Earnings call transcript Q2 2023

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Operator

Good day, and thank you for standing by. Welcome to the Integra LifeSciences Second Quarter 2023 Financial Results.

And now I would like to hand the call over to Chris Ward, Senior Director, Investor Relations. Please go ahead.

Chris Ward

Thank you, Lisa. you conference the call. thank quarter LifeSciences and earnings XXXX morning, for Integra joining second Good

Lea Officer Joining are of President Officer; Jan on Corporate De Chief me the and Witte, and call FP&A, Investor Chief Treasurer. Vice Mathieu Aussermeier, and this Relations morning Knight, President Financial Executive

Events during release integralife.com Earlier and which presentation, corresponding press second Presentations the are XXXX at announcing and reference available call, evening, Investors, file Presentation. we Quarter issued financial a quarter under earnings Earnings we our XXXX a named results. release and will The Second Call

Before to call reports are the company’s of may SEC many with I release. results that we this forward-looking disclosed the in the considered actual begin, materially Factors statements. would remind you filed and differ Act be during Exchange in could like statements the made cause that to

currency, revenue as rates all growth. in and growth the are effects remarks, organic Also prepared franchise-level organic this our based foreign revenue divestitures will reference and otherwise performance. growth revenue stated, excludes products. reported Unless acquisitions, both as Organic aggregated we on of discontinued well

press measures our measures. Reconciliations financial yesterday filed non-GAAP comments certain found SEC. exhibit can Integra’s is which financial be on today in non-GAAP any Lastly, Form X-K an of will today’s to release, report include current with the

over Jan. the to that, with call now will And turn I

Jan De Witte

and morning, good everyone. Chris, you, Thank

and facility team. resuming for we analysts this in that leadership earnings Let me investors production of I this May, announce during timeline for it of top is mind the Boston call. late recall is Boston to our me as and in our sharing from committed products the our for appreciate

the update. first So before this going address we’d broader like business into to

release facility. FDA Many of Boston So PriMatrix, Revize, of let’s in products we which permitted endotoxin manufactured was the identification product initiated recall are our you after based of products. gaps voluntary to endotoxin in our and TissueMend global of our may the with testing with by SurgiMend, products our This on consultation have levels Slide all a and process aware, included in turn higher the resulted of Recall specifications. X.

levels. extended also controls. found prior It necessary to point inspection both making from ones out detection that recent no we is indications was apply implement audits. manufacturing Patient past is additional we related the of in the have pause We previously for and results, quality and in in non-negotiable That compensations made to light product endotoxin to like external to be and have internal over Boston months. of in end caution of implemented important FDA specific companies and we the us high findings safety abundance few

with FDA. We continue to the work closely

in these June, resources that and Boston the quality and past concluded within plan and a our in as effectively outside merged internal we that comprehensive submitted we response and investments actions we the to from the gaps they In addresses And the have system work management have fully inspection existing Boston matter new we over capabilities findings an audit operations, operations. leadership initial strengthened our Boston May. Also additional subject into believe experts. in project months, plan

plan, inventory to the to we will remediation by a complete outside Considering the finished year. to end and quarter that experts. third-party project. who manufacturing a are fourth final materials and by in the of needs resume from from build expect factory, this the bringing cycle audit plant the the moving our of our in over auditor also course on goods we time raw plan, milestones Based We our a assess key project to started progress this

letter the FDA we initiate second received XXXX. consistent and the warning quarter mid-to-late to This the them continue with We our with pursuant the planning updates FDA with by is regular week. the working provide commercial on expect last progress. plan what to We to we closely launch expects,

XXst, submit advance. by the the also March expert will warning as to We the FDA XXXX from our final report letter before or audit outside

Turning of on impact our associated was second second with in and we we the impact returns. financial estimates impact the the May. lost adjusted with $XX in provided our quarter negative slide. approximately million saw of results right-side The The to revenues the recall. in roughly guidance to revised $X.XX the line It’s for from EPS quarter significant. negative In of

In in of XXXX, that impact full range May, and in see $XX guidance we for will impacts EPS. of for a $X.XX you million revenues approximately provided negative year and our adjusted updated

Xth of offset not to projections the during ramp in XXXX are Investor and which Boston to We to the required headwind impact for return plan the will sales timing this implied and long May the time market time, we presented for we providing time up our XXXX XXXX. the estimate impact guidance a restart Day. negatively impact Although of net range create our inventory manufacturing the

crystal be patients. we We assure complete focused our estimate EPS. around customers remediation. to our efforts remediation expect on our are to in to we for impact this highly market negative adjusted the and $X.XX fully $XX and customers their and and revenue return million in technologies to Want And around investors the this that

to review So backdrop highlights. X Slide quarter our to business second that now with let’s turn

protection decreased impact X.X% revenue the on the and quarter recall of second an organic basis, Our halts. reflecting Boston by mainly

on the revised side technologies total high above our and portfolio end our leading May. the as diverse the guidance of However, strength which second the for reflects the also markets demand products right-hand in can and of resulted brands, in we provided of strong of across page, a quarter you see

solid manufacturer and organic double-digit growth growth programmable quarter. of growth key valves, DuraGen, landed business, Bactiseal Mayfield, products of Certas our at driven CUSA, Several portfolio catheters in in CSS the like products Boston, our X.X%. which Excluding instruments. by was in Plus delivered

product like key growth saw Now MicroMatrix, in Cytal, MediHoney. and double-digit products lines tissue technologies’ both business we

