Integra Lifesciences Holdings Corp (IART) Q3 2023 Earnings: A Mixed Bag Amidst Challenges
Integra Lifesciences Holdings Corp (NASDAQ:IART) reported Q3 2023 revenues of $382.4 million, a slight decline of 0.7% on a reported basis and 0.4% on an organic basis compared to the prior year.
GAAP earnings per diluted share stood at $0.24, compared to $0.60 in the prior year, while adjusted earnings per diluted share were $0.76, compared to $0.86 in the prior year.
The company completed a $125 million accelerated share repurchase initiated in the third quarter.
IART updated its full-year 2023 revenue and adjusted earnings per share guidance to a range of $1.541 billion to $1.547 billion and $3.10 to $3.14 respectively.
Integra Lifesciences Holdings Corp (NASDAQ:IART) released its Q3 2023 earnings report on October 25, 2023. Despite facing challenges with the Boston returns, the company remains optimistic about its future growth, backed by strong organic growth performance in the Codman Specialty Surgical and Tissue Technologies businesses, excluding Boston, and advancements across its product pipeline.
Financial Performance
The company's total reported revenues of $382.4 million declined 0.7% on a reported basis and 0.4% on an organic basis compared to the prior year. The GAAP gross margin was 57.1%, compared to 61.5% in Q3 2022. Adjusted gross margin was 64.6%, compared to 66.7% in the prior year. Adjusted EBITDA for Q3 2023 was $88.1 million, or 23.0% of revenue, compared to $105.3 million, or 27.3% of revenue, in the prior year.
Segment Performance
The Codman Specialty Surgical segment, which accounts for approximately 70% of revenues, reported total revenues of $268.2 million, representing reported growth of 7.4% and organic growth of 7.4% compared to Q3 2022. The Tissue Technologies segment, accounting for about 30% of revenues, reported total revenues of $114.2 million, representing a reported decline of 15.6% and organic decline of 15.1% compared to Q3 2022.
Key Highlights and Future Outlook
Despite the challenges, IART successfully completed all interim external inspections in preparation for the Boston manufacturing facility restart and remains on track to committed timelines. The company also relaunched CereLink ICP Monitor in select international markets and submitted a 510(k) premarket notification in the U.S.
For the full year 2023, the company updated its revenue and adjusted EPS expectations to $1.541 to $1.547 billion and $3.10 to $3.14, respectively. The revenue range represents reported growth of -1.1% to -0.7%, with organic growth of 0.1% to 0.5%, reflecting the impact of higher-than-expected Boston recall returns, strong organic growth excluding Boston, the strength of the U.S. dollar, and an updated tax rate.
Balance Sheet, Cash Flow, and Capital Allocation
The company generated cash flow from operations of $26.8 million in the quarter. Total balance sheet debt and net debt at the end of the quarter were $1.52 billion and $1.24 billion, respectively, and the consolidated total leverage ratio was 3.0x. As of quarter end, the company had total liquidity of approximately $1.48 billion, including $273.7 million in cash and the remainder available under its revolving credit facility.
This article first appeared on GuruFocus.
