Integra Lifesciences Holdings Corp (IART) 2023 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Integra LifeSciences First Quarter 2023 Financial Results Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Ward, Senior Director of Investor Relations. Please go ahead, sir.

美好的一天，謝謝你的支持。歡迎參加 Integra LifeSciences 2023 年第一季度財務業績電話會議。 （操作員說明）請注意，今天的會議正在錄製中。我現在想把會議交給今天的演講者，投資者關係高級總監克里斯沃德。請繼續，先生。

Thank you, Norma. Good morning, and thank you for joining the Integra LifeSciences First Quarter 2023 Earnings Conference Call. Joining me on the call this morning is Jan De Witte, President and Chief Executive Officer; Mathieu Aussermeier, Vice President of FP&A, Investor Relations and Treasurer; and Jeff Mosebrook, Principal Accounting Officer.

謝謝你，諾瑪。早上好，感謝您參加 Integra LifeSciences 2023 年第一季度收益電話會議。今天早上和我一起參加電話會議的是總裁兼首席執行官 Jan De Witte； FP&A 副總裁、投資者關係兼財務主管 Mathieu Aussermeier；和首席會計官 Jeff Mosebrook。

Earlier today, we issued a press release announcing our first quarter 2023 financial results. The release and corresponding earnings presentation, which we will reference during the call, are available at integralife.com under Investors, Events and Presentations and a file named First Quarter 2023 Earnings Call Presentation.

今天早些時候，我們發布了一份新聞稿，宣布了我們 2023 年第一季度的財務業績。我們將在電話會議期間參考的新聞稿和相應的收益演示文稿可在 integralife.com 的投資者、活動和演示文稿下以及名為“2023 年第一季度收益電話會議演示文稿”的文件中找到。

Before we begin, I would like to remind you that many of the statements made during this call may be considered forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's Exchange Act reports filed with the SEC and in the release. Also in our prepared remarks, we will reference both organic and reported revenue growth. Organic revenue growth excludes the effects of foreign currency, acquisitions, divestitures as well as discontinued products. Unless otherwise stated, all this aggregated and franchise-level revenue growth rates are based on organic performance.

在我們開始之前，我想提醒您，在本次電話會議中所做的許多陳述可能被視為前瞻性陳述。公司向美國證券交易委員會提交的《交易法》報告和新聞稿中討論了可能導致實際結果出現重大差異的因素。同樣在我們準備好的評論中，我們將參考有機和報告的收入增長。有機收入增長不包括外匯、收購、資產剝離以及停產產品的影響。除非另有說明，否則所有這些匯總和特許經營級別的收入增長率均基於有機績效。

And lastly, our comments today will include certain non-GAAP financial measures. Reconciliations of any non-GAAP financial measures can be found in today's press release, which is an exhibit to Integra's current report on Form 8-K filed with the SEC. And with that, I will now turn the call over to Jan.

最後，我們今天的評論將包括某些非 GAAP 財務指標。在今天的新聞稿中可以找到任何非 GAAP 財務措施的對賬，這是 Integra 當前向美國證券交易委員會提交的 8-K 表格報告的展示。有了這個，我現在將把電話轉給 Jan。

Thank you, Chris, and good morning, everyone. Let me start by reviewing our first quarter business highlights on Slide 4. Our first quarter revenue performance reflects solid execution by our teams as well as positive trend in market demands and procedure volumes that we see now nearing pre-COVID levels.

謝謝克里斯，大家早上好。首先讓我回顧一下幻燈片 4 上我們第一季度的業務亮點。我們第一季度的收入表現反映了我們團隊的穩健執行以及我們現在看到的接近 COVID 前水平的市場需求和程序量的積極趨勢。

First quarter revenues finished at around $381 million above our February guidance range with organic growth of 4.6% comprised of Tissue Technologies at 6.8% and Codman Specialty Surgical at 3.5%. Tissue Technologies enjoyed a strong start to the year, including double-digit growth from a number of our leading products in the wound reconstruction franchise, such as Integra Skin, MicroMatrix, Gentrix and Cytal, along with high single-digit growth from SurgiMend. We also launched MicroMatrix in Europe where we are seeing positive initial feedbacks from wounds and reconstructive surgeons.

第一季度的收入比我們 2 月份的指導範圍高出約 3.81 億美元，有機增長 4.6%，其中 Tissue Technologies 增長 6.8%，Codman Specialty Surgical 增長 3.5%。 Tissue Technologies 今年開局強勁，包括我們在傷口重建特許經營中的一些領先產品的兩位數增長，例如 Integra Skin、MicroMatrix、Gentrix 和 Cytal，以及 SurgiMend 的高個位數增長。我們還在歐洲推出了 MicroMatrix，在那裡我們看到了來自傷口和重建外科醫生的積極初步反饋。

While we are encouraged by the broad strength in demand for our Tissue Technology products, we are also experiencing the expected revenue pressure from the normalization of private label orders, as we mentioned in our February guidance. Beyond the top line results in Tissue Technologies, we remain confident in our efforts to obtain a breast reconstruction indication for SurgiMend, and we're on track to file our PMA update this August, as well as completing related work at our Boston facility to upgrade our quality systems. An FDA inspection in March reinforced the urgency of these quality system upgrades. To maximize focus and efficiency in implementing these changes, we have paused production at the Boston site and accelerated certain project work that was originally planned for later in the year.

儘管我們對組織技術產品的廣泛需求感到鼓舞，但正如我們在 2 月份的指導中提到的那樣，我們也正面臨自有品牌訂單正常化帶來的預期收入壓力。除了 Tissue Technologies 的頂級結果外，我們仍然對我們為 SurgiMend 獲得乳房重建適應症所做的努力充滿信心，我們有望在今年 8 月提交 PMA 更新，並在我們的波士頓工廠完成相關工作以升級我們的質量體系。 3 月份的 FDA 檢查強化了這些質量體系升級的緊迫性。為了最大程度地集中註意力並提高實施這些變化的效率，我們暫停了波士頓工廠的生產，並加快了原計劃在今年晚些時候進行的某些項目工作。

We plan to resume production in early June after the system upgrades are substantially complete. And in the meantime, we are continuing to work with our customers and commercial teams to minimize the supply chain impact as they work through existing finished product stock.

我們計劃在系統升級基本完成後於六月初恢復生產。與此同時，我們將繼續與我們的客戶和商業團隊合作，以盡量減少他們處理現有成品庫存時對供應鏈的影響。

Turning to CSS now. Here, we also saw a good start to the year with double-digit growth in our CUSA product line and our programmable valves as well as strong performance in instrument sales. We launched CUSA clarity bone tip in U.S., Canada, Australia and New Zealand, further expanding the global CUSA portfolio. As expected, we also continue to work through several headwinds and back-order levels remain elevated, particularly in our dural access and repair and neuromonitoring franchises.

現在轉向 CSS。在這裡，我們也看到了今年的良好開端，我們的 CUSA 產品線和可編程閥門實現了兩位數的增長，並且儀器銷售表現強勁。我們在美國、加拿大、澳大利亞和新西蘭推出了 CUSA 透明骨尖，進一步擴大了全球 CUSA 產品組合。正如預期的那樣，我們還繼續克服一些不利因素，延期交貨水平仍然很高，特別是在我們的硬腦膜通路和修復以及神經監測專營權方面。

Related to CereLink, we've made progress on resolving the electrical interference issue in our monitors and now expect to relaunch late third quarter of this year. As we were validating and testing an earlier technical fix, our engineers identify a more robust solution that does not require any change to the monitor. We are currently in verification testing and, in the meantime, have contacted the FDA to discuss the regulatory pathway to return to the market. Also working with regulatory agencies outside U.S. to finalize the plan in our international markets. Our current technical solution allows us to ramp up distribution faster once we're back in the market. We are excited about the relaunch of CereLink, our customers' commitment and support during the recall further validates our confidence that CereLink remains an important catalyst to our long-term growth expectations.

