UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 4, 2008
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware (State or other jurisdiction of incorporation or organization) |
0-26224 (Commission File Number) |
51-0317849 (I.R.S. Employer Identification No.) |
311 Enterprise Drive
Plainsboro, NJ 08536
(Address of principal executive offices) (Zip Code)
Plainsboro, NJ 08536
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (609) 275-0500
Not Applicable
(Former name or former address, if changed since last report)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On June 4, 2008, Integra LifeSciences Holdings Corporation (the “Company”) issued a press release
announcing financial results for the quarter ended March 31, 2008 (the “Earnings Press Release”).
A copy of the Earnings Press Release is attached as Exhibit 99.1 to this Current Report on Form 8-K
and is incorporated by reference into this Item. In the financial statements portion of the
Earnings Press Release, the Company has included a reconciliation of GAAP net income to adjusted
net income and GAAP earnings per diluted share to adjusted earnings per diluted share used by
management for the quarters ended March 31, 2008 and 2007.
The information contained in Item 2.02 of this Current Report on Form 8-K (including the Earning
Press Release) is being furnished and shall not be deemed “filed” for the purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the
liabilities of that Section. The information contained in Item 2.02 of this Current Report on Form
8-K (including the Earnings Press Release) shall not be incorporated by reference into any
registration statement or other document pursuant to the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Discussion of Adjusted Financial Measures
In addition to our GAAP results, we provide adjusted net income and adjusted earnings per diluted
share. Adjusted net income consists of net income excluding (i) acquisition-related charges, (ii)
certain employee termination and related costs, (iii) facility consolidation, manufacturing and
distribution transfer and system integration charges, (iv) charges associated with discontinued or
withdrawn product lines, (v) incremental audit, legal and/or bank fees related to the delay in the
filing of our 2007 Annual Report on Form 10-K, and (vi) the income tax expense/benefit related to
these adjustments. Adjusted earnings per diluted share are calculated by dividing adjusted net
income for earnings per diluted share by diluted weighted average shares outstanding.
Integra believes that the presentation of adjusted net income and adjusted earnings per diluted
share provides important supplemental information to management and investors regarding financial
and business trends relating to the Company’s financial condition and results of operations.
Management uses non-GAAP financial measures in the form of adjusted net income and adjusted
earnings per diluted share when evaluating operating performance because we believe that the
inclusion or exclusion of the items described below, for which the amounts and/or timing may vary
significantly depending upon the Company’s acquisition, integration, and restructuring activities
or for which the amounts are not expected to recur at the same magnitude as we further build out
our finance department and implement certain tax planning strategies, provides a supplemental
measure of our operating results that facilitates comparability of our operating performance from
period to period, against our business model objectives, and against other companies in our
industry. We have chosen to provide this information to investors so they can analyze our operating
results in the same way that management does and use this information in their assessment of our
core business and the valuation of our Company.
Internally, adjusted net income and adjusted earnings per diluted share are significant measures
used by management for purposes of:
| • | supplementing the financial results and forecasts reported to the Company’s board of directors; | ||
| • | evaluating, managing and benchmarking the operating performance of the Company; | ||
| • | establishing internal operating budgets; | ||
| • | determining compensation under bonus or other incentive programs; | ||
| • | enhancing comparability from period to period; | ||
| • | comparing performance with internal forecasts and targeted business models; and | ||
| • | evaluating and valuing potential acquisition candidates. |
2
Adjusted net income reflects net income adjusted for the following items:
• Acquisition-related charges. Acquisition-related charges include in-process research and
development charges, charges related to discontinued research and development projects for product
technologies that were made redundant by an acquisition, inventory fair value purchase accounting
adjustments, and impairments to existing intangible assets in connection with a subsequent
acquisition. Inventory fair value purchase accounting adjustments consist of the increase to cost
of goods sold that occur as a result of expensing the “step up” in the fair value of inventory that
we purchased in connection with acquisitions as that inventory is sold during the financial period.
