Integra LifeSciences Holdings Corporation

Good day and thank you for standing by. Welcome to the Integra Life Science Second Quarter 2025 Financial Results Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd like to hand the conference over to your first speaker today, Chris Ward, Senior Director, Investor Relations. Please go ahead.

Good morning, and thank you for joining the Integral Life Science of Second Quarter 2025 Earnings Conference Call. With me on the call are Melissa Pohl, President and Chief Executive Officer, and Leah Knight, Chief Financial Officer. Earlier this morning, we issued a press release announcing our second quarter 2025 financial results. The release and corresponding earnings presentation which we will reference during the call, are available at integralife.com under Investor Events and Presentations in a file named Second Quarter 2025 Earnings Call Presentations. Before we begin, I want to remind you that many of the statements made during this call may be considered forward-looking. Factors that could cause actual results to differ materially are discussed in the company's Exchange Act reports that are filed with the SEC and in the loop. Also in our prepared remarks, we will reference reported inorganic revenue growth. organic revenue growth excludes the effects of foreign currency acquisition and divestiture. Unless otherwise stated, all disaggregated and franchise-level revenue growth rates are based on organic performance. Lastly, in our comments today, we will reference certain non-GAAP financial measures. Reconciliations of non-GAAP financial measures can be found in today's press release, which is an exhibit to Integra's current report on Form 8-K, filed today with the SEC. With that, I will now turn the call over to motions.

Thank you, Chris. Good morning, everyone, and thank you for joining us for our second quarter 2025 earnings call. I would like to start by acknowledging the tremendous work done by our teams across the company to deliver strong second quarter performance while advancing our priorities. Our transformation is underway, and I'm encouraged by the progress we're making in establishing the foundation for operational excellence and a culture of continuous improvement that will drive long-term performance consistency and reliability across our business. Today, I will walk through the progress we're making on our Compliance Master Plan, provide an update on our operational excellence efforts, and close with an overview of our financial results and updated guidance. Leah will then take you through the financials and our revised outlook in more detail. Let's begin with our progress on the Compliance Master Plan. We continue to execute our Compliance Master Plan as a cornerstone of our turnaround. I'm pleased to share that we completed assessments at all of our internal manufacturing sites ahead of our original Q3 timeline with zero related shift goals identified or initiated since our last earnings call. This is a key milestone in our risk reduction and operational readiness efforts. We have taken the learnings from our site assessments and have begun remediation planning and execution. Our quality, engineering, and operations teams working closely with the newly formed Transformation and Program Management Office have built a detailed risk-based execution roadmap that prioritizes efforts aligned with the FDA quality system regulations and previous observations. This office oversees execution of the risk mitigation plan, including resource allocation, timelines, and deliverables. Some of the remediation work will extend into 2026 with continuous improvement becoming a standard element of operating in highly regulated industries. We remain fully committed to transforming our quality management system across our supply chain network and recognize there is still significant work ahead. We are encouraged by the positive outcomes from recent FDA inspections at two of our facilities not covered by the warning letters. Related to our warning letters, we continue to provide regular updates on our actions committed to the FDA. The progress we're making in quality compliance supports our advancement towards the operational strength and agility required to execute consistently across our global network. Together, these capabilities are critical to delivering the reliability and performance our stakeholders expect. Moving to operations, We remain focused on strengthening execution across our global network. We have implemented a new supply chain control tower to drive enhanced visibility, accountability, and performance management throughout our global supply chain. We are making good progress at our Braintree facility, which will support the relaunch of Surgimen and Primetrix. We remain on track to bring the site online in the first half of 2026, and plan to share our relaunch timeline by the end of this year. The facility's quality management system is on schedule for implementation, with equipment installation and qualifications underway. In addition, the site staffing model has transitioned to its long-term operating structure, ensuring readiness to resume manufacturing operations. Turning to our financial performance in the second quarter, we delivered global revenue of $415.6 million exceeding the high end of our guidance. Reported and organic revenue growth were both down slightly versus the prior year, which was expected and previously communicated during our Q1 earnings call. This was largely due to the impact of up-setting healthy mid-single-digit growth across the portfolio, which underscores continued demand for our differentiated products. Adjusted EPS came in at 45 cents at the top of our guidance range. reflecting strong revenue execution and office management, offset by higher remediation costs. A standout this quarter was Integrate Skin. Through our manufacturing resiliency and yield improvement effort, we achieved the company's highest ever production levels in Q2 and expect to maintain normal revenue run rate through the rest of the year. We are also rebuilding safety stock to improve supply reliability moving forward. As the reimbursement and access dynamic shifts in wound care, we are well positioned with a clear path to restore our full wound reconstruction portfolio. The timing of our integral skin production recovery, along with our preparations to restart Cryometrics next year, align well with the recent proposed changes for wound care reimbursement in the outpatient and physician office settings. The established clinical evidence across our portfolio strongly supports the opportunity for us to deliver care beyond the acute care setting. Our continued investments in further clinical evidence will also provide additional support for broader reimbursement. Looking ahead to our financial expectations for the third quarter, we expect revenue between $410 million and $420 million, representing approximately 8% to 10% reported growth. For the full year, we are updating our revenue guidance to a range of $1.655 billion to $1.68 billion. This reflects increased visibility into our ship hold and remediation outlook, including an expectation that we will not experience any material new holds related to the compliance master plan for the remainder of the year. For Q3, we expect adjusted EPS between 40 and 45 cents and we are maintaining our full year EPS guidance range of $2.19 to $2.29. Before turning the call over to Leah, I want to emphasize the long-term focus and an initiative we are taking to drive additional shareholder value. We remain confident in our leadership positions in neurosurgery and tissue technology and the sustained demand in the attractive market we serve. We are laying the foundation for sustainable growth and profitability through strategic investments and discipline cost management. This includes enhancing supply chain reliability and executing on our compliance master plan. Additionally, as part of our broader transformation, we are optimizing our operating model to accelerate decision-making, strengthen accountability, and enable scalable execution while embedding a culture of continuous improvement. These efforts will allow us to move with greater agility, reduce complexity, and unlock meaningful value in quarters ahead. Based on our preliminary work in the initial phase of this initiative, we expect to deliver minimum annualized savings of $25 to $30 million over the next 12 to 18 months by driving out inefficiencies and redundant costs. Optimizing our cost structure is essential to maintaining long-term competitiveness particularly in light of the evolving tariff and macroeconomic environment. This is a foundational first step in a larger strategic initiative to drive sustained margin expansion. I look forward to keeping you updated on this initiative in the coming quarter. With that, I will now turn the call over to Leah.