與 CereLink 相關，我們在解決顯示器中的電子乾擾問題方面取得了進展，現在預計將在今年第三季度末重新推出。在我們驗證和測試早期的技術修復時，我們的工程師確定了一個更強大的解決方案，不需要對顯示器進行任何更改。我們目前正在進行驗證測試，同時已與 FDA 聯繫，討論重返市場的監管途徑。還與美國以外的監管機構合作，最終確定我們國際市場的計劃。我們當前的技術解決方案使我們能夠在重返市場後更快地擴大分銷。我們對 CereLink 的重新推出感到興奮，我們的客戶在召回期間的承諾和支持進一步證實了我們的信心，即 CereLink 仍然是我們長期增長預期的重要催化劑。

Turning to our bottom line now. First quarter adjusted earnings per share came in at $0.74 within our original guidance range. Despite some temporary pressures to our adjusted gross margin during the quarter from product and geographical mix and the Boston quality project, we were able to meet our profitability targets and continue to make the necessary investments to fuel our long-term growth plans.

現在轉向我們的底線。第一季度調整後每股收益為 0.74 美元，處於我們最初的指導範圍內。儘管產品和地域組合以及波士頓優質項目在本季度對我們調整後的毛利率造成了一些臨時壓力，但我們能夠實現盈利目標並繼續進行必要的投資以推動我們的長期增長計劃。

During the quarter, we also appointed Dr. Stuart Hart as Chief Medical Officer. Dr. Hart has worked at leading medtech organizations and brings a deep and broad experience in global medical affairs and surgical innovation. That will enable him to strengthen our clinical operations and innovation capabilities.

在本季度，我們還任命 Stuart Hart 博士為首席醫療官。 Hart 博士曾在領先的醫療技術組織工作，在全球醫療事務和外科創新方面擁有深厚而廣泛的經驗。這將使他能夠加強我們的臨床運營和創新能力。

Our CFO search continues with a strong slate of candidates. We're close to identifying a great leader who has the right skills and fit for the company. On the first quarter, we further solidified our balance sheet and liquidity position by amending and extending our credit facility, providing us ample liquidity as we execute our M&A strategies. We also initiated a $150 million accelerated share repurchase to return additional value to shareholders.

我們的首席財務官搜索繼續進行，候選人名單眾多。我們即將確定一位擁有合適技能並適合公司的優秀領導者。第一季度，我們通過修改和擴大信貸額度進一步鞏固了資產負債表和流動性狀況，為我們執行併購戰略提供了充足的流動性。我們還啟動了 1.5 億美元的加速股票回購，以向股東回報額外價值。

Overall, the strength demonstrated by our portfolio at the beginning of this year provided us confidence that we will deliver our 2023 commitments, and we are reaffirming our original full year guidance for revenue, organic growth and adjusted EPS. Consistent with the guidance we provided in February, we expect to see a clear step-up from our first half to second half revenues. Additionally, we now also expect a larger step-up in gross margin as a result of the Boston quality project cost acceleration from the later part of the year into the first half.

總體而言，我們的投資組合在今年年初展現的實力讓我們有信心兌現 2023 年的承諾，我們重申了我們最初的全年收入、有機增長和調整後每股收益指導方針。與我們在 2 月份提供的指導一致，我們預計上半年和下半年的收入將明顯增加。此外，我們現在還預計，由於波士頓優質項目成本從今年下半年加速到上半年，毛利率將有更大的提升。

So with that, I'd like to turn the call over to Mathieu now to go deeper into our first quarter performance and our guidance.

因此，我現在想把電話轉給 Mathieu，以更深入地了解我們第一季度的業績和我們的指導。

Thank you, Jan. Let me provide you with a more detailed look at our first quarter financial highlights, starting on Slide 5. As Jan mentioned, first quarter total revenues were approximately $381 million, representing an increase of 1.1% on a reported basis and 4.6% on an organic basis. Total revenues were $5 million, above the high end of the guidance range communicated back in February.

謝謝你，Jan。讓我從幻燈片 5 開始更詳細地介紹我們第一季度的財務亮點。正如 Jan 所提到的，第一季度總收入約為 3.81 億美元，較報告基礎增長 1.1%，有機增長 4.6%。總收入為 500 萬美元，高於 2 月份公佈的指導範圍的上限。

First quarter revenue growth was strong across many parts of our business with organic growth of 3.5% in Codman Specialty Surgical and 6.8% in Tissue Technologies. Overall, organic growth was 3.5% in the U.S. and 7.2% in international. Adjusted gross margin for the quarter was 67.3%, up sequentially by 100 basis points versus the fourth quarter of 2022, but down 40 basis points versus the prior year. Adjusted EBITDA margin for the quarter was 24.2%, down 60 basis points and adjusted earnings per share were flat at $0.74. Both metrics were largely impacted by gross margin pressures, planned growth investments and year 1 dilution from the SIA acquisition.

第一季度我們許多業務部門的收入增長強勁，Codman Specialty Surgical 的有機增長為 3.5%，Tissue Technologies 的有機增長為 6.8%。總體而言，美國的有機增長率為 3.5%，國際增長率為 7.2%。本季度調整後的毛利率為 67.3%，較 2022 年第四季度連續上升 100 個基點，但較上年同期下降 40 個基點。本季度調整後的 EBITDA 利潤率為 24.2%，下降 60 個基點，調整後的每股收益持平於 0.74 美元。這兩個指標在很大程度上都受到毛利率壓力、計劃中的增長投資和收購 SIA 的第 1 年稀釋的影響。

If you turn to Slide 6, I will go deeper into the first quarter revenue performance for our CSS segment. Reported Q1 revenues in CSS were $248 million, flat on a reported basis, and up 3.5% on an organic basis from the prior year. Global neurosurgery sales were up 2.9%, driven by low double-digit growth in our CUSA capital and disposable and mid-single-digit growth in CSF management, including continued strength in our Certas Plus programmable valves. Neuromonitoring declined low digit -- low double digits, primarily because of the lack of CereLink monitor sales in the quarter following its recall in the third quarter last year. Our global neurosurgery performance in the quarter was also impacted by continued supply challenges in our dural access and repair as well as neuromonitoring.

如果你轉到幻燈片 6，我將更深入地介紹我們 CSS 部門第一季度的收入表現。 CSS 報告的第一季度收入為 2.48 億美元，與報告基礎持平，比上一年有機增長 3.5%。全球神經外科銷售額增長了 2.9%，這得益於我們的 CUSA 資本的低兩位數增長以及 CSF 管理的一次性和中個位數增長，包括我們的 Certas Plus 可編程閥門的持續增長。神經監測下降了低位數——低兩位數，這主要是因為 CereLink 顯示器在去年第三季度召回後該季度的銷售量不足。我們在本季度的全球神經外科業績也受到我們硬腦膜通路和修復以及神經監測方面持續供應挑戰的影響。

Overall, excluding CereLink, capital sales within the quarter were strong and grew low double digits driven by CUSA with low single-digit growth in smaller capital. We continue to see strong demand funnels for our capital equipment as customers see value, innovation and additional productivity in these products, particularly our CUSA platform. Instruments grew approximately 6% driven by healthy demand and the timing of orders. This result exceeded our low single-digit long-term growth expectations for this business.

總體而言，不包括 CereLink，本季度的資本銷售強勁，並且在 CUSA 的推動下實現低兩位數增長，較小的資本實現低個位數增長。隨著客戶看到這些產品（尤其是我們的 CUSA 平台）的價值、創新和額外的生產力，我們繼續看到對我們的資本設備的強勁需求渠道。受健康需求和訂單時機的推動，儀器增長了約 6%。這一結果超出了我們對該業務的低個位數長期增長預期。

Shifting to international. Sales grew high single digits in the quarter, led by double -- low double-digit growth in both Japan and China. Japan growth was led by sales in CUSA capital and disposables as well as DuraGen while China benefited from the recovery of grueling COVID lockdowns and our continued geographic expansion.

轉向國際化。在日本和中國兩位數低雙位數增長的帶動下，本季度銷售額實現了高個位數增長。日本的增長是由 CUSA 資本和一次性用品以及 DuraGen 的銷售帶動的，而中國則受益於艱難的 COVID 封鎖的恢復和我們持續的地域擴張。

Moving to our Tissue Technologies segment on Slide 7. Tissue Technologies grew 2.6% on a reported basis and 6.8% on an organic basis compared to the prior year. First quarter sales in wound reconstruction increased 11%, driven by strong demand and commercial execution, led by double-digit growth from Integra Skin, MicroMatrix, Gentrix and Cytal as well as high single-digit growth in SurgiMend.

