IART - Earnings call transcript Q3 2024 | Integra LifeSciences Holdings Corporation

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Operator

Good day. Thank you for standing by. Welcome to Integra LifeSciences Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Chris Ward, Senior Director of Investor Relations. ahead. go Please

Christopher Ward

President thank we Quarter and Events the joining Integra Officer. De the are Lea Officer; Good Chief Knight, Earnings you Conference Third Financial Witte, during Jan release earnings presentation, Chairman; Investors, which XXXX issued a third Essig, this Presentation on Chief Call. our LifeSciences integralife.com Executive corresponding announcing Stuart and are and quarter XXXX at morning, will file and Quarter morning, reference Earlier Executive the for and a press release With financial call, call available me results. Presentation. named The Earnings XXXX and we under Third Call

call I Before unusual Unless revenue manufacturing the performance. in nature useful information otherwise looking. the that to remarks, revenues Organic the currency, third believes forward in the franchise-level based organic quarter, disaggregated of Act actual may when provide recall evaluating acquisitions Factors excluding and revenue would and the Boston through all that and you plant SEC and could are this in growth from on of of Exchange at to company's organic remind excluding discussed the Boston. Boston foreign and the excluding be from in like revenue products are reports all growth our in Boston we because stated, reported revenue both divestiture. in voluntary excludes company's Also differ stoppage rates materially growth organic global cause reference impact. that Organic manufactured considered Management excludes prepared growth, the facility periods. begin, with products manufactured effects many filed revenue results the revenue will growth, of release. during statements our organic the growth made we

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

call that, over with And the turn Stuart. to to I would like

Stuart Essig

you, the Poul and our Integra's ensuring by to I X morning, I'd to pleased contributions Thank of over Mojdeh his and next and to transition. discuss Jan leadership CEO thanking years am start for to for announce like good as everyone. leadership his the a Chris, today and last seamless transition. appointment commitment

been a Jan faced his During number work, several significant hard made His and have tenure, difficult constant contributions of dedication and challenges. throughout. professionalism

DuraSorb, We we into international of entry and important X his acquisitions, breast grew an Acclarent, recently, important reconstruction innovations synthetic to product executed our significantly business which added product our nose and our digital throat and market. Under cementing added pipeline. leadership, to ear, more pipeline the our

one to His of Integra. to on teams strong most company. Jan's leave capable will has his building In the top been ability important addition, talent lasting recruit contribution a focus impact on

remain, Thank the challenges efforts well. many future wish I groundwork and On laid have Board the our all our Jan's you of myself, you, employees, While of Jan. behalf for success.

in CEO joining Mojdeh will next and as that delighted also be January. Integra's I'm President Poul us

process Before I impressive and details CEO the background, and sharing competitive to Mojdeh's opportunity of candidates. a search was on that number underscore attracted want the thorough

operations, strategy, growth global portfolio health businesses experience operational transformation, proven decades executive and extensive almost and led global accomplished track innovation She complex of through care a Throughout value-creating career, commercial allocation. multinational Mojdeh an with record excellence, has has business performance impactful M&A. is capital Mojdeh operations X leading and R&D, organizations. execution successfully and delivering her in of

of served XM, global Healthcare, Mojdeh responsibility Scientific. and Prior of Mojdeh on served with of to iRhythm business. an Decker. roles has $X.X Technologies leadership recently, & Directors in leadership Medtronic also She and most Stanley Group including Technology, Black of several held Company, increasing Align Boston the XM positions billion Board at President

product and Integra's have career, this businesses foundation and are built Mojdeh across led neurosurgery I different value we Her through next geographies. and her process. functions, to And The growth medical has further strengthen and markets, teams spans and including of in she confident will Board digital experience high-performing technologies. Throughout wound usher know Mojdeh and getting enjoyed innovation, chapter well our creation. care, our shareholder very

forward building demand looking joins a know to our portfolio upon our to at the in products quality, for herself positioned continued drive introducing us the growth. and is and well leader critical strong I us when is you January. juncture in is right Mojdeh joins resilience improvements, and customer company's to Integra's history ensuring officially She capacity for she

