Integra LifeSciences Holdings Corporation

Good day and welcome to the Integra Life Science second quarter 2022 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Chris Ward, Senior Director, Investor Relations. Please go ahead, sir.

Thank you, Leanne. Good morning, and thank you for joining the Integra Life Sciences second quarter 2022 earnings conference call. Joining me on the call this morning are Jan DeWitt, President and Chief Executive Officer, Glenn Coleman, Chief Operating Officer, and Carrie Anderson, Chief Financial Officer. Earlier today, we issued a press release announcing our second quarter 2022 financial results. The results and corresponding earnings presentation, which we will reference during the call, are available at integralife.com under Investors, Events and Presentations, and a file named Second Quarter 2022 Earnings Call Presentation. Before we begin, I would like to remind you that many of the statements made during this call may be considered forward-looking statements. Factors that could cause the actual results to differ materially are discussed in the company's exchange acts reports filed with the SEC and in the release. Also in our prepared remarks, we'll make reference to both reported and organic revenue growth. Organic revenue growth excludes the effects of foreign currency acquisitions, including ASEL, for the first 19 days of the year. divestitures, as well as discontinued products. Unless otherwise stated, all disaggregated and franchise-level revenue growth rates are based on organic performance. And lastly, our comments today will include certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures can be found in today's press release, which is an exhibit to Integra's current report on Form 8K, filed today with the SEC. And with that, I will now turn the call over to Jan.

Thank you, Chris, and good morning, everyone. Let me start by reviewing our second quarter and first half business highlights on slide four. To summarize our performance over the past six months, we started the year strongly, with the second quarter building nicely off our first quarter momentum. And despite choppy waters in the macro environment and plenty of disruptions within our supply chain, we capitalized on the recovery of growth in procedures in our markets while protecting Second quarter revenues were $398 million above the midpoint of our guidance range, yielding organic growth of 4.8%. And with our strong first quarter performance, this resulted in first half organic growth of just north of 5%. I'm pleased with our sales performance in the quarter as we overcame persistent supply constraints and heightened foreign currency headwinds. We saw continued strength in our international business, particularly in Japan, China, and Europe, along with strong orders from our private label partners and within our U.S. instruments business. Over the course of the second quarter, hospital procedures activity continued to move closer to pre-COVID levels. Our current revenue numbers do not yet fully reflect this market momentum as backorder levels increased over Q1 2020. as a result of ongoing supply challenges, particularly in our neuro business. Nevertheless, we achieved revenues above the midpoint and delivered adjusted earnings per share of 82 cents at the top end of our guidance range. Just as importantly, we held our first half adjusted margins relatively flat year over year, in line with what we communicated during our April earnings call. We're very pleased with the team's ability to navigate the challenging supply chain and inflationary environments and deliver profitable growth while continuing to advance our key strategic initiatives. We intend to maintain this focus in the back half of the year. Speaking of key strategic initiatives, we launched two new products in the second quarter. First, we introduced our Aurora Evacuator with coagulation capability in the U.S., This product is designed to be used with our Aurora Surgescope to safely address and evacuate blood in the brain caused by hemorrhagic stroke. Second, we launched the NITUS EVD system, our first external ventricular drain in China. The NITUS EVD system is manufactured in China by Shanghai Haozhou Medical Technology Company and commercialized by Integra under an exclusive distribution arrangement. The device is used in the management of cerebrospinal fluid and is highly complementary to our back-to-ceiling catheter and our advanced intracranial pressure monitoring products. While expanding our resilient portfolio of life-saving solutions, we also continue to streamline the portfolio in order to enhance profitability. In the second quarter, we signed a definitive agreement to sell our traditional wound care business This business consists of slower growth and lower margin wound care dressings, such as sponges, gauze, and confirming bandages. Expect this transaction to close by the end of August, and our updated 22 guidance that Kari will detail in a few minutes reflects the expected impact of this divestiture. The sale of our traditional wound care business is one of a series of steps we have taken over the past two years to optimize our product portfolio. which has enabled us to focus on Integra's core market-leading products in neurosurgery, surgical instrumentation, and regenerative tissue, and moves us closer to achieving our long-term organic growth and profitability targets. In further support of expanding product margins, we closed a manufacturing facility in France in the second quarter and are in the process of transferring production to our existing facility in Switzerland. In addition, we announced plans to outsource certain back office finance and customer service activities in order to enhance customer quality, build scale for future growth, and capture cost efficiencies. We expect this transition to be completed by the end of the year. We're extremely proud that our efforts in building a diverse and engaged workforce have resulted in Integra being named one of the 2022 Best Places to Work in New Jersey and recognized as a great place to work certified organization in China. So there's a lot to be pleased with as we close out the second quarter and turn our focus towards the second half of the year and beyond. We're tightening our full year organic growth guidance at the bottom end, which reflects our solid first half performance, but also recognizes the mix of opportunities and challenges ahead of us in the second half. With that, I'm going to turn the call to Carrie now, who will give deeper into our second quarter performance and updated guidance. Carrie?