Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Integra LifeSciences Holdings Corporation (IART - Snapshot Report) reported earnings per share (‘EPS’) of 46 cents in the third quarter of fiscal 2012, significantly up from 39 cents in the year-ago quarter. Adjusted EPS increased 10.3% year over year to 85 cents and comfortably beat the Zacks Consensus Estimate of 76 cents.

Total revenue during the quarter increased 4% year over year (5% at constant exchange rates or CER) to $210.1 million. However, it missed the Zacks Consensus Estimate of $211 million. The growth was primarily on the back of improved sales across most of the segments of Integra.

Segment wise, barring International revenues (down 3.4% year over year to $43.2 million) and U.S. Instruments (down 0.2% year over year to $41.5 million), all the other segments of Integra recorded growth – U.S. Spine & Other (up 1.9% to $49.2 million), U.S. Neurosurgery (up 1.1% to $43.3 million), and U.S. Extremities (up 32.8% to $32.9 million) at CER.

Product category wise, worldwide Orthopedics sales increased 9.9% year over year to $94.2 million (up 12.5% in the U.S., offset by a 4.9% dip outside the U.S.) in the quarter. The company also registered a 0.1% year-over-year drag in worldwide Neurosurgery sales to $69.7 million as a 0.8% rise in US Neurosurgery revenues were more than offset by a 1.6% dip in the non-U.S. revenues during the quarter. Worldwide Instruments revenues were $46.2 million, down 1.0% year over year with a 0.1% decline in U.S. sales and 7.3% dip in non-U.S. sales.

Integra witnessed a 5.7% year-over-year increase in gross profit to $130.6 million. Gross margin during the quarter was up 108 basis points (bps) to 62.16%. During the quarter, research and development expenses dropped 0.6% to $13.1 million but selling, general and administrative expenses increased 6.4% year over year to $93.1 million. Operating margin expanded 35 bps to 9.4%.

Integra exited the quarter with $125.7 million in cash, cash equivalents compared with $100.8 million at the end of 2011. The company generated $27.9 million in cash flow from operations and incurred capital expenditures of $19.7 million in the quarter.

Outlook

Integra reiterated its 2012 revenue guidance of $828–$838 million. However, the company increased its 2012 adjusted EPS guidance to $3.04–$3.09 (earlier guidance being $2.97–$3.06). The current Zacks Consensus Estimate for revenues and EPS of $834 million and $3.05, respectively, are in line with the company’s guided range.

Recommendation

We are encouraged by the company’s balanced performance in the reported quarter amidst a challenging macroeconomic environment. The company’s focus on strategic initiatives to drive growth and profitability in the orthopedic market is quite encouraging. Several initiatives on the company’s part like planned product launches and acquisitions are expected to accelerate sales growth for the next several quarters.

However, tighter capital spending continues to challenge the surgical instruments market. Moreover, Integra faces direct competition in the medical instruments & supplies industry from major players like Medtronic (MDT - Analyst Report) and Stryker Corp. (SYK - Analyst Report). Currently, the company retains a short-term Zacks #3 Rank (Hold rating).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%