U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended April 1, 2005
Commission File Number 1-16137
WILSON GREATBATCH TECHNOLOGIES, INC.
 (Exact name of Registrant as specified in its charter)
Delaware
 (State of incorporation)
16-1531026
(I.R.S. employer identification no.)
9645 Wehrle Drive
Clarence, New York
14031
(Address of principal executive offices)
(716) 759-5600
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes [X] No [ ]
The number of shares outstanding of the Company's common stock, $.001 par value per share, as of May 6, 2005 was: 21,581,083 shares

                      WILSON GREATBATCH TECHNOLOGIES, INC.
                         TABLE OF CONTENTS FOR FORM 10-Q
                          QUARTER ENDED MARCH 31, 2005
                                                                                                           PAGE

COVER PAGE                                                                                                     1

TABLE OF CONTENTS                                                                                              2

PART I - FINANCIAL INFORMATION (unaudited)

ITEM 1.  Condensed Consolidated Financial Statements

            Condensed Consolidated Balance Sheet                                                               3

            Condensed Consolidated Statement of Operations and Comprehensive Income                            4

            Condensed Consolidated Statement of Cash Flows                                                     5

            Notes to Condensed Consolidated Financial Statements                                               6

ITEM 2.  Management's Discussion and Analysis of Financial Condition and                                      16
            Results of Operations

ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                                           26

ITEM 4.  Controls and Procedures                                                                              26

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings                                                                                    27

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                          27

ITEM 3.  Defaults Upon Senior Securities                                                                      27

ITEM 4.  Submission of Matters to a Vote of Security Holders                                                  27

ITEM 5.  Other Information                                                                                    27

ITEM 6.  Exhibits                                                                                             27

SIGNATURES                                                                                                    28

EXHIBIT INDEX                                                                                                 29	

PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
WILSON GREATBATCH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET - Unaudited
 (IN THOUSANDS)

ASSETS                                                  March 31,  December 31,
                                                           2005         2004
                                                        ---------  ------------
Current assets:
  Cash and cash equivalents                             $  78,860     $  89,473
  Short-term investments                                    6,876         2,759
  Accounts receivable, net                                 29,672        24,288
  Inventories                                              32,277        34,027
  Refundable income taxes                                   3,972         3,673
  Deferred income taxes                                     3,622         3,622
  Prepaid expenses and other current assets                 5,987         4,637
                                                        ---------  ------------
          Total current assets                            161,266       162,479
Property, plant, and equipment, net                        97,791        92,210
Intangible assets, net                                     63,021        63,984
Goodwill                                                  156,772       156,772
Other assets                                                4,317         4,493
                                                        ---------  ------------
Total assets                                            $ 483,167     $ 479,938
                                                        =========  ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                          7,006         8,971
  Accrued expenses and other current liabilities           14,840        18,109
  Current portion of long-term debt                           890         1,000
                                                        ---------  ------------
           Total current liabilities                       22,736        28,080
Long-term debt, net of current portion                        408           652
Convertible subordinated notes                            170,000       170,000
Deferred income taxes                                      26,988        25,029
                                                        ---------  ------------
           Total liabilities                              220,132       223,761
                                                        ---------  ------------
Stockholders' equity:
  Preferred stock                                            --            --
  Common stock                                                 21            21
  Additional paid-in capital                              214,791       212,131
  Deferred stock-based compensation                          (693)         (833)
  Treasury stock, at cost                                    --             (95)
  Retained earnings                                        48,974        44,971
  Accumulated other comprehensive income                      (58)          (18)
                                                        ---------  ------------
           Total stockholders' equity                     263,035       256,177
                                                        ---------  ------------
Total liabilities and stockholders' equity              $ 483,167     $ 479,938
                                                        =========  ============	

The accompanying notes are an integral part of these condensed consolidated financial statements
-3-
 
WILSON GREATBATCH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND COMPREHENSIVE INCOME - Unaudited
 (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

                                                    Three months ended
                                                         March 31,
                                                    2005           2004
                                                   --------    --------
Sales                                              $ 56,358    $ 55,525
Cost of sales                                        35,571      32,350
                                                   --------    --------
  Gross profit                                       20,787      23,175
Selling, general and administrative expenses          6,766       6,925
Research, development and engineering costs, net      4,401       4,881
Amortization of intangible assets                       958         775
Other operating expense, net                          2,388         221
                                                   --------    --------
  Operating income                                    6,274      10,373
Interest expense                                      1,131       1,160
Interest income                                        (575)       (313)
Other expense, net                                     --             2
                                                   --------    --------
  Income before provision for income taxes            5,718       9,524
Provision for income taxes                            1,715       2,905
                                                   --------    --------
  Net income                                       $  4,003    $  6,619
                                                   ========    ========
Earnings per share:
  Basic                                            $   0.19    $   0.31
  Diluted                                          $   0.19    $   0.29

Weighted average shares outstanding:
  Basic                                              21,473      21,281
  Diluted                                            21,583      25,911

Comprehensive income:
  Net income                                       $  4,003    $  6,619
  Net unrealized loss on available for sale
    securities, net of $23 deferred income
     tax benefit in 2005                                (40)       --
                                                   --------    --------
Comprehensive income                               $  3,963    $  6,619
                                                   ========    ========	

The accompanying notes are an integral part of these condensed consolidated financial statements
-4-
 
WILSON GREATBATCH TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - Unaudited
 (IN THOUSANDS)

                                                                     Three months ended
                                                                         March 31,
                                                                     2005         2004
                                                                 ---------    ---------
Cash flows from operating activities:
  Net income                                                     $   4,003    $   6,619
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Depreciation and amortization                                  4,039        3,362
      Stock-based compensation                                         795          881
      Deferred income taxes                                          1,959           --
      Loss on disposal of assets                                       512          221
  Changes in operating assets and liabilities:
    Accounts receivable                                             (5,384)      (3,765)
    Inventories                                                      1,750       (2,781)
    Prepaid expenses and other current assets                       (1,830)         210
    Accounts payable                                                (1,965)       1,333
    Accrued expenses and other current liabilities                  (1,345)      (3,837)
    Income taxes                                                      (297)         332
                                                                 ---------    ---------
             Net cash provided by operating activities               2,237        2,575
                                                                 ---------    ---------
Cash flows from investing activities:
  (Purchase) sale of short-term investments, net                    (4,117)       3,910
  Acquisition of property, plant and equipment                      (8,523)      (6,615)
  Proceeds from sale of assets                                          23            9
  Decrease (increase) in other assets                                    6          (68)
  Acquisition of subsidiary, net                                        --      (45,445)
                                                                 ---------    ---------
             Net cash used in investing activities                 (12,611)     (48,209)
                                                                 ---------    ---------
Cash flows from financing activities:
  Principal payments of long-term debt                                (354)        (286)
  Issuance of common stock                                             115          508
  Issuance of treasury stock                                           --           179
                                                                 ---------    ---------
           Net cash (used in) provided by financing activities        (239)         401
                                                                 ---------    ---------
Net decrease in cash and cash equivalents                          (10,613)     (45,233)
Cash and cash equivalents, beginning of year                        89,473      119,486
                                                                 ---------    ---------
Cash and cash equivalents, end of period                         $  78,860    $  74,253
                                                                 =========    =========	

The accompanying notes are an integral part of these condensed consolidated financial statements
-5-
WILSON GREATBATCH TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. In the opinion of management, the condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of Wilson Greatbatch Technologies, Inc. (the "Company") for the periods presented. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from these estimates. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004.
The Company utilizes a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. For 52-week years, each quarter contains 13 weeks. For clarity of presentation, the Company describes all periods as if each quarter end is March 31st, June 30th and September 30th and as if the year-end is December 31st. The first quarter of 2005 and 2004 each contained 13 weeks.
2. STOCK-BASED COMPENSATION
The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS No. 123"). As permitted in that standard, the Company has chosen to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related interpretations.
The Company has determined the pro forma information as if the Company had accounted for stock options granted under the fair value method of SFAS No.
123. The Black-Scholes option-pricing model was used with the following weighted average assumptions.
-6-
These pro forma calculations assume the common stock is freely tradable for all periods presented and, as such, the impact is not necessarily indicative of the effects on reported net income of future years.

