4 unchanged sentences
(Dollars in thousands, except per share amounts)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 2021 2020
+Added: Three Months Ended March 31,
Total revenue, net $ 376,638 $ 360,071
8 unchanged sentences
Interest expense ( 11,655 ) ( 12,929 )
−Removed: Gain (loss) from the sale of business ( 230 ) — 41,967 —
+Added: Gain from the sale of business — 42,876
Other income, net 3,429 4,869
13 unchanged sentences
(Dollars in thousands, except per share amounts)
−Removed: September 30, 2021 December 31, 2020
+Added: March 31, 2022 December 31, 2021
Current assets:
4 unchanged sentences
Prepaid expenses and other current assets 96,946 91,051
−Removed: Assets held for sale — 162,105
Total current assets 1,066,053 1,153,716
9 unchanged sentences
Current portion of borrowings under senior credit facility $ 45,000 $ 45,000
−Removed: Current portion of borrowings under securitization facility — 112,500
Current portion of lease liability - operating leases 14,300 14,775
Accounts payable, trade 88,371 61,837
−Removed: Income taxes payable 24,780 —
Contract liabilities 5,343 5,295
1 unchanged sentence
Accrued expenses and other current liabilities 105,342 120,458
−Removed: Liabilities held for sale — 11,751
Total current liabilities 315,833 340,021
14 unchanged sentences
240,000 authorized shares;
−Removed: 89,597 and 89,251 issued at September 30, 2021 and December 31, 2020, respectively
+Added: 89,956 and 89,600 issued at March 31, 2022 and December 31, 2021, respectively
Additional paid-in capital 1,266,739 1,264,943
Treasury stock, at cost;
−Removed: 4,899 shares and 4,914 shares at September 30, 2021 and December 31, 2020, respectively
+Added: 6,823 shares and 4,899 shares at March 31, 2022 and December 31, 2021, respectively
( 362,886 ) ( 234,448 )
7 unchanged sentences
(Dollars in thousands)
−Removed: Nine Months Ended September 30,
+Added: Three Months Ended March 31,
OPERATING ACTIVITIES:
3 unchanged sentences
Non-cash impairment charges — 2,754
−Removed: Deferred income tax (benefit) provision ( 13,498 ) 4,784
+Added: Deferred income tax provision (benefit) 3,544 ( 1,234 )
Share-based compensation 6,291 6,334
1 unchanged sentence
Non-cash lease expense ( 17 ) 1,522
−Removed: Accretion of bond issuance discount — 11,075
Loss on disposal of property and equipment 712 ( 2 )
13 unchanged sentences
Proceeds from sale of Extremity Orthopedics business — 191,736
−Removed: Proceeds from sale of property and equipment 3 3,311
+Added: Acquired in-process research and development milestone ( 4,742 ) —
Cash paid for business acquisitions, net of cash acquired — ( 302,627 )
−Removed: Acquired in-process research and development — ( 5,000 )
−Removed: Net proceeds on swaps designated as net investment hedges 76 —
Net cash used in investing activities ( 14,067 ) ( 117,566 )
2 unchanged sentences
Payments on debt ( 11,750 ) ( 2,200 )
−Removed: Purchase of option hedge on convertible notes — ( 104,248 )
−Removed: Proceeds from convertible notes issuance — 575,000
−Removed: Proceeds from sale of stock purchase warrants — 44,563
−Removed: Payment of debt issuance costs ( 249 ) ( 24,347 )
Purchases of treasury stock ( 125,000 ) —
1 unchanged sentence
Cash taxes paid in net equity settlement ( 9,204 ) ( 3,637 )
−Removed: Net cash (used) provided by financing activities ( 98,747 ) 100,403
+Added: Net cash used in financing activities ( 133,465 ) ( 3,015 )
Effect of exchange rate changes on cash and cash equivalents ( 3,168 ) ( 9,690 )
−Removed: Net increase in cash and cash equivalents 65 197,368
+Added: Net decrease in cash and cash equivalents ( 106,356 ) ( 61,190 )
Cash and cash equivalents at beginning of period 513,448 470,166
3 unchanged sentences
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
−Removed: (Dollars in thousands, except per share amounts)
−Removed: Nine Months Ended September 30, 2021
+Added: (Dollars in thousands)
+Added: Three Months Ended March 31, 2022
Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity
6 unchanged sentences
Share-based compensation — — — — 6,324 — — 6,324
−Removed: Adoption of Update No.
−Removed: 2020-06 — — — — ( 63,274 ) — ( 2,772 ) ( 66,046 )
+Added: Accelerated shares repurchased — $ — ( 1,938 ) $ ( 129,152 ) $ 4,152 $ — $ — $ ( 125,000 )
Balance, March 31, 2022 89,956 $ 900 ( 6,823 ) $ ( 362,886 ) $ 1,266,739 $ ( 21,025 ) $ 731,469 $ 1,615,197
−Removed: Net income — — — — — — 35,068 35,068
−Removed: Other comprehensive loss, net of tax — — — — — ( 6,336 ) — ( 6,336 )
−Removed: Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 68 1 — — 1,175 — — 1,176
−Removed: Share-based compensation — — — — 15,742 — — 15,742
−Removed: Balance, June 30, 2021 89,474 $ 895 ( 4,899 ) $ ( 234,461 ) $ 1,248,555 $ ( 49,963 ) $ 609,955 $ 1,574,981
−Removed: Net income — — — — — — 43,229 43,229
−Removed: Other comprehensive income, net of tax — — — — — 3,189 — 3,189
−Removed: Treasury shares retirement — — — 12 ( 12 ) — — —
−Removed: Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 123 1 — — 2,541 — — 2,542
−Removed: Share-based compensation — — — — 7,746 — — 7,746
−Removed: Balance, September 30, 2021 89,597 896 ( 4,899 ) ( 234,449 ) 1,258,830 ( 46,774 ) 653,184 1,631,687
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
−Removed: (Dollars in thousands, except per share amounts)
−Removed: Nine Months Ended September 30, 2020
+Added: Three Months Ended March 31, 2021
Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity
2 unchanged sentences
Net income — — — — — — 45,394 45,394
−Removed: Other comprehensive loss, net of tax — — — — — ( 28,187 ) — ( 28,187 )
+Added: Other comprehensive income, net of tax — — — — — 30,432 — 30,432
Issuance of common stock through employee stock purchase plan 18 — — — 1,127 — — 1,127
1 unchanged sentence
Share-based compensation — — — — 6,098 — — 6,098
−Removed: Share repurchase and equity component of the convertible note issuance, net — — ( 135 ) ( 7,632 ) 42,538 — — 34,906
−Removed: Accelerated shares repurchased — — ( 1,304 ) ( 75,407 ) ( 16,961 ) — — ( 92,368 )
Adoption of Update No.
1 unchanged sentence
Balance, March 31, 2021 89,406 $ 894 ( 4,899 ) $ ( 234,461 ) $ 1,231,637 $ ( 43,627 ) $ 574,888 $ 1,529,331
−Removed: Net loss — — — — — — ( 369 ) ( 369 )
−Removed: Other comprehensive income, net of tax — — — — — 1,464 — 1,464
−Removed: Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 84 3 — ( 35 ) 1,282 — — 1,250
−Removed: Share-based compensation — — — — 4,948 — — 4,948
−Removed: Accelerated shares repurchased — — ( 621 ) ( 32,685 ) 32,685 — — —
−Removed: Balance, June 30, 2020 89,189 892 ( 4,915 ) ( 235,226 ) 1,279,370 ( 103,125 ) 407,185 1,349,096
−Removed: Net loss — — — — — — 32,337 32,337
−Removed: Other comprehensive loss, net of tax — — — — — 11,212 — 11,212
−Removed: Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 2 — — 2 ( 69 ) — — ( 67 )
−Removed: Share-based compensation — — — — 5,410 — — 5,410
−Removed: Balance, September 30, 2020 89,191 $ 892 ( 4,915 ) $ ( 235,224 ) $ 1,284,711 $ ( 91,913 ) $ 439,522 $ 1,397,988
The accompanying unaudited notes are an integral part of these condensed consolidated financial statements.
3 unchanged sentences
The terms “we,” “our,” “us,” “Company” and “Integra” refer to Integra LifeSciences Holdings Corporation, a Delaware corporation, and its subsidiaries unless the context suggests otherwise.
−Removed: In the opinion of management, the September 30, 2021 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, statement of changes in shareholders' equity, results of operations and cash flows of the Company.
+Added: In the opinion of management, the March 31, 2022 unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, statement of changes in shareholders' equity, results of operations and cash flows of the Company.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
1 unchanged sentence
The December 31, 2021 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States.
−Removed: Operating results for the three and nine month period ended September 30, 2021 are not necessarily indicative of the results to be expected for the entire year.
+Added: Operating results for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be expected for the entire year.
The preparation of consolidated financial statements is in conformity with generally accepted accounting principles in the United States ("GAAP") which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenues and expenses.
3 unchanged sentences
Risks and Uncertainties
−Removed: The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic.
−Removed: During the beginning of 2020, the Company's customers diverted resources to treat COVID-19 patients and deferred or canceled elective or non-emergent surgical procedures, all of which impacted hospitals' abilities to meet their obligations, including to the Company.
−Removed: Towards the end of 2020 and through the end of the third quarter of 2021, procedural volumes relevant to the Company’s products steadily increased and, in some geographic areas, began to approach normalized levels.
−Removed: However, on-going uncertainty persists about the continuing sustainability of those procedural volumes as virus outbreaks and staffing constrains at hospitals and surgical centers impact healthcare networks.
−Removed: Furthermore, capital markets and economies worldwide have also seen other indirect COVID-19 pandemic related disruptions including supply chain impacts, material inflation, and labor constraints in certain markets and geographies.
−Removed: Such economic disruption has had an adverse effect on the Company's business as customers curtailed and reduced capital and overall spending that have resulted in higher freight costs, longer supply chains and select labor constraints in certain geographic regions.
