GlobeNewswire Inc | Jul 30, 2020 08:00AM EDT

July 30, 2020

PLANO, Texas, July 30, 2020 (GLOBE NEWSWIRE) -- Integer Holdings Corporation (NYSE:ITGR), a leading medical device outsource manufacturer, today announced results for the three months ended July 3, 2020. Unless otherwise stated, all results and comparisons are from continuing operations.

Leading through the new normal of COVID-19

-- COVID-19 safety measures are in place for Integer associates, who continue to deliver critical products that customers and patients rely on every day. -- Integer is treating the current environment as the new normal by increasing its agility to respond to changing customer demand and adjusting costs related to the expected temporary volume decline. -- Integer continues to execute its operational strategic imperatives to create long-term value. -- Integer is positioned to continue making strategic investments in capabilities and potential bolt-on acquisitions with ample liquidity and the recent bank covenant amendment.

Second Quarter 2020 Highlights (compared to Second Quarter 2019)

-- Sales declined $74 million to $240 million, a decrease of 24%. -- The COVID-19 driven sales decline of 24% was better than the estimated industry decline, as expected. -- GAAP income declined $28 million to $0.4 million, a decrease of 99%. Non-GAAP adjusted income declined $30 million to $10 million, a decrease of 74%. -- Income declined as variable costs were managed to match lower volumes and infrastructure maintained to support the return of sales post-COVID-19 and continue executing our strategy. -- Adjusted EBITDA declined $42 million to $33 million, a decrease of 56%. -- GAAP diluted EPS declined $0.84 per share to $0.01 per share, a decrease of 99%. Non-GAAP adjusted diluted EPS decreased $0.91 per share to $0.32 per share, a decrease of 74%. -- Net total debt decreased $33 million from the end of the first quarter 2020 to $770 million. -- Early in the third quarter, the United States Court of Appeals affirmed the $27 million judgment in Integers favor in the patent infringement dispute with its competitor.

I want to recognize the sacrifice our associates have made during the pandemic to continue delivering the products our customers and patients need, said Joseph Dziedzic, Integers president and chief executive officer. We have implemented the necessary measures to manage in the new normal while continuing to execute our strategy. Our financial strength, ample liquidity and improved bank covenant cushion, positions us to continue making strategic investments to earn the valuation premium we expect in the long term.

Discussion of Product Line Second Quarter 2020 Sales (compared to Second Quarter 2019)

-- Cardio & Vascular sales decreased 14%. Sales were negatively impacted by the COVID-19 pandemic and a blend of our customers responses across nearly all C&V markets, though structural heart continued to grow due to development programs. -- Cardiac & Neuromodulation sales decreased 37%. CRM and Neuromodulation declined commensurate with the market impact and a blend of our customers responses. Additionally, the Nuvectra bankruptcy created a $7 million headwind. -- Advanced Surgical, Orthopedics & Portable Medical includes sales to the acquirer of our AS&O product line, Viant, under supply agreements entered into as part of the divestiture. Sales declined 6% driven by COVID-19 impact and a blend of our customers responses, partially offset by increased demand for ventilator and patient monitoring components. -- Electrochem sales declined 48% driven by a severe decline in the energy market and demand fall-out from the COVID-19 pandemic.

Summary of Financial and Product Line Results from Continuing Operations

(dollars in thousands, Three Months Endedexcept per share data) June 28, OrganicGAAP July 3, 2020 2019 Change Change^ (a)Medical Sales Cardio & Vascular $ 129,084 $ 150,397 (14.2 )% (15.2 ) %Cardiac & Neuromodulation 71,675 114,488 (37.4 )% (37.4 ) %Advanced Surgical, )Orthopedics & Portable 30,625 32,646 (6.2 )% (6.1 %MedicalTotal Medical Sales 231,384 297,531 (22.2 )% (22.8 ) %Non-Medical Sales 8,731 16,663 (47.6 )% (47.6 ) %Total Sales $ 240,115 $ 314,194 (23.6 )% (24.1 ) % Income from continuing $ 389 $ 28,222 (98.6 )% (75.5 )operations %Diluted EPS from continuing $ 0.01 $ 0.85 (98.8 )% (75.6 )operations % Six Months Ended June 28, OrganicGAAP July 3, 2020 2019 Change Change^ (a)Medical Sales Cardio & Vascular $ 308,289 $ 302,971 1.8 % 0.9 %Cardiac & Neuromodulation 179,495 231,399 (22.4 )% (22.4 ) %Advanced Surgical, )Orthopedics & Portable 61,862 64,234 (3.7 )% (3.6 %MedicalTotal Medical Sales 549,646 598,604 (8.2 )% (8.6 ) %Non-Medical Sales 18,895 30,266 (37.6 )% (37.6 ) %Total Sales $ 568,541 $ 628,870 (9.6 )% (10.0 ) % Income from continuing $ 31,489 $ 49,588 (36.5 )% (31.1 )operations %Diluted EPS from continuing $ 0.95 $ 1.50 (36.7 )% (31.4 )operations %

