IART - Earnings call transcript Q1 2022 | Integra LifeSciences Holdings Corporation

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Operator

Good day, ladies, and gentlemen.

You are on hold for today's conference call. We're waiting arrival of additional participants and should be starting shortly. [Operator instructions]. Thank you for your patience and please continue to hold. to LifeSciences welcome financial Quarter and results. day the First Integra XXXX Good being conference recorded. Today's is time. this At I would turn like to to Mr. the conference over Ward, Relations. Christopher Investor Director Senior Please go ahead, sir.

Christopher Ward

Integral thank Cecelia. Call. for morning. you, Quarter And Thank joining Earnings Good the LifeSciences Conference First XXXX you

issued release on and our this Financial reference morning earnings The Officer. Officer, and filed earnings Executive De presentation, President are Chief first the call me are quarter Carrie at Coleman, will results. XXXX quarter Investors, call the corresponding Anderson, Chief which we Presentations Jan during a available XXXX financial name Earlier Glenn first in Chief announcing Operating call, Joining the press we release presentation. Events, Witte, today, Officer, and integrallife.com under and

you the Jan. Integra's will X-K revenue today over press year, the comments exhibit non are be turn rates growth based to measures. I franchise-level of with certain revenue otherwise the Exchange that, the are divestitures, lastly, measures Reconciliations which filed on financial reference be GAAP considered company's and Before would including many made this today's current foreign for in reported could disaggregated our filed acquisitions, remind SEC. that financial differ Act results in days Also, is of Factors report XX growth on to as like to cause requirements. call that I'll during any begin, both to with actual we'll release. to can all call now well organic GAAP materially forward-looking Unless prepared as non products. may stated, statements currency, the the in report - we remarks, Organic the discussed of our And organic effects make revenue the And Form ACell excludes release, of today SEC - discontinued first growth. include with the and statements. in an found

Jan De Witte

Thank everyone. good you, And Chris. morning,

highlights to on feel and the me a Let start by Definitely we providing that start X. about, of Slide first quarter is strong reflective year. a business quarter review for good

Our with guidance above at growth finished million X%. of and range revenues first above around our organic high-end the quarter $XXX

You in in first half for mid-February, we that will cautious guidance remember the with went of the year.

about after data by felt how how impacted points few at and passed. we they the and Although when markets level we towards very confident next And disruption. of our our had Omicron on peak that also, normalcy the time, exactly would of capabilities will to disruption operations that be the ease

Our better-than-expected as revenue March, results saw driven amount in in procedures our across favorable the in order well by starting steadily our products early in expected for a business. increase than surgical in March. by the timing globe QX private label was stronger We recovery as

our keep with agility demands operations quarter. While strengthening in teams commercial late up and allowed us the to in

and or and the Our Surgical international broad-based growth contributions drove markets. U.S. both from our Specialty quarter in first X% Tissue with Codman organic strong both at Technologies segments mid our our was exceeding and

pleased the our inflationary points basis Our improving to intend in commercial per despite With to chain first the revenue, driven supply environments. increasing by we And maintain protecting utilization of this focus also of margin the year. protection taken margins, guidance compared combined. earnings $X.XX quarter procurement of our QX our adjusted margins XX factories measures succeeded with and and exceeded throughout of XXXX. margin share gross teams, reach, the the higher by We're high-end that

in with rates, As what China disruption driven from caution are instability, continued but uncertainties, we COVID, we more think slide now, the interest macroeconomic about including moment. risk and full we optimistic feel geopolitical seeing pampered hikes, year, further at around this still

continue our steadily we will due the over year. with anticipate procedures side balance to trends ripples in continued to we more of And patterns. through on surgical while supply the the balance operations operations improve the macro our the of normal expect improving see of some seasonal year We these should factors, of

headwinds our X.X% to to We're dollar continues and same compared guidance guidance a as our expectations As of outlook absorbing the Reported the additional our balanced of adjusted to range we increasing guidance full-year we year initial of full the February result X.X% our range year, the reaffirming strengthen. for of revenue also organic currency our to remains strong start are growth remainder are for a as as X.X%, for to EPS. X%. the

our well in to order QX performance the business future invest as solid to Our to our years. a us for a performance organization as the of in over level in next the foundation accelerate coming provides continuing resilience

the During Canada, first and indirect catalysts. global projects. organizational of product first markets. XD, in launched growth nerve we our as and initiated invested CereLink And number peripheral our the as well quarter, continued several in in strategic roadmap our we of quarter, Australia, capabilities repair and new our we capacities, NeuraGen rollout a Also, we

We to rigor. go the have our a would performance updated as into like $XXX to we strong of Carrie keeping result, shareholders, call that, first-quarter announced. Finally, completed deeper now records turn and returned with accelerated share With track guidance. previously repurchase over million to our financial the to our up program. And our I

Carrie Anderson

Thanks, I Slide our brief financial of Jan. like on quarter start And highlights a summary would first everyone. good X. morning, with to

upside high-end million revenues as communicated range by million to of in our a our procedures maintain deliveries, driven representing above an coupled were revenue XXrd. First basis, pace largely label as recovery revenues would on March, of the the $XXX with reported on private quarter February I ability X.X% guidance customer is favorable characterize on basis. and the from strong X.X% were timing an the total with $XX order our business. of increase organic Total well