轉到幻燈片 7 上的組織技術部門。與上一年相比，組織技術在報告的基礎上增長了 2.6%，在有機基礎上增長了 6.8%。在 Integra Skin、MicroMatrix、Gentrix 和 Cytal 的兩位數增長以及 SurgiMend 的高個位數增長的帶動下，傷口重建的第一季度銷售額增長了 11%。

In our private label franchise, sales declined 5% versus last year, as expected, while our partners continue to normalize their inventory levels following strong purchases in the first half of 2022. And finally, international sales in Tissue Technologies were down mid-single digits due to supply challenges in certain markets.

在我們的自有品牌特許經營中，銷售額與去年相比下降了 5%，正如預期的那樣，而我們的合作夥伴在 2022 年上半年的強勁採購之後繼續將其庫存水平正常化。最後，Tissue Technologies 的國際銷售額下降了中個位數由於某些市場的供應挑戰。

Turning to Slide 8 to review our first quarter P&L metrics. Adjusted gross margin for the quarter was 67.3%, down 40 basis points compared to Q1 of 2022. The decline of our gross margin year-over-year was primarily driven by unfavorable product and geographic mix as well as Boston quality project expenses. These temporary pressures represented a headwind of approximately 120 basis points in the quarter and offset our positive revenue performance and continuous cost improvement activities. Despite these interim pressures, our gross margin improved sequentially by 100 basis points versus Q4 of 2022, primarily driven by continued strength in our higher gross margin Tissue Technology business, some improvement in supply and the passing of onetime cost pressures we saw in the fourth quarter of last year, all of which were factored in our February guidance.

轉到幻燈片 8 來回顧我們第一季度的損益指標。本季度調整後的毛利率為 67.3%，與 2022 年第一季度相比下降了 40 個基點。毛利率同比下降的主要原因是不利的產品和地域組合以及波士頓優質項目費用。這些臨時壓力代表了本季度約 120 個基點的逆風，抵消了我們積極的收入表現和持續的成本改善活動。儘管存在這些臨時壓力，但我們的毛利率與 2022 年第四季度相比環比提高了 100 個基點，這主要是由於我們較高的毛利率組織技術業務的持續強勁、供應的一些改善以及我們在第四季度看到的一次性成本壓力的過去去年，所有這些都包含在我們 2 月份的指導中。

We expect the cost of acceleration of the Boston quality project to continue into the second quarter and impact our first half adjusted gross margin unfavorably by approximately 100 basis points compared to our February guidance. This implies flat to marginal improvement in gross margins in Q2 compared to Q1.

我們預計波士頓優質項目的加速成本將持續到第二季度，並且與我們 2 月份的指導相比，對我們上半年調整後的毛利率不利影響約 100 個基點。這意味著與第一季度相比，第二季度的毛利率持平或略有改善。

Our first quarter adjusted EBITDA margin was down 60 basis points compared to the prior year driven by temporary gross margin pressures highlighted earlier as well as the investments supporting our key strategic priorities discussed during our February call. Our EBITDA margin also reflects the 1-year dilution of our SIA acquisition, which closed in December 2022. Our adjusted EPS was $0.74, flat to prior year and includes a negative $0.04 impact as a result of the Boston quality project.

我們第一季度調整後的 EBITDA 利潤率與上一年相比下降了 60 個基點，原因是之前強調的臨時毛利率壓力以及支持我們在 2 月份電話會議上討論的關鍵戰略優先事項的投資。我們的 EBITDA 利潤率還反映了我們於 2022 年 12 月完成的 SIA 收購的 1 年攤薄。我們調整後的每股收益為 0.74 美元，與上年持平，其中包括波士頓質量項目帶來的 0.04 美元的負面影響。

If you turn to Slide 9 for a brief update on our balance sheet, capital structure and cash flow. In the first quarter, we initiated the previously announced $150 million accelerated share repurchase program. We also amended and extended our $2.1 billion credit facility from 2025 to 2028, on favorable terms despite the challenging banking environment, providing us strong liquidity to support our M&A game board.

如果您轉到幻燈片 9 以簡要了解我們的資產負債表、資本結構和現金流量。第一季度，我們啟動了此前宣布的 1.5 億美元加速股票回購計劃。我們還修改並延長了 21 億美元的信貸額度，從 2025 年延長至 2028 年，儘管銀行業環境充滿挑戰，但條款優惠，為我們提供了強大的流動性來支持我們的併購遊戲板。

During the quarter, operating cash flow was $26 million and free cash flow was $13 million reflecting both expected increases in capital and EU MDR compliance spending as well as increased inventory levels compared to the fourth quarter of 2022 as we increase our finished goods safety stock levels. Free cash flow conversion was 71% on the trailing 12 months. Our balance sheet remains strong with ample liquidity to support our short-term and long-term plans. And as of March 31, net debt was $1.1 billion, and our consolidated total leverage ratio was 2.5x. The company had total liquidity of $1.6 billion, including $307 million in cash and the remaining available under our revolving credit facility.

本季度，運營現金流為 2600 萬美元，自由現金流為 1300 萬美元，這反映了與 2022 年第四季度相比資本和歐盟 MDR 合規支出的預期增長以及庫存水平的增加，因為我們提高了成品安全庫存水平.過去 12 個月的自由現金流轉換率為 71%。我們的資產負債表依然強勁，流動性充足，可以支持我們的短期和長期計劃。截至 3 月 31 日，淨債務為 11 億美元，我們的合併總槓桿率為 2.5 倍。公司的流動資金總額為 16 億美元，包括 3.07 億美元現金和我們循環信貸額度下可用的剩餘資金。

Turning to Slide 10. I will provide an update to our consolidated revenue and adjusted earnings per share guidance for the second quarter and full year 2023. Second quarter revenues are forecasted to be in the range of $396 million to $400 million, representing approximately flat reported growth and organic growth in the range of 1.5% to 2.5%. Our second quarter revenue guidance reflects continued procedure recovery and strong demand for our products but also continuing supply challenges and a modest negative impact of approximately $5 million from the Boston quality project. Our organic growth guidance also reflects the higher comps from last year in private label and Instruments as well as the lack of revenue from CereLink monitors in the quarter.

轉到幻燈片 10。我將更新我們第二季度和 2023 年全年的綜合收入和調整後每股收益指導。第二季度收入預計在 3.96 億美元至 4 億美元之間，與報告的收入大致持平增長和有機增長在 1.5% 至 2.5% 之間。我們的第二季度收入指引反映了持續的程序恢復和對我們產品的強勁需求，但也反映了持續的供應挑戰和波士頓質量項目約 500 萬美元的適度負面影響。我們的有機增長指引還反映了去年自有品牌和儀器的較高收入，以及本季度 CereLink 顯示器的收入不足。

For the full year 2023, we are reaffirming our revenue and organic growth guidance. Our guidance contemplates the strong demand and portfolio performance we demonstrated in the first quarter, a slight improved FX outlook, updated timing for the relaunch of CereLink, supply and back-order challenges and a modest revenue impact from the Boston quality project. We are also holding our organic growth expectations to approximately 3% in the first half and 6% in the second half as shared during our February call. As a reminder, the step-up from first half to second half is driven by gradual supply improvements, the relaunch of CereLink and favorable back half comps in China and private label.

對於 2023 年全年，我們重申我們的收入和有機增長指導。我們的指導意見考慮了我們在第一季度展示的強勁需求和投資組合表現、外匯前景略有改善、重新啟動 CereLink 的更新時間、供應和延期交貨挑戰以及波士頓優質項目對收入的適度影響。我們還將上半年的有機增長預期保持在 3% 左右，下半年的有機增長預期為 6%，正如我們在 2 月份的電話會議上所分享的那樣。提醒一下，從上半年到下半年的增長是由供應的逐步改善、CereLink 的重新啟動以及中國和自有品牌的有利後半部分驅動的。

Turning to adjusted earnings per share guidance for the second quarter, we expect adjusted EPS to be in the range of $0.75 to $0.79, up sequentially, but down from the prior year driven by temporary gross margin pressures, including the cost from the Boston quality project as well as our planned strategic investments, including the SIA acquisition. This guidance range reflects an approximate $0.06 headwind from the Boston quality project but will have a benefit in the second half of the year.