Although recurring given the ongoing character of our acquisition program, these
acquisition-related charges are not factored into the evaluation of our performance by management
after completion of acquisitions because they are of a temporary nature, they are not related to
our core operating performance and the frequency and amount of such charges vary significantly
based on the timing and magnitude of our acquisition transactions as well as the level of inventory
on hand at the time of acquisition.
• Employee termination and related costs. Employee termination and related costs consist of
charges related to significant reductions in force that are not initiated in connection with
facility consolidations or manufacturing transfers and senior management level terminations.
Management excludes these items when evaluating Integra’s operating performance because these
amounts do not affect our core operations and because of the infrequent and/or large-scale nature
of these activities.
• Facility consolidation, manufacturing and distribution transfer and system integration
charges. These charges, which include employee termination and other costs associated with exit
or disposal activities, costs related to transferring manufacturing and/or distribution activities
to different locations, and costs associated with the worldwide implementation of a single
enterprise resource planning system, result from rationalizing and enhancing our existing
manufacturing, distribution and administrative infrastructure. Many of these cost-saving and
efficiency-driven activities are identified as opportunities in connection with acquisitions that
provide the Company with additional capacity or economies of scale. Although recurring in nature
given management’s ongoing review of the efficiency of our manufacturing, distribution and
administrative facilities and operations, management excludes these items when evaluating the
operating performance of the Company because the frequency and amount of such charges vary
significantly based on the timing and magnitude of the Company’s rationalization activities and
are, in some cases, dependent upon opportunities identified in acquisitions, which also vary in
frequency and magnitude.
• Charges associated with discontinued or withdrawn product lines. This represents charges
taken and reductions in revenue recorded in connection with product lines that the Company
discontinues or withdraws. Management excludes this item when evaluating Integra’s operating
performance because of the infrequent nature of this activity.
• Incremental audit, legal and/or bank fees related to the delay in the filing of our 2007
Annual Report on Form 10-K. These charges include incremental fees directly related to the
late filing of our Annual Report on Form 10-K for the year ended 2007,
including audit fee overruns from our independent registered accounting firm, fees for legal advice
and consultations with our external counsel, and fees paid to various banks in connection with
obtaining waivers to certain non-financial debt covenants. Management excludes these items when
evaluating Integra’s operating performance because such incremental amounts are not expected to be
incurred to the same magnitude subsequent to the completion of our 2007 audit.
• Income tax expense (benefit) and the cumulative impact of changes in income tax rates and
certain other infrequently occurring items that affected the reported income tax rate for the
quarter and year-to-date period. Income tax expense is adjusted by (i) the amount of additional
tax expense or benefit that the Company estimates that it would record if it used non-GAAP results
instead of GAAP results in the calculation of its tax provision, based on the statutory rate
applicable to jurisdictions in which such non-GAAP adjustments relate, (ii) reductions related to
incremental income tax provisions directly related to our European legal entity restructuring
activities, (iii) eliminating the cumulative impact on prior quarters of changes in statutory
income tax rates during the year, (iv) penalties, interest, and settlements with government tax
authorities related to prior tax periods, and (v) other infrequently occurring tax charges.
Adjusted net income and adjusted earnings per diluted share are not calculated in accordance with
GAAP, and should be considered supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. Non-GAAP financial measures have limitations
in that they do not reflect all of the costs or benefits associated with the operations of the
Company’s business as determined in accordance with GAAP. As a result, you should not consider
these measures in isolation or as a substitute for analysis of Integra’s results as reported under
GAAP. Integra expects to continue to incur expenses of a nature similar to some of the non-GAAP
3
adjustments described above, and exclusion of these items from its adjusted net income should not
be construed as an inference that all of these costs are unusual, infrequent or non-recurring. Some
of the limitations in relying on adjusted net income and adjusted earnings per diluted share are:
• Integra periodically acquires other companies or businesses, and we expect to continue to incur
acquisition-related expenses and charges in the future. These costs can directly impact the amount
of the Company’s available funds or could include costs for aborted deals which may be significant
and reduce GAAP net income.
