Integra LifeSciences Holdings Corporation (NASDAQ:IART) Q1 2018 Earnings Conference Call - Final Transcript

Apr 25, 2018 • 08:30 am ET

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Integra LifeSciences Holdings Corporation (NASDAQ:IART) Q1 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Certainly, sir. [Operator Instructions] We can now take our first question from Dave Turkaly from JMP Securities. Please go ahead, sir.

Analyst
David L. Turkaly

Thanks. Good morning, guys.

Executive
Peter J. Arduini

Good morning.

Analyst
David L. Turkaly

Just quickly, I realize it's early in the year, but obviously, the quarter was strong, your SG&A was a little lower, your taxes were a little lower. You got a bunch of new products and a bunch of new reps coming on board. I guess I'd just like to -- at a high level ask you, why $10 million is sort of the right bump to the revenue target for the year and noting that $5 million of that is coming from FX?

Executive
Peter J. Arduini

Dave, it's Pete. I would say if you think about how we started the year and we framed up from our -- giving our guidance last call and we had two major risks as we entered the year. One is the channel integration and potential disruption, so if you think about it, in the first quarter, we fundamentally kind of tweaked the dial so to speak, pretty much every channel around the world, China, Japan, all Western Europe, pretty much all of the United States except for some select focus channels.

And so we've come out for the most part in very good shape, had very low turnover, but we still have some adds and change in the second quarter, and hence that's reflective in the comments that Glenn made.

And then the second part is tied to coming off the transition service agreements from Codman. And realistically, about July is when the first one start coming off, and I would say as we look at things, we've actually been, I would say, one of the companies when it comes to integration and moving off, we've got pretty good system in place. Our teams know how to do it well. I think the fact that we integrated the sales force and we're able to put up a beat demonstrates that.

But the fact is we still have some risk that we have to work through here in the second quarter, and we think this is kind of the right place to be. Based on that, if we're successful coming through that, do we have some opportunity towards the higher end of those ranges or better, I think there's that potential. But we want to be pretty pragmatic about -- there's some pretty big TSAs that will be coming off in July.

Glenn, I don't know if you want to add anything else to this.

Executive
Glenn G. Coleman

No. Obviously, we're off to a good start to the year. Really the largest outperformance came in our CSS segment. We're quite enthusiastic about how we started off with the integration of the two teams, now becoming one team. And to your point, we do have a number of products that are going to be launched, but I think the impact of those products is really going to be felt more in 2019 --

Executive
Peter J. Arduini

Right.

Executive
Glenn G. Coleman

Versus 2018.