IART - Earnings call transcript Q4 2024 | Integra LifeSciences Holdings Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Integra LifeSciences Fourth Quarter 2024 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Ward, Senior Director of Investor Relations. Please go ahead.

Christopher Ward

you Conference the Call. thank Quarter LifeSciences and Earnings XXXX morning, for Integra joining Fourth Good

Lea Officer. Joining Quarter are press year and and XXXX Mojdeh on release Poul, Chief me the quarter President Chief call announcing our Executive and issued morning, we This this fourth morning Knight, a Financial full Officer; financial reference Investors, are Fourth call, integralife.com under Earnings during Events file release Presentations XXXX available corresponding the presentation, earnings and The Presentation. the results. which will in and we Call at named

Act want we growth. we begin, may and SEC remind Before will revenue that to the remarks, of many release. reports the the forward-looking. in organic Exchange are considered made I could in reference call filed to this with materially our you actual and prepared results in differ that the during cause reported Also Factors statements discussed be company's

divestitures. Organic revenue otherwise performance. the foreign disaggregated effects stated, on of growth acquisitions excludes franchise-level growth based rates We all organic are Unless and revenue and currency,

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

that, With I to call over turn the will Mojdeh. now

Mojdeh Poul

Chris. morning, us everyone, Good you, Thank and joining thank for today. you

a recognize thank and around take world. to want moment we to I Before begin, our employees the

I results commitment. grateful patients. navigated hard is quarter months, truly the have delivering resilience, our their challenges several in our focused Over for today, it teams reflected is Integra makes our work for Their dedication past and and company with on am the what staying is customers fourth and

and for earnings here be CEO my President first to Integra LifeSciences. delighted of as call I'm

take minutes opportunities and about Before thoughts few we introduce I some what share me offer our our and a to challenges. Integra myself, excites want to initial into results, dive on

tech med leading Global years last nearly XM's Integra after month industry, I Health most Care XX in joined business. recently

transformation gained the and years, have Over excellence. commercial I and deep in business innovation, operations strategy experience

the complex More doing through teams had here and importantly, is I've what privilege that leading I'm at Integra. exactly of challenges,

Let mission, I me position differentiated workforce, specialized near-term to committed also portfolio and the excited drawn growth Integra. see but about joining drive I'm I'm in company's recognize highly tell tremendous our you highly I product and opportunities to markets. challenges ahead. innovation, why leadership

recent Our not expectations. performance has met

need have listening in employees Since to fully We manufacturing a and had be of I making our and improvements. to have have committed with and those learning. our conversations that number time visited sites. spent I've critical areas investors customers, I'm improved joining, and

foundation we have discussions what insights These future. which a strong to me improve. bright and Integra here's upon strength has need know. a valuable into build our to provided with where I And

Our relied no we our focus differentiated attractive in by markets and have is that right and for I value. portfolio profitable. can surgeons, operate on demand significant remain highly strong. upon products the unlock We execution, it with the doubt is

stabilize quality, will We accelerate our customer growing reliably serve and address improvements Once supply to better key manufacturing priority. we customers, remain do demand. challenges said, in That and markets. and that, we our we to in meet regain our quality operational our top must ensure to have we growth position a chain systems strengthen operations be momentum

making We are meaningful already progress.

and Integra's we manufacturing months, sustainable on processes improvements compliance have X global systemic to last system. an plan the For enterprise-wide management quality ensure to executing master and been

is We quality with consistent and system have streams a work building framework standard initiated regulations. plan, of prioritized XX Manchester compliance that industry the

and are quality management bring that firms expertise extensive with framework the partnering system model, we consulting improvement. develop To in governing third-party

FDA Form resources warning term will sustain the to resources improvements the significant implementation letter compliance efforts clients. but across also observations, support to only XXXs committed the us of company. These have and We allow not long for master remediation

and I encouraged been Their both to have quality already their by and have comprehensiveness the efforts fruit. spent a of commitment plans great to teams and time their with deal have bear execute of our them. begun operations

For fourth expected, of the quarter in the ship cleared successfully quarter, example, third as we many holds.

future. compliance, Beyond in our are investing we

ramp to In we so and We for the are were customers. enhance fourth able capacity of making facility quarter, [indiscernible] manufacturing better center. Integra in our our equipment to deliver upgrades resilience up can production we collagen quality,

which production first hit we allow the Additionally, SurgiMend milestones restart of us PriMatrix. facility XXXX will in online and half of toward key to Braintree bringing our

We share regain are with growth drive differentiated confident in to and our these products. ability

also and are the reconstruction SurgiMend attractive clinical on dual to implant-based PMA opportunity for strategy DuraSorb breast market. the capitalize in our advancing We

leveraging presence. Additionally, global We of CereLink. Korea to our our key strengthening continue and driving in the progress uptake we expanded strategy, commercial expansion including China, continued make global footprint our in products India, market Brazil, and international

Additionally, we important for China China this capability to serve our better continue build manufacturing to in market.