• All of the adjustments have been tax affected at Integra’s actual tax rates. Depending on the
nature of the adjustments and the tax treatment of the underlying items, the effective tax rate
related to adjusted net income could differ significantly from the effective tax rate related to
GAAP net income.
In the financial statements portion of the Earnings Press Release, the Company has included a
reconciliation of GAAP net income to adjusted net income and GAAP earnings per diluted share to
adjusted earnings per diluted share used by management for the quarters ended March 31, 2008 and
2007. Also included are reconciliations for future periods.
| ITEM 2.04 | TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT |
On May 31, 2008, we notified Wells Fargo Bank, N.A. as trustee under the indentures governing our
Senior Convertible Notes due 2010 and 2012 (collectively, the “Notes”), of our obligation to pay
additional amounts to the holders of the Notes due to the suspension of the registration statements
that permit resales of the common stock issuable upon conversion of the Notes. Additional amounts
were calculated with respect to the period from and including May 1, 2008 to but excluding June 1,
2008 at the prescribed rate of 0.25% per annum of the aggregate principal amount of the Notes
outstanding. We paid additional amounts in the aggregate amount of approximately $70,000 to the
holders of the Notes.
| ITEM 7.01 | REGULATION FD DISCLOSURE |
Attached as Exhibit 99.1, and incorporated into this Item 7.01 by reference, is the Earnings Press
Release issued on June 4, 2008 by the Company.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) Exhibits
| 99.1 | Earnings Press Release, dated June 4, 2008, issued by Integra LifeSciences Holdings Corporation |
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
| Date: June 4, 2008 | By: | /s/ Stuart M. Essig | ||
| Stuart M. Essig | ||||
| Title: | President and Chief Executive Officer | |||
5
EXHIBIT INDEX
| Exhibit No. | Description | |||
| 99.1 | Earnings Press Release, dated June 4, 2008, issued by Integra LifeSciences Holdings Corporation. |
|||
6
Exhibit 99.1
News Release
Contacts:
Integra LifeSciences Holdings Corporation
John B. Henneman, III
|
Karen Mroz-Bremner | |
Executive Vice President,
|
Senior Manager, | |
Finance and Administration
|
Corporate Development | |
and Chief Financial Officer
|
and Investor Relations | |
(609) 936-2481
|
(609) 936-6929 | |
jhenneman@Integra-LS.com
|
Karen.mroz-bremner@Integra-LS.com |
Integra LifeSciences Reports First Quarter 2008 Financial Results
Revenues for the First Quarter Increase 27% to $156.0 million
Revenues for the First Quarter Increase 27% to $156.0 million
Plainsboro,
New Jersey, June 4, 2008 — Integra LifeSciences Holdings Corporation (NASDAQ: IART)
today reported its financial results for the first quarter ending March 31, 2008. Total revenues
were approximately $156.0 million, reflecting an increase of $33.0 million, or 27%, over the first
quarter of 2007. Revenues from products acquired since the beginning of the first quarter of 2007
were $23.2 million for the first quarter of 2008. There were no revenues from such acquired
products in the first quarter of 2007. The company reported GAAP net income of $11.6 million, or
$0.41 per diluted share, for the first quarter of 2008, compared to GAAP net income of $9.1
million, or $0.30 per diluted share, in the first quarter of 2007.
Operating income for the first quarter of 2008 was $20.5 million, a 24 percent increase over the
prior year period. Integra generated approximately $20.3 million in cash flows from operations in
the quarter.
In addition to GAAP results, Integra reports adjusted net income and adjusted diluted earnings per
share. A further discussion of these non-GAAP financial measures can be found below, and
reconciliations of GAAP net income to adjusted net income and GAAP diluted earnings per share to
adjusted diluted earnings per share for the quarters ended March 31, 2008 and 2007 appear in the
financial statements attached to this release.
