On August 10, 2020 Integra LifeSciences Holdings Corporation (NASDAQ: IART), a leading global medical technology company, reported financial results for the second quarter ending June 30, 2020 (Press release, Integra LifeSciences, AUG 10, 2020, View Source [SID1234563343]).
Second Quarter 2020 Financial Summary

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Reported revenues were $258.7 million, representing a decrease of 32.6% on a reported basis and 31.3% on an organic basis compared to the prior year. These results were above the high end of the preliminary results provided on July 9, 2020;

GAAP loss per diluted share was ($0.00), compared to GAAP earnings of $0.34 in the second quarter of 2019. Adjusted earnings per diluted share were $0.33, compared to $0.73 in the prior year. The decline was largely attributable to lower revenues due to the impact of COVID-19;

The Company’s full-year 2020 guidance remains withdrawn due to the uncertainty related to COVID-19 and the extent of the recovery in surgical procedure volumes.
"We are encouraged by the sequential, monthly improvement in revenue throughout the second quarter following the lows experienced in April," said Peter Arduini, Integra’s president and chief executive officer. "I want to thank our Integra colleagues for their perseverance and commitment to our customers and patients during these challenging times. Given the strength of our people and our financial agility, I remain confident the Company will return to long-term growth."

The Company reported GAAP gross margin of 59.2%, compared to 62.6% in the second quarter of 2019. Adjusted gross margin was 66.2%, compared to 67.4% in the prior year.
Adjusted EBITDA for the second quarter of 2020 was $52.8 million, or 20.4% of revenue, compared to $97.9 million, or 25.5% of revenue, in the prior year.
The Company reported GAAP net loss of $(0.4) million, or ($0.00) per diluted share, in the second quarter of 2020, compared to GAAP net income of $29.7 million, or $0.34 per diluted share, in the prior year.

Adjusted net income for the second quarter of 2020 was $28.4 million, or $0.33 per diluted share, compared to $63.4 million, or $0.73 per diluted share, in the prior year.
Second quarter revenues were negatively impacted by COVID-19 and the associated reduction of non-emergent surgical procedures. Lower procedure volumes also contributed to the lower gross margins, EBITDA and net income, year over year. To partially mitigate this impact, the Company initiated a cost savings plan in April, while maintaining investments in critical R&D, clinical and long-term growth programs. These actions contributed to a 28% reduction of total operating expenses in the second quarter as compared to the prior period.
Integra’s financial position and liquidity remain strong. The Company ended the quarter with $361 million in cash and cash equivalents, $1.15 billion in undrawn revolver capacity, and a consolidated total leverage ratio of 3.4x.
In July, the Company amended its credit agreement to temporarily increase its maximum consolidated total leverage ratio from 5.0x to 5.5x for the four financial quarters beginning July 1, 2020 and ending June 30, 2021. The Company entered into this amendment to increase financial flexibility in light of the unprecedented impact of the COVID-19 pandemic and the related uncertainty surrounding the global economy.
During the second quarter, the Company completed the accelerated share repurchase (ASR) agreement, entered into in February 2020. A total of 1.9 million shares were repurchased in the first half of 2020.
2020 Full-Year Outlook
Due to the ongoing uncertainty around the scope and duration of the pandemic and the timing of recovery across the globe, the Company’s guidance for the full-year 2020 remains withdrawn. The Company continues to expect quarterly sequential revenue improvement in the second half of 2020 as compared to the second quarter of 2020. For the third quarter of 2020, revenues are expected to remain below prior year levels due to COVID-19 and the associated reduction of non-emergent surgical procedures. The Company does not expect all markets and product lines to improve at the same rate. The level and location of COVID-19 emergence or recurrence and its associated impact on surgical procedure volumes, as well as economic normalization, will shape the Company’s recovery.
Supplemental financial and operational information is included in a presentation that can be found in the "Investor" section of the Company’s website at investor.integralife.com under "Events & Presentations".
In the future, the Company may record, or expects to record, gains or losses, 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 4:30 PM ET today, Monday, August 10, 2020, to discuss financial results for the second quarter. 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 (800) 263-0877 and using the passcode 4133628. The call can also be accessed via a webcast link provided on investor.integralife.com. A replay of the call will be available until August 15, 2020 by dialing (888) 203-1112 and using the passcode 4133628. The webcast will also be archived on the website.