third And turn our now, I'll discuss Jan quarter to and to Lea results. it over

Jan De Witte

morning, smooth transition to Good ensure my for Mojdeh and acknowledgments. forward Stuart, nice I welcoming and along momentum path. you, a with the improvement words to successor working and everyone, look thank maintain her to as through our the we

our of presentation. Turning to X Slide

X.X% quarter million. and we adjusted by revenue Organic $X.XX. third year-over-year, of $XXX revenues were decreased Our EPS delivered

third demand quarter results to Our reflect strong our portfolio. a continue for

this However, deliver ability demand. challenges against our ongoing limited to supply

colleagues the challenges. laser-focused Our team remain and Board, organization across leadership these on resolving

across during As call, master our our we operations. plan, we second initiated compliance our to management our approach a quarter systems, discussed QMS quality enhance comprehensive our compliance

in and across We QMS identify resolve work our continue to sites. our diligently to gaps

facility quality, demand. continue we through committed actions to what's quarter, to investing We're We expect employees shareholders. capacity the fully long-term upgrades equipment patients, doing and customer last we you resilience for ensure told in our to right and customers, also to meet corrective we the remain and As XXXX. assessments improve and

Most And growth These ENT been instruments. business. business for we needing growth down the shipping surgical due the We our resolved primarily to see overview an call. for still of XX.X%, was continue continued have saw holds overshadowed growth during be Codman in with discussed in second of quarter to in we Neurosurgery reported our earnings portion challenges solid Turning Surgical Specialty now only our of our was results shipping and holds as Organic a demand expectation. to the single-digit organic significant quarter. significant them our supply specialty products. to high these our lifted growth

has continued The the growth date. to our with and business. the the in synergies about of pleased Acclarent team's integration Neurosurgery expectations collaboration ENT our with We're to opportunities and remain outperform excited business the

international demand also Strong and reach. expansion our resulting we our encouraged momentum the look the markets obscured international the quarter. we of our to as by by double-digit in business in the in commercial was low remain decline shipping a the future, holds, Nevertheless, in

X.X% the Skin. Technologies, down Tissue meet because Within production demand revenues for not strong Integra able to were yet was

revenue UBM deliver Cytal, our allow and half growth label to continue Integra rate the portfolio, and return and to will quarter. Skin growth business. in MicroMatrix double-digit strong We in to including fourth our for private second And our for run historical us DuraSorb production

pleased also the our Braintree We're team facility. of the progress is with with making the build-out

installing completed SurgiMend facility we the largely have towards begun as production of half and and the online continue work first PriMatrix equipment facility construction bringing within We the Braintree in of XXXX. resuming have to and

to our guidance. turning Now

range our EPS $X.XXX XXXX $X.XX We and tightening are $X.XXX respectively. a full $X.XX, adjusted to billion year of revenue guidance to billion and to

of the the guidance, holds to back our the from plan. products remediation While high compliance master quarter work end end release of third place our top the to resulting the tightening we we We're holds recent actively remediate of and implement taking ongoing working quality as guide the on range market. reflects the delivered

year many fourth mid-XXXX. in expect remaining fourth these this resolved later quarter guidance of by color be full We holds the the quarter, will provide and products within for additional to with remediated our call. Lea on

our So initiatives in left on key while across to our and challenges progress on delivering summary, commitments. still we're we making have overcome,

I'll results guidance. And with detail turn now the to over more to that, provide our on call financial and Lea

Lea Knight

Thank you, Jan.

detailed financial on highlights look quarter third at more our starting Slide a take X. Let's

mentioned, reported on was flat total $XXX third last revenues were the organic an Jan to compared million, X.X% approximately year. basis As basis a and quarter's on approximately which down

