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Item 1. Financial Statements

2023-07-27 compared with 2023-04-26 · 228 added, 152 removed, 736 unchanged (34% of the section changed)

4 unchanged sentences

(Dollars in thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Total revenue, net $ 381,267 $ 397,815 $ 762,113 $ 774,453

8 unchanged sentences

Interest expense ( 12,464 ) ( 12,236 ) ( 24,564 ) ( 23,891 )

Other income, net 1,389 3,429

Other income (expense), net ( 155 ) 1,979 1,234 5,408

Income before income taxes 3,824 51,575 33,602 90,890

Provision for income taxes 5,552 6,414

Provision (benefit) for income taxes ( 360 ) 6,787 5,192 13,201

Net income $ 4,184 $ 44,788 $ 28,410 $ 77,689

11 unchanged sentences

(Dollars in thousands, except per share amounts)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets:

15 unchanged sentences

Current portion of borrowings under senior credit facility $ 4,844 $ 38,125

Current portion of borrowings under securitization facility 90,800 —

Current portion of lease liability - operating leases 14,618 14,624

19 unchanged sentences

240,000 authorized shares;

90,813 and 90,477 issued at March 31, 2023 and December 31, 2022, respectively

90,881 and 90,477 issued at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 1,283,675 1,276,977

Treasury stock, at cost;

8,918 shares and 6,823 shares at March 31, 2023 and December 31, 2022, respectively

9,527 shares and 6,823 shares at June 30, 2023 and December 31, 2022, respectively

( 513,782 ) ( 362,862 )

Accumulated other comprehensive loss 7,067 10,265

Accumulated other comprehensive income 4,830 10,265

Retained earnings 907,528 879,118

5 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES:

14 unchanged sentences

Accounts payable, accrued expenses and other current liabilities ( 15,899 ) ( 14,556 )

Contract liabilities 724 774

Other non-current liabilities ( 1,003 ) ( 8,118 )

3 unchanged sentences

Acquired in-process research and development milestone — ( 4,742 )

Net proceeds from swaps designated as net investment hedges — 4,909

Net cash used in investing activities ( 29,252 ) ( 18,565 )

15 unchanged sentences

(Dollars in thousands)

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity

8 unchanged sentences

Balance, March 31, 2023 90,813 $ 908 ( 8,918 ) $ ( 481,678 ) $ 1,245,297 $ 7,067 $ 903,344 $ 1,674,938

Three Months Ended March 31, 2022

Net income — — — — — — 4,184 4,184

Other comprehensive loss, net of tax — — — — — ( 2,237 ) — ( 2,237 )

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 68 1 — 21 985 — — 1,007

Share-based compensation — — — — 5,268 — — 5,268

Accelerated shares repurchased — $ — ( 609 ) ( 32,125 ) 32,125 $ — $ — —

Balance, June 30, 2023 90,881 $ 909 ( 9,527 ) $ ( 513,782 ) $ 1,283,675 $ 4,830 $ 907,528 $ 1,683,160

Six Months Ended June 30, 2022

Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Equity

8 unchanged sentences

Balance, March 31, 2022 89,956 $ 900 ( 6,823 ) $ ( 362,886 ) $ 1,266,739 $ ( 21,025 ) $ 731,469 $ 1,615,197

Net income — — — — — — 44,788 44,788

Other comprehensive loss, net of tax — — — — — 7,810 — 7,810

Issuance of common stock for vesting of share based awards, net of shares withheld for taxes 378 3 — 6 ( 13,655 ) — — ( 13,646 )

Share-based compensation — — — — 6,768 — — 6,768

Balance, June 30, 2022 90,334 $ 903 ( 6,823 ) $ ( 362,880 ) $ 1,259,852 $ ( 13,215 ) $ 776,257 $ 1,660,917

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.

In the opinion of management, the March 31, 2023 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.

In the opinion of management, the June 30, 2023 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 in the United States ("GAAP") 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, 2022 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.

Operating results for the three-month period ended March 31, 2023 are not necessarily indicative of the results to be expected for the entire year.

Operating results for the three and six-month periods ended June 30, 2023 are not necessarily indicative of the results to be expected for the entire year.

The preparation of consolidated financial statements is in conformity with 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.

11 unchanged sentences

Federal Reserve Board and the New York Federal Reserve, has recommended the use of the Secured Overnight Financing Rate ("SOFR") as a more robust reference rate alternative to LIBOR.

The use of SOFR as a substitute for LIBOR is, however, voluntary and may not be suitable for all market participants.

There can be no assurance that the replacement rate will be economically equivalent to LIBOR, which could result in higher interest rates for us under our debt facilities.

There is no guarantee that a transition from LIBOR to SOFR will not result in financial market disruptions, significant increases in benchmark rates, or our borrowing costs, any of which could have an adverse effect on our business, results of operations and financial condition.

On March 24, 2023, the Company entered into the seventh amendment and restatement (the "March 2023 Amendment") of its Senior Credit Facility (the “Senior Credit Facility”) with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

In connection with the March 2023 Amendment the Company replaced all LIBOR-based contracts with SOFR, which is calculated based on overnight transactions under repurchase agreements backed by Treasury securities (See Note 6).

In connection with the March 2023, Amendment the Company replaced all LIBOR-based contracts with SOFR, which is calculated based on overnight transactions under repurchase agreements backed by Treasury securities.

In addition, on April 17, 2023 the company entered into an amendment (the "April 2023 Amendment") of the Securitization Facility and amended the interest rate from LIBOR to SOFR indexed rate.

(See Note 6).