CSF led for high growth growth of We Canada. and single-digit also above in double-digit by international in China X% enjoyed strong growth

I’m bottom turning to our line.

rest offsets adjusted beyond high revenue positive laid left strong profitability, per guidance revised Delivering otherwise of share $X.XX. second while earnings results back portfolio $X.XX points end of the our during our along Boston quarter the adjusted look our day. out proof headwind in commitments the the quarter of above the recall To drove page. Second to our EPS at range. growth came our side and several to path investor the from

the portfolio PMA implant-based strategy continue application We for that section of and excited advance market have to our to we the breast reconstruction amendments we’re in filed clinical our the SurgiMend. announce to

recent track enrollments completed PMA on DuraSorb for and high clinical a and our clinically trial. SIA developments important first This to The second products us PMA integration closer is having well of and team a in step growth the markets. our clinical is acquisition bring

and market. the Moving back section we end testing to significant CereLink. the of the bringing We’ve finalizing, to Completed our with made technical make which the CereLink progress of FDA, filing August. preparing toward by to intend

CereLink commitments. about an and expect late and important late year in relaunch of long-term catalyst We excited growth the in differentiated ICP this fourth with US. quarter the and Remain in monitoring technology quarter the third CereLink and monitors to the toward international markets

illustrating the portfolios also and and bolstered leading expanded DuraGen our of to We brands Bactiseal markets. have to our CUSA international technologies the our catheters evidence opportunities and for clinical international market. new we reach into bring our Further European

technologies. quarter, regenerative the new clinical dedicated we of certainly late, June. last, and guidance in and Center And we through Lea to but new Richard not further will on appointed the Also development Lea Innovation us repurchase. our take Plainsboro, Integra’s our in research, the second Knight the in share the details Caruso, our on education New Learning at the opened as and highlighting end and founder, Jersey, planned Dr. investments financials, least, CFO updated

more of reputation operational to XX a support. Before for a teams across Lea scale to search, to X and has of welcome the depth high-performing that her, comes us leading and companies the her also from Integra. aiming developing were going track years strategic a outcomes right experience business strong Lea breadth apart Lea the with great for let’s bringing mix And complexity. to delivering during significant with record we and global organizational move officially introduce of operating Slide than and in to

to to on and and excited Lea have board forward leadership contributions the to look We’re Integra’s future.

our like team led transition the I would the over to I contributions And and I months. resilience, the call diligence to time leadership Before Mathieu Mathieu over this With been to the partners CFO to rigor Jeff financial and turn Jeff by past and Lea. to team like would during acknowledge the that, take and me and have to point. over great demonstrated finest Aussermeier. Lea, turn call of have the Mosebrook leadership

Lea Knight

back that Integra you, and industry. thank welcome. of the be part and morning Good excited Jan in for I’m warm lifesciences the to team

myself to learning and opportunity how to remediation know plan four With lives. about the Integra patient considerable my our weeks, and and emerge our excited help more growth to we’re I’ve to products learn, assessing and opportunity time leverage past positioned taken purpose getting I to Boston our much I’m spent our restore have our to about potential timeline. and Others also the experiences its people. and markets, the

Now, start Slide quarter and I’ll X. second onto our financial results on

the mentioned, quarter result. on our laid second Jan heavily Boston As recall

EBITDA our drove but revenues declines our see the growth, not margins, will adjusted EPS. You in also margins and adjusted impacted only gross Boston recall and it organic

Excluding positive quarter our and our that second the will the the many from result slides. underlying reflects of on diversified business growth points across portfolio demonstrating coming provides highlight impact the Boston, solid strength I

the were our our basis on outlined of quarterly segment. a the will year. on go prior Overall, turn million, quarter Please organic this X.X% an delivered increase deeper segment Reported second second I range results the into during growth CSS of in revenues Slide X.X% exceeding X, and quarter an to Day. Investor reported performance from $XXX basis CSS

and high single-digit in programmable CereLink sales mid-single-digit X.X%, low in year Dural due Neuro Access driven CUSA Plus driven disposables; of up were DuraGen by growth neurosurgery by Energy, Mayfield Monitoring growth and and Advanced in the Cerebrospinal Bactiseal; Certas single-digit growth decline Repair and mid-single-digit comp and the management to prior Fluid valves by in capital driven Global recall.

