CONMED (US:CNMD)2025-11-06 17:39Financial 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].