What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-05-05 · 170 added, 96 removed, 297 unchanged (47% of the section changed)

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We have made statements in this Quarterly Report that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”).

All statements other than statements of historical fact contained in this Quarterly Report, including, but not limited to, statements regarding our future business, operational and financial performance and the Company’s expectations and plans with respect to market opportunity, business and operational performance, strategic initiatives, capabilities, resources , manufacturing capabilities, product development, product availability and regulatory approvals, including our plans to operationalize the Company’s manufacturing facility in Braintree, Massachusetts (“the Braintree facility”), our expectations regarding the Compliance Master Plan (“the CMP”) implementation, engagement and efficacy, our restructuring and cost-saving initiatives, our intellectual property rights, litigation and tax matters, governmental proceedings and investigations, mergers and acquisitions, divestitures, market acceptance of our products and services, accounting estimates, financing activities, ongoing contractual obligations and compliance with restrictive and financial covenants of our outstanding indebtedness, working capital adequacy, value of our investments, our effective tax rate, estimates regarding the impact of tariffs adopted or implemented by the U.S.

or other countries on our business, financial condition and results of operations, our expected returns to shareholders, and our sales efforts, are forward-looking statements.

All statements other than statements of historical fact contained in this Quarterly Report, including, but not limited to, statements regarding our future business, operational and financial performance and the Company’s expectations and plans with respect to market opportunity, business and operational performance, strategic initiatives, capabilities, resources , manufacturing capabilities, product development, product availability and regulatory approvals, including our plans, production capability, and anticipated operational timelines for the Company’s manufacturing facility in Braintree, Massachusetts (“the Braintree facility”), our expectations regarding the Compliance Master Plan (“the CMP”) implementation, engagement and efficacy, our restructuring and cost-saving initiatives, our intellectual property rights, litigation and tax matters, governmental proceedings and investigations, mergers and acquisitions, divestitures, market acceptance of our products and services, accounting estimates, financing activities, ongoing contractual obligations and compliance with restrictive and financial covenants of our outstanding indebtedness, working capital adequacy, value of our investments, our effective tax rate, estimates regarding the impact of tariffs adopted or implemented by the U.S.

or other countries on our business, tariff refunds, anticipated impact of the flooding event at our Cincinnati, Ohio manufacturing facility, financial condition and results of operations, our expected returns to shareholders, and our sales efforts, are forward-looking statements.

In some cases, these forward-looking statements may be identified by forward-looking words such as “believe,” “may,” “might,” “could,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,” “expect,” “should,” “would” or the negative version of these words or other similar words and expressions in this Quarterly Report.

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potential difficulties, delays and disruptions in manufacturing, distribution or sale of products;

the Company's ongoing assessment of the flooding event at its Cincinnati, Ohio manufacturing facility, related financial impacts, recovery efforts, potential asset impairments, unforeseen costs and insurance recoveries;

the failure of the Company’s suppliers, vendors, and other third parties to meet contractual, regulatory and other obligations;

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difficulties in controlling expenses, including costs to procure and manufacture the Company’s products;

the ability of the Company to successfully manage leadership and organizational changes and the impact of changes in management or staff levels;

the ability of the Company to successfully manage leadership and organizational changes

and the impact of changes in management or staff levels;

the impact of goodwill and intangible asset impairment charges if future operating results of acquired businesses are significantly less than the results anticipated at the time of the acquisitions;

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

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

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ENT Solutions :

The Company’s ENT portfolio comprises a broad range of products including the TruDi® Navigation System featuring navigated surgical instrumentation, the RELIEVA SPINPLUS® Balloon Sinuplasty System, the AERA® Eustachian Tube Dilation System, and the MicroFrance ENT instrumentation line.

We provide technologies and instruments that support a broad range of ear, nose and throat procedures, including navigation, balloon sinuplasty, airway and eustachian tube dilation applications.

The Company’s ENT portfolio comprises products including the TruDi® Navigation System featuring navigated surgical instrumentation, the RELIEVA

SPINPLUS® Balloon Sinuplasty System, the AERA® Eustachian Tube Dilation System, and the MicroFrance ENT instrumentation line.