have funnels Capital driven in this half in Mayfield We year. which capital. by remain excluding sales and growth resulted demand capital our double-digit the by momentum capital and double-digits, quarter grew strong in encouraged CUSA continued the Overall, equipment first the and CereLink in for were

exceed favorable timing. half The XX%, of with instruments demand Instruments grew continued benefiting first growth from order to expectations double the this strong of our digit business year. approximately and through growth continues long term performance near

regional in expansion. and expectations, Day Investor and performance our delivered the Shifting single-digit results quarter, growth high China, to China International, led with strong indirect in the our the by in Consistent grew were sales Canada Neuro double-digit above markets. portfolio

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

organic products, X.X% growth and Excluding the Boston respectively. and X.X% reported was

XX% Second in recall. sales to wound reconstruction decreased by due the quarter Boston

Despite Cytal, and our the recall, in double-digit commercial strong execution saw we nerve MediHoney growth and from MicroMatrix, franchise. demand

the double-digit and from see [ph] Gentrix. strong Cytal We portfolio, growth to continued key growth are are long [SIA] pleased range MicroMatrix, through contributors including first and half All the plan.

declined recall. franchise, versus In associated and to the from the partners sales with year, XX% our returns due sales lost private private label last label

Integra offset approximately in the which were private label And clarity, recall, international recall products double-digit and from returns returned growth from to half For in sales down due double-digits finally, particular, were of distributor in MediHoney. the the technologies from partners Skin tissue partners.

Turning will second our to metrics. review XX, P&L I quarter Slide now

growth have Boston second the by reported our is remainder basis on recall an partially X.X% the down X.X% of quarter solid the basis, across organic a offset revenue discussed, portfolio. on As by driven we and

recall. improvement and margins, As we gross our impact gross are we by underlying broadly the look the at of Boston offset in seeing our margins profitability metrics,

the margins which volume Boston was coming XX The from and points basis improvement efficiency approximately of price, headwind for XXX basis quarter approximately to overshared mix, gross points gains.

in January, the critical adjusted reflect from investments priorities are margins the that are the adjusted originally EPS In EBITDA addition to also so including and investments we our planned These year-one impact and from dilution growth, our site to margins, SIA them recall. acquisition. protecting outlined the we gross long-term the to strategic

I that brief XX, Slide our on to flow. sheet, turn you capital structure cash a update balance provide and will If

XX% as $XX flow flow free safety cash on stock operating increased was was was levels. quarter, and basis. the inventories $XX our Free trailing million XX-month reflecting During cash million, we replenish cash the conversion flow

with remains ample Our balance our sheet liquidity short plans. to and support strong long-term

$XXX had net total As facility. billion, the million of X.X and billion, in consolidated remainder leverage was June The XXth, under liquidity company $X.X debt ratio cash times. available including revolving of was total our $X.X credit our and

The million our objectives, plan restart included in liquidity to to and plans confidence Boston XXXX in as to expected XXXX. our share guidance is EPS is the growth $XXX full our initiate commitment respectively, repurchase to end full well Boston buyback our long-term short and a by and quarter our continued of year XXXX third and $X.XX impact. as and the of approximately by position, Given favorable contribute we share a of XXXX year $X.XX XXXX

If you I third and share adjusted XX, year update our XXXX. an turn to per on quarter full provide revenue and Slide will the guidance earnings for consolidated

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

improvement global approximately our modest the strong demand X.X% the supply. are driven Excluding continued products, Boston for of organic growth and by at in products midpoint we forecasting

year of $X.XXX An X.X% the to range be to in billion, organic the of revenues to growth reported forecasted For are X.XXX approximately growth range full X.X% in X.X%. positive the billion representing XXXX, to minus X.X%. of

organic timing supply for performance have that Boston, been X%, we demonstrated relaunch along improvement. of modest reflecting are updated growth Excluding approximately first the the the demand of half, CereLink global with strong and in and and backorder forecasting

I from our revenue full guidance our impact that to the recall, highlight excluding Boston year remains the with original February. consistent in guidance want when

end tightened reflect guidance performance. also to our range of QX We the our bottom

quarter. to for Turning earnings adjusted the guidance third

down in $X.XX, from sequentially, savings prior strategic recall offset be planned expect as well by of to We up the to recall. range impact of driven year but investments to adjusted Boston $X.XX the as our the in of EPS OpEx part the that

approximate XXX the improvement expect point gross XXXX. estimated modest In the we impact recall, the versus year, to year and margins now, margin basis for in a April, in an full improvement only we gross Boston with full

our guidance year share and management outlook, $X.XX expense per full share, is adjusted half revenue Our reflects adjusted $X.XX announced as revised the to margin to well a gross which second being EPS range of revised Boston as our repurchase.