                                         Three months ended
                                             March 31,
                                        2005           2004
                                        ----         -------

Risk-free interest rate                 4.13%          3.07%
Expected volatility                       52%            50%
Expected life (in years)                   5              5
Expected dividend yield                    0%             0%	

The Company's net income and earnings per share as if the fair value based method had been applied to all outstanding and unvested awards in each year is as follows (in thousands except per share data:

                                              Three months ended
                                                  March 31,
                                              2005         2004
                                            ---------   ----------
Net income as reported                       $   4,003   $   6,619
Stock-based employee compensation cost
included in net income as reported, net of
related tax effects                          $     557   $     612
Stock-based employee compensation cost
determined using the fair value based
method, net of related tax effects           $   1,042   $   1,154

Pro forma net income                         $   3,518   $   6,077

Earnings per share:
    Basic - as reported                      $    0.19   $    0.31
    Basic - pro forma                        $    0.17   $    0.29
    Diluted - as reported                    $    0.19   $    0.29
    Diluted - pro forma                      $    0.17   $    0.27	

3. SUPPLEMENTAL CASH FLOW INFORMATION (in thousands):

                                                           Three months ended
                                                                March 31,
                                                           2005          2004
                                                         ------         -------
Noncash investing and financing activities:
     Common stock contributed to 401(k) Plan            $ 2,729        $ 2,723	

-7-
 
4. SHORT-TERM INVESTMENTS
Short-term investments at March 31, 2005 and December 31, 2004 consist of investments acquired with maturities that exceed three months and are less than one year at the time of acquisition and equity securities classified as available-for-sale securities.
Short-term investments comprised the following (in thousands):

                                                       As of March 31, 2005
                                                                          Gross
                                                Gross unealized         unrealized        Esimated fair
                                      Cost            gains               losses              value
                                     ------          -------            ---------          ----------
Available-for-sale:
Equity Security                     $  276              $--              $  (81)                 195

Held-to-maturity:
Municipal Bonds                      6,681               --                 (13)               6,668
                                    ------          -------              ------               ------
Short-term investments              $6,957              $--              $  (94)              $6,863
                                    ======          =======              =======              ======	

                                                       As of March 31, 2004
                                                                         Gross
                                                Gross unealized       unrealized        Esimated fair
                                     Cost            gains               losses              value
                                    ------          -------            ---------          ----------
Available-for-sale:
Available-for-sale:
Equity Security                     $  276              $--              $  (18)              $  258

Held-to-maturity:
Municipal Bonds                      2,501               --                   1                2,502
                                    ------          -------              ------               ------
Short-term investments              $2,777              $--              $  (17)              $2,760
                                    ======          =======              =======              ======	

The municipal bonds have maturity dates ranging from April 2005 to September 2005.
5. INVENTORIES
Inventories comprised the following (in thousands):

                                       March 31,     December 31,
                                         2005           2004
                                      ----------    ------------
Raw materials                           $ 14,441        $ 14,053
Work-in-process                           10,609          11,275
Finished goods                             7,227           8,699
                                      ----------    ------------
Total                                   $ 32,277        $ 34,027
                                      ==========    ============	

-8-
 
6. INTANGIBLE ASSETS
Intangible assets comprised the following (in thousands):

                                                           As of March 31, 2005
                                                           --------------------
                                            Gross carrying            Accumulated           Net carrying
                                                 Amount               amortization             Amount
                                               --------             ---------------          --------
Amortizing intangible assets:
   Patented technology                         $ 21,462               $(10,537)              $ 10,925
   Unpatented technology                         30,886                 (7,082)                23,804
   Other                                          1,340                 (1,300)                    40
                                               --------               --------               --------
                                                 53,688                (18,919)                34,769
Non-amortizing intangible assets:
   Trademark and names                           31,420                 (3,168)                28,252
                                               --------               --------               --------
Total intangible assets                        $ 85,108               $(22,087)              $ 63,021
                                               ========               ========               ========	

                                                           As of March 31, 2004
                                                           --------------------
                                           Gross carrying           Accumulated           Net carrying
                                               Amount               amortization             Amount
                                              --------             ---------------          --------
Amortizing intangible assets:
Amortizing intangible assets:
  Patented technology                         $ 21,462               $(10,137)              $ 11,325
  Unpatented technology                         30,886                 (6,525)                24,361
  Other                                          1,340                 (1,294)                    46
                                              --------               --------               --------
                                                53,688                (17,956)                35,732
Non-amortizing intangible assets:
  Trademark and names                           31,420                 (3,168)                28,252
                                              --------               --------               --------
Total intangible assets                       $ 85,108               $(21,124)              $ 63,984
                                              ========               ========               ========	

Aggregate amortization expense for first quarter 2005 and 2004 was $1.0 million and $0.8 million, respectively. Annual amortization expense is estimated to be $2.9 million for the remainder of 2005, $3.8 million for 2006 to 2008, $3.2 million for 2009, and $2.7 million for 2010.
7. DEBT
Long-term debt comprised the following (in thousands):

                                                      March 31,   December 31,
                                                        2005          2004
                                                     ---------     ----------
2.25% convertible subordinated notes, due 2013        $ 170,000     $ 170,000
Capital lease obligations                                 1,298         1,652
                                                      ---------     ---------
                                                        171,298       171,652
Less current portion                                       (890)       (1,000)
                                                      ---------     ----------
Total long-term debt                                  $ 170,408     $ 170,652
                                                      =========     =========	

-9-
REVOLVING LINE OF CREDIT
As of March 31, 2005, the Company had no balance outstanding on its existing $20.0 million committed revolving line of credit. As of March 31, 2005 the Company was not in compliance with one of the financial covenants in the credit agreement. The Company and its lending syndicate are in the process of amending the agreement and the Company expects to have an amended agreement in place before May 31, 2005. The Company expects the amended agreement will include a larger credit line and revised financial covenants.
8. EARNINGS PER SHARE
The following table reflects the calculation of basic and diluted earnings per share (in thousands, except per share amounts):

                                                                                    Three months ended
                                                                                         March 31,
                                                                                     2005         2004
                                                                                   --------     -------
Numerator for basic earnings per share:
  Income from continuing operations                                                $ 4,003      $ 6,619
Effect of dilutive securities:
Interest expense on convertible notes and related
   deferred financing fees, net of tax                                                   -          768
                                                                                   -------      -------
Numerator for diluted earnings per share                                           $ 4,003      $ 7,387
                                                                                   =======      =======
Denominator for basic earnings per share:
   Weighted average shares outstanding                                              21,473       21,281
Effect of dilutive securities:
   Convertible notes                                                                     -        4,219
   Stock options and unvested restricted stock                                         110          411
                                                                                   -------      -------
Dilutive potential common shares                                                       110        4,630
                                                                                   -------      -------
Denominator for diluted earnings per share                                          21,583       25,911
                                                                                   =======      =======
Basic earnings per share                                                           $  0.19      $  0.31
                                                                                   =======      =======
Diluted earnings per share                                                         $  0.19      $  0.29
                                                                                   =======      =======	

9. COMPREHENSIVE INCOME
For first quarter 2004, the Company's only component of comprehensive income is its net income. For first quarter 2005, the Company's comprehensive income includes net income and an unrealized loss on available-for-sale securities.
-10-
10. COMMITMENTS AND CONTINGENCIES
LITIGATION - During 2002, a former non-medical customer commenced an action alleging that the Company had used proprietary information of the customer to develop certain products. We have meritorious defenses and are vigorously defending the case. No accrual for an adverse judgment has been made as such outcome is not deemed probable, the potential risk of loss is between $0.0 and $1.75 million.
On May 2, 2005, a complaint was filed against the Company by a developer of an implantable drug delivery device in the United States Federal District Court for the Central District of California. The complaint was legally served on the Company on May 6, 2005. In its complaint, the plaintiff alleges that the Company has breached a 2002 supply agreement providing for the Company to supply the customer with pumps for drug delivery devices that it is developing. Plaintiff seeks significant compensatory and punitive damages, together with certain declatory and injunctive relief. While the Company has not completed its investigation, it believes that it has meritorious defenses and intends to vigorously defend this action.
PRODUCT WARRANTIES - The change in aggregate product warranty liability for the quarter ended March 31, 2005, is as follows (in thousands):

Beginning balance                                              $ 926
Additions to warranty reserve                                     25
Warranty claims paid                                              (3)
                                                               -----
Ending balance                                                 $ 948
                                                               =====	