TISSUE RECONSTRUCTION

Our Tissue Reconstruction segment develops and markets a broad portfolio of regenerative tissue products and technologies primarily focused on wound reconstruction and care and private label.

Our Tissue Reconstruction segment develops and markets a broad portfolio of tissue products and technologies primarily focused on wound reconstruction and care and private label.

This segment serves a diverse range of specialties, including plastic and reconstructive surgery, general surgery, and wound management.

We currently utilize five unique regenerative technology platforms consisting of highly engineered bovine collagen (derived from bovine sources for structural support), bovine dermis (acellular dermal tissue for natural integration), porcine urinary bladder (extracellular matrix for cellular repopulation), human amniotic tissue (allografts as a wound cover), and resorbable synthetic mesh (biodegradable materials for temporary reinforcement).

Wound Reconstruction Solutions:

We currently utilize five unique technology platforms consisting of highly engineered bovine collagen (derived from bovine sources for structural support), bovine dermis (acellular dermal tissue for natural integration), porcine urinary bladder (extracellular matrix for cellular repopulation), human amniotic tissue (allografts as a wound cover), and resorbable synthetic mesh (biodegradable materials for temporary reinforcement).

These technologies address clinical needs in treating acute wounds such as burns, chronic wounds including diabetic foot ulcers, and surgical tissue repair applications such as hernia reinforcement, tendon protection, and peripheral nerve repair.

Wound Reconstruction:

We offer a broad portfolio of products and solutions addressing a full spectrum of needs when managing complex wounds including acute wounds (e.g., burns and trauma), chronic wounds (e.g., diabetic foot ulcers and venous ulcers), and other complex wound types.

The goal is to support the body’s wound healing process by providing scaffolds that create a wound environment that facilitates cellular invasion and revascularization.

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We offer extensive expertise in collagen biomaterials for other medical technology companies that sell to end markets primarily in spine, surgical and wound care.

We manufacture a broad set of our regenerative and wound care technologies that are available for private label distribution by our customers, produce raw materials that can be integrated into our customers’ production processes, and have the expertise to design, develop and manufacture products to meet the specific needs of our customers.

We manufacture a broad set of our tissue and wound care technologies that are available for private label distribution by our customers, produce raw materials that can be integrated into our customers’ production processes, and have the expertise to design, develop and manufacture products to meet the specific needs of our customers.

RESEARCH AND DEVELOPMENT STRATEGY

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Our research and development efforts are focused on the further development and improvement of our existing products, the design and development of new innovative medical technologies, and regulatory compliance across all our business segments.

We apply our core competency in regenerative technology to innovate products for neurosurgical, wound applications, plastic surgery, and reconstructive surgery and we have extensive R&D development programs for our core platforms of electromechanical technologies.

Additionally, we conduct projects and clinical studies to generate efficacy and health economic evidence.

We apply our core competency in tissue reconstruction to innovate products for neurosurgical, wound applications, plastic surgery, and reconstructive surgery and we have extensive R&D development programs for our core platforms of electromechanical technologies.

Additionally, we conduct projects and clinical studies to generate effectiveness and health economic evidence.

The Company has continued its investments in clinical education as a key value driver to leverage its global footprint, enhanced digital content, and strengthened its clinical network.

As part of this objective, the Company remains committed to participation in clinical research demonstrating the efficacy of its products prior to market introduction, and in supporting the clinical education and technical training.

As part of this objective, the Company remains committed to participation in clinical research demonstrating the effectiveness of its products prior to market introduction, and in supporting the clinical education and technical training.

Neurosurgery, Surgical Instruments, and ENT Solutions.

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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 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.

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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.

Throughout the first half of 2026, we introduced the Mayfield Ghost Base Unit Post to markets in Europe, Asia, Australia, and New Zealand.

In November 2025, we received 510(k) clearance for the use of the CUSA Clarity system for cardiac surgeries, used for the debridement of unwanted tissue in cardiac surgeries, including valve replacement and repair.

Regenerative Technologies .

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.

Tissue Products and Technologies .

Our tissue 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.

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

Our tissue 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 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 currently expect the Braintree facility to be operational in June 2026, with PMA approval anticipated to follow in 2027.

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

We expect PMA approval for SurgiMend in 2027.

We are also pursuing a PMA for DuraSorb for use in implant-based breast reconstruction.