談到第二季度調整後的每股收益指引，我們預計調整後的每股收益將在 0.75 美元至 0.79 美元之間，環比上升，但由於暫時的毛利率壓力，包括波士頓優質項目的成本，低於上一年以及我們計劃的戰略投資，包括對 SIA 的收購。該指導範圍反映了來自波士頓質量項目的大約 0.06 美元的逆風，但將在今年下半年受益。

As we look at the rest of the year, we expect that the acceleration of the project cost, along with other gross margin levers will contribute to a sequential improvement in gross margin from first half to second half of approximately 100 basis points. We will also continue to manage our spending ramp for the remaining of the year while preserving our key growth investments. In summary, we are holding our full year 2023 adjusted EPS guidance of $3.43 to $3.51 per share. Now I would like to turn the call back over to Jan.

展望今年剩餘時間，我們預計項目成本的加速增長以及其他毛利率槓桿將有助於毛利率從上半年到下半年環比提高約 100 個基點。我們還將在今年剩餘時間繼續管理我們的支出增長，同時保留我們的關鍵增長投資。總之，我們將 2023 年全年調整後的每股收益指引維持在 3.43 美元至 3.51 美元之間。現在我想把電話轉回 Jan。

Thank you, Mathieu, and please turn to Slide 11 to conclude our prepared remarks. Our first quarter performance was solid and the results and trends provide confidence that we can deliver on our full year commitments through market recovery and strong demand for our products, while we navigate supply challenges and the acceleration of our quality system project in Boston. In parallel, we continue to progress towards our long-term strategic goals. We strengthened our core business with new product launches in the CUSA platform and in our international Tissue Technologies portfolio with MicroMatrix in Europe. We're advancing our PMA projects, intending to file the SurgiMend PMA amendment this summer as well as additional modules of the DuraSorb PMA later this year. This keeps us on track to deliver the first 2 PMAs for an ADM in the high-growth implant-based breast reconstruction market.

謝謝你，Mathieu，請翻到幻燈片 11 來結束我們準備好的發言。我們第一季度的業績穩健，結果和趨勢使我們有信心通過市場復甦和對我們產品的強勁需求來實現我們的全年承諾，同時我們應對供應挑戰和加速我們在波士頓的質量體系項目。與此同時，我們繼續朝著我們的長期戰略目標前進。我們通過在 CUSA 平台和我們在歐洲的 MicroMatrix 國際組織技術產品組合中推出新產品來加強我們的核心業務。我們正在推進我們的 PMA 項目，打算在今年夏天提交 SurgiMend PMA 修正案，並在今年晚些時候提交 DuraSorb PMA 的其他模塊。這使我們能夠在基於植入物的高增長乳房重建市場中為 ADM 交付前 2 個 PMA。

The team has also done a tremendous job getting to the root causes on CereLink and developing a robust technical solution to bring the monitor back to the market. In addition, we made continued progress in enhancing our executive leadership team and strengthening our core capabilities in manufacturing, quality assurance, clinical study design and evidence generation. We have also taken the opportunity to fortify our balance sheet by extending our credit facility and we returned value to our shareholders through a share repurchase. All of these achievements will enable us to continue to bring innovative and life-saving technologies to market and serve our customers and their patients around the world. Our full year outlook is balanced reflecting our commercial momentum and our focus on improving execution but also the pulling forward of the Boston quality project costs, while we push ahead with investments in critical initiatives, that will propel our growth over the long term.

該團隊還做了巨大的工作，找到了 CereLink 的根本原因，並開發了強大的技術解決方案，將顯示器重新推向市場。此外，我們在加強我們的執行領導團隊和加強我們在製造、質量保證、臨床研究設計和證據生成方面的核心能力方面取得了持續進展。我們還藉此機會通過擴大信貸額度來鞏固我們的資產負債表，並通過股票回購將價值回報給我們的股東。所有這些成就將使我們能夠繼續將創新和拯救生命的技術推向市場，並為我們的客戶和他們在世界各地的患者提供服務。我們的全年展望是平衡的，反映了我們的商業勢頭和我們對提高執行力的關注，以及對波士頓優質項目成本的推動，同時我們推進對關鍵計劃的投資，這將推動我們的長期增長。

Our second half reflects a clear step-up in organic growth and margin expansion with expected organic growth well above 5%, adjusted gross margins greater than 68% and adjusted EPS growth approaching double digits. I believe these metrics for the second half are much more reflective of where we see the business in the near term as we progress towards our LRP commitments.

我們的下半年反映出有機增長和利潤率擴張明顯加快，預期有機增長遠高於 5%，調整後的毛利率超過 68%，調整後的每股收益增長接近兩位數。我相信下半年的這些指標更能反映我們在實現 LRP 承諾的過程中對短期業務的看法。

In that context, we look forward to going into more detail on our exciting growth catalysts and providing more clarity on our plans to achieve our long-term targets next week on Thursday, May 4, at our Investor Day in New York.

在這種情況下，我們期待在下週 5 月 4 日星期四的紐約投資者日上更詳細地介紹我們令人興奮的增長催化劑，並更清楚地說明我們實現長期目標的計劃。

That concludes our prepared remarks. Thank you for joining us this morning. And operator, would you please open the lines for questions?

我們準備好的發言到此結束。感謝您今天早上加入我們。接線員，請您打開問題熱線好嗎？

(Operator Instructions) Our first question comes from the line of Steve Lichtman with Oppenheimer.

（操作員說明）我們的第一個問題來自 Steve Lichtman 和 Oppenheimer 的對話。

I guess just first on CereLink. Can you talk a little bit more about sort of the adjustment in the fix there. And I think, Jan, you alluded to the fact that on the back end that, that will help. Just any more color you could provide on sort of what the change and the fix is and why it will help on the back end in terms of ramp?

我想首先是在 CereLink 上。你能多談談那裡的修復中的調整嗎？我認為，Jan，你提到了這樣一個事實，即在後端，這將有所幫助。您可以提供更多顏色來說明更改和修復是什麼，以及為什麼它會在斜坡方面對後端有所幫助？

Yes. So as we were over the past couple of months with our engineers are doing the statistical validation and testing of the initial fix, they identified a more robust technical solution that is even more capable to shield away the different electrical interference, specifically, in this case, one that came from the patient and the [table.] It's a fix in addition that does not require a change to the monitor box but rather to the sensor connector. It's a cable-type component. So the benefit of the solution other than shielding interferes better, is that it does not require a change to the monitor box, which allows us to ramp up faster the moment we're back in the field. So that's the change.

是的。因此，在過去的幾個月裡，我們的工程師正在對初始修復進行統計驗證和測試，他們確定了一種更強大的技術解決方案，能夠屏蔽不同的電氣乾擾，特別是在這種情況下，一個來自患者和[桌子]。這是一個額外的修復，不需要改變監視器盒，而是需要改變傳感器連接器。它是一種電纜型組件。因此，除了屏蔽干擾之外，該解決方案的好處是它不需要更改監視器盒，這使我們能夠在回到現場後更快地提升。這就是變化。

That's also the change that we thought was a better solution in the medium and long term for the business. It does require us now to restart validation and verification testing with this new solution. And that's the main driver why essentially, we're slipping out 1 quarter with a plan in terms of going back to the market.

這也是我們認為對企業的中長期而言更好的解決方案的變化。它確實要求我們現在使用這個新解決方案重新啟動驗證和驗證測試。這就是為什麼從本質上講，我們計劃在 1 個季度內重返市場的主要驅動力。

Okay. Got it. And then on the Boston manufacturing project, can you just maybe provide a little bit more detail there in terms of what's being done, how far along you are in that process? And then what exactly is being manufactured there? It obviously sounds like SurgiMend and anything else?

好的。知道了。然後在波士頓製造項目上，你能否提供更多細節，說明正在做什麼，你在這個過程中走了多遠？那麼那裡究竟在製造什麼？這顯然聽起來像 SurgiMend 和其他任何東西？

Yes. In short, in Boston, the main product there is SurgiMend. There's also one private label product that's being manufactured there. To go back to the Boston production or the quality project there, we've been working for the past couple of years to upgrade our Boston facility based on FDA observations in 2018 and 2021, okay? In addition, as we are preparing to have SurgiMend PMA product there, the Boston site requires a quality system that operates at a higher level.

