Integra Lifesciences Holdings Corporation · NASDAQ:IART
Integra Lifesciences — Q3 2023 Earnings Presentation
21 slides from Integra Lifesciences's earnings presentation, Oct 25, 2023
Slide 1: Q3 2023 Earnings Presentation
Q3 2023 EARNINGS PRESENTATION OCTOBER 25, 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, organic revenues excluding Boston, adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted net income, adjusted earnings per diluted sha
Slide 4: Boston Update
Boston Update Status Update Financial Impact • Defined holistic remediation plan consistent with requirements outlined by the FDA in July ‘23 warning letter 2023 • Reinforced Boston leadership and project team with internal resources and • Boston returns negatively impacted Q3 revenue and adj. EPS b
Slide 5: Executing On Our Strategy
Executing On Our Strategy Business Highlights Q3 Financial Performance Innovating for Outcomes Total revenue $382.4 million • Relaunched CereLink® in select international markets and submitted -0.4% organic growth (+7.1% excl. Boston) 510(k) for CereLink in the U.S.; expect U.S. launch early Q1’24 •
Slide 6: Third Quarter Financial Highlights
Third Quarter Financial Highlights • -0.7% reported growth Revenue $382.4 • Positive business performance offset by Boston returns provision Organic -0.4% • 7.4% Global CSS organic growth • -4.8% U.S. organic growth Revenue +7.1% excl Growth1 Boston • -15.1% Global TT organic growth • 11.8% Intl. or
Slide 7: Codman Specialty Surgical Q3 Revenue
Codman Specialty Surgical Q3 Revenue Revenues Q3’23 Q3’22 Growth Reported $268.2M $249.8M 7.4% Q3 2023 Organic1 $265.9M $247.7M 7.4% Revenue Composition Q3 2023 Growth and Performance Drivers2 Instruments Neurosurgery Instruments International 22.0% 8.0% 5.0% Double-Digit growth • Neurosurgery – Low
Slide 8: Tissue Technologies Q3 Revenue
Tissue Technologies Q3 Revenue Growth excl. Revenues Q3’23 Q3’22 Growth Boston Reported $114.2M $135.4M -15.6% 5.4% Q3 2023 Organic1 $111.2M $131.0M -15.1% 6.7% Revenue Composition Q3 2023 Growth and Performance Drivers2 Private Label Wound Reconstruction Private Label International 22.9% -15.5% -13
Slide 9: Q3 2023 Financial Results ($M except per share data)
Q3 2023 Financial Results ($M except per share data) Total Revenue Adj. Gross Profit Adj. EBITDA Adj. EPS Reported (0.7%) (210bps) Margin (430bps) Margin (11.6%) EPS Organic (0.4%) $105.3 $0.86 $257.0 $45 0.0 $30 0.0 20 105 1.2 $0.9 0 1.2 $385.2 $382.4 $0.76 $247.2 $88.1 $40 0.0 15 $0.8 5 100 $25 0.
