Revenue Increased 11.4% to $279 million;
Organic Revenue Increased 1.5%
Integra LifeSciences Holdings Corporation (NASDAQ:IART), a leading
global medical technology company, today reported financial results
for the third quarter ending September 30, 2017.
Highlights
- Third quarter revenue increased 11.4% to $278.8 million over
the same quarter in the prior year, and organic revenue increased
1.5%. The recent storms had a negative impact of approximately $7
million in the third quarter. Derma Sciences contributed $24.1
million of revenue in the quarter;
- Third quarter GAAP earnings per share was $0.04, down from
prior year quarter largely due to acquisition and integration
related expenses. Third quarter adjusted earnings per share was
$0.45, compared to $0.46 in the same quarter in the prior
year;
- Third quarter cash flow from operations was $45.2 million, a
slight decrease from $46.8 million in the prior year's quarter due
to higher cash outlays for acquisition and integration
expenses. Trailing twelve-month free cash flow conversion was
70.8%, compared to 75.6% in the prior-year period;
- The company is revising its full-year 2017 revenue guidance to
a new range of $1.165 billion to $1.175 billion, primarily
reflecting the addition of the Codman Neurosurgery business
acquired from Johnson & Johnson. This results in a full-year
2017 reported revenue growth range of 17.4% to 18.4%;
- The company is lowering its 2017 full-year organic sales growth
to about 4%, from its previous guidance of 6.0% to 7.0%, reflecting
the impact from storm-related disruptions and lower base business
sales growth; and
- The company is revising 2017 full-year GAAP earnings per share
to a new range of $0.24 to $0.30 and adjusted earnings per share
guidance to a new range of $1.83 to $1.87.
Total revenues for the third quarter were $278.8 million,
reflecting an increase of $28.5 million, or 11.4%, over the third
quarter of 2016. Sales in Orthopedics and Tissue Technologies
increased by 25.5%, which includes the acquired revenues from Derma
Sciences and strength in our regenerative and orthopedic total
ankle and shoulder portfolios. Sales in Specialty Surgical
Solutions increased 3.4% compared to the third quarter of 2016. The
increase resulted from strength in global tissue ablation sales
driven by the recent launch of CUSA® Clarity.
Excluding the revenue contribution from acquisitions and the
effect of currency exchange rates and discontinued products, total
organic revenues increased 1.5% over the third quarter of
2016. Excluding the impact of the recent storms, organic
growth was approximately 4.4%.
"Despite the challenges that we encountered during the third
quarter, we were able to mitigate much of the impact on adjusted
earnings per share with tighter expense controls, resulting in
better than expected cash flows," said Peter Arduini, Integra's
president and chief executive officer. "We are pleased to have
closed the acquisition of Codman Neurosurgery and look forward to
the increased scale and profitability that this strategic deal
enables."
The company reported GAAP net income of $3.2 million, or $0.04
per diluted share, for the third quarter of 2017, compared to a
GAAP net income of $20.1 million, or $0.25 per diluted share, in
third quarter of 2016. The decline primarily reflects expenses
associated with the Derma Sciences and Codman Neurosurgery
transactions.
The adjusted measures discussed below are computed with the
adjustments to GAAP reporting set forth in the attached
reconciliation.
Adjusted EBITDA for the third quarter of 2017 was $63.0 million,
or 22.6% of revenue, compared to $58.6 million, or 23.4% of
revenue, in the third quarter of 2016. The decrease in adjusted
EBITDA margin on a year-over-year basis primarily results from
dilution from Derma Sciences.
Adjusted net income for the third quarter of 2017 was $36.1
million, unchanged from the prior year quarter. Adjusted earnings
per share for the third quarter of 2017 were $0.45, a decrease of
2.2% over the prior year quarter.
2017 Full-Year Outlook
The company is adjusting its full-year 2017 revenue guidance to
a new range of $1.165 billion to $1.175 billion, from $1.125
billion to $1.140 billion, primarily reflecting the addition of
sales from the Codman acquisition in the fourth quarter. The
company is reiterating Codman's fourth quarter revenue contribution
of $60 million to $65 million, net of divestitures. The company is
revising its full-year GAAP earnings per share guidance to a new
range of $0.24 to $0.30 from its previous range of $0.49 to $0.55.
