Fourth Quarter 2023
- Reported revenues were
$397.0 million , representing a decrease of 0.2% on a reported basis and a decrease of 1.2% on an organic basis compared to the fourth quarter 2022. Revenue increased 3.6% on an organic basis excludingBoston .
- GAAP earnings per diluted share were
$0.25 , compared to$0.63 in the fourth quarter 2022.
- Adjusted earnings per diluted share were
$0.89 , compared to$0.94 in the fourth quarter of 2022.
Full-Year 2023
- Reported revenues were
$1,541.6 million representing a decrease of 1.0% on a reported basis and flat on an organic basis compared to full-year 2022. Revenue increased 5.5% on an organic basis excludingBoston .
- GAAP earnings per diluted share were
$0.84 , compared to$2.16 in 2022.
- Adjusted earnings per diluted share were
$3.10 , compared to$3.36 in 2022.
Business Highlights
Boston relaunch remains on track for mid-to-late Q2 2024- Completed global CereLink® relaunch with 510k clearance and US relaunch in Q1 2024
- Successful integration of the SIA acquisition
- Advanced PMA clinical strategy for SurgiMend® and DuraSorb®
- International portfolio expansion of DuraGen®, CUSA®, and 100+ product registrations
- Building-out in-
China -for-China manufacturing capability - Obtained 510(k) for next generation Aurora® Surgiscope
- Signed definitive agreement to acquire the Acclarent® ENT business by Q2 2024
- Executed
$275M in share repurchases - Upgraded Quality Management System with investments in talent and process capabilities
"In 2023, we saw stability in our markets and resilience of our product portfolio, which demonstrates the impact of our products and technologies on restoring patients’ lives," said
Fourth Quarter 2023 Financial Summary
Total reported revenues for the fourth quarter were 397.0 million, a decrease of 0.2% from the fourth quarter of 2022. Fourth quarter organic revenues were down 1.2% compared to the prior year. Revenue increased 3.6% on an organic basis excluding
The Company reported GAAP net income of
Adjusted EBITDA for the fourth quarter of 2023 was
Adjusted net income for the fourth quarter of 2023 was
Cash flows from operations totaled
Fourth Quarter 2023 Segment Performance
- Codman Specialty Surgical (69% of Revenues)
- Total revenues were
$271.6 million , representing reported an increase of 2.7% and organic growth of 2.3% compared to the fourth quarter of 2022. Sales in Neurosurgery grew 2.0% on an organic basis.- CSF management had mid-single digit growth driven by Certas® Plus valves.
- Mid-single-digit growth in dural access and repair driven by DuraGen, partially offset by a decline in DuraSeal.
- Neuro monitoring grew low-single digits driven by BactiSeal® catheters and ICP microsensors.
- Advanced energy was down by low-single digits driven by lower CUSA® capital sales.
- Sales in Instruments grew 3.0% on an organic basis.
- Total revenues were
- Tissue Technologies (31% of Revenue)
- Total revenues were
$125.4 million , representing a decrease of 6.0% on a reported basis and organic decline of 8.0% compared to the fourth quarter of 2022 due to the impact of the lost revenue related to theBoston product recall which was partially offset by double digit growth from BioD® and Gentrix® and mid-single digit growth in Integra skin and MediHoney®.
- Total revenues were
Full-Year 2023 Financial Summary
Total reported revenues for the full-year 2023 were
The Company reported GAAP net income of
Adjusted EBITDA for the full-year 2023 was
Adjusted net income for the full-year 2023 was
2023 Balance Sheet, Cash Flow and Capital Allocation
The Company generated cash flow from operations of
2024 Revenue and Adjusted Earnings Per Share Guidance
The Company’s guidance for 2024 revenue and adjusted earnings per share reflects the stability of our markets and strong demand for our differentiated portfolio, gradual improvement in supply over the year, continued international expansion and the relaunch of the
For the full-year 2024, the Company expects revenues to be in a range of
For the first quarter 2024, the Company expects reported revenues in the range of
Organic sales growth excludes acquisitions and divestitures as well as the effects of foreign currency.
The Company is providing forward-looking guidance regarding adjusted earnings per diluted share but is not providing a reconciliation to GAAP earnings per share, because certain GAAP expense items are highly variable, and management is unable to predict them with reasonable certainty and without unreasonable effort. Specifically, the financial impact and timing of divestitures, acquisitions, integrations, structural optimization and efforts to comply with the EU Medical Device Regulation are uncertain, depend on various dynamic factors and are not reasonably ascertainable at this time. These expense items could have a material impact on GAAP results.