back Now, I to call the Jan. would turn over

Jan De Witte

enormous the Slide overshadowing you, to to is is Thank turn our Lea. results. remarks. efforts prepared quarter requiring focus that Boston our recall of conclude fact the XX Please and Despite second and

Tissue Second quarter on CSS provided points strong actually proof business many both Technologies. our and positive performance, in

in growth back to Continuing provides performance healthy, the underlying the volumes that supply in double-digit portfolio recall. in our chain, deliver our of as a a trends cute and are we operational The of Boston markets our and proceed confidence will largely several move long normal. to build past commitments resilience impact range drivers that we

initiatives. and long-term held intensely growth standards In to on Our world-class we bringing support products Continue long path drive there. our on and to are will the manufactured to range our completing Boston growth the get Day the focused our for May, expectation teams manufacturing quality progress an remediation and there. showcasing Investor targets facility the that

PMA advancing reconstruction. strategy portfolio We’re breast our and implant-based

DuraSorb SurgiMend trial. and clinical completed the amendment the filing enrollment in the PMA PMA We’re

on market its monitoring a end place start the to by to innovation ICP quarter as a of its third and path segment. CereLink retake return leading is in

third also quarter, from repurchase expanding our we value DuraGen are we’re by CUSA in products shareholders. And key share We’re expansion. platforms to million our to additional $XXX portfolio launching international commitments international plan with our launching markets, the global the furthering in which our returning and

to and strengthening and Integra’s focus on markets. growth capture capabilities, to In in drive addition, our operational we commercial opportunities organic continue healthy invest and and to

at the our ensuring resilience facilities. to quality manufacturing Committed and

XX a internal manufacturing of months, facilities using our and completed in combination quality auditors. assessment we of the For past external our the XX compliance full systems

to processes, as global confident increase. people investments and and we’ll to that footprint quality for LRP of necessary we quality system and we’re operation the growth our the equipment a bring and and support capabilities margin Boston making in liability, with up manufacturing and We’re expectations, have drive efficiency commitments the

evidence generation introductions. new management and commercial product marketing, product innovation support strategic end-to-end in for stronger success investing also clinical We’re and to

US. growth We international leverage fully in to key market to develop our outside penetration regions acceleration the continue several capabilities opportunities and

innovative allow patient worldwide us these will to enabling lives. to restore continue of lifesaving measures technologies researchers All to market, bringing and

improving reflects outlook Boston also The our our full balanced, recall. and impact and confident about the I reflecting execution, am of year and excited full remains the trajectory. commercial year progress

we’re on the have focused dedicated to the driving team business. and unlock this We of potential improvements the needed full

open Thank questions. you for morning. the us our this lines joining operator, we remarks. can And concludes for This prepared

Operator

we question have coming The Instructions] from first [Operator Steve is you. that Lichtman today Oppenheimer. with Thank

Your line is open.

Steven Lichtman

Thank SurgiMend, guys. restart. on new wondering your IBBR to inspection updated the IBBR are I of timelines you the terms going and with per terms talk you indications sort decision How process, you then morning, beyond latest was things impacting parallel potentially think the of anticipating you in file could can Good timing with have the two process market? you. gave if mentioned and of for you IBBR of specifically restart the Jan, you so when in what’s the so timing Boston

Jan De Witte

Okay.

So as part. clinical a a you parts. stated, manufacturing There’s part, there’s there’s two

On only from by to shift out the that year. submitted manufacturing PMA And early earlier for then That get the which that the PMA to But while. the the clinical week there’s next will end equally as this part the shipping year, are clinical of talking piece when about we that on part certification. critical starts is that it have of a we in part, FDA now been again. tandem the signed have hope we

inspection. product do start the point, manufacturing the end-to-end and come validation have then the we that to required FDA is preapproval to and At that do can in

taking we ‘XX communicated, we or QX early see this place that timelines inspection the ‘XX. either with now so in And preapproval

see our towards you are that, ’XX. we the with shifting in the half first PMA needed know approval overall because so of parallel, two And

we with be Okay, that believe early versus any timing, still competition. that’ll

Steven Lichtman

on Can you Thanks. Okay. Boston? talk there better And expected. second know to my question sustainability you look It Understood. some know then you excluding underlying margin. the even just certainly gross drivers is than of did those of

Jan De Witte

to I’m Thank Steven. move question And Lea. you, that going to

Lea Knight

morning, Good Steven. you. thank Yes,

a So couple of things.

you first with the We variances and expected. revenue out originally an improvement in more margins. than So favorable originally which quarter and anticipated quarter mix less call kind the first, better that the was our anticipated. Couple see to landed respect in an drivers, in what than also maybe would we on experience versus we I of performance how drove did was manufacturing had know

