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]

Core Insights - CONMED Corporation (CNMD) reported fourth-quarter 2024 adjusted earnings per share (EPS) of $1.34, exceeding the Zacks Consensus Estimate of $1.20 by 11.7% and showing a 26.4% improvement year-over-year [1] - The company's revenues for the fourth quarter totaled $345.9 million, reflecting a 5.8% year-over-year increase and surpassing the Zacks Consensus Estimate by 1.4% [2] - For the full year 2024, CNMD's revenues reached $1.31 billion, up 5% year-over-year, with adjusted EPS of $4.17, marking a 20.9% increase compared to 2023 [3] Revenue Breakdown - The Orthopedic Surgery segment generated revenues of $139 million, a 1.8% increase year-over-year, with U.S. sales improving by 5.2% [4] - The General Surgery segment reported revenues of $206.9 million, up 8.6% year-over-year, with U.S. sales increasing by 7.4% and international sales rising by 11.9% [5] - Total sales in the United States were $203.3 million, up 6.8% year-over-year, while international sales amounted to $142.6 million, reflecting a 4.4% increase [6] Margin and Expenses - CNMD's gross profit improved by 8.9% year-over-year to $198.3 million, with a gross margin of 57.3%, an increase of 160 basis points [7] - Selling and administrative expenses rose by 12.5% year-over-year to $132.7 million, while research and development expenses decreased by 6.1% to $13.2 million [7] - The operating income for the quarter was $52.5 million, compared to $50.2 million in the prior-year quarter, with an operating margin of 15.2% [7] Financial Position - CNMD ended the fourth quarter with a cash balance of $24.5 million, down from $38.5 million in the previous quarter [8] - Cash flow from operations in the reported quarter was $43.3 million, compared to $56.4 million in the fourth quarter of 2023 [9] Future Guidance - For 2025, CNMD expects revenues between $1.34 billion and $1.37 billion, indicating a constant-currency growth of approximately 4% to 6% [10] - The company anticipates adjusted EPS for 2025 to be in the range of $4.25 to $4.40, with the Zacks Consensus Estimate at $4.41 [10] - CNMD also provided first-quarter 2025 revenue guidance, expecting reported sales between $310 million and $316 million [11] Market Reaction - Following the earnings report, CNMD's shares fell by 9.5% in after-market trading, likely due to revenue and EPS guidance for 2025 being below estimates [14] - Despite this, CNMD's shares have increased by 13.1% over the past six months, outperforming the industry growth of 5.2% and the S&P 500 Index's gain of 16.6% [14]

Financial Data and Key Metrics Changes - Total sales for Q4 2024 were $345.9 million, a year-over-year increase of 5.8% as reported and 6% in constant currency [8] - GAAP net income for Q4 was $33.8 million, compared to $33.1 million in the prior year, while adjusted net income increased 26.2% year-over-year to $41.8 million [9][12] - For the full year, sales reached $1.307 billion, representing a 5% year-over-year growth as reported and 5.3% in constant currency [10] Business Line Data and Key Metrics Changes - Orthopedic business sales increased 2.4% in Q4 and 2.5% for the full year on a constant currency basis [10][21] - General Surgery business saw constant currency growth of 8.7% in Q4 and 7.5% for the full year [10][22] - AirSeal achieved strong double-digit growth, with record capital and disposable sales despite market dynamics [11] Market Data and Key Metrics Changes - U.S. sales increased 6.8% in Q4, while international sales grew 5.0% [19] - Total worldwide Orthopedic sales grew 2.4% in Q4, with U.S. Orthopedic sales growing 5.2% and international sales increasing 0.6% [20] - Total worldwide General Surgery sales increased 8.7% in Q4, with U.S. sales growing 7.4% and international sales increasing 12.0% [20] Company Strategy and Development Direction - The company is focused on resolving supply challenges in the Orthopedic business and maximizing growth drivers like AirSeal, Buffalo Filter, BioBrace, and Foot & Ankle portfolio [13][16] - A consulting firm has been engaged to expedite operational improvements and strengthen the Orthopedic business [14] - The company aims to enhance its portfolio's durability, growth, and profitability over the next decade [16][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of AirSeal, driven by strong demand for improved patient outcomes [15] - The company is cautious in its 2025 guidance, projecting revenue growth of 4% to 6% in constant currency, reflecting current operational challenges [38][39] - Management acknowledged the impact of currency headwinds and ongoing operational improvements on profitability [70][92] Other Important Information - Adjusted gross margin for Q4 was 57.6%, a 120 basis point improvement year-over-year [23] - The company reported a cash balance of $24.5 million at year-end, down from $38.5 million [31] - Capital expenditures for the full year were $13.1 million, compared to $19.0 million in 2023 [34] Q&A Session Summary Question: What accounts for the delta in growth rates? - Management attributed the delta to lingering supply chain challenges that have affected performance [61] Question: What is the outlook for AirSeal growth? - Management expects AirSeal to continue growing at double-digit rates due to strong clinical demand [64] Question: What factors contribute to the conservatism in guidance? - The conservatism is due to market conditions, timing of new products, and ongoing supply chain issues [66][70] Question: What is the strategy for capital allocation and M&A? - The company plans to focus on paying down debt and improving leverage, while remaining open to compelling acquisition opportunities [104] Question: How is the company addressing the impact of tariffs? - Management indicated that passing on tariff costs to hospitals may be challenging due to existing contracts [111][112]

