IART - Earnings call transcript Q3 2020 | Integra LifeSciences Holdings Corporation

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Operator

Good day and welcome to the Integra LifeSciences Third Quarter 2020 Financial Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mike Beaulieu, please go ahead, sir.

Mike Beaulieu

Thank you, Samantha. Good morning and thank you for joining the Integra LifeSciences third quarter 2020 earnings conference call.

call Coleman, Arduini, Carrie Chief Financial the Executive and Anderson, on Officer. Glenn Officer; Operating me are; President Peter Chief Chief Joining Officer; and XXXX release we our a today press Earlier third issued quarter financial results. announcing release Quarter reference the will Presentation. XXXX under Events Earnings call, which the and integralife.com during & at Call corresponding Presentations, presentation, available file The and Investors, we earnings are named Third

you business the sell Act we of current, call. it recent, quarterly entered company’s the considered to definitive discussed for that end this disclosing typical with in Before than anticipated of Extremity statements. the light many the uncertainty, COVID-XX transaction company performance the we announced the today Exchange to are the in begin, to rationale cause the business and SEC about will and during during be a ongoing I’d discuss call. had statements we in in a more would filed Also, differ release. could information call reports that investors remind may to materially to Pete forward-looking for future like Factors made its results around of actual On into XX, Smith strategic September expected earnings agreement the The Orthopedics transaction at/or XXXX. later close & Nephew. this are is

for I'll certain of the include current in And of over X-K Reconciliations Integra's our Carrie? now that, measures. today today Form quarter any measures financial exhibit comments review Carrie release, press performance. call the today's found filed third non-GAAP which can on turn SEC. to financial our be will is with a Lastly, report with to non-GAAP an

Carrie Anderson

to everyone. summary Thanks, I'd a X. quarter third start and brief Mike, highlights on slide morning, with good our of like

were quarter of revenues a decline total representing the of basis on $XXX and third decline an X.X% X.X% a on compared reported to XXXX. a million, basis quarter organic of Third

the Xth. end range high communicated at performance revenue of on preliminary October was Our our

part the while pleased And our strength from sequential, exclude growth in portfolio. are capital over Our in increase capital flat. procedures well much of care the the roughly enhancements we growth. across of would of our also increase more down OTT recovery during to due commercial systems XX% equipment pleased rest represents continue we second direct drive deferred as the operational by did franchises, measures. lag a we also driven performance, of as vary X.X%, the with total sequential strategies, resources We to noted while this put we and We business. we our pandemic. U.S., a of was quarter On capital slower did a the quarter And surgical recovery, QX. as by place line. but on broad-based and quite QX where was strength growth If revenue And delayed our XX% third second result XX% despite confident by our capital results, especially final quarter sustainable product increased year-over-year improve health reallocate still profitability consistent that programs during performance the the was of was organic of quarter, from QX to our the capital our improvement third call, saw our sales were impact organic in the sales that were with or

as improve our and our prior our share revenue points return margin EBITDA improvement year. costs. metrics manage mix, earnings QX we to These our XXX of XX% increase. to represented per the earnings an compared of Our $X.XX growth, adjusted XX%, And operating nearly nearly demonstrate was power basis product an

the with segment. Sales CSS review prior year. Energy down specific I'll you'll and of the by which an $XXX our if the sales from quarter of million, only and remains Certas catheters basis of to a constraints primarily Global strong management This COVID sales Sales X.X% as there capital of in discussed our impacted third to and strong the decline slide we'll and down difficult as five, in of on quarter. recovery sales mid-teens, of pandemic. organic on for Now capital I were single-digits. second the QX CSS products, organic a decrease turn third deal an from led the increased single-digits sequential basis, low X.X% Though a neuromonitoring antimicrobial Reported signs. Advanced as recovered were forecast, our are neurosurgery repair are access such tasks, the timing recovery growth our in revenues earlier XX% sales valves. programmable performance were about were in by strong low down budget in quarter lower result positive still dural reflects leading being U.S. sales the

capital a directly levels, of CUSA second, potential the for and basis we on First, CUSA sequential recovered consumables capital opportunities. sales strong continue a utilization quarterly to implying have demand. And of to improved and tied sales improved funnel strong XXXX future nearly

the compared basis do we instruments improvement franchise decline a in on believe X% XX% in about QX. the competitive the to organic market QX, pandemic. meaningful an dynamics have Sales the in Additionally, changed of declined during not meaningfully our

market, a volume. closely in Greater quarter. our both high the As by Latin some Asia. CSS parts sales reminder, down in and America budgets and tied instruments Japan of were to recovery International and offset Canada sales Growth in single-digits procedure of indirect surgical and including mostly was hospital slower are

revenues an X%. the segment Sales on basis. X.X% and increase in six, and $XXX organic showed grew recovery OTT reported million, of were both on over the to stronger representing in U.S. slide Moving an even

in performance but reconstruction, improved the Integra declined from products in sales Nerve PriMatrix, surgical mid-single-digits reconstruction Growth these and mid-teens of quarter offset were tissue increased Sales QX. year-over-year, quarter. prior the by sequentially versus wound year. aggregate Third which using wound in Amniotic was flat skin, during in

We and treated more and are as and expected the in as in business, gradually. slower are urgent, this and returning the strength part recovery some The part driven U.S. reconstructive saw especially less a strategies implemented surgeries in in more consistent of these outside plastic and growth we sustainable our inpatient channels. by programs reconstruction outpatient wound drive business we to therefore, was

also For example, educational sales our components when Integra of clear with both and across Health programs and products surgeons wound the Skin, relative market. user strong address facilities clinical scale training. limited, has strategies, products lack segments extensive the Rural have our been our through often care customer working advantage many and the data risk leaders and Integra strengthen competitors with our become COVID to complex clinical clinicians health commercial key we of We've advantage to the clinical introduced differentiate and sharing to who contracting is supporting engagement scale proven both during of Economics helping relationships history also increase these in What matrix experience. the play of have become of and in access to relative which to take wounds. We've managing partnered our enhance and leading opinion to Prime positioning webinars reconstruction others

Orthopedic components well recovering Moving and August as On to both ortho second sales this on increased P&L among X% into deferred quarter earnings of orders that our strongest private call, key were quarter the customer X benefiting label our our continued third QX. compared timing increased from of as showed indicated flow. now prior we procedures third review completed. sale performance momentum the our sales improvement to as in XX% Slide quarter year. and the franchises, procedures third I'll and quarter cash