We completed enrollment for the DuraSorb U.S.

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

completed treatment in 2024, completed patient 1-year follow up in 2025, and we continue to advance the PMA application.

Currently, we hope to secure PMA approval for DuraSorb in 2027.

investigational device exemption clinical study for two-stage breast reconstruction in June 2023, completed treatment in 2024, completed patient 1-year follow up in 2025, and we continue to advance the PMA application.

We expect PMA approval for DuraSorb later in 2027.

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

EUROPEAN UNION MEDICAL DEVICE (“EU MDR”) REGULATION UPDATES

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

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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 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.

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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 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.

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”).

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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.

The restart of the manufacturing of SurgiMend 510k product will occur at the Company’s new tissue manufacturing facility in Braintree, Massachusetts (the “Braintree transition”).

In addition, the Company entered into a new third-party agreement, which facilitated the relaunch of PriMatrix, as well as Durepair Dural Regeneration Matrix in 2025, ahead of previously disclosed timelines.

The Braintree facility became operational in June 2026 and is currently ramping up production to support the planned SurgiMend relaunch in the fourth quarter of 2026.

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.

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During 2025, we incurred $8.5 million of restructuring costs related to this initiative.

In the first quarter of 2026, we incurred an additional $3.8 million in restructuring related expenses, consistent with the previously announced plans.

In the six months ended June 30, 2026, we incurred an additional $3.8 million in restructuring related expenses, consistent with the previously announced plans.

In addition, we incurred costs related to executive restructuring activities during the six months ended June 30, 2026, which were separate from the previously announced plans.

CINCINNATI FACILITY FLOOD DAMAGE

On July 17, 2026, our manufacturing facility in Cincinnati, Ohio sustained flood damage as a result of severe weather conditions.

The flooding caused damage to portions of the facility, equipment, inventory and other assets and resulted in operational disruptions at the site.

We responded immediately to the event and implemented our business continuity plans to support ongoing customer service and operational continuity.

We are continuing to assess the full extent of the damage and finalize remediation and recovery plans.

Based on our current assessment, including available inventory at our distribution centers and our insurance coverage, we do not currently expect the event to have a material adverse effect on our operations or financial condition.

However, our evaluation of the full financial impact of the event remains ongoing, including the ultimate costs of remediation and restoration, the amount of any potential asset impairments, and the timing and extent of insurance recoveries.

We maintain insurance coverage for property damage and business interruption losses and are actively working with our insurance carriers to assess available coverage and potential recoveries.

While we believe the event may result in insurance recoveries, the amount and timing of any such recoveries cannot be assured.

For additional information regarding the flood damage to the Cincinnati facility, see Note 17.

Subsequent Events .

RESULTS OF OPERATIONS

Executive Summary

Net loss for the three months ended March 31, 2026 was $(4.6) million, or $(0.06) per diluted share, as compared to net loss of $(25.3) million, or $(0.33) per diluted share, for the three months ended March 31, 2025.

The net loss decreased for the three months ended March 31, 2026, primarily due to the reduced impact of quality and operational issues in the current year compared to prior period.

For the three and six months ended June 30, 2026, net income (loss) was $4.5 million and $(0.1) million, or $0.06 and $(0.00) per diluted share, as compared to net losses of $(484.1) million and $(509.4) million, or $(6.31) and $(6.65) per diluted share, for the three and six months ended June 30, 2025.

The improvement in net income (loss) for the three and six months ended June 30, 2026 was primarily attributable to the goodwill impairment charge recognized in the prior year.

Special Charges

Income before taxes includes the following special charges :

Three Months Ended March 31,

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

Dollars in thousands 2026 2025 2026 2025

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Structural optimization charges 7,513 5,944 16,817 16,607

Boston recall / Braintree transition (2)

Braintree transition (2)

9,918 13,630 17,646 28,440

EU medical device regulation 2,439 10,681 10,326 21,625

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

Three Months Ended March 31,

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

Dollars in thousands 2026 2025 2026 2025

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

Three Months Ended March 31,

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

Dollars in thousands 2026 2025 2026 2025

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Gross margin as a percentage of total revenues 52.5 % 50.4 % 53.9 % 50.6 %

Three Months Ended March 31, 2026 as Compared to Three Months Ended March 31, 2025

Three Months Ended June 30, 2026 as Compared to Three Months Ended June 30, 2025

Revenues and Gross Margin

For the three months ended March 31, 2026, total revenues increased by $9.3 million to $391.9 million from $382.7 million for the same period in 2025, representing low-single digit growth compared to the same period in the prior year.

