• Total Revenue (Q4 2024): $443 million, representing year-over-year reported growth of 11.5%.
• Adjusted EPS (Q4 2024): $0.97, above guidance range.
• Full-Year Revenue (2024): $1.61 billion, 4.5% growth on a reported basis.
• Organic Revenue Growth (2024): Decline of 1.3% due to supply challenges and quality-related product holds.
• Gross Margin (2024): 64.5%, down 160 basis points from 2023.
• Adjusted EBITDA Margin (2024): 20%, down 400 basis points from 2023.
• Operating Cash Flow (2024): $129.4 million.
• Free Cash Flow Conversion (2024): 12.7%.
• Revenue Guidance (Q1 2025): $375 million to $385 million, reported growth of 1.6% to 4.4%.
• Adjusted EPS Guidance (Q1 2025): $0.40 to $0.45.
• Full-Year Revenue Guidance (2025): $1.65 billion to $1.72 billion.
• Full-Year Adjusted EPS Guidance (2025): $2.41 to $2.51.

• Warning! GuruFocus has detected 3 Warning Sign with IART.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Integra Lifesciences Holdings Corp (NASDAQ:IART) reported a total revenue of $443 million for the fourth quarter, representing a year-over-year growth of 11.5%, which was within their guidance range.
• The company successfully cleared many of the third-quarter shipping holds, contributing to a $62 million sequential revenue increase over the third quarter.
• Fourth-quarter adjusted EPS was $0.97, exceeding the guidance range, indicating strong financial performance.
• The company is making significant progress in its Compliance Master Plan, which aims to improve manufacturing processes and global quality management systems.
• Integra Lifesciences Holdings Corp (NASDAQ:IART) is advancing its global expansion strategy, with increased market presence in Brazil, India, Korea, and China, and is building in-China-for-China manufacturing capabilities.

Negative Points

• The company faces operational challenges, particularly in quality, manufacturing, and supply chain improvements, which remain a top priority.
• First-quarter 2025 revenues are forecasted to be between $375 million and $385 million, with organic growth expected to be negative, ranging from -6.2% to -3.5%.
• The company has identified $18 million to $20 million in quality-related shipping holds impacting the first quarter of 2025.
• Integra Skin production is expected to face constraints in the first quarter of 2025 due to scheduled maintenance and lower-than-historical safety stock levels.
• The company anticipates a 70 basis point decrease in gross margin for 2025 due to investments in the Compliance Master Plan and potential supply disruptions.

Q & A Highlights

Q: Can you explain the approach to guidance for Integra Skin and potential shipping holds in 2025? A: Lea Knight, CFO, explained that the guidance includes a wider range due to uncertainties. The high end assumes mid-single-digit growth with a $60 million impact from additional shipping holds, while the low end assumes a $120 million impact. For Integra Skin, production constraints are expected to diminish starting in Q2 as capacity projects come online. (Lea Knight, CFO)

Q: What are the key strategic initiatives for Integra LifeSciences in 2025? A: Mojdeh Poul, CEO, emphasized operational excellence, including executing the Compliance Master Plan and enhancing manufacturing capacity. Other priorities include growing core markets, expanding internationally, and focusing on timely product innovation. A new long-range plan will be developed throughout 2025. (Mojdeh Poul, CEO)

Q: How is Integra addressing potential tariffs on Mexico and Canada? A: Mojdeh Poul stated that while Integra does not have manufacturing facilities in Mexico or Canada, they source products from these countries. The company is monitoring developments and assessing plans to offset any negative impacts from potential tariffs. (Mojdeh Poul, CEO)

Q: Why is there an expectation of future shipping holds in 2025? A: Lea Knight explained that the Compliance Master Plan involves a comprehensive assessment of the manufacturing network, which may lead to potential supply disruptions. The guidance reflects this risk, although no specific issues are currently identified. (Lea Knight, CFO)

Q: What is the outlook for Acclarent's contribution to Integra's business in 2025? A: Lea Knight confirmed that Acclarent is expected to grow at high single digits in 2025, aligning with business expectations and the deal model. The integration has been successful, and strong growth opportunities in ENT are anticipated. (Lea Knight, CFO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.