Integra LifeSciences logs Q2 sales, earnings beat; SeaSpine spinout misses with prelims

Integra LifeSciences (NSDQ:IART) beat expectations for its 2nd-quarter sales and earnings, but the medical device company still lowered its outlook for the rest of the year. SeaSpine Holdings (NSDQ:SPNE), Integra’s spine business spinout, didn’t fare as well with its Q2 preliminaries, missing expectations with its top-line prediction.

Integra posted profits of $5.0 million, or 15¢ per share, on sales of $244.1 million for the 3 months ended June 30, amounting to a bottom-line gain of 3.6% on sales growth of 5.5%.

Adjusted to exclude 1-time items, earnings per share were 79¢, 7¢ ahead of the consensus estimate on Wall Street, where analysts were looking for sales of $210.1 million for the quarter.

“We finished the 1st half of 2015 ahead of our original financial objectives, as we continued to see strength in our regenerative product sales in both specialty surgical solutions and orthopedics and tissue technologies,” president & CEO Peter Arduini said in prepared remarks. “In addition, our teams worked hard to complete the spin-off of SeaSpine ahead of schedule and close the strategic acquisition of TEI. We are optimistic about the top-line growth acceleration and margin improvement these transactions will add to Integra.”

The Plainsboro, N.J.-based company lowered its outlook for the rest of 2015, saying it now expects to post adjusted EPS of $3 to $3.10, down from $3.15 to $3.33, on sales of $870 million to $885 million (vs. prior guidance for $965 million to $980 million).

“The new guidance range for 2015 continuing operations is consistent with our prior expectations. This new guidance reflects the removal of our spine business for the full year, which is expected to have a 20¢ dilutive impact to adjusted EPS, and the slight accretion we expect from the TEI acquisition, net of any financing impact we expect to incur in the 2nd half of 2015,” CFO Glenn Coleman said. “We are maintaining our expectations for the underlying business excluding these transactions.”

IART shares were up 0.1% to $64.26 apiece in early afternoon activity today.

For its part, SeaSpine said it expects to report sales of $33.5 million for the quarter, missing the consensus of $34.1 million.

“Our 2nd-quarter 2015 revenues, within Integra LifeSciences’ diversified portfolio, are in line with our expectations and reflect recent trends in both of our product portfolios,” president & CEO Keith Valentine said in a statement. “Moving forward from July 1 as an independent public company, we are investing in innovation and growth initiatives which are supported by our leading orthobiologics platform and a robust R&D pipeline, which includes several spinal fusion hardware products that we recently launched and additional products expected to launch in the 2nd half of 2015. We look forward to providing additional detail on our growth strategy and our outlook for 2015 when we release our complete 2nd quarter 2015 results in mid-August.”

SeaSpine is slated to release its full Q2 results August 13. SPNE shares were down 3.5% to $15.58 each today.

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