For the three months ended June 30, 2026, total revenues increased by $3.2 million to $418.8 million from $415.6 million for the same period in 2025, representing low-single digit growth compared to the same period in the prior year.

In the Specialty Surgery segment, revenues were $309.3 million which represents an increase of $5.3 million, or 2% as compared to the prior-year period.

Excluding the impact of foreign currency of $4.1 million, the increase in revenue is primarily driven by Neurosurgery, offset by decreases in our Instrument and ENT business.

In the Tissue Reconstruction segment, revenues were $108.8 million which represents an increase of $6.8 million, or 7% as compared to the prior-year period.

This is primarily attributable to growth in Integra Skin, which recovered from prior year supply issues, Primatrix and Durasorb, offset by the impact of quality and operational issues associated with Medihoney.

Gross margin was $217.0 million for the three months ended March 31, 2026, an increase of $22.6 million from $194.4 million for the same period in 2025.

Gross margin as a percentage of revenues was 55.4% for the three months ended March 31, 2026 and 50.8% for the same period in 2025.

The increase in gross margin is primarily attributable to higher revenues and a reduction in costs related to the Braintree remediation.

Excluding the impact of foreign currency of $0.4 million, the increase in revenue is primarily driven by Neurosurgery and Surgical Instruments, offset by decreases in our ENT Solutions business.

In the Tissue Reconstruction segment, revenues were $109.5 million which represents a decrease of $2.2 million, or 2% as compared to the prior-year period.

The decline was attributable to lower sales of MicroMatrix and Integra Skin, partially offset by growth in PriMatrix and DuraSorb.

The decrease in Integra Skin sales was primarily due to the clearance of backorders in the prior-year period.

Gross margin was $219.7 million for the three months ended June 30, 2026, an increase of $10.4 million from $209.3 million for the same period in 2025.

Gross margin as a percentage of revenues was 52.5% for the three months ended June 30, 2026 and 50.4% for the same period in 2025.

The increase in gross margin is primarily attributable to a reduction in costs associated with the Braintree remediation, lower costs related to quality and operational issues, and improved manufacturing performance compared to the same period in the prior year.

Operating Ex penses

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

Three Months Ended March 31,

Three Months Ended June 30,

Research and development 5.8 % 6.5 %

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Intangible asset amortization 0.9 % 0.9 %

Goodwill Impairment — % 123.0 %

Total operating expenses 47.9 % 173.7 %

Total operating expenses, which consist of research and development, selling, general and administrative, and amortization expenses, decreased by $4.4 million, or 2.1%, to $205.5 million in the three months ended March 31, 2026, compared to $209.9 million in the same period in 2025.

Total operating expenses, which consist of research and development, selling, general and administrative, and amortization expenses, decreased by $521.5 million, or 72.2%, to $200.5 million in the three months ended June 30, 2026, compared to $722.0 million in the same period in 2025, mainly driven by the goodwill impairment charge in the second quarter of the prior year.

Research and Development

Research and development expenses for the three months ended March 31, 2026 decreased by $1.2 million as compared to the same period in the prior year, primarily attributable to cost management initiatives in the current year.

Research and development expenses for the three months ended June 30, 2026 decreased by $2.7 million as compared to the same period in the prior year, primarily attributable to reduced spending in EU MDR.

Selling, General and Administrative

Selling, general and administrative costs for the three months ended March 31, 2026 decreased by $3.3 million as compared to the same period in the prior year, primarily due a reduction in Acclarent integration costs and reduced spending in EU MDR.

Selling, general and administrative costs for the three months ended June 30, 2026 decreased by $7.5 million as compared to the same period in the prior year, primarily due a reduction in Acclarent integration costs and reduced spending in EU MDR.

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 March 31, 2026 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 June 30, 2026 was $3.8 million, consistent with 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 March 31,

Three Months Ended June 30,

Dollars in thousands 2026 2025

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Interest Income

Interest income for the three months ended March 31, 2026 decreased by $0.3 million as compared to the same period in the prior year.

