Integra LifeSciences Holdings (IART)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	32,842	39,824	79,645	98,962	132,446	166,939	206,873	254,396	263,488	250,298	241,673	235,835	265,072	257,427	256,754	216,114	165,101	148,703	72,849	105,283
Interest expense (ttm)	US$ in thousands	70,632	65,399	59,088	52,901	51,377	50,520	50,267	50,039	49,594	48,825	48,208	49,121	50,395	55,621	64,225	66,758	71,581	67,692	60,858	58,560
Interest coverage		0.46	0.61	1.35	1.87	2.58	3.30	4.12	5.08	5.31	5.13	5.01	4.80	5.26	4.63	4.00	3.24	2.31	2.20	1.20	1.80

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $32,842K ÷ $70,632K
= 0.46

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a better ability to cover interest payments.

For Integra LifeSciences Holdings, the interest coverage ratio has fluctuated over the periods provided. In March 2020, the ratio was 1.80, indicating that the company's earnings before interest and taxes could cover its interest expenses 1.80 times over. The ratio then decreased to 1.20 in June 2020, signaling a slight decline in the company's ability to cover interest payments.

However, from September 2020 onwards, the interest coverage ratio started to improve steadily, reaching its peak at 5.31 in December 2022. This significant improvement indicates that Integra LifeSciences Holdings became more capable of meeting its interest obligations with its operating profits.

In the later quarters of 2023 and 2024, the interest coverage ratio started to decline, dropping to 0.46 by December 2024. This sharp decrease suggests that the company's earnings may not be sufficient to cover its interest expenses adequately during those periods.

Overall, while Integra LifeSciences Holdings showed improvements in its interest coverage ratio over the years, the recent decline raises concerns about its ability to comfortably meet its interest payments using its operating profits. Management should monitor this ratio closely to ensure the company's financial health and stability in the long run.