Revenue Discussion - Tissue Technologies revenues totaled $116.4 million in the second quarter, up 5.6% year over year on a reported basis and 5.7% on an organic basis, driven by high-double-digit growth in DuraSorb, mid-double-digit growth in Gentrix, and low double-digit growth in MicroMatrix, Cytal, and amniotics [2] - Total revenues in the reported quarter rose 9.7% year over year to $418.2 million, surpassing the Zacks Consensus Estimate by 1.4%, with organic growth of 2.3% year over year [19] Profitability - Adjusted operating profit was $0.7 million, down 95.6% year over year, with adjusted operating margin contracting 391 basis points year over year to 0.2% [3] - Gross profit totaled $225.9 million, up 9.1% year over year, but gross margin contracted 27 basis points to 54% [11] Guidance - For 2024, the company projects revenues in the range of $1.61 billion to $1.63 billion, down from previous guidance of $1.67 billion to $1.69 billion, indicating reported growth of 4.4% to 5.7% and organic growth of -1% to 0.3% [13] - For the third quarter of 2024, reported revenues are expected to be in the range of $372 million to $382 million, suggesting reported growth of -2.6% to 0.0% and organic growth of -9.4% to -6.7% [23] Financial Position - The company exited the second quarter of 2024 with cash and cash equivalents of $215.2 million, down from $591.9 million at the end of the first quarter [12] - Cumulative net cash flow from operating activities at the end of the second quarter of 2024 was $56.2 million compared to $54.4 million at the first-quarter end [30] Segmental Details - Revenues in the Codman Specialty Surgical (CSS) segment rose 11.3% year over year to $301.8 million, with organic growth of 0.9% attributed to high-single-digit growth in Dural Access and Repair, low-single-digit growth in advanced energy, and low-double-digit ENT growth [28] Expenses - Selling, general and administrative expenses increased 18.5% to $195.5 million, while research and development expenses rose 11.9% to $29.8 million [29] Earnings - Adjusted earnings per share (EPS) were 63 cents in the second quarter of 2024, down 11.3% year over year, but surpassed the Zacks Consensus Estimate by 1.6% [9] - The company projects adjusted EPS guidance for 2024 between 36 to 44 cents, down from the previously guided range of 3.01 to 3.11 [14][31]

UNITED STATES 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 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 INTEGRA LIFESCIENCES HOLDINGS CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Registrant's Telephone Number, Including Area Code: (609) 275-0500 Securities registered pursuant to Section 12(b) of the Act: Indicate by check mark wh ...

The company posted a loss per share of $0.16, based on generally accepted accounting principles (GAAP). Integra announced adjusted earnings per share (EPS) of $0.63. Although this reflected a decline from adjusted EPS of $0.71 in the prior-year period, it narrowly beat the consensus estimate of $0.62. Shares of Integra Lifesciences (IART -17.88%) were sinking 15.5% as of 11 a.m. ET on Monday. The decline came after the medical technology company announced its second-quarter results before the market opened. ...

Financial Data and Key Metrics Changes - The company reported Q2 revenues of approximately $418 million, representing a 9.7% growth on a reported basis and 2.3% on an organic basis compared to the prior year [11][16] - Adjusted EPS for the quarter was $0.63, down 11% compared to 2023 [16] - Adjusted EBITDA margins were 20%, down 330 basis points compared to 2023, primarily due to a decrease in gross margins [34][62] - Operating cash flow for the second quarter was $40 million [34] Business Line Data and Key Metrics Changes - The Codman Specialty Surgical (CSS) business reported Q2 revenues of $302 million, up 11.3% on a reported basis and 0.9% on an organic basis [17] - The ENT business saw 18% growth for the second quarter, reflecting early synergies from the Acclarent acquisition [35] - Tissue Technologies increased 5.6% on a reported basis and 5.7% on an organic basis, with high-double-digit growth in DuraSorb [36] Market Data and Key Metrics Changes - Global sales in neurosurgery grew 1.2% on an organic basis, with strong growth in certain franchises offset by backorders [17] - International business saw low-single-digit growth, with strong demand in many markets but unable to meet demand due to backorders [18] Company Strategy and Development Direction - The company is focused on a compliance master plan to improve quality systems and GMP compliance across its manufacturing and supply network, which will increase spending in the second half of 2024 [6][7] - The company remains committed to bringing PriMatrix and SurgiMend back to market and believes in its product portfolio and long-term growth prospects despite recent performance [8][12] - The integration of Acclarent is expected to expand addressable markets and provide immediate scale and accretive growth [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged operational and quality system gaps and emphasized the need for investments to strengthen compliance processes [23][24] - The company expects revenue and adjusted EPS guidance for the year to be impacted by supply holds and backorders, with a forecasted revenue range of $1.609 billion to $1.629 billion [31][70] - For 2025, the company anticipates mid-single-digit organic revenue growth, but also pockets of supply disruption due to the compliance master plan [43] Other Important Information - The company has total liquidity of $1.2 billion, including $297 million in cash and short-term investments [39] - The Braintree facility is expected to be operational in the first half of 2026, which will support the production of SurgiMend and PriMatrix [59][135] Q&A Session Summary Question: Can you provide more color on the shipping holds in Q3? - Management stated that the temporary shipping holds impact several SKUs across the CSS business and expects most holds to be cleared by Q3 [46][47] Question: Why are you confident that the shipping holds won't extend into 2025? - Management expressed confidence based on their plan to clear the majority of holds by the end of 2024, indicating that the issues are isolated to 2024 [50][51] Question: What are the anticipated investments over the next 18 months? - Investments will focus on improving quality compliance and supply chain capabilities, with capital spending expected to remain consistent with 2024 levels [101] Question: How do you plan to retain your sales force amid these challenges? - Management emphasized the importance of supporting the sales force to maintain relationships with customers and drive future growth [95][112] Question: What is the expected contribution of Acclarent to growth in 2025? - Acclarent is expected to contribute positively to growth, with the company seeing continued strength across other parts of the business [138]

