| Delaware | 0-26224 | 51-0317849 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 311 Enterprise Drive Plainsboro, NJ |
08536 |
|
| (Address of principal executive offices) | (Zip Code) |
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| • | supplementing the financial results and forecasts reported to the Company’s board of directors; |
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| • | evaluating, managing and benchmarking the operating performance of the Company; |
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| • | establishing internal operating budgets; |
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| • | determining compensation under bonus or other incentive programs; |
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| • | enhancing comparability from period to period; |
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| • | comparing performance with internal forecasts and targeted business models; and |
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| • | evaluating and valuing potential acquisition candidates. |
| • | Acquisition-related charges. Acquisition-related charges include
in-process research and development charges, charges related to
discontinued research and development projects for product
technologies that were made redundant by an acquisition, inventory
fair value purchase accounting adjustments, and impairments to
existing intangible assets in connection with a subsequent
acquisition. Inventory fair value purchase accounting adjustments
consist of the increase to cost of goods sold that occur as a result
of expensing the “step up” in the fair value of inventory that we
purchased in connection with acquisitions as that inventory is sold
during the financial period. Although recurring given the ongoing
character of our acquisition program, these acquisition-related
charges are not factored into the evaluation of our performance by
management after completion of acquisitions because they are of a
temporary nature, they are not related to our core operating
performance and the frequency and amount of such charges vary
significantly based on the timing and magnitude of our acquisition
transactions as well as the level of inventory on hand at the time of
acquisition. |
|
| • | Facility consolidation, manufacturing and distribution transfer, and
system integration charges. These charges, which include employee
termination and other costs associated with exit or disposal
activities, costs related to transferring manufacturing and/or
distribution activities to different locations, and costs associated
with the worldwide implementation of a single enterprise resource
planning system, result from rationalizing and enhancing our existing
manufacturing, distribution and administrative infrastructure. Many of
these cost-saving and efficiency-driven activities are identified as
opportunities in connection with acquisitions that provide the Company
with additional capacity or economies of scale. Although recurring in
nature given management’s ongoing review of the efficiency of our
manufacturing, distribution and administrative facilities and
operations, management excludes these items when evaluating the
operating performance of the Company because the frequency and amount
of such charges vary significantly based on the timing and magnitude
of the Company’s rationalization activities and are, in some cases,
dependent upon opportunities identified in acquisitions, which also
vary in frequency and magnitude. |
|
| • | Employee termination and related costs. Employee termination and
related costs consist of charges related to significant reductions in
force that are not initiated in connection with facility
consolidations or manufacturing transfers and senior management level
terminations. Management excludes these items when evaluating the
Company’s operating performance because these amounts do not affect
our core operations and because of the infrequent and/or large-scale
nature of these activities. |
|
| • | Charges associated with discontinued or withdrawn product lines. This
represents charges taken and reductions in revenue recorded in
connection with product lines that the Company discontinues or
withdraws. Management excludes this item when evaluating the Company’s
operating performance because of the infrequent nature of this
activity or because many such product discontinuations are related to
recent acquisitions. |
| • | Charges related to restructuring our European subsidiaries. These
amounts represent charges recorded in operating or non-operating
expenses such as levies and fees paid to government authorities,
legal, tax, accounting and consulting fees, and foreign currency gains
and losses related to intercompany loan agreements incurred directly
as a result of reorganizing our European subsidiaries and transfers of
business assets between these legal entities. Management excludes this
item when evaluating the Company’s operating performance because of
the infrequent nature of this activity. |
|
| • | Charges related to litigation matters or disputes.
These charges include estimated losses or actual
settlements and judgments against the Company related
to litigation, disputes or other similar matters.
Management excludes these items when evaluating
Integra’s operating performance because of the
infrequent nature of these matters. |
|
| • | Intangible asset impairment charges. This represents
impairment charges recorded against various intangible
assets, including completed or core technology,
customer relationships, and tradenames. Such
impairments result primarily from management decisions
to discontinue or significantly reduce promoting
certain product lines or tradenames, the inability to
incorporate existing product technologies into product
development programs, and other circumstances.