And an was then was of anticipated cost need FDA. from QX happening had the from to a there coming around the we element a tampered our based bliss perspective and of in of some address some remediation on the observations that

of in implied we to is quarter than of margins were the our better all part in that of factored discussion. So kind originally X-K our why

think As we was balance improves of for question And outlook far, the the in anticipating are XXXX. think shared at point I where earlier with in that versus landed consistent we margins what is are second year. your remarks I my we do the kind modestly this of that

Steven Lichtman

much. Great. Thanks so

Operator

for your Instructions] [Operator question. from Thank Morgan. of you is Robbie Our JP next Marcus question coming

is line open. Your

Rohan Patel

Rohan Robbie. the for question. Hi. is for on This taking Thanks

that is next in was, up what you dilution where your sales. SG&A half make above just on in of to sense get so way in of spend year discussing pulling back like You’re trend asking I offset And need year, the lost savings the a for XXXX? the for to cost helping to you of increase second can want here? from guess I you’re what specifically potentially the another spend projects some

Lea Knight

sorry. So let those I’ll and take questions, me –

questions. Let me clarify the

discussions committed part So remain that year. some of we our in to outlined this our investments planned what is, earlier we’ve of the remarks we as strategic shared

happen to So in the half. continue that’s going back to

Rohan Patel

are the so of or more SG&A is to and of cutting at lost offset all or sales – it’s guess kind you leverage expenses slightly I in like, that some improve

Lea Knight

– Yes, yes

Rohan Patel

Of the –

Lea Knight

part think earlier, planned we cost had we of had, part X-K we the were that discussion So released we it’s some the of when of but initiating yeah talked – I was the that improvement – growth. of to the we when recall. about what we some we preserving of for necessary half saw long-term strategic the back the in are mitigate impact That’s activities some are still investments

Rohan Patel

the I you the then elaborate to And loss question great. selling as you’ll of second can of products quarter lost start that confidence result these another regain for again at had using lose, you mean just is just the and more Okay, share all, you as this if share that? Boston and able recall. to a gives you of share you be you’re kind precedent on why Could expected on once I to it year next a how is the given much quantify start if expect what in

Jan De Witte

and the to now working question, XX% we the a that we’re take in covered me one, relationship And have the we’re of on portfolios we PriMatrix there, learning. retain trying opportunities portfolio, but XX% products other which you that SurgiMend we learning customers That increase and okay. both At are and let to elements customers. of try with is have So this be retain leveraging assuming and Rohan. got time, for to can and percentage. Two other substitution okay, we’re lot folks to volume in our know to, still still point that

share year, get further share we where share, of of and part as just started but to the experience the second know share, based we decade quick market to question, over other back how get can on our with leadership SurgiMend gaining back PriMatrix. of the know sales can up then know was past market you holding situations, And out both the of market. It you that the XXX% some market with then to within you about and we thinks build

on commercial as the well both and in quality So of team. that’s quality product past the capabilities justified by our our of strength as the experience based product

Rohan Patel

you. Thank Great.

Operator

coming [Operator from Instructions] Thank our Taylor next will you. be of question And Matt Jefferies.

Your open. line is

Young Li

is have Boston to all mind investors, obviously is that the you scenarios top the of Young guess updates appreciate for one about start considered you is This the and I guess you Li various great. restart there. All maybe for know a might guys. just I right, know in quality, regard bit the can or you issues testing, processes. things was that there’s focus XQ little moving little relates you as validation understanding share Boston? the faster the now you to restart FDA’s But little about know bit the that if a in a to really you potential Thanks, bit hear bit obviously no little know product more on maybe know to Matt. you for slower it a

Jan De Witte

which for communication over that of timeline of question. of thanks done the had was a May Yeah, The of that for hand, the work is June, on from lot observations translation where the in end most place list one and observation. we they okay, FDA XXX that of And May. external plan in yeah with on based or the to we work already earlier work we the forms half merged the in those had second communicated internal

plan. made that a very holistic So

them longer the already that done a were many with now cause have heavier analysis verification, okay. observation. observations The became the observations to translated in work, more remedy execute the FDA had follow and significant validation to and CAPA we we and internally to process root timeline Because those of that given

the So plan. that’s one element in

work some them to of to are that may that And expect do corrections are know timing. in element There find a is external done the in opportunity in of audits. the those you okay. times take second the those process plan we where today to we a audit stop will move we process, be so we’ve make some So, the audits on, and into couple and a to worked continuing we’ll where but and parallel then the work add additional timings far, final that

which and somewhat timing elements mid-May. than third the then into worked also in And assumed the different we what is

the half defining regulation, had factory, up into were conclusion scrap the to we that and we from adds start we work also think the recall, have the As of we we moment finished length – products to scope the the which the products. the in to startup to the significantly in the moment when of finished translation progress

a factory So before end now the added restart to all elements year. these the up of the of

we’ll timing a there’s the as work maybe opportunities moments we that either this that should we need time, discover in, that to validation but to redo we be new along, to course, Of that also does required at some we discovering go not of if okay, where outcomes. point pull or consider lead work in

plan to I ourselves it, enough so to that and communicate give some we of yeah because in maybe early can to some in yeah trying things has would contingency that as would we’re say And discover we discovered the I new that this some adjust. course as say risk time

