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New Jersey-based medical device manufacturer, Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 39 cents in the first quarter of 2017, which marked a 2.6% increase from the year-ago number.
Adjusted EPS however missed the Zacks Consensus Estimate by a penny. Including one-time items, the company reported earnings of 8 cents per share, down 55.5% from the year-ago quarter.
Revenue Details
Total revenue in the reported quarter increased 9.2% year over year to $258.6 million, which exceeds the Zacks Consensus Estimate by 1.4%. Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues rose 6.4% year over year.
Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise
The first quarter’s solid revenue growth was primarily driven by strong contribution from the company’s Specialty Surgical Solutions and Orthopedics and Tissue Technologies segments.
In terms of product categories, revenues from the company's Specialty Surgical Solutions segment rose 3.4% (up 4% organically) to $156.3 million, aided by strong performance by the dural repair franchise, which grew in high single digits in the reported quarter.
Orthopedics and Tissue Technologies’ revenues came in at $102.3 million in the first quarter, up 19.6% year over year (up 6.4% organically). Regenerative Technologies (excluding Derma Sciences) revenues, the largest franchise in the segment, increased double digits in the first quarter.
Margin Trend
Gross margin expanded 233 basis points (bps) to 66.5% in the reported quarter. Adjusted gross margin improved 100 bps to 70.2%, driven by the company’s higher margin regenerative products and improved operating efficiency.
Selling, general and administrative expenses increased 27.2% to $142.4 million in the reported quarter, and research and development expenses rose 7.2% to $15.5 million. Adjusted operating margin (excluding amortization of intangible asset) saw a 536-bps contraction to 5.4% in the first quarter.
Financial Position
Integra exited first-quarter 2017 with cash and cash equivalents of $124.1 million, up from $102 million recorded at the end of fiscal 2016. As of Mar 31, 2017, net cash flow from operating activities was $28.8 million, up from $25.0 million in the year-ago period.
2017 Outlook Reiterated
Management has reaffirmed its full-year 2017 revenues in the range of $1.12 billion to $1.14 billion and organic sales growth between 7% and 8.5%. The Zacks Consensus Estimate for full-year 2017 revenues is at $1.13 billion, which is within the guided range.
The company also projects adjusted EPS between $1.88 and $1.94. The Zacks Consensus Estimate for 2017 adjusted earnings is pegged at $1.91 per share, which is within the company forecasted range.
Our Take
Integra exited the first quarter of 2017 on a mixed note with earnings missing the Zacks Consensus Estimate and revenues beating the same. We are concerned about the currency headwind that is expected to affect Integra’s financial performance in the rest of 2017. The rise in operating expenses, the integration costs of Derma Sciences and pre-closing costs for Codman Neurosurgery acquisition are likely to affect the company in the upcoming quarters.
Nonetheless, we believe the company is trying to execute its growth plan through product launches and an efficient management team. During the reported quarter, the company recorded strong year-over-year improvement on the revenue front which is indicative of healthy growth via organic and inorganic means across all segments.
Zacks Rank & Key Picks
Integra currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the broader Medical space include Inogen, Inc. (INGN - Free Report) , ZELTIQ Aesthetics, Inc. and Hill-Rom Holdings, Inc. . While Inogen and ZELTIQ Aesthetics sport a Zacks Rank #1 (Strong Buy), Hill-Rom carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained 66.5% in the last one year, compared with the S&P 500’s gain of 15.01%. The company reported a stellar four-quarter positive average earnings surprise of over 49.08%.
ZELTIQ Aesthetics surged 87.4% in the last one year, compared with the S&P 500’s gain. Its four-quarter average earnings surprise was a positive of 12.30%.
Hill-Rom gained over 37.8% in the past one year, better than the S&P 500 mark. It posted a trailing four-quarter positive average earnings surprise of 3.1%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
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Integra LifeSciences (IART) Misses Q1 Earnings, Retains View
New Jersey-based medical device manufacturer, Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 39 cents in the first quarter of 2017, which marked a 2.6% increase from the year-ago number.
