CONMED (CNMD) - 2023 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents CONMED CORPORATION's unaudited consolidated condensed financial statements as of June 30, 2023, including statements of comprehensive income (loss), balance sheets, statements of shareholders' equity, and cash flows, providing an overview of the company's financial performance and position during the reporting period Consolidated Condensed Statements of Comprehensive Income (Loss) Statements of Comprehensive Income (Loss) | Metric (USD in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | 317,652 | 277,190 | 613,121 | 519,516 | | Cost of Sales | 146,962 | 125,413 | 287,110 | 231,748 | | Gross Profit | 170,690 | 151,777 | 326,011 | 287,768 | | Operating Expenses | 143,272 | 127,319 | 285,894 | 240,866 | | Operating Income | 27,418 | 24,458 | 40,117 | 46,902 | | Interest Expense | 9,997 | 5,928 | 20,252 | 10,926 | | Other Expense | — | 112,011 | — | 112,011 | | Income (Loss) Before Income Taxes | 17,421 | (93,481) | 19,865 | (76,035) | | Provision for Income Taxes | 3,689 | 74,810 | 4,314 | 77,281 | | Net Income (Loss) | 13,732 | (168,291) | 15,551 | (153,316) | | Comprehensive Income (Loss) | 15,767 | (172,636) | 20,462 | (156,221) | | Basic Earnings Per Share | 0.45 | (5.65) | 0.51 | (5.18) | | Diluted Earnings Per Share | 0.43 | (5.65) | 0.49 | (5.18) | Consolidated Condensed Balance Sheets Balance Sheets | Metric (USD in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Assets | | | | Cash and Cash Equivalents | 27,848 | 28,942 | | Accounts Receivable, Net | 229,256 | 191,345 | | Inventories | 327,309 | 332,320 | | Total Current Assets | 615,522 | 581,226 | | Property, Plant and Equipment, Net | 116,788 | 115,611 | | Goodwill | 815,634 | 815,429 | | Other Intangible Assets, Net | 665,584 | 681,799 | | Total Assets | 2,322,722 | 2,297,592 | | Liabilities and Shareholders' Equity | | | | Total Current Liabilities | 353,169 | 296,552 | | Long-Term Debt | 971,475 | 985,076 | | Deferred Income Taxes | 66,081 | 66,725 | | Other Long-Term Liabilities | 151,803 | 203,694 | | Total Liabilities | 1,542,528 | 1,552,047 | | Total Shareholders' Equity | 780,194 | 745,545 | | Total Liabilities and Shareholders' Equity | 2,322,722 | 2,297,592 | Consolidated Condensed Statements of Shareholders' Equity Changes in Shareholders' Equity | Metric (USD in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Total Shareholders' Equity | 780,194 | 745,545 | | Net Income | 13,732 | 1,819 | | Net Gain on Cash Flow Hedges | 503 | 877 | | Net Pension Liability | 403 | 403 | | Foreign Currency Translation Adjustment | 1,129 | 1,596 | | Common Stock Issued Under Employee Plans | 11,697 | 2,600 | | Share-Based Compensation | 6,422 | 5,726 | | Dividends on Common Stock | (6,145) | (6,113) | Consolidated Condensed Statements of Cash Flows Statements of Cash Flows | Metric (USD in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | 22,826 | 19,070 | | Net Cash Used in Investing Activities | (9,783) | (151,953) | | Net Cash Used in Financing Activities | (14,437) | 166,610 | | Cash and Cash Equivalents, End of Period | 27,848 | 53,152 | Consolidated Condensed Statements of Comprehensive Income (Loss) Key Data | Metric (USD in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | 317,652 | 277,190 | 613,121 | 519,516 | | Cost of Sales | 146,962 | 125,413 | 287,110 | 231,748 | | Gross Profit | 170,690 | 151,777 | 326,011 | 287,768 | | Operating Expenses | 143,272 | 127,319 | 285,894 | 240,866 | | Operating Income | 27,418 | 24,458 | 40,117 | 46,902 | | Interest Expense | 9,997 | 5,928 | 20,252 | 10,926 | | Other Expense | — | 112,011 | — | 112,011 | | Income (Loss) Before Income Taxes | 17,421 | (93,481) | 19,865 | (76,035) | | Provision for Income Taxes | 3,689 | 74,810 | 4,314 | 77,281 | | Net Income (Loss) | 13,732 | (168,291) | 15,551 | (153,316) | | Comprehensive Income (Loss) | 15,767 | (172,636) | 20,462 | (156,221) | | Basic Earnings Per Share | 0.45 | (5.65) | 0.51 | (5.18) | | Diluted Earnings Per Share | 0.43 | (5.65) | 0.49 | (5.18) | Consolidated Condensed Balance Sheets Key Data | Metric (USD in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Assets | | | | Cash and Cash Equivalents | 27,848 | 28,942 | | Accounts Receivable, Net | 229,256 | 191,345 | | Inventories | 327,309 | 332,320 | | Total Current Assets | 615,522 | 581,226 | | Property, Plant and Equipment, Net | 116,788 | 115,611 | | Goodwill | 