Interest income for the three months ended June 30, 2026 decreased by $0.4 million as compared to the same period in the prior year.

Interest Expense

Interest expense for the three months ended March 31, 2026 increased by $3.7 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, which was repaid in August 2025.

Interest expense for the three months ended June 30, 2026 increased by $2.0 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, which was repaid in August 2025.

Other Income (Expense), net

Other income (expense), net for the three months ended March 31, 2026 changed by $4.6 million as compared to the same period in the prior year, primarily driven by higher income recognized on our cross currency swap contracts.

Three Months Ended March 31,

Other income (expense), net for the three months ended June 30, 2026 changed by $6.1 million as compared to the same period in the prior year, primarily driven by higher income on our cross currency swap contracts.

For additional information regarding our cross-currency swap arrangements, see Note 6.

Derivative Instruments .

Three Months Ended June 30,

Dollars in thousands 2026 2025

Loss before income taxes $ (2,409) $ (30,036)

Income (loss) before income taxes $ 4,744 $ (530,952)

Provision (benefit) for income taxes 262 (46,879)

Effective tax rate 5.5 % 8.8 %

The Company’s effective income tax rates for the three months ended March 31, 2026 and 2025 were (91.7)% and 15.8%, respectively.

For the three months ended March 31, 2026, the Company’s effective tax rate was primarily driven by a $2.9 million tax expense related to a shortfall from stock-based compensation, due to market conditions.

For the three months ended March 31, 2025, the Company’s effective tax rate was driven by federal, state, and international tax benefits generated from operating losses in certain jurisdictions, offset by a $2.1 million tax expense related to a shortfall from stock-based compensation.

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.

We consider these factors and others, including the Company’s history of generating taxable earnings, in assessing our ability to realize tax assets on a quarterly basis.

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

Various governments, both U.S.

and non-U.S., are increasingly focused on tax reform and revenue-raising legislation.

On July 4, 2025 the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S., with certain provisions effective in 2025 and others implemented through 2027.

The OBBBA included the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act, the immediate expensing of previously capitalized research and development costs, and reduced limitations on interest expense deductions, among other provisions.

Further, the Company continues to monitor legislation in foreign jurisdictions, enacted in response to ongoing efforts led by the Organization of Economic Cooperation and Development (“OECD”).

The OECD released Pillar Two model rules, defining a new 15% global minimum tax for each jurisdiction in which a multinational corporation operates, effective beginning in 2024.

The Company’s effective income tax rates for the three months ended June 30, 2026 and 2025 were 5.5% and 8.8%, respectively.

The 2026 effective tax rate was primarily impacted by tax benefits associated with returns filed in certain foreign jurisdictions, as well as the jurisdictional mix of income, including its impact on the Company’s net Controlled Foreign Corporation tested income (“NCTI”) inclusion, formerly referred to as Global Intangible Low Taxed Income (“GILTI”).

The 2025 effective tax rate was primarily impacted by a partially non-deductible goodwill impairment charge, NCTI, and additional taxes related to global minimum tax requirements in certain foreign jurisdictions, partially offset by tax benefits from operating losses in certain jurisdictions.

The effective tax rate may vary from period to period due to factors including the geographic and business mix of taxable earnings and losses, tax planning activities, and settlements with taxing authorities.

The Company evaluates these factors, together with its history of taxable earnings, when assessing the realizability of its tax assets on a quarterly basis.

Additionally, changes in tax laws or regulations in the jurisdictions in which the Company operates could impact its effective tax rate.

Governments in the U.S.

and abroad continue to focus on tax reform and revenue-raising legislation.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), was enacted in the U.S.

The OBBBA includes several tax law changes, including extensions of certain 2017 Tax Cuts and Jobs Act provisions, immediate expensing of certain research and development costs, and changes to interest expense deduction limitations.

The Company continues to monitor tax legislation enacted by foreign jurisdictions in response to the Organization of Economic Cooperation and Development's (“OECD”) Pillar Two global minimum tax framework.

Pillar Two generally provides for a 15% minimum tax on large multinational companies on a jurisdiction-by-jurisdiction basis, with certain provisions effective beginning in 2024.

