Okay, good afternoon everyone. My name is Vik Chopra. I'm one of the Medical Device Analysts at Wells Fargo. Pleased to introduce management from Integra LifeSciences for this session. Joining us from the company are Mojdeh Poul, President and CEO, and Lea Knight, EVP and CFO. Thank you both for being here. Thanks for having us. Thank you. So Mojdeh, I'm going to start with some high-level questions. You've been CEO since the beginning of the year. Can you talk about what surprised you to the upside and the downside since you took over? Sure. So I've been here eight months now, and I can tell you that I can firsthand experience some of the strengths of the organization that got me attracted to opportunities to begin with, which is really being a leader in key attractive market segments. We have a team that's committed to living our purpose, which is restoring patients' lives. We have strong brands, and we have strong commercial execution. We're known for that. And most importantly, I see a tremendous opportunity for us in order to be able to build upon any of the three platforms that we have within our portfolio: Neurosurgery, Tissue Technologies, and ENT through innovation and expansion, market expansion internationally. So a lot of positives that are coming through as I meet with customers every day. On the other hand, early in my time in the business, I quickly realized that the operational and execution challenges that we have are deeper than I had anticipated, so since January, we've been really focused on building those foundational capabilities that are required to set the company up for reliable performance delivery time after time, and we've chosen to do this right, and doing these things right is going to take time, and we've accomplished a great deal. We strengthened the leadership team in operations and quality. We stood up a transformation program management office to drive prioritization and execution excellence. We made great progress on the Compliance Master Plan. We finished the site assessments earlier than we had planned. We stood up a supply chain control tower in order to be able to drive accountability and continuous improvement in the operations. Most recently, we actually have finished the first phase planning for the first phase of our margin improvement plan that we talked about at the earnings call that will bring $25 million-$30 million by the end of 2026. As part of our strategic and long-term planning, we have completed a portfolio prioritization process that's going to help Lea and I make a lot better choices in terms of capital allocation moving forward, focusing on the most important things to drive the company forward. Now, these are all sounding foundational, Vik, but they have been critical in terms of us getting alignment and being able to actually improve in getting predictable results and delivering time after time consistently into the future. Maybe just talk about some of the lessons that you've learned from your time at 3M that you've been applying at Integra specifically. Yeah. So many lessons, but the three that are the most important and I'd say the most relevant to what we're going through right now, and two of them are very closely interrelated: prioritization, discipline execution, and operational discipline, I would say. I learned a long time ago in my career that you will never have enough resources to do everything you want to do, but there's always enough resources to get done the most important things. So prioritization provides the focus and alignment that then informs better resource allocation. Then the most difficult part of prioritization, though, I think, is discipline execution. Nobody likes to delay projects. Nobody likes to stop projects, but you have to do that in order to be able to focus the organization on what matters. And I think that's the discipline we're going to try to drive. And then another emphasis that I bring with me is operational excellence. We have to have a lot more discipline around continuous improvement, which we don't have consistently, and we're building that deeply and broadly within the organization. So I'd say those three things. Okay, great. Let's jump to guidance. You provided updated guidance in your Q2 call. Can you talk about the variables that get you to the high end versus the low end of your guidance and any puts and takes to consider for the back half of the year? Certainly. Thanks for the question. And so to your point, the range that we stated during our Q2 call reflects a couple of key factors. First is timing of our execution of our remediation plans to bring some of our products back off of ship hold to the extent we can execute those in a faster timeline than we've assumed. That should help us get to the top end of the range. Additionally, we do see opportunities related to specific market dynamics within parts of our portfolio where we have strengths, namely potential for stronger demand on instruments, faster close cycle in terms of our capital close cycle, and the continued momentum that we've seen on Integra Skin are all elements that could also contribute to us getting to the top end of our range. Conversely, if we don't see the faster timing and execution in terms of remediation pathway or some of those market dynamics don't materialize, as I've shared, then that's how we get to the lower end. Okay. And just talking about the ongoing remediation work extending into 2026, you made a decision to no longer discuss the ship hold separately in your future guidance. Can you talk about how the Compliance Master Plan execution influences your ability to meet your long-term financial commitments? Yeah. So Compliance Master Plan is a critical component of the turnaround that we're going through. And we have made great progress on the work streams in terms of implementation of the Compliance Master Plan. And we've completed the site assessments ahead of time, and that work has informed the remediation plans that we put together and also the prioritization of that remediation plan. The combination of the two provides us with a clear