(a) Organic Change is a Non-GAAP measure. Please see Notes Regarding Non-GAAP Financial Information for additional information regarding our use of non-GAAP financial measures and refer to Table C and Table D at the end of this release for a reconciliation of these amounts.

Three Months Ended June 28, OrganicNon-GAAP^(a) July 3, 2020 2019 Change Change^ (b)Adjusted EBITDA from $ 33,181 $ 75,393 (56.0 ) (56.8 )continuing operations % %Adjusted income from $ 10,485 $ 40,632 (74.2 ) (75.5 )continuing operations % %Adjusted diluted EPS from $ 0.32 $ 1.23 (74.0 ) (75.6 )continuing operations % % Six Months Ended June 28, YTD OrganicNon-GAAP^(a) July 3, 2020 2019 Change Change^ (b)Adjusted EBITDA from $ 103,872 $ 141,053 (26.4 ) (27.7 )continuing operations % %Adjusted income from $ 51,769 $ 73,472 (29.5 ) (31.1 )continuing operations % %Adjusted diluted EPS from $ 1.56 $ 2.23 (30.0 ) (31.4 )continuing operations % %

(a) Refer to Tables A and B at the end of this release for reconciliations of adjusted amounts to the closest corresponding GAAP financial measures.

(b) Organic Change for Adjusted EBITDA from continuing operations, Adjusted income from continuing operations, and Adjusted diluted EPS from continuing operations are Non-GAAP measures. Please see Notes Regarding Non-GAAP Financial Information for additional information regarding our use of non-GAAP financial measures and refer to Table D at the end of this release for a reconciliation of these amounts.

Conference Call InformationThe Company will host a conference call on Thursday, July 30, 2020, at 9:00 a.m. EDT / 8:00 a.m. CDT to discuss these results. The scheduled conference call will be webcast live and is accessible through our website at investor.integer.netor by dialing (833) 714-0898 (U.S.) or (778) 560-2691 (outside U.S.) and the conference ID is 1449653. The call will be archived on the Companys website. An earnings call slide presentation containing supplemental information about the Companys results will be posted to our website at investor.integer.netprior to the conference call and will be referenced during the conference call.

About IntegerInteger Holdings Corporation(NYSE: ITGR) is one of the largest medical device outsource (MDO) manufacturers in the world serving the cardiac, neuromodulation, vascular, portable medical and orthopedics markets. The Company provides innovative, high-quality medical technologies that enhance the lives of patients worldwide. In addition, the Company develops batteries for high-end niche applications in energy, military, and environmental markets. The Company's brands include Greatbatch Medical, Lake Region MedicalTM and Electrochem. Additional information is available atwww.integer.net.

Contact InformationTony BorowiczSVP, Strategy, Business Development & Investor Relations716.759.5809tony.borowicz@integer.net

Notes Regarding Non-GAAP Financial InformationIn addition to our results reported in accordance with generally accepted accounting principles (GAAP), we provide adjusted income, adjusted diluted EPS, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA, adjusted EBITDA margin, and organic change rates, all from continuing operations. Adjusted income and adjusted diluted EPS from continuing operations consist of GAAP amounts adjusted for the following to the extent occurring during the period: (i) acquisition and integration related expenses, including fair value adjustments to contingent consideration resulting from acquisitions, (ii) amortization of intangible assets, (iii) facility consolidation, optimization, manufacturing transfer and system integration charges, (iv) asset write-down and disposition charges, (v) charges in connection with corporate realignments or a reduction in force, (vi) certain legal expenses, charges and gains, (vii) unusual or infrequently occurring items, (viii) gain (loss) on equity investments, (ix) extinguishment of debt charges, (x) the income tax provision (benefit) related to these adjustments and (xi) certain tax items that are outside the normal provision for the period. Adjusted diluted EPS from continuing operations is calculated by dividing adjusted income from continuing operations by diluted weighted average shares outstanding. EBITDA from continuing operations is calculated by adding back interest expense, GAAP provision (benefit) for income taxes, depreciation and amortization expense, to income from continuing operations, which is the most directly comparable GAAP measure. Adjusted EBITDA from continuing operations consists of EBITDA from continuing operations plus GAAP stock-based compensation and the same adjustments as listed above except for items (ii), (ix), (x) and (xi).

