PRINCETON, N.J., Feb. 18, 2021 (GLOBE NEWSWIRE) -- Integra LifeSciences Holdings Corporation (NASDAQ: IART) today reported financial results for the fourth quarter and full-year ended December 31, 2020, consistent with its preliminary revenue results announced on January 14, 2021.

• Fourth Quarter 2020
  • Reported revenues were $388.6 million, representing a decrease of 1.6% on a reported basis and a decrease of 1.5% on an organic basis compared to the fourth quarter 2019.
    • Fourth quarter revenues increased 5.0% compared to the third quarter of 2020.
  • GAAP earnings per diluted share were $1.09, compared to $0.18 in the fourth quarter 2019.
  • Adjusted earnings per diluted share were $0.84, compared to $0.68 in the fourth quarter of 2019.
• Full-Year 2020
  • Reported revenues were $1,371.9 million, representing a decrease of 9.6% on a reported basis and a decrease of 8.7% on an organic basis compared to full-year 2019.
    • In the first half of 2020, reported revenues declined 18.0% compared to the prior year, reflecting the impact of the COVID-19 pandemic. Organic revenues declined 16.2% over the same period.
    • In the second half of 2020, reported revenues declined 2.0% compared to the prior year, reflecting a recovery in surgical procedures and strong execution by the Company. Organic revenues declined 1.5% over the same period.
  • GAAP earnings per diluted share were $1.57, compared to $0.58 in 2019.
  • Adjusted earnings per diluted share were $2.45, compared to $2.74 in 2019.

During 2020, the COVID-19 pandemic negatively impacted surgical procedure volumes which resulted in lower revenues compared to the prior year. The largest year over year revenue decline rates occurred in April, and surgical procedure volumes recovered over the balance of 2020. In the fourth quarter, the improvement in surgical procedure volumes resulted in five percent sequential revenue growth over the third quarter. Due to local or regional surges of COVID-19, the pace of our sales recovery differed across markets and product lines.

"The safety and well-being of our colleagues has remained our number one priority throughout the pandemic, so they could continue to deliver critical, life-saving products to clinicians," said Peter Arduini, Integra's president and chief executive officer. "The revenue and profitability impact from surgical procedural deferrals caused by COVID were most significant in the first half of 2020. The Company's revenue and profitability improved in the second half of the year as procedures recovered. Over the course of 2020, we focused on enhancing our global operations, investing in critical growth programs, and optimizing our product portfolio. These accomplishments and our strong financial position increase our confidence that we will return to growth in 2021."

Fourth Quarter 2020 Financial Summary

Total reported revenues for the fourth quarter were $388.6 million, a decrease of 1.6% from the fourth quarter of 2019. Fourth quarter organic sales decreased 1.5% over the prior year.

The Company reported GAAP net income of $92.7 million, or $1.09 per diluted share, in the fourth quarter of 2020, compared to GAAP net income of $15.3 million, or $0.18 per diluted share, in the prior year. The increase in GAAP net income was driven primarily by a one-time net tax benefit in the fourth quarter of 2020, attributable to an intra-entity transfer of certain intellectual property which resulted in the recognition of a deferred tax benefit in the amount of $59.2 million.

Adjusted EBITDA for the fourth quarter of 2020 was $102.7 million, compared to $91.6 million in the fourth quarter of the prior year. For the fourth quarter of 2020, adjusted EBITDA as a percentage of revenue was 26.4%, an increase of 320 basis point from the prior year period.

Adjusted net income for the fourth quarter of 2020 was $71.3 million, or $0.84 per diluted share, compared to adjusted net income of $58.9 million, or $0.68 per diluted share, in the fourth quarter of 2019. The increase was primarily driven by actions taken by the Company to reduce operating expenses during the pandemic to mitigate the impact of lower sales.

Cash flows from operations totaled $80.3 million in the fourth quarter and capital expenditures were $8.4 million.

Full-Year 2020 Financial Summary

Total reported revenues for the full-year 2020 were $1,371.9 million, a decrease of 9.6%, from the prior year. Organic sales for the full-year 2020 decreased 8.7% compared to 2019.