Group 1 - Conmed reported quarterly earnings of $1.34 per share, exceeding the Zacks Consensus Estimate of $1.20 per share, and up from $1.06 per share a year ago, representing an earnings surprise of 11.67% [1][2] - The company achieved revenues of $345.94 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.36%, compared to $327.05 million in the same quarter last year [2] - Conmed has outperformed the S&P 500, with shares increasing about 6.5% since the beginning of the year, while the S&P 500 gained 2.7% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $1 on revenues of $334.22 million, and for the current fiscal year, it is $4.71 on revenues of $1.4 billion [7] - The Zacks Industry Rank indicates that the Medical - Dental Supplies sector is currently in the bottom 40% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Fourth quarter 2024 sales reached $345.9 million, a year-over-year increase of 5.8% as reported and 6.0% in constant currency[6] - Full-year 2024 sales totaled $1.307 billion, reflecting a 5.0% increase year-over-year as reported and 5.3% in constant currency[6] - Adjusted diluted net earnings per share for the fourth quarter were $1.34, marking a 26.4% increase compared to the fourth quarter of 2023[6] - The company expects full-year 2025 reported revenue between $1.344 billion and $1.372 billion, indicating a year-over-year constant currency growth of approximately 4% to 6%[3] - Full-year 2025 adjusted diluted net earnings per share are projected to be in the range of $4.25 to $4.40, accounting for a currency headwind of approximately $0.15 to $0.20[4] - Domestic revenue for the fourth quarter increased by 6.8% year-over-year, while international revenue grew by 4.4% as reported[6] - The company reported net income of $33.8 million for the fourth quarter, slightly up from $33.1 million in the same period last year[11] - Total revenue for the year ended December 31, 2024, was $733.0 million, with a gross profit margin of 56.1%[19] Profitability Metrics - Gross profit margin for the fourth quarter was 57.3%, compared to 55.7% in the fourth quarter of 2023[11] - Reported gross profit for Q4 2024 was $198.3 million, representing 57.3% of sales, compared to $182.2 million (55.7% of sales) in Q4 2023[15] - Adjusted net income for Q4 2024 was $41.8 million, with diluted EPS of $1.34, up from $33.2 million and $1.06 in Q4 2023[15] - Adjusted EBITDA for Q4 2024 was $80.0 million, with an adjusted EBITDA margin of 23.1%[28] - Adjusted gross profit margin for the year ended December 31, 2024, was 24.1%[19] Expenses and Costs - Research and development expenses for the full year were $54.4 million, compared to $52.6 million in 2023[11] - The company incurred $955,000 in costs due to Hurricane Milton impacting the Largo, FL facility in 2024[16] - The company recorded lease impairment expenses of $606,000 in Q4 2024[16] Strategic Focus and Future Outlook - The company aims to enhance operations and establish a stronger foundation for future above-market revenue and profitability growth in 2025[2] - The company plans to continue focusing on market expansion and new product development in the upcoming quarters[29] Non-GAAP Financial Measures - The company utilizes non-GAAP financial measures to provide meaningful insights into its financial results, including percentage sales growth in constant currency and adjusted net income[31] - Net sales on a constant currency basis is analyzed to measure comparability of results between periods, excluding the impact of foreign currency exchange rates[32] - The company emphasizes that non-GAAP measures should not be considered in isolation and encourages a comprehensive review of financial statements[33] - Adjusted measures are important indicators of operations as they exclude items not indicative of core operating results, providing a baseline for analyzing trends[31] - The company believes that EBITDA is a useful non-GAAP measurement for assessing aspects of cash flow[31] - Management bases certain incentive compensation on non-GAAP financial measures, reflecting their importance in reviewing operating results[31] Risk Factors and Forward-Looking Statements - The company’s Annual Report on Form 10-K discusses risk factors that could cause actual results to differ from forward-looking statements[30] - Forward-looking statements are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, indicating management's expectations for future performance[30] - The financial impact of certain items affecting earnings performance is uncertain and may be material to consolidated statements of income[34] - The company is unable to provide a quantitative reconciliation of expected diluted net earnings per share to expected adjusted diluted net earnings per share due to uncertainties related to acquisition and integration charges[34]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, CONMED and McKesson, as strong candidates based on their valuation metrics and earnings outlook. Group 1: CONMED (CNMD) - CONMED has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4] - The stock is currently trading at a P/E ratio of 14.19, which is lower than the industry average of 17.14 [4] - CNMD's Forward P/E has fluctuated between 13 and 31.12 over the past 52 weeks, with a median of 15.41 [4] - The PEG ratio for CNMD is 0.74, significantly lower than the industry average of 1.94, indicating potential undervaluation [5] - CNMD's P/B ratio stands at 2.27, compared to the industry's average of 4.56, suggesting a solid valuation [6] - The P/CF ratio for CNMD is 10.19, which is also lower than the industry average of 18.44, reinforcing its undervalued status [7] Group 2: McKesson (MCK) - McKesson is also rated 2 (Buy) with a Value Score of A, making it another attractive option for value investors [8] - The stock is trading at a forward earnings multiple of 16.24, which is below the industry P/E of 17.14 [8] - MCK's PEG ratio is 1.15, lower than the industry average of 1.94, indicating it may be undervalued [8] - The P/B ratio for McKesson is -27.89, which is significantly lower than the industry's average of 4.56, suggesting a unique valuation scenario [9] - Overall, both CONMED and McKesson are highlighted as likely undervalued stocks with strong earnings outlooks, making them appealing to value investors [10]