Slide 10: Balance Sheet and Cash Flow Performance
Balance Sheet and Cash Flow Performance Operating Cash Flow, Free Cash Flow ($M) & Adj. FCF Conversion (%) Summary Balance Sheet ($M) 12/31/22 9/30/23 FCF Capex 300 Cash and Cash Equivalents $457 $274 250 $248.4 Total Debt $1,455 $1,516 $55.3 200 Net Debt $998 $1,242 90 $166.5 80 $68.3 150 70 $56.9
Slide 11: Q4 and FY 2023 Outlook
Q4 and FY 2023 Outlook Q4 2023 Reported Revenue Guidance Bridge ($M) Q4 2023 Organic Growth (at mid-point) ~5.1% ~(5.2%) • Revenue: $397M-$403M • Reported Growth -0.4% to +1.1% ~$3 ~($0.5) ~Flat $397 - $403 $398 • Organic Growth -0.8% to +0.7% • Adj. EPS $0.89 - $0.93 FY 2023 Reported Revenue Guidan
Slide 12: De-risking our path to LRP growth and consistent delivery of our financial commitments
De-risking our path to LRP growth and consistent delivery of our financial commitments Solid progress on Boston restart, with timelines on track • Interim external reviews confirm adequacy of remediation plan and changes made • Expect to restart manufacturing in Boston by end of Q4’23 and resume c
Slide 13: Appendix
Appendix Non-GAAP Reconciliations
Slide 14: Third Quarter 2023 Financial Results
Third Quarter 2023 Financial Results % of Revenues Q3 2023 Q3 2022 Change Q3 YTD 2023 Q3 YTD 2022 Change Total Revenues $382.4 $385.2 (0.7%) $1,144.5 $1,159.6 (1.3%) Gross Margin 57.1% 61.5% -440BPS 57.5% 62.1% -460BPS Adj. Gross Margin(1) 64.6% 66.7% -210BPS 66.5% 67.5% -100BPS Net Income $19.5 $49
Slide 15: Third Quarter 2023 Organic Growth Reconciliation
Third Quarter 2023 Organic Growth Reconciliation (In millions) Q3 2023 Q3 2022 Q3 YTD 2023 Q3 YTD 2022 Neurosurgery $209.2 $193.8 $607.9 $588.8 Instruments $59.0 $55.9 $179.5 $166.1 Total Codman Specialty Surgical $268.2 $249.8 $787.4 $755.0 Wound Reconstruction and Care $88.1 $104.6 $280.1 $304.1 P
Slide 16: Adjusted Free Cash Flow Reconciliation
Third Quarter 2023 and 2022 (TTM) Adjusted Free Cash Flow Reconciliation Note: Numbers may not add due to rounding (In millions) Q3 2023 Q3 2022 Q3 YTD 2023 Q3 YTD 2022 TTM 2023 TTM 2022 Net Cash from Operating Activities $26.8 $68.3 $81.2 $179.1 $166.5 $248.4 Purchases of Property and Equipment ($1
Slide 17: Third Quarter 2023 Adjusted EBITDA Margin Reconciliation
Third Quarter 2023 Adjusted EBITDA Margin Reconciliation Note: Numbers may not add due to rounding (In millions) Q3 2023 Q3 2022 Q3 YTD 2023 Q3 YTD 2022 GAAP Net Income $19.5 $49.9 $47.9 $127.6 Depreciation 9.7 10.3 29.9 30.1 Intangible asset amortization 20.9 19.2 62.1 58.7 Other (income), net (0.3
Slide 18: Third Quarter 2023 Adjusted EPS Reconciliation
Third Quarter 2023 Adjusted EPS Reconciliation Note: Numbers may not add due to rounding (In millions) Q3 2023 Q3 2022 Q3 YTD 2023 Q3 YTD 2022 GAAP Net Income $19.5 $49.9 $47.9 $127.6 Acquisition, divestiture and integration-related charges (1) 5.8 (13.8) 18.1 (19.6) Structural optimization charges
Slide 19: Third Quarter 2023 Gross Margin Reconciliation
Third Quarter 2023 Gross Margin Reconciliation Note: Numbers may not add due to rounding (In millions) Q3 2023 Q3 2022 Q3 YTD 2023 Q3 YTD 2022 Reported Gross Profit $218.3 $236.7 $658.2 $720.2 Structural optimization charges 4.0 2.8 10.3 9.7 Acquisition, divestiture and integration-related charges (
Slide 20: Third Quarter 2023 Adjusted SG&A Reconciliation
Third Quarter 2023 Adjusted SG&A Reconciliation Note: Numbers may not add due to rounding (In millions) Q3 2023 Q3 2022 Q3 YTD 2023 Q3 YTD 2022 Reported SG&A $161.9 $143.8 $493.5 $464.4 Structural optimization charges 1.9 7.4 4.8 14.7 (1) Acquisition, divestiture and integration-related charges 6.6
Slide 21: Third Quarter 2023 Net Debt Reconciliation
Third Quarter 2023 Net Debt Reconciliation Capitalization ($ in millions) 9/30/2023 12/31/2022 Short-term borrowings under senior credit facility 9.7 38.1 Long-term borrowings under senior credit facility 850.1 733.1 Borrowings under securitization facility 75.7 104.7 Long-term convertible securitie
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