Release Date: May 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Integra Lifesciences Holdings Corp (IART, Financial) reported first-quarter revenue of $383 million, near the top end of their guidance range.
- The company saw solid double-digit growth across many product lines not impacted by supply availability, indicating strong underlying demand.
- Adjusted EPS for the quarter was $0.41, within the guidance range.
- The company is making targeted investments in manufacturing infrastructure to position for long-term sustainable growth.
- Integra Lifesciences Holdings Corp (IART) has established a transformation and program management office to improve execution and prioritization of key initiatives.
Negative Points
- Organic revenue declined by 3.5% due to the expected impact of ship holds.
- The company identified additional ship holds, increasing the expected total for the year to between $55 million and $70 million.
- Gross margins were down 220 basis points compared to the previous year, impacted by manufacturing variances and supply challenges.
- Operating cash flow for the first quarter was negative $11.3 million.
- The company faces a $22 million impact from tariffs in 2025, with ongoing uncertainty around global trade negotiations.
Q & A Highlights
Q: Can you elaborate on the second-quarter guidance and the impact of shipping delays?
A: Lea Knight, CFO, explained that the Q2 guidance reflects newly identified ship holds, which lowered expectations. However, the original full-year guidance had already considered potential additional ship holds. The Q2 guidance now includes a $12 million step-up from Q1, driven by improved Integra Skin production and normal seasonality, offset by incremental shipping holds. For the second half, a $125 million increase is expected, driven by improved production, demand, and seasonal factors.
Q: What is the expected impact of tariffs, and how are you mitigating it?
A: Mojdeh Poul, CEO, stated that the company is pursuing tariff exemptions, considering pricing adjustments, and optimizing sourcing and supply chain strategies. Lea Knight added that the $22 million impact for 2025 is specific to this year, and it's too early to provide guidance for 2026. The impact will be progressively reflected in gross margins and EPS throughout 2025.
Q: What is the outlook for private label demand in the second half of the year?
A: Lea Knight, CFO, mentioned a $10 million step-up in private label demand in the second half compared to the first half. The full-year forecast for private label has been adjusted to a low single-digit decline, but the business is expected to return to mid-single-digit growth in 2026.
Q: How are you addressing the remediation efforts and the timeline for the Braintree facility?
A: Mojdeh Poul, CEO, explained that assessments at manufacturing sites will be completed by the end of the year, with most remediations planned for completion by year-end. Some process remediations may extend into 2026. The company is working diligently to resolve FDA warning letters before the Braintree facility becomes operational.
Q: How confident are you in managing tariff impacts without affecting remediation efforts?
A: Lea Knight, CFO, assured that tariff mitigation actions, such as pricing and sourcing adjustments, are being implemented without hindering remediation efforts. The company is prioritizing both initiatives to ensure progress on compliance and operational goals.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