Young Li

you or the right, color. my on the any All interest should helpful pillar about great. remediation? year? think be That’s differently to ability How strategic through for know really M&A on M&A key do I next Will deals you approaching guess follow-up your we just Integra. while working the Boston

Jan De Witte

would let about tell you thinking we answer. Yeah, are let somewhat M&A. I but how say me me –

we’re in game game As Technologies board types board, out that you’ve There’s an push are two strategic where taking our we heard us of leadership much are we talk definitely the board, definitely opportunities. execution. mindset fully Tissue organizational specifically and is a deals engaged timing that about game there pretty our with from deals on Boston control the there’s given on

timing the remediation also important, realities. and deals strategic of But in some term all short control the the on when we will and radar where screen opportunities may importance their those the with we that on evaluate regards not But them. are realities come there will strategically

Lea Knight

it would just I fill that. And on

You long-term our sheet growth that us opportunities find liquidity of those know available remains balance do commitment. allow to strategic we with move to our strong into execute in event the kind

Young Li

you Thank great. right, All so much.

Operator

be [Operator from Instructions] Thank you Turkaly Securities. And of David for JMP your coming our will question question. next

Your open. line is

David Turkaly

those for preapproval and FDA you for going a know to start another two curious just FDA then that Good the happen? and and of to manufacturing inspection you mentioned Great. things for you to now will Jan, morning. assuming out commercialization you or that inspection come have those in right I Are either is of I’m plant.

Jan De Witte

So let me clarify.

the mixing the confirmed I PMA own done FDA at that discussion. our The is with of has decision. think discussion manufacturing restarting you’re somewhat restart

we’ll with when like also external our decide shipping we product. successful, restart then decision on the audits So and in the based our restart we we’ll pull will consultant and if an that is auditor

audits Okay, manufacturing the restarting, FDA restarting we’ll audit be shipping. so no involved in there’s in

And inspection one talking foresee planning trajectory manufacturing specifically you there will ‘XX. And early the as do I at ‘XX that will of that be audit inspection the or PMA take end place that with preapproval part preapproval in you was of by know trajectory. we is the shipping that that FDA PMA about the to

David Turkaly

out we on would about thinking you Thank if think – understand. could Jan, need preapproval we the is, us be make an be to you And to wondering the first know year? you’ll just back could that actually I want would the that know be year I out to have thanks before I was half – impacts was ‘XX detail one to was ship. understand the any of you you there it or the they for what selling yeah be the inspection to you additional if or just do I next in pull I given we was should million before be sort $X.XX that $XX you I know you you. trying I and say as either at look lingering prudent of to know manufacture look

Lea Knight

take I’ll one. that thanks. Yeah,

back market from will a be the to to year, point, back full get up that Boston distribution that be this much communicated, a in late the to perspective earlier. and there recognizing reflected up discussed we shipping QX mid your XXXX again, into or first half resume still we to impact of as will assumes so of that ramp natural the So impact that right we with

David Turkaly

Thank you.

Operator

Thank you question. Instructions] next [Operator for Fargo. your will our coming Vik Wells Chopra be of question from And

is line Your open.

Vik Chopra

providing XXXX good welcome, for for guess color working questions. you. Hey, the you and with to the looking thank forward the just, guidance. morning Lea, I Thanks taking of

algorithm? growth curious X%, in I you So provided you ‘XX preliminary to How then XXXX a impacts that the X% to And are follow-up, goals I’m the just LRP LRP ‘XX May? how please. guidance have in confident does

Lea Knight

to start in So let good and Vik, chime well. you as again and Jan let from I’ll me hear it’s then

So to substantial about the things any from guidance But LRP. some bear we I’m in what or we to tell this think consistent in quarter let outlined have of providing that we in are we perspective, for a what terms LRP. with that respect you what on update officially our saw LRP excited with witness our – of not I me

part as results what performed To Investor through look the our the what saw expectations that LRP. we as at that the with is the our to is QX as in growth to communicated in already both well we live you Tech point, of Neurosurgery first consistent if Which to exactly outlined your there half, at are Tissue levels you in me, that potential Day. ex-Boston

being us drive you terms our growth in the I saw the some advanced our from completed we again of of as communicated filing critical DuraSorb were enrollment steps around Day. that we Investor think what clinical to also PMA, SurgiMend which we part was, able of all clinical commitments of once the

underlying is still as potential the that that is to have good strength the conversation over what we’re have so have it still there, broader that update the will happen we we’ve what talked will there’s everything will to impact we we think about of I above come of the in LRP, or doing is, all that think but that months to reason but strength the they’ll factor back to next there, of deliver lots Boston update stricter in to believe the annual I some So discussed. impact understand couple and

