Okay, good morning, everyone. Thanks for being here. My name is Vik Chopra. I work on the med tech team at Wells Fargo. I'm pleased to introduce Jan De Witte, CEO of Integra LifeSciences. Jan, thanks so much for being here, and I wanted to wish you a happy birthday before we start, so. Yeah. The chair's mic is on. Thanks. Thank you. Very happy to be here today. Given it's my birthday, I'm gonna try maybe at the end of the day to throw a dollar in the slot. Yeah, exactly. Let's see how that works. Good luck. So, you know, thanks for being here. I just wanted to start with an overall macro question. You know, as you approach the one-year mark of being a CEO, I'd like to get your thoughts on what surprised you the most. What's been the most challenging over the past 12 months or so? Yeah. Well, I mean, about, I think it's nine months now, so it's, at the end of a, of a pregnancy time to, to give birth. But when, when I look at, at Integra and my, experience over the past nine months, positives and negatives, right? I mean, I, I love the, the markets where Integra plays, right? Neurosurgery, soft tissue regeneration. Two markets that are, are sizable with a, a good long-term growth trends driven by population growth, driven by, how chronic disease, evolves. Also driven by the fact that standard of care in these, areas is still changing and, and improving, which for a company like Integra with innovation capabilities, strong, strong brands, strong commercial presence, gives us opportunities to really play to what this, this market, needs. Very much like, how Integra plays in, in this market. We have a broad portfolio of products that makes us very relevant, you know, when we sit with the surgeons, when we sit, you know, with the hospital administrators. Also creates a business where, you know, not one product makes or breaks the business. So we have, and we've seen that over COVID. We have quite some resilience, you know, in our growth pattern in the business. Team that is resilient knows how to execute and good profitable growth. First half of this year has shown that. And then, you know, business has multiple avenues for accelerating growth, driving that performance, whether it's organic, inorganic, international. Yeah, there's digital aspects. On the yeah things where look at the business and say we need to step up, make clearly coming out of COVID, but also coming out of quite some significant M&A. There's still some post-merger work to be done, streamlining our operations, building up some of our commercial capabilities, and then we're working at this point on strengthening how we bring new products to market, our strategic marketing capability, and how across the different capabilities of the business to be faster, more predictable in how we bring good ideas to market. Perfect. You know, I'd love to get your thoughts on the LRP goals that were laid out previously. How confident are you in the 5%-7% organic top-line growth with an improving profitability profile? I mean, the short word is very. And I think the first half of this year has helped also for me to validate, yeah, the drivers and the momentum that we have in our markets. We grew in the first half, yeah, a bit above 5%, reflective of the markets, you know, the market dynamic in neuro and tissue technologies. Yeah, we did not have too much benefit yet of the new products that we're putting in the market. Some, you know, are still in the pipeline. Others are very early in the market. So, yeah, the upside potential of new products is more the next couple of years, you know, that we're gonna really see that. International, yeah, Asia and Europe definitely is above-average, yeah, grower. And that will continue in the future, and we're further strengthening that. And then, you know, beyond that, we have a very strong balance sheet and a team that is very M&A capable. And my chairman told me before I joined, said we're an acquisitive business. Right. I, and I took that for granted now that I'm in. I understand what. Right. What he meant. So we have the capability to do acquisitions and definitely see the opportunities, and are working that. From a profitability perspective, you know, tough environment, but we managed to keep profitability year -over -year, you know, at the same level. So despite the headwinds, we're working on all operational and structural levels to accomplish that, but also, you know, looking forward to 2023 and beyond, whether it's pricing, variable costs, productivity, conversion costs, yields, mix. I mean, we're working all these levers. So we feel good, you know, about the levers we have in hand. There's, you know, of course, a bit the overhang and the question on the macroeconomic. Mm-hmm. Like in any industry, I think COVID has, you know, ripped two years out of, you know, whatever, you know, trends. Right. And today there's a bit the political, you know, economic, you know, impacts that keep adding a bit of uncertainty on exactly that timeline. But, yeah, definitely, you know, long-range targets that we've set, feel comfortable that we'll get there. The uncertainty is what's the shape of that curve. Right. To get there with the macro. Great. You know, just stepping back to Q2, I'd love to get your thoughts on any changes in the overall operating in the macro environment. You know, what are your thoughts on what's getting better, what's getting worse when we look at inflation, supply chain, procedure volume, staffing shortages, and obviously capital equipment demand? I think the short is that I would say pretty much across the board things are slowly getting better. Inflation a little bit. Okay. Now on both sides. So what if I look at supply constraints, material supply, which has bothered us, yeah, and I think everybody in the industry, that's slowly getting better, but we still see a lot of supplier decommits, timelines that change, need for us to reprogram, you know, our