March, orders the back-order in we position our back levels still about then, historical with no you discussed demand last but the as revenue our of outcome, levels of earnings stepped meant up higher the in since upside. kept call. with delivered was the escalation quarter up February it considered level And chain good ended maintaining higher considering things we and during demand If our a all same supply recall, roughly than increase when in same call, sharp talked first we back-orders

as Technology where QX turn first capital valves, I'll launch year. disruption. the We cycles CereLink. from both XX up X% programmable per $X.XX. revenue to low review and our CereLink EBITDA margin revenues that the and our business. for nearly an X% points. that neuromonitoring from expectations slide most X.X and with demand. Recall sales sales and Adjusted on growth our the U.S. China and for X -- the strong Global in X% quarter result an double-digit XX.X%, capital growth by CSS of a basis significant Europe double-digits on growth with basis Total quarter including International digits in prior a now by saw revenue in was organic while this larger we in of Omicron First CSS instruments equipment million, approximately share the to CSS neurosurgery by Mayfield long-term of X.X% CSS earnings With growth by organic Specialty at grew $XXX growth recent international were led neuromonitory. a the growth and grew organic sales or business growth in was was reported in single-digits and our sales X% sales line Segments. Surgical X.X% our increased saw X% and segment. extended was strong CSS mid-single growth year, selling driven performance Reported increase grew linked on quarter to of basis basis down smaller pent-up we on Japan of of quarter We high both capital organic portfolio. our above after across QX led and last organic increased an achieved single-digits management countries. in Tissue low were organic basis an CereLink management lagging and adjusted by low benefiting X%. the and Performance in driven Asia. instruments growth increased in Codman in in

Tissue our on Slide organic a on basis Tissue an X. year. grew X.X% prior segment X.X% and technologies to on the reported Technologies basis Moving compared to

consistent increased wound organic reported within on X% was with by basis, with Integra and Skin the in franchise. quarter line XXXX QX an First expectations. in QX revenue reconstruction in in ACell SurgiMend. quarter driven And reconstruction ACell sales the sales our first is levels and wound

franchise intend We building wound hired the hire in half the call, in our on shared second hire a momentum of business colleagues we sales with As and And February reconstruction we anticipate additional we plan XX another QX, our of ACell quarter over total private the XX. to inventory. portfolio first product driven to XXXX. in technologies XXrd to timing digits partners basis increased as in label our And by by and higher continue sales an Canada. orders mid-single favorable Europe strength on our customer international demand organic second finally, of driven and in build tissue grew the half. sales And XX% in

Adjusted review higher gross product neuro now XXXX. within XX The tissue businesses. our Slide QX revenues components. XX.X%, to was favorable technology driven quarter basis our points Turning and compared I by P&L margin X, to improvement was first will of mix up and

higher by as costs, line challenges by which was Omicron and pricing freight well margin, These as variant. and labor was improvement offset cost and unfavorably the material, impacted chain purchasing by manufacturing our actions, with gross Our initiatives, supply activities. inflation, inefficiencies caused in expectations, were

margin for unchanged February from Our of the the year guidance half first gross adjusted call. for our remains

margins our For adjusted in roughly XXXX, first range, which margins margins we largely the half in gross compared the with QX to first at adjusted midpoint XXXX of flat gross of implies QX. of be expect line half guidance to

half points primarily EBITDA to prior first $X.XX to which Similar increases prior Our X% our in EPS on the marketing in half flat revenue our we for EBITDA the as call R&D, Adjusted in with XX by planned was support priorities. reflecting to driven an of our expectations we first compared growth. first margin gross margin, quarter relatively to expect the basis consistent for to $X.XX XXXX adjusted key quarter in margins compared XXXX. increase compared be of expenses year, February growth was and communicated down adjusted selling, of was year,

was reflecting levels with program repurchase more previously approximately a and [indiscernible] In trailing increased normal announced repurchased. completed brief was XX% the turn I'll a was Operating Now, Free in cash cash Slide flow provide quarter cash balance cash and if capital you sheet. conversion free million, on accelerated our $XX million we capital X.X first million. structure. at spending share and compliance. spending the the to quarter, for XX-month million $XX flow. on flow update X, basis, flow $XXX shares

liquidity of And Our ample sheet short had as and was XXst net and X.X our and March total revolving ratio remains The under cash, credit remainder the debt balance $X.XX long-term facility. company strong total billion, with liquidity plans. support to times. leverage million available consolidated $XXX in our $X.XX including billion, our was

XX, to provide Slide adjusted revenue earnings guidance an full-year to second and I'll for share the update XXXX. Turning consolidated per quarter our and

to in are revenues representing of million, $XXX forecasted X.X% to X.X%, quarter to Second to reported range the organic X.X% million be growth growth of and of X.X%. $XXX

headwinds revenue revenue quarter mandated reflects government China and in offset recovery FX the partially increased lockdowns. second guidance our to unexpected in continued impact due COVID by Our procedure

to range of of better-than-expected global and raising performance, the continued initial year organic to from QX new X.X% continued also we range increase revenue constraints. a full our expectation of reflects markets the The are XXXX our the growth For X%, X.X% but supply of an to X.X%. uncertainty expectations

modest anticipated the in a as balance the through levels pace revenue billion Our remains procedure work $X.XX only recovery. the our improvement organic growth, an $X.X absorption assumes the guidance reflecting full of billion, increase to year, we year. revenue with of in Notwithstanding headwinds additional back-order for XX growth FX guidance for keep reported points the guidance to unchanged for basis in at

$X.XX, the second reflecting range adjusted earnings adjusted in quarter $X.XX at to to to continued expect guidance midpoint. the roughly of for to of second flat we EPS when investments. compared the the plan Turning quarter, growth XXXX be Again,

range We $X.XX, of headwinds adjusted are which holding to EPS reflects additional continuing uncertainty. guidance our full-year and $X.XX macroeconomic FX XXXX

we call to to XXXX like growth to of the provide drivers. I over would where a our back recap Now Jan brief stand with turn

