Full Press Release Details
CONMED Corporation Announces Second Quarter 2022 Financial Results
Largo, Florida, July 27, 2022 CONMED Corporation (NYSE: CNMD) today announced financial results for the second quarter ended
Second Quarter 2022 Highlights
I m proud that our team drove strong revenue growth in the second quarter while also refinancing our debt and closing the acquisition of
In2Bones, commented Curt R. Hartman, CONMED s Chair of the Board, President, and Chief Executive Officer. We continue navigating the challenges of hospital staffing and inflation while remaining committed to enhancing the
company s long-term growth and profitability profiles.
Due to changes in foreign exchange rates, the Company is lowering its revenue guidance for the full year 2022 and now expects revenue between
$1.095 billion and $1.140 billion compared to its prior guidance of between $1.105 billion and $1.150 billion. Based on recent exchange rates, the Company now expects foreign exchange to have a 100 to 150 bps negative impact on
full-year 2022 revenue growth.
The Company now expects full-year 2022 adjusted diluted net earnings per share in the range of $3.40 to $3.55, down from
the prior range of $3.50 to $3.65 to account for a $0.10 currency headwind.
Supplemental Financial Disclosures
The Company s management will host a conference call today at 4:30 p.m. ET to discuss its second quarter 2022 results.
To participate in the conference call via telephone, please click here to pre-register and obtain the dial-in number and passcode.
This conference call will also be webcast and can be accessed from the
Investors section of CONMED s website at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.
Consolidated Condensed Statements of Income (Loss)
(in thousands except per share amounts, unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net sales | $ | 277,190 | $ | 255,161 | $ | 519,516 | $ | 487,837 | ||||||||
| Cost of sales | 125,413 | 113,737 | 231,748 | 217,964 | ||||||||||||
| Gross profit | 151,777 | 141,424 | 287,768 | 269,873 | ||||||||||||
| % of sales | 54.8 | % | 55.4 | % | 55.4 | % | 55.3 | % | ||||||||
| Selling & administrative expense | 115,826 | 104,399 | 218,701 | 202,739 | ||||||||||||
| Research & development expense | 11,493 | 11,318 | 22,165 | 21,344 | ||||||||||||
| Income from operations | 24,458 | 25,707 | 46,902 | 45,790 | ||||||||||||
| % of sales | 8.8 | % | 10.1 | % | 9.0 | % | 9.4 | % | ||||||||
| Interest expense | 5,928 | 9,420 | 10,926 | 19,772 | ||||||||||||
| Other expense | 112,011 | 112,011 | ||||||||||||||
| Income (loss) before income taxes | (93,481 | ) | 16,287 | (76,035 | ) | 26,018 | ||||||||||
| Provision for income taxes | 74,810 | 2,997 | 77,281 | 2,868 | ||||||||||||
| Net income (loss) | $ | (168,291 | ) | $ | 13,290 | $ | (153,316 | ) | $ | 23,150 | ||||||
| Basic EPS | $ | (5.65 | ) | $ | 0.46 | $ | (5.18 | ) | $ | 0.80 | ||||||
| Diluted EPS | (5.65 | ) | 0.41 | (5.18 | ) | 0.72 | ||||||||||
| Basic shares | 29,775 | 29,125 | 29,601 | 29,052 | ||||||||||||
| Diluted shares | 29,775 | 32,464 | 29,601 | 31,964 |
(in millions, unaudited)
| Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| % Change | ||||||||||||||||||||||||||||||||||||
| Domestic | International | |||||||||||||||||||||||||||||||||||
| 2022 | 2021 | As Reported | Impact of Foreign Currency | Constant Currency | As Reported | As Reported | Impact of Foreign Currency | Constant Currency | ||||||||||||||||||||||||||||
| Orthopedic Surgery | $ | 120.2 | $ | 107.9 | 11.4 | % | 1.3 | % | 12.7 | % | -0.8 | % | 18.8 | % | 1.9 | % | 20.7 | % | ||||||||||||||||||
| General Surgery | 157.0 | 147.3 | 6.6 | % | 1.1 | % | 7.7 | % | 5.7 | % | 8.6 | % | 3.4 | % | 12.0 | % | ||||||||||||||||||||