Adjusted earnings per share guidance is being revised to a new
range of $1.83 to $1.87 from its previous range of $1.88 to $1.94,
entirely because of storm related disruptions.
Based on third quarter results and the outlook for the remainder
of the year, the company is revising its full-year 2017 organic
revenue growth to about 4%, down from its previous range of 6.0% to
7.0%, which reflects storm related disruptions of approximately
1.5% and lower growth in the base business of approximately 1%.
"We expect some storm-related disruptions to continue to impact
revenues in the fourth quarter as production at our manufacturing
facility and local infrastructure in Puerto Rico gradually return
to full operating capacity," said Glenn Coleman, Integra's chief
financial officer. "Full-year 2017 organic revenue growth is now
expected to be about 4%, which reflects the impact from the storms
and slower run rates in our dural repair and SurgiMend® product
lines."
In the future, the company may record, or
expects to record, certain additional revenues, gains, expenses, or
charges as described in the Discussion of Adjusted Financial
Measures below, which will be excluded from the calculation of
adjusted EBITDA, adjusted earnings per share for historical periods
and in adjusted earnings per share guidance.
Conference Call and Presentation Available
Online
Integra has scheduled a conference call for 8:30 AM ET today,
Thursday, October 26, 2017, to discuss financial results for the
third quarter and forward-looking financial guidance. The
conference call will be hosted by Integra's senior management team
and will be open to all listeners. Additional forward-looking
information may be discussed in a question and answer session
following the call.
Integra's management team will reference a presentation during
the conference call. The presentation can be found on
investor.integralife.com.
Access to the live call is available by dialing (323) 794-2551
and using the passcode 6660907. The call can also be accessed via a
webcast link provided on investor.integralife.com. A replay
of the call will be available through October 30, 2017, by dialing
(719) 457-0820 and using the passcode 6660907. The webcast will
also be archived on the website.
About Integra
Integra LifeSciences is dedicated to limiting uncertainty for
clinicians, so they can concentrate on providing the best patient
care. Integra offers innovative solutions, including leading
plastic and regenerative technologies, in specialty surgical
solutions and orthopedics and tissue technologies. For more
information, please visit www.integralife.com.
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties, and reflect the Company's
judgment as of the date of this release. Forward-looking
statements include, but are not limited to, statements concerning
future financial performance, including projections for revenues,
GAAP and adjusted net income, GAAP and adjusted (loss)/earnings per
diluted share, non-GAAP adjustments such as global enterprise
resource planning ("ERP") system implementation charges,
acquisition-related charges, goodwill impairment charges, non-cash
amortization of imputed interest for convertible debt, intangible
asset amortization, and income tax expense (benefit) related to
non-GAAP adjustments. In addition, with respect to the Codman
Neurosurgery acquisition, forward-looking statements in this
document may include without limitation any statements regarding
the integration of the Codman Neurosurgery business, and the costs
and benefits of the acquisition, including future financial and
operating results. It is important to note that the Company’s
goals and expectations are not predictions of actual
performance. Such forward-looking statements involve risks
and uncertainties that could cause actual results to differ
materially from predicted or expected results. Such risks and
uncertainties include, but are not limited to the following: the
Company's ability to execute its operating plan effectively; the
Company’s ability to successfully integrate the Codman Neurosurgery
business and other acquired businesses; the Company's ability to
successfully resume and sustain manufacturing operations at full
capacity at our Puerto Rico facility and the restoration of
infrastructure and other essential services in Puerto Rico; the
Company's ability to manufacture and ship sufficient quantities of
its products to meet its customers' demands; the ability of
third-party suppliers to supply us with raw materials and finished
products; global macroeconomic and political conditions; the
Company's ability to manage its direct sales channels effectively;
the Company's ability to maintain relationships with customers of
acquired entities and businesses; physicians' willingness to adopt
and third-party payors' willingness to provide or maintain
reimbursement for the Company's recently launched, planned and
existing products; initiatives launched by the Company's
competitors; downward pricing pressures from customers; the
Company's ability to secure regulatory approval for products in
development; the Company's ability to remediate quality systems
violations; fluctuations in hospitals spending for capital
equipment; the Company's ability to comply with and obtain
approvals for products of human origin and comply with regulations
regarding products containing materials derived from animal
sources; difficulties in controlling expenses, including costs to
procure and manufacture our products; the impact of changes in
management or staff levels; the impact of goodwill and intangible
asset impairment charges if future operating results of acquired
businesses are significantly less than the results anticipated at
the time of the acquisitions, the Company's ability to leverage its
existing selling organizations and administrative infrastructure;
the Company's ability to increase product sales and gross margins,
and control non-product costs; the Company’s ability to achieve
anticipated growth rates, margins and scale and execute its
strategy generally; the amount and timing of acquisition and
integration-related costs; the geographic distribution of where the
Company generates its taxable income; the effect of legislation
effecting healthcare reform in the United States and
internationally; fluctuations in foreign currency exchange rates;
the amount of our convertible notes and bank borrowings outstanding
and other factors influencing liquidity; and the economic,
competitive, governmental, technological, and other risk factors
and uncertainties identified under the heading “Risk Factors”
included in Item 1A of Integra's Annual Report on Form 10-K
for the year ended December 31, 2016 and information contained
in subsequent filings with the Securities and Exchange
Commission.
