We came across a bullish thesis on CONMED Corporation on DeepValue Capital’s Substack. In this article, we will summarize the bulls’ thesis on CNMD. CONMED Corporation's share was trading at $46.00 as of September 26th. CNMD’s trailing P/E was 12.99 according to Yahoo Finance. 10 Most Competitive Medical Fellowships in America egyjanek/Shutterstock.com Conmed Corporation (CONMED) is a global medical device company focused on enabling less invasive and more effective surgery across orthopedics, general s ...

Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market engagement, including daily updates on Zacks Rank and Industry Rank, access to the Zacks 1 Rank List, Equity Research reports, and Premium stock screens [1] - The service aims to help investors become more informed and confident in their investment decisions [1] Group 2: Zacks Style Scores - Zacks Style Scores provide a rating system for stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank [2] - Stocks are rated from A to F, with A indicating the highest potential for outperforming the market [3] Group 3: Value Score - The Value Style Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Group 4: Growth Score - The Growth Style Score assesses a company's financial health and future outlook by examining projected and historical earnings, sales, and cash flow [4] Group 5: Momentum Score - The Momentum Style Score identifies optimal times to invest based on price trends and earnings estimate changes, emphasizing the importance of market trends [5] Group 6: VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores, providing a comprehensive rating to identify stocks with the best overall potential [6] Group 7: Zacks Rank and Style Scores Integration - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to guide investors in stock selection, with 1 (Strong Buy) stocks achieving an average annual return of +23.75% since 1988 [7] - The integration of Style Scores with the Zacks Rank helps investors narrow down their choices among over 800 top-rated stocks [8] Group 8: Stock Example - Conmed Corporation - Conmed Corporation, a medical products manufacturer, is currently rated 3 (Hold) on the Zacks Rank with a VGM Score of A [11] - The company has a Momentum Style Score of B, with shares increasing by 8.6% over the past four weeks, and has seen upward revisions in earnings estimates for fiscal 2025 [12]

Group 1 - Zacks Premium offers tools for investors to enhance their stock market confidence and knowledge, including daily updates, research reports, and stock screens [1][2] - The Zacks Style Scores provide ratings based on value, growth, and momentum characteristics, helping investors identify stocks with high potential to outperform the market [2][3] Group 2 - The Value Score identifies attractive and discounted stocks using various financial ratios, appealing to value investors [3] - The Growth Score focuses on a company's future prospects and financial health, analyzing earnings, sales, and cash flow [4] - The Momentum Score helps investors capitalize on price trends by analyzing recent price changes and earnings estimate shifts [5] Group 3 - The VGM Score combines the three Style Scores to identify stocks with the best value, growth, and momentum characteristics, serving as a strong indicator alongside the Zacks Rank [6] - The Zacks Rank model, based on earnings estimate revisions, has shown a historical average annual return of +23.75% for 1 (Strong Buy) stocks since 1988, significantly outperforming the S&P 500 [7][9] Group 4 - CONMED Corporation, a medical products manufacturer, is currently rated 3 (Hold) on the Zacks Rank with a VGM Score of A, indicating potential for investors [11] - The company has a Momentum Style Score of A, with shares increasing by 4.8% over the past four weeks, and an upward revision in earnings estimates for fiscal 2025 [12]

Core Insights - CONMED Corporation (CNMD) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.15, exceeding the Zacks Consensus Estimate of $1.13 by 1.8%, and reflecting a 17.3% year-over-year improvement [1] - The company also raised its 2025 EPS guidance to a range of $4.40-$4.55, up from the previous range of $4.31-$4.46, indicating strong operational performance [11] Revenue Performance - CONMED's total revenues for the quarter reached $342.3 million, marking a 3.1% increase year-over-year and surpassing the Zacks Consensus Estimate by 0.8% [2] - Revenue growth was primarily driven by high-growth product areas such as BioBrace, AirSeal, and Foot & Ankle, despite some supply constraints and international market softness [2][13] Segment Analysis - The Orthopedic Surgery segment generated revenues of $140.7 million, a 0.9% increase year-over-year, with a slight decline of 0.8% in the U.S. but a 1.9% increase in international markets [3] - The General Surgery segment reported revenues of $201.6 million, up 4.7% year-over-year, with U.S. sales increasing by 4.3% and international sales rising by 5.7% [4] Geographic Sales Breakdown - U.S. sales totaled $190.6 million, reflecting a 2.8% year-over-year increase, while international sales amounted to $151.7 million, up 3.4% year-over-year [5] Profitability Metrics - Adjusted gross profit improved by 5.3% year-over-year to $193.4 million, with a gross margin increase of 120 basis points to 56.5% [6] - Adjusted operating income rose to $45.1 million from $39.8 million in the prior-year quarter, resulting in an operating margin of 15.7%, up 110 basis points [6] Financial Position - At the end of the second quarter, CONMED had a cash balance of $33.9 million, down from $35.5 million in the previous quarter [7] Future Guidance - The company raised its revenue guidance for 2025 to a range of $1.356 billion to $1.378 billion, with the Zacks Consensus Estimate at $1.37 billion [10] - For the third quarter of 2025, CONMED expects reported sales between $330 million and $337 million, with adjusted EPS estimated between $1.03 and $1.08 [11] Strategic Outlook - CONMED maintains a positive long-term growth outlook, targeting mid- to high-single-digit revenue increases through strategic drivers such as AirSeal, Buffalo Filter, BioBrace, and Foot & Ankle [14] - The company is focused on transforming its supply chain into a strategic asset to enhance procurement, planning, and production efficiency [14]

[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) This report details CONMED Corporation's financial status and operational highlights for the period ended June 30, 2025 - CONMED Corporation filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) Trading Information | Metric | Value | | :--- | :--- | | Trading Symbol | CNMD | | Exchange | NYSE | | Filer Status | Large accelerated filer | | Common Stock Outstanding (July 28, 2025) | 30,954,963 shares | [PART I FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section details CONMED Corporation's unaudited consolidated condensed financial statements and management's discussion and analysis [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents CONMED Corporation's unaudited consolidated condensed financial statements, including statements of comprehensive income, balance sheets, shareholders' equity, and cash flows for the periods ended June 30, 2025, and 2024, along with detailed notes explaining accounting policies, revenue recognition, fair value measurements, debt, and other financial details [Consolidated Condensed Statements of Comprehensive Income](index=3&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Income) This statement presents CONMED's comprehensive income, detailing key financial performance metrics for the three