What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-07-31 · 140 added, 121 removed, 345 unchanged (43% of the section changed)

24 unchanged sentences

the Company’s ability to remediate quality systems violations;

difficulties or delays in obtaining and maintaining required regulatory approvals related to the transition of manufacturing SurgiMend and PriMatrix to the Braintree facility and obtain pre-market approval of SurgiMend PRS in implant-based breast reconstruction;

difficulties or delays in obtaining and maintaining required regulatory approvals related to the transition of manufacturing SurgiMend and PriMatrix to the Braintree facility and obtain PMA of SurgiMend PRS in implant-based breast reconstruction (“IBBR”);

the possibility that costs or difficulties related to building and the operationalization of the Braintree facility or the transition of manufacturing activities from the Company’s Boston facility to the Braintree facility will be greater than expected;

6 unchanged sentences

the geographic distribution of where the Company generates its taxable income;

and foreign government laws and regulations, and changes in existing laws, regulations and enforcement guidance, which affect areas of our operations including, but not limited to, those affecting the health care industry, including the EU Medical Devices Regulation (“EU MDR”);

the scope, duration and effect of additional U.S.

5 unchanged sentences

disruptions at the FDA, including due to a reduction in the FDA’s and CMS’ workforce and/or inadequate funding for the FDA or CMS;

the impact of the U.S.

government shutdown which began in October 2025 on our business operations;

and the potential impact of our compliance with governmental regulations and accounting guidance.

5 unchanged sentences

We have expanded our base regenerative technology business to include ENT, surgical instruments, neurosurgical products and advanced wound care through global acquisitions and product development to meet the evolving needs of our customers and enhance patient care.

Integra products are sold in more than 120 countries through a direct sales force as well as distributors and wholesalers.

Our products are sold in more than 120 countries through a direct sales force as well as distributors and wholesalers.

We manufacture and sell medical technologies and products in two reportable business segments:

15 unchanged sentences

Innovating for Outcomes .

An important part of Integra’s growth strategy is introducing new products to strengthen and expand our portfolio through clinical evidence to support regulatory approval and strong reimbursement of our product portfolio around the world, including new indications for existing technologies.

In 2021, we filed a PMA application for a specific indication for SurgiMend in the use of post-mastectomy implant-based breast reconstruction (“IBBR”).

We currently anticipate PMA approval following the completion of the construction, FDA approval and operationalization of our Braintree facility, which is expected in 2026.

An important part of our growth strategy is introducing new products to strengthen and expand our portfolio through clinical evidence to support regulatory approval and strong reimbursement of our product portfolio around the world, including new indications for existing technologies.

In 2021, we filed a PMA application for a specific indication for SurgiMend in the use of post-mastectomy IBBR.

We currently anticipate PMA approval following the completion of the construction, successful pre-approval inspection and operationalization of our Braintree facility, which is expected in 2026.

We are also pursuing a PMA for DuraSorb for indications in the use of IBBR.

We completed enrollment for the DuraSorb U.S.

We completed enrollment and subject treatment for the DuraSorb U.S.

investigational device exemption (“IDE”) clinical trial for two-stage breast reconstruction in 2023 and we continue to advance the PMA application.

6 unchanged sentences

Over the years, we have significantly expanded our global footprint by investing in our commercial and manufacturing operations, as well as introducing new products.

In the last two years, we have expanded our presence in key markets such as Southeast Asia, India, South Korea and Brazil.

As part of our In-China-For-China strategy, we continue to build out our assembly capabilities in our facility in Suzhou, China.

Several new products were introduced in select international markets in 2023 and 2024, including MicroMatrix and Certas Plus® Programmable Valve, which were launched in Europe, and CUSA Clarity laparoscopic tip, which was launched in Australia, New Zealand, Japan, Canada, South Africa and Israel.

In addition, DuraGen® Secure received approval in Japan, while DuraGen Plus, an absorbable and sutureless collagen onlay indicated as a dura substitute for the repair of dura mater, and Certas Plus were approved in China.

In 2023 and 2024, DuraGen Plus, an absorbable and sutureless collagen onlay indicated as a dura substitute for the repair of dura mater, and Certas Plus were approved in China.

Several new products were also introduced in select international markets in 2023 and 2024, including MicroMatrix and Certas Plus® Programmable Valve (MDR certification), which were launched in Europe, and CUSA Clarity laparoscopic tip, which was launched in Australia, New Zealand, Japan, Canada, Brazil, South Africa and Israel.

In 2025, Cerelink received approval in Brazil, Philippines, UAE, Albania and India.

Broadening Impact on Care Pathways .

3 unchanged sentences

(“Acclarent”).

Acclarent is an innovator and market leader in ENT procedures and the acquisition of Acclarent has positioned Integra as one of the leading providers of ENT products and technologies.

Furthermore, we believe that, owing to the ENT business being an anatomical adjacency to neurosurgery, the acquisition will allow Integra to deliver future innovation both within the ENT business and across our other CSS technology platforms.

Acclarent is an innovator and market leader in ENT procedures and the acquisition of Acclarent has positioned us as one of the leading providers of ENT products and technologies.

Furthermore, we believe that, owing to the ENT business being an anatomical adjacency to neurosurgery, Acclarent will allow us to deliver future innovation both within the ENT business and across our other CSS technology platforms.

Driving Operations and Customer Excellence.

3 unchanged sentences

We have progressed in the transfer from our Boston facility to our Braintree facility, as well as expanding capacity at our manufacturing facility in Plainsboro, New Jersey.

We are implementing the CMP, a systematic and holistic approach to improving our quality management system across our manufacturing and supply network.

In an effort to enhance our manufacturing flexibility and resilience, we entered into a new third-party manufacturing agreement, which allowed us to relaunch PriMatrix and Durepair ahead of previously disclosed timelines.

Both products are now currently available to our customers.

Additionally, we are implementing the CMP, a systematic and holistic approach to improving our quality management system across our manufacturing and supply network.

