NEWS RELEASE
INTEGRA LIFESCIENCES REPORTS RECORD SECOND QUARTER NET INCOME ON
35% GROWTH IN PRODUCT SALES
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION TOTALED $4.7 MILLION
PLAINSBORO, NJ / AUGUST 2, 2001 / -- LED BY STRONG GROWTH IN PRODUCT SALES,
INTEGRA LIFESCIENCES HOLDINGS CORPORATION (NASDAQ: IART) TODAY REPORTED RECORD
REVENUES AND NET INCOME FOR THE SECOND QUARTER OF 2001. EARNINGS FOR THE QUARTER
WERE $0.10 PER SHARE, AS COMPARED TO AN ADJUSTED NET LOSS OF $0.06 PER SHARE IN
THE SECOND QUARTER OF 2000. NET INCOME TOTALED $2.8 MILLION, WITH TOTAL REVENUES
INCREASING $5.8 MILLION, OR 34%, TO $22.9 MILLION. THIS COMPARES TO AN ADJUSTED
NET LOSS OF $0.6 MILLION IN THE SECOND QUARTER OF 2000 ON TOTAL REVENUES OF
$17.1 MILLION. FOR COMPARABILITY PURPOSES, THE PRIOR YEAR RESULTS WERE ADJUSTED
TO EXCLUDE A $1.1 MILLION GAIN ON THE SALE OF A PRODUCT LINE AND $0.3 MILLION OF
FAIR VALUE INVENTORY PURCHASE ACCOUNTING ADJUSTMENTS RELATED TO AN ACQUISITION.
REVENUE GROWTH WAS LED BY A $5.6 MILLION INCREASE IN PRODUCT SALES TO $21.4
MILLION, A 35% INCREASE OVER THE SECOND QUARTER OF 2000. INCLUDED IN THIS
INCREASE WAS $0.4 MILLION IN SALES OF PRODUCT LINES ACQUIRED EARLY IN THIS
QUARTER. SALES IN THE INTEGRA NEUROSCIENCES DIVISION INCREASED $4.6 MILLION TO
$15.7 MILLION, AND INCLUDED THE $0.4 MILLION IN SALES OF ACQUIRED PRODUCT LINES.
CONTRIBUTING TO THE STRONG GROWTH IN THE INTEGRA NEUROSCIENCES DIVISION WERE
SALES OF THE DURAGEN(R) DURAL GRAFT MATRIX, WITH DOMESTIC REORDER RATES
CONTINUING TO EXCEED 80%, OUR LINE OF INTRACRANIAL MONITORING PRODUCTS FOR THE
NEURO INTENSIVE CARE UNIT, AND THE SELECTOR(R) INTEGRA ULTRASONIC ASPIRATOR FOR
THE ABLATION OF CRANIAL TUMORS. SALES OF INTEGRA LIFESCIENCES DIVISION PRODUCTS
INCREASED $1.0 MILLION TO $5.7 MILLION PRIMARILY DUE TO GROWTH IN THE COMPANY'S
PRIVATE LABEL PRODUCTS.
"THE STRONG RESULTS FOR THIS QUARTER CAN BE ATTRIBUTED TO THE RECENT EXPANSION
IN THE INTEGRA NEUROSCIENCES' SALES FORCE, PARTICULARLY IN THE UNITED STATES,
AND THE DIVERSE LINE OF PRODUCTS ACQUIRED OR DEVELOPED BY THE COMPANY OVER THE
LAST TWO YEARS," COMMENTED STUART M. ESSIG, INTEGRA'S PRESIDENT AND CHIEF
EXECUTIVE OFFICER. "WITH THE ACQUISITIONS OF GMSMBH IN GERMANY AND SATELEC
MEDICAL IN FRANCE IN APRIL, WE ARE CONTINUING TO BUILD OUR SALES AND MARKETING
INFRASTRUCTURE IN EUROPE, WHICH IS EXPECTED TO BENEFIT OUR TOP LINE REVENUE
GROWTH."