Adjusted EPS however missed the Zacks Consensus Estimate by a penny. Including one-time items, the company reported earnings of 8 cents per share, down 55.5% from the year-ago quarter.
Revenue Details
Total revenue in the reported quarter increased 9.2% year over year to $258.6 million, which exceeds the Zacks Consensus Estimate by 1.4%. Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues rose 6.4% year over year.
Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise
Integra LifeSciences Holdings Corporation Price, Consensus and EPS Surprise | Integra LifeSciences Holdings Corporation Quote
The first quarter’s solid revenue growth was primarily driven by strong contribution from the company’s Specialty Surgical Solutions and Orthopedics and Tissue Technologies segments.
In terms of product categories, revenues from the company's Specialty Surgical Solutions segment rose 3.4% (up 4% organically) to $156.3 million, aided by strong performance by the dural repair franchise, which grew in high single digits in the reported quarter.
Orthopedics and Tissue Technologies’ revenues came in at $102.3 million in the first quarter, up 19.6% year over year (up 6.4% organically). Regenerative Technologies (excluding Derma Sciences) revenues, the largest franchise in the segment, increased double digits in the first quarter.
Margin Trend
Gross margin expanded 233 basis points (bps) to 66.5% in the reported quarter. Adjusted gross margin improved 100 bps to 70.2%, driven by the company’s higher margin regenerative products and improved operating efficiency.
Selling, general and administrative expenses increased 27.2% to $142.4 million in the reported quarter, and research and development expenses rose 7.2% to $15.5 million. Adjusted operating margin (excluding amortization of intangible asset) saw a 536-bps contraction to 5.4% in the first quarter.
Financial Position
Integra exited first-quarter 2017 with cash and cash equivalents of $124.1 million, up from $102 million recorded at the end of fiscal 2016. As of Mar 31, 2017, net cash flow from operating activities was $28.8 million, up from $25.0 million in the year-ago period.
2017 Outlook Reiterated
Management has reaffirmed its full-year 2017 revenues in the range of $1.12 billion to $1.14 billion and organic sales growth between 7% and 8.5%. The Zacks Consensus Estimate for full-year 2017 revenues is at $1.13 billion, which is within the guided range.
The company also projects adjusted EPS between $1.88 and $1.94. The Zacks Consensus Estimate for 2017 adjusted earnings is pegged at $1.91 per share, which is within the company forecasted range.
Our Take
Integra exited the first quarter of 2017 on a mixed note with earnings missing the Zacks Consensus Estimate and revenues beating the same. We are concerned about the currency headwind that is expected to affect Integra’s financial performance in the rest of 2017. The rise in operating expenses, the integration costs of Derma Sciences and pre-closing costs for Codman Neurosurgery acquisition are likely to affect the company in the upcoming quarters.
Nonetheless, we believe the company is trying to execute its growth plan through product launches and an efficient management team. During the reported quarter, the company recorded strong year-over-year improvement on the revenue front which is indicative of healthy growth via organic and inorganic means across all segments.
Zacks Rank & Key Picks
Integra currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the broader Medical space include Inogen, Inc. (INGN - Free Report) , ZELTIQ Aesthetics, Inc. and Hill-Rom Holdings, Inc. . While Inogen and ZELTIQ Aesthetics sport a Zacks Rank #1 (Strong Buy), Hill-Rom carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen gained 66.5% in the last one year, compared with the S&P 500’s gain of 15.01%. The company reported a stellar four-quarter positive average earnings surprise of over 49.08%.
ZELTIQ Aesthetics surged 87.4% in the last one year, compared with the S&P 500’s gain. Its four-quarter average earnings surprise was a positive of 12.30%.
Hill-Rom gained over 37.8% in the past one year, better than the S&P 500 mark. It posted a trailing four-quarter positive average earnings surprise of 3.1%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>