In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays LIBOR to convert the portfolio of interest rate swaps from LIBOR to SOFR.

53 unchanged sentences

The Company estimated the fair value of the contingent consideration for the revenue based milestone to be $ 32.6 million at the acquisition date and $ 25.0 million for the PMA approval milestone as of December 31, 2022.

The company recorded a total of $ 48.7 million in other liabilities as of March 31, 2023 and $ 12.5 million in accrued expenses and other current liabilities at March 31, 2023 in the consolidated balance sheet of the company.

The change in the fair value of the contingent obligation was primarily as a result of changes in the timing.

The company recorded a total of $ 50.1 million in other liabilities as of June 30, 2023 and $ 12.7 million in accrued expenses and other current liabilities at June 30, 2023 in the consolidated balance sheet of the company.

Deferred Tax Liabilities

3 unchanged sentences

On August 31, 2022, the Company completed its sale of its non-core traditional wound care ("TWC") business to Gentell, LLC ("Gentell") for $ 28.8 million, which consists of $ 27.8 million in cash plus $ 1.0 million in contingent consideration which may be received upon achieving certain revenue-based performance milestones two years after the closing date.

The proceeds from the sale of the TWC business of $ 27.8 million is presented in the consolidated statement of cash flows net of cash transferred of $ 3.5 million and other transaction fees.

The transaction included the sale of the Company's TWC products, such as sponges, gauze and conforming bandages, and certain advanced wound care dressings, such as supportive, calcium alginate, hydrogel, and foam dressings.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The divestiture did not represent a strategic shift that had a major effect on the Company's operations and financial statements.

6 unchanged sentences

This deposit will be utilized by the Company on future orders placed to Gentell for such products.

As of March 31, 2023, the Company had a deposit remaining of $ 7.3 million which is included in prepaid assets and recognized a payable due to Gentell of $ 0.7 million, which is included in the condensed consolidated balance sheet within accrued expenses and other current liabilities.

As of June 30, 2023, the Company had a deposit remaining of $ 6.2 million which is included in prepaid assets and recognized a payable due to Gentell of $ 0.6 million, which is included in the condensed consolidated balance sheet within accrued expenses and other current liabilities.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

REVENUES FROM CONTRACTS WITH CUSTOMERS

13 unchanged sentences

Upon the authorization, a credit will be issued for the goods returned within a set amount of days from the shipment, which is generally 90 days.

In the second quarter of 2023, due to the voluntary recall of Primatrix®, Surgimend®, Revize™, and TissueMend™, the Company recorded a $ 12.9 million provision for product returns, as a reduction of net revenue.

Of this amount, $ 0.7 million was paid out in Q2.

The Company disregards the effects of a financing component if the Company expects, at contract inception, that the period between the transfer and customer payment for the goods or services will be one year or less.

7 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table summarized the changes in the contract asset and liability balances for the three months ended March 31, 2023:

The following table summarized the changes in the contract asset and liability balances for the six months ended June 30, 2023:

Dollars in thousands Total

2 unchanged sentences

Transferred to trade receivable from contract asset included in beginning of the year contract asset ( 7,743 )

Written off from beginning of the year contract asset due to Boston recall ( 2,379 )

Contract asset, net of transferred to trade receivables on contracts during the period 9,639

Contract asset, March 31, 2023

Contract asset, June 30, 2023

Contract Liability

3 unchanged sentences

Foreign currency translation ( 15 )

Contract liability, March 31, 2023

At March 31, 2023, the short-term portion of the contract liability of $ 7.7 million and the long-term portion of $ 8.8 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.

As of March 31, 2023, the Company is expected to recognize revenue of approximately 47 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within 12 months, with the remaining balance to be recognized thereafter.

Contract liability, June 30, 2023

At June 30, 2023, the short-term portion of the contract liability of $ 8.3 million and the long-term portion of $ 8.5 million is included in current liabilities and other liabilities, respectively, in the consolidated balance sheets.

As of June 30, 2023, the Company is expected to recognize revenue of approximately 49 % of unsatisfied (or partially unsatisfied) performance obligations as revenue within 12 months, with the remaining balance to be recognized thereafter.

Shipping and Handling Fees

13 unchanged sentences

Disaggregated Revenue

The following table presents revenues disaggregated by the major sources of revenues for the three months ended March 31, 2023 and 2022 (dollar amounts in thousands):

Three Months Ended March 31, 2023 Three Months Ended March 31, 2022

The following table presents revenues disaggregated by the major sources of revenues for the three and six months ended June 30, 2023 and 2022 (dollar amounts in thousands):

Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022

Neurosurgery $ 205,803 $ 200,295 $ 398,673 $ 394,970

7 unchanged sentences

Inventories, net consisted of the following:

Dollars in thousands March 31, 2023 December 31, 2022

Dollars in thousands June 30, 2023 December 31, 2022

Finished goods $ 174,603 $ 172,088

2 unchanged sentences

Total inventories, net $ 354,293 $ 324,583

Boston Recall

In the second quarter of 2023, due to the voluntary recall of Primatrix®, Surgimend®, Revize™, and TissueMend™, the Company recorded a $ 24.1 million write off of inventory that was no longer able to be sold.

Subsequent Event

On July 24, 2023, a severe tornado struck the Lelocle, Switzerland area (the “Lelocle Tornado”) causing significant damage to certain inventory held at one of the Company’s storage facilities.

There wasn’t any damage to Integra’s manufacturing facility in Switzerland.

The extent of damage to the facility is being assessed, however, the Company believes the inventory write-off will not exceed $ 8 million.