Jan De Witte

to And Thank you, Carrie. turn let's XX. Slide

that and that we also confidence It our and outlook operational commitments Our first-quarter on levers still protect XXXX invest commercial control. At levers and provide initiatives, we are macro-related to investing the price feel but uncertainty great results can execution, our our our execute projects, efficiencies we're sites. deliver These processes driving in providing strategic catalysts on Combat reflects growth full on time, supply can And we is same our recognizes while focus the of growth year chain balanced. our exists. room key and include in capture, inflationary margins. and to behind catalysts. we our diligently pressure working deal the

disruptions of significant shortages and the Over our our and commercial the teams chain diverse past procedures. many our engaged, international who including through the -- continued factories by elective managed are see seen in I've continue to as our commercial I my and be momentum portfolio, two we're through for portion our at to meetings, colleagues in up capacity also of growth field managing the growth sales products. see free return strength opportunities. And that the staffing I've their spend own true can supply months, energized our customers our I to new fully teams. a the time excited with hospitals leverage At

improved in volumes commercial and Our in these teams Europe. Japan also we seeing double-digit procedure growth to markets. in deliver continued And are China

global planned. as the We of as controlled invasive continue to a capabilities. Aurora our installed in in the new which products, addition includes growth digital minimally grows, as expansion, Surgiscope [indiscernible]. base plan market continues for stream part the and use of multiyear revenue geographic release our launch for of The neurosurgery recurring growing countries

for or the intracerebral hemorrhage treatment ICH. As of does the Registry MIRA surgical

targeted the digital significant a our care neurosurgery small, patients And expect it is surgeons Aurora procedure through peripheral Technologies to growth, our and that clearly we further the in the the gap well should we XD portfolio our the boost balance long-term we repair change nerve long-term as when In from NeuraGen company. the The XXXX to business, work for Tissue in our acquired contributor more platform continued see ICH. the our expect a place the potential revenue product of to business, achieve do year. expected products have And last contribution we of recovery our the benefits to for standard Although to as to have of will of momentum. performance innovation. we a this be mid ACell for

of on on challenges, reconstruction and end a XX team, As digital to long-term XXXX. programs continues objectives. incremental anticipate With in ACell Carrie revenue near-term as commercial our marketing year. an the organization The well focus the June. team growth well mentioned, hired in half by customer resources XXXX expect in commercial demonstrate as with as keeping wound the more executing of the In resilience our while we and outreach conclusion, commitments have for focused of its expanded we growth to new a compensation our to numerous face as start second execution, we're strong plan,

can questions. open with this we this, So, listening. our lines remarks. the you for prepared Cecelia, Thank And concludes for

Operator

is reach [Operator off your ensure function signal the our allow sir. Please telephone to you, on your mute to switched instructions]. equipment. Thank

our will take Company. Lichtman now Oppenheimer from first Please and go Steven from We ahead. question

Steven Lichtman

Good the morning, Thank start to year. congratulations and the everyone, on you.

on Just start wanted maybe to pressures. inflationary Carrie

gross gross you margin totality you to of did efforts assumed guidance? of impact other headwind of much inflation those is start As you the a much in your the think increase that year? since mentioned, how about pressures? assumption words, those your offset net are In how of the And the able from

Carrie Anderson

gross largely and margins question. expect Thanks, would it. I appreciate in that I where our the Steve, say we came

we some we knew So, have to headwinds. were going

our forecast lot actions we of price areas well. of the other those of year terms But guidance. strong reduction into we're started terms think as as in and a our expected. also that we we around played capture, in that think all I initiatives, activities I And with procurement out those of in bake properly cost just out largely factories doing

balance particular reason the of at I maintain necessarily there's that we we as of this year think where part I point. EPS did, guidance and range abating the don't think I see about why the the is

than that get are us I the little in bit growth would does the headwinds little focused in room some gross bit largely in they say in the as little range margin second and I line half. a on margins about are provided get we think margin worse those But give a activities we've equally gross would case now. right I well guidance our for of those saw think worse for year, mitigation they And we all protecting did actually a full QX bode those QX. of that in

all they're there. I think So,

I big that its chain energy are it also a be supply into well. costs finding as the rising think way there freight, continues to issue, are

things to But time, think those are going just of we're through I the offset we year. not to move at ease the working as same All hard as those.

Steven Lichtman

on the then demand terms a just And China, include get And maybe what's but in Great. from I big-ticket know to second health items, seeing Carrie. your doesn't the I then a the under-levered business still of your capital on Thanks, was question equipment there, impact couple lot latest you're macro lockdowns? items. the the know my Thanks. capital U.S. environment of I you're of of in just perspective in but hoping

Carrie Anderson

hit the contribution capital, think and of in I And about I'll capital about Overall, the I China, -- maybe the CereLink. have did QX Glenn performance talked our question but we I'll think as have first.

late that obviously, there, product last So was until not and launched not that was year.

tailwind So, as some of in as growth. it nasal saw a some the QX, like capital nice smaller well us nice was for

And have year-over-year. other declines If thing. you think capital companies kind the the same larger those, seen I of did see exclude many

longer. selling a with extended just think bit cycles those I Omicron the disruption,

than that. any So, I more read wouldn't into it

do terms strong. we pipeline continued see There's, as still Our quarter. the also to very expect in Europe, is to move an we through both the of year-over-year view dollar. growth absolute capital increase And sequentially but of

half of year recovery last quarter. Second was good a capital

need year. to than with dollar your to respond question? just capital growth moderate increase And don't you Glenn, China cycle dollar, to it's through will you because some And then to Omicron. the selling generally, the that. But absolute So, growth just extended think more an of continue I want