Our adjusted for XXXX. quarter EPS to compared was $X.XX, down XX% the

along quarter, revenue prior versus in XXX year As as basis unfavorable were down impact for revenue. P&L, Gross skin from the by such we inefficiencies gross offset XX% scrap, margin. including margins Boston higher XXXX. with was gross look third down by partially the mix points impacted This margins manufacturing XXXX the on lower were

margins maintaining $XX.X compared to margins in we basis XXXX, the resolve and EBITDA investments of shipping points for infrastructure cash XX.X%, million. reflecting in temporary decrease key gross the XXX Operating impact quarter hold. adjusted the Our was flow down while third R&D were and commercial the

supply that Reported If in quarter third and set normal in access highlights on call. in monitoring basis been Dural third the the a you CSS from the organic have temporary holds and and third prior Neurosurgery CSS These management in detail. were in year. resolved to basis organic an our an sales July X% challenges largely XX% and hold our XX.X% turn we due revenues CSS discussed the examine to July expectations repair in shipping and basis, on Slide line remarks we shipping are in within X, our $XXX Global the [ on our holds up earlier with quarter in remaining more largely guidance. quarter and during ] million, for reported down declined revenue we'll the

decline Neurosurgery disposables. driven and Energy, offset Advanced in CUSA growth in The by partially was capital mid-single-digit by

Our ENT organic third for the quarter. X.X% growth business saw

close X. took remain ] for ENT April only of the the XX delivered future $XX the reported the ENT instruments Acclarent will in million. of about growth approximately following and a growth reflect acquisition, the the a first reminder, We the of potential pleased on which with Acclarent our As months organic the segment MicroFrance place reporting On segment. excited [ ENT basis, revenues integration

double growth For the capital low capital. CUSA sales by and double-digit the relaunch, third Clarity up high in growth low our single-digit driven were CereLink quarter, -- digits,

capital global to continue strong Our to remains well and deliver growth. positioned funnel robust

We saw due with primarily X.X% timing. strong along to Turning order Instruments. demand to growth

affected quarter. we international low customer CSS, the our results business to temporary our to within attributable the double-digit hold. shipping quarter, holds the in to meet Shifting decline demand mostly a These for ability saw

in for the business. However, our prospects international growth we remain confident

on X. on a organic were on reported down Tissue X.X% an Moving basis segment to our million, prior Technologies compared Technologies year. sales Slide to basis Tissue X.X% and the $XXX

the demand prior to not in down year from comparison. impact mostly meet production return in and for X.X%. Wound Skin Integra the was Reconstruction were year-over-year challenging Sales Excluding fully did down product manufactured organic us allow a Boston, of shortfalls because growth

We to which have revenue to outpace offset through remainder Wound strong ramp the low that The quarter. run the for Skin growth Reconstruction to expect continued Skin Integra in of from acquisition. model the growth fourth production the for DuraSorb, headwind double-digit rate the Integra continues and third partially including to quarter was franchise, across return deal historical in by

high by single low Overall, saw demonstrating were demand. the and also sales growth union MicroMatrix to XX% continued platform last double-digit strong We digits, platform. label approximately of due order UBM up our compared [ favorable grew Private to in year ] timing. Cytal

Technologies due Finally, were digits Skin sales Integra Tissue shortages. to the production international mid-double in down

turn you flow. X, will capital our Slide to If cash balance discuss and I structure sheet,

cash driven flow primarily XX.X% the million, and million referenced During cash was by was shipping shortages continued XX-month of a the quarter, in $XX.X $X.X previous cash the production and and basis. flow hold operating remarks Free on in conversion trailing flow impact was negative our investments free CapEx. revenue

As debt was our Xx. leverage billion XX, and net ratio of September consolidated $X.X was total

Integra for business liquidity bringing range facility. quarter. million benefit coming in Neurosurgery our company with shipping the on our most from ratio revolving rates resolving credit and $XXX short-term under of target available X.X had run the back immediate are revenue the in cash investments historical to billion, total and including to our in $X.X the and holds focused remainder Skin within consolidated our The We fourth X.Xx returning leverage of

would prepare If and to of XX. our a points for end as like Slide key capital you structure sheet approach balance we XXXX. and highlight few turn the We about to XXXX

our make we our focused we essential strength bank strategies. liquidity, cash in improving long-term including confident sheet facility flow the on are and investments operations remain the While flexibility to and we growth balance our have generation, in

ratio leverage the EBITDA Acclarent stock-based Just the impact in consolidated of reminder, acquisition. compensation the a both pro forma calculating add-backs for as includes used our and