Our P&L and XXXX. to in cost positive well margins the our in within business. were in continued XX.X% compared margin manufacturing as wound quarter reconstruction mix product and U. XX% measures benefited notable Gross ongoing QX the performance our management. from and with management Adjusted as S. expense by across third represent of execution geographic the strength strong gross facilities

to to which in our prior slightly to We all result sequentially will geo and quarter manufacturing mix levels. cost we and levels, control, of higher product normal to that expect more declined fourth remain margins than return likely ease continue but costs our gross increase year as and

prior was XX% mix Operating our expenses quarter remain still Fourth and EBITDA to below expected. were revenue benefited from sequentially the of measures. expenses management margin held operating than prior our stronger cost EBITDA but year from Like revenue expected despite coming in levels. are increase ongoing third quarter, to gross levels XX.X% margin below compared the margins, adjusted XX.X% in Our year. XXXX

anticipate higher that than As QX sequentially but our XXXX. quarter fourth still lower, be to we a margin EBITDA of result,

expense associated XX%. slightly compared loss QX of earnings Third in-process EPS that the to $X.XX earlier to performance. the Therapeutics outstanding million, stronger Recall to was Rebound a was The shares R&D $X.XX year, program were million quarter, by was prior GAAP approximately accelerated third year. reflecting completed an prior diluted year. compared of increase in and cash $X.XX third down last repurchase $XX a adjusted quarter in Operating from in in in benefiting quarter share loss $XX the EPS the GAAP the $X.XX flow was due GAAP year's Acquisition. driven the with higher almost DSO the

Slide our structure. Now on a I'll if turn X, provide update to we brief capital

driven X.Xx XX, $X.X by our improved in earnings consolidated X.Xx total As cash billion, compared flow. leverage was and net to of September debt QX, ratio and higher our to

of ortho the of expected of revolver be the business principal ratio until not $XXX our credit we at/or we any of million, further, X.X The end and to low third end XXXX, of have company does expect billion to divestiture close cash operating equivalents times. cash of range and $X.X undrawn should the consolidated to quarter, in end the our the due the improve With have leverage repayments At total around June and targeted facility approximately capacity. XXXX. were times X.X near

call Glenn. Now with over the I'll turn that, to

Glenn Coleman

Thanks, morning. Carrie, and good

from business growth Japan single growth in valves. digits introductions and high quarter. decreased the By significantly in from some our declines turn in to an of in you led color indirect business our the improvement upon headwinds the new third in number launches CUSA successful third from these including the from performance prior year, operations the indirect year-over-year off to Germany, outside sales quarter, XXXX with improved valves performance quarter, year, Asia on but mostly China coming DuraGen drive X, the third of in continue driven to sales sequentially severity our all down in consumables, improved Based pandemic. compared Europe again, General led some major in discuss way of U.S. of DuraGen. additional by on to year. performance second to provide also the regions this a I'll though had quarter product Sales by improved region, company compared showing international by growth due many organic of and of team. product growth COVID, to improved both fourth performance Japan our Pacific strong programmable may were which factors QX. Surgical down Despite the markets. All for programmable exceeded and but quarter the slide expect to returned current prior completion over we major commercial model China the by on best to brought slightly our us countries the and fourth show Once the direct the widely quarter. that X% and varied the based affect with the to organic Sequentially, prior Compared lows, trends, our slight XX%, the new in with year, the both Performance average. If the to the

Mostly Spain slower compared U.K. that Indirect prior countries However, of of the and the the had seeing as outbreak COVID parts result declined these largest with severity markets to double of the Latin America year. than a a the recover other declines. lag Europe. to digits

America and as slower our include remainder indirect Greater the of markets of a than direct markets markets. to continue the recover And Asia, Middle to we East. the For parts reminder, year, expect Latin indirect

a in product company teams so, several our to supply will with we quarter, manufacturing want and demand I chain to facilities sites, advances But global the performance Turning strategic tissue support in succeeding. the our doing highlight pipeline. also operational the investments our growth. capabilities completed context, enabling operating which future manufacturing and improve stress supply and order to to in that third like made I'd our before our are and few fulfillment

is All the our made face of by headwinds COVID. progress forward of being in unprecedented created

of midst mind, work in in we keep pipeline, to advancements the As through have hybrid occurred many product product a moving walk activities these the environment. development

Rebound is ICH a acquisition, into enter which, with enabler as our the and reminder, neurosurgery both the Integra Let's invasive Therapeutics to market. market an minimally for intracerebral for from start the hemorrhage technologies

side, channel of for opportunity improve On the advancing visualization. well. the the invasive key platform with going about platform next-generation the disposable demonstrated design that We're Aurora minimally a for a larger opinion with the are surgiscope development Surgiscope enthusiastic group scope. designed multi-instrument recently programs elegantly We minimally who use a invasive and this leaders the has are and technology

our our developments, launch phase which to and product Arkis future for to prototyping the creating with period. a about that is pandemic. portfolio. exciting is well the For of our reduce also focus enhance ICP sharing device long-term combines as posed future proven benefits time, them studies, patented moving and the care. programs device. CereLink, We're formation. ICH the as The of excited expect due to our program, wound the our also nerve the potential technology catheter tissue not moved by came surgery, current plastic to the the begun a Endexo, technology anti-infection our next-generation here research acquisition. challenges Integra this clinical of are through more regenerative Both programs technology dates of thrombus of later we potential about this of existing We into select being back on for are we that of short-term other you to obstruction with in a new opportunity, new a MIS expanding technology track and recently forward to development. of to look At repair, the initial these other parts development growth the contribute long-range also details clinical group reconstructive forward EVD product such with and planning out the utilization technologies advancing on seal options that the as initial neuromonitor, we've with compromised in work and is within We're by design and The the KOLs of ICH and bottom-line applications program

the fourth we're ongoing quarter, providing our to ahead Looking given uncertainty. not formal guidance,

given number flat year-over-year, in model fourth along as a a does spike a significantly, a the whole. compared That third in quarter basis. XXXX in that Technologies allows pandemic to said, If This there we year-over-year scenario Orthopedics business remain the U.S. we us which recovery neurosurgery, Italy, anticipate cases countries, quarter. be particularly for grow steady & Assuming sales returns could constrained, in not worsen approximately Tissue down we current the becomes risk which to capacity growth, France, Europe, is the Spain. hospital mid-single-digits on to continue to be with in a to of levels cautious including the COVID and would company

variability behind through a slowing COVID of us, quarter will at continue worst is impact least likely parts already is While a rate base the environment. to risk scenario in recovering XXXX. likely first the our indirect some budgets recovery than the assume our our capital business. slower at the to of This that case the higher constrained Also continues of of remain of of risk other current in markets,

sequentially. modeling to As increase we're a capital result, sales

that the we over However, experienced call now of sales to we Pete. level And turn the like capital same year. quarter expect in do fourth not the last to

Peter Arduini

and Glenn, Thanks, everyone. morning, good

definitive September to you about If announced the the our business. start recent Nephew. Orthopedics signing some to the Smith of XX, we Extremity XX, & slide Orthopedics business to I'd divest to to turn with a agreement announcement like divest On comments

and a moves companies, divesting towards portfolio integrated evident parties became all that bigger and highly fully more company sense the industry to the with As a involved. made most larger products it orthopedics complementary our of for consolidates set

Following strengthen Those opportunities have investments Technologies this expand investments growth focused businesses. and our us will Tissue drive to will leadership we and a pipeline that allows to divestiture, core positions and markets. addressable portfolio existing fund future increase neurosurgery our in our more

up beyond We organization financial reduce gains complexity significantly the benefits. pick the will the and efficiency of also