Core Viewpoint - CONMED Corporation is positioned for growth due to its diverse product offerings and strong recurring revenue base, particularly in General Surgery, despite facing supply chain challenges and data security threats [1][2]. Group 1: Financial Performance - CONMED has a market capitalization of $2.26 billion and projects a 19.3% earnings growth for fiscal 2025 [2]. - The company has surpassed earnings estimates in three of the last four quarters, with an average surprise of 3.71% [2]. - The Zacks Consensus Estimate for earnings in 2024 has improved by 1% to $4.03 per share, with projected fourth-quarter revenues of $341.3 million, indicating growth of 4.3% year-over-year [12]. Group 2: Product and Market Position - CONMED's General Surgery segment is gaining traction with unique products like the Anchor Tissue Retrieval bag, contributing to a 3.6% revenue increase at constant exchange rates in Q3 2024 [4]. - The company has a broad product spectrum across various specialties, including orthopedics and gastroenterology, with key innovations like Hi-Fi Tape and the IM8000 surgical visualization system [6][7]. - Approximately 85% of CONMED's revenues come from recurring sales of single-use disposable products, which are increasingly preferred by healthcare facilities [8]. Group 3: Market Challenges - Supply chain constraints and data security threats are ongoing challenges for CONMED, potentially impacting operational stability and financial performance [1][11]. - The U.S. foot and ankle business may face sales declines due to the impact of hurricanes Helene and Milton, which caused procedure rescheduling [5].

