Integra LifeSciences Holdings Corporation (IART) reported earnings per share (‘EPS’) of 46 cents in the fourth quarter of fiscal 2012, significantly up from 16 cents in the year-ago quarter. Adjusted EPS increased 8.3% year over year to 78 cents, beating the Zacks Consensus Estimate by a penny.
Fiscal 2012 adjusted EPS was $3.06, significantly down from the year-ago $2.79. However, it missed the Zacks Consensus Estimate of $3.08.
Total revenue during the reported quarter increased 5.4% year over year (up 5.7% at constant exchange rates or CER) to $214.4 million, keeping at par with the Zacks Consensus Estimate. The fiscal revenue came in at $830.9 million, up 6.5% (up 7.4% at CER) year over year. The fiscal numbers, with regard to both revenue and adjusted EPS, remained in line with the company’s projection of $828–$838 million and $3.04–$3.09, respectively.
The quarterly revenue growth was primarily on the back of improved sales across most of the segments of Integra. Segment-wise, all the segments of Integra recorded growth: International revenues (up 3.2% year over year to $48.4 million), U.S. Neurosurgery (up 4.8% to $45.5 million), U.S. Instruments (up 6.9% year over year to $41.6 million), U.S. Spine & Other (up 4.7% to $47.7 million), and U.S. Extremities (up 8.6% to $31.3 million) at CER.
On a product-category basis, worldwide Orthopedics sales increased 4.2% year over year to $93.3 million (up 6.4% in the U.S., offset by a 6.3% dip outside the U.S.) in the quarter. The company also registered a 6.7% year-over-year increase in worldwide Neurosurgery sales to $74.0 million as there was a 4.7% rise in the US Neurosurgery revenues combined with a 9.8% increase in the non-U.S. revenues during the quarter.
Worldwide Instruments revenues were $47.1 million, up 5.6% year over year with a 6.1% upsurge in the U.S. sales and 2.9% rise in the non-U.S. sales.
Integra witnessed a 9.7% year-over-year increase in gross profit to $132.5 million. Gross margin during the quarter was up 245 basis points (bps) to 61.2%. During the quarter, research and development expenses dropped 4.0% to $12.9 million but selling, general and administrative expenses increased 1.8% year over year to $96.5 million. Operating margin expanded a huge 459.9 bps to 10.8%.
Integra exited the fiscal with $96.9 million in cash and cash equivalents compared with $100.8 million at the end of 2011. The company used $3.8 million in cash flow from operations and invested $24.7 million in capital expenditures in the quarter.
Outlook
Integra provided its fiscal 2013 guidance. The company expects to generate revenues of $865−$880 million with adjusted EPS in the range of $3.08−$3.27. The current Zacks Consensus Estimate for revenues and EPS of $870 million and $3.20, respectively, are in line with the company’s guided range.