Integra LifeSciences Holdings Corporation

Good day and welcome to the Integra LifeSciences 3rd Quarter 2026 Financial Results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1-1 on your touchtone telephone. Please note, 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 Integra Life Sciences Third Quarter 2026 Earnings Conference Call. Joining me on the call are Stuart Essig, Chairman and Chief Executive Officer, and Lea Knight, Chief Financial Officer. We issued a press release this morning announcing our Third Quarter 2026 financial results. The release and earnings presentation we referenced during the call are available at IntegraLife.com under Investors, Events and Presentations in a file named Third Quarter 2026 Earnings Presentation. Before we begin, I want to remind you that many 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 we filed with the SEC. These factors are also detailed in the release. Also in our prepared remarks, we will reference reported and organic revenue growth. Organic revenue growth excludes the effects of foreign currency, acquisitions, and divestment. unless otherwise stated, all disaggregated and franchise-level revenue growth rates are based on organic performance. Lastly, our comments today will include certain non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included 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 Stuart.

Good morning, everyone, and thank you for joining us. As many of you know, we provided preliminary third quarter 2026 financial results and an updated full year 2026 outlook on October 2nd in conjunction with the initiation of our refinancing. We recognized that the update was disappointing, particularly because it came against a backdrop of meaningful progress for the company during the year. Today, I want to provide more context on our third quarter performance, the factors that shaped our updated outlook, and our priorities as we look ahead to 2027. For the third quarter, we delivered revenue of $411 million, which was at the low end of our guidance range. During the quarter, the Cincinnati disruption proved more significant than initially expected and growth in tissue reconstruction did not materialize as anticipated. At the same time, upside in neurosurgery offset much of those headwinds. We delivered adjusted earnings per share of 59 cents and generated $96 million of operating cash flow. We also reduced leverage to 3.8 times, and subsequent to the end of the quarter, we successfully completed a debt refinancing. The quarter's strong cash generation, lower leverage, and successful refinancing have strengthened our balance sheet and increased our financial flexibility. Together, these are important indicators of the progress we are making to improve Integra's overall financial profile and support continued execution of our priorities. Before moving on, I want to thank our teams around the world for their hard work and dedication throughout the quarter. They responded quickly to the flooding event while continuing to support customers and advance our priorities across the business. There is a lot going right at Integra. Product availability has improved dramatically across much of the portfolio. and preparation for the planned fourth quarter relaunch of Surgimen continues to advance. These improvements allow our commercial teams to spend more time in clinical conversations and less time managing supply challenges. We are especially encouraged by the momentum in neurosurgery, where our strong market positions, differentiated technologies and longstanding customer relationships provide a solid foundation for growth. We have also sharpened the commercial organization around clearer priorities, stronger account planning, and more coordinated customer engagement. Together, these actions position us to drive more consistent growth over time. Turning to our updated outlook for the balance of the year, two factors developed during the third quarter that led us to reduce the midpoint of our full year revenue guidance by approximately $30 million. First, the financial impact from the flooding event at our Cincinnati site was greater than we originally expected. We estimate that the disruption reduced the third quarter revenue by approximately $7 million, and we expect an additional revenue impact of approximately $15 million to $20 million in the fourth quarter. Second, the performance across the portfolio is mixed. Excluding Cincinnati, specialty surgery performed better than we expected and largely offset softer performance in tissue reconstruction during the third quarter. Looking to the balance of our year, our expectations for specialty surgery excluding Cincinnati remain largely unchanged from our July guidance, while we now expect lower fourth quarter revenue in tissue reconstruction than previously anticipated. Together, the larger Cincinnati impact and the moderated outlook for tissue reconstruction in the fourth quarter account for the reduction in our full year revenue outlook. Lea will provide additional detail on the resulting impact on adjusted earnings per share and margin. With the financial impact established, I want to provide additional context on these items. At Cincinnati, our teams continue to make good progress with recovery activities while supporting customers across the portfolio. Through available inventory and support from third-party manufacturing partners, we have mitigated the disruption across most of the products manufactured at Cincinnati and now have greater clarity on the products that remain most effective. The production steps required to support them equipment lead times, and the path to restoring full manufacturing capability. The Mayfield product family represents the majority of the remaining revenue headwinds associated with the disruption. Mayfield has been foundational in neurosurgery for many years, and we remain confident in the long-term durability of the franchise. We continue to expect the return to full manufacturing operations during the second quarter of 2027. Turning to tissue reconstruction, our portfolio is recovering, but progress remains uneven. Primatrix and Durazorb have grown meaningfully year over year, while Integra Skin is approximately flat year to date. Progress has been offset by continued pressure in UBM, primarily Micromatrix. As a result, we now expect tissue reconstruction revenue to be approximately flat for the full year. Supply disruptions clearly created volatility in tissue reconstruction over the past two years. Availability is now largely restored across the portfolio, giving us a clearer view of demand. The largest and most strategic parts of the portfolio have improved sequentially through each of the first three quarters of 2026, although the recovery in certain Integra skin SKUs is taking longer than expected. The primary growth challenge remains in UVM, where performance has offset progress elsewhere in the portfolio. On Surgimen, we continue to make good progress toward the return to market. We are taking a highly methodical approach to documentation and commercial release activities, as well as building sufficient inventory to support the launch. While there is some timing risk around the completion of these final activities, our expectation remains a December limited commercial launch. Our Q4 guidance continues to assume no material revenue contribution from Surgimen. Our early engagement with KOLs in preparation for the relaunch has been encouraging and reinforces our confidence in the opportunity. For 2027, we are approaching the launch in a similar fashion to Prime Matrix, with a measured commercial ramp as we reengage customers and expand availability. Surgimend and Durazorb also provide opportunities for greater clinical differentiation in attractive markets, including hernia repair and implant-based breast reconstruction. As part of our dual PMA strategy in implant-based breast reconstruction, we expect an expanded label for Surgimend in 2027, followed by Durazorb. Overall, the breadth of our tissue reconstruction portfolio is an important competitive advantage. It gives us the unique flexibility to address a broad range of clinical and economic needs and to position the right solutions for different customers and care settings. That portfolio approach helps us deepen relationships and expand our presence within accounts. 2026 to date has been a year of meaningful progress, even as we managed through many challenges. We improved product availability, returned important products to market, strengthened our commercial focus, reduced leverage and increased our financial flexibility. Our strategy remains unchanged. We have strong positions in attractive markets, differentiated products. Trusted Brands, and Long-standing Customer Relationships. A priority now is to build on that foundation and transform this year's progress into more consistent execution and growth. And with that, I'll turn the call over to Lea to provide additional color on our third quarter results and guidance.