CONSOLIDATED GROSS MARGINS ON PRODUCT SALES INCREASED TO 61% IN THE SECOND
QUARTER OF 2001 FROM AN ADJUSTED 57% IN THE SECOND QUARTER OF 2000 AS A RESULT
OF AN IMPROVED SALES MIX OF HIGHER GROSS MARGIN PRODUCTS. CONSOLIDATED OPERATING
EXPENSES (EXCLUDING COST OF PRODUCT SALES) INCREASED $0.7 MILLION FROM THE
SECOND QUARTER OF 2000 TO $11.2 MILLION IN THE SECOND QUARTER OF 2001. THIS
INCREASE WAS THE RESULT OF HIGHER SALES AND MARKETING EXPENSES ATTRIBUTED TO THE
EXPANSION OF THE INTEGRA NEUROSCIENCES DIRECT SALES FORCE, PARTIALLY OFFSET BY
LOWER GENERAL AND ADMINISTRATIVE AND RESEARCH AND DEVELOPMENT EXPENSES.
ON A DIVISIONAL OPERATING BASIS, THE COMPANY REPORTED THE FOLLOWING RESULTS FOR
THE SECOND QUARTER OF 2001:
IN THE INTEGRA NEUROSCIENCES DIVISION:
o SALES OF NEURO INTENSIVE CARE UNIT PRODUCTS INCREASED $1.3 MILLION TO $6.8
MILLION, INCLUDING $0.1 MILLION IN SALES OF ACQUIRED PRODUCTS.
o NEURO OPERATING ROOM PRODUCT SALES INCREASED $3.3 MILLION TO $8.9 MILLION,
INCLUDING $0.3 MILLION IN SALES OF ACQUIRED PRODUCTS.
o GROSS MARGIN ON PRODUCT SALES WAS 63%, AS COMPARED TO AN ADJUSTED 59% IN THE
SECOND QUARTER OF 2000.
o TOTAL OTHER OPERATING EXPENSES INCREASED $1.6 MILLION TO $6.5 MILLION, WITH
THE DIVISION REPORTING A $3.7 MILLION OPERATING PROFIT. THE INCREASE IN
OPERATING EXPENSES WAS ENTIRELY RELATED TO HIGHER SALES AND MARKETING
SPENDING.
IN THE INTEGRA LIFESCIENCES DIVISION:
o SALES OF PRIVATE LABEL PRODUCTS INCREASED $0.6 MILLION TO $3.3 MILLION.
o SALES OF DISTRIBUTED PRODUCTS INCREASED $0.4 MILLION TO $2.4 MILLION.
o GROSS MARGIN ON PRODUCT SALES WAS 55%, AS COMPARED TO AN ADJUSTED 51% IN THE
SECOND QUARTER OF 2000.
o TOTAL OTHER OPERATING EXPENSES DECREASED $0.4 MILLION TO $2.1 MILLION FOR
THE QUARTER, WITH THE DIVISION REPORTING A $2.3 MILLION OPERATING PROFIT.
DIVISIONAL OPERATING RESULTS EXCLUDE CORPORATE GENERAL AND ADMINISTRATIVE
EXPENSES AND AMORTIZATION OF INTANGIBLE ASSETS AND GOODWILL. FOR THE QUARTER,
CORPORATE GENERAL AND ADMINISTRATIVE EXPENSES DECREASED $0.5 MILLION TO $1.8
MILLION, WHILE INTANGIBLE ASSET AMORTIZATION INCREASED TO $0.7 MILLION AS A
RESULT OF THE GMS AND SATELEC MEDICAL ACQUISITIONS.
THE COMPANY REPORTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION OF $4.7 MILLION, AS COMPARED TO AN ADJUSTED $1.1 MILLION IN THE
SECOND QUARTER OF 2000.
THE COMPANY HAS SCHEDULED A CONFERENCE CALL FOR 9:00 AM EST TODAY, AUGUST 2,
2001, TO DISCUSS THE FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2001. HOWEVER,
IN LIGHT OF OUR PENDING REGISTRATION STATEMENT, WE WILL NOT UPDATE OR OTHERWISE
COMMENT ON OUR EXPECTATIONS FOR FUTURE FINANCIAL RESULTS UNTIL OUR THIRD QUARTER
CONFERENCE CALL IN NOVEMBER. ACCESS TO THE LIVE CONFERENCE CALL IS AVAILABLE BY
DIALING (877) 691-0877 IN THE UNITED STATES OR (973) 628-9554 FOR INTERNATIONAL
LISTENERS. ACCESS TO THE CALL WILL ALSO BE AVAILABLE THROUGH A LIVE WEBCAST VIA
A LINK PROVIDED ON THE HOME PAGE OF INTEGRA'S WEBSITE AT www.integra-LS.com.
