[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)

Company Overview - CONMED Corporation is a major medical products manufacturer specializing in surgical instruments and devices for minimally invasive procedures and monitoring [12] - The company is headquartered in Utica, N.Y., employs approximately 3,600 individuals, and operates several manufacturing facilities [12] Investment Ratings - CONMED has a Zacks Rank of 3 (Hold) with a VGM Score of B, indicating a moderate investment outlook [12] - The company also has a Value Style Score of A, attributed to attractive valuation metrics such as a forward P/E ratio of 12.88, which may appeal to value investors [13] Earnings Estimates - For fiscal 2025, three analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.07 to $4.42 per share [13] - CONMED has demonstrated an average earnings surprise of 10.4%, suggesting a positive trend in earnings performance [13] Investment Considerations - With a solid Zacks Rank and top-tier Value and VGM Style Scores, CONMED is recommended for investors' consideration [13]

Financial Performance - Net sales increased by 2.9% to $321.3 million for the three months ended March 31, 2025, compared to $312.3 million in the same period of 2024[89] - Orthopedic surgery sales grew by 2.5% to $138.3 million, driven by growth in procedure-specific, foot and ankle, and BioBrace product offerings[90] - General surgery sales increased by 3.2% to $183.0 million, primarily due to growth in AirSeal, Buffalo Filter, and biliary product offerings[90] - Gross profit margin improved by 20 basis points to 55.3% for the three months ended March 31, 2025, compared to 55.1% in the same period of 2024[88] Expenses - Selling and administrative expenses rose to $148.8 million, representing 46.3% of net sales, an increase of 680 basis points from 39.5% in the prior year[92] - Research and development expenses decreased to $12.9 million, accounting for 4.0% of net sales, down from 4.4% in the same period of 2024[94] - Interest expense decreased to $8.3 million, with a weighted average interest rate of 2.90%, down from 3.18% in the previous year[95] Tax and Compliance - The effective tax rate for the three months ended March 31, 2025, was 21.3%, compared to 22.5% in the same period of 2024[97] - The company was in full compliance with covenants and restrictions of its senior credit agreement as of March 31, 2025[109] Sales and Market - International sales accounted for approximately 43% of consolidated net sales during the three months ended March 31, 2025[83] - There have been no significant changes in primary market risk exposures during the three months ended March 31, 2025[113] Operational Challenges - The company anticipates ongoing supply chain challenges and higher manufacturing costs due to inflation through 2025[84] - The company is experiencing higher manufacturing and operating costs due to inflationary pressures and ongoing supply chain challenges[105] Cash Flow and Capital Management - The net working capital position was $355.9 million as of March 31, 2025, with net cash provided by operating activities increasing to $41.5 million from $29.1 million year-over-year[102] - Capital expenditures rose to $3.8 million in the three months ended March 31, 2025, compared to $2.0 million in the same period a year ago[103] - Net cash used in financing activities increased to $28.4 million in the three months ended March 31, 2025, up from $17.0 million in 2024[104] - The company repaid $14.6 million on its term loan during the three months ended March 31, 2025, and paid $7.2 million in contingent consideration related to the Biorez acquisition[108] - As of March 31, 2025, there were $100.0 million in borrowings outstanding on the term loan facility, with no borrowings under the revolving credit facility and available borrowings of $583.4 million[106] - Management believes cash flow from operations will be adequate to meet anticipated operating working capital requirements and capital expenditures in the foreseeable future[104] Shareholder Returns - The Board of Directors authorized a $200.0 million share repurchase program, with $162.6 million spent to repurchase 6.1 million shares by March 31, 2025[111]

