Full Press Release Details
| NEWS RELEASE | ||||
| CONTACT: CONMED Corporation Todd W. Garner Chief Financial Officer 727-214-2975 ToddGarner@conmed.com |
CONMED Corporation Announces Third Quarter 2024 Financial Results
Largo, Florida, October 30, 2024 CONMED Corporation (NYSE: CNMD) today announced financial results for the third quarter
ended September 30, 2024.
Third Quarter 2024 Highlights
Our third quarter results were largely in line with our expectations, and we remain focused
on getting fully back on offense, commented Curt R. Hartman, CONMED s Chair of the Board, President, and Chief Executive Officer. I am particularly proud of how our teams responded to the disruption from hurricanes Helene and
Milton, which temporarily impacted our employees and facilities in the Southeast as well as many of our customers.
Full year reported revenue is now expected to be between $1.300 billion and $1.305 billion, compared to the prior guidance range of
$1.305 billion to $1.315 billion. Foreign currency is expected to have an immaterial impact on revenue for the full year.
expects full-year adjusted diluted net earnings per share(2) in the range of $4.00 to $4.05, compared to its prior range of $3.95 to $4.02. Foreign currency is expected to have an immaterial
impact on earnings per share for the full year.
Supplemental Financial Disclosures
The Company s management will host a conference call today at 4:30 p.m. ET to discuss its third quarter 2024 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
(in thousands except per share amounts, unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net sales | $ | 316,701 | $ | 304,578 | $ | 961,071 | $ | 917,699 | ||||||||
| Cost of sales | 137,706 | 136,519 | 426,383 | 423,629 | ||||||||||||
| Gross profit | 178,995 | 168,059 | 534,688 | 494,070 | ||||||||||||
| % of sales | 56.5 | % | 55.2 | % | 55.6 | % | 53.8 | % | ||||||||
| Selling & administrative expense | 99,730 | 125,295 | 345,611 | 385,080 | ||||||||||||
| Research & development expense | 13,558 | 12,464 | 41,250 | 38,574 | ||||||||||||
| Income from operations | 65,707 | 30,300 | 147,827 | 70,416 | ||||||||||||
| % of sales | 20.7 | % | 9.9 | % | 15.4 | % | 7.7 | % | ||||||||
| Interest expense | 9,252 | 10,019 | 28,440 | 30,271 | ||||||||||||
| Income before income taxes | 56,455 | 20,281 | 119,387 | 40,145 | ||||||||||||
| Provision for income taxes | 7,471 | 4,444 | 20,719 | 8,757 | ||||||||||||
| Net income | $ | 48,984 | $ | 15,837 | $ | 98,668 | $ | 31,388 | ||||||||
| Basic EPS | $ | 1.59 | $ | 0.52 | $ | 3.20 | $ | 1.02 | ||||||||
| Diluted EPS | 1.57 | 0.50 | 3.17 | 0.99 | ||||||||||||
| Basic shares | 30,856 | 30,741 | 30,815 | 30,638 | ||||||||||||
| Diluted shares | 31,112 | 31,689 | 31,148 | 31,563 |
(in millions, unaudited)
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
| % Change | ||||||||||||||||||||||||||||||||||||
| Domestic | International | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | As Reported | Impact of Foreign Currency | Constant Currency | As Reported | As Reported | Impact of Foreign Currency | Constant Currency | ||||||||||||||||||||||||||||
| Orthopedic Surgery | $ | 130.5 | $ | 124.7 | 4.7 | % | 0.5 | % | 5.2 | % | 7.4 | % | 3.1 | % | 0.8 | % | 3.9 | % | ||||||||||||||||||
| General Surgery | 186.2 | 179.9 | 3.5 | % | 0.1 | % | 3.6 | % | 7.4 | % | -5.3 | % | 0.3 | % | -5.0 | % | ||||||||||||||||||||
| $ | 316.7 | $ | 304.6 | 4.0 | % | 0.3 | % | 4.3 | % | 7.4 | % | -0.4 | % | 0.6 | % | 0.2 | % | |||||||||||||||||||