CAPITAL EXPENDITURES - During 2004, the Company commenced the build out of its medical battery and capacitor manufacturing facility in Alden, NY and its value-add manufacturing facility in Tijuana, Mexico. These facilities will enable the Company to further consolidate its operations and implement state of the art manufacturing capabilities at both locations. The total contractual obligations for construction of these facilities at March 31, 2005 is $6.0 million and will be financed by existing, or internally generated cash.
11. BUSINESS SEGMENT INFORMATION
The Company operates its business in two reportable segments: Implantable Medical Components ("IMC") and Electrochem Commercial Power ("ECP"), (formerly "Electrochem Power Solutions"). The IMC segment designs and manufactures critical components used in implantable medical devices. The principal components are batteries, capacitors, filtered feedthroughs, coated components, enclosures and machined and molded precision components. The principal medical devices are pacemakers, defibrillators and neurostimulators. The ECP segment designs and manufactures high performance cells and battery packs; principal markets for these products are for oil and gas exploration, oceanographic equipment, and aerospace.
-11-
The Company defines segment income from operations as gross profit less costs and expenses attributable to segment-specific selling, general and administrative, research, development and engineering expenses, intangible amortization and other operating expenses. Segment income also includes a portion of non-segment specific selling, general and administrative, and research, development and engineering expenses based on allocations appropriate to the expense categories. The remaining unallocated operating expenses along with other income and expense are not allocated to reportable segments. Transactions between the two segments are not significant. The accounting policies of the segments are the same as those described and referenced in Note 1.
An analysis and reconciliation of the Company's business segment information to the respective information in the consolidated financial statements is as follows (in thousands):

                                                           Three months ended
                                                               March 31,
Sales:                                                 2005                   2004
                                                   ---------              ---------
IMC
  ICD batteries                                    $ 10,751               $  9,420
  Pacemaker and other batteries                       5,255                  5,694
  ICD Capacitors                                      4,297                  8,408
  Feedthroughs                                       13,682                 13,727
  Enclosures                                          6,547                  5,397
  Other                                               7,333                  5,632
                                                   --------               --------
Total IMC                                            47,865                 48,278
ECP                                                   8,493                  7,247
                                                   --------               --------
Total sales                                        $ 56,358               $ 55,525
                                                   ========               ========
Segment income from operations:
  IMC                                              $  7,877               $ 10,822
  ECP                                                 1,880                  2,295
                                                   --------               --------
Total segment income from operations                  9,757                 13,117
Unallocated operating expenses                       (3,483)                (2,744)
                                                   --------               --------
Operating income as reported                          6,274                 10,373
Unallocated other income and expense                   (556)                  (849)
                                                   --------               ---------
Income before income taxes as reported             $  5,718               $  9,524
                                                   ========               ========	

The carrying amount of goodwill at December 31, 2004 and March 31, 2005 is as follows:

   IMC                   ECP             Total
---------             -------         ---------
$ 154,206             $ 2,566         $ 156,772
=========             =======         =========	

-12-
12. OTHER OPERATING EXPENSE
During first quarter 2005, the following non-recurring charges were recorded in other operating expense in the Company's Condensed Consolidated Statement of Operations.
SEVERANCE CHARGES. The Company implemented a 4% workforce reduction as a continuation of cost containment efforts initiated mid-year 2004, which resulted in a severance charge of $1.5 million during the quarter.
Accrued liabilities at March 31, 2005 related to the severance charges comprised the following (in thousands):

                                       IMC          ECP      Corporate     Total
                                     -------     -------     ---------   -------
Severance charges                    $   860     $   210     $   430     $ 1,500
Cash payments                           (464)        (73)       (296)       (833)
Write-offs                                --          --          --          --
                                     -------     -------     -------     -------
Balance, March 31, 2005              $   396     $   137     $   134     $   667
                                     =======     =======     =======     =======	

The severance charges related to corporate employees are included in unallocated operating expenses. It is expected that the remaining accrued severance as of March 31, 2005, will be paid within the next six months.
ALDEN FACILITY CONSOLIDATION - On February 23, 2005, the Company announced its intent to consolidate the medical capacitor manufacturing operations, currently in Cheektowaga, NY, and the implantable medical battery manufacturing operations, currently in Clarence, NY, into the advanced power source manufacturing facility in Alden, NY ("Alden Facility"). The Company is also consolidating the capacitor research, development and engineering operations from the Cheektowaga, NY, facility into the existing implantable medical battery research, development, and engineering operations in Clarence, NY.
The total cost estimated for these consolidation efforts is anticipated to be between $3.5 and $4.0 million. The Company expects to incur this additional expense over the next three fiscal quarters. The expenses for the Alden Facility consolidation are included in the IMC business segment. The major categories of costs to be incurred, which will primarily be cash expenditures, include the following:
o Production inefficiencies and revalidation - $1.5 to $1.7 million;
o Training - $0.6 to $0.7 million;
o Moving and facility closures - $0.9 million to $1.0 million; and
o Infrastructure - $0.5 to $0.6 million.
Alden Facility consolidation infrastructure expenses of $0.03 million were incurred and paid during the quarter.
CARSON CITY FACILITY SHUTDOWN AND TIJUANA FACILITY CONSOLIDATION - On March 7, 2005, the Company announced its intent to close the Carson City, NV facility ("Carson City Facility") and consolidate the work performed at the Carson City Facility into the Tijuana, Mexico facility ("Tijuana Facility").
-13-
The total estimated cost for this facility consolidation plan is anticipated to be between $4.5 million and $5.4 million. The Company expects to incur this additional cost over the next four fiscal quarters. The major categories of costs to be incurred include the following:
o Costs related to the shutdown of the Carson City Facility:
a. Severance and retention - $1.4 to $1.6 million;
b. Accelerated depreciation - $0.5 to $0.6 million; and
c. Other - $0.6 to $0.7 million.
o Costs related to the Tijuana Facility consolidation:
a. Production inefficiencies and revalidation - $0.4 to $0.5 million;
b. Relocation and moving - $0.3 to $0.5 million;
c. Personnel (including travel, training and duplicate wages) - $1.0 to $1.1 million; and
d. Other - $0.3 to $0.4 million.
All categories of costs are considered to be future cash expenditures, except accelerated depreciation. The expenses for the Carson City facility shutdown and the Tijuana facility consolidation are included in the IMC business segment.
Accrued liabilities at March 31, 2005 related to the Carson City facility shutdown comprised the following (in thousands):

                               Severance and     Accelerated
                                  retention      Depreciation           Other               Total
                               -------------     -------------     ----------------   ----------------
Restructuring charges                $ 145              $  50               $  --              $ 195
Cash payments                           --                 --                  --                 --
Write-offs                              --                (50)                 --                (50)
                                     -----             ------                ----             ------
Balance, March 31, 2005              $ 145              $  --               $  --              $ 145
                                     =====             ======                ====             ======	

