Integra's (IART) Q2 Earnings and Revenues Top, Margins Down

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]