The Company maintains insurance coverage for damage to its facilities and inventory, as well as business interruption insurance.

The Company is in the process of reviewing these coverages with its insurance carriers.

The Company believes there will be a recovery under its insurance policies, however no assurance can be given regarding the amounts, if any, that will be ultimately recovered or when any such recoveries will be made.

GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three-month period ended March 31, 2023 were as follows:

Changes in the carrying amount of goodwill for the six-month period ended June 30, 2023 were as follows:

Dollars in thousands Codman Specialty

3 unchanged sentences

Foreign currency translation 3,015 1,759 4,774

Goodwill at March 31, 2023

Goodwill at June 30, 2023

$ 659,234 $ 384,039 $ 1,043,273

The Company tests goodwill for impairment by either performing a qualitative evaluation or a quantitative analysis.

In the second quarter of 2023, due to the voluntary recall of Primatrix®, Surgimend®, Revize™, and TissueMend™ as well as the

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

associated drop in the Company's stock price in Q2, the Company elected to perform a quantitative analysis for its Tissue Technologies reporting unit.

The quantitative test estimates the fair value of the reporting unit using a discounted cash flow model, which incorporates significant estimates and assumptions made by management which, by their nature, are characterized by uncertainty.

The quantitative test utilized a long-term growth rate of 2 % and a discount rate of 10 %.

The Company determined, after performing the quantitative analysis, that the fair value of the goodwill of the reporting unit was not less than the carrying amount, with more than 20 % headroom.

Other Intangible Assets

The components of the Company’s identifiable intangible assets were as follows:

March 31, 2023

June 30, 2023

Dollars in thousands Weighted

20 unchanged sentences

Based on quarter-end exchange rates, amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $ 41.4 million for the remainder of 2023, $ 82.2 million in 2024, $ 82.2 million in 2025, $ 82.0 million in 2026, $ 80.0 million in 2027, $ 78.5 million in 2028 and $ 477.1 million thereafter.

The Company periodically performs testing for impairment on certain long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

In the second quarter of 2023, due to the voluntary recall of Primatrix®, Surgimend®, Revize™, and TissueMend™, the Company elected to perform impairment testing on certain definite lived intangibles.

The impairment testing estimates the fair value of the intangibles using an undiscounted cash flow model.

The Company determined, after performing the impairment testing, that the fair value of the intangibles was not less that the carrying amount.

Amendment to the Seventh Amended and Restated Senior Credit Agreement

On March 24, 2023, the Company entered into the March 2023 Amendment of the Senior Credit Facility with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

On March 24, 2023, the Company entered into the seventh amendment and restatement (the "March 2023 Amendment") of the Senior Credit Facility (the "Senior Credit Facility") with a syndicate of lending banks with Bank of America, N.A., as Administrative Agent.

The March 2023 Amendment extended the maturity date to March 24, 2028, amended the contractual repayments of Term loan A, and amended the interest rate from LIBOR to SOFR-indexed interest.

1 unchanged sentence

(i) a $ 775.0 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.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company’s maximum consolidated total leverage ratio in the financial covenants (as defined in the Senior Credit Facility) was modified to the following:

7 unchanged sentences

the weighted average overnight Federal funds rate, as published by the Federal Reserve Bank of New York, plus 0.50 %

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

the prime lending rate of Bank of America, N.A.

4 unchanged sentences

subsidiaries, excluding intangible assets.

The Senior Credit Facility is subject to various financial and negative covenants and at March 31, 2023, the Company was in compliance with all such covenants.

The Senior Credit Facility is subject to various financial and negative covenants and at June 30, 2023, the Company was in compliance with all such covenants.

The Company capitalized $ 7.6 million in deferred financing costs in connection with the modification of the Senior Credit Facility and wrote off $ 0.2 million of previously capitalized financing costs during the first quarter of 2023.

At March 31, 2023 and December 31, 2022 there wa s no balance ou tstanding under the revolving portion of the Senior Credit Facility.

At March 31, 2023 and December 31, 2022, there was $ 775.0 million outstanding under the term loan component of the Senior Credit Facility at a weighted average interest rate of 6.3 % and 5.6 %, respectively.

As of March 31, 2023 there was no portion of the Term Loan component of the Senior Credit Facility classified as current on the condensed consolidated balance sheet.

As of December 31, 2022, there was $ 38.1 million of the Term Loan component of the Senior Credit Facility classified as current on the consolidated balance sheets under the prior terms of the agreement.

The fair value of outstanding borrowings of the Senior Credit Facility's Term Loan component at March 31, 2023 was $ 750.9 million.

At June 30, 2023 and December 31, 2022 there wa s no balance ou tstanding under the revolving portion of the Senior Credit Facility.

At June 30, 2023 and December 31, 2022, there was $ 775.0 million outstanding under the term loan component of the Senior Credit Facility at a weighted average interest rate of 6.6 % and 5.6 %, respectively.

The liability related to the Senior Credit Facility shown on the balance sheet at June 30, 2023 and December 31, 2022 is reflected net of $ 5.5 million and $ 3.7 million, respectively, in deferred financing costs.

As of June 30, 2023 and December 31, 2022 there was $ 4.8 million and $ 38.1 million of the Term Loan component of the Senior Credit Facility classified as current on the condensed consolidated balance sheet, respectively.

The fair value of outstanding borrowings of the Senior Credit Facility's Term Loan component at June 30, 2023 was $ 759.3 million.

This fair value was 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.

Letters of credit outstanding as of March 31, 2023 and December 31, 2022 to taled $ 1.6 million.

There were no amounts drawn as of March 31, 2023.

