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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-25 · 181 added, 268 removed, 282 unchanged (61% of the section changed)

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Exhibits and Financial Statement Schedules.

Integra LifeSciences Holdings Corporation was founded in 1989 and is a leading global medical technology company innovating treatment pathways to advance patient outcomes and set new standards of surgical, neurologic, ear, nose, and throat (“ENT”) and regenerative care.

Our common stock trades on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “IART.” We have developed numerous product lines from this technology for applications ranging from burn and deep tissue wounds to the repair of dura mater in the brain, as well as nerves and tendons.

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.

Integra LifeSciences Holdings Corporation is a global medical technology company dedicated to restoring lives.

We are advancing transformational care through impactful innovation and our portfolio of highly differentiated technologies is trusted by healthcare professionals to deliver transformative care.

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

Codman Specialty Surgical (“CSS”) and Tissue Technologies (“TT”).

The CSS segment, which represents approximately two-thirds of our total revenue, consists of market-leading technologies and instrumentation used for a wide range of specialties, such as neurosurgery, neurocritical care and otolaryngology.

The CSS segment, which represents approximately 70% of our total revenue, consists of market-leading technologies and instrumentation used for a wide range of specialties, such as neurosurgery, neurocritical care, and otolaryngology, commonly referred to as ear, nose, and throat (“ENT”).

We are the world leader in neurosurgery and one of the top three providers in the U.S.

in instruments used in precision, specialty, and general surgical procedures.

Our TT segment generates about one-third of our overall revenue and focuses on three main areas:

complex wound surgery, surgical reconstruction, and peripheral nerve repair.

We have key manufacturing and research facilities located in California, Maryland, Massachusetts, New Jersey, Ohio, Puerto Rico, Tennessee, Utah, France, Germany, Ireland, Israel and Switzerland.

We source most of our handheld surgical instruments and dural sealant products through specialized third-party vendors.

Our strategies are focused around five pillars.

Of these five pillars, we have identified three core growth drivers:

(1) innovating for outcomes, (2) growing internationally, and (3) broadening our impact on care pathways.

Our execution of the core growth drivers is enabled by two key levers:

(4) driving operational and customer excellence and (5) cultivating a high-performance culture.

As outlined in greater detail below, we believe these five pillars will enable us to realize and advance our integrated growth strategy.

To this end, the executive leadership team has established the following key priorities aligned to the following five pillars:

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.

For example, in 2021, we filed a pre-market approval (“PMA”) application for a specific indication for Surgimend® in the use of post-mastectomy breast reconstruction.

We anticipate PMA approval following the operationalization of the Braintree facility, which is expected in the first half of 2026.

We are also pursuing a PMA for DuraSorb for use in implant-based breast reconstruction (“IBBR”).

We completed enrollment for the DuraSorb U.S.

investigational device exemption clinical study for two-stage breast reconstruction in June 2023;

and in 2024 we have continued to advance the PMA application.

Currently, we hope to secure PMA approval for DuraSorb in 2026.

In 2024 we expanded our urinary bladder matrix platform with the U.S.

launch of MicroMatrix® Flex, a dual-syringe system enabling the convenient mixing and precise delivery of MicroMatrix® paste to provide convenient access to hard-to-reach spaces and to help prepare an even wound surface in challenging wound areas.

Additionally, in 2024, we successfully re-launched our CereLink intracranial pressure (“ICP”) monitor system.

CereLink provides enhanced accuracy, usability and advanced data presentation that provides clinicians with uncompromised, advanced continuous ICP monitoring when treating patients with traumatic brain injuries.

Growing Internationally.

Over the years, we have been significantly expanding our global footprint through investments in our commercial and manufacturing organizations, the expansion and development of international markets and new product introductions.

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

Broadening Impact on Care Pathways .

We seek ways to develop and acquire products and technologies that impact the lives of patients, starting with the journey that a patient takes from diagnosis and treatment planning to surgery and postoperative care.

We are well-established in acute care in the hospital setting and continue to leverage that strong position to grow in this segment and shape treatment pathways into preoperative care and additional sites of care.

On April 1, 2024, we successfully completed the acquisition of Acclarent, Inc.

(“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.

Driving Operations and Customer Excellence.

We have been making investments to build more responsive and scalable processes, enhance the reliability of our quality systems and supply chain, and drive productivity initiatives to further supply and lower costs.

We continue to invest in technologies, systems and processes to enhance the customer experience.

We also continue to invest in our capacity expansion.

This includes ongoing projects of transferring our Boston manufacturing to a new location in Braintree, Massachusetts and further investing in capacity and validating manufacturing processes in our manufacturing facility in Plainsboro, New Jersey.

We are implementing a Compliance Master Plan (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 across the company, and enhance the quality culture at the company.

Cultivating a High-Performance Culture.

In seeking to sustain a culture of excellence and accountability, we focus on employee empowerment, professional development and building an environment where all employees can contribute to their fullest potential.

These efforts have been recognized through our inclusion in several best workplace lists globally in 2023 and 2024.

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

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

Information on our website is not incorporated by reference herein and is not part of this Annual Report on Form 10-K.

New Product Introductions and Research and Development Updates

Our TT segment generates about 30% of our overall revenue and focuses on wound reconstruction and care and private label.

NEW PRODUCT INTRODUCTIONS AND RESEARCH AND DEVELOPMENT

We continue to invest in collecting clinical evidence to support our existing products and new product launches, and to ensure that we obtain market access for broader and more cost-effective solutions.

Neurosurgical Solutions, Surgical Instruments, and ENT Solutions.

The CSS neurosurgical business consists of a broad portfolio of market-leading brands, such as Codman®, DuraGen®, DuraSeal®, CUSA®, CereLink®, Mayfield®, Bactiseal®, and Certas® Plus, which are used for the management of multiple disease states, including brain tumors, traumatic brain injury, hydrocephalus and other neurological conditions.

The CSS neurosurgical business consists of a broad portfolio of market-leading brands, which are used for the management of multiple disease states, including brain tumors, traumatic brain injury, hydrocephalus and other neurological conditions.

The growth in this business in recent years has been fueled by geographic expansion and new product registrations in markets, such as China, Japan, and Europe, which we expect to continue in the near-to-long term.

Because our electromechanical products and instruments address significant needs in surgical procedures and limit uncertainty for surgeons, we continue to invest in registrations, clearances, and approvals for new indications and next generation improvements to our market-leading products.

We have several active programs focused on life cycle management and innovation for capital and disposable products in our portfolio.