是的。簡而言之，在波士頓，那裡的主要產品是 SurgiMend。那裡還生產一種自有品牌產品。回到波士頓的生產或那裡的質量項目，過去幾年我們一直在努力根據 FDA 在 2018 年和 2021 年的觀察升級我們的波士頓設施，好嗎？此外，由於我們準備在那裡使用 SurgiMend PMA 產品，波士頓工廠需要一個在更高水平上運行的質量體系。

So that's a product that we've been -- a project that's been ongoing. We had an audit early in March that confirms we're on the right track with our execution. At the same time, it further ups our sense of urgency to finish the project, specifically upgrading a number of testing-related processes and infrastructure, physical layout changes.

所以這是我們一直在做的產品——一個一直在進行的項目。我們在 3 月初進行了一次審計，確認我們的執行是在正確的軌道上。同時，進一步增強了我們完成該項目的緊迫感，特別是升級了一些與測試相關的流程和基礎設施，改變了物理佈局。

In addition, the plan that we have on the table now gets the job finished well before August, this summer, which is the timing where we also submit the PMA amendment for the SurgiMend breast product. So in that context, we elected to pause production as it allows us to more quicker and more efficient, make the changes in process and physical layouts that are needed. We can do that because we have ample inventory in the system that allows us to satisfy current customer demand. So this project that's an 8-week focused project while we keep the factory down, we're going to be back up and running early June with the factory. And as I said, in the meantime, we're living off inventories to satisfy customer demand.

此外，我們現在提出的計劃可以在今年夏天 8 月之前完成這項工作，這也是我們還提交 SurgiMend 乳房產品 PMA 修正案的時間。因此，在這種情況下，我們選擇暫停生產，因為它使我們能夠更快、更高效地對流程和物理佈局進行必要的更改。我們可以做到這一點，因為我們在系統中有充足的庫存，可以滿足當前客戶的需求。所以這個項目是一個為期 8 週的重點項目，同時我們讓工廠停工，我們將在 6 月初與工廠一起恢復運行。正如我所說，與此同時，我們依靠庫存來滿足客戶需求。

The question comes from the line of Vik Chopra with Wells Fargo.

這個問題來自 Vik Chopra 與 Wells Fargo 的合作。

So I just had one clarification on gross margins. I think you said Q2 is sort of flat to marginal improvement in Q3, and Q4, a step up. You've previously talked about mid 100 basis point gross margin improvement. Is that still on the table? And then I had a follow-up.

所以我只對毛利率進行了一次澄清。我想你說 Q2 在 Q3 和 Q4 上有點持平或邊際改善，是一個進步。你之前談到過 100 個基點左右的毛利率改善。還在桌子上嗎？然後我進行了跟進。

So yes, we expect to see kind of flat to moderate increase in gross margin from Q1 to Q2 and then from first half to second half, as you mentioned, the 100 basis points of improvement. From a full year perspective, we were talking about this mid-100 basis point improvement in gross margin. We're currently looking at more 100 basis points year-over-year of an improvement, so approximately 100 basis points at this point in time. And the drivers that we have discussed during the February call are very much, I would say, alive, tempered by, I would say, some kind of residual impact coming from the Boston project that we're running right now here in the first half. So hopefully, that helps.

所以是的，我們預計從第一季度到第二季度，然後從上半年到下半年，毛利率將持平或適度增長，正如你提到的，100 個基點的改善。從全年的角度來看，我們談論的是毛利率提高 100 個基點。我們目前正在尋找比去年同期更多 100 個基點的改進，因此此時大約 100 個基點。我想說，我們在 2 月的電話會議上討論的驅動因素非常活躍，受到了我們上半年在這裡運行的波士頓項目的某種殘餘影響的影響.希望這會有所幫助。

That does help. And then my follow-up was when can we expect to hear an update on the search for a new CFO? Any color on that would also be helpful.

這確實有幫助。然後我的後續行動是我們什麼時候可以期待聽到有關尋找新 CFO 的最新消息？上面的任何顏色也會有所幫助。

So Vik, on the CFO search, very happy with the slate that we're having. Over the next couple of weeks, we have brought our Board together -- we have a little Board committee. That's part of the selection. So that's the main step into selecting, yes, the main candidates out of that slate. And so I think on the month of May, that's where a decision will be made.

所以 Vik，在 CFO 搜索中，對我們擁有的板岩非常滿意。在接下來的幾周里，我們召集了董事會——我們有一個小型董事會委員會。這是選擇的一部分。所以這是選擇主要候選人的主要步驟。所以我認為在 5 月份，將做出決定。

Our next question comes from Rohan [Patel] with JPMorgan Chase.

我們的下一個問題來自摩根大通的 Rohan [Patel]。

I suggest we go to the next one, right, and Rohan can come back later on.

我建議我們去下一個，對吧，Rohan 稍後可以回來。

Our next question comes from the line of Ryan Zimmerman with BTIG.

我們的下一個問題來自 BTIG 的 Ryan Zimmerman。

I had a question. I mean, historically, Integra has generated closer to 48% to 50% of its EPS in the first half. And if I look at kind of -- if I look back at kind of years passed, now you're targeting this year about 57% in the second half of the year since you generate about 43% in the first half of this year. And so I can appreciate some of the Boston onetime impact in the first half of the year. But I'm curious if you could kind of help us bridge the dynamic, particularly as revenue increases in the back half of the year, I would imagine that costs are also going up on the OpEx side. And so I just want to get comfortable with the EPS ramp in the second half of the year.

我有一個問題。我的意思是，從歷史上看，Integra 在上半年產生了接近 48% 至 50% 的每股收益。如果我看一下——如果我回顧過去的幾年，現在你今年下半年的目標是 57%，因為你在今年上半年產生了大約 43%。因此，我可以在今年上半年欣賞波士頓的一些一次性影響。但我很好奇你是否可以幫助我們彌合這種動態，特別是隨著下半年收入的增加，我想 OpEx 方面的成本也會上升。因此，我只想對今年下半年的 EPS 增長感到滿意。

So as you look at the first half, we've also accelerated certain expenses related to the Boston project right now. So part of this acceleration and some of the costs that we are facing here in the second quarter, we're going to offset some of this in the second half. And so part of that second half improvement, along with the revenue increase that you're going to see first half to second half, this will enable us to generate more EPS contribution to the full year. And you're correct, we're about 43%, 45% in the first half and about just over 50% in the second half.

所以當你看上半年時，我們現在也加快了與波士頓項目相關的某些費用。因此，這種加速的一部分和我們在第二季度在這裡面臨的一些成本，我們將在下半年抵消其中的一部分。因此，下半年的部分改進，以及上半年到下半年的收入增長，將使我們能夠為全年產生更多的每股收益貢獻。你是對的，我們上半年大約是 43%，45%，下半年大約剛剛超過 50%。

Yes. Okay. And then organic growth in the second quarter is certainly softer than what you saw this first quarter. Procedure volumes have -- were good this first quarter. I'm curious kind of why you think there's either a slowdown or just that doesn't continue into the second quarter. And maybe that's all related to some private label or things like that. But help us understand kind of what you're seeing in the second quarter that's maybe tempering your expectations.

是的。好的。然後第二季度的有機增長肯定比你在第一季度看到的要疲軟。第一季度的手術量很好。我很好奇為什麼你認為經濟放緩或者只是沒有持續到第二季度。也許這都與一些私人標籤或類似的東西有關。但請幫助我們了解您在第二季度看到的情況，這可能會降低您的期望。

I'll hand that to Mathieu to give you some of the movements there.

我會把它交給 Mathieu 給你一些動作。

So again, in the second quarter -- the second quarter is the quarter where we'll be facing, I would say, one -- the toughest comps. If you think about private label, about instruments. So that's definitely softening the growth year-over-year. In addition to that, we have this moderate impact coming from Boston, which is about $5 million here in the quarter. So I would say these are the 3 or the 2 big elements that are going to be softening the growth. We believe that demand is going to continue to be strong for the remainder of the year, but it's, again, this temporary comp year-over-year and the Boston that's going to temper a little bit of growth here in the second quarter temporarily.