−Removed: Policymakers around the globe have responded with fiscal policy actions to support the healthcare industry and the economy as a whole.
−Removed: The magnitude and overall effectiveness of these actions remains uncertain.
+Added: The Company is subject to risks and uncertainties as a result of the COVID-19 pandemic, including reductions in capital and overall spending by our customers, increased freight costs, decreased availability of certain raw materials used in certain of our products and labor constraints.
+Added: The COVID-19 pandemic has had, and may continue to have, an adverse effect on the Company’s business, results of operations, financial condition, and cash flows, and its future impacts remain highly uncertain and unpredictable.
+Added: Although there was not a material impact to the Company’s consolidated financial statements as of and for the three months ended March 31, 2022, changes in the Company’s assessment about the length and severity of the pandemic, as well as other factors, could result in actual results differing from estimates.
The severity of the impact of the COVID-19 pandemic on the Company's business will depend on a number of factors, including, but not limited to, duration of the pandemic, including resurgences, new variants or strains, impact of government regulations, the speed and effectiveness of vaccine distribution, vaccine adoption rates and the duration of direct and indirect economic effects of the pandemic and containment measures.
−Removed: The Company's future results of operations and liquidity could be adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions and uncertain demand, the extent of inflationary pressure on material and labor costs and the impact of any initiatives or programs that the Company may undertake to address financial and operations challenges faced by its customers.
−Removed: Through the end of the third quarter of 2021, the Company's revenues were still impacted due to COVID-19 resurgences and lower surgical procedural volumes, though not to the levels seen during 2020.
−Removed: As a result, the Company has continued to manage its operating costs in this environment.
Even after the COVID-19 pandemic and government responses thereto have subsided, residual economic and other effects may have an impact on the demand for post-pandemic surgery levels that are difficult to predict.
1 unchanged sentence
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: Employee Termination Benefits
+Added: The Company incurred restructuring costs related to employee terminations associated with a future plant closure in the consolidated statement of operations for the three months ended March 31, 2022.
+Added: Restructuring liability is included in accrued expenses and other current liabilities in the consolidated balance sheet for the three months ended March 31, 2022 and December 31, 2021 , respectively.
+Added: Restructuring liability activity for the three months ended March 31, 2022 were as follows:
+Added: (Dollars in thousands) Amount
+Added: Balance at December 31, 2021 $ 10,226
+Added: Cost of Goods Sold $ 984
+Added: Research and development 79
+Added: Selling, general and administrative 195
+Added: Adjustments $ ( 365 )
+Added: Balance at March 31, 2022 $ 11,119
Recent Accounting Pronouncements
−Removed: In June 2016, the FASB issued ASU No.
−Removed: 2016-13, Financial Instruments - Credit Losses (Topic 326) :
−Removed: Measurement of Credit Losses on Financial Instruments.
−Removed: The ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations.
−Removed: The ASU requires the measurement of all expected credit losses for financial assets including trade receivables held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
−Removed: Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates.
−Removed: The ASU became effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.
−Removed: The Company adopted this guidance on January 1, 2020 using a modified retrospective transition method which requires a cumulative-effect adjustment to the opening balance of retained earnings to be recognized on the date of adoption with no change to financial results reported in prior periods.
−Removed: The cumulative-effect adjustment recorded on January 1, 2020 is not material.
−Removed: The adoption of this ASU did not have a significant impact on the Company's consolidated financial statements and related disclosures.
−Removed: The Company's exposure to credit losses may increase if its customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the COVID-19 pandemic, and other customer-specific factors.
−Removed: Although the Company has historically not experienced significant credit losses, it is possible that there could be an adverse impact due to customer and governmental responses to the COVID-19 pandemic.
−Removed: In August 2018, the FASB issued ASU 2018-14, Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20):
−Removed: Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans .
−Removed: This guidance modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.
−Removed: The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
−Removed: Early adoption was permitted.
−Removed: The Company adopted this guidance during the year ended December 31, 2020.
−Removed: The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.
−Removed: In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), relating to a customer's accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a vendor (e.g., a service contract).
−Removed: Under this guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license.
−Removed: The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense, and requires additional quantitative and qualitative disclosures.
−Removed: The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.
−Removed: The Company adopted this guidance on January 1, 2020 using a prospective transition method.
−Removed: The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.
In December 2019, the FASB issued ASU 2019-12, Income Taxes :
2 unchanged sentences
The standard is effective for annual periods beginning after December 15, 2020 and interim periods within, with early adoption permitted.
−Removed: The Company adopted ASU No.
−Removed: 2019-12 as of January 1, 2021.
+Added: The Company adopted ASU 2019-12 as of January 1, 2021.
Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively.
5 unchanged sentences
The amendments in this ASU affect the guidance in ASU 2020-04 and are effective in the same timeframe as ASU 2020-04.
−Removed: The Company is currently assessing the impact that this ASU will have on its consolidated financial statements and related disclosures.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: The Company currently has contracts that are indexed to LIBOR and are continuing to monitor this activity and evaluate the associated risk.
+Added: The Company is continuing to evaluate the scope of impacted contracts and the potential impact.
+Added: The Company is also monitoring the developments regarding alternative rates and may amend certain contracts to accommodate those rates if the contract does not already specify a replacement rate.
+Added: While the notional value of agreements potentially indexed to LIBOR is material, the Company does not expect a material impact to the consolidated financial statements and related disclosures associated with this transition.
In August 2020, the FASB issued ASU 2020-06, Debt- Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic 815-40):Accounting for Convertible Instruments and Contracts in an Entity's Own Equity .
4 unchanged sentences
The ASU will be effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years using either the modified retrospective or full retrospective method.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
As detailed in Note 6, Debt , on February 4, 2020, the Company issued $ 575.0 million aggregate principal amount of its 0.5 % Convertible Senior Notes due 2025 (the "2025 Notes").
8 unchanged sentences
Net impact of cumulative-effect adjustment Additional paid-in capital ( 63.3 )
−Removed: Upon adoption of ASU 2020-06, the Company’s 2025 Notes were reflected entirely as a liability since the embedded conversion feature will no longer be separately presented within stockholders’ equity.
On December 9, 2020, the Company made an irrevocable election under the indenture to require the principal portion of its 2025 Notes to be settled in cash and any excess in shares.
Following the irrevocable notice, only the amounts settled in excess of the principal will be considered in diluted earnings per share under the “if-converted” method.
−Removed: Additionally, from January 1, 2021, the Company is no longer incurring non-cash interest expense for the amortization of debt discount, therefore the interest expense for the 2025 Notes, which is included in the interest expense on the consolidated statements of operations and comprehensive loss, is lower as compared to the fiscal year of 2020.
+Added: Upon adoption of ASU 2020-06, the Company’s 2025 Notes were reflected entirely as a liability since the embedded conversion feature will no longer be separately presented within stockholders’ equity.
+Added: Additionally, from January 1, 2021, the Company is no longer incurring non-cash interest expense for the amortization of debt discount.
In October 2020, the FASB issued ASU 2020-10, Codification Improvements , which updates various codification topics by clarifying or improving disclosure requirements to align with the regulations of the U.S.
3 unchanged sentences
The adoption of this guidance did not have a significant impact on the Company's consolidated financial statements and related disclosures.
−Removed: In May 2021, the FASB issued ASU No.
−Removed: 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
+Added: In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options which provides guidance to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.
1 unchanged sentence
2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, including interim periods within those fiscal years.
−Removed: The amendment currently has no impact to the Company as the effect will largely depend on the terms of written call options or financings issued or modified in the future.
+Added: The amendment had no impact to the Company as the effect will largely depend on the terms of written call options or financings issued or modified in the future.
There are no other recently issued accounting pronouncements that are expected to have any significant effect on the Company's financial position, results of operations or cash flows.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
ACQUISITIONS AND DIVESTITURES
Sale of Extremity Orthopedics Business
−Removed: On January 4, 2021, the Company completed its previously announced sale of its Extremity Orthopedics business to Smith & Nephew USD Limited ("Smith & Nephew").
+Added: On January 4, 2021, the Company completed the sale of its Extremity Orthopedics business to Smith & Nephew USD Limited ("Smith & Nephew").
The transaction included the sale of the Company's upper and lower Extremity Orthopedics product portfolio, including ankle and shoulder arthroplasty and hand and wrist product lines.
−Removed: The Company received an aggregate purchase price of $ 240.0 million from Smith and Nephew and concurrently paid $ 41.5 million to the Consortium of Focused Orthopedists, LLC ("CFO") effectively terminating the licensing agreement between Integra and CFO relating to the development of shoulder arthroplasty products.
−Removed: Assets and liabilities divested consisted of the following as of December 31, 2020 (dollar amounts in thousands):
−Removed: Prepaid expenses and other current assets $ 713
−Removed: Right of use asset-operating leases and Other assets 3,186
−Removed: Deferred tax assets 6,589
−Removed: Intangible assets, net 13,332
−Removed: Property, plant and equipment, net 37,893
−Removed: Goodwill 47,546
−Removed: Inventories 52,845
−Removed: Total assets held for sale $ 162,104
−Removed: Other liabilities 336
−Removed: Current portion of lease liability - operating leases 539
−Removed: Accrued compensation 1,767
−Removed: Deferred tax liabilities 3,440
−Removed: Lease liability - operating leases 5,669
−Removed: Total liabilities held for sale $ 11,751
+Added: The Company received an aggregate purchase price of $ 240.0 million from Smith & Nephew and concurrently paid $ 41.5 million to the Consortium of Focused Orthopedists, LLC ("CFO") effectively terminating the licensing agreement between Integra and the CFO relating to the development of shoulder arthroplasty products.
The divestiture does not represent a strategic shift that will have a major effect on the Company's operations and financial statements.
−Removed: Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the Extremity Orthopedics business to the Company's Tissue Technologies reporting unit.