Over the last four quarters, the company has surpassed consensus EPS estimates just once. Integra shares have lost about 27.8% since the beginning of the year versus the S&P 500's gain of 14.5%. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Investors should be mindf ...

[Second Quarter 2024 Highlights](index=1&type=section&id=Second%20Quarter%202024%20Highlights) Integra LifeSciences reported **$418.2 million** in Q2 2024 revenues, a **9.7%** increase, with adjusted EPS declining to **$0.63**, as compliance initiatives lead to temporary shipping holds and lowered full-year guidance, alongside strategic progress on Acclarent integration and future product relaunches Financial Highlights | Financial Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues (Millions USD) | $418.2 | $381.3 | +9.7% (Reported) | | Organic Revenues | - | - | +2.3% | | GAAP EPS | $(0.16) | $0.05 | - | | Adjusted EPS | $0.63 | $0.71 | -11.3% | - Updated full-year 2024 guidance to a revenue range of **$1.609 billion** to **$1.629 billion** and adjusted EPS of **$2.41** to **$2.57**, reflecting temporary shipping holds and investments in quality system improvements[40](index=40&type=chunk) - The company is implementing a compliance master plan to address quality system and GMP compliance, resulting in temporary shipping holds on certain products that will primarily affect the third quarter[15](index=15&type=chunk) - Announced plans to focus the relaunch of SurgiMend® and PriMatrix® at a new manufacturing facility in Braintree, Massachusetts, with operational readiness expected in the first half of 2026, and received PMA approvable notification for SurgiMend, pending GMP certification[1](index=1&type=chunk)[22](index=22&type=chunk) - Noted early integration success with the recently acquired Acclarent ENT business[39](index=39&type=chunk) [Second Quarter 2024 Consolidated Performance](index=1&type=section&id=Second%20Quarter%202024%20Consolidated%20Performance) In Q2 2024, reported revenues increased **9.7%** to **$418.2 million**, but profitability declined, resulting in a GAAP net loss of **$(12.4) million** and a decrease in Adjusted EBITDA to **$83.8 million** Consolidated Performance Metrics | Performance Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues (Millions USD) | $418.2 | $381.3 | | GAAP Gross Margin | 54.0% | 54.3% | | Adjusted Gross Margin | 65.2% | 67.6% | | GAAP Net Income (Loss) (Millions USD) | $(12.4) | $4.2 | | GAAP Diluted EPS | $(0.16) | $0.05 | | Adjusted Net Income (Millions USD) | $49.0 | $57.4 | | Adjusted Diluted EPS | $0.63 | $0.71 | | Adjusted EBITDA (Millions USD) | $83.8 | $88.8 | | Adjusted EBITDA Margin | 20.0% | 23.3% | [Second Quarter 2024 Segment Performance](index=2&type=section&id=Second%20Quarter%202024%20Segment%20Performance) The Codman Specialty Surgical segment grew **11.3%** reported, driven by the Acclarent acquisition, while the Tissue Technologies segment grew **5.6%** reported, fueled by strong performance in key products [Codman Specialty Surgical](index=2&type=section&id=Codman%20Specialty%20Surgical) The Codman Specialty Surgical segment reported **$301.8 million** in Q2 2024 revenue, with **11.3%** reported growth, driven by neurosurgery and ENT, despite declines in instruments and CSF management Codman Specialty Surgical Segment Performance | Segment | Revenue (Q2 2024, Millions USD) | Reported Growth (Year-over-Year) | Organic Growth (Year-over-Year) | | :--- | :--- | :--- | :--- | | Codman Specialty Surgical | $301.8 | +11.3% | +0.9% | - Key growth drivers included: - **Neurosurgery:** Grew **1.2%** organically, with high-single-digit growth in Dural access and repair (DuraGen®, Mayfield®)[43](index=43&type=chunk) - **ENT:** Grew low-double digits, reflecting contributions from MicroFrance ENT instruments[43](index=43&type=chunk) - **Instruments:** Declined **3.1%** organically[43](index=43&type=chunk) - **CSF management** decreased low-double digits due to supply backorders[43](index=43&type=chunk) [Tissue Technologies](index=2&type=section&id=Tissue%20Technologies) The Tissue Technologies segment generated **$116.4 million** in Q2 2024 revenue, with **5.6%** reported growth, driven by strong performance in DuraSorb®, Gentrix®, and MicroMatrix®, despite a decline in Integra Skin sales Tissue Technologies Segment Performance | Segment | Revenue (Q2 2024, Millions USD) | Reported Growth (Year-over-Year) | Organic Growth (Year-over-Year) | | :--- | :--- | :--- | :--- | | Tissue Technologies | $116.4 | +5.6% | +5.7% | - Key growth drivers included: - High double-digit growth for DuraSorb®[44](index=44&type=chunk) - Mid-double-digit growth in Gentrix®[44](index=44&type=chunk) - Low double-digit growth in MicroMatrix®, Cytal®, and amniotics[44](index=44&type=chunk) - Private label sales increased **1.5%** organically (excluding Boston)[44](index=44&type=chunk) - Integra Skin sales saw a low double-digit decline[44](index=44&type=chunk) [Balance Sheet, Cash Flow and Capital Allocation](index=2&type=section&id=Balance%20Sheet%2C%20Cash%20Flow%20and%20Capital%20Allocation) As of Q2 2024, Integra maintained total liquidity of approximately **$1.18 billion**, generated **$40.4 million** in operating cash flow, and reported total debt of **$1.83 billion** with a leverage ratio of **3.8x** Balance Sheet Highlights (as of June 30, 2024) | Metric | Amount | | :--- | :--- | | Cash and Short-term Investments (Millions USD) | $297 | | Total Liquidity (Billions