| Single-use Products | $ | 270.8 | $ | 253.3 | 6.9 | % | 0.3 | % | 7.2 | % | 9.7 | % | 3.1 | % | 0.7 | % | 3.8 | % | ||||||||||||||||||
| Capital Products | 45.9 | 51.3 | -10.6 | % | 0.2 | % | -10.4 | % | -7.1 | % | -13.4 | % | 0.3 | % | -13.1 | % | ||||||||||||||||||||
| $ | 316.7 | $ | 304.6 | 4.0 | % | 0.3 | % | 4.3 | % | 7.4 | % | -0.4 | % | 0.6 | % | 0.2 | % | |||||||||||||||||||
| Domestic | $ | 183.2 | $ | 170.5 | 7.4 | % | 0.0 | % | 7.4 | % | ||||||||||||||||||||||||||
| International | 133.5 | 134.1 | -0.4 | % | 0.6 | % | 0.2 | % | ||||||||||||||||||||||||||||
| $ | 316.7 | $ | 304.6 | 4.0 | % | 0.3 | % | 4.3 | % | |||||||||||||||||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||
| % Change | ||||||||||||||||||||||||||||||||||||
| Domestic | International | |||||||||||||||||||||||||||||||||||
| 2024 | 2023 | As Reported | Impact of Foreign Currency | Constant Currency | As Reported | As Reported | Impact of Foreign Currency | Constant Currency | ||||||||||||||||||||||||||||
| Orthopedic Surgery | $ | 405.0 | $ | 396.6 | 2.1 | % | 0.5 | % | 2.6 | % | 5.7 | % | 0.0 | % | 0.7 | % | 0.7 | % | ||||||||||||||||||
| General Surgery | 556.1 | 521.1 | 6.7 | % | 0.3 | % | 7.0 | % | 7.4 | % | 5.2 | % | 1.0 | % | 6.2 | % | ||||||||||||||||||||
| $ | 961.1 | $ | 917.7 | 4.7 | % | 0.4 | % | 5.1 | % | 6.9 | % | 2.0 | % | 0.8 | % | 2.8 | % | |||||||||||||||||||
| Single-use Products | $ | 814.8 | $ | 767.3 | 6.2 | % | 0.4 | % | 6.6 | % | 8.3 | % | 3.4 | % | 0.8 | % | 4.2 | % | ||||||||||||||||||
| Capital Products | 146.3 | 150.4 | -2.7 | % | 0.3 | % | -2.4 | % | -2.0 | % | -3.4 | % | 0.7 | % | -2.7 | % | ||||||||||||||||||||
| $ | 961.1 | $ | 917.7 | 4.7 | % | 0.4 | % | 5.1 | % | 6.9 | % | 2.0 | % | 0.8 | % | 2.8 | % | |||||||||||||||||||
| Domestic | $ | 545.0 | $ | 509.8 | 6.9 | % | 0.0 | % | 6.9 | % | ||||||||||||||||||||||||||
| International | 416.1 | 407.9 | 2.0 | % | 0.8 | % | 2.8 | % | ||||||||||||||||||||||||||||
| $ | 961.1 | $ | 917.7 | 4.7 | % | 0.4 | % | 5.1 | % |
Reconciliation of Reported Net Income to Adjusted Net Income
(in thousands, except per share amounts, unaudited)
| Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Tax Expense | Effective Tax Rate | Net Income | Diluted EPS | |||||||||||||||||||||||||
| As reported | $ | 178,995 | $ | 99,730 | $ | 65,707 | $ | 9,252 | $ | 7,471 | 13.2 | % | $ | 48,984 | $ | 1.57 | ||||||||||||||||
| % of sales | 56.5 | % | 31.5 | % | 20.7 | % | ||||||||||||||||||||||||||
| Legal matters (1) | (1,885 | ) | 1,885 | 92 | 1,793 | |||||||||||||||||||||||||||
| Contingent consideration fair value adjustments (2) | 27,049 | (27,049 | ) | (1,319 | ) | (25,730 | ) | |||||||||||||||||||||||||
| $ | 178,995 | $ | 124,894 | $ | 40,543 | $ | 9,252 | $ | 6,244 | $ | 25,047 | |||||||||||||||||||||
| Adjusted gross profit % | 56.5 | % | ||||||||||||||||||||||||||||||
| Amortization (3) | $ | 1,500 | (7,158 | ) | 8,658 | (1,443 | ) | 2,440 | 7,661 | |||||||||||||||||||||||
| As adjusted | $ | 117,736 | $ | 49,201 | $ | 7,809 | $ | 8,684 | 21.0 | % | $ | 32,708 | $ | 1.05 | ||||||||||||||||||
| % of sales | 37.2 | % | 15.5 | % | ||||||||||||||||||||||||||||
| Shares | 31,112 | |||||||||||||||||||||||||||||||
| Convertible note hedges (4) | ||||||||||||||||||||||||||||||||
| Adjusted diluted shares | 31,112 | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Tax Expense | Effective Tax Rate | Net Income | Diluted EPS | |||||||||||||||||||||||||