−Removed: In connection with the sale, the Company recognized a gain of $ 42.0 million that is presented in Gain from the sale of business in the consolidated statement of operations for the nine months ended September 30, 2021.
−Removed: The Company finalized the net working capital and paid an additional $ 1.3 million to Smith & Nephew as of September 30, 2021.
−Removed: The Company also entered into a transition services agreement with Smit h & Nephew which requires the Company to provide certain services on behalf of Smith & Nephew for the duration of the period subsequent to the sale of the business as defined in the agreement.
−Removed: The Company recognized a payable due to Smith & Nephew of $ 7.2 million as of September 30, 2021, included in the consolidated balance sheet within accrued expenses and other current liabilities.
+Added: Goodwill was allocated to the assets and liabilities divested using the relative fair value method of the Extremity Orthopedics business to the Company's Tissue Technologies reportable business segment.
+Added: In connection with the sale, the Company recognized a preliminary gain of $ 42.9 million that was presented in Gain from the sale of business in the consolidated statement of operations for the three months ended March 31, 2021.
+Added: The gain was finalized at $ 41.8 million as Gain from the sale of business for the year ended December 31, 2021.
+Added: The Company finalized the net working capital and paid an additional $ 1.3 million to Smith & Nephew as of December 31, 2021.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: The Company also entered into a transition services agreement with Smit h & Nephew which requires the Company to provide certain services on behalf of Smith & Nephew for the duration of the period subsequent to the sale of the business as defined in the transition services agreement.
+Added: The Company also recognized a payable due to Smith & Nephew of $ 8.5 million for invoicing and cash collection from customers on behalf of Smith & Nephew, pursuant to the transition services agreement, as of March 31, 2022, which is included in the consolidated balance sheets within accrued expenses and other current liabilities.
+Added: In April 2022, the Company and Smith & Nephew completed a significant portion of the transition service agreement, including order-to-cash.
On January 20, 2021, the Company acquired ACell, Inc.
−Removed: (the "ACell Acquisition") for an acquisition purchase price of $ 306.9 million plus contingent considerations of up to $ 100 million, that may be payable upon achieving certain revenue-based performance milestones in 2022, 2023 and 2025.
+Added: (the "ACell Acquisition") for a total purchase price of $ 306.9 million plus contingent consideration of up to $ 100 million, which may be payable upon the Company achieving certain revenue-based performance milestones in 2022, 2023 and 2025.
The final working capital adjustments of $ 1.3 million was finalized and paid as of June 30, 2021.
−Removed: Certain amounts relating to tax matters have not been finalized which may result in changes to goodwill upon completion.
−Removed: ACell was a privately-held company that offered a portfolio of regenerative products for complex wound management, including developing and commercializing products based on MatriStem Urinary Bladder Matrix, a technology platform derived from porcine urinary bladder extracellular matrix.
+Added: Prior to the acquisition, ACell was a privately-held company that offered a portfolio of regenerative products for complex wound management, including developing and commercializing products based on MatriStem Urinary Bladder Matrix, a technology platform derived from porcine urinary bladder extracellular matrix.
Assets Acquired and Liabilities Assumed at Fair Value
1 unchanged sentence
This method requires that assets acquired and liabilities assumed in a business combination are recognized at their fair values as of the acquisition date.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date:
−Removed: Dollars in thousands Preliminary Valuation as of September 30, 2021 Weighted Average Life
+Added: The following table summarizes the final fair values of the assets acquired and liabilities assumed at the acquisition date:
+Added: Dollars in thousands Final Valuation Weighted Average Life
Current assets:
1 unchanged sentence
Inventories, net 18,299
−Removed: Prepaids expenses and other current assets 1,498
+Added: Prepaid expenses and other current assets 1,498
Total current assets $ 38,992
17 unchanged sentences
Net assets acquired $ 306,938
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Intangible Assets
4 unchanged sentences
For these and other reasons, actual results may vary significantly from estimated results.
−Removed: The Company allocated goodwill related to the ACell acquisition to the Tissue Technologies segment.
+Added: The Company allocated goodwill related to the ACell acquisition to the Tissue Technologies reportable business segment.
Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected synergies of the combined company and assembled workforce.
Goodwill recognized as a result of this acquisition is non-deductible for income tax purposes.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Contingent Consideration
−Removed: As part of the acquisition, the Company is required to make payments to the former shareholders of ACell up to $ 100 million based on the achievement of certain revenue-based performance milestones in 2022, 2023, and 2025.
+Added: As part of the ACell Acquisition, the Company is required to make payments to the former shareholders of ACell up to $ 100 million based on the achievement by the Company of certain revenue-based performance milestones in 2022, 2023, and 2025.
T he Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone.
The Company estimated the fair value of the contingent consideration to be $ 23.9 million at the acquisition date.
−Removed: The estimated fair value as of September 30, 2021 was $ 23.0 million.
−Removed: This amount is included in other liabilities at September 30, 2021 in the consolidated balance sheets of the Company.
−Removed: The Company determines the acquisition date fair value of contingent consideration obligations using a Monte Carlo simulation, as well as significant unobservable inputs, reflecting the Company’s assessment of the assumptions market participants would use to value these liabilities.
+Added: The estimated fair value as of March 31, 2022 was $ 22.1 million.
+Added: The Company recorded $ 17.2 million and $ 23.9 million in other liabilities at March 31, 2022 and March 31, 2021, respectively, and $ 4.9 million in as accrued expenses and other current liabilities at March 31, 2022 in the consolidated balance sheet of the Company.
+Added: The Company determined the acquisition date fair value of contingent consideration obligations using a Monte Carlo simulation, as well as significant unobservable inputs, reflecting the Company’s assessment of the assumptions market participants would use to value these liabilities.
The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined using the fair value concepts in ASC 820.
The resultant most likely payouts are discounted using an appropriate effective annual interest rate.
−Removed: At each reporting date, the contingent consideration obligations will be revalued to estimated fair value and changes in fair value will be reflected as income or expense in our consolidated statement of operations.
+Added: At each reporting date, the contingent consideration obligations are revalued to estimated fair value and changes in fair value will be reflected as income or expense in our consolidated statement of operations.
Changes in the fair value of the contingent considerations may result from changes in discount periods and rates and changes in the timing and amount of revenue estimates.
2 unchanged sentences
These adjustments create excess book basis over tax basis which is tax-effected by the statutory tax rates of applicable jurisdictions.
−Removed: Pro Forma Results (unaudited)
−Removed: Pro forma revenues for the three months ended September 30, 2021 and 2020 were $ 386.9 million and $ 396.8 million, respectively.
−Removed: Pro forma revenues for the nine months ended September 30, 2021 and 2020 were $ 1,141.5 million and $ 1,051.9 million, respectively.
−Removed: Pro forma net income and earnings per share are not presented for this acquisition as they are not material.
REVENUES FROM CONTRACTS WITH CUSTOMERS
5 unchanged sentences
Significant Judgments
−Removed: Usage-based royalties and licenses are estimated based on the provisions of contracts with customers and recognized in the same period that the royalty-based products are sold by the Company and the Company's strategic partners.
+Added: Usage-based royalties and licenses are estimated based on the provisions of contracts with customers and recognized in the same period that the royalty-based products are sold by the Company's strategic partners.
The Company estimates and recognizes royalty revenue based upon communication with licensees, historical information, and expected sales trends.
1 unchanged sentence
Historically, such adjustments have not been significant.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
The Company estimates returns, price concessions, and discount allowances using the expected value method based on historical trends and other known factors.
4 unchanged sentences
The Company has no significant revenues recognized on payments expected to be received more than one year after the transfer of control of products or services to customers.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Contract Asset and Liability
3 unchanged sentences
A portion of the transaction price allocated to the performance obligations to be satisfied in the future periods is recognized as contract liability.
−Removed: The following table summarizes the changes in the contract asset and liability balances for the nine months ended September 30, 2021:
+Added: The following table summarized the changes in the contract asset and liability balances for the three months ended March 31, 2022:
+Added: Dollars in thousands Total
Contract Asset
2 unchanged sentences
Contract asset, net of transferred to trade receivables on contracts during the period 12,217
−Removed: Contract asset, September 30, 2021
+Added: Contract asset, March 31, 2022
Contract Liability
3 unchanged sentences
Foreign currency translation ( 8 )
−Removed: Contract liability, September 30, 2021
−Removed: At September 30, 2021, the short-term portion of the contract liability of $ 5.4 million and the long-term portion of $ 5.9 million were included in accrued expenses and other current liabilities and other liabilities, respectively, in the consolidated balance sheet.
−Removed: As of September 30, 2021, the Company is expected to recognize approximately 48 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within twelve months , with the remaining balance to be recognized thereafter.
+Added: Contract liability, March 31, 2022
+Added: At March 31, 2022, the short-term portion of the contract liability of $ 5.3 million and the long-term portion of $ 6.9 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.
+Added: As of March 31, 2022, the Company is expected to recognize revenue of approximately 44 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within twelve months , with the remaining balance to be recognized thereafter.
Shipping and Handling Fees
8 unchanged sentences
The Company includes them in accrued expenses and other current liabilities in the consolidated balance sheet.
−Removed: Taxes Collected from Customers
−Removed: The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: Taxes Collected from Customers
+Added: The Company elected to exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer.
Disaggregated Revenue
−Removed: The following table presents revenues disaggregated by the major sources of revenues for the three and nine months ended September 30, 2021 and 2020 (dollar amounts in thousands):
−Removed: Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020
+Added: The following table presents revenues disaggregated by the major sources of revenues for the three months ended March 31, 2022 and 2021 (dollar amounts in thousands):
+Added: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021
Neurosurgery $ 194,675 $ 189,254
2 unchanged sentences
Wound Reconstruction and Care 94,630 88,698
−Removed: 99,744 82,115 291,058 210,673
−Removed: Extremity Orthopedics (1)
−Removed: — 21,922 — 54,556
Private Label 34,700 30,132
1 unchanged sentence
Total revenue $ 376,638 $ 360,071
−Removed: (1) On January 4, 2021, the Company completed its sale of its Extremity Orthopedics business.