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INTEGRA LIFESCIENCES HOLDINGS CORPORATION DEVELOPS, MANUFACTURES AND MARKETS
MEDICAL DEVICES, IMPLANTS AND BIOMATERIALS PRIMARILY USED IN THE TREATMENT OF
CRANIAL AND SPINAL DISORDERS, SOFT TISSUE REPAIR AND ORTHOPEDICS. INTEGRA IS A
LEADER IN APPLYING THE PRINCIPLES OF BIOTECHNOLOGY TO MEDICAL DEVICES THAT
IMPROVE PATIENTS' QUALITY OF LIFE. THE COMPANY HAS ITS CORPORATE HEADQUARTERS IN
PLAINSBORO, NEW JERSEY, WITH MANUFACTURING AND RESEARCH FACILITIES LOCATED
THROUGHOUT THE WORLD. THE COMPANY HAS APPROXIMATELY 575 PERMANENT EMPLOYEES.
THIS NEWS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING
STATEMENTS INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM PREDICTED OR EXPECTED RESULTS. FORWARD-LOOKING STATEMENTS
INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS CONCERNING FUTURE GROWTH IN
REVENUES. IN ADDITION, THE ECONOMIC, COMPETITIVE, GOVERNMENTAL, TECHNOLOGICAL
AND OTHER FACTORS IDENTIFIED UNDER THE HEADING "RISK FACTORS" INCLUDED IN THE
BUSINESS SECTION OF INTEGRA'S ANNUAL REPORT ON FORM 10-K/A FOR THE YEAR ENDED
DECEMBER 31, 2000 AND IN THE COMPANY'S REGISTRATION STATEMENT ON FORM S-3, AND
INFORMATION CONTAINED IN SUBSEQUENT FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION COULD AFFECT ACTUAL RESULTS.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
CONSOLIDATED FINANCIAL RESULTS
(In thousands, except per share data)
(UNAUDITED)
Statement of Operations Data:
Three Month Period Six Month Period
Ended June 30 Ended June 30
2001 2000 2001 2000
Product sales $21,385 $15,827 $41,669 $29,159
Other revenue 1,535 1,259 2,935 2,458
------- ------- ------- -------
Total revenue 22,920 17,086 44,604 31,617
Cost of product sales 8,310 7,212 16,904 13,899
Research and development 1,837 2,004 3,910 3,894
Selling and marketing 5,269 3,904 10,020 6,853
General and administrative 3,319 3,884 6,523 7,631
Amortization 729 670 1,409 1,150
------- ------- ------- -------
Total costs and expenses 19,464 17,674 38,766 33,427
Operating income (loss) 3,456 (588) 5,838 (1,810)
Gain on disposition of product line -- 1,031 -- 1,146
Other expense, net (265) (170) (405) (36)
------- ------- ------- -------
Income (loss) before income taxes 3,191 273 5,433 (700)
Provision for income taxes 429 161 675 223
------- ------- ------- -------
Income (loss) before accounting change 2,762 112 4,758 (923)
Cumulative effect of accounting change -- -- -- (470)
------- ------- ------- -------
Net income (loss) $ 2,762 $ 112 $ 4,758 $(1,393)
Earnings (loss) per share
Basic $ 0.13 $ (0.02) $ 0.20 $ (0.36)
Diluted $ 0.10 $ (0.02) $ 0.18 $ (0.36)
Weighted average Common shares outstanding:
Basic 20,245 17,341 19,931 17,282
Diluted 25,049 17,341 22,211 17,282
Balance Sheet Data:
30-JUN 31-DEC
2001 2000
Cash, cash equivalents & investments $11,655 $15,138
Working capital 28,299 25,177
Total assets 94,193 86,514
Total debt 9,703 13,630
Total stockholders' equity 62,522 53,781
SOURCE: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
Contacts:
Integra LifeSciences Holdings Corporation
John B. Henneman, III John Bostjancic
Chief Administrative Officer Senior Director of Finance
(609) 936-2481 (609) 936-2239
jhenneman@integra-ls.com jbostjancic@integra-ls.com
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