XXXX. We And under using room due revolver. to credit existing have term, repayment repay the in fund our convertible bond quarter short of our we facility the are sufficient the our in to coming third likely

end interest disclosed existing as million low of have rate debt in XX-Q, the the range will $XXX approximately rate X% With fixed in of we through our our XXXX. swaps,

to rate work in We maintain will monitor to continue capital sufficient our liquidity the and structure. environment

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

expect XX.X% in organic growth we X.X%. to XX.X% quarter, and the X% to revenues For range growth million, representing range to million of the $XXX reported of an fourth of $XXX range a

seasonality. guidance our resolution the production us quarter in call, quarter. Our be historical Integra run they rate fourth to of normal revenue sequential for holds step-up holds incremental partially second the offset in implemented fourth step-up the shipping This revenue reflects the quarter Skin by majority allowing will and have driven sequential meet by of a of fourth identified in quarter revenue the quality the we on

For the billion, compliance X.X% X.X% and investments for full representing the associated estimate full an be XXXX, basis organic plan. year, the minus to the impact billion growth reflecting implementation $X.XXX to We range revenues to X%. with forecasted to approximately and minus XXX the gross the year in X% of master decline range in challenges, margin $X.XXX the of approximate of costs supply in reported of are growth of point

For the to quarter, range share the $X.XX of expect per adjusted year. to EPS we full for $X.XX the in and $X.XX be fourth to $X.XX

Finally, the on for count our key reference. Slide assumed for see assumption and XX, considerations summary a rates, rates you in of tax share FX and our will guidance guidance

the closing his to turn remarks. for call Jan now will I over

Jan De Witte

you, Lea. Thank

our Integra you management gaps and addressing to our prepared back made to significant in smoothly, ramping to our XX, If business, our our up to we're I in Slide revenue the Skin resolving meets turn products. the integration Acclarent for shipping quality production remain and of we Across organization, system wrap in growing our run will continues We've committed historical demand rates. holds CSS of market many supply remarks. progress ensuring go

lot do. progress, work are a also encouraged of we While by we this we recognize to have still

achievements to as optimism. down years. and CEO, In and Integra on an prepare our Well, so X past exceptional I resiliency I focused with acknowledge and that Mojdeh, strengthening Integra's over the leadership I proud dedicated As of I'm with challenges remain. welcoming the organization of I do pride mix also is step leave team the hands capable knowing in a predictability. colleagues

The for the growth, for strong customers company patients and well to that of innovative supported pipeline positioned will our lives by is products of continued their improve a years come.

has Integra transition on the been I and successful My remain commitment to unwavering, company's in deeply and focused invested a future success.

are Directors, all heartfelt I'm thanks like Stuart, colleagues to Board of our and we around management our proud accomplishing to would team my our world. of very together. I extend of the what

And to with that, line I'd the open like Q&A. for

Operator

Now coming Lichtman Instructions] Oppenheimer. [Operator question first Steven from with the line of

Steven Lichtman

Best of luck, Jan.

what organization Just few first, supply over a the are I couple quarters? the going been me. seeing stability you challenges from customer from and you've through guess, commercial the as

Jan De Witte

not of in you spend They was several Thank cases, but that are SKUs, those holds long most duration Look, question. term. protocol our for each of the extended. not

do In sales to And protect capable those resolve, strong Their we our reps addition, the differentiated. offer. relationships them we different need all choose on months those products and between they and are attributes based very and across customers. customers or over the specific -- as features it

mix our that the share of feel strong focus, customers. with retaining with capabilities so we And and about

Steven Lichtman

broadly initial on you you And over think, it. 'XX. I Any 'XX? a few months obviously, changes master your and can on then, pass on provided, Got and Lea, thinking thoughts January? provide taking thoughts the quarter, Mojdeh to plan last compliance additional more in Any some with