Importantly, towards exiting long-term financial transaction will us achieving our profitability and finally, will growth shareholder accretive orthopedics and on organic business keep margins, And flexibility. our our targets. EBITDA growth enhance path this value and to is which improve a

leverage to and We reduce will have the to our ability a ratio meaningfully strategic M&A from pursue financial position. stronger

points to pro This over of view. added approximately would If and excluding a the you page to financial EBITDA like Based slide of our the growth, our have expenses total divestiture XXX orthopedics on on financial operating turn basis increased reduced two percentage as and the business XX, years, financial XXX expand of by approximately our basis to points I'd from both metrics, XX orthopedics exclusion sales outlines points. margin benefits performance over organic our forma last the simplification by the business. basis the

in our amount the the impacted the demonstrate not our they about give total line and has a total percentage The On but into Relative of simplify of we to accretion scale. significantly examples businesses. of business revenues directly bottom may also right of lower metrics XX% orthopedics how the of investment than approximately will the required the other lack scale business. of business value without total orthopedics, of our translate for accounted X% disproportionate benefits SKUs. similar side our orthopedics company inventory which our of generated our divestiture These slide, in sales has was productivity but

a leadership have Codman where two focused businesses; we global be technologies company, differentiated regenerative with on scale have already our and Surgical where all will As positions. a main segment, more attention tissue we concentrated portfolio of Specialty our

to behalf portfolio agility. and of to our around dedication Senior demonstrated in Ligotti, customers we Pete growth, their for to I'd the Integra, our forward. result Vice commitment unwavering our EO wish that extremity like Orthopedics, orthopedics challenging and strategic our optimize world times, decision an everyone orthopedics And the increased confident focus the and team during patients. divest well all these On for over has leadership and team are members at faster the and colleagues of years. Even higher moving the President them We profitability thank orthopedics

We strategies of If and in tissue turn in few I'll effectively remarks. a slide neurosurgery positions aimed messages We're at executed you growth our XX, multiple advancing leadership our third a closing driving now performance with pleased all summary and quarter. both provide to key and technologies. programs, the and

company, current the a advantage and facilities. the reprioritizing and financial manufacturing As by bolstering this will We've and been our in we've and position always of accomplished taken accelerating growth remain programs implemented select in and programs future part while to improving has of educational platforms, our for Integra XXXX all of to digital and training and environment our invested R&D multiple clinical beyond. ability advanced M&A, in core improvements growth flexibility reimagine strategy. which our pursue we that And

remarks, demonstrate mentioned Carrie quarter earning in third our metrics her opening our power. As profitability

in in With and complexity growth, XX% targets, we They product X% confidence and XXXX. double-digit improvements reducing achieving our our And introduced include which of goals. EBITDA discussed, I gross margins, just organic enhances as in XX% of costs, business increases our achieving these to Orthopedics our margins and focus to only X% a by to the collective management divestiture our earnings clear the the mix long-term XX% growth, acceleration our path revenue have we in growth.

what our this As for beyond. months, nine are in And open with Based prepared we on concludes a another this positioned Thanks emerge please stronger achieved quarter company. we fourth XXXX look I well over last from as earnings intend quarter, told you on would to the for the morning. update to for That last and we've call February. line listening. forward up questions. operator, now We any our you you remarks providing pandemic

Operator

question Raj come Thank Our first with Instructions] you. Jefferies. [Operator Denhoy from will

Raj Denhoy

we we're possibly sit if I looking the now or getting wonder commentary what's curious, negatively do could the maybe of levels, a that you around to the parts I I'm to lot far, still at quarter? thus be get with going here has your business though afternoon. progressed in perhaps there's start moving how appreciate. could XXXX here there's mentioned of confidence all chance the XXXX level, you Good to fourth you fourth Hi. in level you a as back quarter, growing think

Glenn Coleman

held beds single-digit part potentially COVID But positive resurgence far, procedures, would Raj, trended virus, We're mind, year-over-year us. really outpatient negative has of comments our are that I just a fourth October potential putting line big Tissue have on it's into positively if we beds. the don't Glenn. us say the see far for series with in so based potentially of the could that deferral quarter Keep upon we very what range is we ICU things if outcomes out of in Yeah, a can to play to being we've the like November of be the patients were continue of expecting. trends think, also growth I Obviously, get XXXX over mid more occupy there's and a in in we positive several see But seen COVID for worse. business. levels. December. uncertainty October. Obviously, patients, the that back so sales around require for last Obviously, got to ICU if Technologies month months, trended us, in our things

we I much saw don't regardless beds we more hospitalization. quarter, actually a zones, fourth better having ICU put younger not the in seeing out a more wave to require utilized, about this these meaning green hospitals the things cases this lot direct and patients actually also spike are prepared of patients quarter, and resurgence of We're correlation feel also of quite growth between being the are think ICU You how the there. next for good up play beds.

And things. we close us series even a that QX, see it a flat Obviously, but scenario wouldn't back play keeping out. range right a we're for a on do now, to gets call So, outcomes I down could of get November eye that do of QX. could in worse again, in mid-single-digits to points overall. be things And the and flat if landed few a would December, us And where months down to keep we levels. we XXXX that to

Raj Denhoy

are of I the slide of uncertainty. keep XX% or XX%. orthopedic. process mean laid divesting until divested a you now that as outlook to on appreciate the margins was lot the for just long-term you as you're your I Maybe in long-term there's out one EBITDA to still noted, But your have of up you've goals, now. margins the Orthopedics dilutive EBITDA you've

whether I'm haven't so just at profitability it already? a shouldn't yet or continue updated so represents really you've higher perhaps you this beyond you'll expect to And whether curious perhaps to that what is the some company, outlined that indication in the level, reinvest much expand

Glenn Coleman

the the these takes thanks think for point, question. you're is range I out growth growth the focused investment. Look, always Raj, Yes, that had we And XXXX. that leaning to and as EBITDA we've are not laid your on since the have goals point company, a changed that for are which towards, we

third is about -- the think part the see end touching quarter see hopefully great fact the what that I the range. of bottom were the I investors in we

expenses. as of the heard, were and Now, those. not important also we we squeezing some you've were starving any obviously investing most programs in But

right of you business making And never orthopedics sure levels the moving if could. achieved We at a the have was be are that unfortunately great it. all We they that forward scale. can

to But XX% into we'll broader look upstream well. I be that and tissue it further much to confidence regeneration. about I intracerebral hemorrhage surgery, and if is to that us how see be have X% XX% could to And fed. those us in today's it. represent going state, we're opportunity XX% the neurosurgery will in plastic invasive has portfolio says at an But I higher, up business faster range. that opportunity into we clearly the the range moving to that and may make range for That's think how that where of divesting the the invest for higher going opportunity it, EBITDA we need are at invest minimally you portfolio heading; XX% opportunity to moving you. XX% a out, the closer think our areas confident drive we XX% into us, in cases we think into future. run to expansion see that on reconstructive that an I'd Further fact get we obviously, that gives a to is if into XX% to that do company take plays to keep see quite margin that But our or to frame growth to we platform, and as if scale to feel in it nerve,

Raj Denhoy

Okay, great. Thank you.