Our product development efforts are focused on core clinical applications in cerebrospinal fluid (“CSF”) management, neuro-critical care monitoring, minimally invasive instruments and electrosurgery and ultrasonic medical technologies, as well as our ambition to transform the standard of care in neurosurgery with product advancements in minimally invasive surgery (“MIS”) and the surgical management of intracerebral hemorrhage (“ICH”).

Our lighting franchise is among the most dynamic in the industry.

We are focused on the development of core clinical applications in our electromechanical technologies portfolio.

We continue to update our CUSA® Clarity platform by incorporating new ultrasonic handpiece and integrated electrosurgical capabilities.

We have made several enhancements to our CUSA® Clarity Tissue Ablation System.

The extended laparoscopic tip was launched in the U.S.

to enhance laparoscopic liver procedures.

In addition, a single-sided bone tip received 510(k) clearance from the FDA.

Commercial launch was completed successfully in early 2023.

In August 2023, we launched a modified 23 kHz CUSA® Electrosurgery Module (“CEM”) for Clarity handpieces that can be used with additional electrosurgery generators.

We continue to work with several instrument partners to bring new surgical instrument platforms to the market.

We also continued to advance the early-stage technology platforms we acquired in 2019.

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 designed to reduce the potential for catheter obstruction due to thrombus formation.

We continue to advance the 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.

In vitro evaluations and in vivo animal evaluations do not necessarily predict the clinical performance of the SureFlo EVD Catheter with respect to thrombus formation.

The incidence of thrombus formation on polyurethane containing Endexo polymer in other medical devices and/or tissues systems does not necessarily predict the clinical performance of the SureFlo EVD Catheter for the intended use of CSF external drainage and monitoring.

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 project.

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

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.

The 9mm Surgiscope received 510(k) clearance from the FDA in the fourth quarter of 2023.

In the first quarter of 2024, we relaunched our CereLink ICP monitoring system, after initiating an immediate voluntary global product removal of all CereLink® intracranial pressure monitors in 2022.

Cerelink p rovides enhanced accuracy, usability and advanced data presentation to clinicians treating patients with traumatic brain injuries.

In the second quarter of 2024, we acquired Acclarent, expanding our capabilities in the U.S.

Acclarent pioneered the balloon sinuplasty market and has a broad portfolio including the RELIEVA SPINPLUS® Balloon Sinuplasty System.

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.

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

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 the Aurora® Surgiscope, which is the only tubular retractor system designed for cranial surgery with an integrated access channel, camera and lighting.

The 15mm x 60mm and 15mm x 80mm Aurora Surgiscope System version received 510(k) clearance from the FDA in 2025.

In July 2025, we announced the inaugural enrollment of the first patient in the AERA Pediatric Registry, a prospective, multi-center observational registry evaluating the real-world use of the AERA Eustachian Tube Balloon Dilation System in children.

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 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 .

We were the first company to receive an FDA claim for regeneration of dermal tissue and are a world leader in regenerative technology.

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 healing 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.

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, including our launch of NeuraGen 3D, provides us with strong platform technologies for multiple indications.

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

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

We anticipate PMA approval following the operationalization of the Braintree facility, which is expected in the first half of 2026.

In 2022, we acquired SIA, which has also submitted a PMA application for DuraSorb with IBBR, and in June 2023 we completed enrollment in the DuraSorb U.S.

investigational device exemption clinical study for two-stage breast reconstruction;

and in 2024 we have continued to advance the PMA application.

We anticipate PMA approval following the operationalization of the Braintree facility, which is expected in 2026.

We are also pursuing a PMA for DuraSorb for use in implant-based breast reconstruction (“IBBR”).

We completed enrollment for the DuraSorb U.S.

investigational device exemption clinical study for two-stage breast reconstruction in June 2023;

and we continue to advance the PMA application.

Currently, we hope to secure PMA approval for DuraSorb in 2026.

By offering two distinct product solutions, we believe we have the opportunity to build a leading position in the IBBR market.

Following the completion of design control activities in 2022, we launched both Cytal and MicroMatrix in Europe in 2023.

In March 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 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.

EUROPEAN UNION MEDICAL DEVICE REGULATION UPDATES

As part of our ongoing efforts to remain compliant, the Company continues to work towards European Union Medical Device Regulation (“EU MDR”) certifications.

Over the past two years, the Company received EU MDR certification in the CSS segment for Hakim Programmable Valves, Certas Plus without Bactiseal catheters, DuraSeal Dural, and DuraGen Suturable in the CSS segment, as well as IDRT, BioPatch, MicroMatrix, and Cytal in the TT segment.

On December 19, 2024, a subsidiary of Integra LifeSciences Holdings Corporation received a warning letter from the FDA (the “2024 Warning Letter”).

The 2024 warning letter relates to quality system issues identified during FDA inspections at three of the Company’s facilities located in Mansfield, Massachusetts, Plainsboro, New Jersey, and Princeton, New Jersey.

We continue to work towards certifying our products under the EU MDR.

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, CUSA Clarity and DuraGen Suturable, Cranial Drills and Perforators, as well as IDRT, BioPatch, MicroMatrix, and Cytal in our TT segment.

We do not currently anticipate any significant disruption to our commercial activities in Europe related to EU MDR.

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

The 2024 Warning Letter relates to quality system issues identified during FDA inspections at three of the Company’s facilities located in Mansfield, Massachusetts;

Plainsboro, New Jersey;

and Princeton, New Jersey.

The 2024 Warning Letter did not identify any new observations that had not already been provided in the Form 483s previously issued to the Company by the FDA at the conclusion of its three inspections in June and August of 2024 (the “2024 Form 483s”).

In the 2024 Form 483s, the FDA deemed certain of the Company's devices, including cranial perforators, disposable cottonoid patties and strips, and collagen-based products, to be out of compliance with respect to the quality system regulation.

In the 2024 Form 483s, the FDA deemed certain of the Company’s devices, including cranial perforators, disposable cottonoid patties and strips, and collagen-based products, to be out of compliance with respect to quality system regulations.

At that time, the Company took a number of voluntary actions including the initiation of shipping holds for several products and a voluntary recall of the disposable patties and strips.

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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 already submitted several responses to the 2024 Form 483s issued to each of the three manufacturing facilities to the FDA and has submitted a written response to the warning letter in the first quarter of 2025.

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 throughout 2025.

On March 7, 2019, TEI Biosciences, Inc.

(“TEI”), one of our wholly-owned subsidiaries, received a Warning Letter (the “2019 Warning Letter”), dated March 6, 2019, from the FDA.

The 2019 Warning Letter related to quality systems issues at TEI’s manufacturing facility located in Boston, Massachusetts (the “Boston facility”).