Glenn Coleman

driven and actually that capital many us showed U.S. small piece, You outside and was Europe. direct the that we largely in growth the in businesses China, and Japan, have onto Canada, our markets capital large did by

that encouraging it's capital. see large both small to So, very and

In we terms China largest of revenue China, the represents market I think our second outside before, it our as by X% overall X% revenue. consolidated mentioned in is to U.S., of country about

don't second yet terms the into is expectation lock-down, not think when the will driver been lock-down when a us or you as So, keep not injury built that's about dollars. been traumatic guidance. but that growing to time-frame, five of significant lot our a brain you thing example. so; will But you in a lot back clearly our not lock-down, quarter, in what's right that now happening are it One because us, mid-May double-digits it's right it's for to mind last a of key years could in an in in have it's the build come impact end consistently the an have lock-down procedures of that, go beyond terms now in growth on we a in possibly had business the of for the the

from timing come them a perspective will it, some but will them of back of some So, not. of

I got year, our into that opportunity business have went impact and we think we it it our still say I'd with second already whole, China, pretty in goes we've for in if the quarter. the have timeframe it and full very will mid-May, revenue the beyond, But second impact about say logistic the in quarter. we're on beyond, it's could third built in our quarter. so say I May and our quarter that commitments for have guidance third And the excited very locked manageable But some China. because providers in so, the much quarter, on largely second the the our if And could

Steven Lichtman

Carrie. it. Thanks, Got Glenn. Thanks,

Operator

We Please from from our now take ahead. will Marcus Robbie next question JPMorgan. go

Robbie Marcus

for the nice quarter. taking And Thanks Great. on question a in. congrats

Carrie Anderson

Robbie. Thanks,

Robbie Marcus

impact on macro little FX sizing touched I prepared more the up detail on I bit, get was some hoping the little a the on -- from pressures. was just of you're remarks bottom you to and how costs a this but line

since bottom and being about, thinking quarter you're incremental conservatism you beat line? first much is Just conservative, against balanced the in how for headwinds

Carrie Anderson

Sure, say I question. really for we a nice QX that, the with performance. started out Robbie. Thanks would

the are lot view to there's yesterday only think of only to And this I at factors continued and whole consistent but land. rates the about pragmatic think you year. the where they have conservatism, strengthen. that cautiously say, of kind just it's with dollar a remarks, to call still so, have it didn't think swirling optimistic -- lot were we're where our of about. it's FX factors balance morning, But April, see of on US but the headwinds. macro out a we're a do I that, think I of end And can I the we I that they play when to not And see still

obviously but more overall Interest anything the that even of just we escalates balance that's War instability, about rate think that. hikes, And the Ukraine geopolitical headwind supply as year. in constraints. the So beyond

are play performance as of about those come the all all balance I our -- in as things into the think year. we So, of

here, but lot shaken that a there's think And to optimistic maneuver has our I some range to within here. give be room us think that. a does still I to so, be lot guidance And out

So.

the the we better. the -- our initiatives accelerate that the us for year. us for I QX. back in year, to response a think mentioned for And they Steve, all the real worse get half job I but manage As of offset really in something those And this we're to that hell nice get increased the inflationary do the That actually balance gross investments is give headwinds, to of of to did have. a we successfully those growth before fight going to look, if headwind like optionality may in does we margin can focus

-- bit we'd of I in a of the think positioning about back of XXXX. here about little as the beyond like to degrees year, freedom we as So, ourselves half think

Robbie Marcus

I on a bit Tissue the How a you balance label business the Great. about lumpy, in that. could give private just I doing us balance business the and you could be in do for Technology gains year? And and where little appreciate we update here. of there. an maybe how you if share little to versus the should lot. think think focus wound label on just think growth of a the terms private the business, Thanks is tissue market the of you're know

Carrie Anderson

I question. -- QX to private orders the label, and -- But in hit was labels. into in of GT question maybe advancement private for market or the talk Glenn some ask definitely about And first terms of Jan I'll general then is there there

building inventory. private are label partners Our

about, So, own as they about that the their have think supply you talked supply constraints we've constraints.

So, they and are QX our building benefited that. from inventory

a little and timing of QX QX. So, from advancement bit

a about quarter, for see to that with guidance the of tempering more that as that second growth of I to that have as the lower as rate. growth going got in private rate second We're it going be the revenue So, much relates to think pulled assumed label forward. is our quarter we

saw of because label, year, comps. much some the private So, as believe move we the year-over-year you growth of won't I as you do see just as through that

well private building were as I think remember, was label partners strong you year If really last as inventory. our again,

a part So performance and the we've business balance start bit see year that's there. the through here as wound will some balance going of of then out to the the to quite balance reconstruction moved of the

maybe turn I'll to or Jan. So over Glenn to it

Glenn Coleman

single-digit the down it's high of it. growing overall overall, But think terms the of the I within In to some range. segments market in you mid probably break tissue, for got to

plastic reconstructive is our So repair growth to reconstruction nerve range. and a and in to would that consistent peripheral breast X% procedures in I though, probably complex the with or range. wound going say low X%. our within mid-single-digit double-digit long-term target And probably faster

pretty been over Just But message overall, our we the with what years. to next breaking expect grow it has down. how consistent around five

Jan De Witte

Maybe pretty with ACell in where we line QX quarter, in and specifically QX. much ACell on the first saw

that's -- we not are We where to want be.

up We Ambition capacity there as of are show wound the year ACell real ACell. is growth some capacity, further half the of benefit reconstruction, within and the sales to other products. of second will in building which

Robbie Marcus

Great, thanks much. so

Carrie Anderson

Thank you.