As of the end of the first quarter of 2005, no expenses have been recorded related to the Tijuana facility consolidation other than the cost related to the Carson City shutdown described above.
-14-
13. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In November 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 151, INVENTORY COSTS, an amendment of ARB No. 43, Chapter 4 ("SFAS No. 151"). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, handling costs and wasted material (spoilage). Among other provisions, the new rule requires that such items be recognized as current-period charges, regardless of whether they meet the criterion of "so abnormal" as stated in ARB No. 43. SFAS No. 151 is effective for fiscal years beginning after June 15, 2005. The company does not expect that adoption of SFAS No. 151 will have a material effect on its consolidated financial position, consolidated results of operations, or liquidity.
In December 2004, the FASB issued SFAS No. 123 (revised 2004), SHARE-BASED PAYMENT ("SFAS No. 123(R)"). This statement is a revision of SFAS No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, and supercedes APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. This standard requires the Company to measure the cost of employee services received in exchange for equity awards based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards.
The Company anticipates adopting the provisions of SFAS No. 123(R) on January 1, 2006 using the modified prospective application. Accordingly, compensation expense will be recognized for all newly granted awards and awards modified, repurchased, or cancelled after January 1, 2006. Compensation cost for the unvested portion of awards that are outstanding as of January 1, 2006 will be recognized ratably over the remaining vesting period. The compensation cost for the unvested portion of awards will be based on the fair value at date of grant as calculated for the Company's pro forma disclosure under SFAS 123.
The Company estimates that the effect on net income and earnings per share in the periods following adoption of SFAS 123(R) will be consistent with the Company's pro forma disclosure under SFAS No. 123, except that estimated forfeitures will be considered in the calculation of compensation expense under SFAS 123(R). Additionally, the actual effect on net income and earnings per share will vary depending upon the number of options granted in subsequent periods compared to prior years.
-15-
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
We are a leading developer and manufacturer of batteries, capacitors, feedthroughs, enclosures, and other components used in implantable medical devices ("IMDs") through our Implantable Medical Components ("IMC") business. We offer technologically advanced, highly reliable and long lasting products for IMDs and enable our customers to introduce IMDs that are progressively smaller, longer lasting, more efficient and more functional. We also leverage our core competencies in technology and manufacturing through our Electrochem Commercial Power ("ECP") business (formerly "Electrochem Power Solutions") to develop and produce cells and battery packs for commercial applications that demand high performance and reliability, including oil and gas exploration, oceanographic equipment and aerospace.
Most of the IMC products that we sell are utilized by customers in cardiac rhythm management ("CRM") devices. The CRM market comprises devices utilizing high-rate batteries and capacitors such as implantable cardioverter defibrillators ("ICDs") and cardiac resynchronization therapy with backup defibrillation devices ("CRT-D") and devices utilizing low or medium rate batteries but no capacitors (pacemakers and CRTs). All CRM devices utilize other components such as enclosures and feedthroughs, and certain CRM devices utilize electromagnetic interference ("EMI") filtering technology.
We utilize a fifty-two, fifty-three week fiscal year ending on the Friday nearest December 31st. For 52-week years, each quarter contains 13 weeks. For clarity of presentation, we describe all periods as if each quarter end is March 31st, June 30th and September 30th and as if the year-end is December 31st. The first quarter of 2005 and 2004 each contained 13 weeks.
The commentary that follows should be read in conjunction with our consolidated financial statements and related notes and with the Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Form 10-K for the fiscal year ended December 31, 2004.
OVERVIEW
During and subsequent to the first quarter 2005, there were several developments affecting our business:
o We recorded record sales results of $56.4 million in the quarter, led by strong sales of ICD batteries, enclosures, coated components and commercial power sources.
o We shipped the first assembly products from our facility in Tijuana, Mexico. Remaining construction phases of the Tijuana facility are proceeding as planned.
o We completed the construction of the medical battery portion of our new advanced battery plant in Alden, NY. We began moving the manufacturing equipment from the existing medical battery plant and expect to complete the move by mid-2005. The construction related to our capacitor manufacturing capabilities is underway and we expect to complete construction by mid-2005. We anticipate that the move will be completed by the third quarter of 2005.
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o We signed a modification to an agreement with a major customer that includes securing a significant increase in contractual minimum quantities of wet tantalum capacitors as well as an extension of the agreement through the first quarter of 2006.
PRODUCT DEVELOPMENT
As mentioned in our annual report (which is available on our website, www.greatbatch.com), our near term focus for growth in the medical battery market is the introduction of our Q-Series batteries. Initially they will be available in two configurations - QHR (High Rate) and QMR (Medium Rate). These batteries hold the promise of unparalleled performance in a wide range of implantable device and neurostimulation applications and allow our customers to incorporate advanced power-hungry features into these devices. While companies typically announce new products that have modest improvements in form and/or function regularly, we believe the Q-Series firmly establishes a new industry standard. It delivers advanced performance criteria to an industry that historically embraces new products. We believe the Q-Series will represent a major breakthrough by combining a smaller size with greater energy density (more power).
Based on our limited test results to date, batteries incorporating nanotechnology may demonstrate the potential for generating even further improvements. While nanotechnology is showing some limited benefits in current battery designs, we do not anticipate realizing its full potential until it can be tested in the Q-Series design. As the word implies, "nano" unlocks the promise of smaller size and offers potential for enhanced product performance and manufacturability. Additionally, nano applications are not limited to batteries. The same technology may well be the enabling force behind other new products now in development such as significantly smaller higher voltage capacitors, novel form batteries and capacitors that will be used in new, far less intrusive cardiac therapy applications that represent an entirely new approach to CRM treatment.
NON-RECURRING CHARGES
During first quarter 2005, we recorded non-recurring charges in other operating expense related to our ongoing cost savings and consolidation efforts.
SEVERANCE CHARGES. The Company implemented a 4% workforce reduction, which resulted in a severance charge of $1.5 million during the quarter. Of this amount, $0.8 million was paid in cash during the quarter. The remaining balance is anticipated to be paid in cash within the next six months.
ALDEN FACILITY CONSOLIDATION. On February 23, 2005, we announced our intent to consolidate the medical capacitor manufacturing operations, currently in Cheektowaga, NY, and the implantable medical battery manufacturing operations, currently in Clarence, NY, into the advanced power source manufacturing facility in Alden, NY ("Alden Facility"). We are also consolidating the capacitor research, development and engineering operations from the Cheektowaga, NY, facility into the existing implantable medical battery research, development, and engineering operations in Clarence, NY.
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The total cost estimated for these consolidation efforts is anticipated to be between $3.5 and $4.0 million. Infrastructure expenses of $0.03 million were incurred and paid in cash during the quarter. We expect to incur the remaining expense over the next three fiscal quarters.
CARSON CITY FACILITY SHUTDOWN AND TIJUANA FACILITY CONSOLIDATION. On March 7, 2005, we announced our intent to close the Carson City, NV facility ("Carson City Facility") and consolidate the work performed at the Carson City Facility into the Tijuana, Mexico facility ("Tijuana Facility").
The total estimated cost for this facility consolidation plan is anticipated to be between $4.5 million and $5.4 million, comprised of between $2.5 million to $2.9 million for the Carson City Facility shutdown and $2.0 to $2.5 million for the Tijuana Facility consolidation. We expect to incur these additional costs over the next four fiscal quarters. All categories of costs are considered to be future cash expenditures, except accelerated depreciation.
Carson City Facility shutdown expenses of $0.2 million were recorded during the quarter, $0.15 million for severance and retention and $0.05 million for accelerated depreciation. None of the severance and retention amounts were paid by the end of the first quarter.
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Results of Operation and Financial Condition
                                                                                 Three months ended
                                                                                      March 31,              $            %
In thousands, except per share data                                             2005          2004        Change       Change
---------------------------------------------------------------------------------------------------------------------------------
IMC
     ICD batteries                                                               $ 10,751      $ 9,420        1,331          14%
     Pacemaker and other batteries                                                  5,255        5,694         (439)         -8%
     ICD Capacitors                                                                 4,297        8,408       (4,111)        -49%
     Feedthroughs                                                                  13,682       13,727          (45)          0%
     Enclosures                                                                     6,547        5,397        1,150          21%
     Other                                                                          7,333        5,632        1,701          30%
                                                                            -----------------------------------------------------
Total IMC                                                                          47,865       48,278         (413)         -1%
ECP                                                                                 8,493        7,247        1,246          17%
                                                                            -----------------------------------------------------
Total sales                                                                        56,358       55,525          833           2%
Cost of sales                                                                      35,571       32,350        3,221          10%
                                                                            -----------------------------------------------------
Gross profit                                                                       20,787       23,175       (2,388)        -10%
Gross margin                                                                         36.9%        41.7%                    -4.8%

Selling, general, and administrative expenses (SG&A)                                6,766        6,925         (159)         -2%
SG&A as a % of sales                                                                12.0%        12.5%                     -0.5%

Research, development and engineering costs, net (RD&E)                             4,401        4,881         (480)        -10%
RD&E as a % of sales                                                                  7.8%         8.8%                    -1.0%

Intangible amortization                                                               958          775          183          24%
Other operating expense, net                                                        2,388          221        2,167         981%
                                                                            -----------------------------------------------------
Operating income                                                                    6,274       10,373       (4,099)        -40%
Operating margin                                                                     11.1%        18.7%                     7.6%

Interest expense                                                                    1,131        1,160          (29)         -3%
Interest income                                                                      (575)        (313)        (262)         84%
Other expense (income), net                                                             -            2           (2)       -100%
Provision for income taxes                                                          1,715        2,905       (1,190)        -41%
Effective tax rate                                                                   30.0%        30.5%                    -0.5%
                                                                            -----------------------------------------------------
Net income                                                                        $ 4,003      $ 6,619      $(2,616)        -40%
                                                                            =====================================================
Net margin                                                                            7.1%        11.9%                    -4.8%
Diluted earnings per share                                                         $ 0.19       $ 0.29      $ (0.10)        -34%	