Conference Call and Presentation Available Online
Integra has scheduled a conference call for
A live webcast will be available on the Investors section of the Company’s website at investor.integralife.com. For those planning to participate on the call, please register here to receive dial-in details and a unique pin. While not required, it is recommended to join 10 minutes prior to the start of the event. A webcast replay of the conference call will be available on the Investor Relations section of the Company’s website following the call.
About Integra
At Integra LifeSciences, we are driven by our purpose of restoring patients’ lives. We innovate treatment pathways to advance patient outcomes and set new standards of surgical, neurologic, and regenerative care. We offer a comprehensive portfolio of high quality, leadership brands that include AmnioExcel®, Aurora®, Bactiseal®, BioD™, CerebroFlo®, CereLink® Certas® Plus, Codman®, CUSA®, Cytal®, DuraGen®, DuraSeal®, DuraSorb®, Gentrix®, ICP Express®, Integra®, Licox®, MAYFIELD®, MediHoney®, MicroFrance®, MicroMatrix®, NeuraGen®, NeuraWrap™, PriMatrix®, SurgiMend®, TCC-EZ® and VersaTru®. For the latest news and information about Integra and its products, please visit www.integralife.com.
Forward-Looking Statements
This news release 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 release. 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,” “may,” “could,” “would,” “might,” “possible,” “should,” “expect,” “intend,” "forecast," "guidance," “plan,” “anticipate,” "target," or “continue,” the negative of these words, other terms of similar meaning or they may use future dates. Forward-looking statements contained in this news release include, but are not limited to, statements concerning future financial performance, including projections for revenues, expected revenue growth (both reported and organic), GAAP and adjusted net income, GAAP and adjusted earnings per diluted share, non-GAAP adjustments such as divestiture, acquisition and integration-related charges, intangible asset amortization, structural optimization charges, EU Medical Device Regulation-related charges, charges related to the voluntary global recall of all products manufactured at the Company’s facility in
These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise.
Discussion of Adjusted Financial Measures
In addition to our GAAP results, we provide certain non-GAAP measures, including organic revenues, organic revenues excluding
Reconciliations of GAAP revenues to organic revenues, GAAP revenues to organic revenues excluding
The Company believes that the presentation of organic revenues and the other non-GAAP measures provide important supplemental information to management and investors regarding financial and business trends relating to the Company's financial condition and results of operations. For further information regarding why Integra believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company's Current Report on Form 8-K regarding this earnings press release filed today with the
Investor Relations Contact:
(609) 772-7736
chris.ward@integralife.com
Media Contact:
(609) 208-8121
laurene.isip@integralife.com
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Total revenues | 397,039 | 398,022 | 1,541,573 | 1,557,666 | |||||||
Costs and expenses: | |||||||||||
Cost of goods sold | 170,546 | 147,937 | 656,838 | 587,355 | |||||||
Research and development | 24,284 | 26,783 | 104,192 | 101,193 | |||||||
Selling, general and administrative | 163,128 | 151,919 | 656,641 | 616,316 | |||||||
Intangible asset amortization | 3,034 | 3,543 | 12,376 | 13,882 | |||||||
Total costs and expenses | 360,992 | 330,182 | 1,430,047 | 1,318,746 | |||||||
Operating income | 36,047 | 67,840 | 111,526 | 238,920 | |||||||
Interest income | 4,549 | 5,311 | 17,202 | 11,917 | |||||||
Interest expense | (13,751 | ) | (12,894 | ) | (51,377 | ) | (49,594 | ) | |||