production. So it's getting better, but slowly. Logistics, you can feel that the trade flows in the world are not, yeah, in balance. Yeah, so you know, access to transportation capacity, again, it's better than six months, nine months ago. Yeah, but definitely not yet to what normal state would be. Talent turnover is a lot better than, you know, even six months ago, but we're still higher than normal on that. Yeah, in inflation, yes, primarily energy, and I would say primarily in Europe. You know, we do feel, you know, the high European energy cost in our factories, both in France, you know, and Switzerland and Ireland. U.S. is a bit more subdued. So, yeah, the internal factors slowly getting better. From a procedure perspective, slowly getting better. Our sales force tells me we're still somewhere between 90%-95% in terms of procedures, and the biggest factor there is still nursing capacity in hospitals. You know, they also are bit by bit getting better, but you know, not a step change. Perfect. So just stepping back and looking at the supply constraints and the inflationary environment, how does that factor into your guidance for 2022? And I guess looking into your crystal ball, when do you expect things to improve? So inflation is a tough one, right? And we're definitely over the next couple of months hope to learn a bit more on how these macro factors play. We are literally ramping up, you know, a broad battery of actions, levers, you know, to deal, you know, with pressures. And we'll see how they play out. If, you know, they play out lower than, you know, we'll have a nice margin accretion if the factors really are strong. You know, we'll manage to maintain margins. But yeah, we're working on price. You know, we're working on price getting. You know, we're less cooperative as in the past in giving discount in taking returns. You know, a lot of focus on working with our suppliers or finding other suppliers to deal with inflation. A lot of focus on yields in our factories. There's opportunities to really step up efficiency in our factories that definitely helps. There's structural changes we've done. Closed a factory in the south of France. High-cost, moved volume to our factory in Switzerland, benefiting from scale, outsourced back office processes to low-cost countries. Structural measures that, you know, we'll see the benefits in 2023 and beyond. Right. You know, not really in 2022, and then there's mix that you know we'll see. End of August, you know, we closed the selloff of this small traditional wound care activity, which was low growth, low margin, not strategic. It helped the mix of the business, and we'll see in our tissue technology business, which has, if you look at the market, a higher growth rate than our surgery, our neurosurgery business, but also higher contribution margins. So that leverages up our margin, and so you know all of these factors, that's what I call a battery of levers to. Mm-hmm. To drive gross margin and business profitability. All of them are worked. How they translate, you know, in the end, there's a macro factor that, you know, is still sitting somewhere in between there. Right. Right. I wanted to spend some time on the hospital capital equipment environment. What's your view of the market right now? How has that changed since your comments on the Q2 call? Not too much, in fact. I think we updated two weeks ago our guidance to reflect the CereLink recall. But from the market, I would say, is still the same. We communicated in the second quarter that we saw a somewhat longer selling cycle, decision cycle, driven by, you know, administrative processes that in hospitals go a bit slower. And that's still COVID and staffing that's playing. Yeah, but also some talk, you know, about, you know, is there gonna be a recession or not? But at this point in time, there's talk. People are careful, but there's no way do we see budget freezes in that. So, yeah, the situation today is still like it was a couple of months ago. Not clear when the decision cycles will get shorter. It will definitely, if that happens, accelerate a bit, you know, for us. Right. Although our capital volume today is pretty much at the level of 2019. Oh, wow. Okay. Yeah. So the volume is good. It's just that, you know, the cycles over the past year have been lengthened. Got it. Anything you'd call out between small and large capital? Anything to highlight there or distinguish? Not too much. Yeah, I think both evolve comparably. You also need to consider what we call large capital. It's like our CUSA systems is a $200,000, you know, sales price. So that's, you know, that's medium. Right. If you compare it to, you know, other medtech companies and what they call large capital. So between our large and small, $200,000-$50,000, it's often still the same category in the eyes of purchasing a hospital. Perfect. So just a segue into CSS, you mentioned the CereLink recall. Can you provide an update as to where things stand currently? Yep. On that recall, I'm not sure if you've read the small print. We had an issue where in a number of cases, you know, quite low incidence, but a number of cases, the reading got out of range, and the system gave an alarm and said, "Look, I'm out of range." Low incidence, you know, 1.5%, also concentrated in a number of hospitals. Out of an abundance of caution, we stopped shipment, investigated the root cause, which you know brought back to a component on a circuit board that emits electrical interference, which is more pronounced in hospital environments where there's external interference, bad cable management, and so on. But yeah, enough of a concern to recall the product. We're now, you know, deep into translating the insight into the root cause, the technical root cause into, you know, fixes, testing different components, you know, to be put on that board. That's the focus at this point in time, in addition to helping our