The primary objectives of the CMP are to remediate quality system gaps, harmonize the quality management system and enhance the quality culture across the Company.

2 unchanged sentences

These efforts have been recognized through our inclusion in several best workplace lists globally.

We continue to advance our broader organizational sustainability initiatives, and published our third annual environmental, social and governance (“ESG”) report in 2024.

We continue to advance our broader organizational sustainability initiatives, and published our annual environmental, social and governance (“ESG”) report in the third quarter of 2025.

For more information on our ESG strategy, goals, performance, and achievements, please visit “Our Company—ESG Report” at https://www.integralife.com/esg-report.

10 unchanged sentences

Through the acquisition of Arkis Biosciences, Inc.

(“Arkis”) we added a platform technology, CerebroFlo® external ventricular drainage (“EVD”), a catheter with Endexo® technology, a permanent additive which has shown to be effective in reducing platelet adhesion in-vitro, reducing thrombus accumulation in-vitro and in vivo, and reducing the clinical incidence of thrombus formation.

(“Arkis”) we added a platform technology, CerebroFlo® external ventricular drainage (“EVD”), a catheter with Endexo® technology.

The Endexo polymer in polyurethane is a permanent additive which has shown to be effective in reducing platelet adhesion in-vitro, reducing thrombus accumulation in-vitro and in vivo, and reducing the clinical incidence of thrombus formation.

The CerebroFlo EVD catheter has demonstrated an average of 99% less thrombus accumulation onto its surface, in vitro, compared to a market leading EVD catheter.

Our work to combine our Bactiseal antimicrobial technology with the Endexo anti-occlusive technology continues to progress for both a silicone-based hydrocephalus and EVD product.

We also continue to advance our innovation from the Rebound Therapeutics Corporation (“Rebound Therapeutics”), which was acquired in 2019.

We also continue to advance our innovation from 2019 acquisition of Rebound Therapeutics Corporation (“Rebound Therapeutics”).

Rebound Therapeutics specializes in a single-use medical device, known as the Aurora® Surgiscope, which is the only tubular retractor system designed for cranial surgery with an integrated access channel, camera and lighting.

3 unchanged sentences

Acclarent also pioneered eustachian tube balloon dilation and currently markets the AERA® Eustachian Tube Dilation System, which received 510(k) clearance for expanded pediatric indications in 2023.

In addition, Acclarent sells the TruDi® Navigation System, which includes a portfolio of navigated surgical instrumentation.

In July 2025, we announced the inaugural enrollment of the first patient in the Acclarent AERA Pediatric Registry, a prospective, multi-center observational registry evaluating the real-world use of the AERA Eustachian Tube Balloon Dilation System in children, which marks the focused effort to measure the ongoing, real-world clinical performance of AERA in pediatric patients with obstructive Eustachian tube dysfunction.

In addition, Acclarent sells the TruDi® Navigation System, which

includes a portfolio of navigated surgical instrumentation.

This marks the focused effort to measure the ongoing, clinical performance of AERA in pediatric patients with obstructive Eustachian tube dysfunction.

The registry is designed to capture both safety and efficacy outcomes for up to 300 pediatric patients who undergo Eustachian tube balloon dilation using AERA.

In 2024, we acquired the product rights for Durepair Dural Regeneration Matrix, a suturable dural graft which complements our portfolio of dural grafts and sealants, and subsequently launched the product for commercial sale in the U.S.

in October 2025.

In September 2025 the Mayfield® Ghost Base Unit Post launched in the U.S., which is designed to help provide clear visualization of anatomical structure and to support surgical accuracy and patient positioning.

Regenerative Technologies .

1 unchanged sentence

Our regenerative technology development program applies our expertise in bioengineering to a range of biomaterials including natural materials such as purified collagen, intact human or animal tissues, honey as well as resorbable synthetic polymers with our DuraSorb and DuraSeal product lines.

These unique product designs

are used for neurosurgical and reconstructive surgical applications, as well as dermal regeneration, including the management of chronic and acute wounds, tendon and nerve repair.

These unique product designs are used for neurosurgical and reconstructive surgical applications, as well as dermal regeneration, including the management of chronic and acute wounds, tendon and nerve repair.

Our regenerative technology platform includes our legacy Integra® Dermal Regeneration Template (“IDRT”) products and complementary technologies that we have acquired.

Our collagen manufacturing capability, combined with our history of innovation, provides us with strong platform technologies for multiple indications.

In 2021, we filed a PMA application for a specific indication for SurgiMend for use in post-mastectomy IBBR and in 2024 received approvable pending GMP status from FDA, which approved and closed out the clinical portion of this PMA application.

In 2021, we filed a PMA application for a specific indication for SurgiMend for use in post-mastectomy IBBR and in 2024 received approvable pending Good Manufacturing Practice (“GMP”) status from the FDA, which approved and closed out the clinical portion of this PMA application.

We anticipate PMA approval following successful closeout of the GMP deficiencies, pre-approval inspection, and operationalization of the Braintree facility, which is expected in 2026.

5 unchanged sentences

In 2024, MicroMatrix Flex, used in the management of wounds with hard-to-reach geometries, such as deep wounds that present with tunneling or undermining, became commercially available in the U.S.

In 2024, we also acquired the product rights for Durepair Dural Regeneration Matrix, which is expected to strengthen our dural repair product portfolio and will be manufactured at the Braintree facility.

European Union Medical Device Regulation Updates

1 unchanged sentence

In recent years, we received EU MDR certification in our CSS segment for Hakim Programmable Valves, Certas Plus with and without Bactiseal catheters, Surgical Patties and Strips, DuraSeal Dural, and DuraGen Suturable, as well as IDRT, BioPatch, MicroMatrix, and Cytal in our TT segment.

