Integra Lifesciences Holdings Corporation · NASDAQ:IART
Integra Lifesciences — Q2 2023 Earnings Presentation
22 slides from Integra Lifesciences's earnings presentation, Jul 27, 2023
Slide 1: Q2 2023 Earnings Presentation
Q2 2023 EARNINGS PRESENTATION JULY 27, 2023
Slide 2: Safe Harbor Statement
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
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to our GAAP results, we provide certain non-GAAP measures, including organic revenues, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted net income, adjusted earnings per diluted share, adjusted gross profit, adjusted
Slide 4: Boston Recall and Relaunch update
Boston Recall and Relaunch update Recall overview and relaunch plan Financial impact • May 22, 2023, Integra initiated a voluntary recall of PriMatrix®, 2023 SurgiMend®, Revize™, and TissueMend™ and extended the stoppage of our Boston factory to address gaps in the quality system • Q2 revenue and ad
Slide 5: Executing On Our Strategy
Executing On Our Strategy Business Highlights Q2 Financial Performance • Strong global demand performance across diverse portfolio Total revenue $381.3 million; above high end of revised guidance • Advancing IBBR PMA strategy • -2.7% organic growth (+5.5% excl. Boston) o Submitted clinical PMA amend
Slide 6: Executive Leadership Appointment
Executive Leadership Appointment • 30 years of experience in global companies with significant operating scale and complexity • Most recently served as the executive vice president of business finance for Booz Allen Hamilton • Senior finance leadership roles at Johnson & Johnson, including chief fin
Slide 7: Second Quarter Financial Highlights
Second Quarter Financial Highlights • -4.2% reported growth; +3.8% excl. Boston Revenue $381.3 • Positive business performance offset by Boston recall Organic -2.7% • 6.3% Global CSS organic growth • -3.3% U.S. organic growth Revenue +5.5% excl Growth1 Boston • -19.7% Global TT organic growth • -1.1
Slide 8: Codman Specialty Surgical Q2 Revenue
Codman Specialty Surgical Q2 Revenue Revenues Q2’23 Q2’22 Growth Reported $271.0M $257.9M 5.1% Q2 2023 Organic1 $271.1M $255.1M 6.3% Revenue Composition Q2 2023 Growth and Performance Drivers2 Instruments Neurosurgery Instruments International 24.1% 4.2% 13.3% High Single-Digit • Neurosurgery – high
Slide 9: Tissue Technologies Q2 Revenue
Tissue Technologies Q2 Revenue Growth excl. Revenues Q2’23 Q2’22 Growth Boston Reported $110.2M $140.0M -21.2% 0.8% Q2 2023 Organic1 $107.9M $134.3M -19.7% 3.8% Revenue Composition Q2 2023 Growth and Performance Drivers2 Private Label Wound Reconstruction Private Label International 17.3% -12.0% -42
Slide 10: Q2 2023 Financial Results ($M except per share data)
Q2 2023 Financial Results ($M except per share data) Total Revenue Adj. Gross Profit Adj. EBITDA Adj. EPS Reported (4.2%) (40bps) Margin (250bps) Margin (13.4%) EPS Organic (2.7%) $45 0.0 $397.8 $381.3 20 $30 0.0 $270.6 $257.8 20 105 $102.8 1.2 $0.8 5 $0.82 1.2 $40 0.0 15 15 100 $0.8 0 $25 0.0 1 1 $
Slide 11: Balance Sheet and Cash Flow Performance
Balance Sheet and Cash Flow Performance Operating Cash Flow, Free Cash Flow ($M) & Adj. FCF Conversion (%) Summary Balance Sheet ($M) 12/31/22 6/30/23 FCF Capex 300 Cash and Cash Equivalents $457 $309 $262.9 250 $53.4 Total Debt $1,455 $1,441 $208.1 200 $53.0 Net Debt $998 $1,132 90 80 $66.5 150 70
Slide 12: Q3 and FY 2023 Outlook