| As reported | $ | 168,059 | $ | 125,295 | $ | 30,300 | $ | 10,019 | $ | 4,444 | 21.9 | % | $ | 15,837 | $ | 0.50 | ||||||||||||||||
| % of sales | 55.2 | % | 41.1 | % | 9.9 | % | ||||||||||||||||||||||||||
| Acquisition and integration costs (5) | 2,194 | 2,194 | 222 | 1,972 | ||||||||||||||||||||||||||||
| Contingent consideration fair value adjustments (2) | (3,150 | ) | 3,150 | 320 | 2,830 | |||||||||||||||||||||||||||
| $ | 170,253 | $ | 122,145 | $ | 35,644 | $ | 10,019 | $ | 4,986 | $ | 20,639 | |||||||||||||||||||||
| Adjusted gross profit % | 55.9 | % | ||||||||||||||||||||||||||||||
| Amortization (3) | $ | 1,500 | (7,238 | ) | 8,738 | (1,546 | ) | 2,491 | 7,793 | |||||||||||||||||||||||
| As adjusted | $ | 114,907 | $ | 44,382 | $ | 8,473 | $ | 7,477 | 20.8 | % | $ | 28,432 | $ | 0.90 | ||||||||||||||||||
| % of sales | 37.7 | % | 14.6 | % | ||||||||||||||||||||||||||||
| Shares | 31,689 | |||||||||||||||||||||||||||||||
| Convertible note hedges (4) | (178 | ) | ||||||||||||||||||||||||||||||
| Adjusted diluted shares | 31,511 |
Reconciliation of Reported Net Income to Adjusted Net Income
(in thousands, except per share amounts, unaudited)
| Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Tax Expense | Effective Tax Rate | Net Income | Diluted EPS | |||||||||||||||||||||||||
| As reported | $ | 534,688 | $ | 345,611 | $ | 147,827 | $ | 28,440 | $ | 20,719 | 17.4 | % | $ | 98,668 | $ | 3.17 | ||||||||||||||||
| % of sales | 55.6 | % | 36.0 | % | 15.4 | % | ||||||||||||||||||||||||||
| Legal matters (1) | (4,566 | ) | 4,566 | 344 | 4,222 | |||||||||||||||||||||||||||
| Restructuring and related costs (2) | 235 | (1,539 | ) | 1,774 | 255 | 1,519 | ||||||||||||||||||||||||||
| Asset impairment costs (3) | 1,414 | 1,414 | 203 | 1,211 | ||||||||||||||||||||||||||||
| Termination of distributor agreement (4) | 970 | (970 | ) | (139 | ) | (831 | ) | |||||||||||||||||||||||||
| Contingent consideration fair value adjustments (5) | 42,267 | (42,267 | ) | (2,650 | ) | (39,617 | ) | |||||||||||||||||||||||||
| $ | 536,337 | $ | 382,743 | $ | 112,344 | $ | 28,440 | $ | 18,732 | $ | 65,172 | |||||||||||||||||||||
| Adjusted gross profit % | 55.8 | % | ||||||||||||||||||||||||||||||
| Amortization (6) | $ | 4,500 | (21,466 | ) | 25,966 | (4,256 | ) | 7,320 | 22,902 | |||||||||||||||||||||||
| As adjusted | $ | 361,277 | $ | 138,310 | $ | 24,184 | $ | 26,052 | 22.8 | % | $ | 88,074 | $ | 2.83 | ||||||||||||||||||
| % of sales | 37.6 | % | 14.4 | % | ||||||||||||||||||||||||||||
| Shares | 31,148 | |||||||||||||||||||||||||||||||
| Convertible note hedges (7) | ||||||||||||||||||||||||||||||||
| Adjusted diluted shares | 31,148 | |||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||
| Gross Profit | Selling & Administrative Expense | Operating Income | Interest Expense | Tax Expense | Effective Tax Rate | Net Income | Diluted EPS | |||||||||||||||||||||||||
| As reported | $ | 494,070 | $ | 385,080 | $ | 70,416 | $ | 30,271 | $ | 8,757 | 21.8 | % | $ | 31,388 | $ | 0.99 | ||||||||||||||||
| % of sales | 53.8 | % | 42.0 | % | 7.7 | % | ||||||||||||||||||||||||||
| Software implementation costs (8) | (6,056 | ) | 6,056 | 1,453 | 4,603 | |||||||||||||||||||||||||||
| Acquisition and integration costs (9) | 6,463 | (752 | ) | 7,215 | 1,369 | 5,846 | ||||||||||||||||||||||||||
| Contingent consideration fair value adjustments (5) | (6,949 | ) | 6,949 | 1,334 | 5,615 | |||||||||||||||||||||||||||
| Restructuring and related costs (2) | 2,035 | (1,578 | ) | 3,613 | 930 | 2,683 | ||||||||||||||||||||||||||