Although we do not currently anticipate any disruption to our commercial activities in Europe related to EU MDR, we cannot provide assurance of our ability to timely comply with all applicable requirements of EU MDR and our failure to meet the applicable EU MDR requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

Although we do not currently anticipate any significant disruption to our commercial activities in Europe related to EU MDR, we cannot provide assurance of our ability to timely comply with all applicable requirements of EU MDR and our failure to meet the applicable EU MDR requirements could adversely impact our business in the EU and other regions that tie their product registrations to the EU requirements.

On December 19, 2024, the Company received a warning letter from the FDA (the “2024 Warning Letter”).

7 unchanged sentences

The 2024 Warning Letter states that premarket approval applications for Class III devices to which the quality system regulation violations are reasonably related will not be approved until the violations have been corrected.

The Company has submitted several responses to the 2024 Form 483s issued to each of the three manufacturing facilities to the FDA and has submitted several updates to the 2024 Warning Letter in the first half of 2025.

On March 7, 2019, TEI Biosciences, Inc.

2 unchanged sentences

The Boston facility manufactured extracellular bovine matrix products in our TT segment that were sold both in wound reconstruction and care and surgical reconstruction franchises, and in private label channels.

The letter resulted from an inspection held at that facility in October and November 2018 and did not identify any new observations that were not already provided in the Form 483 that followed the inspection.

The 2019 Warning Letter resulted from an inspection held at the Boston facility in October and November 2018 and did not identify any new observations that were not already provided in the Form 483 that followed the inspection.

We submitted our initial response to the 2019 Warning Letter on March 28, 2019 and provide regular progress reports to the FDA as to our corrective actions.

On October 28, 2021, the FDA initiated an inspection of the facility and at the conclusion of the inspection, issued an FDA Form 483 on November 12, 2021 (the “2021 Form 483”).

On October 28, 2021, the FDA initiated an inspection of the Boston facility and at the conclusion of the inspection, issued an FDA Form 483 on November 12, 2021 (the “2021 Form 483”).

On March 1, 2023, the FDA commenced an inspection of the Boston facility and issued an FDA Form 483 at the conclusion of this inspection (the “2023 Form 483”).

In May 2023, after consultation with the FDA, the Company initiated a voluntary global recall of all products manufactured at the Boston facility, including PriMatrix, SurgiMend, Revize™, and TissueMend™, distributed between March 1, 2018 and May 22, 2023.

On July 19, 2023, TEI received a Warning Letter, dated July 17, 2023, from the FDA related to quality system issues at the Boston facility (the “2023 Warning Letter”).

3 unchanged sentences

Although the warning letters do not restrict the Company’s ability to seek FDA 510(k) clearance of products, PMAs for Class III devices to which the quality system regulation violations are reasonably related will not be approved until the violations have been addressed.

Following its assessment of the results of a third-party audit of the Boston facility, the Company announced in the second quarter of 2024 that it no longer plans to restart the manufacture of PriMatrix and SurgiMend at its Boston facility and will, instead, restart manufacturing of these products at its new tissue manufacturing facility in Braintree, Massachusetts.

In addition, the Company also plans to manufacture Durepair Dural Regeneration Matrix at the Braintree facility.

Following its assessment of the results of a third-party audit of the Boston facility, the Company announced in the second quarter of 2024 that it no longer planned to restart the manufacture of PriMatrix and SurgiMend at its Boston facility.

The restart of the manufacturing of SurgiMend will occur at the Company's new tissue manufacturing facility in Braintree, Massachusetts (the “Braintree transition”).

The Company anticipates the Braintree facility to be operational in 2026.

In addition, the Company entered into a new third-party manufacturing agreement, which facilitated the relaunch of PriMatrix, as well as Durepair Dural Regeneration Matrix, ahead of previously disclosed timelines.

We cannot give any assurances that the FDA will be satisfied with our response to the issues identified by the FDA in any of the foregoing Form 483s or warning letters or as to the expected date of the resolution of such issues.

4 unchanged sentences

These efforts are expected to continue and while we expect a positive impact from ongoing restructuring, integration, and manufacturing transfer and expansion activities, such results remain uncertain.

As a result of both audits by regulatory agencies as well as our own reviews of the Company’s quality management system, we are in the process of implementing the CMP, a systematic and holistic approach to improving our quality management system across our manufacturing and supply network.

As a result of audits and inspections by regulatory agencies as well as our own review of the Company’s quality management system, we are in the process of implementing the enterprise-wide CMP, a systematic and holistic approach to improving our quality management system across our manufacturing and supply network.

The primary objectives of the CMP are to remediate quality system gaps, harmonize the quality management system and enhance the quality culture across the Company.

2 unchanged sentences

Executive Summary

Net loss for the three and six months ended June 30, 2025 was $(484.1) million and $(509.4) million, or $(6.31) and (6.65) per diluted share, as compared to net loss of $(12.4) million and $(15.7) million, or $(0.16) and $(0.20) per diluted share for the three and six months ended June 30, 2024.

The decrease in net income for the three and six months ended June 30, 2025, was primarily driven by goodwill impairment charges of $511.4 million.

Net loss for the three and nine months ended September 30, 2025 was $(5.4) million and $(514.8) million, or $(0.07) and (6.72) per diluted share, as compared to net loss of $(10.7) million and $(26.4) million, or $(0.14) and $(0.34) per diluted share for the three and nine months ended September 30, 2024.

The net loss decreased for the three months ended September 30, 2025 and increased for the nine months ended September 30, 2025, respectively, as compared to prior periods, primarily driven by quality and operational issues across both periods and the impact of the goodwill impairment of $511.4 million recorded in the second quarter of the current year.

Special Charges

Income before taxes includes the following special charges :

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

Three Months Ended September 30, Nine Months Ended September 30,

Dollars in thousands 2025 2024 2025 2024

Acquisition, divestiture and integration-related charges (1)

$ (6,588) $ 7,810 $ 4,599 $ 31,361

Structural optimization charges 11,052 5,739 27,659 15,112

3 unchanged sentences

Total $ 28,975 $ 34,060 $ 106,834 $ 115,258

(1) This includes adjustments for contingent consideration liabilities.