These forward-looking statements are made only as of the date
hereof, and the Company undertakes no obligation to update or
revise the forward-looking statements, whether as a result of new
information, future events, or otherwise.
Discussion of Adjusted Financial Measures
In addition to our GAAP results, we provide organic revenues,
adjusted earnings before interest, taxes, depreciation and
amortization ("EBITDA"), adjusted net income, adjusted earnings per
diluted share, adjusted diluted weighted average shares
outstanding, free cash flow and adjusted free cash flow
conversion. Organic revenues consist of total revenues
excluding the effects of currency exchange rates, acquired revenues
and product discontinuances. Adjusted EBITDA consists of GAAP
net income from continuing operations, excluding: (i) depreciation
and amortization; (ii) other income (expense); (iii) interest
income and expense; (iv) income taxes; and (v) those operating
expenses also excluded from adjusted net income. The measure
of adjusted net income consists of GAAP net income from continuing
operations, excluding: (i) global enterprise resource planning
("ERP") implementation charges; (ii) structural optimization
charges; (iii) certain employee severance charges; (iv)
acquisition-related charges; (v) convertible debt non-cash
interest; (vi) intangible asset amortization expense; and (vii)
discontinued product lines charges; (viii) income tax impact from
adjustments; and (ix) hurricane related expenses and other
items. The measure of adjusted diluted weighted average
shares outstanding is calculated by adding the economic benefit of
the convertible note hedge transactions relating to Integra's 2016
convertible notes. The adjusted earnings per diluted share
measure is calculated by dividing adjusted net income attributable
to diluted shares by adjusted diluted weighted average shares
outstanding. The measure of free cash flow consists of GAAP
net cash provided by continuing operating activities from
continuing operations less purchases of property and
equipment. The adjusted free cash flow conversion measure is
calculated by dividing free cash flow by adjusted net income.
Reconciliations of GAAP revenues to adjusted revenues and GAAP
Adjusted Net Income from continuing operations to adjusted EBITDA,
and adjusted net income, and GAAP earnings per diluted share to
adjusted earnings per diluted share all for the Three Months Ended
September 30, 2017 and 2016, and the free cash flow and free cash
flow conversion for the Three Months Ended September 30, 2017 and
2016 and the twelve months ended June 30, 2017 and 2016, appear in
the financial tables in this release.
The Company believes that the presentation of organic revenues
and the various adjusted EBITDA, adjusted net income, adjusted
earnings per diluted share, adjusted diluted weighted average
shares outstanding, free cash flow and free cash flow conversion
measures provide important supplemental information to management
and investors regarding financial and business trends relating to
the Company's financial condition and results of operations.
For further information regarding why Integra believes that these
non-GAAP financial measures provide useful information to
investors, the specific manner in which management uses these
measures, and some of the limitations associated with the use of
these measures, please refer to the Company's Current Report on
Form 8-K regarding this earnings press release filed today with the
Securities and Exchange Commission. This Current Report on
Form 8-K is available on the SEC's website at www.sec.gov or
on our website at www.integralife.com.