and six months ended June 30 Three Months Ended June 30 (in thousands, except per share amounts) | Metric | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net sales | $342,345 | $332,097 | +3.1% | | Gross profit | $188,320 | $183,729 | +2.5% | | Income from operations | $38,161 | $47,107 | -19.0% | | Net income | $21,421 | $29,976 | -28.5% | | Diluted EPS | $0.69 | $0.96 | -28.1% | Six Months Ended June 30 (in thousands, except per share amounts) | Metric | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net sales | $663,600 | $644,371 | +3.0% | | Gross profit | $366,071 | $355,694 | +2.9% | | Income from operations | $54,119 | $82,121 | -34.1% | | Net income | $27,457 | $49,685 | -44.8% | | Diluted EPS | $0.88 | $1.59 | -44.7% | [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) This statement outlines CONMED's financial position, detailing assets, liabilities, and shareholders' equity at June 30, 2025, and December 31, 2024 As of June 30, 2025 vs. December 31, 2024 (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total current assets | $657,780 | $640,007 | +2.8% | | Total assets | $2,328,458 | $2,306,247 | +1.0% | | Total current liabilities | $294,838 | $278,130 | +6.0% | | Total liabilities | $1,325,588 | $1,343,566 | -1.3% | | Total shareholders' equity | $1,002,870 | $962,681 | +4.2% | [Consolidated Condensed Statements of Shareholders' Equity](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Shareholders'%20Equity) This statement details changes in CONMED's shareholders' equity, driven by net income, stock-based compensation, and foreign currency translation adjustments - Total shareholders' equity increased from **$962,681 thousand** at December 31, 2024, to **$1,002,870 thousand** at June 30, 2025[14](index=14&type=chunk) - Key drivers for the increase include stock-based compensation (**$13,863 thousand** for Q2 2025), net income (**$21,421 thousand** for Q2 2025), and foreign currency translation adjustments (**$10,986 thousand** for Q2 2025), partially offset by dividends paid (**$6,189 thousand** for Q2 2025)[14](index=14&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) This statement presents CONMED's cash flows, categorizing them into operating, investing, and financing activities for the six months ended June 30 Six Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $70,668 | $72,427 | -2.4% | | Net cash used in investing activities | $(8,658) | $(5,625) | +53.9% (increased outflow) | | Net cash used in financing activities | $(54,925) | $(61,099) | -10.2% (decreased outflow) | | Net increase in cash and cash equivalents | $9,476 | $4,573 | +107.2% | | Cash and cash equivalents at end of period | $33,935 | $28,869 | +17.5% | [Notes to Consolidated Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) These notes provide essential context and detailed breakdowns for the unaudited consolidated condensed financial statements, covering the company's operations, accounting policies, revenue segmentation, comprehensive income components, fair value measurements, inventory, earnings per share, goodwill and intangible assets, long-term debt, guarantees, pension plans, business segments, and legal proceedings [Note 1 - Operations](index=8&type=section&id=Note%201%20-%20Operations) This note describes CONMED Corporation's core business as a medical technology company, providing devices and equipment for surgical procedures - CONMED Corporation is a medical technology company providing devices and equipment for surgical procedures[20](index=20&type=chunk) - Products are used by surgeons and healthcare professionals in orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology[20](index=20&type=chunk) [Note 2 - Interim Financial Information](index=8&type=section&id=Note%202%20-%20Interim%20Financial%20Information) This note clarifies the preparation of unaudited interim financial statements in accordance with GAAP, emphasizing the forward-looking nature of estimates - The unaudited consolidated condensed financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions[21](index=21&type=chunk) - Results for the period ended June 30, 2025, are not necessarily indicative of the results expected for the full year ending December 31, 2025[21](index=21&type=chunk) - Management makes estimates and judgments, and actual results could differ materially under different assumptions or conditions[23](index=23&type=chunk) [Note 3 - New Accounting Pronouncements](index=8&type=section&id=Note%203%20-%20New%20Accounting%20Pronouncements) This note outlines new accounting pronouncements, ASU 2024-03 and ASU 2023-09, detailing their effective dates and expected impact on financial disclosures - ASU 2024-03 (Reporting Comprehensive Income - Expense Disaggregation Disclosures) requires disaggregation of certain expense captions in footnotes, effective for annual periods after December 15, 2026, and interim periods after December 15, 2027. Expected to impact disclosures only[24](index=24&type=chunk) - ASU 2023-09 (Income Taxes - Improvements to Income Tax Disclosures) requires disaggregated information about effective tax rate reconciliation and income taxes paid, effective for annual periods after December 15, 2024. Expected to impact disclosures only[25](index=25&type=chunk) [Note 4 - Revenues](index=9&type=section&id=Note%204%20-%20Revenues) This note provides a detailed breakdown of CONMED's revenues, segmented by total sales, primary geographic markets, and timing of recognition Total Sales from Contracts with Customers (in thousands) | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $342,345 | $332,097 | +3.1% | | Six Months Ended June 30 | $663,600 | $644,371 | +3.0% | Revenue by Primary Geographic Markets (Six Months Ended June 30, 2025, in thousands) | Geographic Market | Orthopedic Surgery | General Surgery | Total | | :--- | :--- | :--- | :--- | | United States | $104,702 | $269,672 | $374,374 | | Europe, Middle East & Africa | $70,795 | $60,658 | $131,453 | | Asia Pacific | $60,860 | $34,934 | $95,794 | | Americas (excluding the United States) | $42,667 | $19,312 | $61,979 | | **Total** | **$279,024** | **$384,576** | **$663,600** | Revenue by Timing of Recognition (Six Months Ended June 30, 2025, in thousands) | Timing of Revenue Recognition | Orthopedic Surgery | General Surgery | Total | | :--- | :--- | :--- | :--- | | Goods transferred at a point in time | $256,930 | $379,582 | $636,512 | | Services transferred over time | $22,094 | $4,994 | $27,088 | | **Total** | **$279,024** | **$384,576** | **$663,600** | - Contract liability balance related to extended warranties increased to **$20,391 thousand** at June 30, 2025, from **$18,424 thousand** at December 31, 2024[26](index=26&type=chunk) [Note 5 - Comprehensive Income](index=10&type=section&id=Note%205%20-%20Comprehensive%20Income) This note details CONMED's comprehensive income, including accumulated other comprehensive loss and its key components for the periods ended June 30 Comprehensive Income (in thousands) | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $25,835 | $25,343 | +1.9% | | Six Months Ended June 30 | $33,336 | $45,421 | -26.6% | - Accumulated other comprehensive loss decreased to **$(52,978) thousand** at June 30, 2025, from **$(58,857) thousand** at December 31, 2024[27](index=27&type=chunk) - Key components of other comprehensive income (loss) for the six months ended June 30, 2025, include a cash flow hedging loss of **$(10,508) thousand**, pension liability gain of **$536 thousand**, and foreign currency translation adjustment gain of **$15,851 thousand**[27](index=27&type=chunk) [Note 6 - Fair Value