−Removed: In conjunction with the sale of this business, the Company rebranded the Orthopedics and Tissue Technologies segment as Tissue Technologies in the first quarter of 2021.
−Removed: Acquisitions and Divestitures, for details.
−Removed: (2) See Note 2.
−Removed: Acquisitions and Divestitures, for details around the ACell acquisition.
See Note 15, Segment and Geographical Information , for details of revenues based on the location of the customer.
Inventories, net consisted of the following:
−Removed: Dollars in thousands September 30, 2021 December 31, 2020
+Added: Dollars in thousands March 31, 2022 December 31, 2021
Finished goods $ 165,186 $ 162,528
2 unchanged sentences
Total inventories, net $ 328,005 $ 317,386
−Removed: At December 31, 2020, $ 52.8 million of inventories, net was presented separately as "Assets held for sale" in conjunction with the sale of the Extremity Orthopedics business.
GOODWILL AND OTHER INTANGIBLE ASSETS
−Removed: Changes in the carrying amount of goodwill for the nine-month period ended September 30, 2021 were as follows:
+Added: Changes in the carrying amount of goodwill for the three-month period ended March 31, 2022 were as follows:
Dollars in thousands Codman Specialty
1 unchanged sentence
Goodwill at December 31, 2021 $ 663,428 $ 350,030 $ 1,013,458
−Removed: ACell Acquisition — 94,298 94,298
Foreign currency translation ( 2,965 ) ( 1,565 ) ( 4,530 )
−Removed: Goodwill at September 30, 2021 $ 662,429 $ 349,652 $ 1,012,081
+Added: Goodwill at March 31, 2022
+Added: $ 660,463 $ 348,465 $ 1,008,928
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: Other Intangible Assets
The components of the Company’s identifiable intangible assets were as follows:
−Removed: September 30, 2021
+Added: March 31, 2022
Dollars in thousands Weighted
17 unchanged sentences
Supplier relationships 30 years 30,211 ( 16,192 ) 14,019
−Removed: All other (1)
−Removed: 4 years 6,693 ( 3,755 ) 2,938
+Added: All other 11 years 6,258 ( 3,891 ) 2,367
$ 1,646,892 $ ( 501,319 ) $ 1,145,573
−Removed: (1) Prior period amounts were reclassified as it relates to All other within this table to conform to the current period presentation.
−Removed: The increase in the Company's identifiable intangible assets at September 30, 2021 as compared to the year ended December 31, 2020, was primarily driven from intangible assets acquired in conjunction with the ACell Acquisition.
−Removed: See Note 2, Acquisitions and Divestitures , for details.
−Removed: Goodwill and Intangible Assets with Indefinite Lives
−Removed: The Company tests goodwill and intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC Topic 350.
−Removed: Additionally, the Company may perform interim tests if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit or indefinite lived intangible asset below its carrying amount.
−Removed: The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.
−Removed: The Company tests for impairment by either performing a qualitative evaluation or a quantitative test.
−Removed: The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill.
−Removed: The Company may elect to bypass this qualitative evaluation for some or all of its reporting units and perform a quantitative test.
−Removed: During the third quarter of 2021, the Company elected to perform a qualitative analysis for its three reporting units and intangible asset with indefinite lives.
−Removed: The Company determined, after performing the qualitative analysis, that there was no evidence that it is more likely than not that the fair value was less that the carrying amounts, therefore, it was not necessary to perform a quantitative impairment test.
Based on quarter-end exchange rates, amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $ 58.9 million for the remainder of 2022, $ 78.2 million in 2023, $ 77.6 million in 2024, $ 77.5 million in 2025, $ 77.4 million in 2026, $ 75.4 million in 2027 and $ 509.1 million thereafter.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Amendment to the Sixth Amended and Restated Senior Credit Agreement
3 unchanged sentences
(i) a $ 877.5 million Term Loan facility, and (ii) a $ 1.3 billion revolving credit facility, which includes a $ 60 million sublimit for the issuance of standby letters of credit and a $ 60 million sublimit for swingline loans.
−Removed: On July 14, 2020, the Company entered into an amendment (the "July 2020 Amendment") to the February 2020 Amendment of the Senior Credit Facility to increase financial flexibility in light of the unprecedented impact and uncertainty of the COVID-19 pandemic on the global economy.
−Removed: The July 2020 amendment which expired during June 30, 2021, did not increase the Company’s total indebtedness.
+Added: On July 14, 2020, the Company entered into an amendment (the "July 2020 Amendment") to the February 2020 Amendment of the Senior Credit Facility to increase financial flexibility through June 30, 2021, in light of the unprecedented impact and uncertainty of the COVID-19 pandemic on the global economy.
+Added: The July 2020 amendment did not increase the Company’s total indebtedness.
In connection with the July 2020 amendment, the Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) was modified to the following:
5 unchanged sentences
Borrowings under the Senior Credit Facility bear interest, at the Company’s option, at a rate equal to the following:
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
the Eurodollar Rate (as defined in the amendment and restatement) in effect from time to time plus the applicable rate (ranging from 1.00 % to 2.25 %), or
7 unchanged sentences
subsidiaries, excluding intangible assets.
−Removed: The Senior Credit Facility is subject to various financial and negative covenants and at September 30, 2021, the Company was in compliance with all such covenants.
−Removed: In connection with the February 2020 Amendment, the Company capitalized $ 4.6 million of financing costs in connection with modification of the Senior Credit Facility and wrote off $ 1.2 million of previously capitalized financing costs during the first quarter of 2020.
−Removed: In connection with the July 2020 amendment, the Company expensed $ 3.3 million of incremental financing costs in connection with the modification of the Senior Credit Facility during the third quarter of 2020.
−Removed: At September 30, 2021 and December 31, 2020, there wa s $ 20.0 million an d $ 97.5 million, respectively, ou tstanding under the revolving credit component of the Senior Credit Facility at weighted average interest rates of 1.3 % and 1.5 %, respectively.
−Removed: At September 30, 2021 and December 31, 2020, there was $ 855.0 million and $ 877.5 million, respectively, outstanding under the Term Loan component of the Senior Credit Facility at a weighted average interest rate of 1.3 % and 1.5 %, respectively.
−Removed: At September 30, 2021, $ 45.0 million of the Term Loan component of the Senior Credit Facility is classified as current on the consolidated balance sheet.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit and Term Loan components at September 30, 2021 wer e $ 19.3 million and $ 826.6 million, re sp ectively.
+Added: The Senior Credit Facility is subject to various financial and negative covenants and at March 31, 2022, the Company was in compliance with all such covenants.
+Added: At March 31, 2022 and December 31, 2021, there wa s $ 42.5 million an d $ 31.3 million, respectively, ou tstanding under the revolving portion of the Senior Credit Facility at weighted average interest rates of 1.7 % and 1.4 %, respectively.
+Added: At March 31, 2022 and December 31, 2021, there was $ 832.5 million and $ 843.8 million, respectively, outstanding under the Term Loan component of the Senior Credit Facility at a weighted average interest rate of 1.7 % and 1.4 %, respectively.
+Added: At both March 31, 2022 and December 31, 2021, there was $ 45.0 million, of the Term Loan component of the Senior Credit Facility classified as current on the consolidated balance sheets.
+Added: The fair value of outstanding borrowings of the Senior Credit Facility's revolving credit and Term Loan components at March 31, 2022 wer e $ 43.4 million and $ 847.4 million, re sp ectively.
These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.
1 unchanged sentence
Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly, and are other than active market observable i nputs that reflect unadjusted quoted prices for identical assets or liabilities.
−Removed: Letters of credit outstanding as of September 30, 2021 and December 31, 2020 to taled $ 1.6 million.
−Removed: There were no amounts drawn as of September 30, 2021.
+Added: Letters of credit outstanding as of March 31, 2022 and December 31, 2021 to taled $ 1.6 million.
+Added: There were no amounts drawn as of March 31, 2022.
Contractual repayments of the Term Loan component of the Senior Credit Facility are due as follows:
−Removed: Quarter Ended September 30, 2021
+Added: Quarter Ended March 31, 2022
Principal Repayment
1 unchanged sentence
Remainder of 2022
−Removed: 2022 $ 45,000
−Removed: 2023 $ 61,875
−Removed: 2024 $ 67,500
−Removed: 2025 $ 669,375
+Added: Future interest payments on the term loan component of the Senior Credit Facility based on current interest rates are expected to approximate $ 10.4 million for remainder of 2022, $ 13.0 million in 2023, $ 11.9 million in 2024, and $ 1.1 million in 2025.
+Added: Interest is calculated on the term loan portion of the Senior Credit Facility based on LIBOR plus the certain amounts set forth in the Sixth Amended and Restated Credit Agreement.
+Added: As the revolving credit facility and Securitization Facility can be repaid at any time, no interest has been included in the calculation.
The outstanding balance of the revolving credit component of the Senior Credit Facility is due on February 3, 2025.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Convertible Senior Notes
10 unchanged sentences
or (4) if specified corporate transactions occur.
−Removed: As of September 30, 2021, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term.
+Added: As of March 31, 2022, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term.
On December 9, 2020, the Company entered into the First Supplemental Indenture to the original agreement dated as of February 4, 2020 between the Company and Citibank, N.A., as trustee, governing the Company’s outstanding 2025 Notes.
2 unchanged sentences
The Company will also be required to increase the conversion rate for holders who convert their Notes in connection with certain fundamental changes occurring prior to the maturity date or following delivery by the Company of a notice of redemption.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
In connection with the issuance of the 2025 Notes, the Company entered into call transactions and warrant transactions, primarily with affiliates of the initial purchasers of the 2025 Notes (the “hedge participants”).
7 unchanged sentences
See Note 1, Basis of Presentation, for further details.
−Removed: At September 30, 2021 , the carrying amount of the liability w as $ 575.0 million.