Glenn Coleman

you. Thank

Operator

Thank you.

question Dave next Our will come JMP from Securities. Turkaly with

Dave Turkaly

the morning XQ have sort any that and you But to improvement anticipate in if numbers. maybe where improvement. what on and now follow-up And slide side hospital congrats your from confidence. stands? Pete, question where that about now saw the comments the you of the Good sequential we the mentioned I thoughts of I'm obviously, on for just curious you patient in moving forward? Raj's on updated stands guess I'd get love to

Peter Arduini

add Glenn and Yes, want Carrie then to to it. or if I'll comment see

I own our views. think even personal think of we

was around. the moving Obviously, a think going quarter I third quarter, even more lot in second there out paranoia fourth and improved about quarter. and

this I people at that I patients state, and think steady think and for we the good, meaning procedures aren't done point. good think bad of more, to today's out back are and in go getting is think definite component get I afraid the reasonably it, so

our XX% there, get about that an spikes were is And look need all bed get you if is, surges system the we component folks wound the going confidence associated that front, that's TT what about our is ICU the business predicated follow-up. use chronic gotten your of that and workflows, to the think care more might partners cases in. at QX. folks we're horizon, a does, business, about a neurosurgery so our but emergent that the have that be the of more their a normalized still is deaths different heavily correlated. neuro better scenario part even protocols, to trauma different it of if procedures on, burns side, concern standpoint, on think, hospital of procedures significantly we've again, or example, increase on significant But have been with goes huge an I level always whole get in obviously of that a that to have complications, is back changed ICU you had from with procedures, moving we need have what's up. related I there's the time there and changing bed, utilization availability back a some as in doctor patient believe, on there's hospital managing wouldn't doesn't pharmaceuticals. the what open lot a about business or what But business the patient will Over QX as into says does that confidence. different think that's to have which QX, And either more pandemic, the is in And in just happen of seeing

in very what done the is bodes and well for to maybe of something situation. morning. is we've might we And paint kind tough which our between, of based so potential I But probable, our which outcomes more this that are think on the a that picture be job here situation think here

Dave Turkaly

strength, was just color gross that. a curious much, things you'd pricing. margin, mix. in for that's changed the and you on cost product that geographic I lot. anything changed haven't and the or is noteworthy? imagine make know but this curious, I you I to any world, any there just had was mentioned new if care Thanks for Thank containment I the comments

Glenn Coleman

has on changed Not the thanks. pricing a lot front. Dave,

I in on changes last no with what pretty quarters, And the pricing few think really stable. so you've consistent it's seen the front.

Dave Turkaly

Thank you

Operator

you. Thank

next Zimmerman BTIG. will from Our come question Ryan with

Ryan Zimmerman

Thank you.

think now the ICU comment second subside I XX% COVID And saw in Glenn, quarter. about third and So you up we made a in to holding again. of XX% hospitals to back flare-up suggested but capacity COVID. starting were back for That obviously the pick their quarter,

see was you questions to could of that, partly that wondering was maybe headwind is material just ICU? from of lack dynamic if still consistently? and in comment Raj's trying performance I'm quarter, I whether third holding benefited Because that that in spite I'm guess of a So did you capacity and in follow-up better understand or to the a Dave's on

Glenn Coleman

Thanks. say ICU question, XX%, being the we're even in in around certain XX% Europe. Ryan. I seeing It's XX%, would markets a still especially held, good beds world,

But So many that's really of held COVID not maximum being I'd capacity. in patients. where highlight at systems, beds those they're for

we're not But So the still, holding them, on beds, to deferring not many our impact some cases, yeah, XX% in cases, they're number they as holding beds. given seeing just they're a before they but some beds I in procedures. added comment, additional but are that these countries many fact of XX% previous have enough And of mentioned cases, business, have my the of today. in in

So increase actually handle ICU their they've and added beds capacity more patients. to

much So that's pretty a summary there. quick situation of

Ryan Zimmerman

force And entire of by the about always a A was I for back, OTT I that to extremity repair. was the channel. then sales nerve think sales few restructured one follow-up that. Integra, appreciate you me. tied ortho areas Okay. just But years when

pandemic, you in building force to sales separate discussed I And think a so this space. prior the

in And comment that so where I'm where curious fits nerve you could repair of peripheral and on today? you think kind your if portfolio stands

Peter Arduini

Pete. Hey, Ryan, Yeah. it's

end So earlier a the wounds, well peripheral as there's the bright year, of really future opportunities of of extremity that year, different upper reanimation you're aware traditional for We area. very opportunities we out of things lots in has us. nerve this and this deal at last Earlier think nerve, think, at let's is and reconstruction dedicated a our in discovery scouting dedicated make We tied place. structured and it have year, about we created big a also say, into we up actually group. And that team we time, channel wound didn't are set channel. a had but interesting a

already they good microsurgery more focused orthopedic the that's even are seeing well a separated it relative tend traction it some part last they living. time. And operating we're had the from When and on channels, know, these then we is you at And still fully first, So did dedication do for And our year, be some to of been though extremity what your to memory organization. separate quite surgeons, for out. some we orthopedics it of good. separately team was that as

Ryan Zimmerman

color, for Thanks the it. Got Pete.

Peter Arduini

Sure.

Operator

Thank you.

next will Securities. Krum Our come question with Truist from Kaila

Kaila Krum

questions. our for taking thanks Hi, guys,

how So like year-over-year. your you about seems about thinking I you're benefit But EBITDA may going the QX. margin that I as structure the mean, company's are can come to mean, year? next provide you've next year? margins get pandemic, that you there areas just grew line bottom in a during in the love adjusted thoughts P&L I it going realized forward? into cost stabilizes need would don't into revenue And bit where a on the spend you cut to perhaps back to costs down

Carrie Anderson

it's to in corner I we was opportunity Kaila, call. us And and talked Obviously, Glenn entertainment our of trends, we remarks digital planning getting as about in to question, that management. couple I'll costs. XX% to new and to In for I the world. take quarter, say, cost back that differently certainly think about would we is number into and to could of this touch XX% long-term XXXX, a thinking about the manage turn the Pete think objectives margins. things our travel that I here one, go your to new talked demonstrated good continue it a light continues of that third and

as of with costs talks on the from margin standpoint, large standpoint. basically of away talking favorable presented quarter about gross margins So boost saw ortho XXXX a from another think significant the Technology there -- business. are in TT on a actually And line. slide the we there differently. excess XX%. really here gross our on the geography mix is OTT, about importantly, And Both the more our of that but a to in say impact is margins would also go The you're Tissue piece, business. of third product I fact Couple opportunities business ortho we to the that that think other the costs And that amount is about that that without to mix. you things of the part

of of So, in and through that to here start here product quarter, quarter. you're in that's line seeing favorable we third as that we've great come restored recover had we third the the results mix and product the really the supply power

and year think would a And that. expect would we beyond, to TMA TT is, more a with J&J, you well. Pete, leave agreement of transfer agreement you that and have the mainly stronger see in of off the I is XXXX, we next fourth will through do start that we even than to again, you'll start about piece as here as be list comments? some TMA the manufacturing with quarter, to that but So, last we have move