-19-
SALES
IMC. The nature and extent of our selling relationship with each CRM customer is different in terms of component products purchased, selling prices, product volumes, ordering patterns and inventory management. We have pricing arrangements with our customers that many times do not specify minimum order quantities. Our visibility to customer ordering patterns is over a relatively short period of time. Our customers may have inventory management programs and alternate supply arrangements of which we are unaware. Additionally, the relative market share among the CRM device manufacturers changes periodically. Consequently, these and other factors can significantly impact our sales in any given period.
The 1% decrease in IMC sales was primarily due to lower demand by a major customer for wet tantalum capacitors combined with an average 1% reduction in selling prices. The decrease in volume of capacitors was partially offset by increased volume of other IMC products, primarily coated components, ICD batteries and enclosures. Sales of a minor amount of assembly products manufactured in our Tijuana Facility commenced during the quarter.
ECP. Similar to IMC customers, we have pricing arrangements with our customers that many times do not specify minimum quantities. Our visibility to customer ordering patterns is over a relatively short period of time. The 17% increase in ECP sales is due to volume, resulting from increased demand for power sources used in pipeline inspections. This demand can be attributed in part to increased legislation in the oil and gas industry, resulting in the requirement of more frequent inspections.
GROSS PROFIT
The 480 basis point decrease in gross margin was primarily due to the following factors:
a. Increased period costs resulting from excess capacity at our Tijuana assembly plant: 150 basis points;
b. Increased period costs resulting from excess capacity at our wet tantalum capacitor manufacturing plant: 120 basis points;
c. Lower IMC selling prices: 100 basis points;
d. Various other individually immaterial items: 110 basis points.
SG&A EXPENSES
Expenses decreased as a result of cost savings initiatives instituted mid-year 2004 and January 2005 including workforce reductions and consolidation efforts.
RD&E EXPENSES
Expenses decreased as a result of cost reduction measures in our engineering functions of $0.2 million, workforce reductions related to our cost savings initiatives, and increased engineering income of $0.2 million from new product development projects.
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AMORTIZATION EXPENSE
The increase primarily reflects the impact of the additional intangible amortization resulting from the NanoGram acquisition. The amortization of the NanoGram intangibles amounts to approximately $0.4 million in the first quarter of 2005.
OTHER OPERATING EXPENSE
The increase is comprised of the following:
a. $1.5 million related to severance cost from a 4% reduction in workforce;
b. $0.5 million related to asset writedowns;
c. $0.2 million related to cost associated with the shutdown of the Carson City facility;
d. $0.2 million related to costs associated with the start-up of the Tijuana facility.
Refer to non-recurring charges discussion for disclosure related to the timing and level of remaining expenditures for items a, c, and d.
INTEREST EXPENSE AND INTEREST INCOME
Interest expense was consistent from the prior year.
Interest income increased due to the movement of investments in mid-2004 from tax deferred to taxable securities, which bear higher rates of return.
PROVISION FOR INCOME TAXES
The effective tax rate declined due to various state tax planning initiatives realized in mid-2004. We anticipate the full year effective tax rate will not exceed 30.0%.
Our effective tax rate is below the United States statutory rate primarily as a result of federal and state tax credits and the allowable Extraterritorial Income Exclusion ("ETI") for 2005.
LIQUIDITY AND CAPITAL RESOURCES
REVOLVING LINE OF CREDIT
As of March 31, 2005, we had no balance outstanding on our existing $20.0 million committed revolving line of credit. As of March 31, 2005 we were not in compliance with one of the financial covenants in the credit agreement. We are in the process of amending the agreement with our lending syndicate and we expect to have an amended agreement in place before May 31, 2005. We expect that the amended agreement will include a larger credit line and revised financial covenants.
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Our principal sources of liquidity are our operating cash flow combined with our working capital of $138.5 million at March 31, 2005 and our unused credit line with our lending syndicate. Historically we have generated cash from operations sufficient to meet our capital expenditure and debt service needs, other than for acquisitions. At March 31, 2005, our current ratio was 7.0:1.
The Company regularly engages in discussions relating to potential acquisitions and may announce an acquisition transaction at any time.
OPERATING ACTIVITIES
Positive cash flows from operating activities were achieved in both periods presented. During the current period, increased accounts receivable utilized approximately $5.0 million dollars of the cash provided from operating activities.
INVESTING ACTIVITIES
The majority of the current year increase in capital spending was for the following:
a. New medical power manufacturing plant in Alden, NY - $3.0 million; and
b. New assembly plant in Tijuana, Mexico - $4.0 million.
In March 2004, we purchased NanoGram for approximately $45.7 million. The most significant elements of the purchase price allocation were to patented and unpatented technology and goodwill. The cost is being amortized over the remaining estimated useful life of 11.5 years. The residual amount of the allocation of $35.1 million went to goodwill, which is not amortized but rather subject to periodic testing for impairment. NanoGram is now referred to as our Advanced Research Laboratory. Since the primary function of this operation is research and development, all costs are appropriately classified in that category.
Approximately $4.1 million of cash was converted to short-term investments during the quarter.
FINANCING ACTIVITIES
Payments on capital lease obligations and non-qualified stock option exercises are the primary financing activities for both periods presented.
CAPITAL STRUCTURE
At March 31, 2005, our capital structure consisted primarily of $170.0 million of convertible subordinated notes and our 21.6 million shares of common stock outstanding. We have in excess of $86.0 million in cash, cash equivalents and short-term investments and are in a position to facilitate future acquisitions if necessary. We are also authorized to issue 100 million shares of common stock and 100 million shares of preferred stock. The market value of our outstanding common stock since our IPO has exceeded our book value and the average daily trading volume of our common stock has also increased; accordingly, we believe that if needed we can access public markets to sell additional common or preferred stock assuming conditions are appropriate.
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Our capital structure allows us to support our internal growth and provides liquidity for corporate development initiatives. The current expectation for 2005 is that capital spending is expected to be in the range of $30.0 million to $35.0 million, primarily due to the build-out of the Alden Facility ($11.0 million), the Tijuana Facility ($10.0 million), and normal maintenance capital expenditures.
OFF-BALANCE SHEET ARRANGEMENTS
We have no off-balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K.
INFLATION
We do not believe that inflation has had a significant effect on our operations.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In November 2004, the FASB issued SFAS No. 151, INVENTORY COSTS, an amendment of ARB No. 43, Chapter 4 ("SFAS 151"). SFAS No. 151 amends the guidance in ARB No. 43, Chapter 4, "Inventory Pricing," to clarify the accounting for abnormal amounts of idle facility expense, handling costs and wasted material (spoilage). Among other provisions, the new rule requires that such items be recognized as current-period charges, regardless of whether they meet the criterion of "so abnormal" as stated in ARB No. 43. SFAS 151 is effective for fiscal years beginning after June 15, 2005. We do not expect that adoption of SFAS 151 will have a material effect on our consolidated financial position, consolidated results of operations, or liquidity.
In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), SHARE-BASED PAYMENT ("SFAS 123(R)"). This statement is a revision of SFAS 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, and supercedes APB Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. This standard requires us to measure the cost of employee services received in exchange for equity awards based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards.
We will adopt the provisions of SFAS 123(R) on January 1, 2006 using the modified prospective application. Accordingly, we will recognize compensation expense for all newly granted awards and awards modified, repurchased, or cancelled after January 1, 2006. Compensation cost for the unvested portion of awards that are outstanding as of January 1, 2006 will be recognized ratably over the remaining vesting period. The compensation cost for the unvested portion of awards will be based on the fair value at date of grant as calculated for our pro forma disclosure under SFAS No. 123.
-23-
We estimate that the effect on net income and earnings per share in the periods following adoption of SFAS 123(R) will be consistent with our pro forma disclosure under SFAS No. 123, except that estimated forfeitures will be considered in the calculation of compensation expense under SFAS 123(R). Additionally, the actual effect on net income and earnings per share will vary depending upon the number of options granted in subsequent periods compared to prior years.
APPLICATION OF CRITICAL ACCOUNTING ESTIMATES
Our unaudited condensed consolidated financial statements are based on the selection of accounting policies and the application of significant accounting estimates, some of which require management to make significant assumptions. We believe that some of the more critical estimates and related assumptions that affect our financial condition and results of operations are in the areas of inventories, goodwill and other indefinite lived intangible assets, long-lived assets and income taxes.
During the three months ended March 31, 2005, we did not change or adopt new accounting policies that had a material effect on our consolidated financial condition and results of operations.
CONTRACTUAL OBLIGATIONS
During 2004, we commenced the build out of our Alden Facility and our Tijuana Facility. These facilities will enable the Company to further consolidate its operations and implement state of the art manufacturing capabilities at both locations. The contractual obligations for construction of these facilities is $6.0 million and will be financed by existing, or internally generated cash.
LITIGATION
During 2002, a former non-medical customer commenced an action alleging that we used proprietary information of the customer to develop certain products. We have meritorious defenses and are vigorously defending the case. No accrual for an adverse judgment has been made as such outcome is not deemed probable, the potential risk of loss is between $0.0 and $1.75 million.
On May 2, 2005, a complaint was filed against us by a developer of an implantable drug delivery device in the United States Federal District Court for the Central District of California. The complaint was legally served on us on May 6, 2005. In its complaint, the plaintiff alleges that we have breached a 2002 supply agreement providing for us to supply the customer with pumps for drug delivery devices that it is developing. Plaintiff seeks significant compensatory and punitive damages, together with certain declatory and injunctive relief. While we have not completed our investigation, we believe we have meritorious defenses and intend to vigorously defend this action.
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FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Quarterly Report on Form 10-Q and other written and oral statements made from time to time by us and our representatives, are not statements of historical or current fact. As such, they are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations, which are subject to known and unknown risks, uncertainties and assumptions. They include statements relating to:
o future sales, expenses and profitability;
o the future development and expected growth of our business and the implantable medical device industry;
o our ability to successfully execute our business model and our business strategy;
o our ability to identify trends within the for implantable medical devices, medical components, and commercial power sources industries and to offer products and services that meet the changing needs of those markets;
o projected capital expenditures; and
o trends in government regulation.
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 the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those suggested by these forward-looking statements. In evaluating these statements and our prospects generally, you should carefully consider the factors set forth below. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary factors and to others contained throughout this report. We are under no duty to update any of the forward-looking statements after the date of this report or to conform these statements to actual results.
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: dependence upon a limited number of customers, product obsolescence, inability to market current or future products, pricing pressure from customers, reliance on third party suppliers for raw materials, products and subcomponents, fluctuating operating results, inability to maintain high quality standards for our products, challenges to our intellectual property rights, product liability claims, inability to successfully consummate and integrate acquisitions, unsuccessful expansion into new markets, competition, inability to obtain licenses to key technology, regulatory changes or consolidation in the healthcare industry, and other risks and uncertainties that arise from time to time as described in the Company's Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission.
-25-
 