Q3 and FY 2023 Outlook Q3 2023 Reported Revenue Guidance Bridge ($M) Q3 2023 Organic Growth (at mid-point) ~6.7% ~(5.9%) • Revenue: $386M-$390M ~$3 ~($5) ~$2 $386 - $390 • Reported Growth +0.2% to +1.3% $385 • Organic Growth +0.3% to +1.3% • Adj. EPS $0.76 - $0.80 FY 2023 Reported Revenue Guidance B
Slide 13: Conclusion
Conclusion Solid underlying Q2 business performance, offset by Boston recall impact • Strong market recovery and demand for our technologies and leading brands • Resilient diverse portfolio with DD growth in Instruments, CUSA and Mayfield® capital; MSD growth in CSF management and Dural access and
Slide 14: Appendix: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations
Slide 15: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results % of Revenues Q2 2023 Q2 2022 Change Q2 YTD 2023 Q2 YTD 2022 Change Total Revenues $381.3 $397.8 (4.2%) $762.1 $774.5 (1.6%) Gross Margin 54.3% 62.7% -840BPS 57.7% 62.4% -470BPS Adj. Gross Margin(1) 67.6% 68.0% -40BPS 67.5% 67.8% -30BPS Net Income $4.2 $44.8 (90
Slide 16: Second Quarter 2023 Organic Growth Reconciliation
Second Quarter 2023 Organic Growth Reconciliation (In millions) Q2 2023 Q2 2022 Q2 YTD 2023 Q2 YTD 2022 Neurosurgery $205.8 $200.3 $398.7 $395.0 Instruments $65.2 $57.6 $120.5 $110.2 Total Codman Specialty Surgical $271.0 $257.9 $519.1 $505.2 Wound Reconstruction and Care $91.1 $104.9 $192.1 $199.5
Slide 17: Adjusted Free Cash Flow Reconciliation
Second Quarter 2023 and 2022 (TTM) Adjusted Free Cash Flow Reconciliation Note: Numbers may not add due to rounding (In millions) Q2 2023 Q2 2022 Q2 YTD 2023 Q2 YTD 2022 TTM 2023 TTM 2022 Net Cash from Operating Activities $28.3 $66.5 $54.4 $110.8 $208.1 $262.9 Purchases of Property and Equipment ($
Slide 18: Adjusted EBITDA Margin Reconciliation
Second Quarter 2023 Adjusted EBITDA Margin Reconciliation Note: Numbers may not add due to rounding (In millions) Q2 2023 Q2 2022 Q2 YTD 2023 Q2 YTD 2022 GAAP Net Income $4.2 $44.8 $28.4 $77.7 Depreciation 10.0 10.2 20.2 19.8 Intangible asset amortization 20.6 19.4 41.3 39.5 Other (income), net 0.3
Slide 19: Adjusted EPS Reconciliation
Second Quarter 2023 Adjusted EPS Reconciliation Note: Numbers may not add due to rounding (In millions) Q2 2023 Q2 2022 Q2 YTD 2023 Q2 YTD 2022 GAAP Net Income $4.2 $44.8 $28.4 $77.7 Acquisition, divestiture and integration-related charges (1) 3.4 (6.3) 12.2 (5.7) Structural optimization charges 4.8
Slide 20: Gross Margin Reconciliation
Second Quarter 2023 Gross Margin Reconciliation Note: Numbers may not add due to rounding (In millions) Q2 2023 Q2 2022 Q2 YTD 2023 Q2 YTD 2022 Reported Gross Profit $207.0 $249.4 $439.9 $483.5 Structural optimization charges 3.2 4.1 6.3 7.0 Acquisition, divestiture and integration-related charges (
Slide 21: Adjusted SG&A Reconciliation
Second Quarter 2023 Adjusted SG&A Reconciliation Note: Numbers may not add due to rounding (In millions) Q2 2023 Q2 2022 Q2 YTD 2023 Q2 YTD 2022 Reported SG&A $164.9 $160.7 $331.6 $320.6 Structural optimization charges 1.7 4.0 2.9 7.3 Acquisition, divestiture and integration-related charges (1) 2.7
Slide 22: Net Debt Reconciliation
Second Quarter 2023 Net Debt Reconciliation Capitalization ($ in millions) 6/30/2023 12/31/2022 Short-term borrowings under senior credit facility 4.8 38.1 Long-term borrowings under senior credit facility 764.6 733.1 Borrowings under securitization facility 90.8 104.7 Long-term convertible securiti
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