−Removed: The fair value of the 2025 Notes at September 30, 2021 was $ 636.7 million.
+Added: At March 31, 2022 , the carrying amount of the liability w as $ 575.0 million.
+Added: The fair value of the 2025 Notes at March 31, 2022 was $ 613.7 million.
Factors that the Company considered when estimating the fair value of the 2025 Notes included recent quoted market prices or dealer quote.
The level of the 2025 Notes is considered as Level 1.
−Removed: As a result of the adoption of ASU 2020-06, the Company recognized only cash interest related to the contractual interest coupon of $ 2.1 million on the 2025 Notes for the nine months ended September 30, 2021.
−Removed: Prior to the adoption, during the nine months ended September 30, 2020, the Company recognized cash interest of $ 1.9 million and amortization of the discount on the liability component of $ 11.1 million for a total interest charge of $ 13.0 million on the 2020 Notes.
+Added: As a result of the adoption of ASU 2020-06, the Company recognized only cash interest related to the contractual interest coupon of $ 0.7 million on the 2025 Notes for the three months ended March 31, 2022 and March 31, 2021.
Securitization Facility
5 unchanged sentences
An occurrence of an event of default or a termination event under this Securitization Agreement may give rise to the right of its counterparty to terminate this facility.
−Removed: As of September 30, 2021, the Company was in compliance with the covenants and none of the termination events had occurred.
+Added: As of March 31, 2022, the Company was in compliance with the covenants and none of the termination events had occurred.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
On May 28, 2021, the Company entered into an amendment (the "May 2021 Amendment") of the Securitization Facility which extended the maturity date from December 21, 2021 to May 28, 2024.
The May 2021 Amendment does not increase the Company’s total indebtedness.
−Removed: At September 30, 2021 and December 31, 2020, the Company had $ 111.7 million and $ 112.5 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 1.2 % and 1.3 %, respectively.
−Removed: The fair value of the outstanding borrowing of the Securitization Facility at September 30, 2021 was $ 108.0 million.
+Added: At March 31, 2022 and December 31, 2021, the Company had $ 112.0 million and $ 112.5 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 1.2 % and 1.1 %, respectively.
+Added: The fair value of the outstanding borrowing of the Securitization Facility at March 31, 2022 was $ 113.0 million.
These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.
1 unchanged sentence
Level 2 inputs represent inputs that are observable for the asset or liability, either directly or indirectly, and are other than active market observable i nputs that reflect unadjusted quoted prices for identical assets or liabilities.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
DERIVATIVE INSTRUMENTS
4 unchanged sentences
These interest rate swaps apply a fixed interest rate on a portion of the Company's expected LIBOR-indexed floating-rate borrowings.
−Removed: The Company held the following interest rate swaps as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):
−Removed: September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020
+Added: The Company held the following interest rate swaps as of March 31, 2022 and December 31, 2021 (dollar amounts in thousands):
+Added: March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021
Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value
Asset (Liability)
−Removed: 1-month USD LIBOR Loan $ — $ 100,000 March 27, 2017 December 31, 2017 June 30, 2021 1.971 % $ — $ ( 929 )
1-month USD LIBOR Loan 300,000 300,000 December 13, 2017 January 1, 2018 December 31, 2022 2.201 % ( 1,619 ) ( 5,268 )
12 unchanged sentences
If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCL to interest expense at that time.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Foreign Currency Hedging
6 unchanged sentences
For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
During the fourth quarter of 2020, the Company entered into foreign currency forward contracts, with a notional amount of $ 9.7 million, to mitigate the foreign exchange risk related to certain intercompany loans denominated in Canadian Dollar ("CAD") and intercompany receivables denominated in Japanese Yen ("JPY").
The contracts are not designated as hedging instruments.
−Removed: The Company recognized a $ 0.2 million loss from the change in fair value of the contracts, which was included in other income, net in the consolidated statement of operations as of September 30, 2021.
The Company subsequently settled its foreign currency forward contracts associated with the intercompany receivables denominated in JPY during the first quarter of 2021.
−Removed: The fair value of the foreign currency forward contracts denominated in CAD was $ 0.2 million as of September 30, 2021.
+Added: The Company recognized a $ 0.2 million loss from the change in fair value of the contracts, which was included in other income, net in the consolidated statement of operations as of March 31, 2022 and March 31, 2021.
+Added: The fair value of the foreign currency forward contracts denominated in CAD was $ 0.2 million as of March 31, 2022 and December 31, 2021.
During the second quarter of 2021, the Company entered into a foreign currency swap, with a notional of $ 7.3 million to mitigate the risk from fluctuations in foreign currency exchange rates associated with certain intercompany loan denominated in Japanese Yen ("JPY").
1 unchanged sentence
The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party.
−Removed: The change in fair value of the foreign currency swap was not material for the period.
+Added: The change in fair value of the foreign currency swap was $ 1.0 million as of March 31, 2022.
The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in foreign currency.
10 unchanged sentences
Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss Francs and receive interest in U.S.
−Removed: Upon the maturity of these contracts, the Company will pay the remaining principal amount of the loans in Swiss Francs and receive U.S.
+Added: Upon the maturity of these contracts, the Company will pay the principal amount of the loans in Swiss Francs and receive U.S.
dollars from the counterparties.
−Removed: The Company held the following cross-currency rate swaps as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):
−Removed: September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: The Company held the following cross-currency rate swaps as of March 31, 2022 and December 31, 2021 (dollar amounts in thousands):
+Added: March 31, 2022 December 31, 2021 March 31, 2022 December 31, 2021
Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value
2 unchanged sentences
Receive U.S.$ 4.52 % $ 150,000 150,000
−Removed: Pay CHF October 2, 2017 October 2, 2022 1.95 % CHF 145,598 145,598 ( 3,894 ) ( 11,262 )
−Removed: Receive U.S.$ 4.52 % $ 150,000 150,000
Pay CHF December 21, 2020 December 22, 2025 3.00 % CHF 391,387 397,137 ( 2,421 ) 41
1 unchanged sentence
Total $ ( 9,775 ) $ ( 8,242 )
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
On October 4, 2021 in accordance with the termination date, the Company settled a cross-currency swap designated as a cash flow hedge of an intercompany loan with an aggregate notional amount of $ 50.0 million.
+Added: The gain recorded by the Company upon the settlement of the swap was not material for the period.
The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL.
−Removed: For the three and nine months ended September 30, 2021, the Company recorded gains of $ 4.3 million and $ 34.3 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the losses recognized on the intercompany loans.
−Removed: For the three and nine months ended September 30, 2020, the Company recorded losses of $ 6.9 million and $ 12.0 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gains recognized on the intercompany loans.
−Removed: For the three and nine months ended September 30, 2021, the Company recorded gains of $ 7.0 million and $ 36.3 million in AOCL, respectively, related to change in fair value of the cross-currency swaps.
−Removed: For the three and nine months ended September 30, 2020, the Company recorded a loss of $ 6.3 million and a gain of $ 2.7 million in AOCL, respectively, related to change in fair value of the cross-currency swaps.
−Removed: For the three and nine months ended September 30, 2021, the Company recorded gains of $ 1.5 million and $ 4.1 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
−Removed: For the three and nine months ended September 30, 2020, the Company recorded gains of $ 1.5 million and $ 4.5 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
−Removed: The estimated gain that is expected to be reclassified to other income (expense), net from AOCL as of September 30, 2021 within the next twelve months is $ 6.9 million.
−Removed: As of September 30, 2021, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.
+Added: For the three months ended March 31, 2022, and 2021, the Company recorded a gain of $ 6.5 million and $ 42.9 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the losses recognized on the intercompany loans.
+Added: For the three months ended March 31, 2022, and 2021, the Company recorded a gain of $ 7.9 million and $ 40.2 million in AOCL, respectively, related to change in fair value of the cross-currency swaps.
+Added: For the three months ended March 31, 2022, and 2021, the Company recorded a gain of $ 1.8 million and $ 1.3 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
+Added: The estimated gain that is expected to be reclassified to other income (expense), net from AOCL as of March 31, 2022 within the next twelve months is $ 2.4 million.
+Added: As of March 31, 2022, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.
Net Investment Hedges
2 unchanged sentences
On October 1, 2018 and December 16, 2020, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.
−Removed: The Company held the following cross-currency rate swaps designated as net investment hedges as of September 30, 2021 and December 31, 2020, respectively (dollar amounts in thousands):
−Removed: September 30, 2021
+Added: The Company held the following cross-currency rate swaps designated as net investment hedges as of March 31, 2022 and December 31, 2021, respectively (dollar amounts in thousands):
+Added: March 31, 2022
December 31, 2021
5 unchanged sentences
Receive U.S.$ 2.19 % $ 45,000
−Removed: Pay EUR October 3, 2018 September 30, 2025 — % EUR 38,820 1,723 92
−Removed: Receive U.S.$ 2.19 % $ 45,000
Pay CHF December 16, 2020 December 16, 2027 — % CHF 222,300 ( 1,716 ) ( 792 )
1 unchanged sentence
Total $ 3,771 $ 3,858
−Removed: During the nine months ended September 30, 2021, the Company settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $ 52 million equivalent to 44.9 million Euros based on the termination date.
−Removed: As a result of the settlement, the Company recorded a gain of $ 0.1 million in AOCL.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: On September 30, 2021, in accordance with the termination date, the Company settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $ 52 million equivalent to 44.9 million Euros based on the termination date.
+Added: As a result of the settlement, the Company recorded a gain of $ 0.1 million in AOCL.
The cross-currency swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in AOCL.
−Removed: For the three and nine months ended September 30, 2021, the Company recorded gains of $ 6.9 million and $ 20.5 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.
−Removed: For the three and nine months ended September 30, 2020, the Company recorded a loss of $ 11.3 million and a gain of $ 5.1 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.
