We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
New Jersey-based medical device manufacturer, Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 79 cents in the second quarter of 2016, which were 5.3% up from the year-ago adjusted number.
Adjusted EPS beat the Zacks Consensus Estimate of 76 cents per share by 3.9%.
Including the one-time item, the company reported earnings of 32 cents per share lower than 35 cents in the year-ago quarter.
Revenue Details
Total revenue in the reported quarter increased 17.2% year over year to $249.3 million, handily beating the Zacks Consensus Estimate of $243 million. Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues increased 10.7% year over year, resulting in of 9.8% for the first half of 2016.
The first quarter’s solid revenue growth was primarily driven by strength observed in the Regenerative product portfolios of both the company’s Specialty Surgical Solutions and Orthopedics and Tissue Technologies segments. Besides, strength observed in both the U.S. and international sales also contributed to the quarter’s topline growth.
In terms of product categories, revenues from the company's Specialty Surgical Solutions rose 7.7% (up 7.2% organically) to $158.2 million, aided by a strong performance in the dural repair franchise, which grew in mid-teens in the reported quarter largely due to bovine growth arising from an expanded customer base and border acceptance of DuroGen secure and bovine pericardium. Further, management witnessed consistent, strong momentum in Integra’s Precision Tools and Instruments franchise, which increased by mid-single digits in the second quarter. Tissue Ablation and NeuroCritical Care registered modest year over year growth in the reported quarter.
Orthopedics and Tissue Technologies’ revenues came in at $91.2 million in the second quarter, up 38% year over year (up 18.9% organically). Regenerative Technologies, the largest franchise in the segment (70% of total sales within this segment), led the overall growth. Sales of this segment excluding the TEI acquisitionincreased more than 25%, while sales of extremities franchise increased high teens driven by contributions from the Salto acquisition.
Gross margin contracted 54 basis points (bps) to 64.1% in the reported quarter. However, adjusted gross margin improved 130 bps to more than 69% reflecting favorable product mix.
While selling, general and administrative expenses increased 20% to $119.2 million in the reported quarter, research and development expenses rose 22.2% to $14.7 million. Adjusted operating margin (excluding amortization of intangible asset) experienced a contraction of 190 bps to 10.4% in the second quarter.
Financial Position
Integra LifeSciences exited the second quarter of 2016 with cash and cash equivalents of $86.8 million, up from $77.1 million at the end of the first quarter. Year-to-date, net cash flow from operating activities was $63.1 million, higher than $59.6 million in the year-ago period.
2016 Outlook
Integra has raised the lower end of its full-year 2016 revenue guidance to an updated range of $992 million–$1.002 billion, reflecting annualized growth of 9% organically (the earlier range was $985 million–$1 billion; organic growth of 8%).
The company currently expects its 2016 adjusted EPS in the range of $3.43–$3.53 ($3.38–$3.50).
Our Take
Integra Lifesciences reported another impressive quarter with earnings and revenues both ahead of the respective Zacks Consensus Estimate. Strong year-over-year improvement on the revenue front, in particular, is indicative of the company's healthy growth via organic and inorganic means across all its segments. However, company’s escalating costs and expenses continue to weigh on margin.
We, also remain concerned about the unfavorable foreign currency fluctuations that can considerably hamper Integra's financial performance in the coming quarters. Nonetheless, we believe the company will successfully overcome these hurdles soon, backed by new product launches and an efficient management team.
Zacks Rank
Currently, Integra has a Zacks Rank #3 (Hold). Some better-ranked medical stocks are Anika Therapeutics Inc. (ANIK - Free Report) , ANI Pharmaceuticals, Inc. (ANIP - Free Report) and Fibrocell Science, Inc. . All the three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Integra (IART) Tops Q2 Earnings, Grows Organically, Ups View
New Jersey-based medical device manufacturer, Integra LifeSciences Holdings Corporation (IART - Free Report) reported adjusted earnings per share (EPS) of 79 cents in the second quarter of 2016, which were 5.3% up from the year-ago adjusted number.