Measurement](index=11&type=section&id=Note%206%20-%20Fair%20Value%20Measurement) This note describes CONMED's fair value measurements, including derivative instruments and contingent consideration from acquisitions - The company uses derivative instruments, specifically forward contracts, to manage exposures to interest rates, foreign exchange rates, and commodity prices[28](index=28&type=chunk) Notional Contract Amounts for Forward Contracts Outstanding (in thousands) | Designation | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash flow hedge | $228,427 | $224,177 | | Non-designated | $57,223 | $38,892 | - Fair value of contingent consideration from In2Bones and Biorez acquisitions is measured using Level 3 inputs, with liabilities of **$5,003 thousand** for In2Bones and **$55,283 thousand** for Biorez as of June 30, 2025[41](index=41&type=chunk) [Note 7 - Inventories](index=15&type=section&id=Note%207%20-%20Inventories) This note provides a breakdown of CONMED's inventories, categorized into raw materials, work-in-process, and finished goods Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | $110,140 | $114,728 | | Work-in-process | $33,279 | $31,300 | | Finished goods | $218,833 | $200,691 | | **Total** | **$362,252** | **$346,719** | [Note 8 - Earnings Per Share](index=15&type=section&id=Note%208%20-%20Earnings%20Per%20Share) This note presents CONMED's diluted earnings per share and details the exclusion of anti-dilutive shares from its calculation Diluted Earnings Per Share | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $0.69 | $0.96 | -28.1% | | Six Months Ended June 30 | $0.88 | $1.59 | -44.7% | - Approximately **4.1 million shares** for the three months ended June 30, 2025, and **3.9 million shares** for the six months ended June 30, 2025, were excluded from diluted EPS calculation due to their anti-dilutive effect[44](index=44&type=chunk) [Note 9 - Goodwill and Other Intangible Assets](index=16&type=section&id=Note%209%20-%20Goodwill%20and%20Other%20Intangible%20Assets) This note details CONMED's goodwill and other intangible assets, including changes in goodwill, amortization expense, and future amortization estimates Goodwill (in thousands) | Date | Amount | | :--- | :--- | | Balance as of December 31, 2024 | $805,358 | | Foreign currency translation | $1,568 | | Balance as of June 30, 2025 | $806,926 | - Amortization expense related to intangible assets was **$8.7 million** for the three months ended June 30, 2025, and **$17.3 million** for the six months ended June 30, 2025[47](index=47&type=chunk) Estimated Intangible Asset Amortization Expense Remaining (in thousands) | Year | Amortization included in expense | Amortization recorded as a reduction of revenue | Total | | :--- | :--- | :--- | :--- | | Remaining, 2025 | $15,020 | $3,000 | $18,020 | | 2026 | $29,315 | $6,000 | $35,315 | | 2027 | $30,780 | $6,000 | $36,780 | [Note 10 - Long-Term Debt](index=17&type=section&id=Note%2010%20-%20Long-Term%20Debt) This note outlines CONMED's long-term debt, including total debt, details of the senior credit agreement, and outstanding convertible notes Long-Term Debt (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $881,825 | $905,781 | | Less: Current portion | $714 | $715 | | **Total long-term debt** | **$881,111** | **$905,066** | - On June 10, 2025, the company entered into an eighth amended and restated senior credit agreement, including a **$100.0 million** term loan facility and a **$650.0 million** revolving credit facility. The company was in full compliance with covenants as of June 30, 2025[50](index=50&type=chunk)[52](index=52&type=chunk) - Outstanding borrowings include **$85.0 million** on the term loan facility and **$4.0 million** on the revolving credit facility as of June 30, 2025. Available borrowings on the revolving credit facility were **$644.4 million**[51](index=51&type=chunk) - The **$800.0 million** 2.250% Convertible Notes due 2027 had an estimated fair value of approximately **$758.8 million** as of June 30, 2025[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 11 - Guarantees](index=19&type=section&id=Note%2011%20-%20Guarantees) This note details CONMED's guarantees, including standard warranty liability and costs associated with extended warranty repairs Standard Warranty Liability (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Balance as of January 1 | $1,445 | $1,802 | | Provision for warranties | $290 | $109 | | Claims made | $(366) | $(363) | | Balance as of June 30 | $1,369 | $1,548 | - Costs associated with extended warranty repairs amounted to **$2.2 million** for the six months ended June 30, 2025, a decrease from **$2.6 million** in the prior year[59](index=59&type=chunk) [Note 12 - Pension Plan](index=19&type=section&id=Note%2012%20-%20Pension%20Plan) This note outlines CONMED's pension plan, detailing net periodic pension cost and the expectation of no contributions during 2025 Net Periodic Pension Cost (in thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | $309 | $340 | | Six Months Ended June 30 | $618 | $681 | - The company does not expect to make any pension contributions during 2025[60](index=60&type=chunk) [Note 13 - Business Segment](index=20&type=section&id=Note%2013%20-%20Business%20Segment) This note describes CONMED's single operating segment, detailing its product lines in orthopedic and general surgery, and consolidated net sales - The company operates as a single operating segment, focused on the global development, manufacturing, and sale of surgical devices and related equipment[62](index=62&type=chunk) - Product lines include orthopedic surgery (sports medicine, lower extremities, powered surgical instruments, imaging systems) and general surgery (endo-mechanical instrumentation, insufflation, smoke evacuation, cardiac monitoring, electrosurgical generators)[63](index=63&type=chunk) Consolidated Net Sales by Product Line (Six Months Ended June 30, in thousands) | Product Line | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Orthopedic surgery | $279,024 | $274,449 | +1.7% | | General surgery | $384,576 | $369,922 | +4.0% | | **Consolidated net sales** | **$663,600** | **$644,371** | **+3.0%** | [Note 14 - Legal Proceedings](index=21&type=section&id=Note%2014%20-%20Legal%20Proceedings) This note details CONMED's legal proceedings, including government inquiries, royalty payment issues, the Italian medical device tax, and expected financial impact - The company is subject to various government inquiries and potential enforcement actions related to interactions with healthcare providers and anti-bribery laws (e.g., FCPA)[64](index=64&type=chunk)[65](index=65&type=chunk) - In December 2023, the company voluntarily informed the U.S. Department of Justice of potential issues with certain royalty payments related to surgeons involved in design teams and is cooperating with the review[71](index=71&type=chunk) - The Italian Constitutional Court ruled the medical device tax constitutional on July 22, 2024, granting a **52% discount** for 2015-2018 amounts. The company awaits conversion of Decree-Law No. 95 into law before adjusting its recorded reserve[69](index=69&type=chunk)[70](index=70&type=chunk) - The company does not expect the resolution of any pending claims, investigations, or reports of alleged misconduct to have a material adverse effect on its financial condition, results of operations, or cash flows[73](index=73&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on CONMED's financial performance and condition for the three and six months ended June 30, 2025, discussing net sales, cost of sales, operating expenses, interest, taxes, and liquidity. It highlights the impact