Adjusted EBITDA margin is adjusted EBITDA as a percentage of sales, all from continuing operations. Organic sales change is reported sales growth adjusted for the impact of foreign currency and the contribution of acquisitions. To calculate the impact of foreign currency on sales growth rates, we convert any sale made in a foreign currency by converting current period sales into prior period sales using the exchange rate in effect at that time and then compare the two, negating any effect foreign currency had on our transactional revenue, and exclude the amount of sales acquired/divested during the period from the current/previous period amounts, respectively.

Organic change rates for adjusted EBITDA from continuing operations, adjusted income from continuing operations and adjusted diluted EPS from continuing operations exclude the impact of foreign currency exchange gains and losses included in other (income) loss, net, and the contribution of acquisitions. Contribution of acquisitions represents results, based on the growth rate being presented, attributable to acquired entities for the first four full quarters plus any partial period since the entities' acquisition date. After the completion of four full fiscal quarters, results of the acquired entity are treated as organic for current and comparable historical periods.

We believe that the presentation of adjusted income, adjusted diluted EPS, EBITDA, adjusted EBITDA, adjusted EBITDA margin, and organic change rates, all from continuing operations, provides important supplemental information to management and investors seeking to understand the financial and business trends relating to our financial condition and results of operations. In addition to the performance measures identified above, we believe that leverage ratio provides a meaningful measure of liquidity and a useful basis for assessing our ability to fund our activities, including the financing of acquisitions and debt repayments. We calculate leverage ratio as total principal amount of debt outstanding less cash and cash equivalents divided by trailing 4 quarters adjusted EBITDA.

Forward-Looking StatementsSome of the statements contained in this press release are forward-looking statements within the meaning of Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended, including statements relating to the impact of the COVID-19 global pandemic; future sales, expenses, and profitability; future development and expected growth of our business and industry; our ability to execute our business model and our business strategy; having available sufficient cash and borrowing capacity to meet working capital, debt service and capital expenditure requirements for the next twelve months; and projected capital spending. 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. Actual events or results may differ materially from those stated or implied by these forward-looking statements. In evaluating these statements and our prospects, you should carefully consider the factors set forth below.

Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors include the following: the duration, scope and impact of the COVID-19 pandemic, including government, social, business and other actions taken in response to the pandemic and the effect of the pandemic on our associates, suppliers and customers as well as the global economy; our dependence upon a limited number of customers; pricing pressures that we face from customers; our ability to respond to changes in technology; the intense competition we face and our ability to successfully market our products; our ability to develop new products and expand into new geographic and product markets; our reliance on third party suppliers for raw materials, key products and subcomponents; the potential for harm to our reputation caused by quality problems related to our products; regulatory issues resulting from products complaints, recalls or regulatory audits; the potential of becoming subject to product liability claims; our ability to protect our intellectual property and proprietary rights; our significant amount of outstanding indebtedness and our ability to remain in compliance with financial and other covenants under our senior secured credit facilities; our ability to integrate acquisitions and operate acquired businesses in accordance with expectations; our dependence upon our senior management team and technical personnel; our ability to realize the benefits from cost savings and consolidation initiatives; interruptions in our manufacturing operations; our ability to comply with environmental regulations; our complex international tax profile; our dependence upon our information technology systems and our ability to prevent cyber-attacks and other failures; market, financial and other risks related to our international operations and sales; global economic factors, including currency exchange rates and interest rates; the fact that the healthcare industry is highly regulated and subject to various regulatory changes; the dependence of our energy market-related revenues on the conditions in the oil and natural gas industry; and other risks and uncertainties that arise from time to time and are described in Item1A 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.