We have Officer Quality leadership new new strengthened strengthened We and our Officer recent and a many with capabilities. execution roles our operational at Regulatory and enhance leadership sites and appointed also to focus appointments. manufacturing Chief our Quality Chief

oversight quality has reinforce announced, standing our previously a Also, Board committee accountability. established and to as new

clear. Looking ahead, our priorities are

our outstanding warning executing compliance resolve to continue FDA work master and our will letters. plan We

and delivery of trust laser-focused building reliable remain our transparency products through with will to We and our consistent customers, continue execution. investors on we'll

our fully value flow to sustainable improving deliver portfolio, strong, capitalize and shareholders. leading our customers, meaningful for goal performance. driving quality our our strengthening Ultimately, cash growth, employees By on drive we systems and operations, our long-term and market earnings is and innovation, will

skin $XX year-over-year quarter, supply Integra of financial ship fourth reported $XXX the of our the production. quarter to Turning Total approximately growth over for increased by range. million part was the our chain representing in within and recovery, million, results. XX.X% third of driven landing and by Revenue revenue holds ramp-up clearance guidance

I the Acclarent. quality Fourth growth through of quarter gained team across our and Our last own reflects quarter of discussions portfolio continued and was a EPS my challenges integration diligence above better our have adjusted customers. was with Since joining our and of which and understanding our month, fourth performance strong operational $X.XX successful range. and Integra parts guidance our many

ahead as have substantial operations. our improve we master work systems our still of compliance execute our us We strengthen plan, and quality

continue to I elected While use wider-than-typical have to XXXX. guidance business, range assess the for we revenue a

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

billion. between and are $X.XX projected $X.XX billion be For XXXX full year, revenues to

EPS to of in quarter We first the the $X.XX. adjusted expect for range be $X.XX to

I'll year, turn call For to will EPS the anticipate over With more $X.XX. full we provide and Lea, details $X.XX who guidance. our between the adjusted on financial and be to results that,

Lea Knight

our year Slide begin starting X. Mojdeh. Thanks, results, with financial full with We'll

billion, supply. on $X.XX more X.X% revenue we were approximately a reported revenues an supply basis of XXXX growth mid-single-digit $XX with basis. decline stable than impacted Our million product XXXX product representing growth saw on in by organic and the portfolio offset a on was challenges growth which holds, the quality-related organic X.X% and

$XX revenue supply portfolio challenges. us this approximate of unaffected the give acquisition differentiated our the Our by across to organic We continues by and an reported from confidence many strength saw portfolio. net year areas drive growth. was our revenue This growth the million X.X% offset decline of to contribution in above-market Acclarent parts durable

Tissue posted portfolio, our EVD performance In Mayfield catheters our AmnioCell. of a our and Technologies, at including DuraSorb digits Capital. CFS mid-single contributed UBM business, flow franchise, In and number delivered valves, DuraGen double-digit disposables, reconstruction our [indiscernible] while portfolio delivered above also results, we products inclusive double-digit in we or CereLink Services that growth. wound programmable significant growth, have growth

for to year, in $X.XX, was XXXX. year the EPS the XX.X% down the with adjusted spending offset year. in implemented the investments The versus client supply by Our master additional due partially challenges EPS during mainly along plan, was reductions reduction during

the to half compliance the points XXX Looking the the investments margins for plan. year XX.X% challenges XXXX and second gross P&L, were middle of master at supply in due down our basis versus the