Gain (loss) from the sale of business | — | — | — | 644 | |||||||
Other income, net | 2,013 | 3,951 | 3,718 | 12,007 | |||||||
Income before taxes | 28,858 | 64,208 | 81,069 | 213,894 | |||||||
Income tax expense (benefit) | 9,024 | 11,262 | 13,328 | 33,344 | |||||||
Net income | 19,834 | 52,946 | 67,741 | 180,550 | |||||||
Net income per share: | |||||||||||
Diluted net income per share | 0.25 | 0.63 | 0.84 | 2.16 | |||||||
Weighted average common shares outstanding for diluted net income per share | 77,959 | 83,568 | 80,337 | 83,516 |
Segment revenues and growth in total revenues excluding the effects of currency exchange rates, acquisitions and discontinued products are as follows:
(In thousands)
Three Months Ended | Twelve Months Ended | ||||||||||
2023 | 2022 | Change | 2023 | 2022 | Change | ||||||
Neurosurgery | 210,204 | 205,199 | 2.4% | 818,101 | 794,017 | 3.0% | |||||
Instruments | 61,423 | 59,398 | 3.4% | 240,892 | 225,547 | 6.8% | |||||
Total Codman Specialty Surgical | 271,627 | 264,597 | 2.7% | 1,058,993 | 1,019,564 | 3.9% | |||||
Wound Reconstruction and Care | 93,859 | 102,540 | (8.5)% | 373,986 | 406,689 | (8.0)% | |||||
Private Label | 31,553 | 30,885 | 2.2% | 108,594 | 131,413 | (17.4)% | |||||
Total Tissue Technologies | 125,412 | 133,425 | (6.0)% | 482,580 | 538,102 | (10.3)% | |||||
Total Reported Revenues | 397,039 | 398,022 | (0.2)% | 1,541,573 | 1,557,666 | (1.0)% | |||||
Impact of changes in currency exchange rates | (928 | ) | — | — | 6,817 | — | — | ||||
Less contribution of revenues from acquisitions | (2,548 | ) | — | — | (9,753 | ) | — | — | |||
Less contribution of revenues from divested products | — | (122 | ) | — | (245 | ) | (18,063 | ) | — | ||
Less contribution of revenues from discontinued products | (2,068 | ) | (1,600 | ) | — | (6,604 | ) | (7,876 | ) | — | |
Total organic revenues(1) | 391,496 | 396,300 | (1.2)% | 1,531,788 | 1,531,727 | —% | |||||
Boston Revenue impact | (1,005 | ) | (19,543 | ) | (2,759 | ) | (83,077 | ) | |||
Total Organic Revenues ex | 390,491 | 376,756 | 1,529,029 | 1,448,650 | |||||||
(1) Organic revenues have been adjusted to exclude foreign currency (current period), acquisitions and to account for divested and discontinued products.
Items included in GAAP net income and from continuing operations and locations where each item is recorded are as follows:
(In thousands)
Three Months Ended | |||||||||||||||||
Item | Total Amount | COGS(a) | SG&A(b) | R&D(c) | Amort.(d) | OI&E(e) | Tax(f) | ||||||||||
Acquisition, divestiture and integration-related charges | 7,117 | 73 | 8,040 | (880 | ) | — | (116 | ) | — | ||||||||
Structural Optimization charges | 7,998 | 4,859 | 3,155 | (16 | ) | — | — | — | |||||||||
EU Medical Device Regulation charges | 12,387 | 2,227 | 4,653 | 5,507 | — | — | — | ||||||||||
Boston Recall | 6,346 | 5,587 | 759 | — | |||||||||||||
Intangible asset amortization expense | 20,687 | 17,653 | — | — | 3,034 | — | — | ||||||||||
Estimated income tax impact from above adjustments and other items | (5,272 | ) | — | — | — | — | — | (5,272 | ) | ||||||||
Depreciation expense | 9,834 | — | — | — | — | — | — | ||||||||||
(a) COGS - Cost of goods sold (b) SG&A - Selling, general and administrative (c) R&D - Research & development (d) Amort. - Intangible asset amortization (e) OI&E - Other income & expense (f) Tax - Income tax expense (benefit) | |||||||||||||||||
Three Months Ended | ||||||||||||||||||
Item | Total Amount | COGS(a) | SG&A(b) | R&D(c) | Amort.(d) | OI&E(e) | Tax(f) | |||||||||||
Acquisition, divestiture and integration-related charges(1) | 704 | 619 | 620 | 477 | — | (1,013 | ) | — | ||||||||||
Structural Optimization charges | (1,533 | ) | (4,195 | ) | 2,669 | (7 | ) | — | — | — | ||||||||
EU Medical Device Regulation charges | 12,177 | 1,439 | 4,855 | 5,884 | — | — | — | |||||||||||
Intangible asset amortization expense | 19,632 | 16,089 | — | — | 3,543 | — | — | |||||||||||