|
|
| INTEGRA LIFESCIENCES HOLDINGS CORPORATION |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| (UNAUDITED) |
|
|
| (In
thousands, except per share amounts) |
|
|
| |
Three Months EndedSeptember 30, |
| |
2017 |
|
2016 |
| Total revenues,
net |
$ |
278,834 |
|
|
$ |
250,332 |
|
| |
|
|
|
| Costs and
expenses: |
|
|
|
| Cost of goods sold |
101,757 |
|
|
89,329 |
|
| Research and
development |
15,034 |
|
|
15,124 |
|
| Selling, general and
administrative |
145,945 |
|
|
112,317 |
|
| Intangible asset
amortization |
5,456 |
|
|
3,467 |
|
| Total costs and
expenses |
268,192 |
|
|
220,237 |
|
| |
|
|
|
| Operating income |
10,642 |
|
|
30,095 |
|
| |
|
|
|
| Interest income |
89 |
|
|
2 |
|
| Interest expense |
(6,761 |
) |
|
(6,295 |
) |
| Other income (expense),
net |
(735 |
) |
|
1,192 |
|
| Income from continuing
operations before taxes |
3,235 |
|
|
24,994 |
|
| Income tax expense
(benefit) |
76 |
|
|
4,850 |
|
| Net income |
$ |
3,159 |
|
|
$ |
20,144 |
|
| |
|
|
|
| Net income per
share: |
|
|
|
| Diluted net income per
share |
$ |
0.04 |
|
|
$ |
0.25 |
|
| |
|
|
|
| Weighted average common
shares outstanding for diluted net income per share |
79,455 |
|
|
81,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenues and growth in total revenues excluding the
effects of currency exchange rates, acquisitions, and discontinued
products are as follows:
(In thousands)
| |
Three Months Ended September 30, |
| |
2017 |
2016 |
Change |
| Specialty Surgical
Solutions |
164,760 |
159,409 |
3.4% |
| Orthopedics and Tissue
Technologies |
114,074 |
$90,923 |
25.5% |
| Total revenues |
$278,834 |
$250,332 |
11.4% |
| |
|
|
|
| Impact of changes in
currency exchange rates(1) |
$(1,600) |
|
|
| Less contribution of
revenues from acquisitions(2) |
(24,296) |
|
|
| Less contribution of
revenues from discontinued products(3) |
(9,637) |
(10,559) |
|
| Total organic
revenues |
$243,300 |
$239,773 |
1.5% |
| (1) Excludes $103,000
of foreign currency associated with discontinued products. |
| |
| (2) Acquisitions
include Derma Sciences and TGX Medical. |
| |
| (3) Organic Revenue
Growth has been restated for PY 2016 to account for discontinued
products which includes divestitures related to the Codman
acquisition. |
| |
Items included in GAAP net income from continuing operations and
location where each item is recorded are as follows:
| (In thousands) |
| |
| Three Months Ended September 30, 2017 |
| |
|
Item |
Total Amount |
COGS(a) |
SG&A(b) |
Amort.(c) |
OI&E(d) |
Tax(e) |
| Global ERP
implementation charges |
$— |
$— |
$— |
$— |
$— |
$— |
| Structural optimization
charges |
1,944 |
1,309 |
635 |
— |
— |
— |
| Acquisition-related
charges* |
24,904 |
1,572 |
23,332 |
— |
— |
— |
| Hurricane related
expenses |
1,261 |
1,261 |
— |
— |
— |
— |
| Intangible asset
amortization expense |
15,789 |
10,333 |
— |
5,456 |
— |
— |
| Estimated income tax
impact from above adjustments and other items |
(10,991) |
— |
— |
— |
— |
(10,991) |
|
Total adjustments |
$32,907 |
$14,475 |
$23,967 |
$5,456 |
$— |
$(10,991) |
| |
|
|
|
|
|
|
| Depreciation
expense |
8,470 |
— |
— |
— |
— |
— |
| Stock-based
compensation expense |
5,309 |
|
|
|
|
|
(a) COGS - Cost of goods sold(b) SG&A - Selling, general and
administrative(c) Amort. - Intangible asset amortization(d)
OI&E - Interest (income) expense, net and other (income)
expense, net(e) Tax - Income tax expense
* Acquisition related charges are primarily associated with the
Derma Sciences and Codman Neurosurgery acquisitions and include
banking, legal, consulting and other expenses.