The Boston facility manufactures extracellular bovine matrix products in our TT segment that are sold both in wound reconstruction and care 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.

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

We provided an initial response to the inspection observations.

The 2019 Warning Letter was related to quality systems issues at TEI’s manufacturing facility located in Boston, Massachusetts (the “Boston facility”).

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 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 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.

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 (the “Boston recall”).

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”).

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The Company has submitted periodic responses to the FDA for both the 2023 Form 483 and the 2023 Warning Letter.

We are committed to resolving the matters identified in the Warning Letters and Form 483s and are continuing our significant efforts to remediate the observations.

We are committed to resolving the matters identified in the warning letters and Form 483s and are continuing significant efforts to remediate the observations.

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.

We cannot give any assurances that the FDA will be satisfied with our response to the issues identified by the FDA or as to the expected date of the resolution of such issues.

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 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.

Until the issues cited by the FDA are resolved to the FDA’s satisfaction, the FDA may initiate additional regulatory action without further notice.

Any adverse regulatory action, depending on its magnitude, may restrict us from effectively manufacturing, marketing and selling our products and could have a material adverse effect on our business, financial condition and results of operations.

As required by the 2023 Warning Letter, we retained an outside expert consultant to perform an audit of the Boston facility in March 2024.

Since receiving the third-party audit findings for the Boston facility in March, the Company has reassessed its plans and timeline to resume the manufacture of PriMatrix® and SurgiMend®.

In parallel, the Company has been furthering its plans to complete the construction and operationalization of its new tissue manufacturing facility in Braintree, Massachusetts.

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 the Braintree facility.

The Company expects to operationalize the Braintree facility in the first half of 2026.

As a result of these decisions, in the second quarter of 2024, the Company recorded a $4.6 million impairment charge, comprised of a $1.7 million impairment of an operating lease right-of-use asset and a $2.9 million write-off of fixed assets, which was recorded as a component of cost of goods sold in the consolidated statements of operations.

For further detail on the impairment, see Note 11.

Lease and Related Party Leases .

The Company elected to perform impairment testing on certain definite-lived intangibles and goodwill in the first quarter of 2024, which resulted in an intangible impairment of $7.1 million.

For further detail on the impairment testing, see Note 7.

Goodwill and Other Intangibles .

Revenues of products manufactured in the Boston facility for the year ended December 31, 2022 were approximately 5.3% of consolidated revenues.

No revenues were recorded in 2024 for products manufactured at the Boston facility.

OPTIMIZATION AND INTEGRATION ACTIVITIES

As a result of our ongoing acquisition strategy and significant growth in recent years, we have undertaken cost-saving initiatives in 2024 and 2025 to consolidate manufacturing operations, distribution facilities and transfer activities, eliminate duplicative positions, realign various sales and marketing activities, and expand and upgrade production capacity for our regenerative technology products.

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 audits and inspections by regulatory agencies as well as our own review of the Company’s quality management system, we have implemented an enterprise-wide Compliance Master Plan (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.

The Company has completed baseline audits across all manufacturing facilities, conducted CMP training, and has made significant progress in its prioritized work streams.

During the fourth quarter of 2025, we approved a restructuring initiative to improve the Company’s operational performance by strengthening the stability and resilience of our supply chain and advancing our prioritization and execution discipline.

We expect to incur aggregate restructuring costs associated with this initiative of approximately $12.6 million related to severance and other employee costs.

The costs will be incurred as specific actions required as part of the initiative are identified and approved and are expected to continue through the end of 2026.

The amounts and timing of estimated restructuring costs are subject to change until finalized;

actual amounts and timing may vary materially based on various factors.

We incurred $8.5 million of restructuring related costs related to this initiative during the year ended December 31, 2025.

Restructuring costs were included in accrued expenses and other current liabilities in the consolidated balance sheet for the year ended December 31, 2025.

Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for further details.

ACQUISITIONS & DIVESTITURES

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Acquisitions and Divestitures, of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for a further discussion.

On October 2, 2024, the Company completed the acquisition of the product rights for Durepair ® Regeneration Matrix (“Durepair”), a non-synthetic dura substitute for repair of the dura mater during neurosurgical procedures manufactured in our Boston facility and sold under a private label arrangement, from Medtronic plc for total cash consideration of $45.0 million.

The Company made a cash payment of $10.0 million upon the closing of the acquisition and will make additional cash payments of $15.0 million upon the first anniversary of the acquisition and $20.0 million upon the second anniversary of the acquisition.

The Company accounted for the acquisition of the product rights for Durepair, which consist of certain patents and trademarks, regulatory approvals, and other records, as an asset acquisition in accordance with FASB Topic 805, Business Combinations (“ASC 805”) because the acquisition does not include an assembled workforce and substantially all of the fair value of the assets acquired is concentrated in a single identifiable intangible asset.

Durepair will be reported within Integra’s Codman Specialty Surgical segment.

Durepair® Acquisition

On October 2, 2024, the Company completed the acquisition of the product rights for the Durepair ® Regeneration Matrix (“Durepair”), a non-synthetic dura substitute for repair of the dura mater during neurosurgical procedures, from Medtronic plc for total cash consideration of $45.0 million.

The Company made a cash payment of $10.0 million upon the closing of the acquisition in October 2024, $15.0 million on the first anniversary of the acquisition in October 2025, and will make an additional cash payment of $20.0 million upon the second anniversary of the acquisition in October 2026.

The additional cash payment to be made in October 2026 is included at its present value in accrued expenses and other current liabilities as of December 31, 2025.

The acquisition of the product rights for Durepair, which consist of certain patents and trademarks, regulatory approvals, and other records, has been accounted for as an asset acquisition in accordance with FASB Topic 805, Business Combinations (“ASC 805”) as the acquisition does not include an assembled workforce and substantially all of the fair value of the assets acquired is concentrated in a single identifiable intangible asset.

Acclarent, Inc.

On April 1, 2024, the Company completed the acquisition of Acclarent, a developer and marketer of medical devices used in ENT procedures, from Ethicon, Inc., a subsidiary of Johnson & Johnson, for approximately $282.0 million in cash, subject to customary adjustments set forth in the purchase agreement related to working capital balances transferred to the Company.

The Company finalized the working capital adjustment in the amount of $4.2 million, which resulted in a reduction to goodwill, in September 2024 and the adjustment was settled during the three months ended December 31, 2024.

The addition of Acclarent’s ENT product portfolio, including sinus balloon dilation, eustachian tube balloon dilation, and surgical navigation systems technologies, and dedicated salesforce will enhance the Company’s position in the ENT specialty device market.