Turning to EBITDA. adjusted

Our to was year margin compared basis XXXX. points XXX EBITDA full XX% adjusted down

the challenges in of strategic and margin year. we investments key the EBITDA while impact adjusted plan maintained implementation spending Our the reductions the throughout supply performance of priorities reflects master compliance and

flow Operating for flow cash of XX.X%. million cash with conversion full the free a year was $XXX.X

financial Our flow infrastructure versus manufacturing cash rate cash declined to improve conversion quarter Slide X, operating free On results. invested and we cover flow fourth XXXX our in reliability. I will supply as

historical in were of organic shipping of growth fourth We Skin revenue on sequential the reported return $XXX saw $XX million holds, by representing quarter million, basis revenue a the XX.X% of typical of Integra revenues to driven levels quarter increase and a an X.X%. clearance seasonality. third step-up Our

XXXX up for was to EPS quarter the range. adjusted and guidance above $X.XX, Our compared our X%

basis a adjusted Our the EPS XXX XXXX adjusted point from tax rate. a reduction includes $X.XX benefit in

Looking at basis XX.X% middle the up primarily margins versus the the gross XX for revenue of points mix. P&L, to quarter, fourth due favorable were XXXX,

quarter, compared was margin XXX adjusted our fourth to the XXXX. EBITDA down For points XX.X%, basis

The XX.X%. gross the from $XX.X integration to impact cash for Operating with fourth cash from of clear was order offset million the favorable flow year-on-year cutover the free a margins, margin timing a flow certain and decline of conversion reflects cash the by expenses. operating temporary quarter modest

reported organic acquisition quarter. basis on expectations. dive We'll prior fourth our into revenue X. performance an revenues our and was Reported were for million, in reported the X.X% deeper integration Turning fourth by from quarter $XXX.X of with to basis the line an a Slide driven CFS take growth CFS largely the with in a Acclarent year. Outside on XX.X% increase highlights

shipping on driven of delivered to BactiSeal sales treatment quarter majority clear the an in lines, continued market. able performance of strength the management Global X.X% line differentiated holds growth our hydrocephalus. product digits, for grew reflecting with third solutions a were by segment grew as level, experienced in and primarily CerebroFlo strong of the and the basis double in CSF At of low organic we the Neurosurgery the our

CereLink flow sales and fueled monitors catheters. EVD monitoring, by and In neuro of increased revenues ICP BactiSeal single our CerebroFlo by high digits, strong our

continue and by our to primarily catheters. In drainage CUSA We monitoring single-digit we in growth, reinforce disposables. driven ICP position Energy, leadership experienced low Advanced

and repair of dural and a in [indiscernible] we strips. to quarter franchise, due third the largely recall our single-digit access saw decline, Lastly, our low

The to offset from by decline continued performance robust generate DuraGen, and Mayfield, DuraSeal strong was demand. partially which

the for capital site business. grew instruments, in was strong Our capital reflecting mid-single alternative by digits, our for sales were in timing. due the sales growth offset approximately to order sales funnels decreases robust flat quarter as In hospitals

we U.S. than the Shifting holds in international single to in were cleared later our shipping as low down Sales digits International. markets

year. prior segment double-digit Technologies by Slide DuraSorb, the Tissue our growth UBM double-digit seeing the increased the a reported in DuraSorb, remain which X. UBM Fourth franchise organic portfolio. Technologies sales driven both model Tissue our in from on quarter deal ahead reconstruction the robust our X.X% and compared remains to in basis by X% by We and AmnioFill. our Moving we of on wound grew seen and have growth to we're portfolio growth

We in also delivered growth skin. Integra mid-single-digit

We which and broad underscores remain business. sales by growth the long-term XX% our In down portfolio, the strength reconstruction delays. wound last of to component were this encouraged year resilience due supply private of versus label, potential

sales skin. longer inventory time international on digits down to were low in Finally, Integra lines due Tissue double Technologies recovery

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

was $XX.X was cash $XX.X million CapEx. During and was free the flow the million, XX.X% quarter. flow for reflecting conversion in cash Free increased quarter, flow cash investment operating

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

XXXX. liquidity under investments total Xx of remainder available company the covenant revolving Max debt including is current quarter in ratio of had through under The facility. $XXX and credit short-term the million our our Our $X.X leverage cash billion, and third

adjusted our guidance provide and earnings first per year share will I for the full XX, Slide quarter On revenue and XXXX. consolidated

$XXX approximate X.X% to First an XX versus the to million point between from representing and year quarter of million, revenues the basis are prior forecasted reported $XXX range X.X% be FX. headwind includes in to growth