Condensed Consolidated Statements of Operations - Unaudited(in thousands except per share data) Three Months Ended Six Months Ended July 3, June 28, July 3, June 28, 2020 2019 2020 2019Sales $ 240,115 $ 314,194 $ 568,541 $ 628,870 Cost of sales 182,252 217,210 413,976 443,276 Gross profit 57,863 96,984 154,565 185,594 Operating expenses: Selling, general andadministrative expenses 33,903 33,143 70,360 68,099 (SG&A)Research, development and 12,746 11,396 25,987 22,991 engineering costs (RD&E)Other operating expenses 2,029 3,108 4,957 5,998 (OOE)Total operating expenses 48,678 47,647 101,304 97,088 Operating income 9,185 49,337 53,261 88,506 Interest expense, net 9,273 13,612 19,634 27,442 (Gain) loss on equity 205 1,611 (1,720 ) 1,652 investments, netOther income, net (458 ) (718 ) (1,457 ) (552 )Income from continuing 165 34,832 36,804 59,964 operations before taxesProvision (benefit) for (224 ) 6,610 5,315 10,376 income taxesIncome from continuing $ 389 $ 28,222 $ 31,489 $ 49,588 operations Discontinued operations: Income from discontinued ? 4,930 ? 5,316 operations before taxesProvision for income ? 95 ? 178 taxesIncome from discontinued $ ? $ 4,835 $ ? $ 5,138 operations Net income $ 389 $ 33,057 $ 31,489 $ 54,726 Basic earnings per share: Income from continuing $ 0.01 $ 0.87 $ 0.96 $ 1.52 operationsIncome from discontinued $ ? $ 0.15 $ ? $ 0.16 operationsBasic earnings per share $ 0.01 $ 1.01 $ 0.96 $ 1.68 Diluted earnings per share:Income from continuing $ 0.01 $ 0.85 $ 0.95 $ 1.50 operationsIncome from discontinued $ ? $ 0.15 $ ? $ 0.16 operationsDiluted earnings per $ 0.01 $ 1.00 $ 0.95 $ 1.66 share Weighted average shares outstanding:Basic 32,834 32,621 32,820 32,579 Diluted 33,129 33,009 33,123 32,995

Condensed Consolidated Balance Sheets - Unaudited(in thousands) July 3, December 31, 2020 2019ASSETS Current assets: Cash and cash equivalents $ 206,244 $ 13,535 Accounts receivable, net 147,751 191,985 Inventories 172,458 167,256 Contract assets 37,389 24,767 Prepaid expenses and other current assets 15,660 17,852 Total current assets 579,502 415,395 Property, plant and equipment, net 247,646 246,185 Goodwill 844,972 839,617 Other intangible assets, net 762,434 775,784 Deferred income taxes 5,152 4,438 Operating lease assets 47,327 42,379 Other long-term assets 36,422 29,295 Total assets $ 2,523,455 $ 2,353,093 LIABILITIES AND STOCKHOLDERS? EQUITY Current liabilities: Current portion of long-term debt $ 37,500 $ 37,500 Accounts payable 54,000 64,975 Income taxes payable 4,760 3,023 Current portion of lease liabilities 8,102 7,507 Accrued expenses and other current liabilities 49,286 66,073 Total current liabilities 153,648 179,078 Long-term debt 930,385 777,272 Deferred income taxes 187,300 187,978 Operating lease liabilities 40,552 37,114 Other long-term liabilities 30,169 19,163 Total liabilities 1,342,054 1,200,605 Stockholders? equity: Common stock 33 33 Additional paid-in capital 695,651 701,018 Treasury stock (509 ) (8,809 )Retained earnings 471,747 440,258 Accumulated other comprehensive income 14,479 19,988 Total stockholders? equity 1,181,401 1,152,488 Total liabilities and stockholders? equity $ 2,523,455 $ 2,353,093