Lea Knight

show of XXXX, XXXX do believe Certainly, a we it's quality point, growth now we of full what of Steven. don't expect about guidance the mid-single-digit It calling about that provide thinking supply organic of overall type disruptions way are to to they briefly we referenced. in our disruption that XXXX. continue potential And within change holds with over fair that for to impacting but we of not in QX, year the all your we've provide supply kind Even additional to impact terms And thinking magnitude we're did really talked XXXX. of XXXX. in

guide. good still is that So a

Operator

next of with our Fargo. And Vik coming the question line Chopra Wells from

Vikramjeet Chopra

with Mojdeh. years of to retirement. welcome and the was also, your past a the couple And working warm A over you pleasure in for it me. you questions all X a Jan, wishing best

from see a result me, portfolio? I a for procedures the first, move IV your guess, could XQ hurricane? And quick do then please. into And XQ So you any the shortages impact as of follow-up [indiscernible]

Jan De Witte

words. And thanks for the nice

So any from no, have impact of moving significant seen not procedures we in hurricanes terms across.

If part you of that. didn't second your could the I repeat question. fully get

Vikramjeet Chopra

sorry. I'm

shortages The -- the have the second shortages from or part expecting short was, tail you of the seen any surgical impact tailing on from question procedures? your any

Jan De Witte

not. No, we have

Vikramjeet Chopra

million I Got from heard question $XX Lea, it. QX hold? number. Maybe And in follow-up Lea. still my a think are the a impact you is I for expecting then don't shipping

Lea Knight

Yes, certainly.

able recall based So $XX yes, about our QX. if million those QX, shipping being would we it of on you to have estimated a having in about more limited the the we $XX shipping time, of about talked in expectation an estimated million. point, And QX. an much of to compliance impact your July holds at discussion, in And resolve impact most holds in

continue We true. believe that's to

are we much QX. impact of Order is about smaller a $XX magnitude on So for pace in million.

Operator

question next Zimmerman with the from BTIG. line Our coming Ryan

Ryan Zimmerman

into anything as Do about I in 'XX, online, Skin, kind luck terms a I get of see 'XX. reasonable but margins should terms we're not trough, margin some I the in feel Integra know if to assume you like in for it's to margin mean, -- go we're little we recovery? improvement more of And margins family will, we products to back enter just that that that Jan, the talk Lea, the through dynamics? you getting and best of as consider guidance with in come I guess you the bit. Europe. kind of is want of there

Lea Knight

Ryan. Certainly,

in it levels. step I'll through So X

previously from headwind what 'XX shared would XX a a a into gross 'XX little of you expect kind gross margin on basis year again margins. as of we expect from that at was, a our of bit full move we as of magnitude and perspective, margin XX a order of to So The we're points. under master a We magnitude order still year continue to XXXX compliance gross level. look we plan, at full first,

about impacted in EBITDA business. what not talked XX.X% by saw to is were profitability all we the that QX, an on into holds the those was would compliance representative of margins of we improving this Because point, shipping margin our From level, disproportionately your QX of most profitability majority to QX. of in those, you to we resolve call. able during QX expect see QX

a On it's think XXXX. not year margins we're similar providing basis, full year on of again, full to fair guidance I year full to once XXXX, EBITDA 'XX think while being

Ryan Zimmerman

particularly XXXX. we're I of mind, about given is point. your that to should a That's until high-level if very kind really recovery year going is in mean a at it quantitatively any helpful. and more whether shouldn't not improvement company. 'XX the I And guess of think how what kind manner? given I you in of I could necessarily trying we I just around a or heads contemplate 'XX we on to qualitatively upside is not to have have 'XX for be Integra come it I'm want know strategic some know down? thoughts there what slated ask to back get mean -- resumption her more in this to views in about transition? guess as XXXX. XXXX, going and lost qualitative don't that of I less I in tissue Is Mojdeh's just and think level