X.X% growth organic range the expect of to minus in minus We X.X%.

of to for reflects compliance strong holds quarter in our forecast $XX in already products, offset primarily first part million over the carried global holds $XX Our XXXX demand of identified as million quality-related and ship from approximately million $X master plan. quality-related an continued shipping our by incremental

a slower guidance for Skin. reflects Our first Integra also production quarter ramp

some fully with may While historical catch-up, from we in likely QX. constraints than in combined Skin and scheduled the and equipment in that returned us experienced safety maintenance demand meeting rates lower historical into stock run Integra QX will some prevent upgrades, our supply result

that XXXX. improvements production planned are optimistic have returning about Skin Integra progressing well, in We normal and are we levels to

Acclarent reflecting be full master to forecasted for For $X.XX the from are billion portfolio execution the revenues offset plan. our of of range a by demand $X.XX to XXXX, differentiated billion, disruption year supply for of full revenue, in the the continued year potential compliance

X.X% We expect to FX an point of X.X% full of and XX approximately year reported including organic basis an to X%. revenue growth growth X% headwind approximate and

in a primarily We increase by year sequential revenue and growth, expect seasonality. to clearance unfolds, current see driven demand our as performance of quality-related holes normal the

we production private issues half. label to and in a the see component improvement Additionally, expect in increase Skin from supply resolution the sequential of second Integra

Turning to adjusted earnings guidance.

incremental $X.XX driven investments quarter, EPS the to first to challenges and plan. we in expect adjusted master be supply the For compliance $X.XX, by

the per to the of XXX margin an in in plan an approximate rate increase the decrease the share, $X.XX master EPS versus compliance be adjusted year, XX of the to basis in For gross adjusted our investments point full from XXXX. approximate $X.XX basis our growth in reflecting range business revenue we point and expect tax

Our reflects profitability. managing while plans for also key management to adjusted maintain guidance careful investments our cost EPS

we first reference, turn XX. key your inputs modeling call guidance as as well have full to quarter year assumptions back and will key underlying Mojdeh. Slide I For the included on our that, With the

Mojdeh Poul

Slide Lea. Please turn XX. to you, Thank

As we where where take remarks, to moment conclude we're we stand our strong I foundation. built headed. is a want to Integra a on on reflect prepared and

patients. commitment our and and market-leading for Our customers team delivering their portfolio, solutions innovative talented to

we acknowledge challenges execution. we the are we operational discipline them urgency, are and with addressing facing focused actively While

and manufacturing our drive investing infrastructure growth. We meaningful long-term to progress serve and time, quality systems and global are stabilizing same to remain in customers At and strengthening reliability. chain making in the operations, better insurance expansion committed supply innovation, sustainable we

operational and executing our performance. sustainable driving Looking delivering compliance excellence ahead, priorities are our on financial clear: master plan,

confident We on navigate execution. will opportunities focus I with we to a these continue seize the relentless challenges and am transparency, operate accountability and ahead. will

unlock the value forward lasting By we you our months customers, create for updated for and will your staying Thank I today. progress disciplined, time potential shareholders. ahead. look and to in on our Integra's you keeping full employees

lines the for Operator, please open questions.

Operator

Instructions] question our first from Jefferies. [Operator And of Taylor comes Matt

Matthew Taylor

I ship And and So your some wanted to you've thinking in how I about derisked approach now other risk 'XX. just know things in And your with issues you now Integra put words, happening I Skin about the to is assumptions the in some of it. that problems. the further those that you in wanted that conservatism of throughout in guidance these ask talked you for the how holds about know guidance baked year. in

Lea Knight

Yes.

And Matt, want don't So thank of for you a you question. couple things. the

approach as remarks, are about I'll so wider we'll guide. first, talk maybe the from guidance approach guidance we about So taking talk to perspective, and the a the heard Integra in a then Skin, you

end that the the high compared mid-single-digit is which growth or consistent before. of we've end to XXXX, As with the color guide, of or you look kind frame top assuming the provided at you're

guide, also from It beyond our is range, At it of what shipping of Acclarent million today. end the about a what impact what today. At beyond $XXX contribution, midpoint full at of $XX and know end, about year And does assumed we've the additional of impact the beyond low includes assumption holds. we of know holds assume million the shipping we we've holds shipping the million today. know top a assumed we an $XX

of exactly that us the in for in reflect baking thinking this when it's for that wanted recognizing to happen, to guide. we're they'll holes, shipping how kind but the pinpoint potential at That's point tough

For Integra Skin.