Refer to Note 16.

Commitments and Contingencies for additional information.

(2) This primarily includes idle capacity charges, site transfer costs, quality remediation costs, right of use and fixed asset impairments.

The items reported above are reflected in the condensed consolidated statements of operations as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

Dollars in thousands 2025 2024 2025 2024

13 unchanged sentences

The Company’s revenues and gross margin on product revenues were as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

Dollars in thousands 2025 2024 2025 2024

6 unchanged sentences

Gross margin as a percentage of total revenues 51.5 % 52.6 % 50.9 % 54.2 %

Three Months Ended June 30, 2025 as Compared to Three Months Ended June 30, 2024

Three Months Ended September 30, 2025 as Compared to Three Months Ended September 30, 2024

Revenues and Gross Margin

For the three months ended June 30, 2025, total revenues decreased by $2.6 million to $415.6 million from $418.2 million for the same period in 2024.

This represents a low single digit decline compared to the same period in the prior year, primarily driven by impacts from quality and operational issues.

For the three months ended September 30, 2025, total revenues increased by $21.2 million to $402.1 million from $380.8 million for the same period in 2024, representing mid-single digit growth compared to the same period in the prior year.

In the CSS segment, revenues were $292.6 million which represents an increase of $21.8 million, or 8% as compared to the prior-year period.

Excluding the impact of foreign currency of $3.1 million, the decrease in revenue is primarily driven by the impact of quality and operational issues, offset by strong performance in CSF Management, specifically Certas Plus and Bactiseal.

Excluding the impact of foreign currency of $2.0 million, the increase in revenue is primarily driven by Cerebrospinal Fluid (“CSF”) Management and Dural Access and Repair shipping holds experienced in the third quarter of the prior year.

In the TT segment, revenues were $109.5 million which represents a decrease of $0.6 million, or 1% as compared to the prior-year period.

This is primarily attributable to the impact of quality and operational issues and decreases in private label revenues.

This is partially offset by growth in Integra Skin.

Gross margin was $209.3 million for the three months ended June 30, 2025, a decrease of $16.6 million from $225.9 million for the same period in 2024.

Gross margin as a percentage of revenues was 50.4% for the three months ended June 30, 2025 and 54.0% for the same period in 2024.

For the three months ended June 30, 2025, gross margins were impacted by quality and operational issues, which affected both revenue and expenses, as well as higher manufacturing costs.

For the three months ended June 30, 2024, gross margins were impacted by Boston impairment charges and Acclarent inventory step-up.

This is primarily attributable to the impact of quality and operational issues associated with Medihoney and decreases in private label revenues.

This is partially offset by growth in Integra Skin, which recovered from prior year supply issues, and Durasorb.

Gross margin was $207.0 million for the three months ended September 30, 2025, an increase of $6.8 million from $200.2 million for the same period in 2024.

Gross margin as a percentage of revenues was 51.5% for the three months ended September 30, 2025 and 52.6% for the same period in 2024.

For the three months ended September 30, 2025, and 2024 gross margins were impacted by quality and operational issues, which affected both revenue and expenses, as well as higher manufacturing costs.

Operating Ex penses

The following is a summary of operating expenses as a percent of total revenues:

Three Months Ended June 30,

Three Months Ended September 30,

Research and development 5.6 % 7.2 %

1 unchanged sentence

Intangible asset amortization 0.9 % 1.0 %

Goodwill Impairment 123.0 % — %

Total operating expenses 48.5 % 54.7 %

Total operating expenses, which consist of research and development, selling, general and administrative, and amortization expenses, increased by $493.1 million, or 215.4%, to $722.0 million in the three months ended June 30, 2025, compared to $228.9 million in the same period in 2024, primarily driven by goodwill impairment booked in the current year.

Total operating expenses, which consist of research and development, selling, general and administrative, and amortization expenses, decreased by $13.2 million, or 6.3%, to $195.2 million in the three months ended September 30, 2025, compared to $208.4 million in the same period in 2024.

Research and Development

Research and development expenses for the three months ended June 30, 2025 decreased by $2.8 million as compared to the same period in the prior year, primarily attributable to lower spend on EU MDR and other research and development projects.

Research and development expenses for the three months ended September 30, 2025 decreased by $5.0 million as compared to the same period in the prior year, primarily attributable to cost management initiatives that resulted in lower spend on research and development projects.

Selling, General and Administrative

Selling, general and administrative costs for the three months ended June 30, 2025 decreased by $15.6 million as compared to the same period in the prior year, primarily driven by Acclarent acquisition costs incurred in prior year.

Selling, general and administrative costs for the three months ended September 30, 2025 decreased by $8.1 million as compared to the same period in the prior year, primarily driven by cost management initiatives in the current year and Acclarent acquisition costs incurred in prior year.

Intangible Asset Amortization

Amortization expense (which does not include amounts reported in cost of product revenues for technology-based intangible assets) for the three months ended June 30, 2025 was $3.8 million compared to $3.7 million for the same period in the prior year.

Amortization expense (which does not include amounts reported in cost of product revenues for technology-based intangible assets) for the three months ended September 30, 2025 was $3.7 million compared to $3.8 million for the same period in the prior year.

Non-Operating Income and Expenses

The following is a summary of non-operating income and expense:

Three Months Ended June 30,

Three Months Ended September 30,

Dollars in thousands 2025 2024

4 unchanged sentences

Interest Income

Interest income for the three months ended June 30, 2025 decreased by $0.3 million as compared to the same period in the prior year .

Interest income for the three months ended September 30, 2025 decreased by $0.1 million as compared to the same period in the prior year .

Interest Expense

Interest expense for the three months ended June 30, 2025 increased by $2.4 million as compared to the same period in the prior year primarily due to higher borrowing rates, which includes the impacts of interest rate swaps that have expired and are no longer hedging interest expense in 2025.

Interest expense for the three months ended September 30, 2025 increased by $3.4 million as compared to the same period in the prior year primarily due to higher interest rates on the borrowings under the revolving credit facility component of the Senior Credit Facility as compared to the interest rates on the 2025 Notes.

