News Release
Contacts:
Integra LifeSciences Holdings Corporation
John B. Henneman, III Maria Platsis
Executive Vice President Senior Director of Corporate Development
Chief Administrative Officer and Investor Relations
(609) 936-2481 (609) 936-2333
jhenneman@Integra-LS.com mplatsis@Integra-LS.com
Integra LifeSciences Closes its Acquisition of
the Miltex Companies
Plainsboro, New Jersey / May 12, 2006 -- Integra LifeSciences Holdings
Corporation (NASDAQ: IART) announced today that it has acquired the shares of
Miltex, Inc. ("Miltex") for approximately $101 million in cash, subject to
certain adjustments, and revised its 2006 and 2007 financial guidance.
Miltex, based in York, Pennsylvania, is a leading provider of surgical and
dental hand instruments to alternate site facilities, which includes physician
and dental offices and ambulatory surgery care sectors. Its distribution network
and service management team is recognized for providing the industry's highest
levels of customer service. Miltex generated revenues of $62 million for the
year ending December 31, 2005.
"We are excited to bring Miltex into the Integra family. It will be an excellent
strategic fit with our instrument business and will enhance our cash flow and
profitability, allowing us to reinvest further in our businesses and drive our
targeted long-term annual organic revenue growth of fifteen percent. Miltex will
also provide us with a broader platform on which to grow our business, as it
participates in the alternate site, dental and veterinary markets," said Stuart
M. Essig, Integra's President and Chief Executive Officer. "Miltex has more than
fifty years of continuous service through its distributor network and is well
positioned in each of these markets," Mr. Essig added.
Miltex has an experienced senior management team with a long track record in the
surgical instrument business, which has now joined Integra.
T. Robert Perrett, President of Miltex, said "Integra will be a good fit with
our business. Integra has its own excellent surgical instrument business for the
hospital markets and will offer us additional knowledge and resources to develop
new and innovative products and to provide our customers with unparalleled
service. These capabilities will afford Miltex the opportunity to continue its
company mission of `Redefining Excellence' and provide the ultimate level of
service to the healthcare providers who utilize our products."
Miltex sells the Miltex(R), Meisterhand, Vantage, Moyco, Union Broach, and
Thompson products in over 65 countries, using a network of independent
distributors. Integra has acquired Miltex's manufacturing and distribution
facility in York, Pennsylvania, which employs approximately 200 employees.
Miltex also operates a leased facility in Tuttlingen, Germany, where Miltex's
staff coordinates design, production and delivery of instruments. Miltex will
continue to manufacture and ship its products from York, Pennsylvania. The
company name will remain unchanged.
We are revising our expectations for revenues, gross margin and earnings for
2006 and 2007. In accordance with our usual practice, our expectations for 2006
and 2007 financial performance do not include the impact of acquisitions or
other strategic corporate transactions that have not yet closed. Our revised
guidance now includes the impact of Miltex.
We expect total revenues of $93 million to $98 million in the second quarter of
2006, $402 million to $417 million in the full year 2006, and $485 million to
$505 million in 2007. We expect consolidated gross margin to be 60% and 62% of
total revenues in 2006 and 2007, respectively, including the impact of this
acquisition, the Radionics acquisition, and purchase accounting, restructuring
and integration charges, the change in our reporting of technology-based
intangible asset amortization, and the impact of share-based compensation.
We will report Miltex revenues in the MedSurg Equipment category. Based on our
total revenue guidance for 2006, we expect Neuro/Ortho Implant revenues of $157
million to $163 million and MedSurg equipment revenues of $245 million to $254
million.
We expect earnings per diluted share to be within a range of $0.26 to $0.29 for
the second quarter of 2006. We expect adjusted earnings per diluted share in the
second quarter of 2006 to be within a range of $0.38 to $0.41, excluding costs
related to the fair value purchase accounting for acquired inventory,
restructuring and integration charges of $0.05 and the impact of estimated
share-based compensation expense of $0.07.
We expect earnings per diluted share to be within a range of $1.26 to $1.35 in
2006. Excluding costs related to the fair value purchase accounting for acquired
inventory, restructuring and integration charges and the impact of estimated
share-based compensation expense, we expect earnings per diluted share to be
unchanged for the year 2006 at $1.69 to $1.76. We expect earnings per diluted
share to be within a range of $1.72 to $1.89 in 2007. Excluding the impact of
estimated share-based compensation expense, we expect earnings per diluted share
to be within a range of $2.00 to $2.15 in 2007.
After the closing of the Miltex transaction we had approximately $65 million in
cash and investments and approximately $76 million drawn under our credit
facility.
Miltex was a portfolio company of American Securities Capital Partners, L.P., a
private equity firm in New York that pursues investments in partnership with
management teams in companies with leading market positions servicing attractive
industries.
