Integer Holdings CorpITGR
Integer Holdings Corp Fair Value Disclosure
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its derivative instruments and contingent consideration. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis.
The Company is exposed to global market risks, including the effect of changes in interest rates and foreign currency exchange rates, and uses derivatives to manage these exposures that occur in the normal course of business. The Company does not hold or issue derivatives for trading or speculative purposes. All derivatives are recorded at fair value on the Consolidated Balance Sheets.
The following tables provide information regarding assets and liabilities recorded at fair value on a recurring basis (in thousands):
| Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Assets: Foreign currency hedging contracts | $ | 5,221 | $ | — | $ | 5,221 | $ | — | |||||||||||||||
| Liabilities: Contingent consideration | 8,179 | — | — | 8,179 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Liabilities: Foreign currency hedging contracts | $ | 6,482 | $ | — | $ | 6,482 | $ | — | |||||||||||||||
| Liabilities: Contingent consideration | 904 | — | — | 904 | |||||||||||||||||||
Derivatives Designated as Hedging Instruments
Foreign Currency Contracts
The Company periodically enters into foreign currency forward contracts to hedge its exposure to foreign currency exchange rate fluctuations in its international operations. The Company has designated these foreign currency forward contracts as cash flow hedges.
Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of December 31, 2025 is as follows (dollars in thousands):
| Notional Amount | Maturity Date | $/Foreign Currency | Fair Value | Balance Sheet Location | ||||||||||||||||||||||||||||
| $ | 15,906 | Oct 2026 | 1.1610 | Euro | $ | 266 | Prepaid expenses and other current assets | |||||||||||||||||||||||||
| 7,649 | Oct 2026 | 0.0244 | UYU Peso | 383 | Prepaid expenses and other current assets | |||||||||||||||||||||||||||
| 51,699 | Dec 2026 | 0.0501 | MXN Peso | 4,491 | Prepaid expenses and other current assets | |||||||||||||||||||||||||||
| 2,959 | Oct 2026 | 0.2401 | MYR Ringgit | 82 | Prepaid expenses and other current assets | |||||||||||||||||||||||||||
| 3,842 | Apr 2027 | 0.0519 | MXN Peso | 76 | Other long-term assets | |||||||||||||||||||||||||||
| 8,923 | Jul 2026 | 1.1898 | Euro | (77) | Accrued expenses and other current liabilities | |||||||||||||||||||||||||||
Information regarding outstanding foreign currency forward contracts designated as cash flow hedges as of December 31, 2024 is as follows (dollars in thousands):
| Notional Amount | Maturity Date | $/Foreign Currency | Fair Value | Balance Sheet Location | ||||||||||||||||||||||||||||
| $ | 60,589 | Dec 2025 | 1.0831 | Euro | $ | 1,950 | Accrued expenses and other current liabilities | |||||||||||||||||||||||||
| 10,690 | Dec 2025 | 0.0248 | UYU Peso | 248 | Accrued expenses and other current liabilities | |||||||||||||||||||||||||||
| 51,341 | Dec 2025 | 0.0566 | MXN Peso | 3,893 | Accrued expenses and other current liabilities | |||||||||||||||||||||||||||
| 10,322 | Jul 2026 | 0.0566 | MXN Peso | 391 | Other long-term liabilities | |||||||||||||||||||||||||||
(18.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The following table presents the impact of cash flow hedge derivative instruments on the Company’s Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income for fiscal years 2025, 2024 and 2023 (in thousands):
| Gain (Loss) Recognized in OCI | Gain (Loss) Reclassified from AOCI | |||||||||||||||||||||||||||||||||||||||||||
| Derivative | 2025 | 2024 | 2023 | Location in Statement of Operations | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||
| Interest rate swaps | $ | — | $ | — | $ | — | Interest expense | $ | — | $ | — | $ | 1,262 | |||||||||||||||||||||||||||||||
| Foreign exchange contracts | 4,655 | (3,296) | 1,171 | Sales | 2,516 | 43 | (241) | |||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | 12,224 | (6,473) | 5,666 | Cost of sales | 2,874 | (1,494) | 5,611 | |||||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | 196 | (296) | 171 | Operating expenses | (18) | 21 | (17) | |||||||||||||||||||||||||||||||||||||
The Company expects to reclassify net gains totaling $5.1 million related to its cash flow hedges from AOCI into earnings during the next twelve months.
Derivatives Not Designated as Hedging Instruments
The Company also has foreign currency exposure on balances, primarily intercompany, that are denominated in a foreign currency and are adjusted to current values using period-end exchange rates. To minimize foreign currency exposure, the Company enters into foreign currency contracts with a one month maturity. At December 31, 2025 and December 31, 2024, the Company had total gross notional amounts of $73.4 million and $33.0 million, respectively, of foreign currency contracts outstanding that were not designated as hedges. The fair value of derivatives not designated as hedges was not material for any period presented. The Company recorded net gains (losses) on foreign currency contracts not designated as hedging instruments of $(1.7) million, $2.6 million and $0.4 million for 2025, 2024 and 2023, respectively, which are included in Other loss, net. Each of the foreign currency contracts not designated as hedging instruments will have approximately offsetting effects from the underlying intercompany loans subject to foreign exchange remeasurement.
