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]

EARNINGS PRESENTATION Q2 2025 July 31, 2025 Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties and reflect the Company's judgment as of the date of this presentation. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. Some of these forward-looking statements may contain words like "will," "believe," "ma ...

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]