Financial Performance - Net sales increased by 6.7% to $337.9 million for the three months ended September 30, 2025, and by 4.2% to $1,001.5 million for the nine months ended September 30, 2025, compared to the same periods in 2024[89]. - Orthopedic surgery sales grew by 5.9% and 3.0% for the three and nine months ended September 30, 2025, respectively, driven by specific product offerings[90]. - General surgery sales increased by 7.3% and 5.1% for the three and nine months ended September 30, 2025, respectively, primarily due to growth in key product lines[90]. - Gross profit margins decreased by 250 basis points to 53.1% for the nine months ended September 30, 2025, compared to 55.6% in the same period of 2024[90]. Costs and Expenses - Cost of sales rose to $171.8 million for the three months ended September 30, 2025, compared to $137.7 million in the same period of 2024, leading to a gross profit margin decrease of 730 basis points to 49.2%[90]. - Selling and administrative expenses increased to $140.3 million for the three months ended September 30, 2025, compared to $99.7 million in the same period of 2024, with a percentage of net sales rising by 1,000 basis points to 41.5%[93]. - The company incurred $3.7 million and $12.3 million in consulting costs for supply chain and manufacturing improvements during the three and nine months ended September 30, 2025, respectively[91]. - A write-off of $19.7 million in inventory, equipment, tooling, and patents occurred due to the cancellation of planned new product lines during the three and nine months ended September 30, 2025[92]. - The company experienced higher manufacturing and operating costs due to inflationary pressures and ongoing supply chain challenges[109]. International Sales - International sales accounted for approximately 43% of consolidated net sales for both the nine months ended September 30, 2025, and 2024[83]. Future Agreements and Sales - The company will not renew its Distribution Agreement for the Gore® VIABIL® device after December 31, 2026, which represented $44.1 million in net sales for the nine months ended September 30, 2025[86]. Research and Development - Research and development expense increased to $13.9 million in Q3 2025, compared to $13.6 million in Q3 2024, while it decreased to $41.0 million in the nine months ended September 30, 2025, from $41.3 million in the same period in 2024[95]. Interest and Tax Expenses - Interest expense decreased to $7.6 million in Q3 2025 from $9.3 million in Q3 2024, and to $23.7 million in the nine months ended September 30, 2025, from $28.4 million in the same period in 2024[96]. - Income tax expense recorded an effective tax rate of 33.1% for Q3 2025, compared to 13.2% for Q3 2024, and 27.6% for the nine months ended September 30, 2025, compared to 17.4% for the same period in 2024[100]. Cash Flow and Financing - Net cash provided by operating activities was $124.4 million in the nine months ended September 30, 2025, compared to $123.6 million in the same period in 2024[105]. - Capital expenditures increased to $14.7 million in the nine months ended September 30, 2025, from $9.0 million in the same period a year ago[107]. - Net cash used in financing activities was $98.5 million in the nine months ended September 30, 2025, compared to $99.9 million in the same period in 2024[108]. - As of September 30, 2025, there were $60.0 million in borrowings outstanding on the term loan facility, with no borrowings under the revolving credit facility[110]. - The Board of Directors authorized a $150.0 million share repurchase program effective October 31, 2025, with expectations to repurchase at least $25.0 million in shares annually starting in 2026[115]. Debt Covenants - The eighth amended and restated senior credit agreement contains covenants requiring the maintenance of certain financial ratios and restricting dividend payments[111].

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Core Insights - Conmed reported revenue of $337.93 million for the quarter ended September 2025, reflecting a year-over-year increase of 6.7% and exceeding the Zacks Consensus Estimate of $336.52 million by 0.42% [1] - The company's EPS for the quarter was $1.08, up from $1.05 in the same quarter last year, resulting in an EPS surprise of 2.86% compared to the consensus estimate of $1.05 [1] Revenue Breakdown - International revenue reached $143.9 million, a 7.8% increase year-over-year, but below the average estimate of $148.63 million [4] - Domestic revenue was reported at $194 million, surpassing the average estimate of $187.89 million, with a year-over-year growth of 5.9% [4] - Net sales for single-use products totaled $289.2 million, slightly above the average estimate of $288.97 million, marking a 6.8% increase year-over-year [4] - General surgery net sales were $199.7 million, close to the average estimate of $200.27 million, reflecting a 7.3% year-over-year change [4] - Orthopedic surgery net sales amounted to $138.2 million, exceeding the average estimate of $136.24 million, with a year-over-year increase of 5.9% [4] - Capital products net sales were reported at $48.7 million, above the average estimate of $47.55 million, showing a 6.1% increase compared to the previous year [4] Stock Performance - Conmed's shares have returned -0.4% over the past month, while the Zacks S&P 500 composite has increased by 1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Conmed (CNMD) reported quarterly earnings of $1.08 per share, exceeding the Zacks Consensus Estimate of $1.05 per share, and showing a slight increase from $1.05 per share a year ago, indicating a positive earnings surprise of +2.86% [1] Financial Performance - The company achieved revenues of $337.93 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.42% and reflecting a year-over-year increase from $316.7 million [2] - Over the last four quarters, Conmed has consistently exceeded consensus EPS and revenue estimates [2] Stock Performance - Conmed shares have declined approximately 33.2% since the beginning of the year, contrasting with the S&P 500's gain of 15.1% [3] - The current Zacks Rank for Conmed is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $1.31 on revenues of $368.68 million, and for the current fiscal year, it is $4.47 on revenues of $1.37 billion [7] - The trend of earnings estimate revisions for Conmed was mixed prior to the earnings release, which may influence future stock performance [6] Industry Context - The Medical - Dental Supplies industry, to which Conmed belongs, is currently ranked in the top 24% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