Stuart Essig

try that. Maybe it's Ryan, Essig. Stuart can help with I to

in focused to be meetings bit be and little and spend learning visiting going getting with and a and of Integra attending where us the Neurosurgery, customers initiatives. be on executing on is she'll our that, talk to time. ENT compliance, and resilience February many site know portfolio. January product our the Integra's across Tissue executing our sites of the colleagues going shaping January, She's listening strategic on executing focus about of team, about onboarding of me improving to include Mojdeh's she'll also on . After early regulatory going leaders, joining and she'll part and while the spending maximizing priorities. our Technologies executive capacity and our better the She'll our investors. important, manufacturing Mojdeh's course, with And Integra. potential strong with and support business operational Let leadership she's priorities to teams. quality our our advancing These product of annual be and sales and be And meeting

the long-range In to providing for update time long-range back on that's plan. and getting opportunities you providing update we'll the necessary challenges, to be the take get of time with know to she'll our an business plan, and an on terms and the line

Operator

Kristen And our from King. line coming next question with the Stewart CL of

Kristen Stewart

hope wanted there. just It facility expectations? that you're on there like Braintree. ask sounds getting progress Could I to of any than making be sooner open

Jan De Witte

for you question. Thank the

as So the pleased I And are processes. we that remarks, prepared the them moving of process in validating the we installing equipment and making with Braintree, just the of in will into facility. terms yes, speak, progress we're which allow start qualifying, and to equipment as we're finalizing stated

we'll communicated. which plan provide is production first milestones track every on the we call, are further as half we still XXXX The earnings updates to in Yes, crossing. of resume on

point, February. So what the communicated resuming line in be first we half still the next production with at But yes, in should 'XX is in one this earlier.

Kristen Stewart

you that line, think that 'XX included think likely Okay. in terms And holds potential outlook that not? was additional place. more just sure just top still correctly, that's saw for to I this make that then take understanding wanted some the to I if that ship than quarter that anything the of you I there's made still on

Lea Knight

Yes.

for Kristen. the thanks question, So

are correct. You

over mid-single-digit full we disruption the for potential as in absorb supply show any we out framed the year in what organic as expectation that XXXX. embedded XXXX, saw magnitude a So to XXXX of is to similar growth

we in means 'XX offset, a in supply from a be of XXXX, tailwind what So the recovery as the is right, put experienced XXXX. that Kristen, would simply, it result we disruption for would supply by potential expect but in what more

growing what with of the at left you're organic business rest mid-single-digit growth. so And the is of kind

yes, So [indiscernible] in it's there.

And the as number in smaller compliance much our nature type as prepared remarks talked of even impact the holds our quality discussed and we've terms call. the to in SKUs relates the terms of the of and that products then are shipping of it as versus that about holds in QX, those QX well we've on revenue

so anticipate of And being in magnitude changing our that that, don't in view because supply of we terms of the disruption potential 'XX.

Operator

from Our line Marcus next of question with coming Robbie JPMorgan. the

Robert Marcus

Jan, moving the X Wish great working me. you for with you. best forward.

the First, I manufacturing levels There's past just wanted of sales retention staff to the few COVID then sort ask disruptions. staff and years. on been and and over recent

So I the get the just terms few wondering both of we years? manufacturing a where retention past and union client-facing state if sales on kind could attrition forces of in over was quality, of the and

Jan De Witte

company, the of I'll retention turnover area previous across higher in return the would reconstruction SurgiMend -- where question. as that's a uptick line communication before normal the we over one is than little the years. time market. the is We normal. first and to linked had that we sales summer, the that summer the part take into on surgical updated And did to we our say the that I saw force

that subset So had force. Technologies that on of an sales our Tissue definitely impact

Robert Marcus

Okay. Maybe a free flow. follow-up on cash

move be these cash do negative at you're flow about to a said through how years I in next from believe call, remarks, But you the med year lower you look the Day business. few Day the issues as levels over conversion slated rate your over prepared I third But back and flow free You from XX% conversion it's XX% free let's the time? next the Analyst in and year, quarter spoke of on the 'XX tech of return last to why integrating Acclarent you and transient. peer might cash had Analyst it, and to, in the ability slides as last XXXX. over in call some you the flow cash think

Lea Knight

Yes. Thanks, Robbie.