customers through this transition. They're clearly, you know, disappointed. This is a great technology. We're helping them either get back to their previous ICP EXPRESS, or, you know, we try to help them with loaners to keep them going. Yeah, focus is on keeping this as short as we can. I think we are on the right path in understanding the fix. And then, you know, with the FDA and other regulators, need to define the path to validate and bring the product back into the market. Any steps that you've taken in terms of the changes to your commercial strategy for the product? So more discounting to get it back into the field, perhaps more consignment or placements, anything of that sort? No. And at this point, we don't plan that. I think the product itself is quite unique as with its user interface, user friendliness, the analytics capabilities. It's a unique product. I think we'll again focus on you know making this as short as possible, getting back into the market, and you know really drive the continued success of that product you know with the functionalities, the features that it has. Okay. Perfect. And you seem pretty confident you can address the recall in a timely manner. I am. And that's because I'm deep with our engineers and understanding the root cause. And that it all starts by understanding, you know, the technical root cause. Yeah. There is always some uncertainty with the process, you know, with the regulators, with the FDA and what it takes to validate that. That's not fully in our hands. Got it. You know, let's pivot to the back half of this year, and would love to get your thoughts on how you're thinking about the last few months of this year. You know, we touched on the macro environment assumptions earlier. You know, I'd love to get your thoughts on how you're thinking about the organic growth cadence for Q3 and Q4, and how you're thinking about the typical summer seasonality in Q3. Yeah. Typical seasonality for our business, third quarter, is always comparable to the second quarter, you know, with one correction that we communicated in July, which is the selloff of that traditional wound care business that has a bit. And then, of course, the 8-K that we send out, I think, mid. Mm-hmm. Mid-August, correcting $9 million top line. Right. Yeah, for the recall. And those, we also updated at that time the guidance for the year. That's the only change we brought into the guidance. So we very much see the dynamic today as we saw it in July, you know, with the correction for the recall. It does reflect the broad portfolio again, right? This is, you know, one product, you know, CereLink, where we have this correction, but we have a broad portfolio where, you know, we have pluses and minuses that keep us on track within our guidance. So you, you know, you posted 4.8% organic growth in Q2, just over 5%, for the first half of the year. You updated your guidance for the CereLink recall. How do you feel about that guidance today, just sort of kind of given where we are in the macro environment? So I feel good about that guidance. That's also why two weeks ago we kept it. I think the uncertainties today are pretty much the same as the uncertainties we saw a month ago in that sense. You know, the world hasn't gotten much better. I think we progress, you know, with our internal actions in making Integra better, even more resilient in dealing with, you know, whatever is thrown at us. You know, just looking forward to 2023, can you give us a framework for how you're thinking about that? Are there any items that you're aware of, like FX or inflation, that would flow through the P&L that you can share at this moment? No. At this moment, it's too early for us to give guidance. We typically do that at the end of the year after we've really worked our plan. I think, in this case with some of the macro movements, it's even more warranted to wait until, you know, we see some of that settle, right? I mean, that said, we feel good about, you know, I feel good about Integra. And, you know. Right. The levers that we have, you know, the markets that we have, it's, it's a macro world that, at this point, is gonna be the, a bit the question mark. And, and for sure, probably more than other years, we'll work with scenario planning, you know, as we, go into our 2023 and beyond plan. Earlier, you had talked about some important growth drivers and new products. Can you just highlight some of the new product introductions and key growth drivers that we should be on the lookout for, you know, either later this year or early into next year? Yeah. If I look at, you know, later this year, next year, some of the products, you know, we've talked about. If I look at the drivers, you know, definitely the continued catch-up on procedures, that's a real factor. If I look at ACell, I think that product, we're back in the saddle, right? We saw from first quarter to second quarter, nice digit sequential. Yeah. That's a result of, you know, the investment we've done in the sales force, we're only at the beginning of seeing the yields of bringing more capacity and capability. And so, yeah, that will be a nice growth driver, yeah, the remainder of the year and next year. NeuraGen 3D, you know, which we brought into the market, in the second quarter, you know, is going, you know, through the first months of getting through the VACs in the hospitals. That again, you know, next year, you know, will be more at the steady state. So PriMatrix, another tissue technology product where we had great clinical study where we've done and continue to do the work, you know, with the payers. We've got Medicaid. We've got three of the five, you know, big payers now, under our belt, and we're using that, you know, to get access and place, you know, the product. Aurora, which this year, is in clinical tests, you know, will be really commercially in the market, next year. So several products that, you know, next