Six Months Ended June 30, 2026 as Compared to Six Months Ended June 30, 2025

Revenues and Gross Margin

For the six months ended June 30, 2026, total revenues increased by $12.4 million to $810.7 million from $798.3 million for the same period in 2025, representing low-single digit growth compared to the same period in the prior year.

In the Specialty Surgery segment, revenues were $592.4 million, an increase of $7.8 million, or 1% from the prior year period.

Excluding the impact of foreign currency of $4.5 million, the increase in revenue is primarily driven by Neurosurgery, offset by decreases in our Surgical Instrument and ENT Solutions business.

In the Tissue Reconstruction segment, revenues were $218.3 million, an increase of $4.6 million, or 2% from the prior year period.

This is primarily attributable to growth in Primatrix and Durasorb, offset by the impact of quality and operational issues associated with Medihoney.

Gross margin was $436.7 million for the six months ended June 30, 2026, an increase of $33.0 million from $403.8 million for the same period in 2025.

Gross margin as a percentage of total revenue increased to 53.9% for the six months ended June 30, 2026 from 50.6% in the same period in 2025.

Operating Expenses

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

Six Months Ended June 30,

Research and development 5.9 % 6.5 %

Selling, general and administrative 43.3 % 45.3 %

Intangible asset amortization 0.9 % 0.9 %

Goodwill Impairment — % 64.1 %

Total operating expenses 50.1 % 116.8 %

Total operating expenses, which consist of selling, general and administrative expenses, research and development expenses, and amortization expenses, decreased by $526.0 million, or 56.4% to $406.0 million in the six months ended June 30, 2026, compared to $931.9 million in the same period in 2025, primarily driven by goodwill impairment recorded in the second quarter of the prior year.

Research and Development

Research and development expenses for the six months ended June 30, 2026 decreased by $4.0 million as compared to the same period, primarily attributable to reduced spending in EU MDR.

Selling, General and Administrative

Selling, general and administrative costs decreased by $10.7 million as compared to the same period in the prior year, primarily due a reduction in Acclarent integration costs and reduced spending in EU MDR.

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, 2026 was $7.5 million, consistent with the same period in the prior year.

We expect total annual amortization expense to be approximately $53.7 million for the remainder of 2026, $106.5 million in 2027, $102.9 million in 2028, $97.6 million in 2029, $91.5 million in 2030, $88.5 million in 2031 and $358.6 million thereafter.

Non-Operating Income and Expenses

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

Six Months Ended June 30,

Dollars in thousands 2026 2025

Interest income $ 8,372 $ 9,130

Interest expense (45,459) (39,857)

Other income (expense), net 8,665 (2,090)

Total non-operating expense $ (28,422) $ (32,817)

Interest Income

Interest income for the six months ended June 30, 2026 decreased by $0.8 million as compared to the same period in the prior year.

Interest Expense

Interes t expense for the six months ended June 30, 2026 increased by $5.6 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, which was repaid in August 2025.

Other Income (expense), net

Other income (expense), net for the six months ended June 30, 2026, increased by $10.8 million as compared to the same period in the prior year, primarily driven by higher income on our cross currency swap contracts.

For additional information regarding our cross-currency swap arrangements, see Note 6.

Derivative Instruments .

Six Months Ended June 30,

Dollars in thousands 2026 2025

Income (loss) before income taxes $ 2,333 $ (560,988)

Provision (benefit) for income taxes 2,467 (51,622)

Effective tax rate 105.7 % 9.2 %

The Company’s effective income tax rates for the six months ended June 30, 2026 and 2025 were 105.7% and 9.2%, respectively.

The 2026 effective tax rate was primarily impacted by a tax expense related to a shortfall from stock-based compensation due to market conditions, partially offset by a tax benefit from returns filed in certain foreign jurisdictions.

GEOGRAPHIC PRODUCT REVENUES AND OPERATIONS

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Total revenue by major geographic area consisted of the following:

Three Months Ended March 31,

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

Dollars in thousands 2026 2025 2026 2025

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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 March 31, 2026 and December 31, 2025 was $825.2 million and $703.6 million, respectively.