Operator

We will now take Zimmerman, ahead. go from our BTIG. next Please Ryan from question

Ryan Zimmerman

helpful. the of couldn't size backlog the sense would balance is Hi, able or that to questions. ask year of were what that scale, backlog down? taking talked the a Carrie, to and thanks how could and with chain for terms a backlog of be be I dynamics about that to questions. ability you navigate couple I worked us you in supply and you the guess team your Can want quarter. of to give titrate successfully that your this

Glenn Coleman

take Ryan. a crack Hey, I'll one. at this

of ended In end our where the we consistent ended the back we with quarter orders, year. terms pretty last of

saw we're X just revenue to quarter outcome CSS able order supply seeing terms good the normal maintaining idea about with upside. just level that within the during of so orders. It about really us. chain gives that higher our are the orders, we levels. up where March that the where to demand. probably we're times So, And business our back an it's we we mostly But back considering in you sharp X.X back were above meant a specifically, And was the for deliver kept in the of and same in demand essentially increase

job supply in the managing first we of a So, through did we quarter. actually nice thought

in reductions about in Moving second still modest forward the talked and rest expectations the this the remarks, especially year, for half but we some in demand, increased Carrie's for prepared year. back-order the of levels supporting of

down, improvements move in we're gets back year. as but situation come as going she with rest much of dealing to should to modestly see orders. constraints this So, our for we expect better, forward. But do back-order pretty be we supply They the the and

would lead with I just say So hopefully in and taking seeing positive and a some you -- on we're half-full approach, improvements suppliers. note context. times that gives glass a

are That in much levels. would an in I seen still manufacturing our things was coming We've say improvements to However, just more facilities. back That's area the from absentee early normal. concern normalized QX. in rates far of

those so and back-order help throughput, sites us more helped to And more get are manufacturing to to output the our items from situation. improve going

So, things a from far trending but positive are still direction, in normal.

Ryan Zimmerman

it should view did I What's repurchase your there. on Coleman, striking leverage share as sheet seems Jan balance to you on of much landscape? That's guys the position, maybe the share the that, helpful I not like M&A also with get and want and as That's mean, the both this please. that Carrie's the there's repurchases guidance say. given but quarter, ratio, quarter, thoughts you attractive past this kind out

Jan De Witte

[indiscernible] before. opportunities. at In M&A, remain I terms Ryan, think of looking we we're actively as And are

here what deeper a wings. where I spread two that the we strong, different strong divisions, strategic to in of have scouting to care do is into maybe different think with which and to past months in the look a want a running logic adjacencies couple am was we is before strong markets, compared position exactly I to pathway, parallel the feel our

are a more we adding somewhat set that looking the filter we're of broad opportunities onto at. strategic So,

Carrie Anderson

I just add. would Ryan,

we're lots definitely opportunities, want at On M&A Obviously, have continue disciplined side. the to we of we a to on the so there, be balance but acquirer. active sheet, do look we flexibility

And opportunities to back opportunity. wait would window. target we And X.X. buyback like our we so, find on X.X leverage million had dropped we're And the right to share jump In opportunistically, below meantime, before But to always worked out well. until We the very very, for that the looking X.X allocate buy capital. our to our we're target going ratio to able shares.

the were so, times. And of we at end year, last at X.X

So little of cash bit there. excess

So, we an way. deployed it in opportunistic

So, M&A still be but certainly open, that's the on we'd to side. I like think active

Ryan Zimmerman

taking questions. for Okay. Thanks the

Operator

Fargo. take Wells Chopra We Please will from next go now Vik our from question ahead.

Vik Chopra

the thanks and for the Hey, on good and morning quarter. question, taking congrats

from me. two Just

provide much. could wondering I super an environment. just that be to do expect it remarks I I think with capital so so on you levels? about on SurgiMend? First, is anything us When the on that, don't guess the I've to And Thanks then you for XXXX heard helpful. the PMA prepared update was return if will

Carrie Anderson

I'll question. PMA take take question, part of to first the ask Glenn that the I'll and

QX On I bit the of look mixed. at the as little capital a again, performance capital,

a growth of the And And from lagging. continued nothing to I capital the capital of We markets the CereLink mentioned, smaller parts up as that earlier, longer well, on in of see a heard more and that in, the and quarter. selling the large some U.S. And Glenn in trends larger as saw well. that start to was do capital attribute QX we'll that. just the extension did year-over-year contribution cycles, think of start continued small we'll well bit see both dollar it than did I perspective, really in international and of selling more you As had markets, I from remaining the capital. that to coming

think still capital. be I we bullish can on

just that. selling it's a think that's cycle extension driving I

So, take you SurgiMend the want Glenn, if question. to

Glenn Coleman

Sure.

So back have to on lot don't a update. SurgiMend,

on approval follow the think they're our to submission. to continuing we're We're speculate FDA with too I early timing. working any reviewing the process as on still it's that

really real on we have probably this better that So, indication are any remain late new use breast expect approval I will the we'll report of hopeful of just where year, post nothing I would for ultimately reconstruction, a updates. you receive we indication that say timing. at but specific these give front. for to mastectomy a SurgiMend would But don't

Carrie Anderson

remarks, And of in the would that Tissue what side, some SurgiMend. just you we if to say comment the construction that technology on prepared strength one did we our back I look

growth indication, the without -- do mastectomy for from growth have nice still we without of themselves still does SurgiMend. very of But a train us end we and revascularization we that to some nice product really But indication we breast to as the in and see is there specific indication essentially to post be indication. allow SurgiMend So some properties have and promote even reconstruction. it, the general that lend

Glenn Coleman

a reminder, specific a we do indication rest and outside the as And for have Europe. just U.S. pressed

so, the still ability in so we resides but that the do market biggest And forth, U.S. and to opportunity have

Vik Chopra

you. Thank

Operator

take Craig of from will our go from America. Bank Bijou now question next ahead. We Please

Craig Bijou

U.S. follow-up the if want just to and interesting. Good did breast questions. label your you -- a the are even morning, greater understand Glenn. I demand. And comments, everyone. the And for and though Maybe to taking Maybe don't see your on the underlying Carrie comments just have Thanks I for SurgiMend your on seeing are you in use in breast,

say, docs than more it they year. last So were, label using off basically, our

Glenn Coleman

today the we're for SurgiMend don't because don't to along Again, the gets reconstructive and and And procedures. with Yeah. allowed we sell have specifically into area breast [indiscernible] because procedures we not hernia plastic indication. used

for we U.S. clearly used, we're overall SurgiMend areas a don't being way where other to an the what's So, uptake product U.S. both have and good gets used but the our breast on seeing track versus SurgiMend in outside necessarily