所以，在第二季度 - 第二季度是我們將面臨的季度，我會說，一個 - 最艱難的比賽。如果你考慮自有品牌，關於樂器。因此，這肯定會削弱同比增長。除此之外，我們還有來自波士頓的適度影響，本季度這裡的影響約為 500 萬美元。所以我想說這些是將減緩增長的 3 或 2 個大因素。我們認為今年剩餘時間的需求將繼續保持強勁，但再次是這種臨時的同比增長和波士頓將在第二季度暫時緩和這裡的一點點增長。

And that was -- sorry, you called out a $5 million impact on the Boston quality project in the second quarter. I just want to be clear.

那是 - 抱歉，您在第二季度對波士頓質量項目產生了 500 萬美元的影響。我只想說清楚。

Okay. That is correct.

好的。那是對的。

And part of that, Ryan, will come back in the second half. It's linked with a private label shipment, which we think we're not going to be doing in the second quarter, but it will shift to later second half.

其中一部分，瑞安，將在下半場回歸。它與自有品牌發貨有關，我們認為我們不會在第二季度這樣做，但會轉移到下半年晚些時候。

Okay. So it sounds like -- just to be clear, there's -- private label starts to maybe normalize or at least there's a lumpy larger order that picks up in the third or fourth quarter that can help.

好的。所以這聽起來 - 只是為了清楚，有 - 自有品牌可能開始正常化，或者至少在第三或第四季度有一個更大的訂單可以提供幫助。

Yes. Correct.

是的。正確的。

Our next question comes from Matthew O'Brien with Piper Sandler.

我們的下一個問題來自 Matthew O'Brien 和 Piper Sandler。

This is Will on for Matt. For starters on the CereLink relaunch, thanks for the color on the recent breakthrough there. And -- but given the late Q3 relaunch now, can you let us know what gives you confidence in the steep second half guidance not saying the whole thing was based on CereLink, but certainly, it's not helping. And just on CereLink, how are those conversations with the FDA going? And do you have high visibility in that Q3 time line at this point?

這是 Will on for Matt。對於 CereLink 重新啟動的初學者，感謝那裡最近突破的顏色。而且——但鑑於現在第三季度末重新啟動，你能否讓我們知道是什麼讓你對陡峭的下半年指導充滿信心，而不是說整個事情都是基於 CereLink，但當然，它沒有幫助。就 CereLink 而言，與 FDA 的對話進展如何？在這一點上，你在第三季度的時間線上有很高的知名度嗎？

Yes. So we -- your second question first. We have exchanged with the FDA our engineering -- the early test results on this new solution, which look very robust, are quite binary in terms of pass,fail on several dozens of tests. So that information, we've shared with the FDA. We're going to discuss that next week to further fine-tune how we set up the validation and verification, say, the official testing of that solution. We plan to submit that around mid-August.

是的。所以我們 - 首先是你的第二個問題。我們已經與 FDA 交換了我們的工程——這個新解決方案的早期測試結果，看起來非常穩健，在幾十個測試中通過和失敗方面是相當二元的。因此，我們已經與 FDA 分享了這些信息。我們將在下週討論這個問題，以進一步微調我們如何設置驗證和驗證，比如對該解決方案的正式測試。我們計劃在 8 月中旬左右提交。

Our time line at this point in time, the time line of end third quarter assumes a special 510(k). And that also is aligned with the high end of our top line guidance. If this would not end up being a special 510(k) then we're talking, yes, about 2, 3 months later, which is aligned with the lower end of our guidance. So our guidance reflects the high and the low scenarios when it comes to selling back to market, and that's pretty much driven by the uncertainty on what regulatory path we will have to follow after we submit in mid-August.

我們此時的時間線，第三季度末的時間線假設有一個特殊的 510(k)。這也符合我們頂線指導的高端。如果這最終不會成為特殊的 510(k)，那麼我們正在談論，是的，大約 2、3 個月後，這與我們指導的下限一致。因此，我們的指引反映了回售市場的高低情景，這在很大程度上是由我們在 8 月中旬提交後必須遵循的監管路徑的不確定性所驅動的。

So just to add to Jan's remarks here, if you think about the first half to second half, you need to realize that CereLink -- maybe the delay represents maybe a couple of million dollars of change. So it was a smaller contributor to the second half ramp. And just as a reminder, as we see kind of supply recovering throughout the year, we're expecting to have a bigger contribution in the second half. China normalization post COVID lockdown is also going to be more of a contributor in the second half along with kind of growth in some of our NPIs that are going to continue to ramp here in the second half of the year.

因此，只要在這裡添加 Jan 的評論，如果您考慮上半年到下半年，您需要意識到 CereLink——延遲可能代表幾百萬美元的變化。所以它對下半場斜坡的貢獻較小。提醒一下，正如我們看到全年供應都在恢復一樣，我們預計下半年會有更大的貢獻。中國在 COVID 封鎖後的正常化也將在下半年發揮更大的作用，同時我們的一些 NPI 的增長將在今年下半年繼續增加。

And then we're going to be [passed also] some of the tough comps that we've had from an Instrument and from -- and from a private label perspective, sorry, both of which are going to help also the second half growth. So that's kind of the first, second half log, and the biggest contributors are still very much alive.

然後我們將 [passed also] 我們從 Instrument 那裡獲得的一些艱難的組合 - 從自有品牌的角度來看，抱歉，這兩者都將有助於下半年的增長.所以這就是前半部分日誌，最大的貢獻者仍然非常活躍。

No, that's helpful. And just shifting gears here, can you kind of flesh out what you see on the international front? I know you just mentioned China, but what should we be looking for from Integra here in 2023 and maybe even 2024 as we start to look there as well?

不，那很有幫助。只是在這裡換檔，你能充實一下你在國際方面看到的東西嗎？我知道你剛剛提到了中國，但我們應該在 2023 年甚至 2024 年從 Integra 那裡尋找什麼，因為我們也開始在那裡尋找？

Yes. So as I think we indicated, the international had a good start of the first quarter with 7-plus-percent growth. China and Japan were double digits. That's where we pretty much expect them to be. Where we expect international to be this year in the next couple of years is in the high single digits, driven by mid-single digits, Europe and a couple of double-digit drivers in Asia, China.

是的。因此，正如我認為我們指出的那樣，國際在第一季度開局良好，增長率超過 7%。中國和日本是兩位數。這就是我們非常希望他們成為的地方。我們預計今年國際市場在未來幾年內將處於高個位數，受中等個位數、歐洲和亞洲、中國的幾個兩位數驅動因素的推動。

Our next question comes from the line of Craig Bijou with Bank of America.

我們的下一個問題來自美國銀行的 Craig Bijou。

A couple of follow-ups here. So Jan, I wanted to circle back to CereLink and the change in the solution and your thoughts that you can distribute it faster. So maybe just to ask specifically, so if you don't have to change the monitor, I guess, can components be switched out on site? Can they be sent? I think you mentioned the cable. So can that be sent to sites that can then update the system? Just wanted to understand what exactly the recall consists of now.

這裡有幾個後續行動。所以 Jan，我想回到 CereLink 和解決方案的變化以及您認為可以更快地分發它的想法。所以也許只是具體問一下，所以如果你不必更換顯示器，我想，可以在現場更換組件嗎？可以寄嗎？我想你提到了電纜。那麼可以將其發送到可以更新系統的站點嗎？現在只是想了解召回的具體內容。

So your assumption is right. So the monitor does not change. This is about a connector cable, plug-in cable that plugs into the monitor on the other side, plugs into the sensor cable. It's a cable that can be sent as an accessory into our customers. Of course, it has to be -- has to be manufactured, right? And that's being initiated as we speak, to have those cables manufactured by one of our suppliers.

所以你的假設是對的。所以監視器不會改變。這是關於連接器電纜，插入另一側顯示器的插入式電纜，插入傳感器電纜。它是一種電纜，可以作為附件發送給我們的客戶。當然，它必須——必須製造，對吧？就在我們說話的時候，我們正在啟動這些電纜，讓我們的供應商之一製造這些電纜。

Got it. That's helpful. And then a follow-up on the Boston project. What requirements -- and sorry if I missed it, does the FDA have to come back into the facility and inspect? Or are there any other steps once you do finish the project that need approval or sign off or some other step before you can then submit the SurgiMend PMA?