−Removed: For the three and nine months ended September 30, 2021, the Company recorded gains of $ 1.7 million and $ 5.2 million in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
−Removed: For the three and nine months ended September 30, 2020, the Company recorded gains of $ 2.2 million and $ 6.6 million in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
−Removed: The estimated gain that is expected to be reclassified to interest income from AOCL as of September 30, 2021 within the next twelve months is $ 5.3 million.
+Added: For the three months ended March 31, 2022 and 2021, the Company recorded gains of $ 1.3 million and $ 40.2 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.
+Added: For the three months ended March 31, 2022, and 2021, the Company recorded gains of $ 1.3 million and $ 1.7 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
+Added: The estimated gain that is expected to be reclassified to interest income from AOCL as of March 31, 2022 within the next twelve months is $ 5.3 million.
Counterparty Credit Risk
8 unchanged sentences
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020:
+Added: The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021:
Fair Value as of
Location on Balance Sheet (1) :
−Removed: September 30, 2021 December 31, 2020
+Added: March 31, 2022 December 31, 2021
Dollars in thousands
28 unchanged sentences
(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.
−Removed: (2) At September 30, 2021 and December 31, 2020, the total notional amounts related to the Company’s interest rate swaps were $ 1.8 billion and $ 1.9 billion, respectively.
+Added: (2) At March 31, 2022 and December 31, 2021, the total notional amounts related to the Company’s interest rate swaps were both $ 1.8 billion, respectively.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: The following presents the effect of derivative instruments designated as cash flow hedges on the accompanying condensed consolidated statement of operations during the three and nine months ended September 30, 2021 and 2020:
+Added: The following presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the accompanying condensed consolidated statement of operations during the three months ended March 31, 2022 and 2021:
Dollars in thousands Balance in AOCL
6 unchanged sentences
Statements of
−Removed: Three Months Ended September 30, 2021
−Removed: Cash Flow Hedges
−Removed: Interest rate swap $ ( 62,736 ) $ 2,488 $ ( 5,434 ) $ ( 54,814 ) Interest expense
−Removed: Cross-currency swap ( 4,363 ) 7,045 5,874 ( 3,192 ) Other income (expense),net
−Removed: Net Investment Hedges
−Removed: Cross-currency swap ( 2,078 ) 6,882 1,749 3,055 Interest income
−Removed: $ ( 69,177 ) $ 16,415 $ 2,189 $ ( 54,951 )
−Removed: Three Months Ended September 30, 2020
−Removed: Cash Flow Hedges
−Removed: Interest rate swap $ ( 102,128 ) $ ( 3,971 ) $ ( 5,718 ) $ ( 100,381 ) Interest expense
−Removed: Cross-currency swap 5,843 ( 6,272 ) ( 5,353 ) 4,924 Other income (expense),net
−Removed: Net Investment Hedges
−Removed: Cross-currency swap 22,223 ( 11,254 ) 2,202 8,767 Interest income
−Removed: $ ( 74,062 ) $ ( 21,497 ) $ ( 8,869 ) $ ( 86,690 )
−Removed: Dollars in thousands Balance in AOCL
−Removed: Year Amount of
−Removed: Recognized in
−Removed: AOCL Amount of Gain (Loss)
−Removed: Reclassified from
−Removed: Earnings Balance in AOCL
−Removed: End of Quarter Location in
−Removed: Statements of
−Removed: Nine Months Ended September 30, 2021
+Added: Three Months Ended March 31, 2022
Cash Flow Hedges
Interest rate swap $ ( 43,956 ) $ 41,675 $ ( 5,213 ) $ 2,932 Interest expense
−Removed: Cross-currency swap ( 1,073 ) 36,270 38,389 ( 3,192 ) Other income (expense),net
+Added: Cross-currency swap ( 9,688 ) 316 8,331 ( 17,703 ) Other income, net
Net Investment Hedges
1 unchanged sentence
$ ( 55,965 ) $ 43,300 $ 4,438 $ ( 17,103 )
−Removed: Nine Months Ended September 30, 2020
+Added: Three Months Ended March 31, 2021
Cash Flow Hedges
Interest rate swap $ ( 93,769 ) $ 34,518 $ ( 5,705 ) $ ( 53,546 ) Interest expense
−Removed: Cross-currency swap 177 ( 2,688 ) ( 7,435 ) 4,924 Other income (expense), net
+Added: Cross-currency swap ( 1,073 ) 40,194 44,150 ( 5,029 ) Other income, net
Net Investment Hedges
2 unchanged sentences
STOCK-BASED COMPENSATION
−Removed: As of September 30, 2021, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”).
+Added: As of March 31, 2022, the Company had stock options, restricted stock awards, performance stock awards, contract stock awards and restricted stock unit awards outstanding under the Integra LifeSciences Holdings Corporation Fifth Amended and Restated 2003 Equity Incentive Plan (the “2003 Plan”).
The 2000 and 2001 Equity Incentive Plans were terminated as of February 19, 2021, and no further awards may be issued under the plans.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Stock options issued under the 2003 Plan become exercisable over specified periods, generally within four years from the date of grant for officers and employees, within one year from date of grant for directors which generally expire eight years from the grant date for employees, and from six to ten years for directors and certain executive officers, except in certain instances that result in accelerated vesting due to death, disability, retirement age or change in-control provisions within their grant agreements.
3 unchanged sentences
Stock Options
−Removed: As of September 30, 2021, there were approximately $ 3.7 million of total unrecognized compensation costs related to unvested stock options.
−Removed: These costs are expected to be recognized over a weighted-average period of approximately two years .
−Removed: There were 149,558 stock options granted during the nine months ended September 30, 2021.
−Removed: For the nine months ended September 30, 2021, the weighted average grant date fair value for stock options was $ 22.59 per option.
+Added: As of March 31, 2022, there were approximately $ 5.8 million of total unrecognized compensation costs related to unvested stock options.
+Added: These costs are expected to be recognized over a weighted-average period of approximately three years .
+Added: There were 145,565 stock options granted during the three months ended March 31, 2022.
+Added: For the three months ended March 31, 2022, the weighted average grant date fair value for stock options was $ 23.15 per option.
Awards of Restricted Stock and Performance Stock
2 unchanged sentences
The Company expenses the fair value of restricted stock awards on a straight-line basis over the requisite service period.
−Removed: As of September 30, 2021, there was approximately $ 26.8 million of total unrecognized compensation costs related to these unvested awards.
+Added: As of March 31, 2022, there was approximately $ 44.6 million of total unrecognized compensation costs related to these unvested awards.
The Company expects to recognize these costs over a weighted-average period of approximately two years .
−Removed: The Company granted 258,265 restricted stock awards and 176,147 performance stock awards during the nine months ended September 30, 2021.
−Removed: For the nine months ended September 30, 2021, the weighted average grant date fair value for restricted stock awards and performance stock units was $ 68.41 and $ 68.10 per award, respectively.
+Added: The Company granted 320,385 restricted stock awards and 130,753 performance stock awards during the three months ended March 31, 2022.
+Added: For the three months ended March 31, 2022, the weighted average grant date fair value for restricted stock awards and performance stock units was $ 65.27 and $ 65.11 per award, respectively.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
The Company also maintains an Employee Stock Purchase Plan (the “ESPP”), which provides eligible employees with the opportunity to acquire shares of common stock at periodic intervals by means of accumulated payroll deductions.
2 unchanged sentences
The Company maintains defined benefit pension plans that cover certain employees in France, Japan, Germany and Switzerland.
−Removed: Net periodic benefit costs for the Company’s defined benefit pension plans for three and the nine months ended September 30, 2021 were $ 0.5 million and $ 1.8 million.
−Removed: The components of the net periodic benefit costs other than the service cost component of $ 0.8 million and $ 2.4 million for the three and nine months ended September 30, 2021, are included in other income, net in the consolidated statements of operations.
−Removed: Net periodic benefit costs for the Company’s defined benefit pension plans for the three and nine months ended September 30, 2020 were $ 1.0 million and $ 3.0 million, respectively.
−Removed: The components of the net periodic benefit costs other than the service cost component of $ 1.0 million and $ 2.9 million for the three and nine months ended September 30, 2020 respectively, are included in other income, net in the consolidated statements of operations.
−Removed: The estimated fair values of plan assets were $ 34.0 million and $ 37.8 million as of September 30, 2021 and December 31, 2020, respectively.
−Removed: The net plan assets of the pension plans are invested in common trusts as of September 30, 2021 and December 31, 2020.
+Added: Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2022 were $ 0.3 million.
+Added: The components of the net periodic benefit costs other than the service cost component of $ 0.7 million for the three months ended March 31, 2022 are included in other income, net in the consolidated statements of operations.
+Added: Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2021 were $ 0.6 million.
+Added: The components of the net periodic benefit costs other than the service cost component of $ 0.8 million for the three months ended March 31, 2021 are included in other income, net in the consolidated statements of operations.
+Added: The estimated fair values of plan assets were $ 34.9 million and $ 39.9 million as of March 31, 2022 and December 31, 2021, respectively.
+Added: The net plan assets of the pension plans are invested in common trusts as of March 31, 2022 and December 31, 2021.
Common trusts are classified as Level 2 in the fair value hierarchy.
3 unchanged sentences
The Company maintains a Deferred Compensation Plan in which certain employees of the Company may defer the payment and taxation of up to 75 % of their base salary and up to 100 % of bonus amounts and other eligible cash compensation.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
During the first quarter of 2020, employees participating in the Company's deferred compensation plan began to defer their compensation.
1 unchanged sentence
Assets of the Company's deferred compensation plan are included in other current assets and recorded at fair value based on their quoted market prices.
−Removed: The fair value of these assets at September 30, 2021 were $ 3.4 million and $ 2.0 million as of September 30, 2021and December 31, 2020.
+Added: The fair value of these assets at March 31, 2022 were $ 4.7 million and $ 3.8 million as of March 31, 2022 and December 31, 2021.
Offsetting liabilities relating to the deferred compensation plan are included in Other liabilities.
