Integra LifeSciences Holdings Corp. (NASDAQ: IART) Chief Executive Stuart Essig may be the medical device industry's answer to "Let's Make a Deal's" affable host Monty Hall.
Since 2004, the Plainsboro, N.J.-based company has spent $349 million acquiring 13 businesses or product lines. Earlier this month, Integra reported "strong" quarterly revenue growth for the quarter of 35 percent thanks in part to its acquisition strategy. On the same day, the company also announced it had acquired IsoTis Inc. (NASDAQ: ISOT), another device maker, for $51 million, a deal the company said would "create a global leader in regenerative medicine."
Though that sounds great, there's a big problem: the company's accounting controls are a mess. Its SEC filing said a "material weakness" Integra identified in the first quarter "continued to exist "as of June 30." It added that "remediation of this weakness has not been completed." Though Integra isn't more specific about the problem, it suggested that more might be found:
"While we aim to work diligently to ensure a robust accounting system that is devoid of significant deficiencies and material weaknesses, given the growth of our business through acquisitions and the complexity of the accounting rules, we may, in the future, identify additional significant deficiencies or material weaknesses in our disclosure controls and procedures and internal control over financial reporting."
A company spokesman didn't immediately return a phone call from PhillyInc. For now, investors seem to like the deals Essig is finding. Integra's shares have soared more than 30 percent this year.