| |
| Three Months Ended September 30, 2016 |
| |
| (In
thousands) |
| |
|
Item |
Total Amount |
COGS (a) |
SG&A (b) |
Amort. (c) |
OI&E (d) |
Tax (e) |
| Global ERP
implementation charges |
$3,366 |
$— |
$3,366 |
$— |
$— |
$— |
| Structural optimization
charges |
1,993 |
1,133 |
860 |
— |
— |
— |
| Acquisition-related
charges |
4,935 |
4,570 |
165 |
— |
— |
— |
| Certain employee
severance charges |
153 |
(41) |
194 |
— |
— |
— |
| Intangible asset
amortization expense |
10,316 |
6,849 |
— |
3,467 |
— |
— |
| Convertible debt
noncash interest |
2,132 |
— |
— |
— |
2,132 |
— |
| Estimated income tax
impact from above adjustments and other items |
(6,938) |
— |
— |
— |
— |
(6,938) |
|
Total adjustments |
$15,957 |
$12,511 |
$4,585 |
$3,467 |
$2,132 |
$(6,938) |
| |
|
|
|
|
|
|
| Depreciation
expense |
7,770 |
— |
— |
— |
— |
— |
(a) COGS - Cost of goods sold(b) SG&A - Selling, general and
administrative(c) Amort. - Intangible asset amortization(d)
OI&E - Interest (income) expense, net and other (income)
expense, net(e) Tax - Income tax expense
| |
| RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP NET
INCOME FROM CONTINUNG OPERATIONS TOADJUSTED EBITDA |
| (UNAUDITED) |
|
|
| (In
thousands, except per share amounts) |
|
|
| |
Three Months EndedSeptember 30, |
| |
2017 |
|
2016 |
|
|
| GAAP net income from
continuing operations |
$ |
3,159 |
|
|
$ |
20,144 |
|
| Non-GAAP
adjustments: |
|
|
|
| Depreciation and
intangible asset amortization expense |
24,259 |
|
|
18,086 |
|
| Other (income) expense,
net |
735 |
|
|
(1,192 |
) |
| Interest expense,
net |
6,672 |
|
|
6,293 |
|
| Income tax
(benefit) |
76 |
|
|
4,850 |
|
| Global ERP
implementation charges |
— |
|
|
3,366 |
|
| Structural optimization
charges |
1,944 |
|
|
1,993 |
|
| Acquisition-related
charges |
24,904 |
|
|
4,935 |
|
| Certain employee
severance charges |
— |
|
|
153 |
|
| Hurricane related
expenses |
1,261 |
|
|
— |
|
| |
|
|
|
| Total of
non-GAAP adjustments |
59,851 |
|
|
38,484 |
|
| Adjusted EBITDA |
$ |
63,010 |
|
|
$ |
58,628 |
|
| |
|
|
|
|
|
| RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP NET
INCOME FROM CONTINUING OPERATIONS TOMEASURES OF ADJUSTED NET INCOME
AND ADJUSTED EARNINGS PER SHARE |
| (UNAUDITED) |
|
|
| (In
thousands, except per share amounts) |
|
|
| |
Three Months EndedSeptember 30, |
| |
2017 |
|
2016 |
| |
|
|
|
| GAAP net income from
continuing operations |
3,159 |
|
|
20,144 |
|
| Non-GAAP
adjustments: |
|
|
|
| Global ERP
implementation charges |
— |
|
|
3,366 |
|
| Structural optimization
charges |
1,944 |
|
|
1,993 |
|
| Acquisition-related
charges |
24,904 |
|
|
4,935 |
|
| Certain employee
severance charges |
— |
|
|
153 |
|
| Intangible asset
amortization expense |
15,789 |
|
|
10,316 |
|
| Convertible debt
noncash interest |
— |
|
|
2,132 |
|
| Hurricane related
expenses |
1,261 |
|
|
— |
|
| Estimated income tax
impact from adjustments and other items |
(10,991 |
) |
|
(6,938 |
) |
| |
|
|
|
| Total of
non-GAAP adjustments |
32,907 |
|
|
15,957 |
|
| Adjusted net
income |
$ |
36,067 |
|
|
$ |
36,101 |
|
| |
|
|
|
| Adjusted diluted net
income per share |
|
$0.45 |
|
|
|
$0.46 |
|
| |
|
|
|
| Weighted average common