Core Insights - CONMED Corporation (CNMD) reported first-quarter 2025 adjusted earnings per share (EPS) of 95 cents, exceeding the Zacks Consensus Estimate of 81 cents by 17.3% and showing a 20.3% improvement year over year [1] - The company's revenues totaled $321.3 million, reflecting a 2.9% year-over-year increase and surpassing the Zacks Consensus Estimate by 2.4% [1][2] Revenue Breakdown - Revenues in the Orthopedic Surgery segment reached $138.3 million, up 2.5% year over year, with a 3.9% increase at constant exchange rates (CER) [3] - The General Surgery segment generated revenues of $183 million, marking a 3.2% year-over-year increase and a 3.8% increase at CER [4] - U.S. sales totaled $183.8 million, up 4.2% year over year, while international sales amounted to $137.5 million, up 1.2% year over year on a reported basis and up 3.4% at CER [5] Margin and Expenses - Adjusted gross profit improved 3.4% year over year to $181.2 million, with a gross margin of 56.4%, an increase of 80 basis points [6] - Selling and administrative expenses rose 20.7% year over year to $148.8 million, while research and development expenses decreased 4.8% to $12.9 million [6] Financial Position - The company ended the first quarter with a cash balance of $34.5 million, up from $24.5 million in the previous quarter [7] - Cash flow from operations was $41.5 million, compared to $29.1 million in the fourth quarter of 2024 [7] 2025 Guidance - CONMED raised its revenue guidance for 2025, now expecting full-year revenues between $1.35 billion and $1.378 billion, reflecting lower foreign exchange headwinds [9] - The adjusted EPS guidance for 2025 is now in the range of $4.45-$4.60, up from the previous range of $4.25-$4.40 [10] - For the second quarter of 2025, reported sales are expected to be between $335 million and $340 million, with adjusted EPS estimated between $1.10 and $1.15 [11] Market Performance and Outlook - CONMED shares rose 3.4% in after-hours trading following the earnings report, indicating positive market reception [12] - The company remains optimistic about 2025, focusing on growth in minimally invasive procedures and specific product lines such as AirSeal and BioBrace [15] - Supply chain issues are improving, with a decline in backordered SKUs and anticipated annual savings of at least $20 million [16] Tariff Impact - CONMED estimates a negative impact of $5.5 million in 2025 due to tariffs, primarily from China and Europe, and is actively working on mitigation strategies [18]

Core Viewpoint - Conmed (CNMD) reported a revenue of $321.26 million for the quarter ended March 2025, marking a year-over-year increase of 2.9% and exceeding the Zacks Consensus Estimate by 2.42% [1] Financial Performance - Earnings per share (EPS) for the quarter was $0.95, compared to $0.79 a year ago, resulting in an EPS surprise of 17.28% over the consensus estimate of $0.81 [1] - The stock has returned -13.9% over the past month, contrasting with the Zacks S&P 500 composite's -0.2% change, and currently holds a Zacks Rank 3 (Hold) [3] Revenue Breakdown - Domestic revenue reached $183.80 million, surpassing the two-analyst average estimate of $175.66 million, with a year-over-year change of +4.2% [4] - International revenue was $137.50 million, slightly below the average estimate of $138.31 million, reflecting a year-over-year change of +1.2% [4] - Net sales in Orthopedic Surgery totaled $138.30 million, exceeding the average estimate of $125.60 million, with a year-over-year increase of +2.5% [4] - Net sales in General Surgery were $183 million, slightly above the average estimate of $182.04 million, showing a year-over-year change of +3.2% [4] - Net sales of Single-use Products amounted to $276.30 million, surpassing the average estimate of $268.71 million, with a year-over-year change of +4.4% [4] - Net sales of Capital Products were $45 million, slightly below the average estimate of $45.25 million, indicating a year-over-year decline of -5.5% [4]