Peter Arduini

our specifically areas, lower team, a high might might every level, Carrie, how at a they ask add actually I about in how rethink to because word company. to throughout is And a challenged Just structure. they as company script, reimagine the function just that whole the we, it cost we run run at used leadership their

think systems invested we've the years. I five realize heavily most in folks IT last

might place for the global years we have on would we as put in with development. mentioned pretty utilizing one not digital envelope We commercial pressed past. some interesting front, training about aggressive systems And be in up on we've the been we that and think maybe COVID I say ERP that platform. ideas, come these this And whether during window, tools some of it I have

those, more benefits probably I in is arise. they our a in for of but long what company do be going to is I driving of in part that and of think, to a I take back we're will don't going are do with can which to advantage our profitability, have believe stay trying move big us some they quickly even us and a agility, as opportunities time. so future the And see

Kaila Krum

end bit able much. then And if a we're then thinking but at about curious little as I I'm environment? what guys your specifically from you purchasing about a And saw to sort the sort customers bit into you provide here helpful. month? sitting Super detail so the QX might they're this exited just budgeting into hospital be you what heading more little I how hearing of XXXX? you think of detail, gave Thanks you're CapEx of mean, October. Great. of guess -- just I on

Glenn Coleman

say is it Hey relative Kaila, I I plans. pretty it's would think with the much line October, and expectations Glenn. thing our we'd to in say trended only

that's the to to expecting our going in an financial see do quarter. there's the going to lifting. I the down of So, do even positive been on happens, some mentioned hospitals definitely capital of be forward. that to funnel. constraints do be our the and And we declines difference look And ahead we October of fourth sales third and good The global seen prepared in to when area year-over-year. be dollars when There's to of the to trend strong my one December, came we see fourth we're but as in the be really in improve expect Relative maybe November to to in it quarter; uncertainty our any lines. didn't big expected. we for capital we've is some a us We where down It's are however, had opportunities But a funnel. clearly, for remarks, sequentially move terms more capitalize. capital have X% business, in as see position think expect think which Obviously, I budget I X% we quarter. real in as upon dependent represents capital,

Kaila Krum

Thank guys. you,

Glenn Coleman

[Indiscernible]. But you. thank

Operator

Thank you.

O'Brien will question next from with Our come Sandler. Matthew Piper

Unidentified Analyst

of guess go question made a but that that the you ortho little time guess, have forward Thank was feel competitive the guys. a transaction? to up did chunk taking is Integra. of I with expectations that reason you decision Andrew scale to morning, then, bit of does Good I the part second and felt that overall do that what for advantage do give you Matt. is to of I a business here. just guys And impact for with question. Hi. right anything you it actually from for lingering business Integra, bit ortho wanted the for This much is a you the bit variability on little on be Obviously, a for your smaller push there. the scale COVID-XX? of could of a is when Obviously, maybe a Codman, divestiture

Peter Arduini

say, important really use we we when a use, define the word relevant. just we I I would word it’s think always as scale,

bag leverage things you you the here relevant can more And you R&D, can grocery is Relevance so into platforms. that this necessarily case doesn’t give just adding leverage scale. in

And bit items related so takes leverage neuro the products. with platforms, a that as DuraSeal, in well have the of between we as our DuraGen, regenerative quite GT, neuro, place between

nothing with business. that’s So COVID. with used the There’s to that Orthopedics have we of with associated Orthopedics the And do outset correlation. to the

I then a was that, lot a play for we neurosurgery the decisions instruments, period. where There’s to have But had that biggest return towards or expanding look orthopedics of portfolio, our last for pursuing is these based assets a that which be goes would were we that. as the better the of come a within month on into have dollars TT foresight I in starting. don’t know, the opportunities company many one And much investment clearly investment allowed near think to if applying of happen higher ourself clearly a neighbor see time could would six you right of think processes over couple in. years to optionality

As the that mentioned place. comments were consolidation about which I size and well the that’s as taking

small were As orthopedics changing. consolidations, the or extremity many of acquisitions you – within few with years and that’s companies. ago, Today, the mid-size players

well of best this and next felt profitably over accelerating we that couple And really us clearly for positions for those business. so, also and employees years. was thing And the growth the

Unidentified Analyst

my on at you characterize this would then, years, That get about the then right-sized tissue how makes meet from Okay. talked normalized supply sense. you’ve few a I Thank discussed And a the And be should its digit next as bit to investors perfect growth guess, the contribution over is, little you your to ability demand thinking in working point? before? low environment follow-up business. fair your to in like tissue you. that that how assume it single about to high business double

Peter Arduini

is portfolio. double specifically, I’ll tied Glenn is high within to single, digit the we where for But, our with defiantly we’re what are supply. yeah, positioned on of we’re that but GT here say, have low A and lot comment products, supply. I’ll new

supply. little a bit why Glenn, don’t about So, you talk

Glenn Coleman

Yeah.

I look shape great think, at regenerative in you supply. overall, our when we’re

as up, One silver that levels these with reduced was, to is build other the plans we despite cost of the we've those can capacity Memphis we supply safety actually linings forward. regenerative about we’re safety and thing reductions the faster, demand think think made through. in nice And able built the PriMatrix went I stock stock actually our surgeon some build even products. move COVID of But we And build about to we've more investments makes amniotics build more plan, business, I men and for more which actually now products.

sales we're And good as shape. in XX% plus. products for start with these regenerative So high Carrie as very us, are very to mentioned, margin up ramp our products,

actually well but and to gross drive mix the line, show positioned margins. to also we're higher favorable that capitalize on not So just top

Unidentified Analyst

Thank you.

Operator

you. Thank

next Our come Singh Shagun with Fargo. question Wells from will

Shagun Singh

for taking XXXX on thoughts my get your you to possible. wanted if I question. Thank

that said little points looks – about of to So you XX growth you to in will XXX XXXX. basis to basis capital it just you would seems commentary continue versus consensus like XXXX. not XX ramped into that could back I XXXX sequentially then in looking region very allow And your And it you for capacity given have about think looks to fully is realize days is levels. improve of points that about deferrable, XXX to gain conservative, growth only, it a not XXXX portfolio XX your

And I'm levels from line LRP is growing the curious year, COVID reaction your you to here. XXXX over in here? what your prevent would next only with initial just outlook So, wild card get

Glenn Coleman

the now we us the have of Shagun, as for of outlined it normalcy first there's to between so And and a for QX. XX year. six But going determined quarter mean, thinking. we will the months you're that’s question next XX I lot know, risk And next there's looks much like I XX into we've obviously mean, months, way months, be what for for is, December. about months, out the also you of real think XXXX I like. mentioned mid beginning I a there think year. of, us, lot as I goes of

a of in of long the thing as Not where level business. think well about but as we emergency, of we rural as determination businesses I say our a that think well, I'm like neurosurgery Today, obviously, that it's consistency to as going of in neurosurgery facilities at think world to of a that COVID us, And this a in a its hospitals time versus a that's I for this country, quarter are, that increases period areas is beds. on big big it. business, consistent, when time, because profile. concentration not has mentioned, the be of the quarter. has the this the on do the different But don't growth how bit we and constraint to but not understanding little the wave us, means, stay What of primarily more point our because that, of normal TT think where was second spring high major more bit because or this at – probably same first we little that our big first bodes is countries in reasonably handle we one have are. are percentage going cities know around sure an affect we're actually side clearly, affect don't neuroscience for not they are is metro

I the really how So down on XXXX comes out. say mainly now, it's next really a right going to it time. seeing not we're play lot But think two whole because months not to more honestly, the

world all Just because within obviously, news. everything we're reading the of,

Shagun Singh

a you regen the helpful. fragmented I for on capital to there? you've and landscape? That's And in questions. consolidator Thank were this the the that reference in that question my And have you got could to in you especially you the then other COVID allocation. side, it. for taking Asia give and believe potential distribution on tuck-ins market? evaluating, you us technology And you're an current could update indicated think looking highly I neuro then discuss has if partnerships, M&A act as is made you

Peter Arduini

So, any regen other regen I any question. I'll relative Glenn, comment the if would think you just on I consolidation. than take different then is can -- say, the other and I COVID don't know look, But and markets to within maybe,

for part, within companies this are most look area I think, that of the the fine this MedTech touching into in out peer as bio come even are at folks everyone to and going I sector.