Management excludes this item when evaluating the
Company’s operating performance because of the
infrequent and non-cash nature of this activity. |
|
| • | Incremental professional and bank fees related to (a)
the delayed filing of financial statements and (b)
waivers or the possibility of obtaining waivers under
our revolving credit facility. These charges include
audit fee overruns from our independent registered
accounting firm, fees for legal advice and
consultations with our external counsel and
incremental efforts by consultants, and fees paid to
various banks in connection with waivers or the
possibility of obtaining waivers related to the late
filing of our Annual Report on Form 10-K for the year
ended December 31, 2007 and certain non-financial debt
covenants. Management excludes these items when
evaluating the Company’s operating performance because
such incremental amounts are not expected to be
incurred again. |
|
| • | Charges recorded in connection with terminating
defined benefit pension plans. This charge represents
the expense relating to the termination of defined
benefit pension plans of our subsidiaries. Management
excludes this item when evaluating the Company’s
operating performance because of the infrequent and/or
large scale nature of this item. |
|
| • | Charge relating to the grant of restricted stock units
in connection with the extension of the term of the
CEO’s employment agreement. This charge was recognized
in the third quarter of 2008 upon the grant of
restricted stock units that were vested at the time of
the grant on August 6, 2008. Management excludes this
item when evaluating the Company’s operating
performance because of the infrequent and non-cash
nature of this item.
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| • | Gain related to the early extinguishment of convertible notes. This
charge represents the gain recorded by the Company from repurchasing
its convertible debt securities for less than their face value.
Management excludes this item when evaluating the Company’s operating
performance because of the infrequent nature of this activity. |
|
| • | Non-cash interest expense related to the application
of FSP APB 14-1. FSP APB 14-1, which the Company
adopted on January 1, 2009, requires separate
accounting for the liability and equity components of
the Company’s convertible debt instruments, which may
be settled in cash upon conversion, in a manner that
reflects an applicable nonconvertible debt borrowing
rate at the time that we issued such convertible debt
instruments. Management excludes this item when
evaluating the Company’s operating performance because
of the non-cash nature of this activity and because it
resulted from a change in accounting principles that
were not applicable at the time such convertible notes
were issued. |
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| • | Income tax expense (benefit) related to the above
adjustments. Income tax expense is adjusted by the
amount of additional tax expense or benefit that the
Company estimates that it would record if it used
non-GAAP results instead of GAAP results in the
calculation of its tax provision, based on the
statutory rate applicable to jurisdictions in which
the above non-GAAP adjustments relate. |
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| • | Quarterly adjustments to income tax expense/benefit
related to the cumulative impact of changes in
estimated tax rates and certain infrequently occurring
items. Income tax expense in the current quarter is
adjusted by the cumulative impacts in that quarter of
changes in income tax rates (statutory and estimated
effective tax rates) and certain other infrequently
occurring items (such as penalties, interest, and
settlements with government tax authorities) that
relate to prior periods. Management excludes this item
when evaluating the Company’s current quarter
operating performance because the cumulative impact in
the current quarter of these items applies to prior
periods and thus distorts the Company’s adjusted
income tax rate in the current quarter. The
year-to-date adjusted net income and adjusted diluted
earnings per share amounts are not adjusted by this
item, as the cumulative impacts are properly reflected
in the year-to-date adjusted results. |
|
| • | Income tax expenses or gains related to restructuring
our European subsidiaries. Income tax expense is
adjusted by incremental tax provisions or benefits
recorded directly as a result of reorganizing our
European subsidiaries and transfers of business assets
between these legal entities. Management excludes this
item when evaluating the Company’s operating
performance because of the infrequent nature of this
activity. |
| • | The Company periodically acquires other companies or businesses, and
we expect to continue to incur acquisition-related expenses and
charges in the future. These costs can directly impact the amount of
the Company’s available funds or could include expenses related to
transaction costs for deals which may be significant and reduce GAAP
net income. |
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| • | All of the adjustments to net income have been tax affected at the
Company’s actual tax rates. Depending on the nature of the adjustments
and the tax treatment of the underlying items, the effective tax rate
related to adjusted net income could differ significantly from the
effective tax rate related to GAAP net income. |
| 99.1 | Press release with attachments, dated May 6, 2009, issued by Integra LifeSciences Holdings Corporation |
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| 99.2 | Selected Information from Website Presentations |
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INTEGRA LIFESCIENCES HOLDINGS CORPORATION |
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| Date: May 6, 2009 | By: | /s/ John B. Henneman, III | ||
| John B. Henneman, III | ||||
| Title: | Executive Vice President, Finance and Administration, and Chief Financial Officer |
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| Exhibit | ||||
| No. | Description | |||
| 99.1 | Press Release, dated May 6, 2009, issued by Integra LifeSciences Holdings Corporation |
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| 99.2 | Selected Information from Website Presentations |
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