Adjusted net income for the first quarter of 2008, computed with the adjustments to GAAP reporting
set forth in the attached reconciliation, was $14.4 million, or $0.50 per diluted share. In the
first quarter of 2007, adjusted net income, computed with the adjustments to GAAP reporting set
forth in the attached reconciliation, was $9.8 million, or $0.33 per diluted share.
“Integra posted strong results this quarter,” said Stuart Essig, Integra’s President and Chief
Executive Officer. “We are pleased with the underlying strength of our business, including both
revenue growth and profitability.”
Integra LifeSciences presents its revenues in two categories: a) Medical Surgical Equipment and b)
Neurosurgical and Orthopedic Implants.
The company’s revenues for the periods were as follows:
| Three Months | ||||||||
| Ended March 31, | ||||||||
| 2008 | 2007 | |||||||
Revenue: ($ in thousands) |
||||||||
Medical Surgical Equipment |
$ | 88,408 | $ | 75,945 | ||||
Neurosurgical and Orthopedic Implants |
67,600 | 47,087 | ||||||
Total Revenue |
$ | 156,008 | $ | 123,032 | ||||
Growth in the Medical Surgical Equipment category was led by sales of product lines acquired after
the beginning of the first quarter of 2007, which contributed $12.7 million of equipment product
revenues during the first quarter of 2008. There were no corresponding acquired revenues in the
first quarter of 2007. During 2008, we expect internally generated revenue growth in our Medical
Surgical Equipment category to be lower than in recent periods as we continue to integrate
acquisitions, and focus on improving the profitability of these product lines.
In the Neurosurgical and Orthopedic Implants category, internal growth continues to be strong.
Sales of dermal repair products, the DuraGen® family of products, collagen-based bone growth
products, and extremity reconstruction implants led revenue growth in the Neurosurgical and
Orthopedic Implants category. Sales of product lines acquired after the beginning of the first
quarter of 2007, which consists of the products acquired from IsoTis, contributed $10.5 million of
implant product revenues during the first quarter of 2008. There were no such acquired revenues in
the first quarter of 2007.
Gross margin on total revenues in the first quarter of 2008 was 60.1%. Cost of goods sold included
$3.2 million in charges for inventory fair value purchase accounting from the Precise Dental and
IsoTis acquisitions and charges for restructuring activities. These charges adversely affected the
gross margin by over 2 percentage points.
Research and development expense was $7.8 million in the first quarter of 2008 as compared to $6.1
million in the year ago period.
Selling, general and administrative expense increased to $62.5 million in the first quarter of
2008, or 40% of revenue, compared to $49.1 million, or 40% of revenue, in the first quarter of 2007
and down sequentially from 41% of sales in the fourth quarter of 2007. Substantial increases in
the size of the company’s sales and marketing organizations, the addition of several acquired
entities and higher expenses for corporate staff and consulting accounted for most of the increase
in selling, general and administrative expense over the prior year. As the company gains more
leverage from its selling organizations, decreases its reliance on outside consultants and fully
integrates the IsoTis, LXU and Precise acquisitions, it expects selling, general and administrative
expenses to decrease to between 38% and 40% of revenue during 2008.
Net interest expense was $3.5 million for the first quarter of 2008 as compared to $2.5 million for
the first quarter of 2007.
Other income was $1.5 million in the first quarter of 2008 reflecting the impact of the euro’s
strength on foreign-currency denominated balances among the company’s subsidiaries.
Integra reported an effective income tax rate of 37.5% for the first quarter of 2008.
At March 31, 2008, cash totaled $199 million. Prior to quarter end, the company borrowed $120
million under its credit facility in anticipation of funding the payment of its maturing 2-1/2%
Contingent Convertible Subordinated Notes. Holders who converted notes, with the net share
settlement feature, prior to maturity received the principal amount in cash and the net share
amount in stock. Approximately 768,000 new shares were issued and $120 million dollars in cash was
used to settle these notes, later in the first quarter and early in the second quarter.