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Under our line of credit any borrowings bear interest at fluctuating market rates. At March 31, 2005, we did not have any borrowings outstanding under our line of credit and thus no interest rate sensitive financial instruments.
ITEM 4. CONTROLS AND PROCEDURES.
a. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. During the first quarter of 2005, our management, including the principal executive officer and principal financial officer, evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) related to the recording, processing, summarization and reporting of information in our reports that we file with the SEC. These disclosure controls and procedures have been designed to ensure that material information relating to us, including our subsidiaries, is made known to our management, including these officers, by other of our employees, and that this information is recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC's rules and forms. Due to the inherent limitations of control systems, not all misstatements may be detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Our controls and procedures can only provide reasonable, not absolute, assurance that the above objectives have been met.
Based on their evaluation as of March 31, 2005, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to reasonably ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
b. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
 During 2002, a former non-medical customer commenced an action alleging that the Company had used proprietary information of the customer to develop certain products. We have meritorious defenses and are vigorously defending the case. No accrual for an adverse judgment has been made as such outcome is not deemed probable, the potential risk of loss is between $0.0 and $1.75 million.
On May 2, 2005, a complaint was filed against the Company by a developer of an implantable drug delivery device in the United States Federal District Court for the Central District of California. The complaint was legally served on the Company on May 6, 2005. In its complaint, the plaintiff alleges that the Company has breached a 2002 supply agreement providing for the Company to supply the customer with pumps for drug delivery devices that it is developing. Plaintiff seeks significant compensatory and punitive damages, together with certain declatory and injunctive relief. While the Company has not completed its investigation, it believes that it has meritorious defenses and intends to vigorously defend this action.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
See the Exhibit Index for a list of those exhibits filed herewith.
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SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated:  May 11, 2005     WILSON GREATBATCH TECHNOLOGIES, INC.

                         By  /S/ EDWARD F. VOBORIL
                         --------------------------------------------------
                             Edward F. Voboril
                             Chairman of the Board,
                             President and Chief Executive
                             Officer
                             (Principal Executive Officer)

                         By  /S/ LAWRENCE P. REINHOLD
                         --------------------------------------------------
                             Lawrence P. Reinhold
                             Executive Vice President and
                             Chief Financial Officer
                             (Principal Financial Officer)

                         By  /S/ THOMAS J. MAZZA
                         --------------------------------------------------
                             Thomas J. Mazza
                             Vice President and Controller
                             (Principal Accounting Officer)	

-28-

                                  EXHIBIT INDEX

EXHIBIT NO.             DESCRIPTION

          3.1       Amended and Restated Certificate of Incorporation
                    (incorporated by reference to Exhibit 3.1 to our
                    registration statement on Form S-1 (File No. 333-37554)
                    filed on May 22, 2000).

          3.2       Amended and Restated Bylaws (incorporated by reference to
                    Exhibit 3.2 to our quarterly report on Form 10-Q ended March
                    29, 2002).

          10.1+     Supply Agreement for filtered feedthrough materials and
                    components dated February 22, 2005, between Wilson
                    Greatbatch Technologies, Inc. and Guidant Corporation.

          31.1      Certification of Chief Executive Officer pursuant to Rule
                    13a-14(a) of the Securities Exchange Act.

          31.2      Certification of Chief Financial Officer pursuant to Rule
                    13a-14(a) of the Securities Exchange Act.

          32.1      Certification of Chief Executive Officer and Chief Financial
                    Officer pursuant to 18 U.S.C. Section 1350 as adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	

Portions of the exhibit marked "+" have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.
-29-
 
EXHIBIT 10.1
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT, WHICH HAVE BEEN REMOVED AND REPLACED WITH AN ASTERISK, HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933 AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
Filtered Feedthrough Supply Agreement
Wilson Greatbatch LTD
&
Cardiac Pacemakers, Inc.
Table of Contents
Section Title
I. Contract Period
II. Contract Term
III. Continuity Agreement
IV. Price
Lead Time
V. Manufacturing Location
VI. Forecast Planning
VII. Raw Materials Specified by CPI
VIII. Cancellation Charges
IX. Warranty, Indemnity and Liability Limitation
X. Confidentiality
XI. Force Majeure
XII. Miscellaneous
Attachments: A, B, C
-2-
THIS AGREEMENT, effective February 10, 2005, is between WILSON GREATBATCH LTD., a New York corporation located at 9645 Wehrle Drive, Clarence, New York, 14031 (`SELLER' or `WG') and Cardiac Pacemakers, Inc., (`BUYER' or `CPI') a Minnesota Corporation, located at 4100 Hamline Ave. No., St. Paul, Minnesota 55112.
Whereas BUYER wishes to purchase filtered feedthrough materials/components for its use in medical devices; and
Whereas SELLER agrees to manufacture/provide such filtered feedthrough materials/components in accordance with BUYER's specifications, delivery schedules and other requirements referenced in the AGREEMENT;
NOW, THEREFORE, SELLER and BUYER hereby agree as follows:
I. CONTRACT PERIOD:
This AGREEMENT shall commence on the effective date and terminate December 31, 2007 with yearly extensions beyond the termination date to be based upon mutual written agreement
A. Pricing shown in Attachment A is effective as of the effective date of this Agreement and shall not be applied retroactively to filtered feedthroughs already shipped.
B. All filtered feedthrough units that contain a feedthrough and a filter manufactured by WG and shipped to CPI from the period 01 January 2005 through 31 December 2005 are included in the 2005 quantity commitment made by CPI as outlined in
Section IV, D.
II. CONTRACT TERM:
A. CPI may terminate this agreement at any time with * written notice to WG.
B. In the event of early termination by CPI, WG will invoice CPI for all accumulated engineering and tooling on any custom filtered feedthrough model up to the date the termination letter is received by WG. All unique component parts for a custom filtered feedthrough model will be forwarded to CPI and invoiced at aggregate cost. CPI will be responsible for paying for all work-in-process ("WIP") costs and all finished goods inventory specific to CPI custom designs.
-3-
C. In the event of early termination, WG will dispose of all in-house tooling designed to be used by WG exclusively for any CPI custom filtered feedthrough under the auspices of CPI representatives. This will be done to ensure that financially shared tooling between CPI and WG will not be used for the manufacture of another customer's filtered feedthrough.
D. This agreement may not be modified, changed or terminated orally. No change, modification, addition, or amendment shall be valid unless in writing indicating intent to modify this agreement and signed by an authorized officer of each party.
III. CONTINUITY AGREEMENT:
A. In the event WG experiences a major catastrophe that would prohibit the shipment of filtered feedthroughs in sufficient quantities to meet CPI's firm purchase orders, WG will immediately notify CPI of the nature of the problem and begin discussions on the length of time that shipments will be delayed.
B. *
C. WG must give CPI * written notice of any intent to discontinue supply of filtered feedthroughs to CPI, but WG shall not be bound after the expiration of this agreement to the pricing set forth in Attachment A.
IV. PRICE:
A. CPI will commit to take delivery of a minimum of * WG filtered feedthroughs from 1/1/05 through 12/31/07. CPI will use reasonable efforts to provide ample notification if order patterns change significantly from typical order patterns.
B. Pricing for filtered feedthroughs is shown in Attachment A and is effective for all deliveries scheduled from the date of execution of this Agreement through 31 December 2007. Adjustments under the terms of Section IV "G" of this Agreement apply.
C. Pricing for each calendar year is based upon the minimum quantity commitment (hereafter, collectively the "CPI Commitment") made by CPI for deliveries of WG filtered feedthroughs that contain a feedthrough and a filter manufactured by WG
-4-
D. For calendar year 2005 only, WG will offer CPI the pricing shown in the * unit column of Attachment A for a minimum commitment of * WG filtered feedthroughs that contain a feedthrough and a filter manufactured by WG under the following conditions:
a. CPI demonstrates that the * unit shortfall is solely due to the unavailability of qualified WG Columbia feedthroughs for * and * devices
b. CPI will continue active effort to qualify WG Columbia feedthroughs in * and * filtered feedthroughs
c. Upon successful qualification of these components, CPI will provide a minimum blanket order for * units (combined total) of WG * and/or * filtered feedthroughs
E. In the event that in response to a purchase order issued by CPI, WG is unable to provide the requested filtered feedthroughs in the quantity, quality or within the timeframe requested, the CPI Commitment herein (as it applies to each filtered feedthrough) shall be reduced proportionately. This shall only apply if CPI has allowed WG standard lead times on the purchase order.
F. Additional new parts or additional quantity breaks will be added to this agreement, as needed. *
G. Price Adjustments for Significant Cost Impact: The price for any filtered feedthrough may be adjusted up or down during the term of this agreement, by mutual consent, if there is significant impact to the final cost of the component for these reasons:
1. Precious Metals Price Adjustment for WG supplied feedthroughs only: The price for any filtered feedthrough is subject to upward or downward modification from time to time due to an increase or decrease, as the case may be, in the six-month moving average cost to WG of platinum, to the extent WG's price change is based on an increase or decrease in the cost of platinum in an amount greater than * of the current cost of platinum contained in any filtered feedthrough. The reference price of platinum will be based upon the London Fixed as reported by Kitco. If WG determines that a price increase or decrease under this Section is required or permissible, WG shall deliver written notice to CPI setting forth the basis for such determination. The parties agree to negotiate in good faith after delivery of such notice with respect to an adjustment to the pricing set forth in the pricing table of the proposal. The cost of platinum used as the basis to establish pricing in Attachment A of this Agreement was $* per ounce.
-5-
An example of this precious metals adjustment is shown below:
CPI Product *:
- Amount of platinum used per above part number - * inches