of macroeconomic factors, supply chain challenges, and strategic initiatives [Forward-Looking Statements](index=23&type=section&id=Forward-Looking%20Statements) This section identifies forward-looking statements, outlines associated risks and uncertainties, and cautions readers against undue reliance on these projections - The report contains forward-looking statements identified by words such as 'anticipates,' 'expects,' 'estimates,' 'intends,' and 'believes'[75](index=75&type=chunk) - These statements involve known and unknown risks and uncertainties, including general economic conditions, regulatory changes, supply chain challenges, competition, and litigation[76](index=76&type=chunk)[78](index=78&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the report date[77](index=77&type=chunk) [Overview](index=24&type=section&id=Overview) This overview describes CONMED's medical technology business, its product lines' contribution to net sales, and the recurring revenue from single-use products - CONMED is a medical technology company providing devices and equipment for surgical procedures in orthopedics and general surgery[80](index=80&type=chunk)[81](index=81&type=chunk) Product Lines as a Percentage of Consolidated Net Sales | Product Line | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Orthopedic surgery | 41 % | 42 % | | General surgery | 59 % | 58 % | | **Consolidated net sales** | **100 %** | **100 %** | - Approximately **87%** of revenues are derived from the sale of single-use products, providing a recurring revenue stream. International sales approximated **44%** of consolidated net sales for both the six months ended June 30, 2025, and 2024[81](index=81&type=chunk) [Business Environment](index=24&type=section&id=Business%20Environment) This section discusses the business environment, highlighting inflationary pressures, supply chain challenges, and the engagement of consultants for operational improvements - The company is experiencing higher manufacturing and operating costs due to inflationary pressures and ongoing supply chain challenges, which are expected to continue through 2025[82](index=82&type=chunk) - A consulting firm has been engaged to evaluate and propose improvements in supply chain and manufacturing operations[82](index=82&type=chunk) - The company has not been materially impacted by the conflicts in Ukraine and the Middle East, with business limited to third-party distributors in these regions[83](index=83&type=chunk) [Critical Accounting Policies](index=24&type=section&id=Critical%20Accounting%20Policies) This section outlines CONMED's critical accounting policies, emphasizing management's estimates and assumptions for goodwill, intangible assets, and contingent consideration - Preparation of financial statements requires management to make estimates and assumptions affecting reported amounts of assets, liabilities, revenues, and expenses[84](index=84&type=chunk) - Critical accounting policies include those related to goodwill and intangible assets, contingent consideration, and the pension benefit obligation[85](index=85&type=chunk) [Consolidated Results of Operations](index=25&type=section&id=Consolidated%20Results%20of%20Operations) This section presents key financial metrics as a percentage of net sales, providing an overview of CONMED's consolidated results of operations Key Financial Metrics as a Percentage of Net Sales | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross profit | 55.0 % | 55.3 % | 55.2 % | 55.2 % | | Selling and administrative expense | 39.7 % | 36.9 % | 42.9 % | 38.2 % | | Income from operations | 11.1 % | 14.2 % | 8.2 % | 12.7 % | | Net income | 6.3 % | 9.0 % | 4.1 % | 7.7 % | [Net Sales](index=26&type=section&id=Net%20Sales) This section analyzes CONMED's net sales, highlighting growth drivers, constant currency performance, and trends in single-use versus capital products - Net sales increased **3.1%** for the three months ended June 30, 2025, and **3.0%** for the six months ended June 30, 2025, driven by growth in single-use products, partially offset by lower capital sales[87](index=87&type=chunk) Net Sales Growth (Constant Currency) | Product Line | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Orthopedic surgery | +0.8 % | +2.3 % | | General surgery | +4.4 % | +4.1 % | | **Total Net Sales** | **+2.9 %** | **+3.3 %** | - Single-use products sales increased **6.4%** (constant currency) for the three months and **5.9%** (constant currency) for the six months ended June 30, 2025. Capital products sales decreased **15.6%** (constant currency) for the three months and **10.4%** (constant currency) for the six months ended June 30, 2025[87](index=87&type=chunk) [Cost of Sales](index=26&type=section&id=Cost%20of%20Sales) This section analyzes CONMED's cost of sales, detailing increases and the impact of consulting costs on gross profit margins for the periods ended June 30 - Cost of sales increased to **$154.0 million** for the three months ended June 30, 2025, and to **$297.5 million** for the six months ended June 30, 2025[88](index=88&type=chunk) - Gross profit margins decreased **30 basis points** to **55.0%** for the three months ended June 30, 2025, primarily due to **$5.1 million** in consulting costs for supply chain and manufacturing operations improvements[88](index=88&type=chunk)[89](index=89&type=chunk) - Gross profit margins remained stable at **55.2%** for the six months ended June 30, 2025, compared to the prior year[88](index=88&type=chunk) [Selling and Administrative Expense](index=27&type=section&id=Selling%20and%20Administrative%20Expense) This section details increases in CONMED's selling and administrative expense, both in absolute terms and as a percentage of net sales for the periods ended June 30 - Selling and administrative expense increased to **$136.0 million** for the three months ended June 30, 2025, and to **$284.9 million** for the six months ended June 30, 2025[90](index=90&type=chunk) - As a percentage of net sales, it increased **280 basis points** to **39.7%** for the three months and **470 basis points** to **42.9%** for the six months ended June 30, 2025[90](index=90&type=chunk) [Research and Development Expense](index=27&type=section&id=Research%20and%20Development%20Expense) This section analyzes CONMED's research and development expense, detailing its absolute value and percentage of net sales, influenced by project timing - Research and development expense was **$14.1 million** for the three months ended June 30, 2025 (flat YoY), and decreased to **$27.1 million** for the six months ended June 30, 2025 (from **$27.7 million** in 2024)[92](index=92&type=chunk) - As a percentage of net sales, R&D expense decreased to **4.1%** for both the three and six months ended June 30, 2025, mainly due to the timing of research and development projects[92](index=92&type=chunk) [Interest Expense](index=27&type=section&id=Interest%20Expense) This section details the decrease in CONMED's interest expense, driven by lower weighted average borrowings and interest rates for the periods ended June 30 - Interest expense decreased to **$7.8 million** for the three months ended June 30, 2025, and to **$16.1 million** for the six months ended June 30, 2025[93](index=93&type=chunk) - The weighted average interest rates on borrowings decreased to **2.80%** for the three months and **2.85%** for the six months ended June 30, 2025[93](index=93&type=chunk) - The decrease in interest expense was driven by lower weighted average borrowings outstanding and lower weighted average interest rates during 2025[93](index=93&type=chunk) [Other Expense](index=27&type=section&id=Other%20Expense) This