1 unchanged sentence
The Company leases administrative, manufacturing, research and distribution facilities and vehicles through operating lease agreements.
−Removed: The Company has no finance leases as of September 30, 2021.
+Added: The Company has no finance leases as of March 31, 2022.
Many of the Company's leases include both lease (e.g., fixed payments including rent) and non-lease components (e.g., common-area or other maintenance costs).
4 unchanged sentences
As most of the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments.
−Removed: Total operating lease expense for the nine months ended September 30, 2021 and September 30, 2020 was $ 15.7 million and $ 14.6 million respectively, which includes $ 0.2 million, in related party operating lease expense.
+Added: Total operating lease expense for the three months ended March 31, 2022 and March 31, 2021 was $ 4.9 million and $ 5.3 million respectively, which includes $ 0.1 million, in related party operating lease expense.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
Supplemental balance sheet information related to operating leases were as follows:
−Removed: Dollars in thousands, except lease term and discount rate September 30, 2021
−Removed: December 31, 2020
+Added: Dollars in thousands, except lease term and discount rate March 31, 2022 December 31, 2021
ROU assets $ 81,644 $ 84,543
8 unchanged sentences
Leased vehicles 2.7 % 2.6 %
−Removed: Supplemental cash flow information related to leases for the nine months ended September 30, 2021 and 2020 were as follows:
−Removed: Dollars in thousands September 30, 2021 September 30, 2020
+Added: Supplemental cash flow information related to leases for the three months ended March 31, 2022 and 2021 were as follows:
+Added: Dollars in thousands March 31, 2022 March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
2 unchanged sentences
Operating leases $ 507 $ 9,662
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: Future minimum lease payments under operating leases at September 30, 2021 were as follows:
+Added: Future minimum lease payments under operating leases at March 31, 2022 were as follows:
Dollars in thousands Related Parties Third Parties Total
+Added: Remainder of 2022
$ 222 $ 13,012 $ 13,234
10 unchanged sentences
Long-term lease liabilities 87,806
+Added: There were no future minimum lease payments under finance leases at March 31, 2022.
Related Party Leases
−Removed: The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a corporation whose shareholders are trusts, whose beneficiaries include family members of the Company’s principal stockholder and former director.
+Added: The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a corporation whose stockholders are trusts, whose beneficiaries include family members of the Company’s principal stockholder and former director.
The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $ 0.3 million per year.
The current lease agreement also provides (i) a 5 -year renewal option for the Company to extend the lease from November 1, 2029 through October 31, 2034 at the fair market rental rate of the premises, and (ii) another 5 -year renewal option to extend the lease from November 1, 2034 through October 31, 2039 at the fair market rental rate of the premises.
+Added: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
TREASURY STOCK
−Removed: As of September 30, 2021 and December 31, 2020, there were 4.9 million shares of treasury stock outstanding with a cost of $ 234.4 million and $ 235.1 million, respectively, at a weighted average cost per share of $ 47.86 .
−Removed: On December 7, 2020, the Board of Directors of the Company (the "Board") authorized the Company to repurchase up to $ 225.0 million of the Company’s common stock.
+Added: As of March 31, 2022 and December 31, 2021, there were 6.8 million and 4.9 million shares of treasury stock outstanding with a cost of $ 362.9 million and $ 234.4 million, at a weighted average cost per share of $ 53.18 and $ 47.86 , respectively.
+Added: On December 7, 2020, the Board of Directors authorized the Company to repurchase up to $ 225.0 million of the Company’s common stock.
The program allows the Company to repurchase its shares opportunistically from time to time.
The repurchase authorization expires in December 2022.
−Removed: The Company has $ 225.0 million remaining under the share repurchase of its common stock.
The price and timing of any future purchases under the share repurchase program will depend on factors such as levels of cash generation from operations, the volume of stock option exercises by employees, cash requirements for acquisitions, dividends, economic and market conditions and stock price, and such repurchases may be discontinued at any time.
−Removed: During the twelve months ended December 31, 2020, the Company repurchased 2.1 million shares of Integra’s common stock as part of the previous share repurchase authorization.
−Removed: The Company utilized $ 100.0 million of net proceeds from the offering of the Convertible Senior Notes to execute the share repurchase transactions.
−Removed: This included $ 7.6 million from certain purchasers of the convertible notes in conjunction with the closing of the offering.
−Removed: On February 5, 2020, the Company entered into a $ 92.4 million accelerated share repurchase ("ASR") to complete the remaining $ 100.0 million of share repurchase.
−Removed: The Company received 1.3 million shares at inception of the ASR, which represented approximately 80 % of the expected total shares.
−Removed: Upon settlement of the ASR in June 2020, the Company received an additional 0.6 million shares determined using the volume-weighted average price of the Company's common stock during the term of the transaction.
−Removed: INTEGRA LIFESCIENCES HOLDINGS CORPORATION
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: On January 12, 2022, the Company entered into a $ 125.0 million accelerated share repurchase ("2022 ASR") and received 1.48 million shares of Company common stock at inception of the 2022 ASR, which represented approximately 80 % of the expected total shares under the 2022 ASR.
+Added: On March 24, 2022, the early exercise provision under the 2022 ASR was exercised by 2022 ASR counterparty.
+Added: Upon settlement of the 2022 ASR on March 24, 2022, the Company received an additional 0.46 million shares determined using the volume-weighted average price of the Company's common stock during the term of the 2022 ASR.
+Added: On April 26 2022, the Board of Directors authorized the Company to repurchase up to $ 225.0 million of the Company’s common stock.
+Added: The program allows the Company to repurchase its shares opportunistically from time to time.
+Added: The repurchase authorization expires in December 2024.
+Added: This stock repurchase authorization replaces the previous $ 225 million stock repurchase authorization, of which $ 100 million remained authorized at the time of its replacement, and which was otherwise set to expire on December 31, 2022.
+Added: Purchases may be affected through one or more open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, or a combination of the foregoing.
The following table provides a summary of the Company's effective tax rate:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2021 2020 2021 2020
+Added: Three Months Ended March 31,
Reported tax rate 16.3 % 32.5 %
−Removed: The Company’s effective income tax rates for the three months ended September 30, 2021 and 2020 w ere 14.9 % and 22.1 %, respectively.
−Removed: For the three months ended September 30, 2021, the primary drivers of the tax rate are due to the jurisdictional mix of income and a benefit related to excess tax benefits from stock compensation.
−Removed: For the three months ended September 30, 2020, the primary drivers of the tax rate are due to the jurisdictional mix of income and a $ 4.2 million recognition of a deferred tax liability related to an outside tax basis from the sale of the Extremity Orthopedics business, offset by the reversal of $ 3.2 million valuation allowance on certain foreign deferred tax assets as the Company determined that it was more likely than not that these foreign deferred tax assets would be realized.
−Removed: The Company's effective income tax rates for the nine months ended September 30, 2021 and 2020 were 24.1 % and 24.6 %, respectively.
−Removed: For the nine months ended September 30, 2021, the primary drivers of the tax rate are due to the jurisdictional mix of income and a benefit related to excess tax benefits from stock compensation, offset by the tax impact of the gain on the sale of the Extremity and Orthopedics business which was completed during the first quarter of 2021.
−Removed: For the nine months ended September 30, 2020, the primary drivers of the tax rate are the jurisdictional mix of income and a $ 4.2 million recognition of a deferred tax liability related to an outside tax basis from the sale of the Extremity Orthopedics business.
−Removed: Additionally, changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate.
+Added: The Company’s effective income tax rates for the three months ended March 31, 2022 and 2021 w ere 16.3 % and 32.5 %, respectively.
+Added: For the three months ended March 31, 2022, the primary drivers of the tax rate are a favorable jurisdictional mix of income, as well as a $ 0.8 M benefit related to excess tax benefits from stock compensation.
+Added: For the three months ended March 31, 2021 , the primary driver of the higher tax rate is the tax impact of the gain on the sale of the Extremity Orthopedics business, which closed during the first quarter of 2021.
+Added: Changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate.
Various governments, both U.S.
1 unchanged sentence
The current U.S.
−Removed: administration has proposed tax reform which, if enacted, would increase the Company’s U.S.
+Added: administration has proposed tax reform which, if enacted, may increase the Company’s U.S.
federal income tax liability.
−Removed: Further, legislation in foreign jurisdictions may be enacted, in response to the base erosion and profit-shifting (BEPS) project begun by the Organization for Economic Cooperation and Development (OECD).
−Removed: The OECD recently finalized major reform of the international tax system with respect to a minimum tax rate.
+Added: Further, legislation in foreign jurisdictions may be enacted, in response to the base erosion and profit-sharing project begun by the Organization for Economic Cooperation and Development ("OECD").
+Added: The OECD recently finalized major reform of the international tax system with respect to a global minimum tax rate.
Such changes in U.S.
jurisdictions could have an adverse effect on the Company’s effective tax rate.
−Removed: As of September 30, 2021, the Company has not provided deferred income taxes on unrepatriated earnings from foreign subsidiaries as they are deemed indefinitely reinvested unless there is a manner under which to remit the earnings with no material tax cost.
+Added: As of March 31, 2022, the Company has not provided deferred income taxes on unrepatriated earnings from foreign subsidiaries as they are deemed to be indefinitely reinvested unless there is a manner under which to remit the earnings with no material tax cost.
Material taxes would primarily be attributable to foreign withholding taxes and local income taxes when such earnings are distributed.
−Removed: The Company will repatriate foreign earnings when there is no need for reinvestment overseas and no material tax cost to bring the earnings back to the United States.
+Added: The Company will repatriate foreign earnings when there is no need for reinvestment overseas and there is no material cost to bring the earnings back to the United States.
Reinvestment considerations would include future acquisitions, transactions, and capital expenditure plans.
−Removed: The Company does not anticipate the need to repatriate earnings from foreign subsidiaries as a result of the impact of the COVID-19 pandemic.