that So the kind of to Investor then your a occurred, that yes, changes some and and shipping on being especially that of QX the light call. in holds post of point, challenges couple talked our supply about of Boston we experienced Day

are through hold in So continue flow the why fact, the drivers master cash plan, at remainder don't well that XX% of as those as work we as cash we were compliance about. not back percent a shipping get conversion rate we of And flow. free back expect XX-plus up the into the, talked free to we that the from to

update. as And flow as and supply we're potential the whether terms pace XX-plus we through of into next cash and continue part that XXXX reevaluate managing through back frame to to that our any so we'll not free disruption for do determine conversion updated of beyond come rate LRP time with back thinking in of or percent XXXX. We'll

Operator

with question next Taylor line from coming of the Jefferies. Matt our And

Matthew Taylor

your and up I you callouts compensation capital structure. stock-based the just follow know the the comments debt actually talked to for wanted about and on of some on acquisition. the I

different a here. can scenarios tight lot evolves what as flow cash your in of get So about we covenants mean that are and your questions how

back maybe and speak covenants give what and could terms comfort So us I of debt about get can't target couple how we you to, to guess, of could talk different current see situation the on next years? over then in you state? your maybe in the And your scenarios the

Lea Knight

Yes. Certainly.

we at So is our right ratio now, Xx. as leverage mentioned,

X.X. threshold at right covered now Our is

below operating threshold in are XXXX. we covenant So that

help -- a maintain we this mechanism the cash largely and the where us manage kind way forward we're our to look normal of that in more as now business be are behind holds to the to going under us, flow certainly debt we As that covenants. business QX return compliance operating generation continue will to in

expect sort So as can approach that move forward. you of we

remarks, disruption that supply XXXX. in potential does my contemplate with additional also for previous And consistent the

we're So of allow a light that threshold. under it in that will managing in way that to covenant remain us

Matthew Taylor

can think capital? seems wrong overall -- to I back get think just on you. scenario based I you to guess understand, your here might but that you have significantly like for it you raise to said commentary, go any more from would there is where this Got something have to it wanted I explicitly, don't there. you Or happen?

Lea Knight

Yes.

absorbing So line are how the an see expectation on terms debt business based now, able we from events on of issue. color to of of perspective, about that thinking next where could Again, where of some that we those this kind a covenant. in manage about way a year, a supply impact see business under we're of disruptions, of we as that and sight occur don't But can't potential how remain even we that. speculate I we thought being right in the existential again,

Operator

next Securities. our question Truist of Richard with And line coming Newitter the from

Richard Newitter

next and share, love how the a of you're and degree assumptions you're capture that share rate have achieve luck kind is to some And And you. they what sense Great then to forward. you been with Jan, what's mid-single-digit as working going that share get kind year. Would are get just in a on, of embedded off considering the mid-single-digit to of a just wanted that are have to to recapture why market And come for products of on share hear growth growth whatever kind informing which I recapture seeing XXXX? what able how strategically to good already are, on? coming to back these that follow-up. capture you kind I of

Jan De Witte

Thank earlier, for I these holds the said question. term. of long shipping not are you, Rich, most right, as Yes,

for given of further still that live have inventor X weeks our of means some that outage shortens back share so which we What off, potential get And on our outage, past their that the first, much that shelves customers to programs. specifications kind them. we've they of of pretty those the full these our on of products, over couple is seen months the

And sure and over we that's so sure leads stop a to shipment, the further It loss. time -- share been at the experience. the past to us months when for focus have laser limit limit the we make least has risk make that

Richard Newitter

that confidence and as share get Is basis have year of then to being or in? should year all to equal competition sorry. second is, but relative it's should go potential of products assumption? And be full it a mid-single the think back-half situation? step to appreciate they're then it 'XX Okay. transient, to back share back guess follow-ups, a equally of about digits for ship to products recapture takes just that One, And significantly to regain weighted. all X on full be get of thinking level a we going I the to business I kind we losing capture hold that to fair up basis in that able terms equal whatever follow-up are

Lea Knight

Let me take that.