 - Diameter of platinum wire used for above part
   numbers  - * inches
 - Current cost of platinum per ounce - $*
 - Current cost of platinum used per above part numbers - $*

Price adjustment trigger points under terms of Price
  Adjustment language above
 - Upper trigger point
 - Cost of platinum > $* per above part numbers (six
   month moving average cost of platinum > $* / ounce)
 - Lower trigger point - Cost of platinum < $* per
   above part numbers (six month moving average
   cost of platinum < $* / ounce)	

2. Precious Metals Price Adjustment for * supplied feedthroughs only: Should * provide notice to WG that the cost of precious metals used within their feedthroughs supplied to WG has increased or decreased more than $* per ounce from the quoted platinum price of $* an ounce, and the price has held at that rate for more than *, WG shall deliver written notice to CPI. CPI shall review and audit information directly with *. If the price change is deemed warranted by CPI, notice will be provided back to WG, and the filitered feedthrough pricing shown in Attachment A will be adjusted by that incremental amount only, and only on firm Purchase Orders using * feedthrus.
3. Material Substitution: If the design of any feedthrough or filtered feedthrough changes to allow alternate materials and those materials are lower or higher in cost than previous materials, prices will be discussed and mutually agreed upon at that time.
4. Design changes: If the design of any feedthrough or filtered feedthrough is altered and it affects the manufacturing costs of the part, prices will be discussed and mutually agreed upon at that time.
H. Payment terms are net *, FOB Carson City, NV for filtered feedthroughs. There is a * minimum order per part number unless CPI's total calendar year forecast is less than *.
-6-
V. LEAD TIME:
Standard lead-time for production-filtered feedthroughs is *. WG will notify CPI, in writing, of any changes to these standard lead times.
VI. MANUFACTURING LOCATION:
Should WG wish to manufacture CPI feedthroughs or filtered feedthroughs at any location other than the approved site (Columbia, MD for feedthroughs and Carson City, NV for filtered feedthroughs) WG shall provide written notice to CPI at least 180 days before the site change, to allow for product qualification. WG agrees to provide CPI with transfer plans, site specifications, on-site inspection and audit opportunities and any reasonable documentation as requested by CPI to ensure WG's ability to continue production of acceptable products. Should WG manufacturing move outside the U.S., CPI reserves the right to review and approve any additional charges that result from the move outside the U.S. The parties acknowledge WG's QPR rating (as determined by CPI) and delivery performance as of the effective Date of this Agreement as the desired performance to be achieved and maintained by WG. It is CPI's intent pursuant to this Agreement (and regardless of the location at which feedthroughs and filtered feedthroughs are manufactured) that WG's quality and delivery ratings shall remain consistent with current levels. CPI will qualify each feedthrough or filtered feedthrough before production components can be shipped to CPI.
VII. FORECAST PLANNING:
A. By * of each Contract Year, CPI shall provide WG with a non-binding * forecast indicating CPI's forecasted purchases of all filtered feedthroughs from WG for the next Contract Year. The forecast for the months remaining in 2005 shall be provided within * of the effective date of this Agreement. Also included in such forecasts is the required split between WG feedthroughs and * feedthroughs. The Forecast shall be used for purposes of facilitating each party's planning and in order to meet the lead times required by certain of WG's suppliers. Such forecasts are not legally binding in any manner and may be revised from time to time by CPI, as it deems appropriate, by providing notice to WG.
B. By the fifteenth day of every month, CPI will submit to WG in writing the following information:
(i) A rolling * forecast of anticipated needs. Such forecast shall not be binding on CPI or WG. Only a firm purchase order that is accepted by WG shall create a binding commitment.
(ii) A firm purchase order for each of the immediately following *
-7-
VIII. RAW MATERIALS SPECIFIED BY CPI:
Should a supplier of a component specified by CPI fail to meet the applicable specifications or fail to deliver to an acceptable schedule, and WG cannot rectify the situation, WG shall notify CPI, and a new plan of action shall be agreed upon, to the satisfaction of both parties.
IX. CANCELLATION CHARGES:
For those components not handled in a separate Kanban Agreement, in the event that CPI cancels a purchase order inside WG standard lead-time (or any other lead time separately agreed upon in writing), CPI will be responsible for all finished product, WIP and raw material or components. In the event that CPI cancels a purchase order outside of agreed upon lead-time, CPI and WG will negotiate resulting costs.
X. WARRANTY, INDEMNITY AND LIABILITY LIMITATION:
See attached Warranty Form (Attachment B), which is incorporated into and made a part of this agreement. This warranty shall include unfiltered feedthroughs directly sold from WG to CPI.
XI. CONFIDENTIALITY:
Notwithstanding anything to the contrary contained in this agreement, neither party may initiate or make any public announcement or other disclosure concerning the terms and conditions or the subject matter of this agreement to any third party without the prior written approval of the other party except as may be required by law. In those circumstances where either party believes that any such disclosure is required by law, it shall (a) notify the other party on a timely basis in advance and (b) use its best efforts to seek confidential treatment of the material provisions of this agreement, to the greatest extent permitted by law.
XII. FORCE MAJEURE.
A. "Force Majeure" shall mean any event or condition, not existing as of the date of signature of this Agreement, not reasonably foreseeable as of such date and not reasonably within the control of either party, which prevents in whole or in material part the performance by one of the parties of its obligations hereunder, including, but not limited to,
(i) flood, storm, earthquake, strike, lockout, embargoes, and acts of God, war and/or public enemy.
B. Upon giving notice to the other party, a party affected by an event of Force Majeure shall be released without any liability on its part from the performance of its obligations under this Agreement, except for the obligations under Article III hereof and to pay any amounts due and owing hereunder, but only to the extent and only for the period that its performance of such obligations is prevented by the event of Force Majeure.
-8-
C. During the period that the performance by one of the parties of its obligations under this Agreement has been suspended by reason of an event of Force Majeure, the other party may likewise suspend the performance of all or part of its obligations hereunder to the extent that such suspension is commercially reasonable.
XIII. MISCELLANEOUS:
A. This agreement sets forth the parties' entire agreement with respect to the subject matter hereof and no provision hereof can be amended or waived except in writing signed by both parties. This agreement shall be interpreted, construed and governed by and in accordance with the laws of the State of Minnesota.
B. Either party may assign this agreement to an entity, which acquires, directly or indirectly, substantially all of the assets or merges with it. Except as set forth herein, neither this agreement nor any rights here under, in whole or in part, shall be assignable or otherwise transferable by either party without the express written consent of the other party. Subject to the above, this agreement shall be binding upon and inure to the benefit of the successors and assigns to the parties here to.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their authorized representatives.