Other Expense, net

Other expense, net for the three months ended June 30, 2025 increased by $3.4 million compared to the same period in the prior year, primarily driven by foreign exchange impact.

Three Months Ended June 30,

Other expense, net for the three months ended September 30, 2025 increased by $3.0 million compared to the same period in the prior year, primarily driven by foreign exchange impact.

Three Months Ended September 30,

Dollars in thousands 2025 2024

2 unchanged sentences

Effective tax rate 20.8 % 47.5 %

The Company’s effective income tax rates for the three months ended June 30, 2025 and 2024 were 8.8% and 18.3%, respectively.

For the three months ended June 30, 2025, the Company’s effective tax rate was primarily driven by the goodwill impairment charge, as a portion of the charge is non-deductible for tax, as well as the inclusion of Global Intangible Low Taxed Income (“GILTI”) and additional taxes to meet the global minimum tax in certain foreign jurisdictions;

offset by federal, state, and international tax benefits generated from operating losses in certain jurisdictions.

For the three months ended June 30, 2024, the higher tax rate is primarily driven by lower book income.

The Company’s effective income tax rates for the three months ended September 30, 2025 and 2024 were 20.8% and 47.5%, respectively.

For the three months ended September 30, 2025, the Company’s effective tax rate was primarily driven by the tax expense generated in certain profitable foreign jurisdictions and the inclusion of Global Intangible Low Taxed Income (“GILTI”);

offset by federal, state, and international tax benefits generated from operating losses and favorable prior year tax return positions.

For the three months ended September 30, 2024, the tax rate is primarily due to the limitation of foreign tax credits in the U.S.

and the limitation of federal tax credits in Switzerland, caused by lower book income.

The effective tax rate may vary from period to period depending on, among other factors, the geographic and business mix of taxable earnings and losses, tax planning and settlements with various taxing authorities.

6 unchanged sentences

as well as changes to the capitalization of research and development expenses, accelerated depreciation, and limitations on interest expense deductions.

Further, legislation in foreign jurisdictions may be enacted, in continued response to the base erosion and profit-sharing project begun by the Organization for Economic Cooperation and Development (“OECD”).

Further legislation in foreign jurisdictions may be enacted, in continued response to the base erosion and profit-sharing project led by the Organization for Economic Cooperation and Development (“OECD”).

The OECD released model rules related to a new 15% global minimum tax regime (“Pillar 2”).

1 unchanged sentence

The rules are complex and provide for delays for implementing the tax during the early transition years, if certain conditions are met.

At this time, the Company is projecting a $2.4 million expense related to Pillar 2 tax liability for the 2025 year.

At this time, the Company is projecting an immaterial Pillar 2 tax liability for the 2025 year.

The Company will continue to analyze the new Pillar 2 laws and any related guidance to determine potential impacts.

7 unchanged sentences

The Company’s tax reserves are presented in the balance sheet within other liabilities, except for amounts relating to items that we expect to pay in the coming year, which would be classified as current income taxes payable.

Six Months Ended June 30, 2025 as Compared to Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 as Compared to Nine Months Ended September 30, 2024

Revenues and Gross Margin

For the six months ended June 30, 2025, total revenues increased by $11.2 million to $798.3 million from $787.0 million for the same period in 2024.

This represents low single digit growth compared to the same period in the prior year, primarily driven by sales related to Acclarent, offset by impacts from quality and operational issues.

In the CSS segment, revenues were $584.6 million, an increase of $26.4 million, or 5% from the prior period.

Excluding the impact of foreign currency of $1.1 million, the increase is primarily due to the timing of the Acclarent acquisition completed in the second quarter in the prior year, offset by the impact of quality and operational issues.

In the TT segment, revenues were $213.6 million, a decrease of $15.2 million, or 7% from the prior-year period, primarily attributable to the impact of quality and operational issues and decreases in private label revenues.

This is partially offset by growth in Micromatrix, Cytal, and Integra Skin.

Gross margin was $403.8 million for the six months ended June 30, 2025, a decrease of $29.0 million from $432.8 million for the same period in 2024.

Gross margin as a percentage of total revenue decreased to 50.6% for the six months ended June 30, 2025 from 55.0% in the same period in 2024.

For the six months ended June 30, 2025, gross margins were impacted by quality and operational issues, which affected both revenue and expenses, as well as higher manufacturing costs.

For the six months ended June 30, 2024 gross margins were impacted by Boston impairment charges and Acclarent inventory step-up.

For the nine months ended September 30, 2025, total revenues increased by $32.4 million to $1,200.3 million from $1,167.9 million for the same period in 2024.

This represents low single digit growth compared to the same period in the prior year, primarily driven by sales related to Acclarent, as well as impacts from quality and operational issues in both periods.

In the CSS segment, revenues were $877.2 million, an increase of $48.2 million, or 6% from the prior year period.

Excluding the impact of foreign currency of $3.1 million, the increase is primarily due to the timing of the Acclarent acquisition completed in the second quarter in the prior year and CSF Management and Dural Access and Repair shipping holds experienced in the prior year.

In the TT segment, revenues were $323.1 million, a decrease of $15.8 million, or 5% from the prior year period, primarily attributable to the impact of quality and operational issues associated with Medihoney and decreases in private label revenues.

This is partially offset by growth in Integra Skin, which recovered from prior year supply issues, and Durasorb.

Gross margin was $610.8 million for the nine months ended September 30, 2025, a decrease of $22.2 million from $633.0 million for the same period in 2024.

Gross margin as a percentage of total revenue decreased to 50.9% for the nine months ended September 30, 2025 from 54.2% in the same period in 2024.

For the nine months ended September 30, 2025, gross margins were impacted by quality and operational issues, which affected both revenue and expenses, as well as higher manufacturing costs.

For the nine months ended September 30, 2024 gross margins were impacted by impairment charges associated with the Boston recall, Acclarent inventory step up, and expenses associated with quality and operational issues.