So, a I to if for don't this know is going necessarily be component that.

acquisitions For to plug us, mean more it's evident. looking as company, I a focused rather and clearly into a for it, portfolio having

We also and of products technologies the on and/or focusing that Technologies fit will neurosurgery. Tissue will bag be within

that thinking to partnerships and you want about we've things to point, so talk some And may Glenn, been of about. the

Glenn Coleman

Yes.

really I'm is in partnerships some nice pleased mentioned, As Japan working both we a include that that outside scale us about distribution of markets, Shagun, you would and we things for U.S. deal a one big Codman say product distribution of neuro the China. signed on are the and and the acquisition China. number channels, it's closed and actually to our direct channels, in just first given

the launched seal what's nice back differentiated a in and be already it here XXXX, today. market will a will going And and we're so into as on that's the country product be we have to complementary versus to offering move with selling that

actually us will success we've go that got into help some So, XXXX.

other deals the future in around have within on share working China are to more that. expect I would we'll near We and

to we're the But to side In on in it's couple getting plan channels, bag well around the places scale we addition, I we world, filling distribution regenerative some in-country certain we're as capitalizing of larger the important and think in a now the completed. reps. close on have working again, these we're in deals have Europe. note, able leverage getting these to And for that because we our larger of and on presents that those

but revenue cases, bag. resources a So, and not in products the these into as many lot profitability we adding incremental drop we're adding of

Shagun Singh

much. so you Thank

Operator

you. Thank

Steven from come will Lichtman question Oppenheimer. next with Our

Steven Lichtman

Hi you. guys. Thank

building standout what them drivers the would say are opportunities sort about of of medium XX look next I was you realize XXXX, you wondering pipeline, longer XX I for to term. months? are to talked You out product as and new over the several

Glenn Coleman

first say, first ICP CereLink, on foremost, the Yes, our Steve, intend half and I'd neuromonitor of we relaunching in XXXX.

year the actually to Lapis. contributor be market a growth So, a nice to called for to for launching going Japanese We're lumbar at of new chunk us. that's end this going be the

about of some that's a being So really to international moving contributor the into minimally of invasive that's going an about talked do see nice But going we the term And rebound a commercial at example. we're doing these longer the area as and having launch think XXXX. intend some our be benefits a for we you acquisition to product a XXXX. team for tumor of platforms and on surgical and the end surgiscope

technology scope. those on shortly that, When that benefits So, having through surge new same launch ICH we'll we plan roll in then out see an the we commercial And some of with platform. XXXX. after roll

to some going products. there not would in I are coming the see where we're the highlight. from start revenues would ones be benefit to the these out of that So those these that of But two far

for working products. we're our on more clinical tissue tissue indications pulled together, getting side, data On more the some of

but that's things couple you also excited benefit that, for on I as of should to but a going have which existing start more towards it half look new think latter we're launches, new quite when indications XXXX. help – about we products. the to And we I us at don't of know. product well call to working, come

Peter Arduini

and healing product, has bovine And characteristics. That that a say, supply. which comparator AmnioExcel think comment sheet there really out X-ply really of in product. the Plus your macroporous on I for which SurgiMend is a product size a fair is our dermis it's is handling good then versions tissue feedback isn't marketplace increases now actually that product, this vascularization. point Glenn, the getting We're larger launch the This product adequate off just product. to And new

plastic it's sluggish been area is in year, that, so Glenn driver product chest primarily believe in But clearly the be reconstruction. the little mentioned. very reconstructive a well upper because and it's we this And that future, valve will and a received as being hernia, this and see

Steven Lichtman

and conversion keeping the free cash Thanks, your XQ. seeing? you still that's on was high in market end Certainly, flow it. your there have talk then, drivers a a free level? flow at talk going solid you're And Can tough that to expansion. and you of sort Carrie, Got What guys. other very you outlook cash about activities margin

Carrie Anderson

and Yes. Well, margin quite was strong. performance certainly, and a actually significant QX performance the the revenue to level was DSO higher contributor cash earnings flow.

DSOs Our below XX been XX acquisition. below Codman haven't and were the since

contributions collection to there more as overall, real I nice on of DSO do So or as would there well. a the cash on some Codman are requirement say expect performance again, sequentially, the performance. integration come I the down QX moderate of side as flow the But us. now the we cash cash bit behind

I MDR. a year of push you're replaced Now going the is not as I there. cash needs to EUR that's that there. definitely, That's But there XXXX, But good would of free power earnings company, could would have you get just the flow QX, earnings some MDR forever. the of compliant the in higher news be couple that Steve, think on by conversion see cash about EU say to that

suppliers. not think, managed payments continue But that, we're well will but turns extending show on So working and continue capital, our just on cash proactively flow. I with higher the power, earnings DSOs, through come on our actively on just working to focus supplier there to inventory DPOs, and

Steven Lichtman

Thanks, guys. Great.

Operator

Thank you.

from will with Robbie question Our come Marcus JPMorgan. next

Robbie Marcus

was Thanks M&A the here. current about future about for if could you talk thoughts I taking wondering my question.

you are deal, integrated. good Codman a the up. a prices balance shape. while but divestiture You the have should has environment where since this It's sheet In think How forward? the going in business we coming pretty been been have high, about nicely M&A

Peter Arduini

Yes, Robbie, the thanks for question.

did would have you the last Aurora biggest two recall, out technology scope such and taking both deals. will a year, the capability. now coming they if we deals say out of the as was that in small opportunities. two wouldn't probably we're overall are private we did enhance advancing and But well. the platform deal, public as products So, that look, We Rebound that I rule

the for with of to multiple have not with given in many It's As different we've that do unlike are been arise long-term talking us opportunities past, relationship that a about talked folks. to. the actually, principles us built to over in a we've month, discussions ongoing

partnerships Sometimes they that be advancing where distribution to may and they lead an up end Glenn towards sometimes some partner, we closer had of the in acquisition. this mentioned, a might

opportunities. get into that the position that are near do. out had building on our products to keep point. about We plug neighbors, where And things could move sheet enables it's for what we're still can of many at business then with been we that important talked we that And us those to interest. clearly, completely area. neurosurgery, what similar have So, able that to portfolio say the us would of in things some be a that within we believe to balance I surgiscope

in upper as you when we reconstruction, may that area, in short-term our chain. move we confidence technology in portfolio, clearly other wound that increased chest accretive AB have of our I up could Tissue an profit. say, shy away quite few growth different in wouldn't instruments handheld actually how other into care, operate well. would that move these, well that so that and Technologies, help the our in reconstruction, taking There's are a we clearly areas a dip Wall a think we're ways that instruments a a in I area hospital look touches actually could all longer-term overall goals. from give then looking space of to as really we plastics But us play value be as to there could manage for that and have further would deals There's at instruments. our And

be So, think fold. what able our be us, tuck-in so, or important I deals would key into say focus acquisitions. our keep with really for is is, I over going tuck-in the bringing that's year it's focus the to to particularly next in And to

