Integra LifeSciences Replaces CFO, Releases Q1 Results

Just in time for the announcement of its first quarter results for 2014, Integra LifeSciences Holdings Corporation has appointed a new chief financial officer (CFO) and corporate vice president. Glenn G. Coleman will report to Jack Henneman, former CFO who will now be chief administrative officer and corporate vice president.

“I am delighted that Glenn has joined Integra as my successor in the role of chief financial officer,” said Jack Henneman. “Glenn’s broad experiences in complex and highly-regulated industries make him ideally suited to prepare Integra’s finance function to support a much larger and more global business in the years to come.”

Coleman has 25 years in financial management positions with global businesses. He is currently vice president, finance and corporate controller of Curtiss-Wright Corporation, a $2.5 billion global company headquartered in Charlotte, N.C., that delivers highly-engineered, critical function products and services to the commercial, industrial, defense and energy markets. Prior to joining Curtiss-Wright in 2008, Coleman worked at Alcatel-Lucent for more than 10 years in various finance executive leadership positions, including vice president for the wireless and wireline business groups, controller for the Americas region, vice president of internal audit and finance director of external and internal reporting. Coleman was also instrumental in several significant corporate strategic projects at Alcatel-Lucent, including a multi-billion dollar restructuring program, the spin-off of an $8 billion publicly traded entity, and numerous acquisitions. Coleman began his career at PricewaterhouseCoopers LLP where he was the lead senior manager for a top global account. Coleman has a B.S. degree from Montclair State University and has been a certified public accountant in New Jersey for more than 20 years.

“I am excited to join Integra at such an important time in its growth, and look forward to partnering with the executive leadership to execute on its strategy,” said Coleman. “We have an opportunity to add significant value by optimizing systems and operations, bringing the business to scale, expanding operating margins and increasing cash flow.”

Integra also announced that Henneman plans to retire during 2015, so that he can spend more time with his family in Austin, Texas. Until then, Henneman will continue to be responsible for the company’s financial, legal, information systems, and business development functions, along with its private label business. Over the next year, Henneman will focus on ensuring a smooth transition in the finance function and working on strategic acquisitions and other transactions.

“Jack’s career at Integra has spanned more than 15 years, a period during which the Company has increased its revenues almost 60-fold,” said President and CEO Peter Arduini. “He has been a great partner for me over the past three years and helped ensure a smooth leadership transition. Jack will be missed, but we look forward to his contributions until he retires. I also want to welcome Glenn to Integra. Glenn’s diversified financial leadership experience with major multinational companies will be a strong asset for Integra as we plan for future growth.”

Henneman joined Integra in 1998 as general counsel and chief administrative officer, when Integra had approximately $15 million in annual revenues and 150 employees. Henneman was appointed acting CFO in 2007 and assumed the role permanently in 2008. In his almost seven years as CFO, he transformed the finance function to accommodate Integra’s growth, recruited and developed key leaders in accounting, tax, financial planning and analysis, and treasury, and raised almost $1 billion in new capital from banks and in the debt and equity capital markets. During the last 16 years, he has been responsible at various times for the company’s regulatory affairs, quality systems, clinical affairs, human resources, and the management of the Company’s surgical instruments business, in addition to the responsibilities he retains today. He has led the business development function since 1998, and played a key role in the more than 40 acquisitions and alliances the company has completed during his tenure.

“Jack has made significant contributions to Integra,” said Stuart Essig, Integra’s chairman of the board of directors. “He has been a critical architect of the company’s acquisition strategy and the decisions to establish our franchises in neurosurgery, extremities, instruments and spine. We look forward to Jack devoting more time to supporting our acquisition strategy.”

Financial Results for First Quarter 2014

Integra’s financial results for the first quarter ending March 31, 2014 showed total revenues for of $215.1 million, reflecting an increase of $18.4 million over the first quarter of 2013.

Excluding the contribution of revenues from the DuraSeal acquisition, which closed during the first quarter, the contribution of revenues from discontinued products, and the effect of currency exchange rates, revenues increased 3 percent over the first quarter of 2013.

“We are pleased to have met our revenue and profit objectives for the quarter,” said Arduini. “We expect our revenue growth to accelerate from here, and our operating business is on track to meet our guidance for the full year.”

In the first quarter of 2014, Integra changed its accounting policy for the medical device excise tax to immediately record the expense in selling general and administrative expenses rather than recording it in inventory and subsequently amortizing it in cost of sales. This change had the effect of lowering GAAP (generally accepted accounting principles) and adjusted net income (loss) for the first quarter of 2013 each by $2 million, or $0.07 per diluted share.

The company reported GAAP net income of $2.2 million, or $0.07 per diluted share, for the first quarter of 2014, compared to GAAP net loss of $6 million, or $0.22 per diluted share, for the first quarter of 2013.

Adjusted net income for the first quarter of 2014, computed with the adjustments to GAAP reporting set forth in the attached reconciliation, was $18.6 million, or $0.57 per diluted share, compared to adjusted net income of $8.9 million, or $0.31 per diluted share, in the first quarter of 2013.

Integra generated $11.3 million in cash flows from operations and invested $11.3 million in capital expenditures during the quarter. Integra drew down $235 million on its credit facility to fund the DuraSeal acquisition, which closed in January.

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the first quarter of 2014, computed with the adjustments to GAAP reporting set forth in the attached reconciliation, was $36.9 million, compared to $22.2 million achieved in the first quarter last year. Adjusted EBITDA excluding stock-based compensation for the first quarter of 2014, computed with the adjustments to GAAP reporting set forth in the attached reconciliation, was $39.4 million, compared to $24.3 million achieved in the first quarter last year.

Plainsboro, N.J.-based Integra LifeSciences makes orthopedic extremity surgery, neurosurgery, spine surgery, and reconstructive and general surgery products.