Acclarent sales are reported within Integra’s Codman Specialty Surgical segment.

Surgical Innovation Associates, Inc.

On December 6, 2022, the Company completed its acquisition of Surgical Innovation Associates, Inc.

(“SIA”) for an acquisition purchase price of $51.5 million.

In addition to the purchase price, the acquisition includes two separate contingent considerations payments, which are dependent on (1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $50.0 million in additional payments), as well as (2) the approval by the FDA of the PMA application for DuraSorb for certain uses by certain timing targets (up to $40.0 million in additional payments).

In the second quarter of 2024, the Company paid out $12.4 million related to the 2023 performance year.

Prior to our acquisition, SIA was a privately-held company whose core technology, DuraSorb, is a fully resorbable scaffold of a globally accepted polymer, cleared for use in hernia repair, abdominal wall, and other soft tissue reinforcement.

DuraSorb sales are reported within Integra’s Tissue Technologies segment.

On August 31, 2022, the Company completed the sale of its non-core traditional wound care (“TWC”) business to Gentell, Inc.

(“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.

The transaction is subject to final working capital adjustments, which are pending finalization between the parties.

OPTIMIZATION AND INTEGRATION ACTIVITIES

As a result of our ongoing acquisition strategy and significant growth in recent years, we have undertaken cost-saving initiatives to consolidate manufacturing operations, distribution facilities and transfer activities, eliminate duplicative positions, realign various sales and marketing activities, and expand and upgrade production capacity for our regenerative technology products.

As a result of both audits by regulatory agencies as well as our own reviews of the company’s quality management system, we are implementing a 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 across the company, and enhance the quality culture at the company.

On April 1, 2024, the Company completed the acquisition of all of the outstanding capital stock of Acclarent, Inc.

(“Acclarent”), a developer and marketer of medical devices used in ear, nose, throat (“ENT”) procedures, from Ethicon, Inc., a subsidiary of Johnson & Johnson, for approximately $282.0 million in cash, subject to customary adjustments set forth in the purchase agreement related to working capital balances transferred to the Company.

In the second half of 2024, the Company finalized and settled the working capital adjustment in the amount of $4.2 million, which resulted in a reduction to goodwill and also recognized a measurement period adjustment to recognize deferred tax liabilities of $1.1 million with a corresponding increase to goodwill as a result of a change to the estimated deferred tax rate applied and the book-to-tax difference associated with fixed assets acquired.

The addition of Acclarent’s ENT product portfolio, including sinus balloon dilation, eustachian tube balloon dilation, and surgical navigation systems technologies, and dedicated salesforce enhanced the Company’s position in the ENT specialty device market.

Acclarent’s results of operations have been reported in the Company’s Codman Specialty Surgical reportable segment from the date of acquisition.

RESULTS OF OPERATIONS

Executive Summary

Net loss for the year ended December 31, 2024 was $(6.9) million, or $(0.09) per diluted share, compared to net income of $67.7 million, or $0.84 per diluted share for the year ended December 31, 2023.

The decrease in net income for the year ended December 31, 2024, was driven by impacts from quality and operational issues, along with costs related to the Acclarent acquisition.

Net loss for the year ended December 31, 2025 was $(516.5) million, or $(6.74) per diluted share, compared to a net loss of $(6.9) million, or $(0.09) per diluted share for the year ended December 31, 2024.

The net loss increased for the year ended December 31, 2025 as compared to prior periods, primarily driven by the impact of the goodwill impairment of $511.4 million recorded in the second quarter of the current year.

Income before income taxes includes the following special charges:

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Total 149,721 147,424

(1) See Note 4.

Acquisitions and Divestitures of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for details.

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

(1) This includes adjustments for contingent consideration liabilities.

Refer to Note 15.

Commitments and Contingencies of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K).

(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 consolidated statements of operations as follows:

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Selling, general and administrative 42,449 53,922

Other (income) expense 304 (865)

Other expense 1,268 304

Total 149,721 147,424

We typically define special charges as items for which the amounts and/or timing of such expenses may vary significantly from period to period, depending upon our acquisition, divestiture, integration and restructuring activities, and for which the amounts are non-cash in nature and are not expected to recur at the same magnitude.

items for which the amounts are non-cash in nature;

and items which are not expected to recur at the same magnitude.

We believe that given our ongoing strategy of seeking acquisitions, our continuing focus on rationalizing our existing manufacturing and distribution infrastructure and our continuing review of various product lines in relation to our current business strategy, some of the special charges discussed above could recur with similar materiality in the future.

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Revenues and Gross Margin

Our revenues and gross margin on product revenues were as follows:

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

Years Ended December 31,

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Gross margin as a percentage of total revenues 50.9 % 54.8 %

Revenues and Gross Margin

For the year ended December 31, 2025, total revenues increased by $24.7 million, or 1.5%, to $1,635.2 million from $1,610.5 million during the prior year.

Excluding the impacts of the Acclarent acquisition and foreign currency impact, revenues declined low single digits compared to the same period in the prior year, primarily driven by impacts from quality and operational issues.

In the CSS segment, revenues were $1,143.6 million which was an increase of $84.6 million, or 8.0% as compared to the prior-year period, inclusive of $95.0 million related to the Acclarent acquisition and a $6.1 million unfavorable foreign currency impact on revenue.

Excluding these impacts, revenue remained flat compared to the same period in the prior year, primarily driven by lower sales due to temporary shipping holds in CSF Management and Dural Access & Repair, partially offset by growth in instruments and advanced energy.

In the TT segment, revenues were $466.9 million, which was a decrease of $15.7 million, or 3.3% as compared to the prior-year period.

The TT segment decreased low single digits as compared to the same period in the prior year, primarily attributable to a decline in Integra Skin due to production challenges, partially offset by growth in MicroMatrix® & Cytal and Durasorb.

Gross margin was $882.1 million for the year ended December 31, 2024, a decrease of $2.7 million from $884.7 million for the same period last year.

Gross margin as a percentage of revenues was 54.8% in 2024 and 57.4% in 2023.

Gross margins were impacted by charges associated with the Boston recall comprised of $7.1 million related to intangible impairment, $2.9 million related to fixed asset write offs, and $1.7 million related to operating lease right-of-use asset write offs.

Additionally, gross margins were also impacted by Acclarent inventory step up amortization of $8.4 million and expenses associated with quality and operational issues.

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 across both periods.

In the CSS segment, revenues were $1,200.5 million, an increase of $56.9 million, or 5.0% from the prior year period.