+Added: As such, the Company has determined the tax impact of repatriating these foreign earnings would not be material as of March 31, 2022.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
2 unchanged sentences
Basic and diluted net income per share was as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Dollars in thousands, except per share amounts 2022 2021
10 unchanged sentences
Diluted net income per common share $ 0.39 $ 0.53
−Removed: Common stock of approximately 0.1 million an d 0.6 million shares at September 30, 2021, and 2020, res pectively that are issuable through exercise of dilutive securities were not included in the computation of diluted net income per share because their effect would have been anti-dilutive.
+Added: Common stock of approximately 0.2 million an d 0.5 million shares at March 31, 2022, and 2021, res pectively that are issuable through exercise of dilutive securities were not included in the computation of diluted net income per share because their effect would have been anti-dilutive.
Performance Shares and Restricted Units that entitle the holders to approximately 0.5 million shares of common stock are included in the basic and diluted weighted average shares outstanding calculation from their date of issuance because no further consideration is due related to the issuance of the underlying common shares.
1 unchanged sentence
ACCUMULATED OTHER COMPREHENSIVE LOSS
−Removed: Comprehensive income for the nine months ended September 30, 2021 and 2020 was as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: Comprehensive income for the three months ended March 31, 2022 and 2021 was as follows:
+Added: Three Months Ended March 31,
Dollars in thousands 2022 2021
6 unchanged sentences
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: Changes in accumulated other comprehensive loss by component between December 31, 2020 and September 30, 2021 are presented in the table below, net of tax:
+Added: Changes in accumulated other comprehensive loss by component between December 31, 2021 and March 31, 2022 are presented in the table below, net of tax:
Dollars in thousands Gains and Losses on Derivatives Defined Benefit Pension Items Foreign Currency Items Total
Balance at January 1, 2022
−Removed: Other comprehensive income (loss) 60,497 267 ( 13,058 ) 47,706
−Removed: Amounts reclassified from accumulated other comprehensive loss 20,421 — — 20,421
−Removed: Net current-period other comprehensive income (loss) 40,076 267 ( 13,058 ) 27,285
−Removed: Balance at September 30, 2021 $ ( 42,173 ) $ ( 4,838 ) $ 237 $ ( 46,774 )
−Removed: For the nine months ended September 30, 2021, the Company reclassified a gain of $ 29.5 million and a loss of $ 9.1 million from accumulated other comprehensive loss to other income, net and interest income.
+Added: $ ( 42,981 ) $ 1,893 $ ( 4,067 ) $ ( 45,155 )
+Added: Other comprehensive gain (loss) 33,234 ( 9 ) ( 5,683 ) 27,542
+Added: Amounts reclassified from accumulated other comprehensive income, net 3,412 — — 3,412
+Added: Net current-period other comprehensive gain (loss) 29,822 ( 9 ) ( 5,683 ) 24,130
+Added: Balance at March 31, 2022
+Added: $ ( 13,159 ) $ 1,884 $ ( 9,750 ) $ ( 21,025 )
+Added: For the three months ended March 31, 2022, the Company reclassified a gain of $ 6.4 million and a loss of $ 3.0 million from accumulated other comprehensive loss to other income, net and interest income, respectively.
SEGMENT AND GEOGRAPHIC INFORMATION
1 unchanged sentence
The two reportable segments and their activities are described below.
−Removed: • The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment and (ii) the instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices.
−Removed: • The Tissue Technologies segment includes such offerings as skin and wound repair, bone grafts, and nerve and tendon repair products.
−Removed: In conjunction with the sale of the Extremity Orthopedics business, the Company rebranded the Orthopedics and Tissue Technologies segment as Tissue Technologies in the first quarter of 2021.
+Added: • The Codman Specialty Surgical segment includes (i) the Neurosurgery business, which sells a full line of products for neurosurgery and neuro critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, cranial stabilization equipment, and solutions for use in minimally invasive neurosurgery and in the management of intracerebral hemorrhages, and (ii) the Instruments business, which sells more than 40,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, dental, podiatry, and veterinary offices.
+Added: • The Tissue Technologies segment includes a large, complementary portfolio of products to address plastic and surgical reconstructive procedures such as complex and traumatic wounds, hernia and abdominal wall repair, breast reconstruction, and nerve repair.
+Added: The Tissue Technologies segment has four unique technology platforms, including bovine engineered collagen matrix, bovine dermal matrix, amniotic technology and porcine bladder matrix technology, to address regenerative soft tissue reconstruction procedures.
The Corporate and other category includes (i) various executive, finance, human resource, information systems and legal functions, (ii) brand management, and (iii) share-based compensation costs.
The operating results of the various reportable segments as presented are not comparable to one another because (i) certain operating segments are more dependent than others on corporate functions for unallocated general and administrative and/or operational manufacturing functions, and (ii) the Company does not allocate certain manufacturing costs and general and administrative costs to the operating segment results.
−Removed: Net sales and profit by each reportable segment for the three and nine months ended September 30, 2021 and 2020 are as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: Net sales and profit by each reportable segment for the three months ended March 31, 2022 and 2021 are as follows:
+Added: Three Months Ended March 31,
Dollars in thousands 2022 2021
12 unchanged sentences
Operating income $ 46,164 $ 30,714
−Removed: The Company does not allocate any assets to the reportable segments.
−Removed: No asset information is reported to the chief operating decision maker and disclosed in the financial information for each segment.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
+Added: The Company does not allocate any assets to the reportable segments.
+Added: No asset information is reported to the chief operating decision maker and disclosed in the financial information for each segment.
The Company attributes revenues to geographic areas based on the location of the customer.
Total revenue by major geographic area consisted of the following:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: Three Months Ended March 31,
Dollars in thousands 2022 2021
5 unchanged sentences
COMMITMENTS AND CONTINGENCIES
−Removed: In consideration for certain technology, manufacturing, distribution, selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells.
+Added: In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells.
The royalty payments that the Company made under these agreements were not significant for any of the periods presented.
6 unchanged sentences
Contingent Consideration
−Removed: The Company determined the fair value of contingent consideration during the nine month period ended September 30, 2021 and September 30, 2020 to reflect the change in estimates, additions, payments, transfers and the time value of money during the period.
+Added: The Company determined the fair value of contingent consideration during the three month period ended March 31, 2022 and March 31, 2021 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period.
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)
−Removed: A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the nine months ended September 30, 2021 and September 30, 2020 is as follows (in thousands):
−Removed: Nine Months Ended September 30, 2021 Contingent Consideration Liability Related to Acquisition of:
+Added: A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the three months ended March 31, 2022 and March 31, 2021 is as follows (in thousands):
+Added: Three Months Ended March 31, 2022 Contingent Consideration Liability Related to Acquisition of:
Arkis Location in Financial Statements Derma Sciences ACell Inc.
(See Note 2) Location in Financial Statements
−Removed: Short-term Long-term Long-term Long-term
+Added: Short-term Long-term Long-term Short-term Long-term
Balance as of January 1, 2022
−Removed: Additions from acquisition of ACell — — — 23,900
+Added: $ 3,691 $ 11,408 $ 230 $ — $ 21,800
Transfers 59 ( 59 ) — 4,885 ( 4,885 )
Change in fair value of contingent consideration liabilities — $ ( 1065 ) Research and development — — 300 Selling, general and administrative
−Removed: Balance as of September 30, 2021 $ — $ 14,617 $ 230 $ 23,000
−Removed: Nine Months Ended September 30, 2020 Contingent Consideration Liability Related to Acquisition of:
−Removed: Arkis Derma Sciences Location in Financial Statements
−Removed: Long-term Long-term
+Added: Balance as of March 31, 2022 $ 3,750 $ 10,284 $ 230 $ 4,885 $ 17,215
+Added: Three Months Ended March 31, 2021 Contingent Consideration Liability Related to Acquisition of:
+Added: Arkis Derma Sciences ACell Inc.
+Added: (See Note 2) Location in Financial Statements
+Added: Short-term Long-term Long-term Long-term
Balance as of January 1, 2021
+Added: $ 3,415 $ 11,746 $ 230 $ —
+Added: Additions from acquisition of ACell — — — 23,900
Change in fair value of contingent consideration liabilities 17 265 — — Research and development
−Removed: Balance as of September 30, 2020 $ 14,165 $ 230
+Added: Balance as of March 31, 2021
+Added: $ 3,432 $ 12,011 $ 230 $ 23,900
Arkis BioSciences Inc.
5 unchanged sentences
The Company estimated the fair value of the contingent consideration to be $ 13.1 million at the acquisition date.
−Removed: The estimated fair value as of September 30, 2021 and September 30, 2020 was $ 14.6 million and $ 14.2 million, respectively.
−Removed: The Company recorded $ 14.6 million and $ 14.2 million in other liabilities at September 30, 2021 and September 30, 2020, respectively, in the consolidated balance sheet of the Company.
+Added: The estimated fair value as of March 31, 2022 and March 31, 2021 was $ 14.0 million and $ 15.4 million, respectively.
+Added: The Company recorded $ 10.3 million and $ 12.0 million in other liabilities at March 31, 2022 and March 31, 2021, respectively, and $ 3.8 million and $ 3.4 million in accrued expenses and other current liabilities at March 31, 2022 and March 31, 2021, respectively, in the consolidated balance sheet of the Company.
Derma Sciences
3 unchanged sentences
The Company has already paid $ 33.3 million related to the aforementioned contingent liabilities.
−Removed: One contingent liability remains which relates to net sales of Medihoney™ products exceeding certain amounts defined in the agreement between the Company and Derma Sciences.
+Added: One contingent milestone remains which relates to net sales of Medihoney™ products exceeding certain amounts defined in the agreement between the Company and Derma Sciences.
The potential maximum undiscounted payment amounts to $ 3.0 million.
−Removed: The estimated fair value as of September 30, 2021 and September 30, 2020 was $ 0.2 million.
+Added: The estimated fair value as of March 31, 2022 and March 31, 2021 was $ 0.2 million.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.