USD) | ~$1.18 | | Total Debt (Billions USD) | $1.83 | | Net Debt (Billions USD) | $1.54 | | Consolidated Total Leverage Ratio (x) | 3.8 | Cash Flow Summary (Q2 2024) | Cash Flow | Amount (Millions USD) | | :--- | :--- | | Cash Flow from Operations | $40.4 | | Free Cash Flow | $10.7 | [2024 Outlook](index=3&type=section&id=2024%20Outlook) The company updated its full-year 2024 guidance, lowering expectations due to Q3 shipping holds and quality investments, projecting Q3 revenues between **$372 million** and **$382 million** with adjusted EPS of **$0.36** to **$0.44** Full-Year 2024 Updated Guidance | Metric | Guidance Range | | :--- | :--- | | Revenues (Billions USD) | $1.609 - $1.629 | | Reported Growth | +4.4% to +5.7% | | Organic Growth | -1.0% to +0.3% | | Adjusted EPS | $2.41 - $2.57 | Third Quarter 2024 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenues (Millions USD) | $372 - $382 | | Reported Growth | -2.6% to 0.0% | | Organic Growth | -9.4% to -6.7% | | Adjusted EPS | $0.36 - $0.44 | [Conference Call and Presentation Available Online](index=3&type=section&id=Conference%20Call%20and%20Presentation%20Available%20Online) Integra scheduled a conference call for July 29, 2024, at 8:30 a.m. ET to discuss Q2 2024 results and guidance, with a live webcast and presentation available online - A conference call to discuss Q2 2024 results was scheduled for 8:30 a.m. ET on July 29, 2024[29](index=29&type=chunk) - A live webcast and presentation materials are available on the Investors section of the company's website, investor.integralife.com[30](index=30&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The financial statements show Q2 2024 total revenues of **$418.2 million** and a net loss of **$(12.4) million**, with **$296.9 million** in cash and short-term investments and **$1.53 billion** in stockholders' equity as of June 30, 2024 [Condensed Consolidated Statements of Operations](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The Condensed Consolidated Statements of Operations show Q2 2024 total revenues of **$418,175 thousand**, resulting in an operating loss of **$(3,029) thousand** and a net loss of **$(12,402) thousand** Condensed Consolidated Statements of Operations (Thousands USD) | (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Total revenues, net | $418,175 | $381,267 | | Cost of goods sold | $192,258 | $174,241 | | Operating income (loss) | $(3,029) | $12,504 | | Net income (loss) | $(12,402) | $4,184 | | Diluted net income (loss) per share | $(0.16) | $0.05 | [Condensed Balance Sheet Data](index=12&type=section&id=CONDENSED%20BALANCE%20SHEET%20DATA) The Condensed Balance Sheet Data as of June 30, 2024, shows **$215,236 thousand** in cash and equivalents, **$1,825,297 thousand** in total borrowings, and **$1,534,195 thousand** in stockholders' equity Condensed Balance Sheet Data (Thousands USD) | (In thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $215,236 | $276,402 | | Short term investments | $81,691 | $32,694 | | Inventories, net | $421,775 | $389,608 | | Total Borrowings | $1,825,297 | $1,499,549 | | Stockholders' equity | $1,534,195 | $1,587,884 | [Condensed Statement of Cash Flows](index=12&type=section&id=CONDENSED%20STATEMENT%20OF%20CASH%20FLOWS) The Condensed Statement of Cash Flows for the six months ended June 30, 2024, shows **$56,157 thousand** in net cash from operations, **$(376,163) thousand** used in investing, and a net decrease of **$(61,166) thousand** in cash and equivalents Condensed Statement of Cash Flows (Thousands USD) | (In thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $56,157 | $54,435 | | Net cash used in investing activities | $(376,163) | $(29,252) | | Net cash provided by (used by) financing activities | $264,928 | $(173,376) | | Net increase (decrease) in cash and cash equivalents | $(61,166) | $(147,469) | [Reconciliation of GAAP to Non-GAAP Measures](index=4&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides non-GAAP measures like adjusted EBITDA and net income, with Q2 2024 adjustments including **$14.7 million** for Boston recall/Braintree transition and **$18.7 million** for acquisition costs, reconciling a GAAP net loss of **$(12.4) million** to an adjusted net income of **$49.0 million** - Non-GAAP measures like organic revenues, adjusted EBITDA, and adjusted net income are provided to offer supplemental information on business trends, excluding items such as currency effects, acquisition/divestiture costs, restructuring charges, and amortization[49](index=49&type=chunk)[32](index=32&type=chunk) Reconciliation of GAAP Net Income to Adjusted Net Income (Q2 2024, Thousands USD) | Description | Amount | | :--- | :--- | | **GAAP net income (loss)** | **$(12,402)** | | Boston Recall/Braintree Transition | $14,698 | | Acquisition, divestiture and integration-related charges | $18,666 | | EU Medical Device Regulation charges | $12,508 | | Intangible asset amortization expense | $25,383 | | Structural optimization charges | $5,095 | | Estimated income tax impact from adjustments | $(14,942) | | **Adjusted net income** | **$49,007** | Reconciliation of GAAP Net Income to Adjusted EBITDA (Q2 2024, Thousands USD) | Description | Amount | | :--- | :--- | | **GAAP net income (loss)** | **$(12,402)** | | Depreciation and intangible asset amortization | $35,782 | | Interest expense, net | $13,592 | | Income tax expense | $(2,783) | | Other non-GAAP adjustments | $51,067 | | **Adjusted EBITDA** | **$83,755** |