American Securities Capital Partners, LLC ("ASCP") originated as the
merchant-banking arm of American Securities, L.P., which was founded in 1947 by
the late William Rosenwald to manage his share of his family's Sears, Roebuck
and Co. fortune. ASCP makes equity investments in profitable companies, both
privately and publicly held, partnering with existing management teams to
increase value in the enterprises. Investments are funded from more than $2
billion of committed capital that ASCP manages for its investor partners.
Integra LifeSciences Holdings Corporation is a diversified medical technology
company that develops, manufactures, and markets medical devices for use in a
variety of applications. The primary applications for our products are
neurosurgery, reconstructive surgery and general surgery. Integra is a leader in
applying the principles of biotechnology to medical devices that improve
patients' quality of life. Our corporate headquarters are in Plainsboro, New
Jersey, and we have manufacturing and research facilities located throughout the
world. We have approximately 1,600 employees. Please visit our website at
(http://www.Integra-LS.com).
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include, but are not limited to, statements concerning future financial
performance, including projections for revenues, gross margins and earnings per
share. Such forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from predicted or expected
results. Among other things, our ability to maintain relationships with
customers of acquired entities, physicians' willingness to adopt our recently
launched and planned products, third-party payors' willingness to provide
reimbursement for these products and our ability to secure regulatory approval
for products in development may adversely affect our future product revenues;
our ability to increase sales and product volumes may adversely affect our
future gross margins; our ability to integrate acquired businesses, increase
product sales and gross margins, and control non-product costs may affect our
earnings per share; and our ability to complete our restructuring and
integration activities may affect our operating income. In addition, the
economic, competitive, governmental, technological and other factors identified
under the heading "Factors That May Affect Our Future Performance" included in
the Business section of Integra's Annual Report on Form 10-K for the year ended
December 31, 2005 and information contained in subsequent filings with the
Securities and Exchange Commission could affect actual results.
Regulation G, "Conditions for Use of Non-GAAP Financial Measures", and other
provisions of the Securities Exchange Act of 1934, as amended, define and
prescribe the conditions for the use of certain non-GAAP financial information.
In this news release, we provide guidance as to earnings per diluted share,
excluding the impact of estimated share-based compensation expense and
restructuring and integration charges. We believe that, given our on-going,
active strategy of seeking acquisitions and our current focus on rationalizing
our existing manufacturing and distribution infrastructure, focusing on this
measure is a useful additional basis to measure the performance of our business
operations in future periods. In addition, excluding share-based compensation
charges from our net income and earnings per share allows for comparability to
historical periods that did not reflect the impact of share-based compensation.
A reconciliation of these non-GAAP financial measures to the most comparable
GAAP measures is provided in the tables of financial information contained at
the end of this news release.
Non-GAAP financial measures should not be relied upon to the exclusion of GAAP
financial measures. Management believes that this non-GAAP financial measure is
important supplemental information to investors which reflect an additional way
of viewing aspects of our operations that, when viewed with our GAAP results and
the accompanying reconciliations, provides a more complete understanding of
factors and trends affecting our ongoing business and operations. Management
strongly encourages investors to review our financial statements and filed
reports in their entirety and to not rely on any single financial measure.
Because non-GAAP financial measures are not standardized, it may not be possible
to compare these financial measures with other companies' non-GAAP financial
measures having the same or similar names.
Reconciliation of non-GAAP financial measures to the most comparable GAAP
measure:
Reconciliation of Projected Diluted EPS and Projected Adjusted Diluted EPS
Range
---------------------
Low High
------ ------
<s> <c> <c>
Projected three months ended June 30, 2006:
Diluted EPS $0.26 $0.29
Facility consolidation and acquisition integration
and related costs, including inventory
fair value adjustments, net of tax 0.05 0.05
Share-based compensation expense, net of tax 0.07 0.07
------ ------
Adjusted Diluted EPS $0.38 $0.41
Range
---------------------
Low High
------ ------
<s> <c> <c>
Projected year ended December 31, 2006:
Diluted EPS $1.26 $1.35
Inventory fair value adjustments, net of tax 0.08 0.08
Facility consolidation and acquisition integration
and related costs, net of tax 0.07 0.07
Share-based compensation expense, net of tax 0.28 0.26
------ ------
Adjusted Diluted EPS $1.69 $1.76
Range
---------------------
Low High
------ ------
<s> <c> <c>
Projected year ended December 31, 2007:
Diluted EPS $1.72 $1.89
Share-based compensation expense, net of tax 0.28 0.26
------ ------
Adjusted Diluted EPS $2.00 $2.15
Source: Integra LifeSciences Holdings Corporation