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TheStreet Open House

Greatbatch, Inc. Reports 2013 Third Quarter Results

Orthopaedic sales of $30.1 million for the third quarter of 2013 increased 11% compared to the third quarter of 2012. During the first quarter of 2013, the Company divested certain non-core orthopaedic product lines, which reduced third quarter 2013 orthopaedic revenue by approximately $3.2 million in comparison to the prior year period. Additionally, foreign currency exchange rate fluctuations benefitted current quarter orthopaedic revenue by approximately $1 million in comparison to the prior year. On a constant currency organic basis, orthopaedic product line sales increased 22% in comparison to the prior year third quarter. This improvement was primarily due to orthopaedic implant, and cases and tray market share gains, which benefitted from our increased sales and marketing efforts to drive organic growth.

Third quarter 2013 vascular sales decreased $1.4 million to $12.3 million in comparison to the prior year period, reflecting the previously communicated voluntary recall of two vascular medical devices near the end of 2012.

Electrochem

Third quarter 2013 Electrochem sales decreased 5% to $38.4 million compared to $40.2 million for the comparable 2012 period. During the quarter, we experienced lower revenue from our portable medical, environmental and military product lines, which are being impacted by our increased pricing discipline, as well as reduced government funding on certain military and environmental projects. We expect these factors to continue to impact our business for the foreseeable future. Partially offsetting these decreases was a 4% increase in our energy product line as customer ordering patterns returned to normalized levels.

Financial Guidance

Based upon our results for the first three quarters, as well as our expectations for the remainder of 2013, we continue to believe that revenue will be at the lower end of our original sales guidance of $660 million to $680 million provided at the beginning of the year. If achieved, this would result in organic revenue growth of 5% - 8% after adjusting for the disposition of $15 million of non-core orthopaedic product lines at the end of 2012. Because of our strong productivity performance and favorable mix of product sales we believe that our adjusted diluted EPS will be at the mid-point or better of our previous $2.05 to $2.15 guidance. Further details will be provided on our earnings call later today.

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