Second quarter GAAP earnings per diluted share of $(0.16), compared to $0.05 in the prior year; adjusted earnings per diluted share of $0.63, compared to $0.71 in the prior year. Second quarter revenues of $418.2 million increased 9.7% on a reported basis and 2.3% on an organic basis compared to the prior year. Revenue increased 0.3% on an organic basis excluding Boston. Received PMA approvable notification pending GMP certification for SurgiMend. Second Quarter 2024 Consolidated Performance Adjusted EBITDA ...

Second Quarter 2024 Highlights Second quarter GAAP earnings per diluted share of $(0.16), compared to $0.05 in the prior year; adjusted earnings per diluted share of $0.63, compared to $0.71 in the prior year. Announced plans to focus relaunch of SurgiMend® and PriMatrix® at new state-of-the-art manufacturing facility in Braintree, Massachusetts, with operational readiness expected in the first-half of 2026. Updating full-year 2024 revenue guidance to a range of $1.609 billion to $1.629 billion and adjusted ...

The earnings report, which is expected to be released on July 29, 2024, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. Zacks Consensus Estimate Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results ...

Since receiving the third-party audit findings for its Boston manufacturing facility in March, Integra has been thoroughly reevaluating its plans and timeline to resume the manufacture of PriMatrix and SurgiMend at this site. Simultaneously, the Integra team has been furthering its plans to complete the construction and operationalization of the new state-of-the-art tissue manufacturing facility in Braintree. Based on these assessments, IART no longer intends to commence the manufacture of these products at ...