Contingent Consideration Liabilities
The following table presents the changes in the estimated fair values of the Company’s liabilities for contingent consideration measured using significant unobservable inputs (Level 3) for fiscal years 2025, 2024 and 2023 (in thousands):
| Year Ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||
| Contingent consideration, beginning of year | $ | 904 | $ | 876 | $ | 11,756 | |||||||||||||||||
Amount recorded for current year acquisitions | 9,541 | 3,578 | 876 | ||||||||||||||||||||
| Fair value measurement adjustments | (2,266) | (3,550) | (736) | ||||||||||||||||||||
Payments | — | — | (11,177) | ||||||||||||||||||||
| Foreign currency translation | — | — | 157 | ||||||||||||||||||||
| Contingent consideration, end of year | $ | 8,179 | $ | 904 | $ | 876 | |||||||||||||||||
| Current portion of contingent consideration, end of year | $ | 7,000 | $ | — | $ | — | |||||||||||||||||
| Non-current portion of contingent consideration, end of year | 1,179 | 904 | 876 | ||||||||||||||||||||
The Company will make earnout payments in 2026 of up to $7.0 million based on the achievement of specified milestones being met in 2026. The significant unobservable inputs used to calculate the fair value of the contingent consideration for all acquisitions other than Biocoat are projected revenue for the remaining earnout periods. The payment related to the Biocoat acquisition is contingent upon specified operational milestones being met after close. Actual results will differ from the projected results and could have a significant impact on the estimated fair value of the contingent considerations.
(18.) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The following table provides information on unpaid contingent consideration as of December 31, 2025 (in thousands):
| As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Maximum Remaining Payout (undiscounted) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition | Acquisition Date | RemainingMilestone Years | 2026 | 2027 | 2028 | 2029 | Total | Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Biocoat | 12/04/25 | 2026 | $ | 7,000 | $ | — | $ | — | $ | — | $ | 7,000 | $ | 7,000 | ||||||||||||||||||||||||||||||||||||
| VSi | 02/28/25 | 2026 - 2028 | — | 1,000 | 1,000 | 1,000 | 3,000 | 1,179 | ||||||||||||||||||||||||||||||||||||||||||
| InNeuroCo | 10/01/23 | 2026 - 2027 | — | 2,700 | 2,700 | — | 5,400 | — | ||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. The carrying amounts of cash, accounts receivable, contract assets, accounts payable and accrued expenses approximate fair value due to the short-term nature of these items.
Borrowings under the Company’s Revolving Credit Facility and TLA Facility accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. The carrying amount of this floating rate debt approximates fair value based upon the respective interest rates adjusting with market rate adjustments.
As of December 31, 2025, the estimated fair value of the 2028 Convertible Notes and 2030 Convertible Notes was approximately $131.5 million and $930.0 million, respectively. The estimated fair value of the Convertible Notes is generally determined through consideration of quoted market prices. To the extent quoted prices are not available, fair values are generally derived using bid/ask spreads. The fair value of the Convertible Notes are categorized in Level 2 of the fair value hierarchy.
Equity Investments
Equity investments comprise the following (in thousands):
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Equity method investment | $ | 7,709 | $ | 7,237 | |||||||||||||||||||
| Non-marketable equity securities | 180 | 180 | |||||||||||||||||||||
Total equity investments | $ | 7,889 | $ | 7,417 | |||||||||||||||||||
The components of (Gain) loss on equity investments, net for each period were as follows (in thousands):
| 2025 | 2024 | 2023 | |||||||||||||||||||||
| Equity method investment (gain) loss | $ | (550) | $ | 533 | $ | 481 | |||||||||||||||||
| Impairment charges | — | 247 | 5,210 | ||||||||||||||||||||
| (Gain) loss on equity investments, net | $ | (550) | $ | 780 | $ | 5,691 | |||||||||||||||||
During 2025, the Company received a cash distribution representing a return of capital on our equity method investment of $0.1 million. During 2024 and 2023, the Company recorded charges of $0.2 million and $5.2 million, respectively, after determining that certain investments in its non-marketable equity securities were impaired. These assessments were based on qualitative indications of impairment which are considered to be a Level 3 fair value measurement, as the fair values were determined to be zero based on significant inputs not observable in the market. Factors that significantly influenced the determination of the impairment losses included the investee’s financial condition, operational and financing cash flow activities, and priority claims to the equity security, distributions rights and preferences. The Company’s equity method investment is in a venture capital fund focused on investing in life sciences companies. As of December 31, 2025, the Company owned 7.6% of this fund.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 18, 2021 | |
| 2019 | Feb 20, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Mar 1, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.