Core Insights - Zacks Premium provides tools for investors to enhance their stock market engagement and confidence, including daily updates, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [4][5][6][7] Value Score - The Value Score identifies attractive and discounted stocks using various financial ratios, appealing to value investors [4] Growth Score - The Growth Score emphasizes a company's financial health and future outlook, focusing on projected and historical earnings, sales, and cash flow [5] Momentum Score - The Momentum Score helps investors capitalize on price trends, utilizing factors like recent price changes and earnings estimate shifts [6] VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8][9] Stock Selection Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while also considering earnings outlook changes [10][11][12] Company Spotlight: CONMED Corporation - CONMED Corporation, based in Utica, N.Y., specializes in surgical instruments and devices for minimally invasive procedures, employing approximately 3,600 individuals [13] - Currently rated 3 (Hold) by Zacks, CONMED has a VGM Score of A and a Value Style Score of A, with a forward P/E ratio of 18.32, indicating strong valuation metrics [14] - Recent earnings estimates for fiscal 2024 have been revised upward, with the Zacks Consensus Estimate increasing by $0.04 to $4.03 per share, alongside an average earnings surprise of 3.7% [14] - Given its solid Zacks Rank and favorable Style Scores, CONMED is recommended for investors' consideration [15]

Core Insights - The article discusses the Zacks Premium service, which provides tools and resources for investors to make informed decisions in the stock market [1][2] Zacks Style Scores - Zacks Style Scores are guidelines that rate stocks based on value, growth, and momentum characteristics, helping investors identify securities likely to outperform the market in the short term [3][4] - Each stock is rated from A to F, with A indicating the highest potential for outperformance [4] Categories of Style Scores - **Value Score**: Focuses on identifying undervalued stocks using financial ratios like P/E and Price/Sales [5] - **Growth Score**: Evaluates stocks based on projected earnings and sales growth, targeting companies with strong financial health [6] - **Momentum Score**: Assesses stocks based on price trends and earnings estimate changes, aiming to capitalize on market momentum [7] - **VGM Score**: Combines the three Style Scores to identify stocks with attractive value, growth, and momentum [8] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to help investors build successful portfolios [9] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [10] Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal investment potential [12] - The direction of earnings estimate revisions is crucial; stocks with lower ranks but high Style Scores may still face downward price pressure [13] Company Spotlight: CONMED Corporation - CONMED Corporation, based in Utica, N.Y., specializes in surgical instruments and devices for minimally invasive procedures, employing approximately 3,600 people [15] - Currently rated 3 (Hold) with a VGM Score of A, CONMED shows a Growth Style Score of B, indicating a projected year-over-year earnings growth of 16.8% for the current fiscal year [16] - The Zacks Consensus Estimate for CONMED's earnings has increased by $0.04 to $4.03 per share, with an average earnings surprise of 3.7% [16][17]

Company Overview - CONMED Corporation is a major medical products manufacturer specializing in surgical instruments and devices for minimally invasive procedures and monitoring [11] - The company is headquartered in Utica, N.Y., employs approximately 3,600 people, and operates several manufacturing facilities [11] Investment Insights - CONMED has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid overall rating [11] - The company has a Momentum Style Score of B, with shares increasing by 10% over the past four weeks [12] - Six analysts have revised their earnings estimates higher for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.04 to $4.03 per share [12] - CONMED has an average earnings surprise of 3.7%, suggesting a positive outlook for earnings performance [12] Style Scores and Zacks Rank - The Zacks Rank and Style Scores are designed to help investors identify stocks with the best chances of outperforming the market [6][9] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for higher probability of success [9][10]