Carrie Anderson

nice Glenn's and to reconstruction plastics seen areas. the we've And of follow of those in point, areas and as Yeah. growth well both up as hernia very on those side, in both

Craig Bijou

Got it.

think on you products? think or think guys you then But some get able did year have you abate even you of the been -- And don't the able years. do talked have given having question the following your pricing pressures, and the to pressures price if you this pricing get we option I you supply chain that an don't chain what want later And don't inflationary been over Okay. supply several a if about that's I with to much -- to ask and for last year? I on if guys, not,

Carrie Anderson

to been amount it's -- mind ability capture about certainly, -- the XXXX. had price would it's always top we always I the that of some think price. capture of as Yeah. is we've But say

back -- -- history, to So, to if an we look always opportunity our had we've been at capture.

Some level of number at And it price. I a different look of ways.

price annual your have increases. You

opportunity discount an at rates. have to You look

customers an have older when -- to to, customers pricing get about maybe customers. different you than opportunity new you think new when with You

new introductions to the product You prices. increase with opportunity also have

think So, about CereLink going into the market.

that of So, of A fall. the these some fair about we our that opportunities dialogue revenue I've in we about coming those with were that very about this there's amount thought lot teams in for about before And always commercial price was there headwinds capture. think years active the of falls price duration. that and typically, our XXXX we commented contracts. knew can think Thinking three And of a U.S. a enterprise are began capture. under so there's a I number two to work

they of they have se per those don't have apple -- gives those can the most you in annual be an commitments when to little bite bit contracts because on at sometimes contracts you those obviously, a an opportunity But are But And them. also, longer. knowing volume renegotiate. expire

relative side, sit -surgical of are on the volume there. as another neuro even you even in [indiscernible] are in able highest for all Where to to customers? -- our the reengage if living you opportunity and you can discussion not audit to the cost. up those about the think where are products cost with they total bill, volume which operating a So, procedure. So contract, understand not cost we to sit the things our reopen commitments, the It's of CSS a the is we of

with we've to opportunities opportunity are does us annual on product I there portfolio; it that again, And an our price. our in that innovations capture done So think basis. give

Jan De Witte

it of to some a inflationary close we that that we're where with capture eye use Maybe operational could out measures and through. increases How the the did clear, we start some of different foster the year make price at we or that to Craig, what the can make that price compensate we to we keep additional price pressures. of to on we same number sure with a time levers working

year, very our priorities of myself, down and is the gross and close top pressures. So, and Carrie, this Glenn, to very, the stay one to different for for up our margin the remainder of

Craig Bijou

Great. the for Thank you questions. taking

Operator

We Securities. from Turkaly Please go will now next ahead. Dave our take question from JMP

David Turkaly

Maybe morning. for Good one Jan.

for You solution driving they complimentary is bag. be mentioned for additional training or to there the I the something the on the that, side, hiring guess already I'm plug-and-play just side those need why given like ACell on of such the reps curious, that would have? idea portfolio seems you additional that a sort rep products

Glenn Coleman

you I'll around give David, Hey some color it's Glenn, that.

bought business, many are these reps. are pulling wounds, go we compliance-related we sales too they What deep cases went of complex reps just the we and that the of concepts hospital. reduce learn we workforce. on the more other parts came matters to during some to relates some post So, actually the pulling the And in process, on probably the on was acquisition, and it actually did had the through to as than

So, thing. better complex probably second or we coverage in so first we of also are that's quarter, now the the coverage get another don't adding XX kind which wounds, account in back outside in now. many first quarter adequate reps, have XX other areas cover so the wounds the to complex And today,

compensation is the in selling after our accounts we're now. portfolio. of positive some plans things the in ACell done bigger then The lastly, to change as really hard second behavior sales thing And some we've to going drive more

right we're going of have half in revenues second quarters couple that consistent And of So year, momentum like the the the growth. the expecting though to in in now, revenues feel earlier, on about confident to pretty we we been going we've uptick that's the business an good see said and feel really happen. to last quite

Carrie Anderson

think heads. few I that's the are more a fact to relative And of that you timing a adding more

You You being channels. entire get sales trained. the reconstruction wound These headcounts, to added got them to productive, incremental just to are right? headcount these They're got not are get dedicated them ACell. to that

some just And time momentum productive talked expectation. be and So, about get up -- selling. we've half they little a bit a second in that's or won't why of to

Jan De Witte

see counts, they say getting the three then months We great mobility should person. I six an workforce, months It easy and would of to half full bringing of I the important sales good It's over to takes in that productivity have heads only productivity but six between say job past full second XX not that in out it's the Week And back we bring the of year, hiring productive. about that we're them week, them a added that XX capacity. feel person the about momentum. [indiscernible]. if getting by the it's in look we and

David Turkaly

The one. detail. easy a an as follow-up, I guess quick

that million. Your Is is authorization right buybacks correct? now $XXX for

Carrie Anderson

No.

on the and gone million $XXX one, from original to board, authorization used of million the If press $XXX that that you've release we so -- up. had was we the

a of balance So, we had XXX labs.