Operating Expenses

The following is a summary of operating expenses as a percent of total revenues:

Six Months Ended June 30,

Nine Months Ended September 30,

Research and development 6.2 % 7.2 %

3 unchanged sentences

Total operating expenses 93.9 % 54.8 %

Total operating expenses, which consist of selling, general and administrative expenses, research and development expenses, and amortization expenses, increased by $500.1 million, or 115.8% to $931.9 million in the six months ended June 30, 2025, compared to $431.8 million in the same period in 2024, primarily driven by goodwill impairment booked in the current year.

Total operating expenses, which consist of selling, general and administrative expenses, research and development expenses, and amortization expenses, increased by $487.0 million, or 76.1% to $1,127.2 million in the nine months ended September 30, 2025, compared to $640.2 million in the same period in 2024, primarily driven by goodwill impairment recorded in the second quarter of 2025.

Research and Development

Research and development expenses for the six months ended June 30, 2025 decreased by $5.0 million as compared to the same period, primarily attributable to lower spend on EU MDR and other research and development projects.

Research and development expenses for the nine months ended September 30, 2025 decreased by $10.0 million as compared to the same period, primarily attributable to lower spend on EU MDR and cost management initiatives that resulted in lower spend on other research and development projects.

Selling, General and Administrative

Selling, general and administrative costs increased by $0.1 million as compared to the same period in the prior year.

Selling, general and administrative costs decreased by $8.0 million as compared to the same period in the prior year, primarily driven by Acclarent acquisition costs incurred in prior year, and cost management initiatives in the current year.

Intangible Asset Amortization

Amortization expense (excluding amounts reported in cost of product revenues for technology-based intangible assets) for the six months ended June 30, 2025 was $7.5 million compared to $13.8 million for the same period in the prior year.

Amortization expense (excluding amounts reported in cost of product revenues for technology-based intangible assets) for the nine months ended September 30, 2025 was $11.2 million compared to $17.6 million for the same period in the prior year.

The decrease is driven by the impairment of customer relationship intangible related to our Boston facility of $7.1 million, which was recorded in the first quarter of 2024.

2 unchanged sentences

The following is a summary of non-operating income and expenses:

Six Months Ended June 30,

Nine Months Ended September 30,

Dollars in thousands 2025 2024

4 unchanged sentences

Interest Income

Interest income for the six months ended June 30, 2025 increased by $1.0 million as compared to the same period in the prior year due to increased investments.

Interest income for the nine months ended September 30, 2025 increased by $1.0 million as compared to the same period in the prior year due to increased investments.

Interest Expense

Interes t expense for the six months ended June 30, 2025 increased by $7.6 million as compared to the same period in the prior year primarily due to higher borrowing rates, which includes the impacts of interest rate swaps that have expired and are no longer hedging interest expense in 2025.

Interes t expense for the nine months ended September 30, 2025 increased by $10.9 million as compared to the same period in the prior year primarily due to the impacts of interest rate swaps that have expired and are no longer hedging interest expense in 2025, as well as higher interest rates on the borrowings under the revolving credit facility component of the Senior Credit Facility as compared to the interest rates on the 2025 Notes.

Other (Expense) and Income, net

Other (expense) and income, net for the six months ended June 30, 2025, decreased by $2.9 million as compared to the same period in the prior year, primarily driven by foreign exchange impact.

Six Months Ended June 30,

Other (expense) and income, net for the nine months ended September 30, 2025, decreased by $5.9 million as compared to the same period in the prior year, primarily driven by foreign exchange impact.

Nine Months Ended September 30,

Dollars in thousands 2025 2024

2 unchanged sentences

Effective tax rate 9.3 % 35.3 %

The Company’s effective income tax rates for the six months ended June 30, 2025 and 2024 were 9.2% and 23.2%, respectively.

For the six months ended June 30, 2025, the Company’s effective tax rate was primarily driven by the goodwill impairment charge, as a portion of the charge is non-deductible for tax, as well as the inclusion of GILTI and additional taxes to meet the global minimum tax in certain foreign jurisdictions;

offset by federal, state, and international tax benefits generated from operating losses in certain foreign jurisdictions.

For the six months ended June 30, 2024, the higher tax rate is primarily driven by lower book income and a $1.7 million shortfall from stock-based compensation.

The Company’s effective income tax rates for the nine months ended September 30, 2025 and 2024 were 9.3% and 35.3%, respectively.

For the nine months ended September 30, 2025, the Company’s effective tax rate was primarily driven by the goodwill impairment charge, as a portion of the charge is non-deductible for tax, as well as the inclusion of GILTI and the global minimum tax in certain foreign jurisdictions;

offset by federal, state, and international tax benefits generated from operating losses and favorable prior year tax return positions.

For the nine months ended September 30, 2024, the tax rate is primarily due to the limitation of foreign tax credits in the U.S.

and the limitation of federal tax credits in Switzerland, caused by lower booked income and a $1.9 million shortfall from stock-based compensation.

GEOGRAPHIC PRODUCT REVENUES AND OPERATIONS

1 unchanged sentence

Total revenue by major geographic area consisted of the following:

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

Three Months Ended September 30, Nine Months Ended September 30,

Dollars in thousands 2025 2024 2025 2024

9 unchanged sentences

Local economic conditions, regulatory compliance or political considerations, the effectiveness of our sales representatives and distributors, local competition and changes in local medical practice all may combine to affect our sales into markets outside the U.S.

The decrease in domestic revenues for the three months ended June 30, 2025 was primarily the result of the impact of quality and operational issues.

The increase in international revenues for the three months ended June 30, 2025 was the result of strong performance in CSF Management.

The increase in domestic revenues for the six months ended June 30, 2025 was primarily related to Acclarent, offset by the impact of quality and operational issues.

The decrease in international revenues for the six months ended June 30, 2025 was also the result of the impact of quality and operational issues.