As of March 31, 2008, there was $54.5 million available for repurchases under the existing share
repurchase authorization, which will expire on December 31, 2008. Integra did not repurchase any
shares of common stock during the first quarter.
Full year guidance for revenues and adjusted earnings per share remains unchanged. The company has
updated quarterly guidance for the remaining three quarters of the year to maintain its full year
revenue and earnings per share guidance in light of first quarter actual results. These estimates
assume foreign currency exchange rates remain unchanged from current rates throughout 2008. In
accordance with usual practice, expectations for 2008 financial performance do not include the
impact of acquisitions or other strategic corporate transactions that have not yet closed.
In the future the company may record, or expect to record, certain additional revenues, gains,
expenses or charges (such as acquisition-related charges, facility consolidation, manufacturing and
distribution transfer and system integration charges, and certain employee termination and related
costs) that it will exclude in the calculation of adjusted earnings per share for historical
periods and in providing adjusted earnings per share guidance.
In 2008, Integra anticipates various additional acquisition related charges from the IsoTis and
Precise acquisitions. It also anticipates facility consolidation, manufacturing and distribution
transfer and system integration charges related to various projects including the consolidation of
the Integra Pain Management business into Salt Lake City, continued transfer of manufacturing to
Puerto Rico and Oracle implementation activities in its Ohio and European facilities. Finally, in
the second quarter, the Company anticipates incremental audit, legal and/or bank fees related to
the delay in completing the audit of its 2007 financial statements. These anticipated charges are
outlined in the “Reconciliation of non-GAAP adjustments — guidance” table at the end of this
release.
Quarterly and full-year revenue and earnings per share expectations are as follows:
| Revenue Guidance | GAAP Earnings Per | Adjusted Earnings | ||||
| Period | (in millions) | Share Guidance | Per Share Guidance | |||
Second Quarter 2008
|
$157 — $163 | $0.42 — $0.46 | $0.44 — $0.48 | |||
Third Quarter 2008
|
$155 — $161 | $0.45 — $0.51 | $0.46 — $0.52 | |||
Fourth Quarter 2008
|
$167 — $175 | $0.60 — $0.65 | $0.60 — $0.65 | |||
2008
|
$635 — $655 | $1.88 — $2.03 | $2.00 — $2.15 |
On a quarterly basis, the company expects to incur approximately $3.9 million, or $0.09 per share,
of share-based compensation expense associated with FAS 123R in 2008. This non-cash compensation
expense is included in both the GAAP and adjusted earnings per share guidance for 2008 provided
above.
The company has scheduled a conference call for 9:00 AM ET Thursday, June 5, 2008, to discuss the
financial results for the first quarter of 2008 and forward-looking financial guidance. The call
is open to all listeners and will be followed by a question and answer session. Access to the live
call is available by dialing 913-312-1487 or through a listen-only webcast via a link provided on
the Investor Relations homepage of Integra’s website at www.Integra-LS.com. A replay of the
conference call will be accessible starting one hour following the live event. Access to the
replay is available through June 19, 2008 by dialing 719-457-0820 (access code 7222524) or through
the webcast accessible on our home page.
Integra LifeSciences Holdings Corporation, a world leader in regenerative medicine, is dedicated to
improving the quality of life for patients through the development, manufacturing, and marketing of
cost-effective surgical implants and medical instruments. Our products, used primarily in
neurosurgery, extremity reconstruction, orthopedics and general surgery, are used to
treat millions of patients every year. Integra’s headquarters are in Plainsboro, New Jersey, and we
have research and manufacturing facilities throughout the world. Please visit our website at
(http://www.Integra-LS.com).