Letters of credit outstanding as of June 30, 2023 and December 31, 2022 to taled $ 1.7 million and $ 1.6 million, respectively.

There were no amounts drawn as of June 30, 2023.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Contractual repayments of the Term Loan component of the Senior Credit Facility are due as follows:

Quarter Ended March 31, 2023

Quarter Ended June 30, 2023

Principal Repayment

10 unchanged sentences

In connection with this offering, the Company capitalized $ 13.2 million of financing fees.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The 2025 Notes are senior, unsecured obligations of the Company, and are convertible into cash and shares of its common stock based on initial conversion rate, subject to adjustment of 13.5739 shares per $1,000 principal amounts of the 2025 Notes (which represents an initial conversion price of $ 73.67 per share).

2 unchanged sentences

(2) if the average trading price per $1,000 principal amount of the 2025 Notes is less than or equal to 98 % of the average conversion value of the 2025 Notes during a period as defined in the indenture;

(3) at any time on or after February 20, 2023;

(3) if the Company calls the notes for optional redemption as defined in the indenture;

or (4) if specified corporate transactions occur.

As of March 31, 2023, none of these conditions existed with respect to the 2025 Notes and as a result the 2025 Notes are classified as long term.

As of June 30, 2023, 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.

8 unchanged sentences

The initial strike price of the warrant transactions was $ 113.34 for the 2025 Notes, subject to customary anti-dilution adjustments.

At March 31, 2023 , the carrying amount of the liability w as $ 575.0 million.

The fair value of the 2025 Notes at March 31, 2023 was $ 561.7 million.

Factors that the Company considered when estimating the fair value of the 2025 Notes included recent quoted market prices or dealer quote.

At June 30, 2023 , the carrying amount of the liability w as $ 575.0 million.

The fair value of the 2025 Notes at June 30, 2023 was $ 524.6 million.

Factors that the Company considered when estimating the fair value of the 2025 Notes included recent quoted market prices or dealer quotes.

The level of the 2025 Notes is considered as Level 1.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

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.

As of March 31, 2023, the Company was in compliance with the covenants and none of the termination events had occurred.

As of June 30, 2023, the Company was in compliance with the covenants and none of the termination events had occurred.

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.

The Securitization Facility is currently indexed to LIBOR.

At March 31, 2023 and December 31, 2022, the Company had $ 102.5 million and $ 104.7 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 5.8 % and 5.0 %, respectively.

In April 2023, we amended the facility to replace LIBOR with SOFR-indexed interest.

The fair value of the outstanding borrowing of the Securitization Facility at March 31, 2023 was $ 102.2 million.

In addition, on April 17, 2023 the company entered into an amendment (the "April 2023 Amendment") of the Securitization Facility and amended the interest rate from LIBOR to SOFR indexed rate.

The April 2023 Amendment and the May 2021 Amendment does not increase the Company’s total indebtedness.

The Securitization Facility is currently indexed to SOFR.

At June 30, 2023 and December 31, 2022, the Company had $ 90.8 million and $ 104.7 million, respectively, of outstanding borrowings under its Securitization Facility at a weighted average interest rate of 6.3 % and 5.0 %, respectively.

At June 30, 2023, the total amount outstanding under the Securitization Facility is classified as current on the consolidated balance sheet as the total amount is due on May 28, 2024.

The fair value of the outstanding borrowing of the Securitization Facility at June 30, 2023 was $ 90.6 million.

These fair values were determined by using a discounted cash flow model based on current market interest rates available to the Company.

11 unchanged sentences

In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays LIBOR to convert the portfolio of swaps from LIBOR to SOFR.

The Company held the following interest rate swaps as of March 31, 2023 and December 31, 2022 (dollar amounts in thousands):

March 31, 2023 March 31, 2023

The Company held the following interest rate swaps as of June 30, 2023 and December 31, 2022 (dollar amounts in thousands):

June 30, 2023 June 30, 2023

Hedged Item Notional Amount Designation Date Effective Date Termination Date Fixed Interest Rate Estimated Fair Value

29 unchanged sentences

The Company has designated these derivative instruments as cash flow hedges.

The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive loss (“AOCL”), net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings.

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.

The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive income (“AOCI”), net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings.

Foreign Currency Hedging

2 unchanged sentences

The Company assesses the effectiveness of the contracts that are designated as hedging instruments.

The changes in fair value of foreign currency cash flow hedges are recorded in AOCL, net of tax.

Those amounts are subsequently reclassified to earnings from AOCL as impacted by the hedged item when the hedged item affects earnings.

The changes in fair value of foreign currency cash flow hedges are recorded in AOCI, net of tax.

Those amounts are subsequently reclassified to earnings from AOCI as impacted by the hedged item when the hedged item affects earnings.

If the hedged forecasted transaction does not occur or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time.

16 unchanged sentences

dollars from the counterparties.

The Company held the following cross-currency rate swaps as of March 31, 2023 and December 31, 2022 (dollar amounts in thousands):

March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

The Company held the following cross-currency rate swaps as of June 30, 2023 and December 31, 2022 (dollar amounts in thousands):

June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

Effective Date Termination Date Fixed Rate Aggregate Notional Amount Fair Value

5 unchanged sentences

Total $ ( 21,348 ) $ ( 7,769 )

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.

For the three months ended March 31, 2023, and 2022, the Company recorded a loss of $ 4.9 million and a gain $ 6.5 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.

For the three months ended March 31, 2023, and 2022, the Company recorded a gain of $ 7.5 million and $ 7.9 million in AOCL, respectively, related to change in fair value of the cross-currency swaps.