shares outstanding for diluted net income per share |
79,455 |
|
|
81,032 |
|
| Weighted average common
shares outstanding adjustment for economic benefit of convertible
bond hedge transactions |
— |
|
|
(3,176 |
) |
| Weighted average common
shares outstanding for adjusted diluted net income per share |
79,455 |
|
|
77,856 |
|
| |
|
|
|
|
|
| |
| CONDENSED BALANCE SHEET DATA |
| (UNAUDITED) |
|
|
| (In
thousands) |
|
|
| |
|
|
September 30, 2017 |
|
December 31,2016 |
| |
|
|
|
|
|
| Cash and cash
equivalents |
|
|
$ |
481,943 |
|
|
$ |
102,055 |
|
| Accounts receivable,
net |
|
|
171,126 |
|
|
148,186 |
|
| Inventories, net |
|
|
232,340 |
|
|
217,263 |
|
| |
|
|
|
|
|
| Bank line of
credit |
|
|
1,171,383 |
|
|
665,000 |
|
| |
|
|
|
|
|
| Stockholders'
equity |
|
|
$ |
913,116 |
|
|
$ |
839,667 |
|
| |
|
|
|
|
|
|
|
|
|
| CONDENSED STATEMENT OF CASH FLOWS |
| (UNAUDITED) |
|
|
| (In
thousands) |
|
|
| |
|
Nine Months Ended September 30, |
| |
|
September 30,2017 |
|
December 31,2016 |
| |
|
|
|
|
|
|
|
|
| Net cash provided by
operating activities |
|
$ |
102,995 |
|
|
$ |
109,876 |
|
| Net cash used in
investing activities |
|
(237,767 |
) |
|
(21,480 |
) |
| Net cash provided by
(used in) financing activities |
|
504,733 |
|
|
(28,879 |
) |
| Effect of exchange rate
changes on cash and cash equivalents |
|
9,927 |
|
|
(51 |
) |
| |
|
|
|
|
| Net increase in cash
and cash equivalents |
|
$ |
379,888 |
|
|
$ |
59,466 |
|
| |
|
|
|
|
| |
| RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP
OPERATING CASH FLOW TOMEASURES OF FREE CASH FLOW AND FREE CASH FLOW
CONVERSION |
| (UNAUDITED) |
|
|
| (In
thousands) |
|
|
| |
|
Three Months EndedSeptember 30, |
| |
|
2017 |
2016 |
| GAAP net cash provided
by continuing operating activities |
|
$ |
45,240 |
|
|
$ |
46,766 |
|
| |
|
|
|
| Purchases of property
and equipment from continuing operations |
|
(7,796 |
) |
|
(6,974 |
) |
| Free cash flow |
|
37,444 |
|
|
39,792 |
|
| |
|
|
|
| Adjusted net income
* |
|
$ |
36,067 |
|
|
$ |
36,101 |
|
| Adjusted free cash flow
conversion |
|
103.8 |
% |
|
110.2 |
% |
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
Twelve Months EndedSeptember 30, |
| |
|
2017 |
2016 |
| GAAP net cash provided
by continuing operating activities** |
|
$ |
109,516 |
|
|
$ |
135,515 |
|
| |
|
|
|
| Accreted interest
payment associated with the 2016 convertible note |
|
42,786 |
|
|
|
| Purchases of property
and equipment from continuing operations |
|
(50,998 |
) |
|
(39,235 |
) |
| Adjusted free cash
flow |
|
101,304 |
|
|
96,280 |
|
| |
|
|
|
| Adjusted net income
* |
|
$ |
143,088 |
|
|
$ |
127,362 |
|
| Adjusted free cash flow
conversion |
|
70.8 |
% |
|
75.6 |
% |
* Adjusted net income for quarters ended June 30, 2017 and 2016
are reconciled above. Adjusted net income for remaining
quarters in the trailing twelve months calculation have been
previously reconciled and are publicly available in the Quarterly
Earnings Call Presentations and the Historical Financial Results:
Continuing Operations presentation on our website at
investor.integralife.com under Events & Presentations.**
Operating cash flow excludes $42.8M of accreted interest payment
associated with the 2016 Convertible Notes.