Mojdeh Poul

returned Skin, historical Integra run we rates. while so to Yes,

that to with Our planned than on the online. and we production have will -- we the prevent able with us fact going the capacity constraints of meet diminish from maintenance levels shutdown, for have Integra lower demand come QX resiliency the as expect likely throughout that we safety starting stock to projects some in along historical Skin of go as being year, we

we last be allow run our safety to see replenish meet that And be of those some to us by we but demand, also to quarter-to-quarter. may variability But rates projects at year. only overall, should stock. started able in year-end, We middle not

Matthew Taylor

Great. in. others Okay. I'll jump some let

Operator

Our of comes Fargo. next question Chopra Wells from Vik

Vikramjeet Chopra

a me. just the Mojdeh, had can then I Two strategic LRP? update an about of talk follow-up, maybe for about your some please. key taking in you think the expect to initiatives And and we helm as XXXX

Mojdeh Poul

Thank question. for Okay. you the

So the on some supply -- both we operational resiliency as that as capacity going plan programs capacity compliance of I that in in have And execution manufacturing priorities for one XXXX, and well is the put us the excellence. the number on.

first of highest So foremost priority that and for the is us.

would our I core well to in in grow internationally. Secondly, core, and maintaining our as growing in continuing our as market position in grow continuing say, leadership to U.S. the the

a internationally most us quite going would have time going the to differentiated in our products into things muscles of market. in core. that lot to to on of to the that's to new build that and building our working great and upon, we're full. for on We then and lastly, be continue the team putting important be is in important say, opportunities I is win And one on focus bringing

priorities key driving. the that of some are those So I'm

and the challenges. As far couple as assessment have of engaging internal is would business continue end the external that the can last really that, to about going stakeholders, long throughout And imagine, I over the concerned, ridge you markets opportunities, been plan of months, learning is think the I as with year.

we important ensure the is to the LRP. order informed that forward to work the the that bring And with time, to take the take need we opportunities. reflect It's going forward external realities. to in time much market really for And I of team year our as new at we time. will to a by internal need bring LRP the us same be leadership

need would of in much I order do that. So XXXX to

too at a this So to date specific it's point. provide early

Vikramjeet Chopra

manufacturing and from you flexibility elsewhere production on potential tell Canada? my And Mexico Understood. calls. either price your bouncing or impact. how any of this you the and question much was I tariffs Mexico offset But do on some asked, how Apologies much is us have follow-up regarding move tariff can to to just was take Canada. been if And to coming has

Mojdeh Poul

Yes.

all tariffs are outcomes have we know, be still final do facilities a of as We Mexico to China. in in serve China, uncertain. manufacturing we're the facility Canada. the obviously, it putting manufacturing not would China, but any So Obviously, or

for China manufacturing don't today. facilities China. in any But it's So have those countries we in

products also plans from we able we're and countries decision on But the also do we the to components those on tariffs. those However, to be administration provide business offset how -- we're materialize. actively source made continue impacts And and different has assessing any final a impact should scenarios. tariffs developments, formulating the will advanced to will monitor the once negative updates and be under our we

Operator

question comes Marcus Robbie from Our next of JPMorgan.

Robert Marcus

Great. X for me.

future expecting the First, you point time you're today? XXXX had at the point? there are mean, at I wanted unusual in this in you're to the I any for more remediation. beyond of what's ship this know holds what why future of with ship ask baking what It's lines see expecting? sort to quality And issues given rationale thinking holds we've

have there start follow-up. and me X I let So

Lea Knight

Certainly. Thank Robbie. you,

approach were it of systemic strengthening both And manufacturing if network, quality remember, as shared of at master to of system. was as the across year, well our entirety compliance what our a as assessment management internal we do we going middle when the plan that, you we holistic last part launched external. in So was an the

we And to -- we take specifically, supply while any through potential occur the assessment. the phase, external already understanding this had the of that were to end to work the but in complete XXXX internal the were disruption potential assessment we've of aware disruption. thinking did of and not kind the have would in what all regulatory agencies inform just that of And from that well was we done, we of our work supply as gotten that for as audits be approach observed observations terms for

disruption sorry, driver. work for we've risk talked about So that because again, primary today. to the what end, there going reflects to is about QX we're often talked we've But what about at for -- more What there's the know And guide was we be XXXX. forward. potential in we're done, quarter our of