visibility into the work streams ahead. Our remediation plan is being managed through the governance through the program management office. And at the same time, too, more importantly, as we move forward, we're going to continue to see the supply stabilize. So we should be able to then embed into the guidance ranges that we provide moving forward any headwinds that we may see. So because of that additional visibility that we get because of all those elements. So that's how we're going to be rolling with the additional guidances moving forward rather than discussing ship hold. Great. Okay. So you now expect your gross margins to decline almost 300 basis points in 2025. I think the number you gave was 280 basis points. Can you walk us through the puts and takes of the gross margin decline compared to earlier in the year? What's changed? Yeah. So in our Q1 call, we shared that at the time we expected gross margins in 2025 to decline versus 2024 by about 200 basis points. And that was based on some headwinds that we saw impacting the business, some of which were permanent, most of which were temporary. In the permanent category would be investments we were making behind our Compliance Master Plan. We had shared that described about 70 basis points, again, a fraction of that being a permanent part of our cost structure going forward, and then the rest would be temporary. And then the other elements were, as I said, temporary in nature. So a lot of that having to do with higher manufacturing costs driven in part by unfavorable manufacturing variances that we experienced in 2024 carrying over into 2025, along with an expectation of lower private label volumes as well as some underabsorption that we were seeing across some of our other sites. So that was as of Q1. In Q2, we updated that thinking to what you just stated, which is we now expect gross margins to decline 300 basis points versus 2024. That incremental hundred reflecting primarily the cost associated with the remediation of our MediHoney product, which we executed a recall against and which is fully incorporated into the guidance that we shared in July. Okay. You also lowered your tariff impact from $22 million to about $30 million in Q2. Can you talk about the specific mitigation strategies you're pursuing? Certainly. So the decline of about $9 million that we've characterized in terms of our expected impact in 2025 is driven largely by the tariff implementation delays, right, that were announced kind of post when we shared some of that original impact. It's also driven by an ability that we had to identify additional products in our portfolio that were subject to kind of some of the standard exemptions that are out there under the Nairobi Protocol and USMCA. It also reflects mitigation measures that we've started to implement in terms of how do we optimize movement of inventory across our manufacturing and supply network in order to minimize tariff exposure. So all that is reflected in there. What our updated impact as of July doesn't reflect yet is any of the announced changes that happened on and around August 1st. So that has not been reflected yet in that projection. We would anticipate updating kind of our assumptions with respect to tariff impact as part of our Q3 call. We'll do that kind of in the normal course. At this point, based on our understanding versus the assumptions that we baked in July, those assumptions would appear to be conservative. But again, as I mentioned, we'll update that thinking during our Q3 call. And then as it relates to 2026, at this point, we haven't quantified an impact with respect to tariffs. We're going to continue to monitor the landscape given the very changing dynamic that we're living through, and then we'll incorporate that into our guidance discussion as part of our Q4 call. So I understand the tariff environment is super dynamic, and you're not commenting on 2026. But just given all the mitigation strategies you're pursuing, should we expect that tariff impact to be lower in 2026 versus 2025? I think it's, well, just on the basis of time, right? You think about the number of months that whatever the resulting tariff policy will be in place for in 2025 versus 2026, there's going to be order of magnitude. I would expect 2026 to be higher, right, than 2025. But to your point, we are still diligently pursuing implementation of all of our tariff mitigation measures. So they're not all implemented as of yet as a mechanism to help mitigate some of that impact. Okay, great. Let's talk about the profitability initiative. You recently launched this profitability initiative. You expect to deliver minimum annualized savings of $25 million-$30 million over the next 12-18 months. Can you talk about the specific areas that you've identified as primary targets for these savings? And can you elaborate on the strategies being implemented to achieve these cost reductions? Sure. So basically, two elements. One is on the operational side, and the other one is on the OpEx management and responsible cost management. So on the operational side, a lot of the work ultimately feeds into the COGS reductions, COGS improvements. So we have work streams around productivity improvement and yield improvements as well as operational efficiencies. So the continuous improvement efforts that we're embedding is going to help doing that a nd obviously, the results that we would get out of that because it's in COGS line, it's going to be later that we're going to see, so I would say in the second half of 2026. Th en on the operational expense side, we have work streams around optimization of our operating model. We have work stream that's going on in terms of the reduction of the third-party spend and how do we optimize on all categories, the third-party spend that we have, and then ultimately, consistent with those two, how do we realize efficiencies across our supporting functions, so those are the elements that hopefully will get us to delivering $25 million-$30 million by the end of next year, but it is not necessarily just a one-year effort, it's going to lay the foundation