CONMED (CNMD) - 2025 Q2 - Quarterly Results

News Release Introduction CONMED's Q2 2025 performance, updated full-year outlook, key financial metrics, and conference call details are presented Second Quarter 2025 Performance Overview 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] 2025 Full-Year Outlook 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 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 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][8] Consolidated Financial Statements The consolidated statements of income show decreased net income for Q2 and YTD 2025 despite increased net sales Consolidated Condensed Statements of Income 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 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) 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) 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 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) 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) 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 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 This section provides company information, forward-looking statement disclaimers, and non-GAAP financial measure explanations About CONMED Corporation 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] Forward-Looking Statements 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] Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures 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][30] - 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][32]