Robert Marcus

it. Got

on a flow rate past flow. specific wanted see hear Okay. I number Follow-up, for didn't I the years, conversion to cash sub-XX% or X of It's conversion cash free in been XXXX. ask

free So both how about cash absolute do and the we dollars assumed XXXX? in flow conversion think of the

Lea Knight

Certainly. Yes.

operating will expect lower So integration flow acquisition we cash free or improve cash on flow sequentially remain and XXXX, to costs. consistent. in principally CapEx

will CapEx investments consistent as earlier. capacity in her and of the build some 'XX remarks out So fairly continue XXXX with Braintree, we of remain referenced to continue Mojdeh that

you a convert flow to happen of expect kind lap of from we of QX once a perspective what expect conversion kind XXXX. that you step-up we would free As XX-month on a can trailing to cash

XXXX So that expect above we'll step-up of XX% kind free is referenced. flow see conversion you cash a that when of

ask that as into it I'll then leverage, this, relates we as XX. XXXX overall point you were the well, And about at didn't but to

We the notable much improvement in into but expect of leverage by go down end XXXX. slightly flat leverage to we seeing XXXX, be more as to

Operator

comes question next from Zimmerman of Ryan Our BTIG.

Ryan Zimmerman

kind in of to how that where you're what of Acclarent mean at a the I thinking here want about process. by contribution the is and business of to minute XXXX. about you're understand just in talk the And for Acclarent I kind

if wrong that. me of first Now and Lea, it I'm on that I the you'll be guess lapping kind quarter, after correct

thinking you're can what about enhance that you that. profile forward? to do going growth how And But

Lea Knight

Yes.

So thank you, Ryan.

correct. are You

be fully on first business. organic the we the after Acclarent quarter, So will

in growth our were business deal to able And that the micro in for success the we heard of synergies E&T is align that opportunities high strong we growth. with as model, for to in which our we to that to instruments principle, well In we Acclarent growth continue very with in the as XXXX see single-digit the we business, business. our well. as excited you and would drive remarks, for pleased ENT XXXX business Acclarent expect to see are kind to preference date, of continue the we've expectations As to expect been integration

Ryan Zimmerman

part of And then, alluding step for XX the is question the is Lea, step shipping question. meaning could the second you, P&L-related of of And you're expenses continuing, margins, just The inclusive that I how do in you P&L the see down think pull hold basis of, about these managing the guess, to? that in -- points meaningfully? dynamics we the of you middle of context the back some increased

I have kind thinking you're you again P&L provide how force? the for to Just of what you've 'XX? sales about the retention understand contemplated the in managing incremental, kind Do to want of guess, context for of

Lea Knight

Yes.

as does So additional consider margins, to calling as continue to holds basis XXXX, execute remediation your the master shipping first XX yes, decline compliance point well it we're plan. the versus as efforts that on point we the within our against

we'll frame see contemplated but at basis additional points. that again, of levels sites see underutilization it's So We'll some scrap. within XX of additional the

striking long-term delivery a between shipping as for of as our we this given to current know well From our investments both we'll that those we of year, make as well point, essential expenses our your are additional balance align goals. approach the we're very spending earnings holes, to managing our discretionary as to need careful potential to an perspective, taking operating a OpEx especially

now, to pacing of designed as P&L right to that that, towards managing how of manage and risk. So be able kind to the end the we've our we're lower range we're

Ryan Zimmerman

sorry, I'm EPS lower your of end EBITDA Lower margin? or range, your

Lea Knight

range. guidance our of end lower Yes,

Operator

of Securities. Our Newitter next question comes from Kors Richard

Richard Newitter

following up I to question just one, -- earlier. it Robbie's was First think

to a to It of seems So in really placeholder year. the ship us. guidance have XQ tune of additional million you I the be are below bearing $XXX in the at the brunt hold outlook consensus least was think, below the for there disruption, that

that you're XQ/first in a the that get half? a additional in most So the saying I'm that big or half? just that the sense, XQ a trying of captured you've with materialize back placeholder disruption and after to Or all for ramp of there's could

Lea Knight

Yes.

step me let So through that.

within related have So X QX, ship we to holds. headwinds

First $XX $XX ship $X XXXX million. plan, which carryover new compliance is to under to work million our the order of from continued magnitude, is identified about Second, about holes as million the we've master

it, in it ship about, total, to call in million million So holds. $XX $XX reflects QX, of

We those expect the be holds to or resolved ship second remediated by half.

some So in half. remediated improvement but second you'll principally QX, see progressive by the

impact $XX on to it So we annual impacting an is be today, impact of QX, which expect know we the what million. about --

way structured the $XX the $XX With allows Chipotle. the in is incremental it for that guide in addition million, is to at high million end, an

of end the allows low guide, incremental at ship And the an it of for $XXX million holds.