So and essentially, the the re-upped XXX XXX. we've to remaining kind of historical of canceled level

level for that to though. further XXX, reset authorization So optionality buybacks. additional back just share we've there kind some that and Nothing of just us flexibility nothing announced at give --

David Turkaly

I for appreciate I that you wrong. on math the Thank that. help simple the got

Carrie Anderson

bet. You

David Turkaly

one. Have a good

Operator

question now Please will Rich take ahead. next our go from Truist. from Newitter We

Rich Newitter

the questions and Hi here. calls, for on quarter the Nice Maybe the start, I earlier question some I around in but just improvement congrats the -- was taking guys. see. was seeing on think M&A front. Thanks hopping to to I in

Just doing you're wondering, -- dives the I various units. just more appreciate strategic deep on

all on a will holes -- -- identifying of any want sense you on been come more as relatively little you've there to bit more -- -- or work timing or or ahead filling you start -- any that think where You're but I'm to be bit to while, Any curious. all when to and -- little capital. where aggressive when a deploy it'll focused think do you short

Jan De Witte

-- can is In to we when summer to with fully for updated the tuck-ins strong that the different that clear so by plan direction meanwhile, to of our force, it plan, comes long-range acquisition our strategic -- fully of including So nature. the end ready be acquisitions. leverage sales

holding not of back type we're So, to opportunities. that

Rich Newitter

helpful. That's Thanks. Okay.

on said potential rep into contribution maybe is you -- any setting? strategy I'm that to mix waiting all. the How level second too if presence adds from that increasing evolving not think more I just over us the and the strategy and factor curious, what I you're what if should set some into you the ACell, now. then office in you from Thanks. that of for. there, far you that appreciate how expect in plays to business there? a the side in I half. rep improvement think inpatient, mix So see time on expect at we index care have does you're And

Glenn Coleman

wound our the has for ACell on little the question. Thanks side, physician side, outpatient acute in all for the business in the general business the reconstruction so very in hospital offices. Clearly and

Rich Newitter

question. that Is direction? in guess I to expand move the opportunity or it's there to

Glenn Coleman

Sure.

I opportunity think does the our for our it is at focus for really for be on focus at us, XX create now that'll least right sure, the ACU hospitals an but and side, next months.

Rich Newitter

supply that’s one demand can how comes with up just that you able and hitting higher that's purchasing have fulfilling demand issues higher-price. or on specific the that's go in spot fulfill last one if is just are it to to You be you Okay, maybe to mentioned, and just -- that can just --- guess more -- the higher I Is fair an issue I more a you how little

Glenn Coleman

meeting supply think of I are doing job demand. in of good a we terms

the pickup order are and increased the back with reduced recovery that we're keep to is in seeing able actually a news haven't a seeing up levels, procedures, We we're overall demand. but good

order as backlog. the we and start think we'll back with move forward, higher the demand and procedure also to keep we'll that eat into but only I rates, not up

modestly the next So down that several should come over quarters.

Jan De Witte

-- I our at when but Yeah, look

Rich Newitter

you. Thank

Jan De Witte

ripples tries remainder world more of chain, issues with come steady-state. as suppliers the Supply space for zone have not which chain, their structural is are of about because supply, I to do to the not into will have what I continue see time somewhat shortages, you we just electronics hear ripples the expect do yet, like, but the in a met but more year where supply delivery it's

Rich Newitter

Thank you.

Operator

now Miksic Credit next go We Suisse. question our Matt Please from ahead. take from will

Matt Miksic

that some out. you, some while much European is Can in you around the late the here, process device and the where a been get progress talked just taking Hey, products, your seeing the in. see the -- through, out. of touch about haven't the charges some call a investing phasing I this maybe opted skews talked or at players of and products that some and any that thanks through my the are key maybe products if smaller in in on we talk other about behind your of it come just mid portfolio, do topic that there investing of outset, for We have and consolidation I'll benefits so bit MDR, regulation, other consolidating think we in you're med about made little Thanks. maybe you've you've the environment to We're maybe investment just you where little just so one a on question. a don't

Glenn Coleman

at this it's Matt, take a one. Glenn. shot I'll

continuing class work first compliant to There's early a and couple but years to around we've over get compliant We think on that got X work to lot foremost, a products last done was an last the MDR. we're lot still year, are of EU with class of X start. of for there the go, May happen the I products. months that work many while of has to can products. our which date of May out the this class X is always being at And submissions XXXX, and body, the notify that there's still to XX lot of require we do a so least year

those That means year months. submit XX it's products. this products of animal-based types have for to that For we

lot quite we think portfolio for work of we're bit a But There's the see through of efforts prior a meeting of around activity to that we've a of on this ongoing, that rationalization done So, the track as we the deadlines. of a happening lot and the and are XXXX. to place effort coming speak, take those work lot year. it currently are costs will you in

are So forward. a files this and going done, sell the if pulled other competitive from are right, files that think to advantage we do products going be all many And it market. was maybe remediating, products our the we could where actually

come, that when and take think to to work has but important year all more So EU you about is MDR obviously place. an this the

Matt Miksic

nice Glenn Great. Thanks, and quarter.

Glenn Coleman

Thank you.

Carrie Anderson

Thank you.

Operator

We from ahead. Frank will Camma, Please next from question our Jefferies. go now take

Frank Camma

Congrats quarter. guys. nice on Hey a

on up M&A questions. the picking Just

on X. of I the And on to out I think right have a digital Number out that. particular the adjacencies if Jan last on identified after quarter, then just follow-up segment gate, you digital. and filling I'm cost you've of commented a focusing focus on, curious

Jan De Witte

it's CereLink care we we enabling [indiscernible] a play, business the are matching a Let's where in or analytics - in our of. our setting, opportunity whether we that whether Codman are in today augmented de our Aurora visualization. and into, And say linked are part tissue it's facto Codman pathway are there's our or then into where few platform, technology data and business, both

So possibly broaden to opportunities value-added areas with other inorganically, those but where further organically, our are we digital. have also

Frank Camma

Great. Thanks, Jan. And here. just a final one

seeing feedback hoping timing Just we the you neuraX there you are can and see what What of they launch? the expect maybe to launch it Aurora. how when give and ahead and XD some should NeuraGen you about think -- on XD full-scale launch --