| Termination of distributor agreements (4) | (2,098 | ) | 2,098 | 417 | 1,681 | |||||||||||||||||||||||||||
| $ | 502,568 | $ | 367,647 | $ | 96,347 | $ | 30,271 | $ | 14,260 | $ | 51,816 | |||||||||||||||||||||
| Adjusted gross profit % | 54.8 | % | ||||||||||||||||||||||||||||||
| Amortization (6) | $ | 4,500 | (21,773 | ) | 26,273 | (4,558 | ) | 7,511 | 23,320 | |||||||||||||||||||||||
| As adjusted | $ | 345,874 | $ | 122,620 | $ | 25,713 | $ | 21,771 | 22.5 | % | $ | 75,136 | $ | 2.39 | ||||||||||||||||||
| % of sales | 37.7 | % | 13.4 | % | ||||||||||||||||||||||||||||
| Shares | 31,563 | |||||||||||||||||||||||||||||||
| Convertible note hedges (7) | (152 | ) | ||||||||||||||||||||||||||||||
| Adjusted diluted shares | 31,411 |
Reconciliation of Reported Net Income to EBITDA & Adjusted EBITDA
(in thousands, unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 48,984 | $ | 15,837 | $ | 98,668 | $ | 31,388 | ||||||||
| Provision for income taxes | 7,471 | 4,444 | 20,719 | 8,757 | ||||||||||||
| Interest expense | 9,252 | 10,019 | 28,440 | 30,271 | ||||||||||||
| Depreciation | 4,195 | 3,926 | 12,406 | 12,148 | ||||||||||||
| Amortization | 13,779 | 13,947 | 41,445 | 41,724 | ||||||||||||
| EBITDA | $ | 83,681 | $ | 48,173 | $ | 201,678 | $ | 124,288 | ||||||||
| Stock based compensation | 6,123 | 6,186 | 19,336 | 18,334 | ||||||||||||
| Legal matters | 1,885 | 4,566 | ||||||||||||||
| Contingent consideration fair value adjustments | (27,049 | ) | 3,150 | (42,267 | ) | 6,949 | ||||||||||
| Acquisition and integration costs | 2,194 | 7,215 | ||||||||||||||
| Termination of distributor agreements | (970 | ) | 2,098 | |||||||||||||
| Software implementation costs | 6,056 | |||||||||||||||
| Restructuring and related costs | 1,774 | 3,613 | ||||||||||||||
| Asset impairment costs | 1,414 | |||||||||||||||
| Adjusted EBITDA | $ | 64,640 | $ | 59,703 | $ | 185,531 | $ | 168,553 | ||||||||
| EBITDA Margin | ||||||||||||||||
| EBITDA | 26.4 | % | 15.8 | % | 21.0 | % | 13.5 | % | ||||||||
| Adjusted EBITDA | 20.4 | % | 19.6 | % | 19.3 | % | 18.4 | % |
About CONMED Corporation
CONMED is a medical technology company that provides devices and equipment for surgical procedures. The Company s products are used by surgeons and other
healthcare professionals 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
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 risk factors discussed in the Company s Annual Report on Form 10-K for the full year ended December 31, 2023, listed under the heading Forward-Looking Statements
in the Company s most recently filed Form 10-Q and other risks and uncertainties, which may be detailed from time to time in reports filed by CONMED with the SEC. 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 income tax expense; 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
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, income tax expense, effective income tax rate, net income, diluted shares and diluted net earnings
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.
We are unable to present a quantitative reconciliation of our expected diluted net
earnings per share to expected adjusted diluted net earnings per share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisition, integration and other charges. The financial impact of
these items is uncertain and is dependent on various factors, including timing, and could be material to our consolidated condensed statements of income.