This news release contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks, uncertainties and reflect the Company’s judgment
as of the date of this release. Forward-looking statements include, but are not limited to,
statements concerning future financial performance, including projections for revenues, gross
margin on product revenues, selling, general and administrative expenses, GAAP and adjusted net
income, GAAP and adjusted earnings per diluted share, acquisition and integration related costs and
non-cash compensation expense associated with FAS 123R. Such forward-looking statements involve
risks and uncertainties that could cause actual results to differ materially from predicted or
expected results. Such risks and uncertainties include, but are not limited to, the Company’s
inability to design or improve internal controls to address the disclosed material weaknesses; the
impact upon operations of legal compliance matters or internal controls review, improvement and
remediation; difficulties in controlling expenses, including costs of legal compliance matters or
internal controls review, improvement and remediation; the impact of changes in management or staff
levels; the Company’s ability to maintain relationships with customers of acquired entities;
physicians’ willingness to adopt, and third-party payors’ willingness to provide reimbursement for,
the Company’s recently launched and planned products; initiatives launched by the Company’s
competitors; the Company’s ability to secure regulatory approval for products in development; the
Company’s ability to comply with and obtain approvals for products of human origin and comply with
recently enacted regulations regarding products containing materials derived from animal sources;
the Company’s ability to integrate acquired businesses; the Company’s ability to leverage its
existing selling organizations and administrative infrastructure; the Company’s ability to increase
product sales and gross margins, and control non-product costs; the amount and timing of
acquisition and integration related costs; the timing and amount of share-based awards granted to
employees; and the economic, competitive, governmental, technological and other risk factors and
uncertainties identified under the heading “Risk Factors” included in Item 1A of Integra’s Annual
Report on Form 10-K for the year ended December 31, 2007 and information contained in subsequent
filings with the Securities and Exchange Commission.
Discussion of Adjusted Financial Measures
In addition to our GAAP results, we provide adjusted net income and adjusted earnings per diluted
share. Adjusted net income consists of net income excluding (i) acquisition-related charges, (ii)
certain employee termination and related costs, (iii) facility consolidation, manufacturing and
distribution transfer and system integration charges, (iv) charges associated with discontinued or
withdrawn product lines, (v) incremental audit, legal and/or bank fees related to the delay in the
filing of our 2007 Annual Report on Form 10-K, and (vi) the income tax expense/benefit related to
these adjustments. Adjusted earnings per diluted share are calculated by dividing adjusted net
income for earnings per diluted share by diluted weighted average shares outstanding.
Integra believes that the presentation of adjusted net income and adjusted earnings per diluted
share provides important supplemental information to management and investors regarding financial
and business trends relating to the Company’s financial condition and results of operations. For
further information regarding why Integra believes that these non-GAAP financial measures provide
useful information to investors, the specific manner in which management uses these measures, and
some of the limitations associated with the use of these measures, please refer to the Company’s
Current Report on Form 8-K regarding this earnings press release filed today with the Securities
and Exchange Commission. This Current Report on Form 8-K is available on the SEC’s website at
www.sec.gov or on our website at www.integra-LS.com.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share amounts)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
TOTAL REVENUE |
$ | 156,008 | $ | 123,032 | ||||
COSTS AND EXPENSES |
||||||||
Cost of product revenues |
62,212 | 48,577 | ||||||
Research and development |
7,798 | 6,060 | ||||||
Selling, general and administrative |
62,489 | 49,105 | ||||||
Intangible asset amortization |
2,973 | 2,787 | ||||||
Total costs and expenses |
135,472 | 106,529 | ||||||
Operating income |
20,536 | 16,503 | ||||||
Interest income |
687 | 223 | ||||||
Interest expense |
(4,215 | ) | (2,759 | ) | ||||
Other income (expense), net |
1,507 | (208 | ) | |||||
Income before income taxes |
18,515 | 13,759 | ||||||
Income tax expense |
6,950 | 4,685 | ||||||
Net income |
11,565 | 9,074 | ||||||
Add back of after tax interest expense |
— | 3 | ||||||
Net income for diluted earnings per share |
$ | 11,565 | $ | 9,077 | ||||
Diluted net income per share |
$ | 0.41 | $ | 0.30 | ||||
Weighted average common shares outstanding for
diluted net income per share |
28,468 | 29,965 | ||||||
Listed below are the items included in net income that management excludes in computing the
adjusted financial measures referred to in the text of this press release and further described
under Discussion of Adjusted Financial Measures.