Excluding the impact of foreign currency of $6.5 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 shipping holds experienced in the prior year.

In the TT segment, revenues were $434.7 million, a decrease of $32.2 million, or 6.9% 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 $831.6 million for the year ended December 31, 2025, a decrease of $50.4 million from $882.1 million for the prior year period.

Gross margin as a percentage of revenue decreased to 50.9% in 2025 from 54.8% in 2024.

For the year ended December 31, 2025, gross margins were impacted by quality and operational issues, which affected both revenue and expenses, as well as higher manufacturing costs and cost of tariffs.

For the year ended December 31, 2024, gross margins were impacted by intangible impairment charges associated with the Boston recall, Acclarent inventory step up, and expenses associated with quality and operational issues.

Operating Expenses

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Selling, general and administrative 42.8 % 44.5 %

Goodwill impairment 31.3 % — %

Intangible asset amortization 0.9 % 1.3 %

Total operating expenses 81.0 % 53.0 %

Total operating expenses, which consist of research and development, selling, general and administrative, and intangible asset amortization expenses, increased by $80.4 million or 10.4% to $853.7 million in 2024, compared to $773.2 million in the prior year.

Total operating expenses, which consist of research and development, selling, general and administrative, and intangible asset amortization expenses, increased by $471.3 million or 55.2% to $1,325.0 million in 2025, compared to $853.7 million in the prior year, primarily driven by the goodwill impairment recorded in the second quarter of 2025.

Research and Development

Research and development expenses for the year ended December 31, 2024 increased by $11.2 million as compared to the prior year, primarily due to the Acclarent research and development, new product development and clinical studies.

Research and development expenses for the year ended December 31, 2025 decreased by $16.4 million as compared to the prior year, primarily attributable to cost management initiatives and reduced spend on EU MDR.

Selling, General and Administrative

Selling, general and administrative expenses for the year ended December 31, 2024 increased by $60.3 million as compared to the prior year, primarily driven by the Acclarent acquisition costs and related commercial activities, as well as sustaining our existing cost structure despite temporary shipping holds.

Selling, general and administrative expenses for the year ended December 31, 2025 decreased by $17.3 million primarily due to adjustments to contingent consideration liabilities and cost management initiatives in the current year, as well as Acclarent acquisition costs incurred in the prior year.

Intangible Asset Amortization

Amortization expense (which does not include amounts reported in cost of product revenues for technology-based intangible assets) in 2024 was $21.3 million compared to $12.4 million in 2023, driven by the impairment of customer relationship intangible related to our Boston facility of $7.1 million, as well as amortization associated with the Acclarent acquisition.

We may discontinue certain products in the future as we continue to assess the profitability of our product lines.

As our profitability assessment evolves, we may make further decisions about our trade names and incur impairment charges or accelerated amortization.

Total annual amortization expense is expected to be approximately $106.0 million in 2025, $105.8 million in 2026, $104.9 million in 2027, $101.3 million in 2028, $96.0 million in 2029 and $528.2 million thereafter.

Additionally, we expect the amortization of product technology based intangible assets, presented within cost of goods sold, to be an average of 88% of total future amortization expense.

Amortization expense (excluding amounts reported in cost of product revenues for technology-based intangible assets) in 2025 was $15.0 million compared to $21.3 million in 2024.

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.

We expect total annual amortization expense (which excludes amounts reported in cost of product revenues for technology-based intangible assets) to be approximately $14.9 million in 2026, $14.2 million in 2027, $10.7 million in 2028, $15.8 million in 2029, $15.1 million in 2030 and $43.7 million thereafter.

Non-Operating Income and Expenses

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Interest expense (86,255) (70,632)

Other income, net 3,944 3,718

Other (expense) income, net (2,351) 3,944

Total non-operating income and expense $ (70,132) $ (46,648)

Interest Income

Interest income for the year ended December 31, 2024 increased by $2.8 million as compared to the same period last year primarily due to higher interest on time deposits and cross-currency swap agreements designated as net investment hedges.

Interest income for the year ended December 31, 2025 decreased by $1.6 million as compared to the same period in the prior year primarily due to lower interest earned on cash balances.

Interest Expense

Interest expense for the year ended December 31, 2024 increased by $19.3 million as compared to the same period in the prior year mainly due to incremental borrowing for the Acclarent acquisition.

Other Income, Net

Other income, net for the year ended December 31, 2024 increased by $0.2 million.

Interest expense for the year ended December 31, 2025 increased by $15.6 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) Income, Net

Other (expense) income, net for the year ended December 31, 2025 decreased by $6.3 million as compared to the same period in the prior year, primarily driven by foreign exchange impact related to EUR and CHF denominated balances.

Our effective income tax rate was 8.3% and 61.9% of income before income taxes in 2025 and 2024, respectively.

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At December 31, 2025, the Company had $22.6 million of valuation allowance against the remaining $278.1 million of gross deferred tax assets recorded at December 31, 2025.

Our deferred tax asset valuation allowance increased by $3.0 million in 2024, primarily driven by $1.1 million related to the Swiss federal tax credit.

Our deferred tax asset valuation allowance increased by $7.1 million in 2025, primarily driven by $3.7 million related to Swiss federal and local tax credits and $3.0 million related to U.S.

state credits.

The valuation allowance relates to deferred tax assets for which the Company does not believe it has satisfied the more likely than not threshold for realization.

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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.

Domestic revenues increased by $91.9 million for the year ended December 31, 2024 compared to the same period last year.

European sales decreased by $6.7 million for the year ended December 31, 2024 compared to the same period last year.

Sales to customers in Asia Pacific decreased by $16.5 million for the year ended December 31, 2024 compared to the same period last year.

The Rest of the World for the year ended December 31, 2024 increased by $0.2 million compared to the same period last year.

The increase in revenues is primarily the result of the Acclarent acquisition, offset by a decline in sales due to shipping holds and production challenges.

The international revenues were impacted by a $6.1 million unfavorable foreign exchange impact, with the larger impact in Europe.

LIQUIDITY AND CAPITAL RESOURCES

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

The decrease in working capital as compared to the prior year is primarily driven by $573.2 million related to the 2025 Notes, which became current during the year.

The increase in working capital as compared to the prior year is primarily driven by the repayment of 2025 Notes using our Senior Credit Facility, which decreased current liabilities.

Cash and Marketable Securities

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Net cash used in investing activities (108,063) (390,808)

Net cash provided by (used in) financing activities 237,863 (229,925)

Net cash provided by financing activities 28,335 237,863

Effect of exchange rate fluctuations on cash 18,017 (6,464)

Net increase (decrease) in cash and cash equivalents $ (30,027) $ (180,259)

Net decrease in cash and cash equivalents $ (11,327) $ (30,027)

Cash Flows Provided by Operating Activities

Operating cash flows for the year ended December 31, 2025 decreased by $79.0 million compared to the same period in 2024 .

