2%) for 2023.
Current report — wording carried from elsewhere
Our effective tax rate of 18.0% for 2024 is higher than our effective tax rate of 15.4% for 2023, primarily due to the impact of the OECD Pillar II Global Minimum Tax enacted on January 1, 2024, the expiration of the Malaysia Tax Holiday described below, the increase in pre-tax book income and related statutory rate differential, and the impact of non-recurring discrete tax benefits recorded in 2023 for provision to return adjustments for the 2022 tax return filed in 2023, partially offset by favorable discrete tax benefits in 2024 including the release of uncertain tax benefits related to the expiration of the statute of the 2020 tax year.
Current report — wording carried from elsewhere
The following discussion is a comparison between results for the years ended December 31, 2023 and 2022.
Current report — wording carried from elsewhere
Sales by product line for 2023 and 2022 were as follows (dollars in thousands):
Current report — wording carried from elsewhere
SG&A expenses comprise the following for 2023 and 2022 (in thousands):
Current report — wording carried from elsewhere
(b)Depreciation and amortization expense increased due to amortization of customer list intangible assets from the acquisitions of Aran and Oscor, which was acquired in December 2021.
Current report — wording carried from elsewhere
(d)Contract services expense increased primarily due to higher software costs from information technology enhancements.
Current report — wording carried from elsewhere
RD&E expenses for 2023 and 2022 were $62.0 million and $59.8 million, respectively. The increase in RD&E expenses for 2023 compared to 2022 was primarily due to higher labor costs attributed to annual merit increases and higher incentive compensation.
Current report — wording carried from elsewhere
Restructuring and other charges comprise the following for 2023 and 2022 (in thousands):
Current report — wording carried from elsewhere
(a)Restructuring charges for 2023 and 2022 primarily consisted of costs associated with our strategic reorganization and alignment and manufacturing alignment to support growth initiatives. Included in restructuring charges for 2023 are $3.6 million in costs related to the relocation and closure of our R&D facility in Israel.
Current report — wording carried from elsewhere
(b)Amount for 2023 primarily includes acquisition expenses related to the InNeuroCo and Pulse acquisitions, and integration expenses related to the Aran and Oscor acquisitions. Amount for 2022 primarily includes expenses related to the Aran and Oscor acquisitions. The 2023 and 2022 amounts also include a benefit of $0.7 million and expense of $3.1 million, respectively, related to adjustments to the fair value of acquisition-related contingent consideration liabilities.
Current report — wording carried from elsewhere
Information relating to our interest expense for 2023 and 2022 is as follows (dollars in thousands):
Current report — wording carried from elsewhere
Our outstanding interest rate swap matured as of June 30, 2023. Amortization of deferred debt issuance costs and original issue discount increased during 2023 compared to 2022 as a result of higher unamortized balances related to new debt. The losses from extinguishment of debt during 2023 were related to prepayments of portions of the TLA Facility and full repayment of our Term Loan B facility in connection with issuance of the 2028 Convertible Notes.
Current report — wording carried from elsewhere
During 2023 and 2022, we recognized net losses of $5.7 million and $7.6 million, respectively, on our equity investments. During 2023, we recognized impairment charges of $5.2 million related to investments in our non-marketable equity securities. The residual losses for 2023 and 2022 relate to our share of equity method investee gains/losses, including unrealized appreciation and depreciation of the underlying interests of the investee.
Current report — wording carried from elsewhere
Other (income) loss, net for 2023 were losses of $1.0 million compared to income of $0.9 million in 2022. Other (income) loss, net primarily includes gains/losses from the impact of exchange rates on transactions denominated in foreign currencies. The impact of foreign currency exchange rates on transactions denominated in foreign currencies included in Other (income) loss, net for 2023 were net losses of $1.0 million and net gains of $1.1 million for 2022.
Current report — wording carried from elsewhere
The provision for income taxes for 2023 differs from the U.S. statutory rate due to the following (dollars in thousands):
Current report — wording carried from elsewhere
The provision for income taxes for 2022 differs from the U.S. statutory rate due to the following (dollars in thousands):
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•Other (income) loss, net for 2023 were losses of $1.0 million compared to income of $0.9 million for 2022, primarily due to fluctuations in foreign currency gains and losses in the respective periods.
Previous report — wording carried elsewhere
Income from continuing operations for 2022 was $65.4 million or $1.96 per diluted share compared to $93.0 million or $2.80 per diluted share for 2021. These variances are primarily the result of the following:
Previous report — wording carried elsewhere
•Operating expenses for 2022 increased by $36.4 million compared to 2021, due to higher labor costs and restructuring and other charges.
Previous report — wording carried elsewhere
•We recognized net losses on equity investments of $7.6 million and $3.1 million during 2022 and 2021, respectively. Gains and losses on equity investments are generally unpredictable in nature.
Previous report — wording carried elsewhere
•We recorded provisions for income taxes of $10.6 million and $8.0 million for 2022 and 2021, respectively. The changes in income tax were primarily due to relative changes in pre-tax income and the impact of discrete tax items.