知道了。這很有幫助。然後是波士頓項目的後續行動。什麼要求——抱歉，如果我錯過了，FDA 是否必須返回工廠進行檢查？或者在您完成需要批准或簽署的項目後是否還有其他步驟，或者在您提交 SurgiMend PMA 之前是否有其他步驟？

So the startup of the plant is up to us, yes, when we have finished the project that we do. We're sharing that work and that planning with the FDA, but pretty much when we're done, we just start and restart the factory.

所以工廠的啟動取決於我們，是的，當我們完成我們所做的項目時。我們正在與 FDA 分享這項工作和計劃，但幾乎當我們完成後，我們就開始並重新啟動工廠。

Our next question comes from the line of Joanne Wuensch with Citi.

我們的下一個問題來自花旗銀行的 Joanne Wuensch。

This is actually Anthony on for Joanne. In the presentation, you mentioned your M&A game board. So just with SIA in the bag now, can you just maybe refresh us on thoughts around M&A?

這實際上是安東尼替喬安妮。在演示中，您提到了您的併購遊戲板。那麼，現在有了新航，你能不能讓我們重新思考一下併購？

I think your question is overall thoughts for M&A?

我想你的問題是併購的總體思路？

Yes.

是的。

So as I mentioned several times before, the strategic work we've done last year has translated into a clear M&A game board. We definitely have the balance sheet capacity to execute on that. At this point in time, we have several of our targets in process, in discussion. And that's as far as I can give you any insight in further execution.

因此，正如我之前多次提到的那樣，我們去年所做的戰略工作已經轉化為清晰的併購遊戲板。我們絕對有能力在資產負債表上執行。目前，我們正在討論我們的幾個目標。這就是我能給你的關於進一步執行的任何見解。

Got it. That's helpful. On the backlog, I think you said it was elevated, but could you maybe provide any more color on how it trended. Has it gone down materially during the quarter? Has it sort of stayed flat? Just curious if you could provide any more commentary on that.

知道了。這很有幫助。關於積壓，我想你說過它有所提升，但你能否提供更多關於它趨勢的顏色。它在本季度大幅下降了嗎？它有點持平嗎？只是好奇您是否可以就此提供更多評論。

Yes. Back orders are still elevated, $10 million to $15 million higher than what we consider as normal. We had not expected over the first half for this to materially come down. That's playing out as we assumed. The challenges here are twofold: one, we keep dealing with several challenges of suppliers that are either not delivering on time or discontinuing components, which drives us to recertify new components or build up last time buy inventories. So that's one factor, fiscal factor that's driving the back orders. And then second, we are in several factories stepping up work on ability to keep up with the increased demand with the factory capacity that we have.

是的。延期交貨訂單仍然居高不下，比我們認為的正常水平高出 1000 萬至 1500 萬美元。我們沒想到上半年會出現實質性下降。正如我們所假設的那樣。這裡的挑戰是雙重的：第一，我們一直在應對供應商的一些挑戰，這些供應商要么沒有按時交付，要么停產組件，這促使我們重新認證新組件或建立上次購買的庫存。所以這是一個因素，是推動延期交貨的財政因素。其次，我們在幾家工廠加緊工作，以跟上我們擁有的工廠產能不斷增長的需求。

Next question comes from the line of Richard Newitter with Truist.

下一個問題來自 Richard Newitter with Truist。

This is Sam on for Rich. I appreciate the commentary on the backlog there. But can you just remind us when you think about the second half ramp, does that include realization of that backlog at all? And can you kind of give us any confidence in the dynamic you expect there for the second half?

這是 Rich 的 Sam。我很欣賞那裡對積壓的評論。但是，當您考慮下半年的斜坡時，您能否提醒我們，這是否完全包括積壓的實現？您能否讓我們對下半場的動態充滿信心？

So -- yes. So definitely, we expect an improvement, and it's part of it. I would say, again, as we think overall about all the different elements that contribute to the second half, I talked about NPIs. I talked about the China normalization, about the private label, but the instruments. And the other component, as I mentioned early on, is this kind of supply recovery. We're definitely seeing more than we would like on the dural access and repair side as well as on the neuromonitoring side, and we hope for this to continue and contribute also in the second half.

所以——是的。因此，我們肯定希望有所改進，這是其中的一部分。我想再說一遍，當我們全面考慮對下半年做出貢獻的所有不同元素時，我談到了 NPI。我談到了中國正常化，談到了自有品牌，但談到了工具。正如我之前提到的，另一個組成部分是這種供應恢復。我們肯定在硬腦膜通路和修復方面以及神經監測方面看到的比我們希望的要多，我們希望這種情況能夠繼續下去，並在下半年做出貢獻。

Just to clarify, Tim (sic) [Sam], when I mentioned it's $10 million to $15 million higher than where -- what we consider normal. We do not expect in our guidance that this $10 million to $15 million will be fully sold, okay? We count on about half of that. So that's potential upside or downside in function of how we get over the different supply challenges.

只是澄清一下，蒂姆（原文如此）[山姆]，當我提到它比我們認為正常的地方高出 1000 萬到 1500 萬美元時。在我們的指導中，我們預計這 1000 萬到 1500 萬美元不會全部售出，好嗎？我們指望其中的一半左右。因此，這是我們如何克服不同供應挑戰的潛在上行或下行。

And again, if you look at our guidance range, right, these are things that we are contemplating as well, right? So some of those factors between our low end and our high end of the guidance range are elements that we're factoring in as well.

再一次，如果你看看我們的指導範圍，對吧，這些也是我們正在考慮的事情，對吧？因此，我們的指導範圍的低端和高端之間的一些因素也是我們正在考慮的因素。

Okay. That's helpful. And just one more on the Boston factory change and how that impacted the margin. It sounds like this was more pull-forward than unexpected. So was this the $0.06 impact in 2Q? Was that factored into the full year guide and now it's just being more realized in 2Q? And then with the lower sort of expansion on GM for the year, can you kind of walk us through the levers on the P&L you have that helps you maintain full year EPS?

好的。這很有幫助。還有一個關於波士頓工廠變化及其對利潤率的影響。聽起來這比出乎意料的更有前瞻性。那麼這是第二季度 0.06 美元的影響嗎？這是否已納入全年指南，現在它只是在 2Q 中得到更多實現？然後，隨著今年通用汽車的擴張程度較低，您能否向我們介紹一下您擁有的損益表上的槓桿，這些槓桿可以幫助您維持全年每股收益？

Yes. I'll give this to Mathieu. I think overall, your assumption is right, but Mathieu can get you one -- little more detail.

是的。我會把這個交給馬修。我認為總體而言，您的假設是正確的，但 Mathieu 可以為您提供更多細節。

Yes, Sam, so I agree with what you said. So we need to look at it as a little bit of a shifting in expense, and I would say, impact to gross margin here into the second quarter. So let me take you maybe a step back. So in Q1, we saw about 120 basis points of an impact related to the Boston quality project itself. And we saw some benefit coming from manufacturing efficiencies, favorable FX and product mix as we expected originally, which is resulting in the net-net about 40 basis points down year-over-year.

是的，山姆，所以我同意你所說的。因此，我們需要將其視為費用的一點點變化，我想說，影響到第二季度的毛利率。所以讓我退後一步。因此，在第一季度，我們看到了與波士頓質量項目本身相關的大約 120 個基點的影響。正如我們最初預期的那樣，我們看到製造效率、有利的外彙和產品組合帶來了一些好處，這導致淨值同比下降約 40 個基點。

As we shift to Q2, we're expecting a modest improvement in supply, but still an impact of about 100 basis points I would say in Q2 and for the first half, really driven by the timing, this acceleration of the Boston quality project. As we turn into the second half -- the second half of the year, we're expecting to offset part of this. Again, the Boston impact has really 3 components to it. It has the idle capacity, it has the project cost, and it has some revenue impact. So as you go into the second half, we'll gain back some of the revenue that we lost in the first half you're going to gain back some of the gross margin because of the timing of the expenses.