The increase in domestic and international revenues for the three months ended September 30, 2025 was primarily related to CSF Management and Dural Access and Repair shipping holds experienced in the third quarter of the prior year.

The increase in domestic and international revenues for the nine months ended September 30, 2025 was primarily related to the timing of Acclarent acquisition and CSF Management and Dural Access and Repair shipping holds experienced in the prior year.

LIQUIDITY AND CAPITAL RESOURCES

1 unchanged sentence

Working capital consists of total current assets less total current liabilities as presented in the consolidated balance sheets.

The Company’s working capital as of June 30, 2025 and December 31, 2024 was $213.0 million and $159.6 million, respectively.

The Company’s working capital as of September 30, 2025 and December 31, 2024 was $779.5 million and $159.6 million, respectively.

The increase in working capital is driven by the repayment of the 2025 Notes, which decreased current liabilities.

Cash and Marketable Securities

The Company had cash and cash equivalents totaling approximately $217.9 million and $246.4 million at June 30, 2025 and December 31, 2024, respectively, which are valued based on Level 1 measurements in the fair value hierarchy .

At June 30, 2025, our non-U.S.

The Company had cash and cash equivalents totaling approximately $232.2 million and $246.4 million at September 30, 2025 and December 31, 2024, respectively, which are valued based on Level 1 measurements in the fair value hierarchy .

At September 30, 2025, our non-U.S.

subsidiaries held approximately $192.8 million of cash and cash equivalents that are available for use outside the U.S.

1 unchanged sentence

Short-Term Investments

The Company had short term investments, primarily consisting of time deposits, which are valued based on Level 1 measurements in the fair value hierarchy, totaling approximately $35.7 million at June 30, 2025 compared to $27.2 million at December 31, 2024.

Six Months Ended June 30,

The Company had short-term investments, primarily consisting of time deposits, which are valued based on Level 1 measurements in the fair value hierarchy, totaling approximately $35.7 million at September 30, 2025 compared to $27.2 million at December 31, 2024.

Nine Months Ended September 30,

Dollars in thousands 2025 2024

4 unchanged sentences

Cash Flows Provided by or Used in Operating Activities

Operating cash flows for the six months ended June 30, 2025 decreased by $58.5 million compared to the same period in 2024.

Within operating cash flows, net income less non-cash adjustments decreased for the six months ended June 30, 2025 by approximately $38.2 million as compared to the same period in 2024 due to the impact of quality and operational issues on revenue and associated costs.

The changes in assets and liabilities for the six months ended June 30, 2025, net of business acquisitions, decreased cash flows by $42.7 million, mainly attributable to increases in inventory and prepaid expenses and other current assets.

The changes in assets and liabilities for the six months ended June 30, 2024, net of business acquisitions, decreased cash flows by $22.4 million, mainly attributable to increases in prepaid and other current assets and inventory, and decreases in other non current liabilities.

Operating cash flows for the nine months ended September 30, 2025 decreased by $40.1 million compared to the same period in 2024.

Within operating cash flows, net income less non-cash adjustments decreased for the nine months ended September 30, 2025 by approximately $40.7 million as compared to the same period in 2024 due to the impact of quality and operational issues on revenue and associated costs.

The changes in assets and liabilities for the nine months ended September 30, 2025, net of business acquisitions, decreased cash flows by $18.4 million, mainly attributable to increases in inventory.

The changes in assets and liabilities for the nine months ended September 30, 2024, net of business acquisitions, decreased cash flows by $19.0 million, mainly attributable to increases in prepaid and other current assets, and inventory, offset by decreases in accounts receivable.

Cash Flows Used in Investing Activities

Uses of cash from investing activities for the six months ended June 30, 2025 were $49.1 million paid for capital expenditures to support improvement initiatives at a number of our manufacturing facilities, and other technology investments, as well as $8.5 million related to short term investments.

There were no sources of cash from investing activities for the six months ended June 30, 2025.

Uses of cash from investing activities during the six months ended June 30, 2024 were $282.0 million related to the Acclarent acquisition, $49.0 million related to short term investments, and $45.2 million paid for capital expenditures to support operations improvement initiatives at a number of our manufacturing facilities and other information technology investments.

There were no sources of cash from investing activities during the six months ended June 30, 2024.

Uses of cash from investing activities for the nine months ended September 30, 2025 were $64.2 million paid for capital expenditures to support improvement initiatives at a number of our manufacturing facilities and other technology investments, $8.5 million related to short-term investments, and $0.4 million related to the settlement of our net investment hedges.

There were no sources of cash from investing activities for the nine months ended September 30, 2025.

Uses of cash from investing activities during the nine months ended September 30, 2024 were $74.8 million paid for capital expenditures to support the investment in the new Braintree facility, as well as improvement initiatives at a number of our manufacturing facilities, and other technology investments, $282.0 million related to the Acclarent acquisition, and $49.0 million related to short-term investments.

Sources of cash from investing activities during the nine months ended September 30, 2024 were $19.3 million for short-term investments converted to cash.

Cash Flows Provided by Financing Activities

Uses of cash from financing activities in the six months ended June 30, 2025 related to the repayments of $31.1 million under our Senior Credit Facility and Securitization Facility, as well as $16.5 million related to payments of Arkis and SIA contingent consideration.

In addition, the Company paid $3.9 million in debt issuance costs and $2.4 million in cash taxes for net equity settlements.

Sources of cash from financing activities for the six months ended June 30, 2025 were $67.3 million of proceeds from borrowings of long term indebtedness and $1.0 million related to the proceeds from the exercise of stock options.

Uses of cash from financing activities in the six months ended June 30, 2024 related to the repayments of $105.6 million under our Senior Credit Facility and Securitization Facility, $50.0 million related to the repurchase of treasury stock of under the share repurchase agreements, and $11.9 million related to payment of SIA contingent consideration.

Uses of cash from financing activities in the nine months ended September 30, 2025 related to the repayments of the 2025 Notes of $575.0 million, as well as $69.8 million of repayments under our Senior Credit Facility and Securitization Facility.