For the three months ended March 31, 2023, and 2022, the Company recorded a gain of $ 1.5 million and $ 1.8 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to other income (expense), net from AOCL as of March 31, 2023 within the next twelve months is $ 0.1 million.

As of March 31, 2023, 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.

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 AOCI.

For the three and six months ended June 30, 2023 the Company recorded losses of $ 8.5 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 losses recognized on the intercompany loans.

For the three and six months ended June 30, 2022, the Company recorded gains of $ 19.3 million and $ 25.8 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gain or losses recognized on the intercompany loans.

For the three and six months ended June 30, 2023, the Company recorded losses of $ 12.9 million and $ 10.7 million in AOCI, respectively, related to change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2022, the Company recorded a loss of $ 21.1 million and a gain of $ 21.5 million in AOCI, respectively, related to change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2023, the Company recorded gains of $ 1.4 million and $ 2.9 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the three and six months ended June 30, 2022, the Company recorded gains of $ 2.0 million and $ 3.8 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated loss that is expected to be reclassified to other income (expense), net from AOCI as of June 30, 2023 within the next twelve months is $ 2.0 million.

As of June 30, 2023, the Company does not expect any gains or losses will be reclassified into earnings because the original forecasted transactions will not occur.

Net Investment Hedges

4 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The Company held the following cross-currency rate swaps designated as net investment hedges as of March 31, 2023 and December 31, 2022, respectively (dollar amounts in thousands):

March 31, 2023 December 31, 2022 March 31, 2023

The Company held the following cross-currency rate swaps designated as net investment hedges as of June 30, 2023 and December 31, 2022, respectively (dollar amounts in thousands):

June 30, 2023 December 31, 2022 June 30, 2023

December 31, 2022

8 unchanged sentences

Total $ ( 19,970 ) $ ( 5,643 )

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.

For the three months ended March 31, 2023 and 2022, the Company recorded a loss of $ 1.1 million and a gain $ 1.3 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.

For the three months ended March 31, 2023, and 2022, the Company recorded gains of $ 2.1 million and $ 1.3 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to interest income from AOCL as of March 31, 2023 within the next twelve months is $ 10.9 million.

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 AOCI.

For the three and six months ended June 30, 2023, the Company recorded losses of $ 11.1 million and $ 10.1 million, respectively, in AOCI related to the change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2022, the Company recorded gains of $ 10.8 million and $ 12.1 million in AOCI, respectively, related to change in fair value of the cross-currency swaps.

For the three and six months ended June 30, 2023, the Company recorded gains of $ 2.1 million and $ 4.2 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

For the three and six months ended June 30, 2022, the Company recorded gains of $ 1.0 million and $ 2.3 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The estimated gain that is expected to be reclassified to interest income from AOCI as of June 30, 2023 within the next twelve months is $ 10.6 million.

Foreign Currency Forward Contract

2 unchanged sentences

These changes in fair value will be recognized into earnings as a component of cost of sales when the forecasted-transaction occurs.

During the first quarter of 2023 the Company entered into Foreign Currency Forward Contracts with a notional amount of $ 10.8 million to mitigate the risk of foreign currency on intercompany purchases in CHF.

During the three months ended March 31, 2023 the Company recorded an immaterial loss in AOCL related to the change in fair value of the Foreign Currency Forward Contracts.

During the first half of 2023, the Company entered into Foreign Currency Forward Contracts to mitigate the risk of foreign currency on intercompany purchases in CHF.

These contracts typically settle at various dates within twelve months of execution.

As of June 30, 2023 the notional amount of Foreign Currency Forward Contracts was $ 12.6 million.

During the three and six months ended June 30, 2023 the Company recorded gains of $ 0.3 million and $ 0.2 million, respectively in AOCI related to the change in fair value of the Foreign Currency Forward Contracts.

For the three and six months ended June 30, 2023 the company recorded a gain of $ 0.4 million in cost of goods sold included in the consolidated statements of operations related to the Foreign Currency Forward Contracts.

Counterparty Credit Risk

2 unchanged sentences

Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Fair Value of Derivative Instruments

2 unchanged sentences

The Company performs ongoing assessments of counterparty credit risk.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022:

The following table summarizes the fair value for derivatives designated as hedging instruments in the condensed consolidated balance sheets as of June 30, 2023 and December 31, 2022:

Fair Value as of

Location on Balance Sheet (1) :

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Dollars in thousands

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(1) The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.

(2) At March 31, 2023 and December 31, 2022, the total notional amounts related to the Company’s interest rate swaps were both $ 1.5 billion, respectively.

(2) At June 30, 2023 and December 31, 2022, the total notional amounts related to the Company’s interest rate swaps were both $ 1.5 billion, respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

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, 2023 and 2022:

Dollars in thousands Balance in AOCL

Dollars in thousands Balance in AOCI

Quarter Amount of

Recognized in

AOCL Amount of Gain (Loss)

AOCI Amount of Gain (Loss)

Reclassified from

Earnings Balance in AOCL

Earnings Balance in AOCI

End of Quarter Location in

Statements of

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Cash Flow Hedges

5 unchanged sentences

$ 19,973 $ ( 4,942 ) $ ( 1,583 ) $ 16,614

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Cash Flow Hedges

4 unchanged sentences

$ ( 17,103 ) $ 52,068 $ 18,355 $ 16,610

Dollars in thousands Balance in AOCI

Year Amount of

Recognized in

AOCI Amount of Gain (Loss)

