On April 25, 2018 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the first quarter ending March 31, 2018 (Press release, Integra LifeSciences, APR 25, 2018, View Source [SID1234525694]).
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First Quarter 2018 Consolidated Results
Reported revenue was $357.1 million, an increase of 38.1% compared to the first quarter of 2017; acquisitions contributed $91.6 million of revenue to the first quarter, and organic revenues increased 3.0%;
GAAP earnings per share was $0.14, reflecting an increase of 75.0% compared to the first quarter of 2017;
Adjusted earnings per share was $0.58, reflecting an increase of 48.7% compared to the first quarter of 2017;
Cash flow from operations was $41.5 million, reflecting an increase of 43.8% from the first quarter of 2017;
The company is raising its full-year 2018 guidance based on strong first quarter results to
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Revenue of $1.47 billion to $1.49 billion (previously $1.46 billion to $1.48 billion);
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GAAP EPS of $0.69 to $0.77 (previously $0.60 to $0.70); and
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Adjusted EPS of $2.34 to $2.42 (previously $2.25 to $2.35).
The company is reiterating its full-year 2018 guidance for organic sales growth to be approximately 5.0%.
Total revenues for the first quarter 2018 were $357.1 million, reflecting an increase of 38.1%, over the first quarter of 2017. Sales in the Codman Specialty Surgical segment increased 51.1% compared to the first quarter of 2017, driven by the acquired revenues from Codman Neurosurgery, as well as strong capital sales of CUSA Clarity. Sales in the Orthopedics and Tissue Technologies segment increased 18.2%, reflecting a full quarter of sales from Derma Sciences and strength in both our regenerative technologies, as well as our ankle and shoulder portfolios.
Total organic revenues increased 3.0% over the first quarter of 2017, excluding acquisitions, divestitures and the effect of currency exchange rates, slightly ahead of our expectations.
"We are off to a strong start in 2018, which gives us the confidence to increase our full-year 2018 financial guidance," said Peter Arduini, Integra’s president and chief executive officer. "We are pleased with the progress of the Codman integration and continued progress in the OTT channel expansion. We expect to see organic growth accelerate in the remainder of the year."
The company reported GAAP net income of $11.0 million, or $0.14 per diluted share, for the first quarter of 2018, compared to GAAP net income of $6.4 million, or $0.08 per diluted share, in first quarter of 2017. The increase in GAAP net income results from 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 first quarter of 2018 was $83.2 million, or 23.3% of revenue, compared to $55.2 million, or 21.3% of revenue, in the first quarter of 2017. The margin improvement was largely based on better operating expense leverage, mostly from general and administrative costs.
Adjusted net income for the first quarter of 2018 was $46.1 million, an increase of 49.4% from the prior year’s quarter. Adjusted earnings per share for the first quarter of 2018 were $0.58, an increase of 48.7% over the prior year’s quarter.
2018 Full-Year Outlook
The company is raising its full-year 2018 revenue guidance by $10 million to a new range of $1.47 billion to $1.49 billion, based on the strong performance of the Codman Specialty Surgical segment in the first quarter of 2018, as well as a higher benefit expected from foreign currency translation. The company is raising its full-year 2018 GAAP and adjusted earnings per share guidance range by $0.08 to a new range of $0.69 to $0.77 and $2.34 to $2.42, respectively.
The company is reiterating its full-year 2018 guidance for organic sales to be approximately 5.0%.
"In addition to the strong revenue performance in the quarter, we were pleased with the significant improvement in EBITDA margin and strong operating cash flow," said Glenn Coleman, Integra’s chief financial officer. "This puts us on track to achieve the high-end of our full-year guidance for these metrics for the remainder of this year."
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, April 25, 2018, to discuss financial results for the first 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) 794-2093 and using the passcode 5958152. The call can also be accessed via a webcast link provided on investor.integralife.com. A replay of the call will be available through April 30, 2018 by dialing (719) 457-0820 and using the passcode 5958152. The webcast will also be archived on the website.