The Company reported GAAP net income of $133.9 million, or $1.57 per diluted share, for the full-year 2020, compared to GAAP net income of $50.2 million, or $0.58 per diluted share in 2019. The increase in GAAP net income was primarily driven by two components. The first is due to a one-time net tax benefit in the fourth quarter of 2020, attributable to an intra-entity transfer of certain intellectual property which resulted in the recognition of a deferred tax benefit in the amount of $59.2 million. The second component of the increase to net income in 2020 compared to 2019 resulted from a $64.9 million in-process R&D expense associated with the Rebound Therapeutics acquisition, which occurred during 2019. Excluding these components, net income for the year ended December 31, 2020 declined by $40.4 million compared to the prior year 2019. The decrease was attributable to the impact of the COVID-19 pandemic which resulted in lower revenues, and was partially offset by a decrease in the level of operating expenses due to cost-savings measures implemented by the Company during 2020.

Adjusted EBITDA for the full-year 2020 was $334.5 million, a decrease of $34.1 million over the prior year. Despite the year-over-year decrease, adjusted EBITDA as a percentage of revenue for the full-year 2020 increased slightly to 24.4% from 24.3% in 2019.

Adjusted net income for the full-year 2020 was $208.7 million, or $2.45 per diluted share, compared to $237.4 million, or $2.74 per diluted share in 2019. The decrease was attributable to lower sales as a result of COVID-19, partially offset by actions taken by the Company to reduce operating expenses during the pandemic.

Cash flows from operations totaled $203.8 million for the full-year 2020 and capital expenditures were $38.9 million. Adjusted free cash flow conversion for the trailing twelve months ended December 31, 2020 was 79.0% versus 68.2% for the twelve months ended December 31, 2019.

Integra's financial position and liquidity remain strong. As of December 31, 2020, the Company had $470.2 million in cash and cash equivalents, $1.2 billion in undrawn revolver capacity, and a consolidated total leverage ratio of 3.0x.

2021 Financial Guidance

The Company is providing forward-looking guidance regarding adjusted earnings per diluted share, but is not providing a reconciliation to GAAP earnings per share, because certain GAAP expense items are highly variable and management is unable to predict them with reasonable certainty and without unreasonable effort. Specifically, the financial impact and timing of divestitures, acquisitions, integrations, structural optimization and efforts to comply with the EU Medical Device Regulation are uncertain, depend on various dynamic factors and are not reasonably ascertainable at this time. These expense items could have a material impact on GAAP results. Adjusted earnings per diluted share also excludes the impact of intangible asset amortization associated with prior business acquisitions, which we expect to be approximately $0.73 per diluted share for the full-year 2021.

In addition, the Company will continue to monitor the ongoing uncertainty around the scope and duration of the pandemic and its impact on financial performance. The Company does not expect the ongoing impact of the pandemic to be uniform across all markets and product lines. The Company's guidance assumes a gradual improvement in surgical procedures with no further setbacks from new surges or new COVID variants.

For the first quarter 2021, the Company expects reported revenues in the range of $345 million to $355 million, representing reported growth of approximately (3.0%) to 0.0% and organic growth of approximately 0.0% to 3.0%. Adjusted earnings per diluted share are expected to be in a range of $0.54 to $0.58.

For the full-year 2021, the Company expects revenues to be in a range of $1,520 million to $1,535 million, representing reported growth of 11% to 12% and organic growth of 12% to 13%. Adjusted earnings per diluted share are expected to be in a range of $2.86 to $2.93.

Organic sales growth excludes both the divestiture of the Extremity Orthopedics business, which was completed on January 4, 2021, and the acquisition of ACell Inc., which was completed on January 20, 2021. Organic growth also excludes the effects of foreign currency and discontinued products.

The Company expects a reported revenue contribution from ACell in the range of $83 million to $88 million for the full-year 2021, with approximately $14 million to $15 million in the first quarter of 2021.

In the future, the Company may record, or expects to record, certain additional revenues, gains, expenses or charges as described in the Discussion of Adjusted Financial Measures below that it will exclude in the calculation of organic revenue growth, adjusted EBITDA, adjusted net income, adjusted EPS and adjusted free cash flow conversion for historical periods and in providing adjusted EPS guidance.

About Integra

Integra LifeSciences is a global leader in regenerative tissue technologies and neurosurgical solutions dedicated to limiting uncertainty for clinicians, so they can focus on providing the best patient care. Integra offers a comprehensive portfolio of high quality, leadership brands that include AmnioExcel®, Bactiseal®, CerebroFlo®, Certas® Plus, Codman®, CUSA®, DuraGen®, DuraSeal®, ICP Express®, Integra®, MatriStem UBM^TM, MediHoney®, MicroFrance®, PriMatrix®, SurgiMend®, TCC-EZ®, and VersaTru®. For the latest news and information about Integra and its products, please visit www.integralife.com.