assume -- to shouldn't back-half should terms organic your terms able be We necessarily back-half think disruption, question first of or throughout XXXX. it's the our the of in back about how again, around see a you potential would that half should you I In because of growth oriented XXXX, say weighted not business, swing. mid-single-digit allowance for for significant supply

with to question terms individual respect the products. your -- In of second

about talk QX. were for From a that of month that out CSS for I'll a and holds, out some matter duration -- weeks, some perspective, the X out impacted the had across you and compliance the kind a were that think some of products of it X I through of by that So shipping the were were lenses. or

we where don't And get of XXXX, perspective. it few a position. that's to a have a up us much any an as we were our resume those to take point, we little for to share a move opportunity share out But that's Those share little from to impact that longer anticipate -- at will position. back Jan's into longer, that recapture think a weeks, were where we

area From year, impacted supply we'll we at an rates, entering a are -- move that from we in level. forward back expect QX, that's we we other historical to that Integra again, as were evidence into to this which the to managing our of run be where we're is see that perspective, revenue and XXXX Skin and QX, getting into able

Operator

from Craig coming Bank Bijou with question next the our of Securities. line And America

Craig Bijou

you guys the there. out start strength Obviously, I have And the future. luck you Jan, wanted Acclarent. wish with in called to

has $XX think I you than you expected million more million your had initially. guidance $XX up to what

thinking expected profile in us of And kind 'XX be about of what's just beyond? than there? been should that the you of can going remind we business So and better through growth that run

Lea Knight

Certainly.

of we about and So integration. overall continue the Acclarent the acquisition to the progress be excited

we warranted expectations in recall which you in had call-up that call, of kind our indicators strong outperformed Business a As business QX, early previous saw integration. for in revenue of the for year.

at we million about that $XX that $XX us in and you about business, leading strong $XX million, To we million, where referenced. had additional so is to previously that again called on revenue call that $XX performance your business million once in saw to it up point, QX,

at again, for the were able experienced when of successfully. that but magnitude, to we've experienced Acclarent, we the past terms set integration this been for of in originally most as the integrations in guide through disruption the the time And path as potential companies we manage we've for allowing

to in Going the been true, that has single-digit believe ability and we high forward, what past, to business we've continue growth. the deliver is

how business be XXXX. we expect would this that so in And to drive

Craig Bijou

specifically And that guess, business. one please could me just give wanted it. new but the on you believe if more repair would be challenges on -- in I great. little color if ask bit that's Got a quarter, But supply to Dural I'm the wrong. that, I this correct new

Lea Knight

Yes.

less important business, our is patties recall in the did within our our Dural voluntary X% of initiate small very to Patties access [ So portion base. revenues. of for -- It's and is strips our and us while than revenue -- a strips repair and on relatively business. our QX we customers, a annual ]

hold that's you so that the of about. asked nature supply And the

Operator

coming of from question Wuensch, line Joanne Citi. next the our And

Joanne Wuensch

maybe how don't the and brought put on you're -- your implementation mouth, has put guardrails the maybe into I like of things sounds compliance master But It to words but want love certain light really in I'd plan progressing. opinion the years? over the it? as positives negatives about program? we of Or next of to through is your couple the think this rolls get this something and you year, next the on over And what which see

Jan De Witte

Thank you, Joanne, for that question.

about master our capital QSR, looked a industry on controls we look right? or our after compliance So the of so systemic when quality the so different structured we the so program record management to doing And we're the and plan, into and process regulations document and system that standard we essentially, to chapters on. and elements is be talk way have

restructure, how management pretty What allows and us with system to the the approach, of to program holistic quality is most in quality audit the at much auditors and system. and our look remediate management line

it predictability. does our resiliency, what it strengthens our so is And

may process. predictable, drive that flip will is some the quality have those make efficiency we observations some and effectiveness resilience been But the in in company we more think we while to our that do identify end, that side, talking that lead issues, I the some of will and holds it about.

Joanne Wuensch

And I of would time? over continue going assume period to a it's

Jan De Witte

But XXXX, actions. we communicate process And observations translate that's before where that last summer. XX-month it's will will started we into over corrective further we have that an

Operator

today's we time, This may no the have and you this questions in queue. At conference your you participation, now further Thank will conclude for call. disconnect.

Integra LifeSciences (IART) 4 Nov 242024 Q3 Earnings call transcript