Financial Data and Key Metrics Changes - Total sales for Q3 2025 were approximately $338 million, representing a 6.7% year-over-year growth as reported and 6.3% growth in constant currency [4][12] - Adjusted net income for the quarter was $33.4 million, up 2.2% year over year, while adjusted diluted earnings per share increased by 2.9% to $1.08 [5][15] - Adjusted gross margin for Q3 was 56.1%, slightly ahead of projections, despite a 40 basis point decline compared to Q3 2024 [13] Business Line Data and Key Metrics Changes - General Surgery sales grew 6.9% globally on a constant currency basis, while Orthopedics delivered 5.3% constant currency growth globally [5] - U.S. orthopedic sales increased by 5.5%, and international orthopedic sales grew by 5.2% [12] - Total worldwide general surgery sales increased by 6.9%, with U.S. general surgery sales growing by 6.0% and international sales increasing by 9.2% [12] Market Data and Key Metrics Changes - U.S. sales increased by 5.9% year over year, while international sales grew by 6.8% [12] - The company noted a significant opportunity in the Foot & Ankle franchise, focusing on driving growth through expanded adoption and innovation [6] Company Strategy and Development Direction - The company is undergoing a comprehensive strategic review to sharpen focus, improve margin profiles, and position for long-term growth [9] - The review has identified strong growth opportunities in minimally invasive robotic and laparoscopic surgery, smoke evacuation, and orthopedic soft tissue repair [9] - A new $150 million share repurchase program has been authorized, transitioning from a legacy dividend policy to enhance financial flexibility [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering top-line growth and margin expansion supported by a focused portfolio and operational discipline [10] - The company is optimistic about its ability to meet demand and improve supply chain issues, with record manufacturing volumes achieved in Q3 [32] Other Important Information - The company expects Q4 revenue to be between $363 million and $370 million, indicating mid-single-digit constant currency growth [17] - Adjusted EPS guidance for Q4 is projected to be between $1.30 and $1.35, with full-year guidance at $4.48-$4.53 [17] Q&A Session Summary Question: What drove the shift in capital allocation strategy and should we expect any other changes? - Management indicated that no other changes are expected and that the shift was made to align with peers and return cash to shareholders through share repurchases instead of dividends [20][21] Question: Can you talk about supply and demand for 2026? - Management refrained from providing guidance for 2026 at this time, indicating that they will address it in the future [22][23] Question: Was there any incremental tariff headwind? - Management clarified that the tariff impact has been consistent with previous forecasts and explained how tariffs affect manufacturing variances [24][25] Question: How is AirSeal performing in the market? - Management noted that AirSeal is seeing early adoption, but hospitals must meet commitment volumes before fully utilizing it [26][30] Question: What initiatives strengthened the supply chain in Q3? - Management highlighted improvements in procurement, planning, and production areas, leading to record manufacturing volumes [32] Question: What are the latest thoughts on share loss and recapture? - Management expressed that while they are not declaring victory, they are optimistic about regaining market share as supply chain issues resolve [41]

Investor Presentation Q3 2025 Earnings Pat J. Beyer President and Chief Executive Officer Todd W. Garner Executive Vice President and Chief Financial Officer November 5, 2025 Forward-Looking Information This presentation 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 ...