for us to have continuous and long-term margin improvements moving forward. Right. So you've talked about this as a foundational first step in a larger strategic initiative to drive sustained margin expansion. What are your longer-term aspirations beyond this initial phase? Yeah. So at a minimum, our goal is to get to the profitability levels that we were at just only a couple of years ago. And the focus that we have over the longer term is for us to continue to deliver sustainable growth, which is going to be a key element for us. And while we're building a stronger, more efficient organization, that's also more profitable. So the work that we continue to do is going to probably be for sure in the categories that I talked about: operational efficiencies, cost structure management. And then again, it's going to lay the foundation for a broader transformation that would become the way that we do our business and hopefully be able to build continuous earnings growth and deliver long-term value creation over time. Okay. So So maybe just talk about what's different with this profitability initiative, that what will it do now that you couldn't do before? And I think you said the impact will start to be more in the back half of 2026. Yes. Because a lot of it has to do with the COGS improvements, which really there's a delay by the time it hits the P&L. So it'll be at the back half, but more than anything, Vik, I think it's the execution discipline of ensuring that we have work streams for each of these margin improvement initiatives. They're going to be driven by the Transformation Management Office. So the rigor and rhythm for getting it done and the execution discipline is going to be the one that makes the difference. And again, we have a new leader on the Operations side that comes with 30-some years of experience in global complex supply chain management. And a lot of the work that she's leading is going to help us get there. So that's another difference, the leadership that we have on the operations side. And if I could add on, I think the one additional element is it leaves behind a continuous improvement capability that doesn't exist broadly currently. And that's what's going to allow it to keep moving forward. Any concerns you have around this profitability initiative? No. I think we have the opportunities identified. We're near completion with planning of them. We actually have started execution on some of the work streams that are hopefully lower hanging fruit. I don't see the only thing that I would say it would be if we fall behind in execution, which that's why we're having the transformation program management office govern the execution of it. So we're very committed to driving it. It's a must. Great. Looking forward to hearing more about it on the Q3 call. Let's shift gears to 2026. Any early thoughts and takes, potential headwinds, tailwinds we should be cognizant of now as you look at your milestones for 2026? Yes. I appreciate the question because as you can imagine, there are a lot of moving pieces, right, as you think about what's ahead of us in 2026. We are still very much in the kind of early planning phases for 2026 in terms of guidance. So can't share specifics in terms of numbers, but certainly can share some directional thoughts, right? On the top line, we do expect 2026 to show growth over 2025 as we continue to do the work to strengthen our quality management system, drive, increase supply reliability, and quite frankly, get our commercial teams in a position where they can resume office. Additionally, we do fully expect that 2026 will benefit. We'll experience a comparable benefit over 2025 because we do expect 2025 to represent a peak year in terms of ship hold impacts. So we'll see a comparable benefit in 2026 as a result. On the bottom line, as Mojdeh just talked about, we do have the launch of the initial phase of our Margin expansion program. That program will focus on driving profitability while also mitigating some of the headwinds that we know the business will face in terms of tariffs, as we talked about earlier, along with just more broader inflationary pressures that we see on the business. But in general, we're encouraged by the momentum that we're seeing, and we look forward to coming back in our normal course, which would be our Q4 earnings call, to talk specifics about our 2026 guidance. Got it. And what about gross margin? Any of the drivers you can talk about for 2026? Is there any reason gross margins would be down again in 2026? So same thing in terms of timeline of when we would talk specifics. That would be as part of our Q4 call. But again, the tariff impact that I called out would be a headwind from a gross margin perspective. We have done, to Mojdeh's point earlier, the work that we've done on Compliance Master Plan. We know there's going to be some level of remediation that continues into 2026, which would also represent a headwind. From a tailwind perspective, though, we do expect a reduction, right, in some of the ship hold impacts that impacted gross margins in 2025 should be less in 2026. So that represents a tailwind along with our portfolio mix, right, as we get supply back and some of the products in our portfolio that are above average from a company gross margin perspective, that should also be a tailwind. So there's a number of goods and things that also impact the gross margin line. And so we'll come back in February and talk specifics. Okay. Great. Looking at the Codman Specialty Surgical segment, in Q2, shipping holds significantly impacted various CSS product lines. But you also said you're not expecting any new material ship holds in the back half of 2025. Can you talk about your plan to recover lost business and market share in the impacted CSS Franchises once supply becomes consistently available? Sure. In our CSS business, the market continues to be strong. The demand is strong. It's definitely there for us. In Q2, what we experienced was that the strong demand in the products that we had that didn't have supply constraints, we actually delivered mid-single-digit