Integra LifeSciences Q1 2025: Navigating Tariffs, Production Challenges, and Quality Control Contradictions
Earnings DecryptMonday, May 5, 2025 7:41 pm ET
2min read
Tariff impact and mitigation strategies, Integra Skin production and demand, private label recovery and demand, quality management and remediation efforts are the key contradictions discussed in Integra LifeSciences' latest 2025Q1 earnings call.
Revenue Performance and Supply Constraints:
- Integra LifeSciences reported revenue of $383 million for Q1 2025, near the top end of their guidance range.
- Reported revenue grew 3.7%, while organic revenue declined 3.5%, mainly due to anticipated supply holds.
- Despite constraints, Acclarent contributed positively with $29 million in revenue, and many product lines not affected by supply showed strong underlying demand.
Earnings and Financial Impact:
- Adjusted EPS for Q1 was $0.41, within guidance.
- Gross margins were 62.2%, down 220 basis points versus 2024, impacted by manufacturing variances, inefficiencies, and network optimization spend.
- The operating cash flow for the first quarter was negative $11.3 million.
Compliance Master Plan and Remediation:
- The company completed assessments at 10 of their manufacturing sites and aims to conclude the remaining four by Q3 2025.
- Estimated total ship holds for the year are now between $55 million and $70 million, up from $27 million previously reported.
- The master plan aims to address GAAP findings and FDA warning letters, with resolutions expected by the end of 2025.
Guidance and Tariff Impact:
- Second-quarter revenue guidance ranges from $390 million to $400 million, reflecting an expected 6.8% to 4.4% reported decline and 7.5% to 5.1% organic decline.
- Tariffs are estimated to impact 2025 revenue by $22 million or $0.22 per share after tax, with most exposure in China.
- The company is pursuing tariff mitigation strategies, including sourcing optimization and pricing adjustments.
Revenue Performance and Supply Constraints:
- Integra LifeSciences reported revenue of $383 million for Q1 2025, near the top end of their guidance range.
- Reported revenue grew 3.7%, while organic revenue declined 3.5%, mainly due to anticipated supply holds.
- Despite constraints, Acclarent contributed positively with $29 million in revenue, and many product lines not affected by supply showed strong underlying demand.
Earnings and Financial Impact:
- Adjusted EPS for Q1 was $0.41, within guidance.
- Gross margins were 62.2%, down 220 basis points versus 2024, impacted by manufacturing variances, inefficiencies, and network optimization spend.
- The operating cash flow for the first quarter was negative $11.3 million.
Compliance Master Plan and Remediation:
- The company completed assessments at 10 of their manufacturing sites and aims to conclude the remaining four by Q3 2025.
- Estimated total ship holds for the year are now between $55 million and $70 million, up from $27 million previously reported.
- The master plan aims to address GAAP findings and FDA warning letters, with resolutions expected by the end of 2025.
Guidance and Tariff Impact:
- Second-quarter revenue guidance ranges from $390 million to $400 million, reflecting an expected 6.8% to 4.4% reported decline and 7.5% to 5.1% organic decline.
- Tariffs are estimated to impact 2025 revenue by $22 million or $0.22 per share after tax, with most exposure in China.
- The company is pursuing tariff mitigation strategies, including sourcing optimization and pricing adjustments.
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