Richard Newitter

of private for with label what you regulatory should about prepared to guys a intermediate with kind hand in we any all term lot you horizon? and Okay. you But think how just curious That's -- I items. near be the have are helpful color. on And view there with know dealing Look, on to deals then is the

fixing now down with are the Acclarent, can opportunistic they be you and present builder that head just business digesting you themselves. try right core to that organic in really out the going work this is Or items front? to as Or getting to

Mojdeh Poul

for the question, you thank Richard. So

growth our fit have process M&A and we be evaluating strategic their moving will a and to that, this really down resiliency said been in opportunities part and really robust growth our of strategy, and assessing So all to and M&A a is has continue forward, strategy and of thesis. and compliance capacity bring year our also master Having creation leverage. focus execute plan continue our value with programs manufacturing our

focus we those So that year. are have key the this

Operator

you. Thank

question Lichtman Steve from & comes Our Oppenheimer of Company. next

Steven Lichtman

of to your not needs Lea getting And components demand half second in interim? up in in what where the the private level and year? on confidence label, Mojdeh supply be it customer visibility to is your the losing in

Lea Knight

Yes.

revenue So from results did of volatility see QX. background a because But we in has bit in our private private historically, been a terms variable. of bit -- our maybe little label we -- label

or general, QX across said, the an volatility us. not to expect well, so many issue faced respect is that that mid-single-digit would including with to delay grow did So we companies have label year, we in a new. supplier private the In rates. as That business entirely variability a component from at

we'll anticipate that second that we the business the half that, delay And to point. point, will this able of by at resume component resolved be At XXXX. be

mid-single-digit we'd trajectory. year is digits. means probably that, single the business full the low to For expect beyond that But growth XXXX, it flat at resume to

Steven Lichtman

guess Integra then And you're hearing will Skin fully to similar question you supply that commercial Integra up longer it. confidence your the and what since I once gives organization and bit Can from running demand you customers than you're on taking there be Skin. a expected. talk a Got on

Mojdeh Poul

Yes.

I products from can that repeatedly joined, I Steve, there you that like have the surgeons tell since the I I exactly product the that is and few have customers there's out market. met So hear very the in it

in for extremely, a So it is the market. and high, need for Integra extremely the there is demand Skin

serves into We that have complex sufficient that can in wound that every procedures. it's get much those we when the we day. unique hear confident get back supply back And are And products. indications. that demand. They're we very we entire and

Operator

from Craig comes of Our question next Bank America of Bijou Securities.

Craig Bijou

why One back to bit I just A here. understand more to on wanted guess I Skin, a isn't follow-ups normal. little couple production of Integra

QX, and it and you you think maintenance scheduled update. that have But sounds like gotten then the I goal think of mentioned guys might was there. I

into So you us those presumably, last. you would visibility when talk have had to

about? you're that want of within the delay to may have understand something talking line else the that little if happened So just that there's a caused production bit

Mojdeh Poul

Yes.

we as explained, the calibration, equipment maintenance maintenance do to required maintenance it's to year any really have So shutdowns on as planned twice it's do a preventative have you we the line.

a that's So thing. schedule

I to that us complicated stock levels. think that the factor fact the a we're for is thing our little safety the full bit not

able caused meet that in to us I has think to prevent demand been QX. us that being one the has likely most from

yield from these and equipment we're And manufacturing on, we on skin. the have facilities to set to anywhere address that of that comprehensive have improvements projects optimizing of X However, manufacture that integral the capacity a utilization to we working the Integra upgrades resiliency. skin projects

we initiatives throughout coming online So these back of last of we the QX. and starting our the in investments middle be able of in year as to impact in some year, go really should those started see

Lea Knight

be -- XXXX, And just add of to that the end to were you XXXX so and through able stock. that, to on meet revenue managing not a demand, add we'll but XXXX, difference be between only we run to our back Craig, get reestablish year beyond that XXXX, historical as to In rates. just I'm the to -- to basis, get to safety able project sorry, also on on full XXXX,

will point, year full safety that expect do until so to normal a we variability. we get basis, where we that's to hold on stock And But quarter-to-quarter see demand.