BUYER:                                      SELLER:

CARDIAC PACEMAKERS, INC.            WILSON GREATBATCH LTD.

By:_____________________________  By:_____________________________

Title:__________________________  Title:__________________________

Date:___________________________  Date:___________________________	

-9-
 
Attachment A

                                    *           *            *            *           *          *
                               WG Minimum   WG Minimum   WG Minimum  WG Minimum  WG Minimum  WG Minimum
          Part      Minumum      Annual       Annual       Annual      Annual      Annual      Annual
Product   Number    Quantity   Commitment   Commitment   Commitment  Commitment  Commitment  Commitment
--------  -------   ---------  -----------  -----------  ----------  ----------  ----------  -----------
*           *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
*           *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
*           *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*	

Attachment A (cont.)
ATTACHMENT B

                                    *            *           *           *           *           *
                               WG Minimum   WG Minimum   WG Minimum  WG Minimum  WG Minimum  WG Minimum
          Part      Minumum      Annual       Annual       Annual      Annual      Annual      Annual
Product   Number    Quantity   Commitment   Commitment   Commitment  Commitment  Commitment  Commitment
--------  -------   ---------  -----------  -----------  ----------  ----------  ----------  -----------
*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*

*           *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*
            *            *          $*          $*          $*          $*          $*          $*	

Wilson Greatbatch LTD
PRODUCTS WARRANTY AND LIMITATION OF LIABILITY

WARRANTY
WG warrants that product manufactured by WG and delivered to the user (a) shall meet the WG specifications for such product and (b) shall be free of defects in material and workmanship for a period of * from the date of manufacture.
WG's sole obligation under this Warranty is the repair or replacement, at its election, of any product in place of any such product that is found upon WG's inspection, to be defective in material or workmanship during the period prescribed above. Such product will be repaired or replaced without charge to the user provided that, (1) prior written approval is required before returning any product, (2) freight to WG shall be prepaid, and (3) any product return sent to WG without prior written approval will be returned to sender, freight collect.
This Warranty does not extend to malfunction and/or failure occurring as a result of any of the following: normal use, abuse, misuse, any alteration or modification made to the product without express written consent of WG, attempted disassembly, neglect, improper installation, or any other use inconsistent with the specifications or warninWG or recommended operating practices specific to the product.
THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIED (EXCEPT OF TITLE), EXPRESSED, IMPLIED, OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.
Attachment C
LIMITATION OF LIABILITY
THE REMEDIES OF THE USER IN THE WARRANTY SET FORTH ABOVE ARE EXCLUSIVE, AND THE TOTAL LIABILITY OF WG WITH RESPECT TO THE PRODUCT SOLD TO THE USER, IN CONNECTION WITH THE PERFORMANCE THEREOF, OR FROM THE SALE, DELIVERY, INSTALLATION OR REPAIR COVERED BY OR FURNISHED UNDER ANY SALE TO THE USER WHETHER BASED ON CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY, STRICT LIABILITY, OR OTHERWISE, SHALL NOT EXCEED THE PURCHASE PRICE OF THE PRODUCT UPON WHICH SUCH LIABILITY IS PLACED. WG, ITS SUPPLIERS, AND ITS DISTRIBUTORS SHALL IN NO EVENT BE LIABLE TO THE USER, OR TO ANY SUCCESSOR IN INTEREST OR ANY BENEFICIARY OR ASSIGNEE THEREOF, RELATING TO THE SALE OF ANY WG PRODUCT FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF SUCH SALE, OR ANY DEFECTS IN, OR FAILURE OF, OR MALFUNCTION OF THE PRODUCT UNDER SUCH SALE INCLUDING BUT NOT LIMITED TO, DAMAGES BASED UPON LOSS OF USE, LOST PROFITS OR REVENUES, INTEREST, LOST GOODWILL, INCREASED EXPENSES AND/OR CLAIMS OF CUSTOMERS OF THE USER, WHETHER OR NOT SUCH LOSS OR DAMAGE IS BASED ON CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY, STRICT LIABILITY OR OTHERWISE.
FIRST AMENDMENT TO FILTERED FEEDTHROUGH SUPPLY
AGREEMENT BETWEEN WILSON GREATBATCH LTD. AND
CARDIAC PACEMAKERS, INC.
This First Amendment (the "Amendment") to the Filtered Feedthrough Supply Agreement between WILSON GREATBATCH LTD, a New York corporation ("SELLER" or "WG"), and Cardiac Pacemakers, Inc. d/b/a "Guidant", a Minnesota corporation ("BUYER" or "CPI"). SELLER and BUYER are collectively referred to herein as the "Parties." This Amendment is entered into effective as of March 8, 2005 (the "Effective Date").
BACKGROUND
A. The Parties entered into a Filtered Feedthrough Supply Agreement (the "Agreement") effective February 10, 2005.
B. The Parties to the Agreement desire to replace the (i) original Attachment A with a new Attachment A-1.
AGREEMENT
The Parties hereby agree as follows:
1. As of the Effective Date, Attachment A to the Agreement is hereby amended and restated in its entirety by Attachment A-1 which is attached hereto.
2. Except as provided herein, the Agreement shall remain unchanged and in full force and effect.
The Parties have caused this Amendment to be executed by their respective duly authorized representatives as of the Effective Date.

BUYER:                                               SELLER:

CARDIAC PACEMAKERS, INC.                    WILSON GREATBATCH LTD.

By:___________________________         By:___________________________

Title:________________________         Title:________________________

Date:_________________________         Date:_________________________	

WG FFT Pricing Proposal 2005-2007
March 8, 2005

                                 --------- ------------- -------------- -------------- ------------- -------------- -------------
                                                *              *              *             *              *             *
                                            WG Minimum    WG Minimum     WG Minimum     WG Minimum    WG Minimum     WG Minimum
                    Guidant Part Minimum      Annual        Annual         Annual         Annual        Annual         Annual
     Product           Number    Quantity   Commitment    Commitment     Commitment     Commitment    Commitment     Commitment
                   ------------- --------- ------------- -------------- -------------- ------------- -------------- -------------
*                         *         *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
*                         *         *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
*                                   *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *                     $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

*                         *         *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*
                                    *           $*            $*             $*             $*            $*             $*

                                 --------- ------------- -------------- -------------- ------------- -------------- -------------	

* These platinum values are subject to the same platinum adjustment as called out in Section IV, Paragraph G of this agreement.
 
EXHIBIT 31.1
CERTIFICATION
I, Edward F. Voboril, certify that:
1. I have reviewed this report on Form 10-Q for the fiscal quarter ended April 1, 2005 of Wilson Greatbatch Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
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5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  May 11, 2005

                                  /S/ EDWARD F. VOBORIL
                                  --------------------------------------------
                                  Edward F. Voboril
                                  Chairman of the Board, President and
                                  Chief Executive Officer	

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EXHIBIT 31.2
CERTIFICATION
I, Lawrence P. Reinhold, certify that:
1. I have reviewed this report on Form 10-Q for the fiscal quarter ended April 1, 2005 of Wilson Greatbatch Technologies, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
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5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditor and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  May 11, 2005

                                      /S/ LAWRENCE P. REINHOLD
                                      ----------------------------
                                      Lawrence P. Reinhold
                                      Executive Vice President and
                                      Chief Financial Officer	

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EXHIBIT 32
CERTIFICATION
Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Wilson Greatbatch Technologies, Inc. (the "Company"), does hereby certify, to such officer's knowledge, that:
The Quarterly Report on Form 10-Q for the quarter ended April 1, 2005 (the "Form 10-Q") of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 Dated: May 11, 2005        /S/ EDWARD F. VOBORIL
                            --------------------------------------------
                                     Edward F. Voboril
                                     President and Chief Executive
                                     Officer and Chairman of the Board

Dated: May 11, 2005         /S/ LAWRENCE P. REINHOLD
                            -----------------------------------
                                     Lawrence P. Reinhold
                                     Executive Vice President and
                                     Chief Financial Officer	

This certification is being furnished solely to accompany this Form 10-Q pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise, and is not to be deemed incorporated by reference into any filing of the Company except to the extent the company specifically incorporates it by reference therein.
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