section details other expenses, primarily related to costs associated with the eighth amended and restated senior credit agreement - Other expense of **$0.4 million** for the three and six months ended June 30, 2025, was related to costs associated with the eighth amended and restated senior credit agreement, including a loss on early extinguishment and third-party fees[94](index=94&type=chunk) [Provision for Income Taxes](index=27&type=section&id=Provision%20for%20Income%20Taxes) This section analyzes CONMED's provision for income taxes, detailing the increase in effective tax rate and the impact of non-deductible expenses - The effective tax rate increased to **28.4%** for the three months ended June 30, 2025 (from **20.1%** in 2024), and to **27.0%** for the six months ended June 30, 2025 (from **21.1%** in 2024)[96](index=96&type=chunk) - Higher rates were primarily due to year-to-date expenses related to cash and stock-based compensation for the former CEO (**$12.2 million**), consulting fees for operational optimization (**$2.9 million**), and fair value adjustments to contingent consideration (**$2.1 million** income in H1 2025 vs. **$15.2 million** income in H1 2024), which are not deductible for federal tax[97](index=97&type=chunk)[98](index=98&type=chunk) - The company is evaluating the impact of the recently signed 'One Big Beautiful Bill Act' (OBBBA) on its effective tax rate and cash tax position[99](index=99&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) This section defines 'constant currency' as a non-GAAP measure for comparability, emphasizing it should not be considered in isolation from GAAP metrics - Net sales on a 'constant currency' basis is a non-GAAP measure used to better measure the comparability of results between periods by removing the impact of foreign currency exchange rate changes[100](index=100&type=chunk) - This non-GAAP financial measure should not be considered in isolation or as a substitute for reported net sales growth, the most directly comparable GAAP financial measure[101](index=101&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses CONMED's liquidity and capital resources, detailing cash flow activities, working capital, and capital expenditures - Liquidity needs primarily arise from capital investments, working capital requirements, and payments on indebtedness[102](index=102&type=chunk) - Net working capital position was **$362.9 million** at June 30, 2025[103](index=103&type=chunk) Cash Flows (Six Months Ended June 30, in thousands) | Category | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $70,668 | $72,427 | -2.4% | | Net cash used in investing activities | $(8,658) | $(5,625) | +53.9% (increased outflow) | | Net cash used in financing activities | $(54,925) | $(61,099) | -10.2% (decreased outflow) | - Capital expenditures increased to **$9.5 million** for the six months ended June 30, 2025, from **$5.6 million** in the prior year[104](index=104&type=chunk) [Other Liquidity Matters](index=29&type=section&id=Other%20Liquidity%20Matters) This section addresses other liquidity matters, including the adequacy of cash flows and borrowing capacity, and the status of the share repurchase program - Management believes cash flow from operations, cash and cash equivalents on hand, and available borrowing capacity (**$644.4 million** on the revolving credit facility) will be adequate to meet anticipated operating working capital requirements, debt service, capital expenditures, and dividend payments[106](index=106&type=chunk)[108](index=108&type=chunk) - The company has **$37.4 million** remaining available under its **$200.0 million** share repurchase program; no shares were purchased in 2025[111](index=111&type=chunk) - The company is monitoring spending and expenses due to the macroeconomic environment, inflationary pressures, and ongoing supply chain challenges[107](index=107&type=chunk) [New Accounting Pronouncements (MD&A)](index=29&type=section&id=New%20Accounting%20Pronouncements%20(MD%26A)) This section refers to Note 3 of the consolidated condensed financial statements for a discussion of new accounting pronouncements - Refers to Note 3 to the consolidated condensed financial statements for a discussion of new accounting pronouncements[112](index=112&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no significant changes in the company's primary market risk exposures or their management during the six months ended June 30, 2025, referring to the Annual Report on Form 10-K for further details - No significant changes in primary market risk exposures or their management occurred during the six months ended June 30, 2025[114](index=114&type=chunk) - Reference is made to Item 7A of the Annual Report on Form 10-K for the year ended December 31, 2024, for a detailed description of market risk disclosures[114](index=114&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of June 30, 2025. No material changes to internal control over financial reporting occurred during the quarter - Management, with the participation of the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[115](index=115&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[115](index=115&type=chunk) [PART II OTHER INFORMATION](index=30&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information, including details on legal proceedings, other corporate disclosures, and a list of all exhibits filed with the Form 10-Q [Item 1. Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings%20(Part%20II)) This section refers to Note 14 of the Consolidated Condensed Financial Statements and Item 3 of the Annual Report on Form 10-K for details on legal matters, indicating no new material legal proceedings beyond what is already disclosed - Reference is made to Note 14 of the Notes to Consolidated Condensed Financial Statements for a description of certain legal matters[117](index=117&type=chunk) - Further details on legal proceedings are available in Item 3 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024[117](index=117&type=chunk) [Item 5. Other Information](index=30&type=section&id=Item%205.%20Other%20Information) Richard Glaze, Chief Information Officer, adopted a trading plan for 375 restricted stock units on May 23, 2025, intended to satisfy Rule 105b-1(c) and terminating on December 1, 2025 - Richard Glaze, Chief Information Officer, adopted a trading plan on May 23, 2025, for **375** restricted stock units[118](index=118&type=chunk) - The Glaze Plan is intended to satisfy the affirmative defense of Rule 105b-1(c) under the Securities Exchange Act of 1934 and terminates on December 1, 2025[118](index=118&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Eighth Amended and Restated Credit Agreement, certifications from the CEO and CFO, and XBRL documents - Exhibit 10.1: Eighth Amended and Restated Credit Agreement, dated June 10, 2025[122](index=122&type=chunk) - Exhibits 31.1, 31.2, and 32.1: Certifications of Patrick J. Beyer (CEO) and Todd W. Garner (CFO) pursuant to the Sarbanes-Oxley Act of 2002[122](index=122&type=chunk) - Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, and 104: XBRL Instance Document and Taxonomy Extension Documents[122](index=122&type=chunk) [SIGNATURES](index=32&type=section&id=SIGNATURES) This section contains the official signatures, confirming the filing of the report by the Executive Vice President, Finance & Chief Financial Officer - The report was signed by Todd W. Garner, Executive Vice President, Finance & Chief Financial Officer, on July 31, 2025[125](index=125&type=chunk)