| $ | 277.2 | $ | 255.2 | 8.6 | % | 1.2 | % | 9.8 | % | 3.9 | % | 14.7 | % | 2.5 | % | 17.2 | % | |||||||||||||||||||
| Single-use Products | $ | 230.3 | $ | 208.9 | 10.2 | % | 1.1 | % | 11.3 | % | 7.8 | % | 13.5 | % | 2.5 | % | 16.0 | % | ||||||||||||||||||
| Capital Products | 46.9 | 46.3 | 1.4 | % | 1.3 | % | 2.7 | % | -16.0 | % | 19.6 | % | 2.5 | % | 22.1 | % | ||||||||||||||||||||
| $ | 277.2 | $ | 255.2 | 8.6 | % | 1.2 | % | 9.8 | % | 3.9 | % | 14.7 | % | 2.5 | % | 17.2 | % | |||||||||||||||||||
| Domestic | $ | 149.2 | $ | 143.6 | 3.9 | % | 0.0 | % | 3.9 | % | ||||||||||||||||||||||||||
| International | 128.0 | 111.6 | 14.7 | % | 2.5 | % | 17.2 | % | ||||||||||||||||||||||||||||
| $ | 277.2 | $ | 255.2 | 8.6 | % | 1.2 | % | 9.8 | % |
| Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||
| % Change | ||||||||||||||||||||||||||||||||||||
| Domestic | International | |||||||||||||||||||||||||||||||||||
| 2022 | 2021 | As Reported | Impact of Foreign Currency | Constant Currency | As Reported | As Reported | Impact of Foreign Currency | Constant Currency | ||||||||||||||||||||||||||||
| Orthopedic Surgery | $ | 227.7 | $ | 215.0 | 5.9 | % | 0.7 | % | 6.6 | % | 0.6 | % | 8.9 | % | 1.0 | % | 9.9 | % | ||||||||||||||||||
| General Surgery | 291.8 | 272.8 | 7.0 | % | 0.7 | % | 7.7 | % | 6.5 | % | 8.0 | % | 2.2 | % | 10.2 | % | ||||||||||||||||||||
| $ | 519.5 | $ | 487.8 | 6.5 | % | 0.7 | % | 7.2 | % | 4.8 | % | 8.5 | % | 1.5 | % | 10.0 | % | |||||||||||||||||||
| Single-use Products | $ | 431.8 | $ | 396.3 | 8.9 | % | 0.7 | % | 9.6 | % | 7.1 | % | 11.4 | % | 1.5 | % | 12.9 | % | ||||||||||||||||||
| Capital Products | 87.7 | 91.5 | -4.1 | % | 0.7 | % | -3.4 | % | -7.2 | % | -1.5 | % | 1.3 | % | -0.2 | % | ||||||||||||||||||||
| $ | 519.5 | $ | 487.8 | 6.5 | % | 0.7 | % | 7.2 | % | 4.8 | % | 8.5 | % | 1.5 | % | 10.0 | % | |||||||||||||||||||
| Domestic | $ | 280.4 | $ | 267.5 | 4.8 | % | 0.0 | % | 4.8 | % | ||||||||||||||||||||||||||
| International | 239.1 | 220.3 | 8.5 | % | 1.5 | % | 10.0 | % | ||||||||||||||||||||||||||||
| $ | 519.5 | $ | 487.8 | 6.5 | % | 0.7 | % | 7.2 | % |
Reconciliation of Reported Net Income (Loss) to Adjusted Net Income
(in thousands, except per share amounts, unaudited)
| Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Other Expense | Tax Expense | Effective Tax Rate | Net Income (Loss) | Basic EPS | Adjustments (8) | Diluted EPS | ||||||||||||||||||||||||||||||||||
| As reported | $ | 151,777 | $ | 115,826 | $ | 24,458 | $ | 5,928 | $ | 112,011 | $ | 74,810 | -80.0 | % | $ | (168,291 | ) | $ | $ | (168,291 | ) | |||||||||||||||||||||||
| % of sales | 54.8 | % | 41.8 | % | 8.8 | % | ||||||||||||||||||||||||||||||||||||||
| EPS | $ | (5.65 | ) | $ | (5.65 | ) | ||||||||||||||||||||||||||||||||||||||
| Shares | 29,775 | 29,775 | ||||||||||||||||||||||||||||||||||||||||||
| Acquisition costs (1) | 349 | (2,600 | ) | 2,949 | (1,760 | ) | 4,709 | |||||||||||||||||||||||||||||||||||||
| Legal matters (2) | (775 | ) | 775 | (462 | ) | 1,237 | ||||||||||||||||||||||||||||||||||||||
| Convertible notes premium on extinguishment (3) | (103,125 | ) | (61,521 | ) | 164,646 | |||||||||||||||||||||||||||||||||||||||
| Change in fair value of convertible notes hedges upon settlement (4) | (5,460 | ) | (3,257 | ) | 8,717 | |||||||||||||||||||||||||||||||||||||||
| Loss on early extinguishment of debt (5) | (3,426 | ) | (2,044 | ) | 5,470 | |||||||||||||||||||||||||||||||||||||||
| $ | 152,126 | $ | 112,451 | $ | 28,182 | $ | 5,928 | $ | $ | 5,766 | $ | 16,488 | ||||||||||||||||||||||||||||||||
| Adjusted gross profit % | 54.9 | % | ||||||||||||||||||||||||||||||||||||||||||
