(In thousands, except per share amounts)
Three Months Ended September 30,
2021 2020
--------------------- -------------------
Total revenues, net $ 386,861 $ 370,232
Costs and expenses:
Cost of goods sold 144,468 134,811
Research and development 25,831 19,460
Selling, general and
administrative 156,010 150,076
Intangible asset amortization 4,113 8,343
------------- ------------
Total costs and expenses 330,422 312,690
------------- ------------
Operating income 56,439 57,542
------------- ------------
Interest income 1,786 2,273
Interest expense (12,192) (20,796)
Gain (loss) from sale of
business (230) --
Other income, net 4,985 2,492
------------- ------------
Income before income taxes 50,788 41,511
Income tax expense 7,559 9,174
Net income $ 43,229 $ 32,337
------------- ------------
Net income per share:
Diluted net income per share $ 0.51 $ 0.38
------------- ------------
Weighted average common shares
outstanding for diluted net
income per share 85,447 84,752
The following table presents revenues disaggregated by the major sources for the three months ended September 30, 2021 and 2020 (amounts in thousands):
Three Months Ended September 30,
2021 2020 Change
------------------ ----------- ---------
Neurosurgery 199,210 189,674 5.0%
Instruments 57,287 49,649 15.4%
---------- --------- -----
Total Codman
Specialty Surgical 256,497 239,323 7.2%
Wound Reconstruction and
Care 99,744 82,115 21.5%
Extremity Orthopedics -- 21,922 --
Private Label 30,620 26,872 13.9%
---------- --------- -----
Total Tissue
Technologies 130,364 130,909 (0.4)%
---------- --------- -----
Total reported
revenues 386,861 370,232 4.5%
========== ========= =====
Impact of changes in
currency exchange rates (1,011) --
Less contribution of
revenues from
acquisitions (16,842) --
Less contribution of
revenues from divested
products (249) (22,137)
Less contribution of
revenues from
discontinued products (2,139) (4,344)
---------- --------- ---------
Total organic
revenues(1) $ 366,620 $ 343,751 6.7%
---------- --------- -----
(1) Organic revenues have been adjusted to exclude foreign currency (current period), acquisitions and to account for divested and discontinued products.
Items included in GAAP net income and location where each item is recorded are as follows:
(In thousands)
Three Months Ended September 30, 2021
Total Amort.(
Item Amount COGS(a) SG&A(b) R&D(c) d) OI&E(e) Tax(f)
Acquisition,
divestiture and
integration-related
charges(1) 2,637 1,954 2,166 (160) -- (1,323) --
Structural
Optimization
charges 6,696 2,970 2,235 1,492 -- -- --
EU Medical Device
Regulation charges 7,077 907 1,985 4,185 -- -- --
Discontinued product
lines charges 23 23 -- -- -- -- --
Intangible asset
amortization
expense 20,248 16,135 -- -- 4,113 -- --
Estimated income tax
impact from above
adjustments and
other items (6,853) -- -- -- -- -- (6,853)
-------------------- ------ ------ ----- ----- ------ ------ ------
Total adjustments $29,828 $21,989 $ 6,386 $5,517 $ 4,113 $(1,323) $(6,853)
-------------------- ------ ------ ----- ----- ------ ------ ------
Depreciation expense 9,873 -- -- -- -- -- --
a) COGS - Cost of goods sold
b) SG&A - Selling, general and administrative
c) R&D - Research & development
d) Amort. - Intangible asset amortization
e) OI&E - Other income & expense
f) Tax - Income tax expense (benefit)
(1) Acquisition, divestiture and integration-related charges are associated with the Codman Neurosurgery, Arkis Biosciences, Rebound Therapeutics and ACell acquisitions and the divestiture of Extremity Orthopedics and includes banking, legal, consulting, systems, and other income and expenses.
Three Months Ended September 30, 2020
(In thousands)
Total COGS SG&A R&D Amort. OI&E
Item Amount (a) (b) (c) (d) (e) Tax (f)
Structural
optimization
charges 4,543 491 3,875 177 -- -- --
Acquisition and
integration-related
charges(1) 7,148 3,871 2,596 682 -- -- --
COVID-19 related
charges (193) 2 (195) -- -- -- --
EU Medical Device
Regulation charges 2,399 1,529 871 -- -- -- --
Discontinued product
line charges 999 999 -- -- -- -- --
Intangible asset
amortization
expense 20,180 11,837 -- -- 8,343 -- --
Convertible debt
non-cash interest 4,295 -- -- -- -- 4,295 --
Expenses related to
debt refinancing 3,428 -- -- -- -- 3,428 --
Estimated income tax
impact from above
adjustments and
other items (7,433) -- -- -- -- -- (7,433)
--------------------- ------ ------ ----- --- ------ ----- ------
Total adjustments $35,366 $18,729 $7,147 $859 $ 8,343 $7,723 $(7,433)
--------------------- ------ ------ ----- --- ------ ----- ------
Depreciation expense 10,538
a) COGS - Cost
of goods sold
b) SG&A -
Selling,
general and
administrative
c) R&D -
Research &
Development d)
Amort. -
Intangible
asset
amortization
e) OI&E -
Other income &
expense f) Tax
- Income tax
expense
(benefit)
(1) Acquisition and integration-related charges are associated with the Codman Neurosurgery, Arkis Biosciences and Rebound Therapeutics acquisitions and include banking, legal, consulting, systems, and other expenses.
RECONCILIATION OF NON-GAAP ADJUSTMENTS - GAAP NET INCOME TO ADJUSTED EBITDA
(UNAUDITED)
(In thousands)
Three Months Ended September 30,
------------------------------------------
2021 2020
--------------------- -------------------
GAAP net income 43,229 32,337
Non-GAAP adjustments:
Depreciation and intangible
asset amortization expense 30,121 30,718
Other (income) expense, net (3,432) (2,492)
Interest expense, net 10,406 10,800
Income tax expense 7,559 9,174
Discontinued product lines
charges 23 999
Structural optimization charges 6,696 4,543
EU Medical Device Regulation
charges 7,077 2,399
Acquisition, divestiture and
integration-related charges(1) 2,637 7,148
COVID-19 related charges -- (193)
Convertible debt non-cash
interest (2) -- 4,295
Expenses related to debt
refinancing -- 3,428
----------------- ----------------
Total of non-GAAP
adjustments 61,087 70,819
----------------- ----------------
Adjusted EBITDA $ 104,315 $ 103,156
------------- ------------