Net income after removing the impact of non-cash adjustments decreased for the year ended December 31, 2024 , by approximately $61.1 million as compared to 2023, primarily driven by costs related to Acclarent, as well as costs associated with quality and operational issues.

The changes in assets and liabilities, net of business acquisitions, decreased cash flows by $31.0 million in 2024 as compared to the decrease in cash flows of $81.6 million for the same period in 2023 .

The change in 2024 is mainly attributable to increases in inventory and prepaid and other current assets, offset by decreases in accounts receivable.

Within operating cash flows, net income less non-cash adjustments decreased for the year ended December 31, 2025 by approximately $76.3 million as compared to 2024, due to quality and operational issues, which affected both revenue and expenses, as well as higher manufacturing costs and cost of tariffs.

The changes in assets and liabilities, net of business acquisitions, decreased cash flows by $33.7 million in 2025, mainly attributable to increases in inventory.

The changes in assets and liabilities, net of business acquisitions, decreased cash flows by $31.0 million in 2024 , mainly attributable to increases in inventory and prepaid and other current assets, offset by decreases in accounts receivable.

Cash Flows Used in Investing Activities

Uses of cash from investing activities for the year ended December 31, 2025 were $81.4 million paid for capital expenditures to support improvement initiatives at a number of our manufacturing facilities and other technology investments, $14.2 million related to the purchase of intangible assets for Durepair, $8.5 million related to the purchase of short-term investments, and $10.9 million related to settlement of our cross-currency swap designated as net investment hedge.

Sources of cash from investing activities for the year ended December 31, 2025 were $7.0 million for short term investments converted to cash.

Uses of cash from investing activities for the year ended December 31, 2024 were $277.8 million related to the Acclarent acquisition, $104.4 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, $49.0 million related to the purchase of short-term investments, $10.0 million related to the purchase of intangible assets for Durepair, and $4.1 million related to settlement of our cross-currency swap designated as net investment hedge.

Sources of cash from investing activities for the year ended December 31, 2024 were $54.5 million for short term investments converted to cash.

Uses of cash from investing activities for the year ended December 31, 2023, were $66.9 million for capital expenditures to support operations improvement initiatives at a number of our manufacturing facilities, including our Braintree facility in Massachusetts, and other information technology investments and $32.7 million related to the purchase of short-term investments.

Sources of cash from investing activities for the year ended December 31, 2023 were $5.4 million proceeds on cross-currency swaps designated as net investment hedge.

Cash Flows (Used in) Provided by Financing Activities

Uses of cash from financing activities for the year ended December 31, 2025 related to the repayments of the 2025 Notes of $575.0 million, as well as $94.9 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, $4.1 million in debt issuance costs and $2.7 million in cash taxes for net equity settlements.

Sources of cash from financing activities for the year ended December 31, 2025 were $720.7 million 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 for the year ended December 31, 2024 related to the repayments of $187.1 million under our Senior Credit Facility and Securitization Facility, $52.5 million related to the repurchase of treasury stock under the share repurchase agreements, $11.9 million related to payment of contingent consideration for the SIA acquisition, and $3.5 million in cash taxes paid for net equity settlements.

Sources of cash from financing activities for the year ended December 31, 2024 were $486.5 million proceeds from borrowings under our Senior Credit Facility and Securitization Facility and $6.4 million proceeds from the exercise of stock options.

Uses of cash from financing activities for the year ended December 31, 2023 primarily related to the repurchase of treasury stock of under the share repurchase agreements of $275.0 million, repayments of $110.6 million under our Senior Credit Facility (as defined below), $7.9 million related to debt issuance costs, and $5.9 million in cash taxes paid for net equity settlements.

Sources of cash from financing activities for the year ended December 31, 2023 were $165.1 million borrowings under our Senior Credit Facility and Securitization Facility and $4.3 million proceeds from the exercise of stock options.

Tariffs and Macroeconomic Environment

In April 2025, the U.S.

government announced new tariffs on goods imported into the U.S.

from dozens of countries, including China and the European Union member states.

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.

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.

In November 2025, the U.S.

Supreme Court heard oral arguments on tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”).

In February 2026, the U.S.

Supreme Court issued a 6–3 ruling invalidating the U.S.

Administration’s tariff program implemented under the IEEPA, concluding that the IEEPA did not authorize the broad import duties previously imposed.

The Court did not address the treatment of previously collected tariff payments, leaving refund processes subject to future administrative and judicial determinations.

Following the ruling, the Administration announced a new global 10% tariff under Section 122 of the Trade Act of 1974, which permits temporary import surcharges of up to 15% for up to 150 days to address balance of payments deficits, with implementation effective almost immediately and subject to certain exemptions.

We are evaluating the combined impact of these developments on our supply chain, cost structure, and financial outlook;

however, the ultimate effects remain uncertain pending additional guidance from federal agencies.

For context, the Company incurred $19.9 million in tariff costs in 2025, of which an estimated $16.0 million related to tariffs imposed under IEEPA authority.

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

Particularly, the U.S.

import tariffs and reciprocal measures by China, are expected to increase the Company’s cost of goods sold.

The Company anticipates that some of its suppliers will incur incremental tariff-related costs, which may be passed on to the Company.

Approximately half of our global revenue is generated from products manufactured in the U.S.

In China, which accounts for approximately 5 percent of our total revenue, roughly half of the products we sell are manufactured in the United States.

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

During the year ended December 31, 2025, the Company paid approximately $19.9 million of tariffs on imported goods.

Of this amount, $6.5 million 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.

The extent and duration of the tariffs and the resulting impact on general economic conditions and on the business are uncertain and are expected to be impacted by various factors, such as negotiations between the U.S.

and affected countries, the responses of other countries or regions, exemptions or exclusions that already exist or may be granted, availability and cost of alternative sources of our products and materials, and our ability to offset the effects of any tariffs that might be imposed.

For additional information on the risks that tariffs pose to the Company, please see Part I, Item 1A.

“Risk Factors” of this Annual Report on Form 10-K.

Credit Agreement, Convertible Senior Notes, Securitization and Related Hedging Activities

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Derivative Instruments to the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for further details of our hedging activities.

Our Senior Credit Facility has a maturity date of March 24, 2028 and we expect to seek to refinance all of our outstanding debt in 2026.