Estimated income tax impact from above adjustments and other items | (5,091 | ) | — | — | — | — | — | (5,091 | ) | |||||||||
Depreciation expense | 9,861 | — | — | — | — | — | — | |||||||||||
(a) COGS - Cost of goods sold (b) SG&A - Selling, general and administrative (c) R&D - Research and development (d) Amort. - Intangible asset amortization (e) OI&E - Other income and expense (f) Tax - Income tax expense | ||||||||||||||||||
Items included in GAAP net income and location where each item is recorded are as follows:
(In thousands)
Twelve Months Ended | |||||||||||||||||
Item | Total Amount | COGS(a) | SG&A(b) | R&D(c) | Amort.(d) | OI&E(e) | Tax(f) | ||||||||||
Acquisition, divestiture and integration-related charges | 25,173 | 3,045 | 25,181 | (2,188 | ) | — | (865 | ) | — | ||||||||
Structural Optimization charges | 23,020 | 15,144 | 7,943 | (67 | ) | — | — | — | |||||||||
EU Medical Device Regulation charges | 46,559 | 5,813 | 20,002 | 20,745 | — | — | — | ||||||||||
Boston Recall | 40,034 | 39,181 | 853 | — | |||||||||||||
Intangible asset amortization expense | 82,823 | 70,447 | — | — | 12,376 | — | — | ||||||||||
Estimated income tax impact from above adjustments and other items | (37,573 | ) | — | — | — | — | — | (37,573 | ) | ||||||||
Depreciation expense | 39,704 | — | — | — | — | — | — | ||||||||||
(a) COGS - Cost of goods sold (b) SG&A - Selling, general and administrative (c) R&D - Research and development (d) Amort. - Intangible asset amortization (e) OI&E - Interest (income) expense, net and other (income), net (f) Tax - Income tax expense | |||||||||||||||||
Twelve Months Ended | ||||||||||||||||||
Item | Total Amount | COGS(a) | SG&A(b) | R&D(c) | Amort.(d) | OI&E(e) | Tax(f) | |||||||||||
Acquisition, divestiture and integration-related charges | (18,849 | ) | 1,543 | (13,379 | ) | (2,195 | ) | — | (4,818 | ) | — | |||||||
Structural Optimization charges | 23,072 | 5,554 | 17,368 | 150 | — | — | — | |||||||||||
EU Medical Device Regulation charges | 45,147 | 4,626 | 16,596 | 23,926 | — | — | — | |||||||||||
Intangible asset amortization expense | 78,295 | 64,413 | — | — | 13,882 | — | — | |||||||||||
Estimated income tax impact from above adjustments and other items | (27,349 | ) | — | — | — | — | — | (27,349 | ) | |||||||||
Depreciation expense | 39,943 | — | — | — | — | — | — | |||||||||||
(a) COGS - Cost of goods sold (b) SG&A - Selling, general and administrative (c) R&D - Research and development (d) Amort. - Intangible asset amortization (e) OI&E - Interest (income) expense, net and other (income), net (f) Tax - Income tax expense |
RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED EBITDA (UNAUDITED) | |||||||||||
(In thousands) | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
GAAP net income | 19,834 | 52,946 | 67,741 | 180,550 | |||||||
Non-GAAP adjustments: | |||||||||||
Depreciation and intangible asset amortization expense | 30,522 | 29,493 | 122,528 | 118,238 | |||||||
Other (income), net | (1,897 | ) | (2,938 | ) | (2,853 | ) | (7,833 | ) | |||
Interest expense, net | 9,202 | 7,583 | 34,175 | 37,677 | |||||||
Income tax expense (benefit) | 9,024 | 11,262 | 13,328 | 33,344 | |||||||
Structural optimization charges | 7,998 | (1,533 | ) | 23,020 | 23,072 | ||||||
EU Medical Device Regulation charges | 12,387 | 12,177 | 46,559 | 45,147 | |||||||
Boston Recall | 6,346 | — | 40,034 | — | |||||||
Acquisition, divestiture and integration-related charges | 7,117 | 704 | 25,173 | (18,849 | ) | ||||||
Total of non-GAAP adjustments | 80,700 | 56,747 | 301,964 | 230,796 | |||||||
Adjusted EBITDA | 100,534 | 109,693 | 369,705 | 411,346 |
RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP NET INCOME FROM CONTINUING OPERATIONS TO MEASURES OF ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE (UNAUDITED) | |||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
GAAP net income | 19,834 | 52,946 | 67,741 | 180,550 | |||||||||||