Craig Bijou

Got it.

'XX, in at And $XX for brought Okay. I $XX Acclarent has guys -- board in I million you guidance but the did was very that That's helpful. since it then a in believe recognize and -- I done million. came well

understand there -- it to growth sounds wanted just reason can small. is the any recognize a high to to you in it's that delta So single-digit million 'XX. think like rate you difference. is And believe still $X I then what get

other getting any anything the on cadence of on your the confidence growth? But that growth? Or maybe else to comments of Acclarent

Lea Knight

Yes.

QX, we QX to on when business that. few it $XX was a That's be trending did above million recall, of adjust guidance that for just at guide to off we in I largely we attributable and think closer Acclarent, up initially QX. million And $XX-ish the million. were was were about So our -- backtrack, In a QX, initial business acquired and you as we if then we that. just actualize

a our environment migrated to existing ERP from clearance actually their We Oracle. one

so little relatively And that. the we impact a that business. on call bit disruption of did result have a it, minor a as of, I'll operational had

that So to we don't repeat. expect

consistent I with we response and expectations grow at our anticipate mentioned earlier, will our I in As Ryan's deal high digits is think XXXX question, Acclarent model. do to single for

Operator

question Joanne of And Wuensch comes our Citi. next from

Joanne Wuensch

pathway quarter could and given about first returning you sort of I'll is how second over where for imply And ramp, positive street your I'm then about all, level it the private curious just we think steep and X just of take of guide, that if ramp a the growth recovery upfront. remaining time? that year of label to sort pretty great. X over should quarters, and that the you think would how us full your sort be would set

Lea Knight

Yes.

that deliver think revenue organic certain in more with start me of think, when of let there's to and I -- noise growth supply the revenue So XXXX right? the our in hold. of cadence our as quarters, So kind I yes, does the cadence terms revenue the absolute disruptions in the will happened QX, at and cadence reflect it, the quarter-to-quarter some it's instructive, it's question mentioned, you look headwinds shipping year-on-year, QX, about concentration question, given that in of

It Skin supply due the label delay. to reflects component as as on well the Integra variability decline production private

remediation skin an of we a As hole levels. of perspective, we expect kind slightly by absolute be QX Integra step-up higher ship in into QX part also QX, by and QX move against driven at do then production. get from some out in above driven QX revenue will the existing

in earlier. would get allows kind then the you we and if will, I guide considerations seasonal path, the of to our step-up you of that's that And kind that typical shared glide to QX, expect

we Going have was I supply your dynamic as delay to supply -- do when component question delay related label, that original we specifically of and QX that back to private because be resolved. to mentioned, sight will the saw in line around a

of don't permanent any a kind anticipate the long-term negative to We business or as result. impacts

Operator

Raymond comes & James Jayson question Associates. Our Bedford from of next

Jayson Bedford

ones label, component of in here. private did Just the the quarter? a delay, the couple you On quantify impact fourth quick

Lea Knight

not. We did

Jayson Bedford

to? care you Would

Lea Knight

$X of No it's million. Yes. order magnitude, about

Jayson Bedford

Okay.

to assumes we Okay. Is hold roughly think the low on mid for that an wrap up apply so guide. I of end plus the identified revenue, on the can meaning Lea end the $XX million, impacts, ship you high million incremental math in And impact and $XX and the similar hold ship just million $XX fair?

Lea Knight

That's fair.

Jayson Bedford

And on is Braintree, just 'XX? last first half one, if I still can. line it Time

Mojdeh Poul

Yes.

with of And of put rigorous management construction on that And XXXX. that completed, Braintree. are equipment. first and half we're we ensure So we lines. we're qualifying on and the time project installing progress we're to in making resuming is The track for we place the in have we stay in process in production a that pleased process

Operator

concludes may question-and-answer you This Thank participating, the and session and today's disconnect. now you conference call. for

Integra LifeSciences (IART) 25 Feb 252024 Q4 Earnings call transcript