Despite Setbacks IART Still Feeling Confident About Sales

Integra LifeSciences Corporation reported $382.6 million in sales and -$15,497 million in operating profit for the quarter ending March 31, 2025.

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Supply Interruptions Continue to Plague IART

IART’s President and Chief Executive Officer Mojdeh Poul and Chief Financial Officer Lea Knight recently reported on first quarter 2025 earnings in a call with analysts.

Poul said, “Our year has started out largely as we expected. On our first quarter performance, revenue came in at $383 million, near the top end of our guidance range. Reported revenue grew 3.7%, while organic revenue declined 3.5%.”

He explained that the decline was primarily due to the expected impact of ship holds, adding, “even with those constraints, we saw positive reported revenue contribution from clearance and solid double-digit growth across many product lines not impacted by supply availability, which speaks to the strength of our underlying demand for our portfolio.”

He added, “While we recognize we’re not yet achieving the full potential of this business, our compliance master plan, along with targeted investments in our manufacturing infrastructure are positioning us for long-term sustainable growth through improved supply chain excellence.”

Poul said that they expect second quarter revenue in the range of $390 million to $400 million, representing a reported decline of approximately minus 6.8% to minus 4.4%.

We are maintaining our full year revenue guidance of $1.65 billion to $1.72 billion.

Knight added, “Reported revenues include approximately $29 million from the Acclarent acquisition and a 60-basis point FX headwind. Organic revenue performance was negatively impacted by several supply disruptions provided for in our guide.”

Global neurosurgery revenues declined 4.7% organically, largely driven by the impact of ship holds. She emphasized though that the demand across the neurosurgery portfolio remains strong.

In addition, international sales within cerebrospinal fluid management declined by high single-digits with the decline primarily attributable to the timing and duration of the ship hold.

“The resolution of these holds have taken longer in the international markets than in the U.S. limiting our ability to fulfill customer demand. Addressing these international delays is among our highest operational priorities, and we have directed significant resources to meet the continued underlying demand from our international customers,” Knight said.

Tariff Impacts Continue to be on the Mind of Analysts

Young Li with Jefferies asked about tariff impact and mitigation efforts.

Poul said, “So we have several mitigations that we’re pursuing when it comes to tariffs. In the near term, obviously, we’re continuing to apply for tariff exemptions and we’re considering pricing—selected pricing increases as well as surcharges were appropriate and possible. And then when it comes to longer-term actions, it’s about sourcing optimization and also optimizing our supply chain network and value streams and obviously, we do have the manufacturing facility in China that we’re building.”

He added, “We are actively pursuing all these mitigations, both short and long term, but we haven’t built the impacts of them into our guide at this point.”

An analyst with Truist asked about the progress on getting the Braintree facility live again.

Poul said, “Regarding our efforts on compliance master plan and remediations. We, as stated, have completed the assessments in 10 of our 14 manufacturing sites and the remaining 4 are going to be completed by the end of the third quarter. And then in the fourth quarter is where we’ll be evaluating the findings as well as strategizing the remediation plans. And then also we are doing the assessments of our key finished goods suppliers.”

He added that all the assessments are going to be completed by the end of the year, and most of the remediations should be done by the end of the year. The plan is to also have the FDA warning letters resolved by the time the manufacturing facility is up and running again.