year will really start to deliver, you know, their promise as expanding our TAM on top of, you know, the markets that we have, you know, which, you know, are markets that are, if you mix tissue tech and neurosurgery, are 5%+ growth markets. Mm-hmm. International remains a significant opportunity for us. Yeah. It has been growing, you know, well above 5%. We're further investing. I'm building a more localized international organization. You know, in a month from now, we're bringing in a leader who's gonna be based in Singapore. It's gonna be the first of our executive leadership team that's not gonna be based in the U.S. It's a clear signal to the organization and also an investment in, you know, the opportunity that international represents for us. What about SurgiMend? Anything you can share on the pending PMA for breast reconstruction? So, SurgiMend, we're at this point continuing to work with the FDA to, you know, bring more, you know, data, to the case. So, good cooperation there. It's unclear yet, you know, when that comes to a decision point. We still feel comfortable, you know, and hopeful that, you know, we're gonna get, you know, the PMA. We hope, you know, early, early next year. That's kind of what, you know, what we're, we're planning for. But, but clearly, as we, we see this, this breast opportunity market, even more convinced than before that this is a, a place where, you know, we have the right to play, and it's an attractive opportunity for us to play. So, we're, you know, keep focused on getting through that PMA. Got it. I'd like to spend a couple of minutes on capital allocation. You know, you said Integra is a acquisitive company. Can you give us your thoughts on how you're thinking about M&A at this point, including a potentially larger transaction? You know, you mentioned selling off your traditional wound care business, so some portfolio management going on there as well. So just love to get your thoughts on how you see the market. Yep. So the selloff of the traditional wound care is. I call it the hygiene factor. It's a relatively small selloff, but it made a lot of sense. If I look at our M&A strategy, you know, over the past months, we've gone, you know, with the board, with the leadership team through, you know, our strategic updates. I started out saying earlier, I love the two markets, you know, where we play and the position where we play. But in neither of these markets do we have the breadth nor the scale that we could and should have. So from an M&A perspective, we're looking in both cases to, one, bring bolt-ons in that purely leverage our strong commercial presence in those markets, you know, also further round out that broad solution portfolio that we have. But we're also looking at adjacencies in those markets, complementary care areas that further, you know, build out our presence in the care pathway or in the care area and really transform more from, you know, a product portfolio to a solution portfolio, be, you know, even more a solution partner to the surgeons that, you know, we serve, and like to serve. So, yeah, that's where you're gonna see some of those, you know, more larger size, you know, acquisition opportunities to really broaden in the care pathway. Also looking geographic, you know, opportunities that, you know, accelerate our footprint, our product footprint and commercial footprint outside of the U.S. Are there any areas you're likely to be more acquisitive than others if you're looking at wound care versus neurosurgery? I would say both equally. I see in both cases, you know, real opportunities. You know, we have the financial capability to, you know, over the next couple of years, to take on several bigger ones, you know, if the right, you know, opportunities present themselves. You know, we remain a disciplined acquirer. You know, we're strong financially, but we're disciplined in understanding what, you know, will bring us return on investment, and, you know, where to stay away. We're also relatively patient to understand, you know, when is the right time to acquire. So when you've talked about financial flexibility a couple of times. Can you elaborate on sort of what that means in terms of, you know, your firepower or your balance sheet prowess? So at this point in time, our debt ratio is at 2.5x, which is the lowest end of our range. And that's after, you know, a buyback that we did earlier this year. So our capability to, you know, leverage up, you know, is significant. We're a business that, you know, has good profit margins, has good cash generation. And so we generate cash that we can redeploy, you know, plus can lever up. With the last minute left, you know, I'm just gonna ask you a broader question. The macro environment is pretty dynamic. You know, investors are confused and looking for an investment that will work in this environment. Just with the last 60 seconds that we have, you know, why should someone invest in Integra now? Yeah. It's a company that has shown to be able to deliver profitable growth. You know, I love the two markets where we are. They're sizable, you know, where we have a brand-wise and commercial-wise a really strong position capabilities, you know, to play well in those markets, you know, from an innovation, from a domain perspective. Levers, you know, organic, you know, inorganic international levers we can play to accelerate that growth. And we're investing. We're investing, you know, in our operations, to further build our strength. We're investing in our international organization, and we have our balance sheet to play with, with synergistic M&As to, you know, strengthen that profile. So that's, you know, a relatively, you know, low, low-risk, high-opportunity play, but, you know, requires a lot of execution to make it come to fruition. Perfect. And with that, we're at time. Thanks so much, Jan, and thanks. Thank you, Vik. Everyone for being here. Thank you.