Adjusted EPS beat the Zacks Consensus Estimate of 76 cents per share by 3.9%.
Including the one-time item, the company reported earnings of 32 cents per share lower than 35 cents in the year-ago quarter.
Revenue Details
Total revenue in the reported quarter increased 17.2% year over year to $249.3 million, handily beating the Zacks Consensus Estimate of $243 million. Excluding the contribution of revenues from acquisitions, discontinued products and the effect of currency exchange rates, organic revenues increased 10.7% year over year, resulting in of 9.8% for the first half of 2016.
The first quarter’s solid revenue growth was primarily driven by strength observed in the Regenerative product portfolios of both the company’s Specialty Surgical Solutions and Orthopedics and Tissue Technologies segments. Besides, strength observed in both the U.S. and international sales also contributed to the quarter’s topline growth.
In terms of product categories, revenues from the company's Specialty Surgical Solutions rose 7.7% (up 7.2% organically) to $158.2 million, aided by a strong performance in the dural repair franchise, which grew in mid-teens in the reported quarter largely due to bovine growth arising from an expanded customer base and border acceptance of DuroGen secure and bovine pericardium. Further, management witnessed consistent, strong momentum in Integra’s Precision Tools and Instruments franchise, which increased by mid-single digits in the second quarter. Tissue Ablation and NeuroCritical Care registered modest year over year growth in the reported quarter.
Orthopedics and Tissue Technologies’ revenues came in at $91.2 million in the second quarter, up 38% year over year (up 18.9% organically). Regenerative Technologies, the largest franchise in the segment (70% of total sales within this segment), led the overall growth. Sales of this segment excluding the TEI acquisitionincreased more than 25%, while sales of extremities franchise increased high teens driven by contributions from the Salto acquisition.
INTEGRA LIFESCI Price, Consensus and EPS Surprise
INTEGRA LIFESCI Price, Consensus and EPS Surprise | INTEGRA LIFESCI Quote
Margin Trends
Gross margin contracted 54 basis points (bps) to 64.1% in the reported quarter. However, adjusted gross margin improved 130 bps to more than 69% reflecting favorable product mix.
While selling, general and administrative expenses increased 20% to $119.2 million in the reported quarter, research and development expenses rose 22.2% to $14.7 million. Adjusted operating margin (excluding amortization of intangible asset) experienced a contraction of 190 bps to 10.4% in the second quarter.
Financial Position
Integra LifeSciences exited the second quarter of 2016 with cash and cash equivalents of $86.8 million, up from $77.1 million at the end of the first quarter. Year-to-date, net cash flow from operating activities was $63.1 million, higher than $59.6 million in the year-ago period.
2016 Outlook
Integra has raised the lower end of its full-year 2016 revenue guidance to an updated range of $992 million–$1.002 billion, reflecting annualized growth of 9% organically (the earlier range was $985 million–$1 billion; organic growth of 8%).
The company currently expects its 2016 adjusted EPS in the range of $3.43–$3.53 ($3.38–$3.50).
Our Take
Integra Lifesciences reported another impressive quarter with earnings and revenues both ahead of the respective Zacks Consensus Estimate. Strong year-over-year improvement on the revenue front, in particular, is indicative of the company's healthy growth via organic and inorganic means across all its segments. However, company’s escalating costs and expenses continue to weigh on margin.
We, also remain concerned about the unfavorable foreign currency fluctuations that can considerably hamper Integra's financial performance in the coming quarters. Nonetheless, we believe the company will successfully overcome these hurdles soon, backed by new product launches and an efficient management team.
Zacks Rank
Currently, Integra has a Zacks Rank #3 (Hold). Some better-ranked medical stocks are Anika Therapeutics Inc. (ANIK - Free Report) , ANI Pharmaceuticals, Inc. (ANIP - Free Report) and Fibrocell Science, Inc. . All the three stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>