The Company calculates adjusted free cash flow conversion by
dividing its free cash flow by adjusted net income. The
Company believes this measure is useful in evaluating the
significance of the cash special charges in its adjusted earnings
measures.
| |
| INTEGRA LIFESCIENCES HOLDINGS CORPORATION |
| RECONCILIATION OF NON-GAAP ADJUSTMENTS - GUIDANCE |
| |
|
|
|
|
|
| |
Recorded Yearto Date |
|
Projected Year Ended |
| (In thousands, except
per share amounts) |
September 30, 2017 |
|
December 31, 2017 |
| |
|
|
Low |
|
High |
| GAAP net income |
$ |
20,388 |
|
|
$ |
11,552 |
|
|
$ |
16,052 |
|
| Non-GAAP
adjustments: |
|
|
|
|
|
| Global ERP
implementation charges |
3,261 |
|
|
3,261 |
|
|
3,261 |
|
| Structural optimization
charges |
5,336 |
|
|
8,609 |
|
|
8,609 |
|
| Acquisition-related
charges |
68,919 |
|
|
105,696 |
|
|
105,696 |
|
| Certain employee
severance charges |
125 |
|
|
125 |
|
|
125 |
|
| Hurricane related
charges |
1,261 |
|
|
|
|
|
| Discontinued product
lines charges |
1,025 |
|
|
1,025 |
|
|
1,025 |
|
| Intangible asset
amortization expense |
39,253 |
|
|
59,970 |
|
|
59,970 |
|
| Estimated income tax
impact from adjustments and other items |
(37,229 |
) |
|
(41,138 |
) |
|
(41,138 |
) |
| |
|
|
|
|
|
| Total of non-GAAP
adjustments |
81,951 |
|
|
137,548 |
|
|
137,548 |
|
| Adjusted net
income |
$ |
102,339 |
|
|
$ |
149,100 |
|
|
$ |
153,600 |
|
| |
|
|
|
|
|
| GAAP diluted net income
per share |
$0.26 |
|
|
$0.24 |
|
|
$0.30 |
|
| Non-GAAP adjustments
detailed above (per share) |
$1.04 |
|
|
$1.59 |
|
|
$1.57 |
|
| Adjusted diluted net
income per share |
$1.30 |
|
|
$1.83 |
|
|
$1.87 |
|
| |
|
|
|
|
|
| Weighted average common
shares outstanding for diluted net income per share
|
78,973 |
|
|
79,500 |
|
|
79,000 |
|
| |
|
|
|
|
|
|
|
|
| |
| GUIDANCE - SPECIAL CHARGES |
| |
|
|
|
|
|
|
|
|
|
Item |
YTD Amount
|
FYGuidance |
COGS |
SG&A |
R&D |
Amort. |
Interest(Inc)Exp |
Tax |
| Global ERP
implementation charges |
$ |
3,261 |
|
|
$ |
3,261 |
|
|
$ |
— |
|
$ |
3,261 |
|
$ |
— |
|
$
|
— |
|
$ |
— |
|
$
|
— |
|
| Structural optimization
charges |
5,336 |
|
|
8,609 |
|
|
4,607 |
|
4,002 |
|
— |
— |
|
|
| Acquisition-related
charges |
68,919 |
|
|
105,696 |
|
|
22,711 |
|
82,985 |
|
|
— |
— |
— |
|
| Certain employee
severance charges |
125 |
|
|
125 |
|
|
— |
|
125 |
|
— |
— |
— |
— |
|
| Hurricane related
expenses |
1,261 |
|
|
1,261 |
|
|
— |
|
— |
|
— |
— |
— |
|
| Discontinued product
lines charges |
1,025 |
|
|
1,025 |
|
|
1,025 |
|
— |
|
— |
— |
— |
— |
|
| Intangible asset
amortization expense |
39,253 |
|
|
59,970 |
|
|
39,605 |
|
— |
|
— |
20,365 |
— |
— |
|
| Convertible debt
non-cash interest |
— |
|
|
— |
|
|
— |
|
— |
|
— |
— |
— |
— |
|
| Estimated income tax
impact from adjustments and other items |
(37,229 |
) |
|
(41,138 |
) |
|
— |
|
— |
|
— |
— |
— |
(41,138 |
) |
|
Total |
81,951 |
|
|
138,809 |
|
|
67,948 |
|
90,373 |
|
— |
20,365 |
— |
(41,138 |
) |
Contact:
Investor Relations:Michael Beaulieu(609)
750-2827michael.beaulieu@integralife.com
Media:Laurene Isip(609) 750-7984laurene.isip@integralife.com
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