The Company’s working capital as of June 30, 2026 and December 31, 2025 was $860.6 million and $703.6 million, respectively.

The increase in working capital is driven by the 2026 amendment of our Securitization Facility, which resulted in the reclassification of borrowings from current liabilities to long term liabilities.

Cash and Marketable Securities

The Company had cash and cash equivalents totaling approximately $236.8 million and $235.0 million at March 31, 2026 and December 31, 2025, respectively, which are valued based on Level 1 measurements in the fair value hierarchy .

At March 31, 2026, our non-U.S.

The Company had cash and cash equivalents totaling approximately $214.4 million and $235.0 million at June 30, 2026 and December 31, 2025, respectively, which are valued based on Level 1 measurements in the fair value hierarchy .

At June 30, 2026, our non-U.S.

subsidiaries held approximately $185.1 million of cash and cash equivalents that are available for use outside the U.S.

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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 $28.7 million at March 31, 2026 and December 31, 2025.

Three Months Ended March 31,

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 $59.7 million and $28.7 million, respectively, at June 30, 2026 and December 31, 2025.

Six Months Ended June 30,

Dollars in thousands 2026 2025

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Cash Flows Provided by or Used in Operating Activities

Operating cash flows for the three months ended March 31, 2026 increased by $21.1 million compared to the same period in 2025.

Within operating cash flows, net income less non-cash adjustments increased for the three months ended March 31, 2026 by approximately $27.0 million, primarily due to the reduced impact of quality and operational issues in the current year compared to the prior period.

The changes in assets and liabilities for the three months ended March 31, 2026, net of business acquisitions, decreased cash flows by $30.6 million, mainly attributable to a decrease in accrued expenses and other current liabilities due to payment of employee bonuses and an increase in inventory which increased cash outflows.

Operating cash flows for the six months ended June 30, 2026 increased by $34.9 million compared to the same period in 2025.

Within operating cash flows, net income less non-cash adjustments increased for the six months ended June 30, 2026 by approximately $49.0 million, primarily due to the reduced impact of quality and operational issues in the current year compared to the prior period, as well as lower spending on EU MDR compliance and Braintree transition.

The changes in assets and liabilities for the six months ended June 30, 2026, net of business acquisitions, decreased cash flows by $56.8 million, mainly attributable to a decrease in accrued expenses and other current liabilities, due to payment of SIA contingent consideration, and an increase in other current assets.

This is partially offset by improved customer collections.

The changes in assets and liabilities for the three months ended March 31, 2025, net of business acquisitions, decreased cash flows by $24.7 million, mainly attributable to decreases in accrued expenses and other current liabilities due to payment of employee bonuses.

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.

Cash Flows Used in Investing Activities

Uses of cash from investing activities for the three months ended March 31, 2026 were $14.8 million paid for capital expenditures to support improvement initiatives at a number of our manufacturing facilities and other technology investments.

There were no sources of cash from investing activities for the three months ended March 31, 2026.

Uses of cash from investing activities during the three months ended March 31, 2025 were $28.9 million paid for capital expenditures to support improvement initiatives at a number of our manufacturing facilities, and other technology investments, as well as $7.0 million related to short-term investments.

There were no sources of cash from investing activities for the three months ended March 31, 2025.

Uses of cash from investing activities for the six months ended June 30, 2026 were $31.0 million purchases of short term investments and $27.2 million paid for capital expenditures to support improvement initiatives at a number of our manufacturing facilities and other technology investments.

There were no sources of cash from investing activities for the six months ended June 30, 2026.

Uses of cash from investing activities during 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 purchases of short-term investments.

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

Cash Flows Provided by Financing Activities

Uses of cash from financing activities in the three months ended March 31, 2026 related to the repayments of $35.6 million under our Senior Credit Facility and Securitization Facility.

In addition, the company paid $1.4 million in cash taxes for net equity settlements.

Sources of cash from financing activities for the three months ended March 31, 2026 were $44.5 million of proceeds from borrowings of long term indebtedness and $0.8 million related to the proceeds from employee stock purchases.

Uses of cash from financing activities in the three months ended March 31, 2025 related to the repayments of $15.2 million under our Senior Credit Facility and Securitization Facility, as well as $2.6 million related to payment of contingent consideration in connection with our acquisition of Arkis.