Vik Chopra

from just macro in Great. for year question the of And level headwind high and the just Thank worse? back then What for me. what’s half assumptions the you talk you. getting maybe getting your one Thank what’s need color. about better

Jan De Witte

Also coming and US, part as we opportunity that markets. start outside pretty that the when you I remarks penetration me see market let US my Europe in we dynamic here. from much of to we world. So our dynamic expected. procedures is markets and see good talk much in continue a strength And expect pretty doing the solid Asia see that over across we deeper prepared perspective, that and year. shared is we

growth have the our what the penetration is, move of we faster opportunities than to market. independent So market

we’re to a past process have that less as at has showed time, talked think we components I to that of we products back here in got I gradual new see resourcing components our new on new consider with up at situation, organization sitting that overcapacity tough this or leads normal that’s additional supply discontinuation and relatively but suppliers normal a year, recertification liable will now to bit point that about improvements we of to and continue take From also than worked the world and where work. seeing and but before to to the some are it are

in half, first we’ve improvement in terms our So, and lowering back yields that execution half second some see results that on of own the orders. of the over seen the that in

see than that say more half businesses. headwinds So from the second perspective, tailwinds we

Operator

coming question your Richard Thank [Operator from will you question. And Truist for Securities. next Instructions] be of our Newitter

line open. Your is

Samuel Brodovsky

Rich. taking change is timeline for in in timeline the process Sam Thanks How you just timing anything the there the the earlier whether that’d the I’ll question. Thanks. first This be could restart holding for cause facility. Hi. that are Is ask on on the or one plan? to for later? confident that the

Jan De Witte

Yeah, thank Sam for you, you. question. the Thank

resourcing stream, that all that depth the before, indicated of year product I observations As a of plan is holistic different the with this and breadth the the past there.

things sense, and now first some elements verification that succeeds the in in limits may and it the of here the second we are biggest try validation be we watching So elements happen that closely which time to unforeseen care there. get for contingency that has would a and

the of August I of where and down before, is those that we some month built and and trying button contingency we’ve in, of So the we’re there but to said risk as September areas really pull list is as self-buffer be to to raised. to that and can well it as if that risk and work to we yeah with we’re in early give deal a has as resources may trying

Samuel Brodovsky

Okay so –

Lea Knight

on If a with. Jan build respect If that. fully I with the I to point timeline, may agree on which can just that to I that, build made

the to those execute interesting the the a but we plan, the occur in Jan’s opportunities point, all the earlier of I about or Jan the might to way and that versus this where some what mentioned do have the to and in as timeline rather have is extent to and against later. realize challenges think we that plan rework reposition would what’s likelihood or remediation we understand large we to structured plan you

be the and forward have more some better the hold. why layered along strategically of can exact progressed that of where advantage the help that to opportunities risks, reviews take to is we understand keep So as to pull independent able way we’ll information through also to we’ve which timing we in mitigate timeline to

Samuel Brodovsky

Okay, call how timeline quarter is we could so have third on maybe the better characterization. solid of that a at the idea correct

Jan De Witte

Yeah, definitely. Definitely.

Samuel Brodovsky

with or happen line. [inaudible]? ‘XX the regards one, to And to for get happen you then to see normalized is not the we need in on what a the questions. first OpEx Should should in do Thanks level? to a until to half manufacturing OpEx going ramping think And you that we taking confident after that expect up

Lea Knight

have let we perspective, to make some we regaining From kind Jan can OpEx temper continue share, of you we of move me get evaluate as XXXX we there spending. to on. start an our start have our OpEx restarted, to build plan into the sure distribution, to we and we what’s and to will continue needed So commercial

I then prioritize a as start return are kind will what to continue normal OpEx we that’s and we our the in know return anticipate did this that our consistent of with that And when that long-term would market year you always more so investments progress – shipping growth to realizing we XXXX. the start we that behavior level. to fueling I strategic Again, also will expect

Operator

your of Instructions] question Ryan Zimmerman And Thank next [Operator question. you will coming our be from for BTIG.

open. Your line is

Ryan Zimmerman

taking Great. question. my from Couple Thanks for me.