Condensed Consolidated Statements of Cash Flows^(a) - Unaudited(in thousands) Six Months Ended July 3, June 28, 2020 2019Cash flows from operating activities: Net income $ 31,489 $ 54,726 Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization 39,074 38,535 Debt related charges included in interest expense 2,045 3,676 Stock-based compensation 3,242 5,433 Non-cash charges related to customer bankruptcy 567 ? Non-cash lease expense 3,875 3,750 Non-cash (gain) loss on equity investments (1,720 ) 1,652 Other non-cash gains (losses) 39 (311 )Deferred income taxes 39 (1,126 )Changes in operating assets and liabilities, net of acquisition:Accounts receivable 44,115 (30,545 )Inventories (5,933 ) 2,846 Prepaid expenses and other assets (16,564 ) (16,692 )Accounts payable (5,854 ) 16,289 Accrued expenses and other liabilities (18,195 ) (8,593 )Income taxes payable 1,735 2,884 Net cash provided by operating activities 77,954 67,550 Cash flows from investing activities: Acquisition of property, plant and equipment (26,680 ) (15,506 )Purchase of intangible asset (4,107 ) ? Proceeds from sale of property, plant and equipment 52 5 Purchase of equity investments ? (327 )Acquisitions, net (5,219 ) ? Proceeds from sale of discontinued operations ? 4,734 Net cash used in investing activities (35,954 ) (11,094 )Cash flows from financing activities: Principal payments of long-term debt (18,750 ) (70,750 )Proceeds from senior secured revolving line of credit 185,000 15,000 Payments of senior secured revolving line of credit (15,000 ) (10,000 )Proceeds from the exercise of stock options 2,474 1,600 Tax withholdings related to net share settlements of (2,779 ) (2,123 )restricted stock unit awardsNet cash provided by (used in) financing activities 150,945 (66,273 )Effect of foreign currency exchange rates on cash and (236 ) 170 cash equivalentsNet increase (decrease) in cash and cash equivalents 192,709 (9,647 )Cash and cash equivalents, beginning of period 13,535 25,569 Cash and cash equivalents, end of period $ 206,244 $ 15,922

(a)Condensed Consolidated Statements of Cash Flows - Unaudited includes cash flows related to discontinued operations.

Reconciliations of Non-GAAP Measures from Continuing Operations

Table A: Income from Continuing Operations and Diluted EPS Reconciliations(in thousands except per share amounts)

Three Months Ended July 3, 2020 June 28, 2019 Net of Per Net of Per Pre-Tax Tax Diluted Pre-Tax Tax Diluted Share ShareIncome fromcontinuing $ 165 $ 389 $ 0.01 $ 34,832 $ 28,222 $ 0.85 operations(GAAP)Adjustments^ (a):Amortization 10,151 8,026 0.24 9,831 7,778 0.24 of intangiblesCertain legalexpenses (SG& 407 323 0.01 680 537 0.02 A)^(b)Otheroperating 2,029 1,571 0.05 3,108 2,379 0.07 expenses (OOE)^(c)(Gain) loss onequity 205 162 ? 1,611 1,273 0.04 investments,netLoss onextinguishment ? ? ? 562 443 0.01 of debtCustomer 18 14 ? ? ? ? bankruptcy^(d)Adjustedincome fromcontinuing $ 12,975 $ 10,485 $ 0.32 $ 50,624 $ 40,632 $ 1.23 operations(Non-GAAP) Dilutedweightedaverage shares 33,129 33,009 for adjustedEPS Six Months Ended July 3, 2020 June 28, 2019 Net of Per Net of Per Pre-Tax Tax Diluted Pre-Tax Tax Diluted Share ShareIncome fromcontinuing $ 36,804 $ 31,489 $ 0.95 $ 59,964 $ 49,588 $ 1.50 operations(GAAP)Adjustments^ (a):Amortization 20,595 16,280 0.49 19,685 15,574 0.47 of intangiblesCertain legalexpenses (SG& 1,009 798 0.02 2,076 1,640 0.05 A)^(b)Otheroperating 4,957 3,872 0.12 5,998 4,596 0.14 expenses (OOE)^(c)(Gain) loss onequity (1,720 ) (1,359 ) (0.04 ) 1,652 1,305 0.04 investments,netLoss onextinguishment ? ? ? 974 769 0.02 of debtCustomer 872 689 0.02 ? ? ? bankruptcy^(d)Adjustedincome fromcontinuing $ 62,517 $ 51,769 $ 1.56 $ 90,349 $ 73,472 $ 2.23 operations(Non-GAAP) Dilutedweightedaverage shares 33,123 32,995 for adjustedEPS

(a) The difference between pre-tax and net of tax amounts is the estimated tax impact related to the respective adjustment. Net of tax amounts are computed using a 21% U.S. tax rate, and the statutory tax rates applicable in foreign tax jurisdictions, as adjusted for the existence of net operating losses (NOLs). Expenses that are not deductible for tax purposes (i.e. permanent tax differences) are added back at 100%.

(b) Expenses associated with non-ordinary course legal matters.

(c) Other operating expenses includes acquisition and integration related expenses, facility consolidation, optimization, manufacturing transfer and system integration charges, asset write-down and disposition charges, charges in connection with corporate realignments or a reduction in force, unusual or infrequently occurring items.