Jan De Witte

Glenn some color there. let I'll give

Glenn Coleman

Sure. Yes.

the nerve only momentum It So, starting short nerve market. first us, into the gap which XD of so in was Very it. see quarter, nerve opens addressing we're up gap market for launched the at here previously, the were we about mid QX. the repair pickup to excited now repair end

got in this products. of we've got So, product group a team our with place. a selling are specialists along We've nerve other that

And XXXX. in so to year so, for growth much driver be there's launch, not this will going be but would say a because nice I a this partial certainly year, us.

in both the revenues have of And on the our be So spaces get again, see platform how more it regular in and hemorrhage. momentum that's both these nerve this going opportunities On happen. continued areas, really Aurora, surgery going good for some to down the on come U.S. we KOLs. that. technology big the is with used in Perhaps outside both minimally give And terms to in doing feedback launch. invasive from U.S. a We'll of and intracerebral updates we're to good road to very what's and the

of that revenues. results support from road. were and a time, we the ICH the it will still And MIS over years few the actually we come have actual and significant then -- down the But evaluation demonstrate the in that's side Our need differentiation can really near term. where hopefully drive clinical

Carrie Anderson

there, of issue more reimbursement an not do it's surgeons a is differently. to converting say just their just reimbursement. would approach The it bit I And is of Yeah.

of surgical mainly been and deep invasive the instead use ICH for past, to tool so leads where the the any have approach a there hasn't management. And in this it's open it's -- minimally standard medical to do an -- changing of markets, brain the intervention, care, it's really really in craniotomy

change really for exciting And can this is area where of the standard so, a care we ICH.

the launch So, of this about getting access that our influence here it technology. of can limited is the in clinical adoption and really hands KOLs this getting products

Operator

We from Jayson take from Raymond James. go Bedford next will question now Please ahead our

Jayson Bedford

jumped quarter? I morning. questions are the on good I these in quantify late, little if apologize so the redundant. CereLink Hi, revenue you But level a did of

Carrie Anderson

didn't. we was to But nice say a it would growth. Jayson, No, contributor I our that very

I think we year. about million of sales year, capital last worth had the second of the in half $X

And for multiyear QX, is about stream. us. you so, was a of this it's certainly And to growth will in QX it. the year we us. has it for disclosed And think remember, for opportunity haven't but growth CereLink a contributor full have XXXX, I XXXX a benefit it obviously recurring revenue And as nice

to wins It's large So, as more unit, I not the like it wouldn't market capital purchase. capital consider -- a you the is which mid-sized small see, capital.

us. is You nice microsensors, stream recurring which the also for revenue a have

as I capital combination as about revenue. I the goes, think continued the recurring recurring start the you'll CereLink the about So for think And of sale as it's and buildup see that's year-over-year of to opportunity capital revenue. the

Glenn Coleman

launching in mind, outside U.S. beyond. markets in the and and XXXX CereLink new we're still Keep

year we'll it. this So, launch

we're the of to launch in in Some by Japan launching expecting China. markets we're indirect XXXX

Europe, say Australia. we've that new when be like to launch, a other U.S.., we beyond. in launched the product, are going though XXXX even markets Canada, we've launched are and There markets So in major

Jayson Bedford

Right.

this Okay. on growth kind And market? this expect their of growth the of dynamics low-single-digit we level is for the second or the in Dural just other in here, Thanks. should segment going one access

Carrie Anderson

expected, And will rest all talked lower bit very to spectrum. say would X% to higher, group. the considered -- was nice going in the And the mean, on I X that is side can but it's I overall CSS I growth it again, it be -- instruments we unusual the we've of a was of nothing CSS quarter the think what I about all say things a be neurosurgical nothing little here

Jayson Bedford

Okay thanks.

Operator

from Piper take now will O'Brien Sandler. Please Matthew our We ahead. next go question from

Unidentified Analyst

is thanks this for and taking Drew morning the Good Matt, Hi. for on questions.

freight, XXX-supply little Is anything in to throughout year. the ask to Sorry get -- anything you. a to due here, just raw a to budget? probably material, that backlog, like to perspective, some the quantify your the chain staffing, worse that Thank down issues may impact Carrie anything question that? revenue from pressures margin particular then may up And the quarter you the that but in sourcing related or in are related comment able

Carrie Anderson

a the just as and [indiscernible]. costs generic material pressures have on overall material input on margin specific say energy comment really continued the than what costs, gross there's well nothing other comments as backlog. chain is But headwinds, in I'd about I'll freight particular more Yes, say talk Glenn challenges, just other I'd it's of continued around supply

offset But for in of year. I so would I done them a subsiding, here at be, are been? and comment these the bay than and that's generally, these any them prevalent, in and get job are it's and the of to still they worse we less than keeping think think a them rather very don't will than our I very about of they nice and So, nicely I will more about intent general more working, think they specific. the we've QX is say have question actions balance anything hear

Glenn Coleman

of I now $XX $X then million. back year, up orders, $X to at normal have a And back and right the million we'd million we about we're terms orders, way look in in backorder think quantification, of

of have million number. million million were we But backorder about pretty to we'd We now. again, $XX level, way So, to incremental revenue. to with if the that consistent of normal at $XX think we're we're down end the It's around a the $XX it. year-end, relative year, were

this that's the all incremental But guidance us. as that that we built is the situation to into later obviously backorder’s provided. think Carrie year, again, for news start eat into that's revenue good I

Unidentified Analyst

you. Thank

Operator

concludes joining. the Integra now you LifeSciences for XXXX This quarter first call. Thank earnings

Jan De Witte

Thank you.

Integra LifeSciences (IART) 27 Apr 222022 Q1 Earnings call transcript