On October 31, 2018 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the third quarter ending September 30, 2018 (Press release, Integra LifeSciences, OCT 31, 2018, View Source [SID1234530398]).
Third Quarter 2018 Consolidated Results
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Reported revenue was $365.9 million, an increase of 31.2% compared to the third quarter of 2017 with the acquisition of Codman contributing $78.9 million, and organic revenues increased 6.2% over the third quarter of 2017;
GAAP earnings per share was $0.15, compared to $0.04 in the third quarter of 2017;
Adjusted earnings per share was $0.59, reflecting an increase of 31.1% compared to the third quarter of 2017;
The company is revising its full-year 2018 guidance as follows:
Total revenue is now expected to be a range of $1.467 billion to $1.472 billion (previously $1.475 billion to $1.490 billion);
Guidance range reflects lower forecasted revenue from extremities orthopedics, Codman revenue in select countries outside the U.S. where commercial operations have not yet transferred to Integra ("Day 2 Countries"), and a lower foreign currency benefit;
Organic revenue growth guidance is now expected to be approximately 4% (previously approximately 5%);
The company is reiterating its full-year 2018 GAAP earnings per share of $0.71 to $0.77 and adjusted earnings per share of $2.36 to $2.42.
Total revenues for the third quarter of 2018 were $365.9 million, reflecting an increase of 31.2% over the third quarter of 2017. Sales in the Codman Specialty Surgical segment increased 45.1% compared to the third quarter of 2017, driven by the Codman acquisition and strong performance in the Dural Access and Repair, Advanced Energy, and Neuro Monitoring businesses. Sales in the Orthopedics and Tissue Technologies segment increased 11.2%, reflecting continued strength in our Regenerative Technologies and Private Label businesses.
Total organic revenues increased 6.2% over the third quarter of 2017, excluding acquisitions, divestitures and the effect of currency exchange rates.
"Despite some revenue softness in the second half of the year, we continue to make solid progress with the Codman integration and the channel expansion efforts, particularly in Regenerative Technologies," said Peter Arduini, Integra’s president and chief executive officer. "We remain confident that 2019 organic sales will grow within our targeted long-term range of 5% to 7% and accelerate from our full-year 2018 results."
The company reported GAAP net income of $13.3 million, or $0.15 per diluted share, for the third quarter of 2018, compared to GAAP net income of $3.2 million, or $0.04 per diluted share, in the third quarter of 2017. The increase in GAAP net income is a result of higher revenues, better operating expense leverage and a lower tax rate.
The adjusted measures discussed below are computed with the adjustments to GAAP reporting that are set forth in the attached reconciliation.
Adjusted EBITDA for the third quarter of 2018 was $84.3 million, or 23.0% of revenue, compared to $63.0 million, or 22.6% of revenue, in the third quarter of 2017. The margin improvement was largely based on better operating expense leverage, mostly from selling, general and administrative costs.
Adjusted net income for the third quarter of 2018 was $50.6 million, an increase of 40.2% from the prior year’s third quarter. Adjusted earnings per share for the third quarter of 2018 was $0.59, an increase of 31.1% over the prior year’s quarter.
2018 Full-Year Outlook
The company is revising its full-year 2018 total revenue guidance to a new range of $1.467 billion to $1.472 billion. This includes an expectation for organic growth of approximately 4% for the full year 2018 versus the previous guidance of approximately 5%.
The company is reiterating its full-year 2018 GAAP earnings per share guidance range of $0.71 to $0.77, and adjusted earnings per share guidance range of $2.36 to $2.42.
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, Wednesday, October 31, 2018, 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 (334) 323-0522 and using the passcode 3216000. The call can also be accessed via a webcast link provided on investor.integralife.com. A replay of the call will be available through November 5, 2018 by dialing (719) 457-0820 and using the passcode 3216000. The webcast will also be archived on the website.