Tissue we’ve one on question So Boston do the CSS. have But I about obviously on talked facility. one and enough Technologies

in to to And seeking is alternative sources this so, curious know of how label, given the the private given impact we’ve first one customers the your I’m just you Tissue Technologies recall, label period? are related private kind

that of is the does guys’ what isn’t associated as private profitable a present And it, the of on the that operating longer-term it but label margin just line. quite on in to for business? private label impact your lot recoupment with know it I EBITDA margins expenses And there view business? risk does,

that? So, curious that if you could speak on

health and that perspective this was question, as the Neuro think nice it relative know Jan, ask CSS in strong which on of the so, quarter comp market the like quarter? I’d you you year just I’ll it and other for very characterize know last what you’d this it to your how I then market Neuro taking was was Thanks the question. it, the why And

Jan De Witte

the by Let me ask [inaudible] question great way.

they full closely So to help and partners timelines. private the with that we’re on working on label can transparency make we sure our very have understand where them

And For customers the easy or get make back as sure technologies as it’s other hence, other to they in switch soon we when we get with work talk, private that on and label them back. providers. timelines partners not the making to big sure we focus

your second then question on market. Good markets. And the CSS

not procedures procedures. you as many think are elective know, CSS of I in our

markets are But our has of And so are the that translates the also in operation backorders really to the as our some led but we seeing into get dynamic out the distractions getting full of market world. own out distractions the sales. of

it goes two good And that CSS quarter. so it elements the of are a performance second driving conjoined

Ryan Zimmerman

Okay. I’ll I leave in sneak more want out. her just one don’t Lea, for to

in Just just that leverage? know your then at But what’s in for mean if and times down. your you seat, the of range terms for years you the out – think you you during maybe you know a right ratio, understand I’m X.X obviously comfort called I the Codman given leverage help worked I what’s the where the know investors you you mistaken. deal ratio new not ago leverage Integra called with out leverage took pay comfort of on company? what’s the debt lot the to know What

Lea Knight

leverage, in think that range times you kind Ryan. and we’ve of Thank now to to we a the X.X we right is know we question. as I fairly the spending to X.X capital, about been is allocation had tend as methodology well the just be. you, regard Appreciate that operate Yeah. range disciplined of we’ve want And kind think

we’re low this as would business. that end actually a we appropriate guide with for so acceptable and at And the of what deem

Ryan Zimmerman

taking there. it Thanks leave for I’ll the question. Okay.

Operator

Thank you –

Jan De Witte

Thanks, Ryan.

Operator

Ranieri our [Operator coming And Drew Instructions] question of be from will next Morgan Stanley.

line Your open. is

Drew Ranieri

that Technology Hi. a here. questions. ones looking there’s your ’XX Tissue to But start but I for for those Thanks two might CSS guidance to help couple Lea in maybe just help quick lot closer expectations I when particularly taking for your in understand imagine the that maybe a to out. the with of that? Lot you would we’re be range your us segments? But Maybe long growth maybe plan, can slice business. us on at going frame

called just in out And And then kind instruments in driving order there the performance follow-up. touched have the – instrumentation Thanks. back that there I question. timing business? the to on neurosurgery expectations bit of anything CSS the on just just then a a But second, you you half the strength prior for any favorable

Lea Knight

you. Thank

saw call in the know in that where QX business underlying it I I in half shouldn’t high say first through the Technologies think was performance performance with business consistent Tissue So in consistent Tissue underlying the for single-digits. I Technologies, you – ex we that what

range half, second full the out we’ve it again anticipate ex-Boston, the be what right I being for kind framed would Boston for same of to you in year. already the and we the anticipate For impact

On question to much like where the the in similar think believe balance business persist you the and the I year strength the continue question. CSS again referenced of, to of a terms had Jan already answered that previous when will side, in

And to year. know hold the question performance expect then, through you that so, Instrument – the think was of I with would final to I balance your respect And

Drew Ranieri

Just on Instruments –

Lea Knight

in that in growth quarter, past seen we’ve the lumpiness On some – think strong the I Instruments Instruments yeah double-digit business. in

I to think moderate long-term you’ll of kind its typical that see back growth rates.

will to quarter. that necessarily it saw We the at degree this in we experience continue same

Jan De Witte

that new in think Drew couple that broadening do last commercial for our accounts is portfolio, we part one the more footprints strengthened just our commercial year in we’re specialty commercial signing What that focusing instruments for and of there, fruits and investment add Instruments. that strengths things the than on me see dynamic year the up on on there, of we dynamic Let seeing of I a of specific. of have then are second,

Drew Ranieri

out are the your kind longer-term it. of more But more touched the category? what this thanks open aggressive rule, bit Got the a getting about entering again, see views PFS color the taking more I with M&A kind question. the appreciate and change doing earlier. you non-acute few Tissue and seen in dynamics force, a proposal the Tissue for non-acute in Thanks. in came to the of you there on Tech space? is M&A setting be appreciate that Have there you more I to But to in And you into weeks like need in in know Technology. strategically ago, any happening Jan,

Jan De Witte

as and some communicated right be. internal Day pushed space. been external closely Right, watch the is strategic in continue both to is these I when that given and time to uncertainties to the right there. have out consider be Investor timing we so decisions that non-acute we’ll The some that the area and remaining Yeah, space question during and of place the would move is what

Operator

question. all you Thank today. for conference our conclude does this And you. Thank for your

have disconnect all and may a You great day. everyone,

Integra LifeSciences (IART) 27 Jul 232023 Q2 Earnings call transcript