On July 25, 2018 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the second quarter ending June 30, 2018 (Press release, Integra LifeSciences, JUL 25, 2018, View Source [SID1234527855]).

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Second Quarter 2018 Consolidated Results

Reported revenue was $366.2 million, an increase of 29.8% compared to the second quarter of 2017; the acquisition of Codman contributed $79.2 million of revenue to the second quarter, and organic revenues increased 3.4%. Relative to the foreign currency rates used in April 2018 guidance, the second quarter revenues would have been $368.4 million, if the foreign currency rates were stable throughout the quarter;

GAAP earnings per share was $0.14, flat compared to the second quarter of 2017;

Adjusted earnings per share was $0.60, reflecting an increase of 33.3% compared to the second quarter of 2017;

The company has successfully exited the first wave of Codman transition services agreements and assumed full operational control of all commercial services and functions covering approximately 60% of the revenue associated with the acquired business;

The company is raising the low end of its full-year 2018 total revenue and earnings per share guidance as follows:

Total revenue of $1.475 billion to $1.490 billion (previously $1.470 billion to $1.490 billion);

Guidance range reflects lower foreign currency benefit based on current rates (expected foreign currency benefit was reduced from $15 million to $8 million)

GAAP EPS of $0.71 to $0.77 (previously $0.69 to $0.77);

Adjusted EPS of $2.36 to $2.42 (previously $2.34 to $2.42); and

The company is reiterating full-year 2018 organic sales growth guidance of approximately 5%.

Total revenues for the second quarter of 2018 were $366.2 million, reflecting an increase of 29.8% over the second quarter of 2017. Sales in the Codman Specialty Surgical segment increased 49.8% compared to the second quarter of 2017, driven by the Codman acquisition and strong performance in the Dural Access and Repair and Advanced Energy businesses. Sales in the Orthopedics and Tissue Technologies segment increased 3.6%, reflecting broad-based strength in our regenerative technologies business, following the completion of the commercial expansion strategy.

Total organic revenues increased 3.4% over the second quarter of 2017, excluding acquisitions, divestitures and the effect of currency exchange rates.
"We look forward to an acceleration in organic growth in the second half of 2018, as we realize the benefits of a larger sales organization, improved sales productivity and an expanded product portfolio," said Peter Arduini, Integra’s president and chief executive officer. "The successful integration of Codman and the completion of the hiring associated with our OTT channel expansion strategy increase our confidence for the second half of the year."
The company reported GAAP net income of $11.4 million, or $0.14 per diluted share, for the second quarter of 2018, compared to GAAP net income of $10.8 million, or $0.14 per diluted share, in the second quarter of 2017. The slight increase in GAAP net income is a result of higher revenues and better operating expense leverage.
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 second quarter of 2018 was $85.9 million, or 23.5% of revenue, compared to $62.7 million, or 22.2% of revenue, in the second 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 second quarter of 2018 was $50.5 million, an increase of 42.7% from the prior year’s quarter. Adjusted earnings per share for the second quarter of 2018 was $0.60, an increase of 33.3% over the prior year’s quarter.
2018 Full-Year Outlook

The company is raising the low end of its full-year 2018 total revenue guidance by $5 million to a new range of $1.475 billion to $1.490 billion. The company is also raising the low end of its full-year 2018 GAAP earnings per share guidance range to $0.71 to $0.77, and adjusted earnings per share guidance range to $2.36 to $2.42, an increase of two cents.
The company expects full-year 2018 organic revenue growth to be approximately 5.0%, consistent with prior guidance.
"We were pleased with the strong operational performance from both segments in the second quarter, which enabled us to achieve 40% growth in adjusted net income and 130 basis points of adjusted EBITDA margin expansion, compared to the prior year’s quarter," said Glenn Coleman, Integra’s chief financial officer. "Given the strong momentum we expect in the second half of 2018, we are raising the low-end of our revenue and EPS guidance ranges."

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, July 25, 2018, to discuss financial results for the second 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 7616000. The call can also be accessed via a webcast link provided on investor.integralife.com. A replay of the call will be available through July 30, 2018 by dialing (719) 457-0820 and using the passcode 7616000. The webcast will also be archived on the website.