Integra LifeSciences reported second quarter financial results, with huge growth in the neurosurgery business.
Here are 10 key points from the financial report:
1. Total revenue reached $231.4 million for the second quarter, a 12.6 percent increase over the same period last year. "Our revenues were in-line with our expectations, driven by strong sales of DuraSeal, which helped gross profit margin," said President and CEO Peter Arduini.
2. The neurosurgery business revenue was 40 percent of total revenue and posted growth across all major product lines. The United States neurosurgery business grew 45 percent in the second quarter, reaching $60.5 million. United States spine and other business grew 4 percent to $45 million.
3. GAAP net income was $4.8 million, or $0.15 per diluted share, which was an increase from the second quarter of 2013 when the GAAP net income reached $1.5 million. Adjusted net income for the second quarter was $22.2 million, up from $14.8 million over the same period last year.
4. The company generated $16.4 million in cash flows from operations. The adjusted free cash flow conversion for the second quarter was 31.6 percent. The success in cash flow and increased profit margins were a result of improved product mix and lower year-over-year expenses, according to a Seeking Alpha report.
5. The company invested $9.4 million in capital expenditures during the second quarter.
6. The adjusted EBITDA was $43.4 million for the quarter, up from $31.1 million over the same period last year. Excluding stock-based compensation, adjusted EBIDTA was $46.2 million, up from $33.8 million last year.
7. The company expects full year revenues to reach $920 million to $940 million in 2013. Updated full year expectations for GAAP earnings per diluted share are now between $1.06 and $1.24 to account for additional severance costs. Adjusted earnings per diluted share remain between $2.88 and $3.06.
8. The company expanded their customer base through new distribution and plans to continue tracking new customers, especially in the reverse and total shoulder offerings. The upper extremities sale were successful, but lower extremities hardware sales were disappointing for the quarter. "We believe we lost some share in this area partially as a consequence of sale turnover which is being addressed and new product pipeline conversions specifically in our new total foot system, which we launched in the later part of the second quarter, mainly in the second quarter," said Mr. Arduini in the Seeking Alpha report.
9. The company expects research and development spending to stay at 6 percent of sales, consistent with prior guidance.
10. The company will continue to focus on their sales force and surgeons. Integra LifeSciences recently added local regional mobile labs, onsite education and digital online training. They are also creating a "key opinion leaders" team to leverage their surgeon education program.