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
Acquisition-related charges |
3,208 | — | ||||||
Employee termination and related costs |
— | 69 | ||||||
Facility consolidation, manufacturing and
distribution transfer and system integration
charges |
364 | 499 | ||||||
Charges associated with discontinued or
withdrawn product lines |
— | 500 | ||||||
Incremental audit, legal and/or bank fees related
to the delay in the filing of our 2007 Annual
Report on Form 10-K |
548 | — | ||||||
Income tax (benefit) related to
above adjustments |
(1,324 | ) | (362 | ) | ||||
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP ADJUSTMENTS — HISTORICAL
(UNAUDITED)
RECONCILIATION OF NON-GAAP ADJUSTMENTS — HISTORICAL
(UNAUDITED)
(In thousands, except per share amounts)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2008 | 2007 | |||||||
GAAP net income |
$ | 11,565 | $ | 9,074 | ||||
Non-GAAP adjustments: |
||||||||
Acquisition-related charges (a) |
3,208 | — | ||||||
Employee termination and related costs (b) |
— | 69 | ||||||
Facility consolidation, manufacturing and
distribution transfer and system integration charges
(c) |
364 | 499 | ||||||
Charges associated with discontinued or
withdrawn product lines (d) |
— | 500 | ||||||
Incremental audit, legal and/or bank fees related
to the delay in the filing of our 2007 Annual Report
on Form 10-K (e) |
548 | — | ||||||
Income tax (benefit) related to above adjustments |
(1,324 | ) | (362 | ) | ||||
Total of non-GAAP adjustments |
2,796 | 706 | ||||||
Adjusted net income |
14,361 | 9,780 | ||||||
Add back of after tax interest expense |
— | 3 | ||||||
Adjusted net income for diluted earnings per share |
14,361 | 9,783 | ||||||
Weighted average common shares
outstanding for diluted net income per share |
28,468 | 29,965 | ||||||
GAAP diluted net income per share |
.41 | .30 | ||||||
Non-GAAP adjustments detailed above (per share) |
.09 | .03 | ||||||
Adjusted diluted net income per share |
.50 | .33 | ||||||
| (a) | All in cost of product revenues | |
| (b) | Q1 2007 — Negative $86 recorded in selling general and administrative, $155 recorded in cost of product revenues | |
| (c) | Q1 2008 — $235 in cost of product revenues, $129 recorded in selling general and administrative; | |
| Q1 2007 — $272 in cost of product revenue, $227 recorded in selling general and administrative | ||
| (d) | Q1 2007 — $150 recorded in cost of product revenues, $350 in total revenue | |
| (e) | $230 in selling general and administrative and $318 in interest expense |
Condensed Balance Sheet Data (in thousands):
| March 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
Cash and marketable securities,
including non-current portion |
199,013 | 57,339 | ||||||
Accounts receivable, net |
106,880 | 103,539 | ||||||
Inventory, net |
144,037 | 144,535 | ||||||
Bank line of credit |
120,000 | — | ||||||
Convertible securities, current |
119,380 | 119,962 | ||||||
Convertible securities,
non-current |
330,000 | 330,000 | ||||||
Stockholders’ equity |
288,878 | 260,429 | ||||||
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP ADJUSTMENTS — GUIDANCE
RECONCILIATION OF NON-GAAP ADJUSTMENTS — GUIDANCE
(In thousands, except per share amounts)
| Projected Three Months Ended | ||||||||
| 30-Jun-08 | ||||||||
| Low | High | |||||||
GAAP net income |