Reclassified from

Earnings Balance in AOCI

End of Quarter Location in

Statements of

Six Months Ended June 30, 2023

Cash Flow Hedges

Interest rate swap $ 56,712 $ 8,160 $ 7,971 $ 56,901 Interest expense

Cross-currency swap ( 20,271 ) ( 10,682 ) ( 12,028 ) ( 18,925 ) Other income (expense),net

Foreign Currency Forward Contract — 235 358 ( 123 )

Net Investment Hedges

Cross-currency swap ( 6,914 ) ( 10,117 ) 4,208 ( 21,239 ) Interest income

$ 29,527 $ ( 12,404 ) $ 509 $ 16,614

Six Months Ended June 30, 2022

Cash Flow Hedges

Interest rate swap $ ( 43,956 ) $ 61,790 $ ( 9,105 ) $ 26,939 Interest expense

Cross-currency swap ( 9,688 ) 21,452 29,599 ( 17,835 ) Other income (expense), net

Net Investment Hedges

Cross-currency swap ( 2,321 ) 12,125 2,298 7,506 Interest income

$ ( 55,965 ) $ 95,367 $ 22,792 $ 16,610

Derivative Instruments not designated hedges:

3 unchanged sentences

The Company subsequently paid down a portion of this swap, bringing the notional amount down to $ 6.4 million.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The following table summarizes the gains (losses) of derivative instruments not designated as hedges on the condensed consolidated statements of income, which was included in other income:

Dollars in thousands Three Months Ended March 31,

Dollars in thousands Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Foreign currency swaps 588 460 643 820

1 unchanged sentence

STOCK-BASED COMPENSATION

As of March 31, 2023, 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.

As of June 30, 2023, 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”).

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.

2 unchanged sentences

The vesting of performance stock issued under the Plans is subject to service and performance conditions.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Stock Options

As of March 31, 2023, there were approximately $ 5.6 million of total unrecognized compensation costs related to unvested stock options.

As of June 30, 2023, there were approximately $ 5.0 million of total unrecognized compensation costs related to unvested stock options.

These costs are expected to be recognized over a weighted-average period of approximately three years .

There were 151,293 stock options granted during the three months ended March 31, 2023.

For the three months ended March 31, 2023, the weighted average grant date fair value for stock options granted was $ 21.58 per option.

There were 151,293 stock options granted during the six months ended June 30, 2023.

For the six months ended June 30, 2023, the weighted average grant date fair value for stock options granted was $ 21.58 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.

As of March 31, 2023, there was approximately $ 48.6 million of total unrecognized compensation costs related to these unvested awards.

As of June 30, 2023, there was approximately $ 43.3 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 .

The Company granted 346,745 restricted stock awards and 161,218 performance stock awards during the three months ended March 31, 2023.

For the three months ended March 31, 2023, the weighted average grant date fair value for restricted stock awards and performance stock units granted was $ 53.37 and $ 52.87 per award, respectively.

The Company granted 397,664 restricted stock awards and 161,218 performance stock awards during the six months ended June 30, 2023.

For the six months ended June 30, 2023, the weighted average grant date fair value for restricted stock awards and performance stock units granted was $ 52.92 and $ 52.87 per award, respectively.

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.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2023 were $ 0.3 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.5 million for the three months ended March 31, 2023 are included in other income, net in the consolidated statements of operations.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three months ended March 31, 2022 were $ 0.3 million.

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.

The estimated fair values of plan assets were $ 36.4 million and $ 38.1 million as of March 31, 2023 and December 31, 2022, respectively.

The net plan assets of the pension plans are invested in common trusts as of March 31, 2023 and December 31, 2022.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three and six months ended June 30, 2023 were $ 0.3 million and $ 0.6 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.5 million and $ 1.1 million for the three and six months ended June 30, 2023 are included in other income, net in the consolidated statements of operations.

Net periodic benefit costs for the Company’s defined benefit pension plans for the three and six months ended June 30, 2022 were $ 0.3 million and $ 0.5 million.

The components of the net periodic benefit costs other than the service cost component of $ 0.6 million and $ 1.3 million for the three and six months ended June 30, 2022 are included in other income, net in the consolidated statements of operations.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

The estimated fair values of plan assets were $ 38.0 million and $ 38.1 million as of June 30, 2023 and December 31, 2022, respectively.

The net plan assets of the pension plans are invested in common trusts as of June 30, 2023 and December 31, 2022.

Common trusts are classified as Level 2 in the fair value hierarchy.

5 unchanged sentences

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.

The fair value of these assets were $ 5.0 million and $ 4.7 million as of March 31, 2023 and December 31, 2022, respectively.

The fair value of these assets were $ 5.4 million and $ 4.7 million as of June 30, 2023 and December 31, 2022, respectively.

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.

The Company has no finance leases as of March 31, 2023.

The Company has no finance leases as of June 30, 2023.

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).

For vehicles, the Company has elected the practical expedient to group lease and non-lease components.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Most facility leases include one or more options to renew.

2 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.

Total operating lease expense for the three months ended March 31, 2023 and March 31, 2022 was $ 6.0 million and $ 4.9 million respectively, which includes $ 0.1 million, in related party operating lease expense.

Total operating lease expense for the six months ended June 30, 2023 and June 30, 2022 was $ 11.8 million and $ 10.2 million respectively, which includes $ 0.1 million, in related party operating lease expense.