Core Insights - Conmed reported revenue of $342.35 million for the quarter ended June 2025, reflecting a 3.1% increase year-over-year and a surprise of +0.81% over the Zacks Consensus Estimate of $339.59 million [1] - The company's EPS for the quarter was $1.15, up from $0.98 in the same quarter last year, with an EPS surprise of +1.77% compared to the consensus estimate of $1.13 [1] Revenue Breakdown - Domestic revenue reached $190.6 million, exceeding the average estimate of $186.19 million, marking a year-over-year increase of +2.8% [4] - International revenue was reported at $151.7 million, slightly below the estimated $153.68 million, but still showing a +3.4% increase year-over-year [4] - Net sales in Orthopedic Surgery amounted to $140.7 million, surpassing the average estimate of $139.41 million, with a year-over-year change of +0.9% [4] - Capital Products net sales were $44.5 million, falling short of the $50.63 million estimate, representing a significant year-over-year decline of -15.7% [4] - Single-use Products generated $297.8 million in net sales, exceeding the average estimate of $289.24 million, with a year-over-year increase of +6.6% [4] - General Surgery net sales were reported at $201.6 million, slightly above the estimated $200.46 million, reflecting a +4.7% change compared to the previous year [4] Stock Performance - Conmed's shares have returned -7% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Company Performance - Conmed reported quarterly earnings of $1.15 per share, exceeding the Zacks Consensus Estimate of $1.13 per share, and up from $0.98 per share a year ago, representing an earnings surprise of +1.77% [1] - The company posted revenues of $342.35 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.81%, compared to year-ago revenues of $332.1 million [2] - Over the last four quarters, Conmed has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Conmed shares have declined approximately 26.5% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The current Zacks Rank for Conmed is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.01 on revenues of $335.21 million, and for the current fiscal year, it is $4.42 on revenues of $1.37 billion [7] - The outlook for the Medical - Dental Supplies industry, where Conmed operates, is currently in the top 12% of over 250 Zacks industries, suggesting a favorable environment for performance [8]

Financial Data and Key Metrics Changes - Total sales for Q2 2025 were $342 million, slightly above the high end of guidance, with year-over-year growth of 3.1% as reported and 2.9% in constant currency [6][19] - Adjusted net income for Q2 was $35.6 million, an increase of 16.4% year-over-year, and adjusted diluted net earnings per share were $1.15, up 17.3% year-over-year [7][22] - Adjusted gross margin for Q2 was 56.5%, which is 120 basis points higher than the prior year [20] Business Line Data and Key Metrics Changes - Worldwide general surgery sales grew by 4.4%, while worldwide orthopedic sales increased by 0.8% year-over-year [6][19] - AirSeal remains the largest contributor to general surgery growth, with a recurring revenue profile of 92% [8] - Buffalo Filter experienced double-digit growth, supported by legislative adoption and new product introductions [10] Market Data and Key Metrics Changes - U.S. general surgery sales grew by 4.3%, while international general surgery sales increased by 4.7% [19] - U.S. orthopedic sales decreased by 0.8%, while international orthopedic sales grew by 1.8% [19] - The global smoke evacuation market is estimated to be approximately $300 million today, with potential growth to $2 billion in the coming years [11] Company Strategy and Development Direction - The company is focused on building a stronger operational foundation to support long-term growth and deliver value [14] - Key priorities include stabilizing and scaling operations, driving efficiencies, and building a high-performance supply chain [15][16] - The company aims to maintain a strong balance sheet and reduce debt, expecting the leverage ratio to fall below 3.0 by the end of 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in business fundamentals and long-term strategy, actively optimizing the portfolio towards higher margin opportunities [17] - The company anticipates gradual improvement in growth rates in the second half of the year, with expectations of lower capital headwinds [43] - Management noted that supply chain challenges are being addressed, with expectations of a significantly improved position by the end of the year [33] Other Important Information - The company is committed to maintaining a strong balance sheet and reducing debt, with a focus on higher margin, high growth opportunities [17][16] - Capital expenditures in Q2 were $5.7 million, compared to $3.6 million a year ago [23] Q&A Session Summary Question: Has there been increased competition in the Buffalo Filter market? - Management noted that there have not been new players entering the market, and competition remains the same despite legislative tailwinds [30] Question: What is the current status of supply chain constraints and Salesforce expansion? - Management indicated progress in resolving supply chain issues and mentioned that sales professionals are typically added dynamically throughout the year [32][34] Question: How is the capital market performing, and what trends are being observed? - Management stated that capital demand from hospitals remains strong, but supply chain challenges have impacted capital flow [38] Question: How does the company view its share position in orthopedics amid supply constraints? - Management acknowledged a loss of market share but emphasized ongoing innovation and the strength of the Biobrace platform [40][41] Question: Can you clarify the guidance for the next two quarters? - Management expects gradual improvement in growth rates and has raised the bottom end of the revenue guidance while keeping the top end the same [43][44] Question: What factors contributed to the increase in EPS guidance? - The increase in EPS guidance was attributed to improvements in margins, currency effects, and operational performance [45]

Financial Performance - Q2 2025 - Worldwide revenue reached $342.3 million, representing a 2.9% increase in constant currency compared to the prior year period[22] - Orthopedic surgery revenue was $140.7 million, with a constant currency growth of 0.8%[22] - General surgery revenue amounted to $201.6 million, showing a constant currency growth of 4.4%[22] - GAAP EPS was $0.69, a decrease of 28.1% year-over-year, while adjusted EPS was $1.15, an increase of 17.3%[22] - Single-use products accounted for $297.8 million in revenue, while capital products generated $44.5 million[24] - Single-use products represent 87% of the total revenue[24] Financial Performance - June 2025 YTD - Worldwide revenue totaled $663.6 million, a 3.3% increase in constant currency[28] - Orthopedic surgery revenue was $279.0 million, with a constant currency growth of 2.3%[28] - General surgery revenue reached $384.6 million, showing a constant currency growth of 4.1%[28] - GAAP EPS was $0.88, a decrease of 44.7% year-over-year, while adjusted EPS was $2.09, an increase of 17.4%[28] - Single-use products accounted for $574.1 million in revenue, while capital products generated $89.5 million[30] - Single-use products represent 87% of the total revenue[30] Updated Financial Guidance for 2025 - The company updated its revenue guidance to a range of $1.356 billion to $1.378 billion, with immaterial currency impact[32] - Adjusted diluted EPS is expected to be between $4.59 and $4.74, with an estimated foreign currency impact of $(0.10)[32] - The estimated tariff impact is $(0.09), resulting in a total adjusted diluted EPS of $4.40 to $4.55[32]