$ | 12,160 | $ | 13,360 | ||||
Non-GAAP adjustments: |
||||||||
Acquisition-related charges |
270 | 270 | ||||||
Facility consolidation, manufacturing
and distribution transfer and system
integration charges |
70 | 70 | ||||||
Incremental audit, legal and/or bank
fees related to the delay in the filing
of our 2007 Annual Report on Form 10-K |
250 | 250 | ||||||
Income tax (benefit) related
to above adjustments |
(150 | ) | (150 | ) | ||||
Total of non-GAAP adjustments |
440 | 440 | ||||||
Adjusted net income |
$ | 12,600 | $ | 13,800 | ||||
Weighted average common shares
outstanding for diluted net
income per share |
28,900 | 28,900 | ||||||
GAAP diluted net income per share |
$ | 0.42 | $ | 0.46 | ||||
Non-GAAP adjustments detailed
above (per share) |
$ | 0.02 | $ | 0.02 | ||||
Adjusted diluted net income per share |
$ | 0.44 | $ | 0.48 | ||||
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP ADJUSTMENTS — GUIDANCE
RECONCILIATION OF NON-GAAP ADJUSTMENTS — GUIDANCE
(In thousands, except per share amounts)
| Projected Three Months Ended | Projected Three Months Ended | |||||||||||||||
| 30-Sept-08 | 31-Dec-08 | |||||||||||||||
| Low | High | Low | High | |||||||||||||
GAAP net income |
$ | 13,130 | $ | 14,830 | $ | 17,530 | $ | 19,030 | ||||||||
Non-GAAP adjustments: |
||||||||||||||||
Acquisition-related charges |
180 | 180 | — | — | ||||||||||||
Facility consolidation, manufacturing
and distribution transfer and system
integration charges |
340 | 340 | 120 | 120 | ||||||||||||
Income tax (benefit) related
to above adjustments |
(250 | ) | (250 | ) | (50 | ) | (50 | ) | ||||||||
Total of non-GAAP adjustments |
270 | 270 | 70 | 70 | ||||||||||||
Adjusted net income |
$ | 13,400 | $ | 15,100 | $ | 17,600 | $ | 19,100 | ||||||||
Weighted average common shares
outstanding for diluted net
income per share |
29,200 | 29,200 | 29,400 | 29,400 | ||||||||||||
GAAP diluted net income per share |
$ | 0.45 | $ | 0.51 | $ | 0.60 | $ | 0.65 | ||||||||
Non-GAAP adjustments detailed
above (per share) |
$ | 0.01 | $ | 0.01 | $ | 0.00 | $ | 0.00 | ||||||||
Adjusted diluted net income per share |
$ | 0.46 | $ | 0.52 | $ | 0.60 | $ | 0.65 | ||||||||
.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP ADJUSTMENTS — GUIDANCE
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP ADJUSTMENTS — GUIDANCE
(In thousands, except per share amounts)
| Projected Year Ended | ||||||||
| 31-Dec-08 | ||||||||
| Low | High | |||||||
GAAP net income |
$ | 54,390 | $ | 58,790 | ||||
Non-GAAP adjustments: |
||||||||
Acquisition-related charges |
3,660 | 3,660 | ||||||
Facility consolidation, manufacturing
and distribution transfer and system
integration charges |
890 | 890 | ||||||
Incremental audit, legal and/or bank
fees related to the delay in the filing of
our 2007 Annual Report on Form 10-K |
800 | 800 | ||||||
Income tax expense (benefit) related
to above adjustments |
(1,770 | ) | (1,770 | ) | ||||
Total of non-GAAP adjustments |
3,580 | 3,580 | ||||||
Adjusted net income |
$ | 57,960 | $ | 62,360 | ||||
Weighted average common shares
outstanding for diluted net
income per share |
29,000 | 29,000 | ||||||
GAAP diluted net income per share |
$ | 1.88 | $ | 2.03 | ||||
Non-GAAP adjustments detailed
above (per share) |
$ | 0.12 | $ | 0.12 | ||||
Adjusted diluted net income per share |
$ | 2.00 | $ | 2.15 | ||||