Integra LifeSciences(IART) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents Integra LifeSciences' unaudited condensed consolidated financial statements, including operations, balance sheets, cash flows, and equity changes, with detailed notes Condensed Consolidated Statements of Operations and Comprehensive Income | Metric (Dollars in thousands, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue, net | $415,605 | $418,175 | $798,258 | $787,047 | | Total costs and expenses | $928,279 | $421,204 | $1,326,429 | $786,112 | | Operating (loss) income | $(512,674) | $(3,029) | $(528,171) | $935 | | Net loss | $(484,073) | $(12,402) | $(509,366) | $(15,683) | | Net loss per share (Basic and diluted) | $(6.31) | $(0.16) | $(6.65) | $(0.20) | | Comprehensive loss | $(490,874) | $(20,482) | $(512,702) | $(19,303) | - The company reported a significant increase in net loss for both the three and six months ended June 30, 2025, primarily due to a $511.4 million goodwill impairment charge[9][223] Condensed Consolidated Balance Sheets | Metric (Dollars in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Total current assets | $1,142,828 | $1,081,681 | | Total assets | $3,667,905 | $4,037,424 | | Total current liabilities | $929,806 | $922,126 | | Total liabilities | $2,629,244 | $2,492,144 | | Total stockholders' equity | $1,038,661 | $1,545,280 | - Total assets decreased by approximately $369.5 million from December 31, 2024, to June 30, 2025, largely influenced by a significant goodwill impairment charge[11][59] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (Dollars in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(2,338) | $56,157 | | Net cash used in investing activities | $(57,568) | $(376,163) | | Net cash provided by financing activities | $14,238 | $264,928 | | Effect of exchange rate changes on cash and cash equivalents | $17,207 | $(6,088) | | Net decrease increase in cash and cash equivalents | $(28,461) | $(61,166) | | Cash and cash equivalents at end of period | $217,914 | $215,236 | - Operating cash flows shifted from a positive $56.2 million in H1 2024 to a negative $2.3 million in H1 2025, primarily due to the impact of quality and operational issues on revenue and associated costs[266] - Investing activities used significantly less cash in H1 2025 ($57.6 million) compared to H1 2024 ($376.2 million), mainly because the prior year included a large business acquisition (Acclarent)[269][270] Condensed Consolidated Statements of Changes in Shareholders' Equity | Metric (Dollars in thousands) | Balance, January 1, 2025 | Net Loss | Other Comprehensive (Loss) Income, net of tax | Issuance of Common Stock | Share-Based Compensation | Other Adjustments | Balance, June 30, 2025 | | :---------------------------- | :----------------------- | :------- | :-------------------------------------------- | :----------------------- | :----------------------- | :---------------- | :--------------------- | | Total Equity | $1,545,280 | $(509,366) | $(3,336) | $(1,373) | $7,201 | $279 | $1,038,661 | - Total stockholders' equity decreased from $1,545.3 million at January 1, 2025, to $1,038.7 million at June 30, 2025, primarily driven by a net loss of $509.4 million[16] Notes to Unaudited Condensed Consolidated Financial Statements 1. BASIS OF PRESENTATION - The financial statements are unaudited and include all normal recurring adjustments necessary for fair presentation, condensed or omitted certain GAAP disclosures per Form 10-Q instructions[18] - Management makes significant estimates and assumptions affecting reported amounts, including allowances, inventory valuation, intangible asset valuation, impairment tests, taxes, and contingent liabilities[19] - The company is evaluating the impact of new FASB ASUs 2023-09 (Income Tax Disclosures) and 2024-03/2025-01 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2024, and 2026 respectively[20][21] - Cash and cash equivalents decreased from $246.4 million at December 31, 2024, to $217.9 million at June 30, 2025. Short-term investments increased from $27.2 million to $35.7 million over the same period[23][24] - The company is monitoring trade relations and tariffs, which are expected to significantly impact future costs of revenue. An amendment to the Senior Credit Facility was made in June 2025 to modify financial covenants through December 31, 2026, to maintain compliance[26][27] 2. ACQUISITIONS AND DIVESTITURES - On October 2, 2024, Integra acquired product rights for Durepair Regeneration Matrix from Medtronic plc for $45.0 million, accounted for as an asset acquisition[33][34] - On April 1, 2024, Integra acquired Acclarent, Inc. for approximately $282.0 million in cash, enhancing its position in the ENT specialty device market and reporting its results within the Codman Specialty Surgical segment[35][36] Acclarent Acquisition: Fair Values of Assets Acquired and Liabilities Assumed (Dollars in thousands) | Category | Estimated Fair Value | | :------------------------ | :------------------- | | Total current assets | $44,759 | | Property, plant and equipment, net | $7,716 | | Right of use asset - operating leases | $989 | | Intangible assets, net | $222,000 | | Goodwill | $62,482 | | Deferred tax assets | $6,895 | | Total assets acquired | $344,841 | | Total current liabilities | $11,653 | | Lease liability - operating leases | $624 | | Deferred tax liabilities | $54,753 | | Total liabilities assumed | $67,030 | | Net assets acquired | $277,811 | - The estimated fair value of acquired intangible assets for Acclarent was determined using the multi-period, excess earnings method with a discount rate of 12.2% and a weighted average useful life of 11 years[39][40] [3. REVENUES FROM CONTRACTS WITH CUSTOMERS](index=11&type=section&