[News Release Introduction](index=1&type=section&id=News%20Release%20Introduction) CONMED's Q2 2025 performance, updated full-year outlook, key financial metrics, and conference call details are presented [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Highlights) CONMED's President and CEO expressed encouragement regarding Q2 2025 performance, highlighting efforts to build a stronger operational foundation and strengthen supply chain operations, while maintaining confidence in long-term growth drivers - Management is encouraged by Q2 performance, focusing on building a **stronger operational foundation** and strengthening **supply chain operations**[3](index=3&type=chunk) [2025 Full-Year Outlook](index=1&type=section&id=2025%20Outlook) CONMED updated its full-year 2025 financial guidance, revising revenue and adjusted diluted EPS expectations upwards, while noting an immaterial foreign currency headwind for revenue and a specific negative impact from tariffs on EPS Updated 2025 Full-Year Outlook | Metric | New Guidance | Prior Guidance | Change | Notes | | :----- | :----------- | :------------- | :----- | :---- | | Reported Revenue | $1.356B - $1.378B | $1.350B - $1.378B | Increased lower bound | Foreign currency headwinds now immaterial (vs. 50-70 bps previously) | | Adjusted Diluted EPS | $4.40 - $4.55 | $4.31 - $4.46 | Increased | Foreign currency headwind ~10 cents (vs. 10-15 cents previously) | | Tariff Impact on EPS | ~$0.09 negative (H2 2025) | N/A | New information | Included in updated guidance | [Second Quarter 2025 Key Financial Metrics](index=1&type=section&id=Supplemental%20Financial%20Disclosures) The company reported key financial metrics for Q2 2025, including sales growth and both GAAP and adjusted diluted net earnings per share, showing an increase in adjusted EPS despite a decrease in GAAP EPS year-over-year Second Quarter 2025 Key Financial Metrics (YoY) | Metric | Q2 2025 Value | Q2 2024 Value | YoY Change (Reported) | YoY Change (Constant Currency) | | :----- | :------------ | :------------ | :--------------------- | :----------------------------- | | Sales | $342.3 million | N/A | +3.1% | +2.9% | | Domestic Revenue | N/A | N/A | +2.8% | N/A | | International Revenue | N/A | N/A | +3.4% | +2.9% | | Diluted Net EPS (GAAP) | $0.69 | $0.96 | -28.2% | N/A | | Adjusted Diluted Net EPS | $1.15 | $0.98 | +17.3% | N/A | [Conference Call Details](index=2&type=section&id=Conference%20Call) CONMED's management will host a conference call on July 30, 2025, at 4:30 p.m. ET to discuss Q2 2025 results, with options for telephone participation via pre-registration and a webcast available on the company's website - A conference call to discuss Q2 2025 results will be held on **July 30, 2025, at 4:30 p.m. ET**, accessible via telephone pre-registration or webcast on CONMED's website[7](index=7&type=chunk)[8](index=8&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) The consolidated statements of income show decreased net income for Q2 and YTD 2025 despite increased net sales [Consolidated Condensed Statements of Income](index=3&type=section&id=Consolidated%20Condensed%20Statements%20of%20Income) The consolidated condensed statements of income show a decrease in net income for both the three and six months ended June 30, 2025, compared to the prior year, despite an increase in net sales. Gross profit margin remained relatively stable, but operating income and diluted EPS declined Consolidated Condensed Statements of Income (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :------------------------ | :------------------ | :------------------ | :--------- | | Net sales | $342,345 | $332,097 | +3.1% | | Cost of sales | $154,025 | $148,368 | +3.8% | | Gross profit | $188,320 | $183,729 | +2.5% | | % of sales (Gross Profit) | 55.0% | 55.3% | -0.3 pp | | Selling & administrative expense | $136,021 | $122,524 | +11.0% | | Research & development expense | $14,138 | $14,098 | +0.3% | | Income from operations | $38,161 | $47,107 | -19.0% | | % of sales (Operating Income) | 11.1% | 14.2% | -3.1 pp | | Interest expense | $7,824 | $9,593 | -18.4% | | Other expense | $418 | $- | N/A | | Income before income taxes | $29,919 | $37,514 | -20.3% | | Provision for income taxes | $8,498 | $7,538 | +12.7% | | Net income | $21,421 | $29,976 | -28.5% | | Diluted EPS | $0.69 | $0.96 | -28.1% | Consolidated Condensed Statements of Income (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :------------------------ | :------------------ | :------------------ | :--------- | | Net sales | $663,600 | $644,371 | +3.0% | | Cost of sales | $297,529 | $288,677 | +3.1% | | Gross profit | $366,071 | $355,694 | +2.9% | | % of sales (Gross Profit) | 55.2% | 55.2% | 0.0 pp | | Selling & administrative expense | $284,868 | $245,881 | +15.9% | | Research & development expense | $27,084 | $27,692 | -2.2% | | Income from operations | $54,119 | $82,121 | -34.1% | | % of sales (Operating Income) | 8.2% | 12.7% | -4.5 pp | | Interest expense | $16,110 | $19,188 | -16.1% | | Other expense | $418 | $- | N/A | | Income before income taxes | $37,591 | $62,933 | -40.3% | | Provision for income taxes | $10,134 | $13,248 | -23.5% | | Net income | $27,457 | $49,685 | -44.8% | | Diluted EPS | $0.88 | $1.59 | -44.7% | [Sales Performance Analysis](index=4&type=section&id=Sales%20Performance%20Analysis) This section analyzes CONMED's sales performance for Q2 and YTD 2025 by surgical area, product type, and geography [Sales Summary (Three Months Ended June 30, 2025)](index=4&type=section&id=Sales%20Summary%20-%20Three%20Months) For the three months ended June 30, 2025, total sales increased by 3.1% (2.9% in constant currency) year-over-year. General Surgery and Single-use Products showed strong growth, while Capital Products experienced a significant decline. Domestic sales grew 2.8% and International sales grew 3.4% (2.9% in constant currency) Sales Performance (Three Months Ended June 30, 2025 vs. 2024) | Category | 2025 Sales (Millions) | 2024 Sales (Millions) | % Change (Reported) | % Change (Constant Currency) | | :---------------- | :-------------------- | :-------------------- | :------------------ | :--------------------------- | | **By Surgical Area:** | | | | | | Orthopedic Surgery | $140.7 | $139.5 | +0.9% | +0.8% | | General Surgery | $201.6 | $192.6 | +4.7% | +4.4% | | **By Product Type:** | | | | | | Single-use Products | $297.8 | $279.3 | +6.6% | +6.4% | | Capital Products | $44.5 | $52.8 | -15.5% | -15.6% | | **By Geography:** | | | | | | Domestic | $190.6 | $185.4 | +2.8% | +2.8% | | International | $151.7 | $146.7 | +3.4% | +2.9% | | **Total Sales** | **$342.3** | **$332.1** | **+3.1%** | **+2.9%** | [Sales Summary (Six Months Ended June 30, 2025)](index=4&type=section&id=Sales%20Summary%20-%20Six%20Months) For the six months ended June 30, 2025, total sales increased by 3.0% (3.3% in constant currency) year-over-year. Single-use Products continued to drive growth, while Capital Products saw a double-digit decline. Domestic sales increased by 3.5% and International sales by 2.3% (3.2% in constant currency) Sales Performance (Six Months Ended June 30, 2025 vs. 2024) | Category | 2025 Sales (Millions) | 2024 Sales (Millions) | % Change (Reported) | % Change (Constant Currency) | | :---------------- | :-------------------- | :-------------------- | :------------------ | :--------------------------- | | **By Surgical Area:** | | | | | | Orthopedic Surgery | $279.0 | $274.5 | +1.7% | +2.3% | | General Surgery | $384.6 | $369.9 | +4.0% | +4.1% | | **By Product