當我們轉向第二季度時，我們預計供應會適度改善，但我會在第二季度和上半年說出約 100 個基點的影響，這實際上是受時機的推動，即波士頓質量項目的加速。當我們進入下半年 - 今年下半年時，我們預計會抵消部分損失。同樣，波士頓的影響實際上有 3 個組成部分。它有閒置產能，有項目成本，對收入有一定影響。因此，當您進入下半年時，我們將收回上半年損失的部分收入，由於支出的時間安排，您將獲得部分毛利率。

And then you asked about lever. The other lever is that we're continuously just looking at being good stewards of our P&L and looking at our investments in the second half and prioritizing some of them while really focusing on our key strategic priorities and spending in the second half.

然後你問了槓桿。另一個槓桿是，我們一直在尋找成為損益表的好管家，並審視我們在下半年的投資並優先考慮其中的一些，同時真正專注於我們下半年的關鍵戰略重點和支出。

Our next question comes from Eric Fleming with Raymond James.

我們的下一個問題來自 Eric Fleming 和 Raymond James。

It's Eric on for Jason Bedford. Just had a couple of quick questions. on the private label -- with the comps on the private label, were there any account losses in there? Or is that straight down?

埃里克替傑森貝德福德上場。只是有幾個簡單的問題。在自有品牌上——在自有品牌上有補償，那裡有任何賬戶損失嗎？還是直接下來？

No, no account losses. I mean I think a lot of our partners last year built inventory based on certain assumptions around EU MDR. With the change in the EU MDR assumptions and kind of later dates, we just see them actively managing their inventory levels and these are coming down. So this is part of the prioritization, I would say with the kind of normalization, I should say, of inventory levels that we're seeing. And again, the impact is going to be heavier in the first half than in the second half.

不，沒有賬戶損失。我的意思是，我認為我們的很多合作夥伴去年都基於圍繞歐盟 MDR 的某些假設建立了庫存。隨著歐盟 MDR 假設的變化和更晚的日期，我們只是看到他們積極管理他們的庫存水平並且這些正在下降。所以這是優先順序的一部分，我想說的是我們所看到的庫存水平的正常化。同樣，上半年的影響將比下半年更大。

Okay. And just one follow-up on CereLink. Before we were expecting a $6 million to $7 million contribution in the second half. Is that -- are we now looking at about half of that now with the delay?

好的。並且只是對 CereLink 的一項後續行動。在我們預計下半年將有 600 萬至 700 萬美元的貢獻之前。那是——我們現在看到的是延遲的一半左右嗎？

Yes. I think that's roughly correct.

是的。我認為這大致是正確的。

Next question comes from Rohan [Patel] with JPMorgan Chase.

下一個問題來自摩根大通的 Rohan [Patel]。

Sorry. Can you hear me?

對不起。你能聽到我嗎？

Yes.

是的。

Yes we can.

我們可以。

We can hear you now.

我們現在可以聽到你的聲音了。

Sorry about the early confusion. I'm on for Robbie Marcus. Just a quick one on free cash flow. It definitely looks like conversion looks a little soft in the first quarter. How much of that is related to the Boston manufacturing quality issue? And is there anything else driving that kind of weak conversion? And what should we expect for the balance of the year?

對於早期的混亂感到抱歉。我支持羅比馬庫斯。簡單介紹一下自由現金流。第一季度的轉換看起來確實有點疲軟。其中有多少與波士頓製造質量問題有關？是否還有其他原因導致這種微弱的轉化？我們應該對今年餘下的時間有何期待？

So we definitely expected from a cash flow perspective a ramp in capital spend as well as EU MDR spend. That's the first thing. Second of all, we've started also building more inventory. And so you'll see that a portion of our cash flow at this point in time is also driven by higher inventory levels at the end of Q1, some of which would -- will continue throughout the year as we're kind of rebuilding our stock levels and some of it being kind of in WIP and all this that will flush through for the remainder of the year.

因此，從現金流的角度來看，我們絕對預計資本支出和歐盟 MDR 支出都會增加。這是第一件事。其次，我們也開始建立更多庫存。因此，您會看到，此時我們的部分現金流量也受到第一季度末較高庫存水平的推動，其中一些將 - 將持續全年，因為我們正在重建我們的庫存水平和其中一些處於 WIP 狀態，所有這些都將在今年餘下的時間裡湧現。

So Rohan, no connection to the Boston project.

所以 Rohan，與波士頓項目無關。

Correct.

正確的。

It's not in that.

不在裡面。

Got it. And then just when we look forward to your Analyst Day, what are the main things you'd highlight for us to inspect? What are the most exciting things? Should we think of new products? Should we think of updated LRP? Just kind of a preview of that would be helpful.

知道了。然後就在我們期待您的分析師日時，您要強調哪些主要內容需要我們檢查？最激動人心的事情是什麼？我們應該考慮新產品嗎？我們應該考慮更新 LRP 嗎？只是預覽一下會有幫助。

Yes. Thanks. So hope to see you next week, by Rohan, but the way we've set it up is to really give insights into how we get from where we are today to the long-term parts that we set forth. And many of you over the past years have asked me for where is the plan and how do you get to -- what are the contributors.

是的。謝謝。所以希望下週見到你，Rohan，但我們設置它的方式是真正深入了解我們如何從今天的位置到我們提出的長期部分。在過去的幾年裡，你們中的許多人都問過我計劃在哪裡，你是如何實現的——貢獻者是什麼。

So we'll spend most of our time making sure that not only do we explain why we feel great about several of our innovations or our markets but how does that translate into top line, top line growth acceleration and gross margin acceleration. We'll also give further insight into when we talk about M&A game board, what directions are we looking into.

因此，我們將花費大部分時間來確保我們不僅要解釋為什麼我們對我們的一些創新或我們的市場感覺很好，而且還要解釋這如何轉化為收入、收入增長加速和毛利率加速。當我們談論併購遊戲板時，我們還將進一步深入了解我們正在研究的方向。

And our last question will come from the line of Drew Ranieri with Morgan Stanley.

我們的最後一個問題將來自摩根士丹利的 Drew Ranieri。

A couple of questions on maybe the forward guidance, but I appreciate the second half ramp for revenue and for earnings. But as you are thinking about upside for the year, are you more inclined to drop that through to the bottom line? Or are you looking more to reinvest in the middle of the P&L, just given some of the growth initiatives ahead? And then just as a second question, I will just ask them both upfront, as you are reaffirming the '23 guidance, is there any change necessarily in the composition of how you're thinking about CSS versus Tissue Technology growth?

關於前瞻性指導的幾個問題，但我很欣賞下半年收入和收益的增長。但是，當您考慮今年的上行空間時，您是否更傾向於將其降至底線？還是考慮到未來的一些增長計劃，您是否希望更多地在損益中間進行再投資？然後作為第二個問題，我會先問他們兩個，因為你重申了 23 年的指導方針，你對 CSS 與 Tissue Technology 增長的思考方式的構成是否必然發生變化？

On your first question, in our guidance, we are protecting our key strategic growth investments. So I would say if we have top line upside, a lot of that will flow down to the bottom line, okay, given again, that we are making sure that the projects we want to do, we do. In the case of Boston, we do it earlier than planned. So we're really determined in 2023 to execute on our growth investments. And so top line impact should rather translate into bottom line.

關於你的第一個問題，在我們的指導中，我們正在保護我們的關鍵戰略增長投資。所以我想說，如果我們有頂線上漲，其中很多會流向底線，好吧，再次給出，我們正在確保我們想做的項目，我們做。就波士頓而言，我們比計劃的時間更早。因此，我們真的下定決心在 2023 年執行我們的增長投資。因此，頂線影響應該轉化為底線。

And then to your second question around CSS and Tissue Tech growth in our guidance. We expect this very much to be in line with our expectation of the February call. So no change in there. We're still expecting good growth coming from both CSS and Tissue Tech here in 2023.

然後是我們指南中關於 CSS 和 Tissue Tech 增長的第二個問題。我們希望這非常符合我們對 2 月份電話會議的預期。所以那裡沒有變化。我們仍然期待 2023 年 CSS 和 Tissue Tech 的良好增長。

And thank you for your questions. This concludes Integra LifeSciences First Quarter Earnings Conference Call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.

謝謝你的問題。 Integra LifeSciences 第一季度收益電話會議到此結束。感謝您的參與。您現在可以斷開連接。每個人，祝你有美好的一天。