In addition, the Company had $2.1 million in cash taxes paid for net equity settlements.

Sources of cash from financing activities for the three months ended March 31, 2025 were $54.4 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, 2026 related to the repayments of $60.5 million under our Senior Credit Facility and Securitization Facility.

In addition, the Company paid $6.8 million related to payment of SIA contingent consideration, $1.6 million in cash taxes for net equity settlements, and $0.3 million in debt issuance costs.

Sources of cash from financing activities for the six months ended June 30, 2026 were $75.9 million of proceeds from borrowings of long term indebtedness and $0.8 million related to the proceeds from employee stock purchases.

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 paid 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.

Tariffs and Macroeconomic Environment

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administration’s tariff program implemented under the International Emergency Economic Powers Act (“IEEPA”), concluding that IEEPA did not authorize the broad import duties previously imposed.

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

Following the ruling, the U.S.

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.

administration announced a global 10.0% tariff under Section 122 of the Trade Act of 1974, which permits temporary import surcharges of up to 15% for a period of up to 150 days to address balance of payments deficits, with implementation effective almost immediately and subject to certain exemptions.

Following the expiration of tariffs previously imposed under Section 122 in July 2026, the U.S.

administration announced the immediate implementation of tariffs which apply to certain products we import under Section 301 of the Trade Act of 1974 at rates ranging from 10.0% to 12.5%.

The timing, scope, and duration of these tariffs remain uncertain and are subject to change based on governmental actions.

Subsequent to the U.S.

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Customs and Border Protection (“CBP”) to establish an administrative process to issue refunds of any IEEPA tariffs imposed without appropriate authority.

On April 20, 2026, the CBP launched an online portal referred to as the Consolidated Administration and Processing of Entries (“CAPE”) that can be used to submit IEEPA tariff refund requests.

All requests will be reviewed by the CBP to determine validity prior to the issuance of refunds.

On April 20, 2026, the CBP launched an online portal referred to as the Consolidated Administration and Processing of Entries (“CAPE”) that can be used to facilitate the submission and processing of IEEPA tariff refund requests.

As of June 30, 2026, the Company had submitted IEEPA tariff refund claims of $17.6 million, consisting of $16.7 million submitted through Phases 1 and 2 of CAPE and $0.9 million submitted through formal protests filed outside CAPE, all of which remain subject to CBP review and validation prior to the issuance of refunds.

The Company expects the remaining amount will be received through Phase 3 of CAPE and through vendor refunds.

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

During the three months ended March 31, 2026, the Company applied the guidance within FASB Topic 405-20, Liabilities - Extinguishments of Liabilities (“ASC 405-20”).

As a result, the Company recognized a receivable of $18.7 million, recorded within other current assets, for tariffs previously paid on imported goods that are subject to refund.

In the first quarter of 2026, the Company applied the guidance within FASB Topic 405-20, Liabilities - Extinguishments of Liabilities (“ASC 405-20”) and as a result, recognized a receivable of $19.0 million, recorded within other current assets, for tariffs previously paid on imported goods that are subject to refund.

Of this amount $3.4 million had been previously expensed in 2025 to cost of goods sold, and $15.6 million would have been expensed in the current year.

These adjustments relate to the legal right to receive a refund of IEEPA tariffs previously imposed on the Company without appropriate authority.

During the six months ended June 30, 2026, the Company received cash refunds of $0.5 million, which reduced the receivable balance.

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.

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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 March 31, 2026, the Company was in compliance with all such covenants.

Our Consolidated Total Leverage Ratio was 4.12, with the covenant requirement at 5.00 at the end of March 31, 2026.

The Senior Credit Facility is subject to various financial and negative covenants and, at June 30, 2026, the Company was in compliance with all such covenants.

Our Consolidated Total Leverage Ratio was 4.10, with the covenant requirement at 5.00 at the end of June 30, 2026.

As outlined in the table in Note 5.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements during the three months ended March 31, 2026 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 six months ended June 30, 2026 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

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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.

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

Retirement Plans , and Note 15.

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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, 2025 did not materially change in the three months ended March 31, 2026.

The critical accounting estimates discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 did not materially change in the six months ended June 30, 2026.

Recently Issued Accounting Standards

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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