Supplemental balance sheet information related to operating leases were as follows:

Dollars in thousands, except lease term and discount rate March 31, 2023 December 31, 2022

Dollars in thousands, except lease term and discount rate June 30, 2023 December 31, 2022

ROU assets $ 148,651 $ 148,284

8 unchanged sentences

Leased vehicles 2.7 % 2.7 %

Supplemental cash flow information related to leases for the three months ended March 31, 2023 and 2022 were as follows:

Dollars in thousands March 31, 2023 March 31, 2022

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

Supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 were as follows:

Dollars in thousands June 30, 2023 June 30, 2022

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Operating leases $ 7,582 $ 64,489

Future minimum lease payments under operating leases at March 31, 2023 were as follows:

Future minimum lease payments under operating leases at June 30, 2023 were as follows:

Dollars in thousands Related Parties Third Parties Total

12 unchanged sentences

Long-term lease liabilities 159,538

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

There were no future minimum lease payments under finance leases at March 31, 2023.

There were no future minimum lease payments under finance leases at June 30, 2023.

Related Party Leases

The Company leases its manufacturing facility in Plainsboro, New Jersey, from Plainsboro Associates, a New Jersey general partnership.

Ocirne, Inc., a subsidiary of Provco Industries, owns a 50 % % interest in Plainsboro Associates.

Provco Industries is the corporate general partner of Tru St.

Partnership LLP, a principal stockholder of the Company.

The Company leases its manufacturing facility in Plainsboro, New Jersey, from a general partnership that is 50 % owned by a principal stockholder of the Company.

The term of the current lease agreement is through October 31, 2029 at an annual rate of approximately $ 0.3 million per year.

1 unchanged sentence

TREASURY STOCK

As of March 31, 2023 and December 31, 2022, there were 8.9 million and 6.8 million shares of treasury stock outstanding with a cost of $ 481.7 million and $ 362.9 million, at a weighted average cost per share of $ 54.01 and $ 53.18 , respectively.

As of June 30, 2023 and December 31, 2022, there were 9.5 million and 6.8 million shares of treasury stock outstanding with a cost of $ 513.8 million and $ 362.9 million, at a weighted average cost per share of $ 53.93 and $ 53.18 , respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (continued)

On January 26, 2023, the Company entered into a $ 150 million accelerated share repurchase ("2023 ASR") and received 2.1 million shares of the Company common stock at inception of the 2023 ASR, which represented approximately 80 % of the expected total shares under the 2023 ASR.

The remaining repurchase transactions are expected to be completed in the second quarter of 2023.

The settlement of the ASR agreement was completed in two separate transactions on April 26, 2023 and May 4, 2023, where the Company received an additional 0.30 million and 0.31 million shares respectively, determined using the volume-weighted average price of the Company's common stock during the term of the 2023 ASR.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “Act”) was signed into law.

The Act implements a new excise tax of 1% on the net share repurchases made by the Company effective for share repurchases performed January 1, 2023, or after.

The company accrued $ 1.2 million regarding the excise tax in Q-1 related to the ASR mentioned above.

The Company accrued $ 1.2 million regarding the excise tax the first half of 2023 related to the ASR mentioned above.

On April 26, 2022, the Board of Directors authorized the Company to repurchase up to $ 225 million of the Company’s common stock.

On July 18, 2023, the Board of Directors authorized a new $ 225 million share repurchase program, replacing the existing $ 225 million program authorized in April 2022, and of which $ 75 million remained authorized at the time of its replacement .

The program authorized in July 2023 allows the Company to repurchase its shares opportunistically from time to time.

The Company may utilize various methods to effect any repurchases, including open market transactions, privately negotiated transactions, transactions structured through investment banking institutions, including accelerated share repurchases, or a combination of the foregoing, some of which may be effected through Rule 10b5-1 plans.

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.

On January 12, 2022, the Company entered into a $ 125 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.

2 unchanged sentences

The following table provides a summary of the Company's effective tax rate:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Reported tax rate ( 9.4 ) % 13.2 % 15.5 % 14.5 %

The Company’s effective income tax rates for the three months ended March 31, 2023 and 2022 w ere 18.6 % and 16.3 %, respectively.

For the three months ended March 31, 2023, the primary driver of the higher tax rate relates to a reduction of excess tax benefits from stock compensation.

The Company’s effective income tax rates for the three months ended June 30, 2023 and 2022 w ere ( 9.4 )% and 13.2 %, respectively.

For the three months ended June 30, 2023, the primary drivers of the lower tax rate relate to a reduction to book income and a $ 1.1 million benefit associated with the Federal R&D credit.

The Company’s effective income tax rates for the six months ended June 30, 2023 and 2022 were 15.5 % and 14.5 %, respectively.

For the six months ended June 30, 2023 , the primary drivers of the tax rate relate to a reduction to book income and a $ 1.1 million benefit associated with the Federal R&D credit.

The lower rate from the six months ended June 30, 2022 was primarily due to a $ 5.7 million benefit related to excess tax benefits from stock compensation.

Changes to income tax laws and regulations, in any of the tax jurisdictions in which the Company operates, could impact the effective tax rate.

5 unchanged sentences

jurisdictions could have an adverse effect on the Company’s effective tax rate.

As of March 31, 2023, 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.

As of June 30, 2023, 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.

5 unchanged sentences

Basic and diluted net income per share was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands, except per share amounts 2023 2022 2023 2022

10 unchanged sentences

Diluted net income per common share $ 0.05 $ 0.54 $ 0.35 $ 0.93

Common stock of approximately 0.3 million an d 0.2 million shares at March 31, 2023, and 2022, 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.