| Amortization (6) | $ | 1,500 | (6,808 | ) | 8,308 | (1,036 | ) | 2,291 | 7,053 | |||||||||||||||||||||||||||||||||||
| As adjusted | $ | 105,643 | $ | 36,490 | $ | 4,892 | $ | $ | 8,057 | 25.5 | % | $ | 23,541 | $ | 1,263 | $ | 24,804 | |||||||||||||||||||||||||||
| % of sales | 38.1 | % | 13.2 | % | ||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted EPS | $ | 0.76 | ||||||||||||||||||||||||||||||||||||||||||
| Shares | 29,775 | 3,820 | 33,595 | |||||||||||||||||||||||||||||||||||||||||
| Convertible notes hedges (7) | (856 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted Shares | 32,739 | |||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Other Expense | Tax Expense | Effective Tax Rate | Net Income | Basic EPS | Adjustments (8) | Diluted EPS | ||||||||||||||||||||||||||||||||||
| As reported | $ | 141,424 | $ | 104,399 | $ | 25,707 | $ | 9,420 | $ | $ | 2,997 | 18.4 | % | $ | 13,290 | $ | $ | 13,290 | ||||||||||||||||||||||||||
| % of sales | 55.4 | % | 40.9 | % | 10.1 | % | ||||||||||||||||||||||||||||||||||||||
| EPS | $ | 0.46 | $ | 0.41 | ||||||||||||||||||||||||||||||||||||||||
| Shares | 29,125 | 3,339 | 32,464 | |||||||||||||||||||||||||||||||||||||||||
| $ | 141,424 | $ | 104,399 | $ | 25,707 | $ | 9,420 | $ | $ | 2,997 | $ | 13,290 | ||||||||||||||||||||||||||||||||
| Adjusted gross profit % | 55.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Amortization (6) | $ | 1,500 | (6,689 | ) | 8,189 | (3,586 | ) | 2,886 | 8,889 | |||||||||||||||||||||||||||||||||||
| As adjusted | $ | 97,710 | $ | 33,896 | $ | 5,834 | $ | $ | 5,883 | 21.0 | % | $ | 22,179 | $ | $ | 22,179 | ||||||||||||||||||||||||||||
| % of sales | 38.3 | % | 13.3 | % | ||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted EPS | $ | 0.71 | ||||||||||||||||||||||||||||||||||||||||||
| Shares | 29,125 | 3,339 | 32,464 | |||||||||||||||||||||||||||||||||||||||||
| Convertible notes hedges (7) | (1,362 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted Shares | 31,102 |
Reconciliation of Reported Net Income (Loss) to Adjusted Net Income
(in thousands, except per share amounts, unaudited)
| Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Other Expense | Tax Expense | Effective Tax Rate | Net Income (Loss) | Basic EPS | Adjustments (8) | Diluted EPS | ||||||||||||||||||||||||||||||||||
| As reported | $ | 287,768 | $ | 218,701 | $ | 46,902 | $ | 10,926 | $ | 112,011 | $ | 77,281 | -101.6 | % | $ | (153,316 | ) | $ | $ | (153,316 | ) | |||||||||||||||||||||||
| % of sales | 55.4 | % | 42.1 | % | 9.0 | % | ||||||||||||||||||||||||||||||||||||||
| EPS | $ | (5.18 | ) | $ | (5.18 | ) | ||||||||||||||||||||||||||||||||||||||
| Shares | 29,601 | 29,601 | ||||||||||||||||||||||||||||||||||||||||||
| Acquisition costs (1) | 349 | (2,600 | ) | 2,949 | (1,760 | ) | 4,709 | |||||||||||||||||||||||||||||||||||||
| Legal matters (2) | (775 | ) | 775 | (462 | ) | 1,237 | ||||||||||||||||||||||||||||||||||||||
| Convertible notes premium on extinguishment (3) | (103,125 | ) | (61,521 | ) | 164,646 | |||||||||||||||||||||||||||||||||||||||
| Change in fair value of convertible notes hedges upon settlement (4) | (5,460 | ) | (3,257 | ) | 8,717 | |||||||||||||||||||||||||||||||||||||||
| Loss on early extinguishment of debt (5) | (3,426 | ) | (2,044 | ) | 5,470 | |||||||||||||||||||||||||||||||||||||||
| $ | 288,117 | $ | 215,326 | $ | 50,626 | $ | 10,926 | $ | $ | 8,237 | $ | 31,463 | ||||||||||||||||||||||||||||||||
| Adjusted gross profit % | 55.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Amortization (6) | $ | 3,000 | (13,370 | ) | 16,370 | (1,916 | ) | 4,451 | 13,835 | |||||||||||||||||||||||||||||||||||
| As adjusted | $ | 201,956 | $ | 66,996 | $ | 9,010 | $ | $ | 12,688 | 21.9 | % | $ | 45,298 | $ | 2,978 | $ | 48,276 | |||||||||||||||||||||||||||