Financial Data and Key Metrics Changes - Total sales for Q1 2025 were $321.3 million, representing a year-over-year increase of 2.9% as reported and 3.8% in constant currency, slightly better than guidance [7] - Adjusted net income for Q1 was $29.6 million, an increase of 19.6% year-over-year, with adjusted diluted net earnings per share of $0.95, up 20.1% year-over-year [21] - Adjusted gross margin for Q1 was 56.4%, which is 80 basis points higher than the prior year quarter [18] Business Line Data and Key Metrics Changes - Constant currency sales growth in orthopedics was 3.9%, with double-digit growth in foot and ankle products [7] - General surgery sales saw constant currency growth of 3.8%, driven by strong demand for AirSeal and smoke evacuation products [9] - U.S. orthopedic sales decreased by 2.1%, while international orthopedic sales increased by 7.9% [16] Market Data and Key Metrics Changes - U.S. general surgery sales grew by 6.9%, while international general surgery sales decreased by 3.3% due to declines in energy and critical care product lines [16] - The company noted strong demand for its products, particularly in minimally invasive surgery and areas of laparoscopy and arthroscopy [12] Company Strategy and Development Direction - The company is focused on improving supply chain operations and expects to see significant savings from these initiatives, with a target of at least $20 million in annual savings [18] - Management emphasized the importance of clinical differentiation in products like BioBrace and AirSeal, which are expected to drive future growth [8][12] - The company is working on enhancing its supply chain stability and continuity to support future growth [45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged uncertainties in the macroeconomic environment but noted strong demand for their products [11] - The company remains optimistic about its growth drivers and is focused on operational improvements to enhance performance [27] - Management expects revenue growth for the year to be between 4% and 6% in constant currency, with an improved outlook due to currency effects [23][30] Other Important Information - The company received FDA clearance for a new delivery device for rotator cuff repair, which is expected to enhance surgical procedures [8] - Cash flow from operations for Q1 was $41.5 million, compared to $29.1 million in the same quarter of the previous year [22] Q&A Session Summary Question: Guidance and hospital budgets - Management indicated no concerns about softness in hospital budgets and maintained guidance for the year [30] Question: CEO's perspective on surprises - The CEO noted no negative surprises but was positively surprised by the commitment of the ConMed team and customer embrace of their technology [34] Question: Tariff impact and mitigation efforts - Management discussed the impact of tariffs, particularly from China, and outlined mitigation strategies including logistics adjustments and potential price changes [40][42] Question: Supply chain improvement initiatives - Management provided updates on supply chain improvements, focusing on procurement, planning, and production, with positive progress noted in key portfolios [45][49] Question: Growth potential post-supply chain issues - Management expressed confidence in achieving higher growth rates once supply chain issues are resolved, targeting a balanced mix of growth drivers [72][74]

Financial Data and Key Metrics Changes - Total sales for Q1 2025 were $321.3 million, representing a year-over-year increase of 2.9% as reported and 3.8% in constant currency, slightly better than guidance [7] - Adjusted net income for Q1 was $29.6 million, an increase of 19.6% year-over-year, with adjusted diluted net earnings per share of $0.95, up 20.1% year-over-year [22] - Adjusted gross margin for Q1 was 56.4%, which is 80 basis points higher than the prior year quarter [19] Business Line Data and Key Metrics Changes - Constant currency sales growth in orthopedics was 3.9%, with double-digit growth in foot and ankle products [7] - General surgery sales saw constant currency growth of 3.8%, driven by strong demand for AirSeal and smoke evacuation products [10] - U.S. orthopedic sales decreased by 2.1%, while international orthopedic sales increased by 7.9% [16] Market Data and Key Metrics Changes - U.S. general surgery sales grew by 6.9%, while international general surgery sales decreased by 3.3% due to declines in energy and critical care product lines [18] - Total worldwide orthopedic sales grew by 3.9% in Q1 [16] Company Strategy and Development Direction - The company is focused on improving supply chain operations and expects to see significant savings from these initiatives, with a target of at least $20 million in annual savings [19] - The management is optimistic about the long-term future, emphasizing strong growth drivers in minimally invasive surgery and the potential of products like BioBrace and AirSeal [12][14] - The company is working on enhancing its product portfolio and has received FDA clearance for a new delivery device for rotator cuff repair [9] Management's Comments on Operating Environment and Future Outlook - Management noted that demand for products remains strong despite macroeconomic uncertainties, with hospital systems prioritizing key areas of business [12] - The company expects to maintain its revenue guidance for the year, projecting constant currency growth between 4% and 6% [31] - Management expressed confidence in the growth potential of its four key platforms, which are expected to drive double-digit growth [56] Other Important Information - The company has made progress in reducing backordered SKUs, although it acknowledges that there is still work to be done [11] - Cash flow from operations in Q1 was $41.5 million, compared to $29.1 million in the same quarter of the previous year [23] Q&A Session Summary Question: Guidance and hospital budgets - Management indicated no concerns about softness in hospital budgets and maintained a constant currency growth guidance of 4% to 6% for the year [31] Question: CEO's perspective on surprises - The CEO noted no negative surprises but was positively surprised by the commitment of the ConMed team and customer enthusiasm for their technology [34] Question: Tariff impact reconciliation - Management clarified that the majority of previous tariff estimates were related to Mexico, which is now exempt, leaving China as the primary concern [40] Question: Supply chain improvement initiatives - The company is focusing on procurement, production planning, and production processes to enhance supply chain stability and continuity [47] Question: Capital trends and AirSeal utilization - Management reported no significant change in customer appetite for capital expenditures and noted continued adoption of AirSeal in complex procedures [61] Question: Growth potential post-supply chain issues - Management believes that once supply chain issues are resolved, the company could achieve higher growth rates, potentially in the 7% to 9% range [75]

