Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $415.6 million, reflecting a decline of approximately 0.6% on a reported basis and 1.4% on an organic basis compared to the prior year [17][18] - Adjusted EPS for the quarter was 45 cents, representing a 29% decline compared to the previous year [18] - Gross margin for the quarter was 60.7%, down 450 basis points year over year, primarily due to higher operational costs associated with remediation efforts [19] - Operating cash flow for the quarter was $9 million, with free cash flow being negative $11.2 million due to continued capital investments [24] Business Line Data and Key Metrics Changes - Specialty Surgical Segment (CSS) reported revenues of $304 million, reflecting growth of 0.7% on a reported basis and a decline of 0.3% on an organic basis [20] - Tissue Technology revenues were $111.6 million, down approximately 4% on both a reported and organic basis compared to the prior year [23] - The ENT business experienced growth below expectations due to reimbursement-driven market pressure, despite double-digit growth in certain product lines [21][62] Market Data and Key Metrics Changes - International performance within CSS declined by low single digits, primarily due to ship holds, which offset strong underlying demand from international markets, including high single-digit growth in China [22] - The company noted a slowdown in private label demand due to competitive pressures, impacting overall market expectations [54] Company Strategy and Development Direction - The company is focused on transforming its quality management system and executing its compliance master plan, which is seen as critical for operational readiness and risk reduction [8][14] - Strategic investments and disciplined cost management are being emphasized to enhance supply chain reliability and drive long-term growth [14][15] - The company is optimistic about the proposed Medicare payment changes favoring evidence-backed, cost-effective wound reconstruction products, positioning it well for future growth [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leadership positions in neurosurgery and tissue technology, citing sustained demand in attractive markets [14] - The company anticipates a revenue range of $410 million to $420 million for Q3 2025, representing approximately 8% to 10% reported growth [13] - For the full year, the revenue guidance has been updated to a range of $1.655 billion to $1.68 billion, reflecting increased visibility into ship hold and remediation outlook [26][27] Other Important Information - A goodwill impairment charge of approximately $511 million was recorded during the quarter, primarily driven by macroeconomic uncertainties [18] - The company ended the quarter with total liquidity of $1.1 billion, including $254 million in cash and short-term investments [25] Q&A Session Summary Question: Thoughts on CMS' proposed 2026 reimbursement changes - Management indicated that the majority of the business is in the acute care setting, so immediate impacts are not expected, but long-term opportunities are seen as favorable for the wound reconstruction portfolio [35][36] Question: Q3 EPS guidance below street expectations - Management explained that the Q3 guidance is consistent with Q2 performance, with a revenue step-up expected in Q4 driven by seasonal lift and supply recovery [38][39] Question: Impact of ship holds and compliance programs - Management expressed confidence in the progress made and estimated a $100 million impact for the year, with no new material ship holds anticipated [44][45] Question: Ability to win back customers after supply issues - Management noted that once products come off ship holds, they typically see a return to market share, although reintroducing some products may require additional effort [50][51] Question: Revenue growth expectations and guidance adjustments - Management clarified that the updated guidance reflects a more refined view of the full-year impact from ship holds and market demand declines [54] Question: Gross margin softness and future expectations - Management attributed the decline in gross margins to manufacturing variances and operational inefficiencies, projecting a full-year gross margin decline of about 300 basis points [58][59] Question: Expectations for ENT business growth - Management expects mid-single-digit growth for the ENT business moving forward, supported by investments in new products and clinical evidence [63][64]

Financial Performance - Q2 2025 revenue was $415.6 million, a decrease of 0.6% compared to Q2 2024's $418.2 million[37] - Organic revenue decreased by 1.4% to $412.4 million in Q2 2025 compared to $418.2 million in Q2 2024[9, 38] - Adjusted EPS for Q2 2025 was $0.45, a decrease of 28.6% compared to $0.63 in Q2 2024[10, 37] - Adjusted EBITDA margin decreased by 290 bps to 17.1% in Q2 2025 compared to 20.0% in Q2 2024[10, 40] - Adjusted gross margin decreased by 450 bps to 60.7% in Q2 2025 compared to 65.2% in Q2 2024[11, 37] - Operating cash flow was $8.9 million with a negative 32.7% free cash flow conversion in Q2 2025[11, 39] Segment Performance - Codman Specialty Surgical Q2 2025 revenue was $304.0 million, a 0.7% increase, with organic growth down 0.3% to $300.9 million[13] - Tissue Technologies Q2 2025 revenue was $111.6 million, a decrease of 4.1%[18] Guidance - Q3 2025 reported revenue is projected to be between $410 million and $420 million, with organic growth between +7.3% and +9.9%[28] - Full year 2025 reported revenue is projected to be between $1.655 billion and $1.680 billion, with organic growth between +0.6% and +2.1%[29, 30]

Core Insights - Integra LifeSciences Holdings Corporation reported total revenues of $382.7 million for Q1 2025, reflecting a 3.7% increase on a reported basis but a 3.5% decline on an organic basis compared to the previous year [3][13] - The company experienced a GAAP net loss of $(25.3) million, or $(0.33) per diluted share, compared to a net loss of $(3.3) million, or $(0.04) per diluted share, in Q1 2024 [5][13] - Adjusted EBITDA for Q1 2025 was $63.6 million, representing 16.6% of revenue, down from $71.8 million, or 19.5% of revenue, in the prior year [4][29] Financial Performance - Total revenues for the Codman Specialty Surgical segment were $280.7 million, showing reported growth of 9.4% but an organic decline of 1.1% compared to Q1 2024 [6] - The Tissue Technologies segment reported revenues of $102.0 million, a decline of 9.3% on a reported basis and 9.1% organically compared to the same quarter last year [7] - The company generated cash flow from operations of $(11.3) million in the quarter, with total balance sheet debt at $1.85 billion and net debt at $1.58 billion, resulting in a consolidated total leverage ratio of 4.3x [7][8] Outlook - For Q2 2025, the company expects reported revenues between $390 million and $400 million, indicating a decline of 6.8% to 4.4% on a reported basis and 7.5% to 5.1% organically [9] - The full-year 2025 revenue guidance remains at $1.650 billion to $1.715 billion, representing reported growth of 2.4% to 6.5% and organic growth of 0.4% to 4.4% [10] - Adjusted EPS guidance for 2025 has been reduced to a range of $2.19 to $2.29 per share, accounting for an estimated impact of $(0.22) per share due to new tariffs [10] Segment Insights - Sales in the Neurosurgery segment declined by 4.7% on an organic basis, attributed to shipping holds across several product lines [14] - Instruments sales grew by 15.1% on an organic basis due to strong demand and favorable prior year comparisons [14] - The ENT segment reported significant revenue growth driven by the Acclarent acquisition, while private label sales decreased by 13.3% due to component supply delays [14]