Integra LifeSciences Holdings Corporation

Good day and welcome to the Integra Life Sciences third quarter 2025 financial results. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your touchtone telephone. To remove yourself from the queue, please press star 1-1 again. As a reminder, this call may be recorded. I would like to turn the call over to Chris Ward, Senior Director, Investor Relations. Please go ahead.

Good morning, and thank you for joining the Integral Life Sciences Third Quarter 2025 Earnings Conference Call. With me on the call this morning are Moe Stapol, President and Chief Executive Officer, and Leah Knight, Chief Financial Officer. Earlier this morning, we issued a press release announcing our Third Quarter 2025 financial results. The results and corresponding earnings presentation, which we will reference during the call, are available at IntegralLife.com under Investors, Events and Presentations, and a file named Third Quarter 2025. 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 were filed with the SEC and in the release. Also in our prepared remarks, we will reference reported and organic revenue growth. Organic revenue growth excludes the effects of long-currency acquisitions and divestitures. Unless otherwise stated, all disaggregated and franchise-level revenue growth rates are based on organic performance. Lastly, in our comments today, we will include 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, 8K, filed today with the SEC. And with that, I will now turn the call over to Moshe.

Good morning, everyone, and thank you for joining us for our third quarter 2025 earnings call. During today's call, I will begin with an overview of our third quarter results. I will then discuss our progress on our three key priorities, which will position us for sustainable long-term success. Lastly, I will provide updated 2025 guidance, after which Leah will review our financials in more detail. Since our second quarter earnings call, we have made meaningful progress on our compliance master plan, moved ahead with our plans to improve operational and execution excellence, and reintroduced prime metrics and do repair ahead of schedule. We saw continued healthy demand across our portfolio, offset by two supply interruptions in our CSS business, which led to growth below expectations for the quarter. Discipline spend control allowed us to deliver strong operating income and improved operating cash flow performance despite the top-line results. In the third quarter, we delivered revenue of $402 million, representing organic growth of approximately 5% year-over-year. but below our guidance range. Adjusted EPS for the quarter was 54 cents, exceeding the top end of our guidance range. This reflects our ability to offset top-line pressure through improved operational efficiency and disciplined cost management. Our third quarter revenue shortfall underscores the work still ahead to achieve greater execution consistency, which remains a critical transformation imperative for us. We have been taking a systemic and foundational approach to strengthening our supply chain to allow us to reliably meet demand and drive predictable growth. We have made progress realizing that building a robust supply chain is going to take time. Looking forward, we remain focused on our three key priorities, executing our compliance master plan to strengthen our quality systems, driving operational and execution excellence, and delivering on our financial commitments. Starting with our first priority, which is executing our compliance master plan, we have made good progress and remain fully committed to transforming and improving our quality management system. During the third quarter, we continue to execute our remediation plans under the oversight of our transformation and program management office, ensuring discipline prioritization, effective resource allocation, and consistent progress tracking. We have maintained active constructive engagement with the FDA and have delivered steady progress on our warning letter commitments and routine inspections. As previously stated, while our remediation work will extend beyond 2025, we are establishing a firm foundation for supply chain excellence and resilience. Our second priority is driving operational and execution excellence. Since their appointment in April, Valerie Young, our Corporate Vice President of Global Supply Chain, has been implementing a comprehensive plan to establish a robust end-to-end supply chain for Integra capable of delivering consistently reliable performance. Val is strengthening her leadership team by bringing on new, highly experienced talent and is driving a culture of accountability, discipline, and continuous improvement. While it will take time for our supply chain capabilities to fully mature, we are already seeing measurable progress and expect continued improvement over the coming quarters. I would like to highlight three examples of such progress, integral skin production improvements, brain tree facility progress, and our strategic approach to dual sourcing. In the case of integral skin, we have proven that focused planning and discipline execution deliver results. Since January, Integra Skin manufacturing yields have improved by more than 50%, and inventory levels have increased by 2.5 times. These improvements in Integra Skin demonstrate the effectiveness of our approach and the progress we are making towards greater operational reliability across the enterprise. In the case of the Braintree facility, we continue to make good progress and are on track to resume production in June of 2026, in line with our previous issue timeline. This facility will produce surgiment, primetrics, and door repair, with initial production focused on surgiment to build inventory ahead of its planned relaunch in the fourth quarter of 2026. Finally, in the case of strategic dual sourcing, in order to enhance our manufacturing flexibility and resilience, we have entered into a new third-party supply agreement for primetrics and door repair. As a result of this agreement, I'm pleased to share that we recently relaunched both products in the fourth quarter of this year, almost a year ahead of previously expected timelines. Most importantly, this dual sourcing strategy gives us the opportunity to return these critical products to the physicians and patients who rely on them. Before moving to our third priority, I would like to highlight the appointment of Dr. Raymond Turner as our Corporate Vice President and Chief Medical Officer reporting directly to me. Ray is a board-certified neurosurgeon, fellowship-trained in endovascular neurosurgery. He's also an accomplished executive with extensive experience in the medtech industry, having held chief medical officer positions for Siemens Endovascular Robotics and Johnson & Johnson Cernovus Business. We welcomed Ray to our team last month. He's leading our worldwide medical and clinical affairs organizations, including clinical research, clinical trial operations, evidence generation, and medical safety and communication. These extensive medical and clinical experience and expertise are already proving to be significant assets as we strengthen our focus on building robust clinical evidence and delivering innovative solutions to transform patient care. Now, turning to our third priority, which is delivering on our financial commitments. Earlier on this call, we reviewed our third quarter financial results. Now, I would like to take this opportunity to talk about those steps we are taking to position our company for long-term growth. We recently completed a portfolio prioritization process that will guide our capital and resource allocation decisions. Our longer-term goal is to shift our product mix towards higher growth, more profitable categories to drive accelerated growth and performance. This disciplined approach is reflected in how we are investing in high-growth segments of our portfolio. As an example, we're progressing the PMAs for Surgimen and Dorazorb in implant-based breast reconstruction, positioning us to become a key player in this high-growth $800 million market. As the proposed CMS reimbursement changes continue, favoring evidence-based, cost-effective products, we also see additional investment opportunities in clinical evidence to expand our reach in outpatient wound care settings, driving sustainable, profitable growth. Finally, to drive long-term profitability and create room for investment in growth, last quarter we announced the initial phase of our margin expansion initiative, which is progressing well. We expect the program to yield $25 to $30 million of cost reduction in 2026. through initiatives focused on COGS improvement, third-party spend reduction, and operating model efficiencies. Not only will these initiatives support our longer-term margin expansion goals, they will also leave us well-positioned to offset any potential headwinds that may arise from a cost perspective, for example, tariffs. Moving to 2025 guidance, we are revising our full-year 2025 revenue and adjusted EPS guidance to a range of $1.62 billion to $1.64 billion, and $2.19 to $2.24, respectively. Our new guidance reflects our lower than expected revenue in the third quarter, coupled with updated assumptions for the fourth quarter. We remain confident in our plans and ability to deliver the foundational transformation required to improve our performance and delivery of consistently reliable results. Looking ahead, we will continue to balance near-term execution with investments that strengthen our foundation for sustainable growth. Now, I would like to turn it over to Leah, who will provide more specifics on our third quarter results and share additional details on our revised guidance.