Financial Performance - CONMED Corporation reported first quarter 2025 sales of $321.3 million, an increase of 2.9% year-over-year and 3.8% in constant currency[7]. - Domestic revenue grew by 4.2% year-over-year, while international revenue increased by 1.2% as reported and 3.4% in constant currency[7]. - Full-year reported revenue is now expected to be between $1.350 billion and $1.378 billion, compared to the prior guidance of $1.344 billion to $1.372 billion[4]. - Net income for the three months ended March 31, 2025, was $6.036 million, a decrease of 69.4% compared to $19.709 million in the same period of 2024[20]. - Adjusted EBITDA increased to $61.302 million, up 8.9% from $56.301 million year-over-year[20]. Earnings and Margins - Adjusted diluted net earnings per share for 2025 are expected to be in the range of $4.45 to $4.60, up from the previous range of $4.25 to $4.40[5]. - Diluted net earnings per share (GAAP) were $0.19, down from $0.63 in the first quarter of 2024[7]. - The company's gross profit margin for the first quarter was 55.3%, slightly up from 55.1% in the same quarter of 2024[11]. - EBITDA margin for the three months ended March 31, 2025, was 10.6%, down from 17.0% in the same period of 2024[20]. Expenses and Costs - Research and development expenses for the first quarter were $12.9 million, compared to $13.6 million in the first quarter of 2024[11]. - The company incurred executive transition costs of $12.165 million during the quarter, which were not present in the previous year[20]. - Interest expense decreased to $8.286 million from $9.594 million, reflecting a reduction of 13.7%[20]. - Provision for income taxes was $1.636 million, down from $5.710 million, indicating a decrease of 71.3%[20]. Currency and Tariff Impact - The company anticipates a negative impact of approximately $0.14 on EPS in the second half of 2025 due to recent tariff announcements[5]. - The company expects revenue currency headwinds of approximately 50 to 70 basis points, an improvement from the previous estimate of 100 to 120 basis points[4]. - The company analyzes net sales on a constant currency basis to measure comparability between periods, excluding the impact of foreign currency exchange rates[24]. Investor Engagement - The company will host a conference call to discuss the first quarter results, indicating ongoing engagement with investors[8]. - Forward-looking statements indicate potential risks and uncertainties that could affect future performance, as detailed in the company's Annual Report[22]. Other Financial Metrics - The company reported a gain on the sale of a product line amounting to $(354) thousand, with no comparable figure in the previous year[20]. - The company emphasizes the importance of non-GAAP measures, such as adjusted net income and adjusted diluted EPS, for understanding financial results[23].