| % of sales | 38.9 | % | 12.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted EPS | $ | 1.45 | ||||||||||||||||||||||||||||||||||||||||||
| Shares | 29,601 | 4,774 | 34,375 | |||||||||||||||||||||||||||||||||||||||||
| Convertible note hedges (7) | (1,134 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted Shares | 33,241 | |||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Other Expense | Tax Expense | Effective Tax Rate | Net Income | Basic EPS | Adjustments (8) | Diluted EPS | ||||||||||||||||||||||||||||||||||
| As reported | $ | 269,873 | $ | 202,739 | $ | 45,790 | $ | 19,772 | $ | $ | 2,868 | 11.0 | % | $ | 23,150 | $ | $ | 23,150 | ||||||||||||||||||||||||||
| % of sales | 55.3 | % | 41.6 | % | 9.4 | % | ||||||||||||||||||||||||||||||||||||||
| EPS | $ | 0.80 | $ | 0.72 | ||||||||||||||||||||||||||||||||||||||||
| Shares | 29,052 | 2,912 | 31,964 | |||||||||||||||||||||||||||||||||||||||||
| Restructuring and related costs (9) | (414 | ) | 414 | 109 | 305 | |||||||||||||||||||||||||||||||||||||||
| $ | 269,873 | $ | 202,325 | $ | 46,204 | $ | 19,772 | $ | $ | 2,977 | $ | 23,455 | ||||||||||||||||||||||||||||||||
| Adjusted gross profit % | 55.3 | % | ||||||||||||||||||||||||||||||||||||||||||
| Amortization (6) | $ | 3,000 | (13,527 | ) | 16,527 | (7,147 | ) | 5,855 | 17,819 | |||||||||||||||||||||||||||||||||||
| As adjusted | $ | 188,798 | $ | 62,731 | $ | 12,625 | $ | $ | 8,832 | 17.6 | % | $ | 41,274 | $ | $ | 41,274 | ||||||||||||||||||||||||||||
| % of sales | 38.7 | % | 12.9 | % | ||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted EPS | $ | 1.34 | ||||||||||||||||||||||||||||||||||||||||||
| Shares | 29,052 | 2,912 | 31,964 | |||||||||||||||||||||||||||||||||||||||||
| Convertible note hedges (7) | (1,201 | ) | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted Diluted Shares | 30,763 |
Reconciliation of Reported Net Income (Loss) to EBITDA & Adjusted EBITDA
(in thousands, unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net income (loss) | $ | (168,291 | ) | $ | 13,290 | $ | (153,316 | ) | $ | 23,150 | ||||||
| Provision for income taxes | 74,810 | 2,997 | 77,281 | 2,868 | ||||||||||||
| Interest expense | 5,928 | 9,420 | 10,926 | 19,772 | ||||||||||||
| Depreciation | 4,059 | 3,984 | 8,090 | 8,741 | ||||||||||||
| Amortization | 13,266 | 13,797 | 26,065 | 27,316 | ||||||||||||
| EBITDA | $ | (70,228 | ) | $ | 43,488 | $ | (30,954 | ) | $ | 81,847 | ||||||
| Stock based compensation | 5,755 | 4,290 | 10,218 | 7,676 | ||||||||||||
| Acquisition costs | 2,949 | 2,949 | ||||||||||||||
| Legal matters | 775 | 775 | ||||||||||||||
| Convertible notes premium on extinguishment | 103,125 | 103,125 | ||||||||||||||
| Change in fair value of convertible notes hedges upon settlement | 5,460 | 5,460 | ||||||||||||||
| Loss on early extinguishment of debt | 3,426 | 3,426 | ||||||||||||||
| Restructuring and related costs | 414 | |||||||||||||||
| Adjusted EBITDA | $ | 51,262 | $ | 47,778 | $ | 94,999 | $ | 89,937 | ||||||||
| EBITDA Margin | ||||||||||||||||
| EBITDA | -25.3 | % | 17.0 | % | -6.0 | % | 16.8 | % | ||||||||
| Adjusted EBITDA | 18.5 | % | 18.7 | % | 18.3 | % | 18.4 | % |
About CONMED Corporation
CONMED is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. The Company s products are used by
surgeons and physicians in a variety of specialties, including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology. For more information, visit www.conmed.com.
Forward-Looking Statements
This press release and the
associated conference call may contain forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed
in the forward-looking statements herein or in previous disclosures. For example, in addition to general industry and economic conditions, factors that could cause actual results to differ materially from those in the forward-looking
statements may include, but are not limited to, the risks posed to the Company s business, financial condition, and results of operations by the COVID-19 global pandemic and the various government responses to the pandemic, including
deferral of surgeries, reductions in hospital and ambulatory surgery center operating volumes, disruption to potential supply chain reliability; any assumptions underlying any of the foregoing as well as the risk factors discussed in
the Company s Annual Report on Form 10-K for the full year ended December 31, 2021. Any and all forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate
to the Company s performance on a going-forward basis. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that management s expectations, beliefs or projections as
expressed in the forward-looking statements will actually occur or prove to be correct.
Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures
The Company supplements the reporting of its financial information determined under
generally accepted accounting principles in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; adjusted gross profit; cost of sales
excluding specified items; adjusted selling and administrative expenses; adjusted operating income; adjusted interest expense; adjusted other expense; adjusted income tax expense (benefit); adjusted effective income tax rate; adjusted net income,
adjusted diluted shares and adjusted diluted net earnings per share (EPS). The Company believes that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding
its financial results and assessing its prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of its operations because they
exclude items that may not be indicative of, or are unrelated to, its core operating results and provide a baseline for analyzing trends in the Company s underlying business. Further, the presentation of EBITDA is a non-GAAP measurement that management considers useful for measuring aspects of the Company s cash flow. Management uses these non-GAAP financial measures for reviewing
the operating results and analyzing potential future business trends in connection with its budget process and bases certain management incentive compensation on these non-GAAP financial measures.
Net sales on a constant currency basis is a non-GAAP measure. The
Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange
rates that affect the comparability and trend of net sales. To measure earnings performance on a consistent and comparable basis, the Company excludes certain items that affect the comparability of operating results and the trend of earnings. These
adjustments are irregular in timing, may not be indicative of past and future performance and are therefore excluded to allow investors to better understand underlying operating trends.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures
with other companies non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth,
gross profit, cost of sales, selling and administrative expenses, operating income, interest expense, other expense, income tax expense (benefit), effective income tax rate, net income (loss), diluted shares and diluted net earnings (loss) per
share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company s operations that, when viewed with GAAP results and
the reconciliations to corresponding GAAP financial measures above, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly filed reports in
their entirety and not to rely on any single financial measure.