The Senior Credit Facility is subject to various financial and negative covenants and, at December 31, 2025, the Company was in compliance with all such covenants.

Our Consolidated Total Leverage Ratio was 4.50, with the covenant requirement at 5.00 at the end of December 31, 2025.

As outlined in the table in Note 5.

Debt, the covenant requirement will drop from 5.00 to 4.25 for the fiscal quarter ended December 31, 2025.

Based on our current forecast for the next twelve months we expect to remain in compliance with the financial and negative covenants.

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

Please refer to Note 5.

Debt for the complete covenant table.

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

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Capital Resources

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

We believe that our cash 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, among others.

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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 term loan component of the Senior Credit Facility and our Securitization Facility.

Debt , to the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for details.

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Amounts related to the Company’s other obligations, including employment agreements and purchase obligations were not material.

The Company has contingent consideration obligations related to prior and current year acquisitions and future pension contribution obligations.

T he Company has contingent consideration obligations related to prior years ’ acquisitions and future pension contribution obligations.

Retirement Benefit Plans , and Note 15.

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The Company cannot make a reliable estimate of the period in which the uncertain tax benefits may be realized.

Employee Termination Benefits

The Company incurred employee termination costs on restructuring activities of $5.2 million in the consolidated statement of operations for the year ended December 31, 2024.

Restructuring costs were included in accrued expenses and other current liabilities in the consolidated balance sheet for the year ended December 31, 2024 and 2023.

Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements (Part IV, Item 15 of this Annual Report on Form 10-K) for further details.

CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

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The Company could be required to expense previously capitalized costs related to pre-approval inventory upon a change in such judgment, due to, among other potential factors, a denial or delay of approval by necessary regulatory bodies or a decision by management to discontinue the related development program.

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

Refer to Note 2.

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These assumptions were developed with the assistance of a third-party valuation expert.

In our acquisition of SIA, the key areas of judgment relating to the valuation of the acquired definite-lived developed technology

intangible assets were net revenue growth rates;

cost of sales;

operating expenses including selling and marketing costs, research and development costs, and general and administrative costs;

discount rates;

and intangible assets’ useful lives.

The key areas of judgment relating to the valuation of the contingent consideration are the inputs to the Monte-Carlo model including revenue-adjusted discount rate;

counterpart discount rate;

revenue volatility and forecasted revenue;

earnings before income taxes;

and fixed costs.

These assumptions were developed with the assistance of a third-party valuation expert.

In-process research and development (“ IPR&D ”) acquired in connection with the acquisition of a business in accordance with ASC 805 is initially recognized at fair value and characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use.

The Company uses the income approach to determine the fair value of developed technology and IPR&D acquired in a business combination.

This approach determines fair value by estimating the after-tax cash flows attributable to the respective asset over its useful life and then discounting these after-tax cash flows back to a present value.

Some of the more significant assumptions inherent in the development of those asset valuations include the estimated net cash flows for each year for each product including net revenues, cost of sales, research and development costs , selling and marketing costs, general and administrative costs, the appropriate discount rate to select in order to measure the risk inherent in each future cash flow stream, the assessment of each asset’s life cycle, and competitive trends impacting the asset and each cash flow stream.

The Company has not acquired any IPR&D in connection with the acquisition of a business during the years ended December 31, 2025 and 2024 .

Research and development costs incurred after the acquisition are expensed as incurred.

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If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized.

In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is charged to expense at the acquisition date.

In an asset acquisition, the amount allocated to acquired IPR&D with

no alternative future use is charged to expense at the acquisition date.

Payments that would be recognized as contingent consideration in a business combination are recognized when probable in an asset acquisition.

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In accordance with FASB Topic 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not subject to amortization but is tested for impairment at the reporting unit level annually in the third quarter.

In addition, the Company may perform interim tests of goodwill for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount.

Additionally, the Company may perform interim tests of goodwill for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount.

The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units.

An impairment loss is recognized when the reporting unit’s carrying amount exceeds its estimated fair value.

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

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The Company may elect to bypass this qualitative evaluation for some or all of its reporting units and perform a quantitative test.

For the quantitative test, management uses a combination of both an income approach and a market approach to determine the fair value of the reporting unit.

The income approach utilizes the estimated discounted cash flows for the reporting unit, while the market approach utilizes comparable publicly-traded companies’ revenue and EBITDA multiples.

Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, cost of sales, terminal growth rate, and a discount rate for each reporting unit.

The quantitative test uses a combination of both an income approach and a market approach to determine the fair value of the reporting unit.

The income approach utilizes the estimated discounted cash flows for the reporting unit, while the market approach utilizes comparable publicly-traded companies’ revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples.

Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, cost of sales, terminal growth rates, and a discount rate for each reporting unit.

Discount rates are determined using a weighted average cost of capital for risk factors specific to each reporting unit and other market and industry data.

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Level 3 inputs are supported by limited or no market activity and reflect the Company’s assumptions in measuring fair value.

Key assumptions used to estimate the fair value of each reporting unit include the following:

The key assumptions impacting the valuation included the following:

• The reporting unit’s financial projections, including revenue growth rates and cost of sales, which are based on management’s assessment of regional and macroeconomic variables, industry trends and market opportunities, and the Company’s strategic objectives and future growth plans.

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The weighted-average cost of capital is the Company’s estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.

The Company had goodwill of $1.1 billion on its consolidated balance sheet as of December 31, 2024.

During the third quarter of 2024, the Company elected to bypass the qualitative evaluations of its Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units and perform quantitative tests.

The quantitative test for the Tissue Technologies reporting unit utilized a terminal growth rate of 2.5% and a discount rate of 12.5% in the income approach.

The Company determined, after performing the quantitative analysis, that the fair value of the Tissue Technologies reporting unit was not less than its carrying amount, with 21.2% headroom.

The quantitative test for the Neurosurgery reporting unit utilized a terminal growth rate of 2.5% and a discount rate of 12.0% in the income approach.

The Company determined, after performing the quantitative analysis, that the fair value of the Neurosurgery reporting unit was not less than its carrying amount, with 11.7% headroom.

The quantitative test for the Instruments and ENT reporting unit utilized a terminal growth rate of 2.5% and a discount rate of 11.5% in the income approach.

The Company determined, after performing the quantitative analysis, that the fair value of the Instruments and ENT reporting unit was not less than its carrying amount, with 22.1% headroom.

Based on the results of these quantitative tests, the Company recorded no impairment of goodwill for Tissue Technologies, Neurosurgery, or Instruments and ENT reporting units.