(d) In November 2019, one of our customers, Nuvectra Corporation, filed a voluntary Chapter 11 bankruptcy petition (the Customer Bankruptcy). During the first six months of 2020, we incurred costs and recorded charges associated with the Customer Bankruptcy, primarily consisting of an $0.8 million charge in the first quarter related to inventory recorded in cost of sales in our condensed consolidated statement of operations.

Please see Notes Regarding Non-GAAP Financial Information for additional information regarding our use of non-GAAP financial measures.

Table B: EBITDA Reconciliations(in thousands)

Three Months Ended Six Months Ended July 3, June 28, July 3, June 28, 2020 2019 2020 2019Income from continuing $ 389 $ 28,222 $ 31,489 $ 49,588 operations (GAAP) Interest expense 9,273 13,612 19,634 27,442 Provision for income (224 ) 6,610 5,315 10,376 taxesDepreciation 9,429 9,046 18,479 18,850 Amortization of 10,151 9,831 20,595 19,685 intangiblesEBITDA from continuing 29,018 67,321 95,512 125,941 operations (Non-GAAP)Stock-based compensation 1,504 2,673 3,242 5,386 (excluding OOE)Certain legal expenses 407 680 1,009 2,076 Other operating expenses 2,029 3,108 4,957 5,998 (OOE)(Gain) loss on equity 205 1,611 (1,720 ) 1,652 investments, netCustomer bankruptcy 18 ? 872 ? Adjusted EBITDA fromcontinuing operations $ 33,181 $ 75,393 $ 103,872 $ 141,053 (Non-GAAP) Total Sales $ 240,115 $ 314,194 $ 568,541 $ 628,870 Adjusted EBITDA margin 13.8 % 24.0 % 18.3 % 22.4 %

Table C: Organic Sales from Continuing Operations Growth Rate Reconciliation (% Change)

GAAP Impact of Non-GAAP Reported Acquisitions Organic Growth and Foreign Change Currency^(a)QTD Change (2Q 2020 vs. 2Q 2019) Medical Sales Cardio & Vascular (14.2 )% (1.0 )% (15.2 )%Cardiac & Neuromodulation (37.4 )% ? (37.4 )%Advanced Surgical, Orthopedics & Portable (6.2 )% 0.1 % (6.1 )%MedicalTotal Medical Sales (22.2 )% (0.6 )% (22.8 )%Non-Medical Sales (47.6 )% ? (47.6 )%Total Sales (23.6 )% (0.5 )% (24.1 )% YTD Change (6M 2020 vs. 6M 2019) Medical Sales Cardio & Vascular 1.8 % (0.9 )% 0.9 %Cardiac & Neuromodulation (22.4 )% ? (22.4 )%Advanced Surgical, Orthopedics & Portable (3.7 )% 0.1 % (3.6 )%MedicalTotal Medical Sales (8.2 )% (0.4 )% (8.6 )%Non-Medical Sales (37.6 )% ? (37.6 )%Total Sales (9.6 )% (0.4 )% (10.0 )%

(a) 2020 sales have been adjusted to exclude the contribution of business acquisitions and foreign currency exchange rate fluctuations. 2019 sales have been adjusted to exclude the impact of foreign currency exchange rate fluctuations. There was no impact from business acquisitions on the 2019 periods.

Table D: Non-GAAP Organic Growth Rate Reconciliation (% Change)

GAAP Impact of Impact of Non-GAAP Reported Non-GAAP Acquisitions Organic Growth^ Adjustments and Foreign Change (a) ^(b) Currency^(c)QTD Change (2Q 2020 vs. 2Q 2019)EBITDA from continuing (56.9) 0.9% (0.8)% (56.8) operations % %Income from continuing (98.6) 24.4% (1.3)% (75.5) operations % %Diluted EPS from (98.8) 24.8% (1.6)% (75.6) continuing operations % % YTD Change (6M 2020 vs. 6M 2019)EBITDA from continuing (24.2) (2.2)% (1.3)% (27.7) operations % %Income from continuing (36.5) 7.0% (1.6)% (31.1) operations % %Diluted EPS from (36.7) 6.7% (1.4)% (31.4) continuing operations % %

(a) EBITDA from continuing operations is a non-GAAP financial measure. See Table B for a reconciliation to the most comparable GAAP measure.

(b) Represents the impact to our growth rate from our Non-GAAP adjustments. See Tables A and B for further detail on these items.

(c) Represents the impact to our growth rate due to changes in foreign currency exchange rates realized in income and reported in other (income) loss, net in the consolidated statements of operations, and the adjustment to exclude the contribution of acquisitions when applicable.