Financial Performance - Third quarter 2025 sales reached $337.9 million, a 6.7% increase year-over-year, with a 6.3% increase in constant currency[5] - Domestic revenue grew by 5.9% year-over-year, while international revenue increased by 7.8% as reported and 6.8% in constant currency[5] - The company reported diluted net earnings per share of $0.09 for Q3 2025, down from $1.57 in Q3 2024[5] - Gross profit margin for Q3 2025 was 49.2%, compared to 56.5% in Q3 2024[10] - Adjusted net income for the nine months ended September 30, 2025, was $98,646, with an EPS of $3.17[18] - Net income for the three months ended September 30, 2025, was $2,859 million, a significant decrease from $48,984 million in the same period of 2024[26] - Adjusted net income for the nine months ended September 30, 2025, was $30,316 million, compared to $98,668 million in the same period of 2024[26] Revenue Guidance - The company anticipates full-year reported revenue to be between $1.365 billion and $1.372 billion, slightly adjusted from the previous guidance[3] Expenses and Costs - Research and development expenses for Q3 2025 were $13.9 million, compared to $13.6 million in Q3 2024[10] - Income from operations for Q3 2025 was $11.9 million, representing 3.5% of sales, down from 20.7% in Q3 2024[10] - Selling and administrative expenses for the nine months ended September 30, 2025, totaled $425,207, accounting for 42.5% of sales[18] - The company incurred $19,653 in product rationalization costs in 2025, impacting overall profitability[18] - The company incurred product rationalization costs of $19,653 million for the three months ended September 30, 2025[26] - Legal matters incurred costs of $4,566 in 2024, affecting overall expenses[20] - Amortization costs for the nine months ended September 30, 2025, were $4,500, affecting adjusted net income[18] Profitability Metrics - Adjusted gross profit margin for the nine months ended September 30, 2024, was 55.8%[20] - EBITDA margin for the three months ended September 30, 2025, was 9.0%, down from 26.4% in the same period of 2024[26] - Adjusted EBITDA for the three months ended September 30, 2025, was $65,629 million, compared to $64,640 million in the same period of 2024, reflecting a growth of 1.5%[26] Shareholder Actions - A $150.0 million share repurchase program was authorized, with plans to repurchase at least $25.0 million in shares annually starting in 2026[5] - The company suspended its quarterly cash dividend as part of the modified share repurchase program[6] Tax and Interest - The effective tax rate for the nine months ended September 30, 2025, was 27.6%[18] - Total interest expense for the nine months ended September 30, 2025, was $23,716 million, a decrease from $28,440 million in the same period of 2024[26] - The provision for income taxes for the three months ended September 30, 2025, was $1,414 million, compared to $7,471 million in the same period of 2024[26] Non-GAAP Measures - The company emphasizes the importance of non-GAAP measures, including adjusted EBITDA, for assessing its financial performance and future prospects[29] - The company analyzes net sales on a constant currency basis to measure comparability between periods, excluding the impact of foreign currency exchange rates[30] Forward-Looking Statements - Forward-looking statements indicate potential risks and uncertainties that could affect actual results, as detailed in the company's filings with the SEC[28]

Core Thesis - CONMED Corporation is viewed positively due to its strong fundamentals, recovery in supply chain efficiency, and potential for significant value appreciation over the next three years [1][5]. Company Overview - CONMED Corporation is a global medical device company focused on less invasive and effective surgical solutions across various medical fields, including orthopedics and general surgery [2]. - The company was founded in 1970 and has expanded through acquisitions and internal R&D, with notable acquisitions including Linvatec in the 1990s and Buffalo Filter in 2019 [2]. Financial Performance - In 2024, CONMED generated approximately $1.3 billion in revenue, with 42% from orthopedic surgery and 58% from general surgery [3]. - The orthopedic segment relies heavily on single-use disposables, contributing 79% of its revenue, while the general surgery segment features high-margin products, with over 92% of revenue from single-use items [3]. - Revenue has increased by 30%, free cash flow has risen by 50%, and returns on capital have improved, indicating strong financial health [4]. Market Position and Growth Potential - Despite a decline of over 70% from 2021 highs, CONMED's fundamentals remain robust, with significant margin expansion and management forecasting peak EPS in 2025 [4]. - Approximately 45% of sales are derived from international markets, providing a diversified revenue stream [3]. - The company is expected to benefit from industry tailwinds, although past supply chain disruptions have temporarily affected its market share, particularly in orthopedics [4]. Investment Case - The investment case for CONMED is strengthened by its differentiated products, high recurring revenue, and recovery in supply chain efficiency [5]. - Assuming mid-single-digit growth and modest margin improvement, the company could potentially double in value over the next three years, indicating a potential compound annual growth rate (CAGR) of approximately 27% [5].

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]