Financial Performance - CONMED's Q1 2025 worldwide revenue reached $321.3 million[22] - The company's GAAP EPS was $0.19, a decrease of 69.3% year-over-year[22, 25] - Adjusted EPS was $0.95, an increase of 20.1% year-over-year[22, 25] - Single-use products accounted for 86% of worldwide revenue[24] - The company anticipates approximately 4% to 6% constant currency revenue growth for the full year 2025, projecting reported revenue between $1350 million and $1378 million[26] Segment Performance - Orthopedic surgery revenue was $138.3 million with 3.9% constant currency growth[22] - General surgery revenue was $183.0 million with 3.8% constant currency growth[22] - Domestic revenue accounted for 57% and international revenue accounted for 43% of the total revenue[22] - Domestic revenue grew 3.4% and international revenue grew 5.4% (3.8% in constant currency)[22] Market and Strategy - The orthopedics market is estimated to be between $5.1 billion and $5.3 billion[10] - The US capital equipment market within orthopedics represents 38% of the total, while international accounts for 62%[10] - The general surgery market includes segments like access ($1.5 to $1.7 billion), energy ($3.1 to $3.3 billion), and endoscopic technologies ($3.1 to $3.3 billion)[11] - The company aims to achieve above-market revenue and profitability growth over the long term[9]

Financial Performance - Consolidated net sales for 2024 reached $1,307,015 thousand, a 5% increase from $1,244,744 thousand in 2023[22] - Annual royalty expenses for licensed product net sales were approximately $6.8 million in 2024, compared to $5.3 million in 2023[36] - Stock-based compensation expense recognized was $25.6 million for the year ended December 31, 2024, compared to $24.3 million in 2023 and $21.7 million in 2022[199] Product Revenue Breakdown - Orthopedic surgery products accounted for 42% of net sales in 2024, while general surgery products made up 58%[22] - Approximately 77% of orthopedic surgery revenue in 2024 came from single-use products expected to be recurring[23] - In 2024, approximately 91% of general surgery revenue was derived from single-use products anticipated to be recurring[27] Research and Development - Research and development expenditures were approximately $54.4 million in 2024, up from $52.6 million in 2023[37] - The company maintains a focus on developing new products and enhancing existing ones to drive organic growth[21] Strategic Acquisitions - The company completed strategic acquisitions of In2Bones Global, Inc. and Biorez, Inc. in June and August 2022, respectively[21] International Sales - International sales represented approximately 32% of consolidated net sales in 2024, with products sold in over 100 countries[28] Workforce and Employee Engagement - As of December 31, 2024, CONMED had approximately 3,900 full-time employees, with around 2,400 in operations[46] - CONMED's global workforce engagement score increased year-over-year, with 98% participation in the Gallup Q12 Employee Engagement Survey in May 2024[56] - The company is committed to pay equity, conducting annual reviews globally by role, location, and gender[50] - CONMED's talent management practices involve annual reviews by the Board of Directors to support business strategy and succession planning[48] Compliance and Regulations - CONMED's operations are subject to various environmental health and safety laws, and the company believes its practices comply with applicable regulations[45] - The EU Medical Device Regulation (EU MDR) imposes stricter requirements for marketing medical devices, effective May 2021[43] - The company maintains quality system certifications through EU recognized Notified Bodies to authorize the CE Mark for product distribution[43] Intellectual Property - The company has rights to a wide range of patents with expiration dates from 2025 to 2043, which are crucial for its competitive position[38] Financial Obligations - Total contractual obligations amount to $1,197,487, with long-term debt at $914,588 and contingent consideration payments of $72,217[198] Diversity and Inclusion - The company emphasizes diversity and inclusion as vital to its success, believing that diverse teams enhance innovation and understanding of customer needs[52]