The Company also performed a hypothetical sensitivity analysis of the fair value for each reporting unit by increasing the discount rate by 50 basis points, decreasing the terminal growth rate by 50 basis points, and holding all other assumptions constant, which resulted in a decrease to the estimated fair value of the Tissue Technology reporting unit by 4.5%, a decrease to the estimated fair value of the Neurosurgery reporting unit by 3.8%, and a decrease to the estimated fair value of the Instruments and ENT reporting unit by 3.5%.

Based on the results of the hypothetical sensitivity analyses, the Company would still not have recorded an impairment of goodwill for Tissue Technologies, Neurosurgery, or Instruments and ENT reporting units.

During the first quarter of 2024, due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Company’s manufacturing facility located in Boston, Massachusetts, the Company elected to perform a quantitative analysis of its Tissue Technologies reporting unit.

The quantitative test utilized a terminal growth rate of 2.0% and a discount rate of 14.5% in the income approach.

The Company determined, after performing the quantitative analysis, that the fair value of the Tissue Technologies reporting unit was not less than its carrying amount, with 19.9% headroom.

In accordance with ASC 350, the Company does not amortize intangible assets with indefinite lives but tests its intangible assets with indefinite lives for impairment annually in the third quarter.

In addition, the Company performs interim tests of its intangible assets with indefinite lives for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a indefinite lived intangible asset below its carrying amount.

The Company tests its intangible assets with indefinite lives for impairment by either performing a qualitative evaluation or a quantitative test.

The qualitative evaluation is an assessment of factors, including specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of the intangible asset is less than its carrying amount.

The Company may elect to bypass this qualitative evaluation and perform a quantitative test.

For the quantitative test, management uses an income approach to determine the fair value of the indefinite-lived intangible asset.

The income approach utilizes the estimated discounted cash flows for the indefinite-lived intangible asset.

Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, operating margins, and a discount rate for each indefinite-lived intangible asset.

Discount rates are determined using a weighted average cost of capital that considers market and industry data as well as the Company’s specific risk factors that are likely to be considered by a market participant.

The weighted-average cost of capital is the Company’s estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.

The assumptions used are inherently subject to uncertainty and slight changes in these assumptions could have a significant impact on the concluded value.

The estimates and assumptions applied represent a Level 3 measurement in the fair value hierarchy described in ASC 820.

Level 3 inputs are supported by limited or no market activity and reflect the Company’s assumptions in measuring fair value.

During the third quarter of 2024, the Company elected to bypass the qualitative evaluation for its indefinite-lived intangible asset and performed a quantitative test.

In performing this test, the Company utilized a discount rate of 13.0%.

The assumptions used in evaluating the Codman trade name for impairment are subject to change and are tracked against historical results by management.

Based on the results of the quantitative test, the Company recorded no impairment to the Codman trade name intangible asset.

Developed technologies and other definite-lived intangible assets are amortized over their estimated useful lives either using the straight-line method or, if reliably determinable, based on the pattern of which the economic benefit of the asset is expected to be utilized.

Definite-lived intangible assets are periodically evaluated for impairment in accordance with FASB Topic 360, Property, Plant and Equipment , (“ASC 360”) whenever events or changes in circumstances indicate that a definite-lived intangible asset ’s carrying value may not be recoverable.

The evaluation for recoverability involves comparing the carrying amount of the definite-lived intangible asset to the Company’s expectations of the future undiscounted cash flows derived from the definite-lived intangible asset .

In the event the carrying value of the definite-lived intangible asset exceeds the undiscounted future cash flows expected to be derived from the definite-lived intangible asset over its remaining estimated useful life , the definite-lived intangible asset is considered not recoverable and the definite-lived intangible asset is tested for impairment.

An impairment loss is measured as the excess of the definite-lived intangible asset’s carrying value over its fair value, calculated using market participant assumptions pursuant to ASC 820 using discounted future cash flows based on the present value of estimated future cash flows to be generated by the definite-lived intangible asset using a risk-adjusted discount rate.

The impairment loss is recognized in the period that the impairment occurs.

In the first quarter of 2024, due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility, the Company elected to perform quantitative impairment testing on certain definite-lived intangible assets including completed technology and customer relationships.

The Company recorded an impairment charge related to the definite-lived intangible asset associated with the customer relationships of $7.1 million in intangible asset amortization in the consolidated statement of operations.

With respect to the definite-lived intangible assets associated with the completed technology of SurgiMend® and PriMatrix®, the Company determined that the carrying amount of these definite-lived intangible assets were recoverable and, therefore, the intangible assets were not deemed to be impaired.

In the second quarter of 2024, the Company approved a plan to transition the commercial distribution of SurgiMend® and PriMatrix® from the Boston facility to the Company’s manufacturing facility in Braintree, Massachusetts.

The Company considered the impact to the update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility on the assumptions used in the quantitative assessment of the definite-lived intangible assets completed in the first quarter of 2024, which did not require further evaluation for impairment.

The carrying values of SurgiMend® and PriMatrix® are $32.8 million and $24.4 million, respectively, as of December 31, 2024.

The Company had identifiable intangible assets, net of accumulated amortization, of $1.2 billion on its consolidated balance sheet as of December 31, 2024.

During the second quarter of 2025, the Company performed a quantitative assessment of its Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units in accordance with ASC 350 due to the decrease in the price per share of the Company’s common stock related to a number of factors including recent tariff changes that created broad economic uncertainty and the impact of quality, operational, and supply issues.

The Company recognized an aggregate charge of $511.4 million in goodwill impairment expense in the consolidated statement of operations in the second quarter of 2025.

In the third quarter of 2025, the Company performed its annual test of its reporting units for impairment and completed a qualitative evaluation of its Tissue Technologies and Neurosurgery reporting units.

The Instruments and ENT reporting unit had been deemed fully-impaired during the second quarter of 2025 and was excluded from this evaluation.

After performing the qualitative analysis, the Company concluded that it was more likely than not that the fair values of the Tissue Technologies and Neurosurgery reporting units were greater than their carrying amounts.

Therefore, it was not necessary to perform a quantitative impairment test.

If the price per share of the Company’s common stock, macro-economic market conditions, or related forecast revisions deteriorate, these events or changes in circumstances may indicate a decline in the fair values of the Tissue Technologies and Neurosurgery reporting units below their respective carrying amounts and require the Company to perform an interim test of goodwill for impairment which may potentially result in additional goodwill impairment expense in the future.

The Company had identifiable intangible assets, net of accumulated amortization, of $1.1 billion on its consolidated balance

sheet as of December 31, 2025.

Refer to Note 7.

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What changed 10-K

Item 7. Management’s Discussion and Analysis