Robbie Marcus

maybe on Raj's And earlier. a color. the Appreciate follow-up quick just Great. question

EBITDA adjusted XX%, XX%, back this moving JPMorgan the year, did to from and orthopedic put guidance the Conference even with the divestiture. out at up XX% the you now down On it's

So, Is difference in how about think January to there are now? the should or COVID we it fundamentals other Thanks. involved? due from to all thinking

Peter Arduini

I had in of to mean, charts XXXX, always Yes, change used we've our the XX% Robbie, December from, that commentaries our numbers. aspiration we XX%, been there's or think, I has XX% XX% XX%, actual meeting. when no

growth closer even without closer that it. but know, So, XX%. if sure drive we to helps us your think us only run six had to exit XX% investments or some better, the you closer margin we're of be, probability orthopedics us to are We find were we running to helps may get higher should they today takeaway only seven getting organic range, our to when five range, than if to for XX% EBITDA that in I orthopedics

frame I So, up. would that's of how it kind

Robbie Marcus

lot. a Thanks

Operator

you. Thank

come question with next Matt Our Miksic Suisse. from will Credit

Matt Miksic

the taking question. Hey, for thanks

just on So divestiture. one your OTT orthopedic or

wondering orthopaedics greater consignment was the is markets, impact related kind So, which to for an inventory directional et heavy flow in to of I potential models a this think, it's turns provide one maybe your there? burden, of the from inventory business model had business, you then to if on I terms going conversion, had targets for pertains due model long-term forward on working true, those scale the highlighted inventories as in your any could it even cetera. color And other capital you I end pre-cash benefits follow-up.

Carrie Anderson

highlighted goes of Matt, the we reason would And burden Yeah, point business of only two it terms the to with of – efficiencies highlighted I focus on core conversion of that the ortho we, turns inventory OpEx, that But businesses. cash obviously, the that expenses away definitely, business. in lot the just we'll the some a that is team that the overall towards the did. a amount this certainly the operating not that terms benefit. amount free from the All now workload went see of slide that it of P&L had why flow in individuals that perspective say, lower, that exactly the

that assets, is the into that in about freeing and not inventory, and up cycle investment investment investment, consideration, take the that you set, but think only in including instrument you divesting If business fixed significant.

profile flow not And so only a perspective, Matt. help will it from free perspective, from but an cash EBITDA also

Matt Miksic

And one then just follow-up. maybe Great.

time, a in different I touched ICU these – their And Pete, this QX, all then was saw were the August many and could that we same of deal in some in might of way about out be you anything but mean, the up? in what and they capacity the maybe wound mentioned maybe that COVID they've might or that other are surge expecting the addition with this cases think outpatient? and in the July and You flare that different the how not what of if some like to you simply, earlier talk we're patients. it And the and hotspots changed the Q&A et in learned what on built fact But that things about cetera. how on just hospitals kind interim effects

potentially, in what's Thanks. particularly incremental but anything maybe else different neuro? this So wound, in time,

Peter Arduini

Yeah.

on much having me, just huge hospitals kind difference. this actual a I beds prepared, made more available. would ICU that's already, touched say we one of think but bit a being better little I To

of fact patients' as to November procedures And willingness more ICU on the back so things trend deferred, this the course, see it even beds, we in that some and the could it I months, we along spike not by though to and mean that preparedness system. summer continue Does did in expected. you've there's change there's hospitals, could. in had business resurgence the come our getting December? But into cases, of seen Of over think the impact

and way. have been positive get we deferred being expect levels all and back trends think that to and broad don't to QX meaningful shutdowns any expect to I procedures those in see lockdowns don't

seem some moment. may me, in the how to at months. next in within place what's hospital we'll of that's those or And very have out the country different. You a selective, isolated over spots to the couple see take of U.S., the but plays countries they more see and certain But be to certain certain that system

Glenn Coleman

business lot the a a orthopedics had the has And would just most run better from just confidence. for instrument have business I I more operations us of the think might pent-up add, a not business other within rate is non-hospital areas. lot Clearly, but little maybe environment. demand in part. quarter, in all TT There's And significant the the gives second clearly of we've some all this. -- pent-up But had some a businesses the of our But been a within QX, amount. bit health systems a mentioned

So environment, through with telemedicine that has hospital roof. the the take But even visits now its the going benefits. in

neurosurgery. need We you can have react that eye-to-eye you it need that's here, change come do or have If wound in may for the now you you talk something mostly related an to a in. to much MRI that within and if need to and of you get kind an doctor issue have to quarter. an may the even will it, chronic with fourth for increased have more how can to also fact and televisits you people tougher think discussion The come does to have

Robbie Marcus

color. for Okay. Thank you the

Operator

you. Thank

question of next Our will Travis from come with Steed Bank America.

Travis Steed

question. Hi, thanks for taking the

clarification. one Just quick

was I heard say in you October actually the earlier positive. Q&A, think I

and there's some still uncertainty but that? actually know October? growth did Just see you December, wanted November I to clarify for in

Glenn Coleman

to relative only the and plans. I Yes October, our thing I said was line in trending think it's with

the numbers difference in see any of October we for were October We're commenting we of So didn't month any has played out. what not October. on specifically versus terms expecting how in

Travis Steed

new do Okay. the is how That's just compares growth little I'm And where new weighted that. fair. think And bit average that the the assuming portfolio, excluding X% your business, market below to long-term excluding X% you at ortho are then that And Integra today target you if growth the you business? have? is a that around look ortho you to

that term? your you the long outgrow can gives what So confidence market over you

Peter Arduini

we've have we to think term. launches the that all CSS X% think ICH. indicated done over new we channel, can I MIS, again, range, Well, given would our if along hopefully the at these of work we some the around say with the X% we've and that would we we grow opportunities I long with with at end neurosurgery, our expect our product at look be business, to higher of And

X% as kind that still of X% higher to end the but of that we see rate, range. targeting a are overall So growth

but I single not yes, and range about On -- that. the growing talked ortho was nicely, end we orthopedic quite I markets think not and double-digit our And we've low are obviously have demonstrated tissue business, of ability high ortho in growth. the part past. have XXXX, to for and XXXX, our to grow down; of we the look were mean think single-digit kind at XXXX, growth flattish. that kind the in business low if I was were that of I we time results, back last posted was and we

in tissue business was range the we technologies, we range to end if that would into have at to in single-digit opportunity years. blended maybe our tissue see in grow not I get we're X% an focus that certain regenerative and overall. markets the mix hands, just ortho And business double while increased growing, now growing. high that and X% and that our us even business to And look going think should on So digits were the

ortho. So with long-term ability changed growth, there and divesting has targets our view on organic our not get to