Non-GAAP adjustments: | |||||||||||||||
Structural optimization charges | 7,998 | (1,533 | ) | 23,020 | 23,072 | ||||||||||
Acquisition, divestiture and integration-related charges | 7,117 | 704 | 25,173 | (18,849 | ) | ||||||||||
EU Medical Device Regulation charges | 12,387 | 12,177 | 46,559 | 45,147 | |||||||||||
Boston Recall | 6,346 | — | 40,034 | — | |||||||||||
Intangible asset amortization expense | 20,687 | 19,632 | 82,823 | 78,295 | |||||||||||
Estimated income tax impact from adjustments and other items | (5,272 | ) | (5,091 | ) | (37,573 | ) | (27,349 | ) | |||||||
Total of non-GAAP adjustments | 49,264 | 25,889 | 180,036 | 100,316 | |||||||||||
Adjusted net income | $ | 69,098 | $ | 78,835 | $ | 247,777 | $ | 280,866 | |||||||
Adjusted diluted net income per share | $ | 0.89 | $ | 0.94 | $ | 3.10 | $ | 3.36 | |||||||
Weighted average common shares outstanding for diluted net income per share | 77,959 | 83,568 | 80,337 | 83,516 |
CONDENSED BALANCE SHEET DATA (UNAUDITED) | ||||||||
(In thousands) | ||||||||
2023 | 2022 | |||||||
Cash and cash equivalents | $ | 276,402 | $ | 456,661 | ||||
Accounts receivable, net | 259,327 | 263,465 | ||||||
Inventory, net | 389,608 | 324,583 | ||||||
Current and long-term borrowing under senior credit facility | 840,094 | 771,274 | ||||||
Borrowings under securitization facility | 89,200 | 104,700 | ||||||
Long-term convertible securities | 570,255 | 567,341 | ||||||
Stockholders' equity | 1,587,884 | 1,804,403 |
CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED) | |||||||
Twelve Months Ending | |||||||
2023 | 2022 | ||||||
Net cash provided by operating activities | $ | 139,955 | $ | 264,469 | |||
Net cash used in investing activities | (94,178 | ) | (58,580 | ) | |||
Net cash used in by financing activities | (229,925 | ) | (251,953 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 3,889 | (10,723 | ) | ||||
Net increase (decrease) in cash and cash equivalents | (180,259 | ) | (56,787 | ) |
RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP OPERATING CASH FLOW TO MEASURES OF ADJUSTED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW CONVERSION (UNAUDITED) | ||||||
(In thousands) | ||||||
Three Months Ended | ||||||
2023 | 2022 | |||||
GAAP Net cash provided by operating activities | $ | 58,746 | $ | 85,333 | ||
Purchases of property and equipment | (24,563 | ) | (14,455 | ) | ||
Adj. Free Cash Flow | $ | 34,183 | $ | 70,878 | ||
Adjusted net income (1) | $ | 69,098 | 78,835 | |||
Adjusted Free Cash Flow Conversion | 49.5 | % | 89.9 | % | ||
Twelve Months Ending | ||||||
2023 | 2022 | |||||
GAAP Net cash provided by operating activities | $ | 139,955 | $ | 264,469 | ||
Purchases of property and equipment | (66,865 | ) | (42,343 | ) | ||
Adj. Free Cash Flow | $ | 73,090 | $ | 222,127 | ||
Adjusted net income (1) | $ | 247,777 | 280,867 | |||
Adjusted Free Cash Flow Conversion | 29.5 | % | 79.1 | % | ||
(1) Adjusted net income for quarters and twelve months ended
The Company calculates adjusted free cash flow conversion by dividing its free cash flow by adjusted net income. The Company believes this measure is a useful metric in evaluating the significance of the cash special charges in its adjusted earnings measures.
RECONCILIATION OF NON-GAAP ADJUSTMENTS - NET DEBT CALCULATION (UNAUDITED) | |||||||
(In thousands) | |||||||
2023 | 2022 | ||||||
Short-term borrowings under senior credit facility | $ | 14,531 | $ | 38,125 | |||
Long-term borrowings under senior credit facility | 825,563 | 733,149 | |||||
Borrowings under securitization facility | 89,200 | 104,700 | |||||
Long-term convertible securities | 570,255 | 567,341 | |||||
Deferred financing costs netted in the above | 9,651 | 11,385 | |||||
Short-term investments | (32,694 | ) | — | ||||
Cash & Cash Equivalents | (276,402 | ) | (456,661 | ) | |||
Net Debt | $ | 1,200,104 | $ | 998,039 |
Source:
2024 GlobeNewswire, Inc., source