When patients' hearts race out of control, implantable cardiac defibrillators, or ICDs, can help put on the brakes. These devices can detect irregularly rapid heartbeats and shock the heart back into a normal rhythm. They may also help to keep growth strong and steady for Greatbatch (NYSE:GB), a leading developer of battery, capacitor, and related technologies for implanted medical devices.

Medtronic (NYSE:MDT) says that ICD market is growing at a mid-20's clip, while St. Jude (NYSE:STJ) is growing its ICD business at better than 60%. Medical companies both large and small are saying that the market for implanted electrical medical devices will be huge and poised for many, many years of growth -- all of which is music to Greatbatch's ears.

Sales were up 38% in the third quarter, and you don't have to think hard to figure out why. ICD batteries and capacitors alone make up more than a quarter of this company's revenue. Overall medical sales were up 43% this quarter (about 87% of the total), with pretty much every product category but enclosures (11% of medical, about 10% of the total) posting 30% or better sales growth.

Unfortunately, figuring out the margin and profit picture isn't quite so simple. Gross margin did improve very slightly in the quarter, but operating margin, operating profit, and net income were all impacted by charges relating to new manufacturing start-ups, restructuring, and asset writedowns. Excluding those charges, everything was shiny: Operating margins were up, and net income doubled.

Although there wasn't much news in this quarterly release, the company did announce a royalty agreement with Medtronic on some intellectual property relating to tantalum capacitors. I wouldn't expect a whole lot from this, and the company isn't expecting any near-term impact. But I find it noteworthy, since Medtronic usually does things in-house. Although the two companies already do business together, I'd find it an interesting development if Medtronic decided that it wanted or needed some of Greatbatch's capacitor technologies.

Investors new to this stock and/or medical technology in general will need to exercise some patience. It takes time to develop new devices and get them through the approval process. The great potential of neurostimulation and other implanted devices won't be fulfilled in the next quarter or three. Rather, it will be a steady process of innovation and -- if it's successful -- sales growth for this small pick-and-shovel type of company.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).