Type:** | | | | | | Single-use Products | $574.1 | $544.0 | +5.5% | +5.9% | | Capital Products | $89.5 | $100.4 | -10.8% | -10.4% | | **By Geography:** | | | | | | Domestic | $374.4 | $361.8 | +3.5% | +3.5% | | International | $289.2 | $282.6 | +2.3% | +3.2% | | **Total Sales** | **$663.6** | **$644.4** | **+3.0%** | **+3.3%** | [Non-GAAP Financial Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Reconciliations) This section reconciles GAAP net income to adjusted net income, EBITDA, and adjusted EBITDA for Q2 and YTD periods [Reconciliation of Reported Net Income to Adjusted Net Income (Three Months Ended June 30)](index=5&type=section&id=Reconciliation%20-%20Adjusted%20Net%20Income%20(Three%20Months)) This section provides a detailed reconciliation of GAAP reported net income to adjusted net income for the three months ended June 30, 2025 and 2024. Key adjustments include operational optimization consulting fees, legal matters, debt refinancing costs, contingent consideration fair value adjustments, and amortization, which significantly increased adjusted diluted EPS compared to GAAP EPS Adjusted Net Income Reconciliation (Three Months Ended June 30, 2025) | Metric | As Reported (in thousands) | Adjustments (in thousands) | As Adjusted (in thousands) | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net Income | $21,421 | +$6,552 (Net of Tax) | $27,973 | | Diluted EPS | $0.69 | +$0.46 | $1.15 | | **Key Adjustments (Pre-Tax):** | | | | | Operational optimization consulting fees | N/A | +$7,572 | N/A | | Legal matters | N/A | +$1,192 | N/A | | Debt refinancing costs | N/A | +$418 | N/A | | Contingent consideration fair value adjustments | N/A | -$1,799 | N/A | | Amortization | N/A | +$8,692 | N/A | Adjusted Net Income Reconciliation (Three Months Ended June 30, 2024) | Metric | As Reported (in thousands) | Adjustments (in thousands) | As Adjusted (in thousands) | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net Income | $29,976 | +$628 (Net of Tax) | $30,604 | | Diluted EPS | $0.96 | +$0.02 | $0.98 | | **Key Adjustments (Pre-Tax):** | | | | | Legal matters | N/A | +$1,343 | N/A | | Contingent consideration fair value adjustments | N/A | -$8,673 | N/A | | Amortization | N/A | +$8,657 | N/A | [Reconciliation of Reported Net Income to Adjusted Net Income (Six Months Ended June 30)](index=6&type=section&id=Reconciliation%20-%20Adjusted%20Net%20Income%20(Six%20Months)) This section details the reconciliation of GAAP reported net income to adjusted net income for the six months ended June 30, 2025 and 2024. Significant adjustments for 2025 included operational optimization, executive transition costs, and legal matters, leading to a higher adjusted diluted EPS compared to the GAAP figure Adjusted Net Income Reconciliation (Six Months Ended June 30, 2025) | Metric | As Reported (in thousands) | Adjustments (in thousands) | As Adjusted (in thousands) | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net Income | $27,457 | +$22,474 (Net of Tax) | $49,931 | | Diluted EPS | $0.88 | +$1.21 | $2.09 | | **Key Adjustments (Pre-Tax):** | | | | | Operational optimization consulting fees | N/A | +$11,472 | N/A | | Executive transition costs | N/A | +$12,165 | N/A | | Legal matters | N/A | +$2,229 | N/A | | Contingent consideration fair value adjustments | N/A | +$2,163 | N/A | | Debt refinancing costs | N/A | +$418 | N/A | | Gain on sale of product line | N/A | -$354 | N/A | | Amortization | N/A | +$17,364 | N/A | Adjusted Net Income Reconciliation (Six Months Ended June 30, 2024) | Metric | As Reported (in thousands) | Adjustments (in thousands) | As Adjusted (in thousands) | | :-------------------------------- | :------------------------- | :------------------------- | :------------------------- | | Net Income | $49,685 | +$5,681 (Net of Tax) | $55,366 | | Diluted EPS | $1.59 | +$0.19 | $1.78 | | **Key Adjustments (Pre-Tax):** | | | | | Legal matters | N/A | +$2,680 | N/A | | Contingent consideration fair value adjustments | N/A | -$15,219 | N/A | | Restructuring and related costs | N/A | +$1,774 | N/A | | Asset impairment costs | N/A | +$1,414 | N/A | | Termination of distributor agreement | N/A | -$970 | N/A | | Amortization | N/A | +$17,309 | N/A | [Reconciliation of Reported Net Income to EBITDA & Adjusted EBITDA](index=8&type=section&id=Reconciliation%20-%20EBITDA%20%26%20Adjusted%20EBITDA) This section presents the reconciliation from reported net income to EBITDA and Adjusted EBITDA for both the three and six months ended June 30, 2025 and 2024. Adjusted EBITDA showed growth for both periods, indicating improved operational cash flow when excluding non-recurring and non-cash items EBITDA & Adjusted EBITDA (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net income | $21,421 | $29,976 | -28.5% | | EBITDA | $56,315 | $64,946 | -13.2% | | Adjusted EBITDA | $68,601 | $64,590 | +6.2% | | EBITDA Margin | 16.4% | 19.6% | -3.2 pp | | Adjusted EBITDA Margin | 20.0% | 19.4% | +0.6 pp | EBITDA & Adjusted EBITDA (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | YoY Change | | :-------------------------------- | :------------------ | :------------------ | :--------- | | Net income | $27,457 | $49,685 | -44.8% | | EBITDA | $90,525 | $117,998 | -23.3% | | Adjusted EBITDA | $129,902 | $120,891 | +7.5% | | EBITDA Margin | 13.6% | 18.3% | -4.7 pp | | Adjusted EBITDA Margin | 19.6% | 18.8% | +0.8 pp | [Company Information & Disclosures](index=9&type=section&id=Company%20Information%20%26%20Disclosures) This section provides company information, forward-looking statement disclaimers, and non-GAAP financial measure explanations [About CONMED Corporation](index=9&type=section&id=About%20CONMED%20Corporation) CONMED Corporation is a medical technology company specializing in devices and equipment for surgical procedures across various specialties, including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology - CONMED Corporation is a medical technology company providing devices and equipment for surgical procedures in specialties such as **orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology**[27](index=27&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section contains a standard disclaimer regarding forward-looking statements, noting that actual results may differ materially due to various risks and uncertainties, as detailed in SEC filings, and that such statements are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 - The press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, as outlined in SEC filings and made under the **safe harbor provisions of the Private Securities Litigation Reform Act of 1995**[28](index=28&type=chunk) [Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Supplemental%20Information%20-%20Non-GAAP%20Reconciliation) CONMED supplements its GAAP financial reporting with non-GAAP measures, such as constant currency sales growth, adjusted gross profit, and adjusted diluted EPS, believing these provide meaningful insights into core operating results and underlying business trends for investors and management - CONMED uses non-GAAP financial measures (e.g., **constant currency sales growth, adjusted EPS**) to provide meaningful information to investors and management, as they exclude items not indicative of core operating results and help analyze underlying business trends[29](index=29&type=chunk)[30](index=30&type=chunk) - The company cautions that non-GAAP measures are not standardized, should not be considered in isolation from GAAP results, and a quantitative reconciliation for forward-looking adjusted diluted EPS is unavailable due to **unreasonable effort**[31](index=31&type=chunk)[32](index=32&type=chunk)