Common stock of approximately 0.6 million an d 0.2 million shares at June 30, 2023, and 2022, 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.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income for the three months ended March 31, 2023 and 2022 was as follows:

Three Months Ended March 31,

Comprehensive income for the six months ended June 30, 2023 and 2022 was as follows:

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands 2023 2022 2023 2022

4 unchanged sentences

Comprehensive income, net $ 1,947 $ 52,598 $ 22,975 $ 109,630

Changes in accumulated other comprehensive income by component between December 31, 2022 and March 31, 2023 are presented in the table below, net of tax:

Changes in accumulated other comprehensive income by component between December 31, 2022 and June 30, 2023 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

4 unchanged sentences

Net current-period other comprehensive gain (loss) ( 9,978 ) 334 4,209 ( 5,435 )

Balance at March 31, 2023

Balance at June 30, 2023

$ 12,839 $ 9,656 $ ( 17,665 ) $ 4,830

For the three months ended March 31, 2023, the Company reclassified a gain of $ 4.3 million and a loss of $ 2.7 million from accumulated other comprehensive income to other income, net and interest income, respectively.

For the six months ended June 30, 2023, the Company reclassified a gain of $ 9.4 million and a loss of $ 9.0 million from accumulated other comprehensive income to other income, net and interest income, respectively.

INTEGRA LIFESCIENCES HOLDINGS CORPORATION

7 unchanged sentences

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.

Net sales and profit by each reportable segment for the three months ended March 31, 2023 and 2022 are as follows:

Three Months Ended March 31,

Net sales and profit by each reportable segment for the three and six months ended June 30, 2023 and 2022 are as follows:

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands 2023 2022 2023 2022

16 unchanged sentences

Total revenue by major geographic area consisted of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Dollars in thousands 2023 2022 2023 2022

16 unchanged sentences

Contingent Consideration

The Company determined the fair value of contingent consideration during the three month period ended March 31, 2023 and March 31, 2022 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period.

A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the three months ended March 31, 2023 and March 31, 2022 is as follows (in thousands):

Three Months Ended March 31, 2023 Contingent Consideration Liability Related to Acquisition of:

The Company determined the fair value of contingent consideration during the six month period ended June 30, 2023 and June 30, 2022 to reflect the change in estimate, additions, payments, transfers and the time value of money during the period.

A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the six months ended June 30, 2023 and June 30, 2022 is as follows (in thousands):

Six Months Ended June 30, 2023 Contingent Consideration Liability Related to Acquisition of:

Arkis Location in Financial Statements Derma Sciences ACell Surgical Innovations Associates, Inc.

5 unchanged sentences

Change in fair value of contingent consideration liabilities 1,544 1,537 Research and development — ( 2,200 ) 200 5,000 Selling, general and administrative

Balance as of March 31, 2023 4,388 11,806 230 1,500 12,500 48,707

Three Months Ended March 31, 2022 Contingent Consideration Liability Related to Acquisition of:

Balance as of June 30, 2023 4,389 11,587 230 1,500 12,700 50,107

Six Months Ended June 30, 2022 Contingent Consideration Liability Related to Acquisition of:

Arkis Location in Financial Statements Derma Sciences ACell Inc.

5 unchanged sentences

Change in fair value of contingent consideration liabilities ( 155 ) ( 1,978 ) Research and development — ( 4,885 ) 1,219 Selling, general and administrative

Balance as of March 31, 2022

Balance as of June 30, 2022

$ 3,536 $ 9,430 $ 230 $ — $ 18,134

6 unchanged sentences

The Company estimated the fair value of the contingent consideration to be $ 13.1 million at the acquisition date.

The estimated fair value as of March 31, 2023 and March 31, 2022 was $ 16.2 million and $ 14.0 million, respectively.

The Company recorded $ 11.8 million and $ 10.3 million in other liabilities at March 31, 2023 and March 31, 2022, respectively, and $ 4.4 million and $ 3.8 million in accrued expenses and other current liabilities at March 31, 2023 and March 31, 2022, respectively, in the consolidated balance sheet of the Company.

The estimated fair value as of June 30, 2023 and June 30, 2022 was $ 16.0 million and $ 13.0 million, respectively.

The Company recorded $ 11.6 million and $ 9.4 million in other liabilities at June 30, 2023 and June 30, 2022, respectively, and $ 4.4 million and $ 3.5 million in accrued expenses and other current liabilities at June 30, 2023 and June 30, 2022, respectively, in the consolidated balance sheet of the Company.

Derma Sciences

5 unchanged sentences

The potential maximum undiscounted payment amounts to $ 3.0 million.

The estimated fair value as of March 31, 2023 and March 31, 2022 was $ 0.2 million.

The estimated fair value as of June 30, 2023 and June 30, 2022 was $ 0.2 million.

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 2023 and 2025.

1 unchanged sentence

The Company estimated the fair value of the contingent consideration to be $ 23.9 million at the acquisition date.

The estimated fair value as of March 31, 2023 was $ 1.5 million .

The Company recorded $ 1.5 million and $ 17.2 million in other liabilities at March 31, 2023 and March 31, 2022, respectively, and $ 4.9 million in accrued expenses and other current liabilities at March 31, 2022 in the consolidated balance sheets of the Company.

The estimated fair value as of June 30, 2023 was $ 1.5 million .

The Company recorded $ 1.5 million and $ 18.1 million in other liabilities at June 30, 2023 and June 30, 2022 , respectively, and $ 0.0 million in accrued expenses and other current liabilities at June 30, 2022 in the consolidated balance sheets of the Company.

The change in the fair value of the contingent obligation was primarily as a result of changes in the timing and amount of revenue estimates.

1 unchanged sentence

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.

What changed 10-Q

Item 1. Financial Statements