growth rates, which are pretty healthy. So the underlying demand is there. For us, we have to continue to focus on supply recovery. Now, in the Q2, we had the offset for that demand through the supply constraints that we had due to ship holds. But it doesn't negate the fact that the market demand is strong still and our portfolio has strength and a lot of following amongst the surgeons that use our products. So moving forward, like Lea said, the best thing that we can do is to make sure we get stable supply to meet the demand that we already have for the business. We have the demand. We just have to meet it. And our sales teams continue to be engaged with the customers. They have been helping the customers navigate in the occasional situations where we've had ship holds or constraints in terms of supply. But the number one thing that we can do, both internationally and in the U.S., is to replenish and ensure that we are in steady and consistent supply and we're confident that we can get our business back in the cases that we've lost share. Okay. In your ENT segment, I think growth was below expectations due to reimbursement market pressures and the timing of capital equipment sales. Can you talk about your strategy for navigating these headwinds in ENT in the back half of the year? Yeah. So in the ENT business in Q2, we did have actually the challenge part of the business was on the Balloon Sinuplasty side, which is part of the portfolio that's a single-digit grower. And the payer issue is not a broad nationwide payer issue. It happens to be in a couple of specific geographies where we happen to have a higher volume. So we're working in those instances with the payers through our sales organizations and health economics teams in terms of education and being able to remedy the situation. We obviously have the rest of the country that we're working on the penetration and increase of the utilization of our product. And we have the Aera Eustachian Tube for balloon dilation that is going very strong, as well as some of the handheld pieces and navigated handheld pieces on 2D. We are driving those forward with clinical evidence, innovation, and continuing to work with our sales teams in areas where we need better education on the payer side. Okay. Great. In Tissue Tech, you talked about the highest ever production rate for Integra Skin. Can you provide an update on where you are with Integra Skin as we head into the back half of the year and when do you expect to be back to full supply? We're actually pretty excited about the performance of the Integra Skin last quarter. And it's not by chance. Because when you look back, we started some of these initiatives in the middle of last year to build resiliency in the supply chain, increase the capacity, improve the yields for the product line. And we saw really the fruits of all of that work that was initiated last year in the results that we saw. So not only we met demand, we were able to deliver strong growth. And moving forward, we see that being the case. We're going to continue to meet demand and deliver strong growth while at the same time build the safety stock. And we're going to be shortly, hopefully, in a position where the conversation on Integra Skin is going to be about growth and not supply inconsistency. Right. What's the latest you can share on the PMA for SurgiMend for the breast reconstruction indication? Yes, so as you know, Braintree is a critical component of our plan in 2025 and 2026 and beyond. We are making great progress on the Braintree side. We have equipment installed, w e've completed the qualifications. We're in the process of validation, and we still are targeting the first half of 2026 for operationalization of the site. And we will provide another update in Q4 on the milestones as well as the production start dates and how we're going to sequence the launch of PriMatrix and SurgiMend, and we will have to, for the 510(k) products, obviously, we don't need to have the FDA come and inspect, but we already have approval letter from the FDA on the PMA for SurgiMend. But that requires an inspection from FDA and getting approval on GMPs, which we will ensure that we do all the work that's required for us to be prepared for doing that PAI inspection. But then it depends on the timing where FDA can come for the inspection and what their timeline might be. But we are doing what's on our part to position ourselves to meet all the requirements for FDA to come. And we will provide updates as we get updates. Right. It's great to hear you're making progress on shifting to the Braintree facility, but it's a fairly long time between now and the first half of 2026. Are there any near-term catalysts we should be on the lookout for as you shift your manufacturing to Braintree? Yeah. Our focus has been really, other than making sure Braintree comes online in the timelines that we had anticipated, the work that we're doing is to continue to stay engaged with our customers. We continue to serve the same customers that were using SurgiMend before. So we continue to serve them with other products that are in our bags. We continue to advance the clinical evidence for the product line, which is really important. We are working to ensure that the go-to-market and launch planning that we have is robust that would allow us to launch the products with strong momentum. So those are the way both PriMatrix and SurgiMend are actually having very strong brand equity as well as clinical value for the customers. We get told that time after time, even though there are some alternatives that they're using today, they're not operating either at the handling or patient outcome level or in terms of the benefits that they bring to the customers. We know it's going to, we're not naive to think that it's not going to take time and effort to be able to gain back some of the share. Because of the strengths that we talked about, we believe we can gain that share back over time. Can you talk about what specifically you're doing to sort of reintroduce the products back to market once you get Braintree