Travis Steed

Okay. Thanks questions. taking the for

Operator

you. Thank

Our with Bedford will come next Jason from James. question Raymond

Jason Bedford

just honestly I you the back me to morning. if earlier. transcript. call Good can kick were If late, questions apologize so joined covered Hi. the I they were, these

in private the quarter, if you deck. So kind this I'm label, the may orders catch quantify mentioned timing wondering up in you recur? that just orders stocking the were third of of not there or Did

Carrie Anderson

say, than to Yes, historically business we the lumpy. other quantify yes, as characterized it we've didn't

and in back If the we down you quarter the to go up quarter, the third quarter. were quarter third XX%, second last of second the year, we were in like

performance third the procedures the quarter of strong. part pent-up and in here procedures But nicely an growth year of and certainly, as and was in last the negative we in QX as were demand benefit private So, there in well label, spine because surgical quarter. some was easy some certainly, comp, recovered dental in third the coming

than So in that, year's it's expect. last differences growth. would mainly just be some negative timing little it orders, But other lumpy we bit of will as a normally because but

Jason Bedford

Is this to good build on? a base

Carrie Anderson

it as QX, still you'll to business. scenery change on have But, see that's what QX I we improvement But, again, that a QX. into growth we've in would from the some not of outbreaks COVID, always we in COVID externally But QX lumpiness sequential overall. absent mean, expect. again, sequentially, would still of say, characterized I And type the mid-single-digit barring expect in that kind grower. would Yes. we huge and expect

will will quarters some higher, Some be be quarters lower.

Jason Bedford

waiting just picture And standpoint, do think from do like on benefit backlog, to there's Technology? Okay. still patients patient or sidelines then feel the Integra you a you've exhausted big the you from

Peter Arduini

No.

that think I depending more previously. we'll still completed how probably There's that things not there's play more definitely fourth upon that out. some in procedures have backlog have deferred the still see been been quarter,

forward. of of most point, some around So to it’s backlog. an the the that point areas are virus out move number, we'll back see been would of things And meaningful in is example significant both a there pull-through being is being backlog some pull-through fourth haven't There deferred. that of don't a some of gone backlog. Again, hasn't some the kind where forward, those clearly at move see see good any procedures is normal I But way, would quarter. us, is quarter. there execution, recovery. some did say, they’ll third they will equal, expect in the of U.K. we still more it some but we for if resurgence I I been

well. that example, there one others So as but just are use as

Jason Bedford

Okay. Thank you.

Peter Arduini

Yes.

Operator

you. Thank

next UBS. Taylor will Matt Our with question come from

Matt Taylor

seen plays how taking Hi. you're script, Looking forward? Thanks for one expecting about the geographic is it a question. characterization, do comments the little to haven't your it the and about Asia recovery Is for there's talk bit fair at little can some the a QX the U.S. scenarios you, and trends in or Maybe of a of wanted I just looks any and that yet, risk you geographically? like your in Europe, markets uncertain. into trends in looking to that ask but you better. some

Pete Arduini

you're quarter, mean, quarter looked there, to you've I how growth in Yes, it's in we'd the And it. example, we I expect COVID posted again, Japan still and see at the quarter correct well. business even growth. quite double-digit China, an is this think though fourth as done Japan, another in past impacting of

a In there Asia. well. Japan and would will it a probably We important quite of markets mixed And in see obviously those bit us to is the are markets, So expect for in business Europe, both our doing China. be direct in growth bag.

QX, a kind here. of U.K., Germany We the have like We extent, did play how down to see but year-over-year. actually Spain, in see Italy, are lesser things markets out in some certain to growth

U.S. outside think America. be concern indirect the in biggest I particular, Latin And to our continues markets.

business, at total, And When you business our probably to So represents are sell distributors. double-digits. still mind, in we of down look those it X% sales. global in our indirect keep

closely. remarks. So that's growth will U.S., the are like prepared In the other made continuing fourth comment We to OTT quarter. good continue areas looking But I Canada, to Australia show in that progress. the think area we're very show in at our

up we'd some good sequentially OTT, expect We will quarter, slightly here progress all, play hold fourth really and out. it out. play QX. to So But see and have things in We'll to And well. grow in CSS have to that's But TT, year-over-year, then the see we'll did in quite particular, the we third how plays to have all continues geographically. things how how out. the make look U.S. how were at we see quarter down in to

Matt Taylor

follow-up. one had I Excellent.

about I you increases come you pass? the strategies plan that tax. Democrat use what specifically, looked if could could numbers? in if place, tax Just to to ask to be to the at ballpark wanted is in impact if And And what tax mitigate topic. different put you've some totally were

Carrie Anderson

know that higher. U.S. what difficult would And it's tax tax the office, XX% I the rate expect happen cash exactly side, could move Democrats will in take type rate Yes. to I that the on of be the going if but tax U.S. that do would mean, to

tax take we'll different have actively strategies, at we around obviously, those. and take so planning, and forward-looking We're of look advantage world the And though structures different advantage an to to it those peers impact this working, of competitors of some as other to the impact. try minimize in our that that year But have space here. and of certainly, would most would

Matt Taylor

Thanks, Carrie.

Operator

Thank you.

come will question last Our Ryan from with BTIG. Zimmerman

Ryan Zimmerman

Yes.

a to Just quick follow-up, the call sorry, run on.

there capital divestiture price the get complete repurchase. on with where the the ASR I is repurchase you But know room talked with we've stock has coming line. ahead might do I the over an share the there did consideration? be gone, guys and And still growth any You the quarters? think lot just And dollars to have wanted top a thoughts on earlier about from the your this on year. some looking

Carrie Anderson

in the we about would Yes, think capacity I on that capacity buyback we've and like really what you're we say interested we to right. remarks, consistent share of still to left, could do We strategic million I what expected with to in do his some be M&A. do. and completed Pete have announced be some we've $XXX

from the and improvement then get like So net thinking about the X.X coming consolidated But we've proceeds that say I think had X.X terms we a range that's we'd here towards leverage the the year-end, in would in going end of to focus. where that window. to of into with ortho a priority, I at

in as that think So, we we to of to spot us a our left. we still down have of to of half in a do have a about and do lever pipeline sweet else want the we whether we because to talked terms optionality to execute that really which gets targeted a something want what capacity ratio lot gives in whether half, on, it something we have do more and leverage range three about that and again, low a to us end two

Ryan Zimmerman

you. Thank

Operator

conference to would closing you for session. this Beaulieu, you. Mr. concludes to I That question-and-answer back Thank or remarks. at today's turn the like any time, additional

Mike Beaulieu

joining in future. Thank we today all the to you and forward near look for up us catching

Operator

you participation. concludes for Thank your today's call. This Thank you.

You may now disconnect.

Integra LifeSciences (IART) 28 Oct 202020 Q3 Earnings call transcript