In addition, the company paid $16.5 million related to payments of Arkis and SIA contingent consideration, $3.9 million in debt issuance costs and $2.6 million in cash taxes for net equity settlements.

Sources of cash from financing activities for the nine months ended September 30, 2025 were $671.0 million of proceeds from borrowings of long term indebtedness and $1.0 million related to the proceeds from employee stock purchases.

Uses of cash from financing activities in the nine months ended September 30, 2024 related to the repayments of $147.2 million under our Senior Credit Facility and Securitization Facility, $50.0 million related to the repurchase of treasury stock of under the share repurchase agreements, and $11.9 million related to payment of SIA contingent consideration.

In addition, the Company had $3.4 million in cash taxes paid for net equity settlements.

Sources of cash from financing activities for the six months ended June 30, 2024 were $429.3 million of proceeds from borrowings of long-term indebtedness and $6.4 million related to the proceeds from the exercise of stock options.

Sources of cash from financing activities for the nine months ended September 30, 2024 were $451.1 million of proceeds from borrowings of long-term indebtedness and $6.4 million related to the proceeds from the exercise of stock options.

Tariffs and Macroeconomic Environment

3 unchanged sentences

In response, governments have threatened or imposed reciprocal tariffs or taken other measures, and the United States is in the process of negotiating trade agreements with certain governments.

Uncertainty remains with respect to trade policies and treaties between the U.S.

and other countries and we continue to monitor and evaluate the situation.

In August 2025, the U.S.

Court of Appeals for the Federal Circuit ruled against certain of the U.S.

tariffs that have been implemented.

administration has appealed this ruling and the U.S.

Supreme Court has agreed to hear the case, with oral arguments anticipated in November 2025.

In September 2025, the U.S.

Department of Commerce initiated national security investigations into medical equipment, devices, and robotics.

The tariff environment has continued to shift throughout the 2025 calendar year, with new measures being proposed, paused, implemented, and countered, contributing to broader trade policy uncertainty.

Tariffs could result in an increase in certain product costs or have adverse impacts on, among other things, demand for our products and supply chains.

5 unchanged sentences

Any tariffs paid have been capitalized in inventory and will be recognized in our cost of goods sold as those products are sold.

During the six months ended June 30, 2025, the Company paid approximately $5.4 million of tariffs on imported goods.

Of this amount, $1.1 million was recognized in cost of goods sold in the consolidated statements of operations.

During the three and nine months ended September 30, 2025, the Company paid approximately $6.7 million and $12.1 million, respectively of tariffs on imported goods.

Of this amount, $1.6 million and $2.6 million, respectively, was recognized in cost of goods sold in the consolidated statements of operations.

The overall macroeconomic and geopolitical environment, including tariffs or changes in trade policies, slower economic growth or recession, market volatility and inflation, and uncertainty regarding all of the foregoing, pose risks that could impact our business, results of operations, financial condition and cash flows.

7 unchanged sentences

Derivative Instruments , to the Notes to Unaudited Condensed Consolidated Financial Statements (Part I, Item 1 of this Quarterly Report) for discussion of our hedging activities.

The Senior Credit Facility is subject to various financial and negative covenants and, at June 30, 2025, the Company was in compliance with all such covenants.

Our Consolidated Total Leverage Ratio was 4.53, with the covenant requirement at 5.00 at the end of June 30, 2025.

The Senior Credit Facility is subject to various financial and negative covenants and, at September 30, 2025, the Company was in compliance with all such covenants.

Our Consolidated Total Leverage Ratio was 4.35, with the covenant requirement at 5.00 at the end of September 30, 2025.

As outlined in the table in Note 6.

Debt, the covenant requirement will drop from 5.00 to 4.75 for the fiscal quarter ended September 30, 2026.

The 2025 Notes are scheduled to mature on August 15, 2025.

We have sufficient capacity under the revolving credit facility of the Senior Credit Facility to repay the outstanding principal and accrued interest on the 2025 Notes upon maturity.

The 2025 Notes matured on August 15, 2025 and were settled upon maturity for $575.0 million in cash, excluding accrued interest, funded by borrowings on the revolving credit facility component of the Senior Credit Facility.

No shares were issued to settle the 2025 Notes.

Share Repurchase Plan

5 unchanged sentences

Capital Resources

We believe that our cash, cash equivalents, short term investments and available borrowings under the Senior Credit Facility are sufficient to finance our operations, capital expenditures and repayment of the 2025 Notes for the next twelve months and foreseeable future.

We believe that our cash, cash equivalents, short-term investments and available borrowings under the Senior Credit Facility are sufficient to finance our operations and capital expenditures for the next twelve months and foreseeable future.

Our future capital requirements will depend on many factors, including the growth of our business, the timing and introduction of new products and investments, strategic plans and acquisitions, and the potential impact of tariffs on our cost of goods sold and consumer demand for our products, among others.

1 unchanged sentence

Off-Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements during the six months ended June 30, 2025 that have or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.

We do not have any off-balance sheet financing arrangements during the nine months ended September 30, 2025 that have or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.

Contractual Obligations and Commitments

1 unchanged sentence

As part of our ongoing operations, we enter into contractual arrangements that obligate us to make future cash payments.

Our primary obligations include principal and interest payments on the revolving credit facility and t erm loan component of the Senior Credit Facility, Securitization Facility and 2025 Notes.

Our primary obligations include principal and interest payments on the revolving credit facility and t erm loan component of the Senior Credit Facility and our Securitization Facility.

Debt , to the Notes to Consolidated Financial Statements (Part I, Item 1 of this Quarterly Report) for details.

13 unchanged sentences

The preparation of these financial statements requires us 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.

The critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 did not materially change in the six months ended June 30, 2025.

The critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 did not materially change in the nine months ended September 30, 2025.

Recently Issued Accounting Standards

2 unchanged sentences

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 2. Management’s Discussion and Analysis