operational? And what are your plans to regain market share beyond the brand recognition aspect of the products? Beyond the what? Brand recognition aspects of the products. For sure, clinical evidence. One of the key initiatives that we have and investments that we have was around PMA, getting a PMA indication, and we have been trying to position ourselves so that we would be the first and second with SurgiMend and DuraSorb in that space for IBBR, so that's one of the elements that's going to strengthen even our product entry back into the market, and the fact that we have a full portfolio and we have SurgiMend as well as DuraSorb in terms of biologic and synthetic, it allows the opportunity for the physicians to pick depending on the side of care, the clinical outcome they're looking for, and the economics that they're looking for, so there's many strengths in terms of our clinical support, our full breadth of portfolio, and the strong relationships that we continue to maintain with our customers. What other products are you going to manufacture at Braintree besides SurgiMend and PriMatrix? So it's those two plus DuraSorb. Okay. Yes. You leveraged at the end of Q2 with about 4.5x, it's within your current maximum allowable leverage ratio of 5x. Can you remind us of your capital allocation priorities? Certainly. So a couple of things. Well, we did, our converts matured in the middle of August. We did satisfy that maturity leveraging our revolver. And absent any other strategy, that would have meant that that comes on at an interest rate that approximates 6%-7% at prevailing rates. Fortunately, we did have the foresight at the time that we entered into the converts to also enter into an interest rate swap instrument that allows us to fix up to $900 million of our debt at a rate of 3.5% through 2027, right? So we've adopted a posture of maintaining a strong and flexible balance sheet. We'll look to continue to do that and make sure we're entering into, look for long-term financial instruments that will allow us to continue to achieve that objective. In the interim, to your point, we're operating well within our covenants. We anticipate continuing to do so, and then in terms of your question on our priorities with respect to capital allocation, it remains debt reduction. It's certainly in the near term. Okay. And then with the convert that matured in August, obviously, you've satisfied the commitment. But can you talk about your plans for more permanent financing? Yeah. So we'll look. So as we, again, get through some of the supply remediation issues, bring more of our products back to market, start getting the business into a mode where we're getting back to more normal cash flow generation, we think that's a more opportune time to pursue a longer-term kind of financial instrument in order to kind of replace the convert. And so ideally, that timeframe is sometime in 2026, but more to come. Okay, and I know the focus obviously is on remediation and the operational side of the business. But how are you thinking about M&A going forward in terms of deal size and portfolio gaps? Can you just talk about that at a high level? Yeah. So right now, really, our focus, as you said, is to get the stabilization on the way for our supply and continue to implement our Compliance Master Plan as we had planned. So the M&A is not a priority for us in the near term. But it has been in the DNA of the company, and I'm sure it will be in the DNA of the company moving forward. But right now, we're really focused on execution. But there's many opportunities for us across any of our platforms that we have a robust pipeline of M&A at the right time. I'm sure that we will have the right opportunities to go after, but it's not a focus for us right now. Okay. My favorite question to ask you, and I think I've asked you this for the last eight months, actually, is when can we get an update to your LRP? Any plans either later this year or in 2026? You could expect for us to have an LRP in 2026. Yeah. Meanwhile, we're focused on execution, and hopefully, that'll be the foundation that we will build a refreshed LRP upon. Yeah. Okay. Great. We've got a couple of minutes left. So I want to end with a high-level question and turn the floor over to both of you for any closing remarks. And maybe just talk about Integra's top three growth drivers over the next two to three years. Yes. The first growth driver by far is for us to stabilize our supply. The demand is there. We're not meeting the demand that's out there for our products. And that's the number one priority for us both in the U.S. and internationally. Obviously, reintroduction of PriMatrix and SurgiMend is going to be a key growth driver for us in the near term. Then I would say the second key driver for us continues to be International. We have the opportunity to continue to increase penetration in the current markets we're in and also selectively get into the markets and geographies that have promise for us in terms of sustainable growth. And thirdly, it becomes about category expansion and innovation. And we have innovation planned in category-leading segments of our portfolios in CSS as well as ENT. On the Tissue Technology front, clinical evidence investments play a critical role for us, both to continue shoring up our leadership position in the acute care setting, but also to allow us to accelerate growth as the reimbursement and coverage landscape changes. We have opportunities outside the hospital in the ambulatory surgery centers and wound clinics and so on and so forth. And obviously, there are opportunities for tuck-in M&A when we're ready for it. And beyond that, beyond three years, the portfolio prioritization process we're going through and the capital allocation we're going to have discipline towards that prioritization will get us into higher growth spaces where we can see sustainable growth and value creation into the future. Okay. Great. Lea, anything to add to that? No. I think that was well done. Okay. Awesome. Well, thank you so much for being here. Yes. Thank you. Thank you, Vik. Thanks for having us.