815,634 | 815,429 | | Other Intangible Assets, Net | 665,584 | 681,799 | | Total Assets | 2,322,722 | 2,297,592 | | Liabilities and Shareholders' Equity | | | | Total Current Liabilities | 353,169 | 296,552 | | Long-Term Debt | 971,475 | 985,076 | | Deferred Income Taxes | 66,081 | 66,725 | | Other Long-Term Liabilities | 151,803 | 203,694 | | Total Liabilities | 1,542,528 | 1,552,047 | | Total Shareholders' Equity | 780,194 | 745,545 | | Total Liabilities and Shareholders' Equity | 2,322,722 | 2,297,592 | Consolidated Condensed Cash Flow Statements Key Data | Metric (USD in thousands) | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | 22,826 | 19,070 | | Net Cash Used in Investing Activities | (9,783) | (151,953) | | Net Cash Used in Financing Activities | (14,437) | 166,610 | | Cash and Cash Equivalents, End of Period | 27,848 | 53,152 | Notes to Consolidated Condensed Financial Statements This section provides detailed notes to the consolidated condensed financial statements, covering key information such as company operations, accounting policies, new accounting pronouncements, business combinations, revenue recognition, comprehensive income, fair value of financial instruments, inventories, earnings per share, goodwill and other intangible assets, long-term debt, guarantees, pension plans, business segments, and legal proceedings, offering essential context and details for understanding the financial data Note 1 - Operations - CONMED Corporation is a medical technology company providing surgical equipment and instruments for various specialties including orthopedics, general surgery, gynecology, thoracic, and gastroenterology[23] Note 2 - Interim Financial Information - Interim financial statements are prepared in accordance with GAAP and Form 10-Q instructions, including all normal recurring material adjustments, but do not contain all information and notes required for annual financial statements; management believes no specific events or circumstances as of July 27, 2023, require updating estimates or revising the carrying values of assets and liabilities[24][25] Note 3 - New Accounting Pronouncements - The company has not yet adopted ASU 2020-04 (extended by ASU 2022-06) issued by FASB, which provides guidance on reference rate reform; the company believes reference rate reform will not materially impact its consolidated financial statements as its senior credit agreement already includes provisions for LIBOR to SOFR transition[50] Note 4 - Business Combinations - On June 13, 2022, the company acquired In2Bones Global, Inc. for $145.2 million in cash, with potential contingent consideration up to $110 million based on revenue targets; on August 9, 2022, it acquired Biorez, Inc. for $85.5 million in cash, with potential contingent consideration up to $165 million based on revenue targets, both financed through cash on hand and long-term borrowings[51][53] Note 5 - Revenues Net Sales by Geographic Market and Product Line (Six Months) | Market/Product Line | Six Months Ended June 30, 2023 (USD in thousands) | Six Months Ended June 30, 2022 (USD in thousands) | | :------------------ | :---------------------------------------------- | :---------------------------------------------- | | Primary Geographic Markets | | | | United States | 339,257 | 280,409 | | Europe, Middle East, and Africa | 114,298 | 104,835 | | Asia Pacific | 98,713 | 80,246 | | Americas (Excluding U.S.) | 60,853 | 54,026 | | Product Line | | | | Orthopedic Surgery | 271,966 | 227,698 | | General Surgery | 341,155 | 291,818 | | Revenue Recognition Timing | | | | Goods Transferred at a Point in Time | 589,011 | 497,037 | | Services Transferred Over Time | 24,110 | 22,479 | | Total Sales | 613,121 | 519,516 | Contract Liabilities Balance | Metric (USD in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Contract Liabilities | 18,604 | 19,114 | - Revenue recognized from beginning contract liabilities for the six months ended June 30, 2023, was $7.6 million, compared to $7.0 million for the same period in 2022[55] Note 6 - Comprehensive Income (Loss) Components of Comprehensive Income (Loss) | Metric (USD in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income (Loss) | 13,732 | (168,291) | 15,551 | (153,316) | | Net Gain on Cash Flow Hedges | 503 | 4,662 | 1,381 | 5,744 | | Net Pension Liability | 403 | 490 | 806 | 1,012 | | Foreign Currency Translation Adjustment | 1,129 | (9,497) | 2,724 | (9,661) | | Comprehensive Income (Loss) | 15,767 | (172,636) | 20,462 | (156,221) | Accumulated Other Comprehensive Income (Loss) | Metric (USD in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Cash Flow Hedges Gain (Loss) | 3,878 | 2,497 | | Pension Liability | (22,943) | (23,749) | | Cumulative Translation Adjustment | (33,882) | (36,606) | | Accumulated Other Comprehensive Income (Loss) | (52,947) | (57,858) | Note 7 - Fair Value of Financial Instruments - The company engages in derivative transactions solely for risk management, primarily using forward contracts to hedge foreign currency exposure and designating them as cash flow hedges; as of June 30, 2023, the notional amount of forward foreign exchange contracts designated as cash flow hedges was $214,933 thousand, and non-designated contracts were $80,528 thousand[58][59][60] Fair Value of Derivative Instruments | Metric (USD in thousands) | Fair Value of Assets as of June 30, 2023 | Fair Value of Liabilities as of June 30, 2023 | Net Fair Value as of June 30, 2023 | | :---------------------- | :--------------------------------------- | :------------------------------------------ | :--------------------------------- | | Hedge-Designated Forward Foreign Exchange Contracts | 8,085 | (2,967) | 5,118 | | Non-Hedge-Designated Forward Foreign Exchange Contracts | 15 | (224) | (209) | | Total Derivative Instruments | 8,100 | (3,191) | 4,909 | - The company values contingent consideration for the In2Bones and Biorez acquisitions using Level 3 inputs, primarily based on expected payment dates, discount rates, revenue volatility, and projected revenues; as of June 30, 2023, total contingent consideration was $190,231 thousand[143][117] Note 8 - Inventories Inventory Composition | Metric (USD in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Raw Materials | 123,951 | 110,677 | | Work-in-Process | 27,797 | 26,166 | | Finished Goods | 175,561 | 195,477 | | Total | 327,309 | 332,320 | Note 9 - Earnings (Loss) Per Share Earnings (Loss) Per Share Calculation | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income (Loss) (USD in thousands) | 13,732 | (168,291) | 15,551 | (153,316) | | Basic Earnings Per Share (USD) | 0.45 | (5.65) | 0.51 | (5.18) | | Diluted Earnings Per Share (USD) | 0.43 | (5.65) | 0.49 | (5.18) | | Basic Weighted Average Common Shares Outstanding (Thousands of shares) | 30,662 | 29,775 | 30,587 | 29,601 | | Diluted Weighted Average Common Shares Outstanding (Thousands of shares) | 31,795 | 29,775 | 31,499 | 29,601 | - Due to the company's net loss in 2022, potential dilutive shares were excluded from diluted earnings per share calculations; in 2023, approximately 1.8 million (three months) and 1.7 million (six months) anti-dilutive stock options and stock appreciation rights were excluded from diluted EPS calculations[146][148] Note 10 - Goodwill and Other Intangible Assets Changes in Net Carrying Value of Goodwill | Metric (USD in thousands) | Amount | | :---------------------- | :----- | | Balance as of December 31, 2022 | 815,429 | | Foreign Currency Translation Adjustment | 205 | | Balance as of June 30, 2023 | 815,634 | Composition of Other Intangible Assets | Intangible Asset Category | Weighted-Average Amortization Period (Years) | Gross Carrying Amount as of June 30, 2023 (USD in thousands) | Accumulated Amortization as of June 30, 2023 (USD in thousands) | | :------------------------ | :------------------------------------------- | :----------------------------------------------------------- | :-------------------------------------------------------------- | | Customer and Distributor Relationships | 24 | 369,888 | (179,698) | | Sales Representative, Marketing, and Promotion Rights | 25 | 149,376 | (69,000) | | Developed Technology | 18 | 320,204 | (39,616) | | Patents and Other Intangible Assets | 16 | 81,139 | (53,253) | | Trademarks and Trade Names | Indefinite | 86,544 | — | | Total | | 1,007,151 | (341,567) | - Intangible asset amortization expense for the three and six months ended June 30, 2023, was $8.8 million and $17.6 million, respectively, primarily recognized in selling and administrative expenses and as a reduction of revenue[123] Note 11 - Long-Term Debt Long-Term Debt Composition | Debt Type (USD in thousands) | June 30, 2023 | December 31, 2022 | | :------------------------- | :------------ | :---------------- | | Revolving Credit Facility | 54,000 | 70,000 | | Term Loan, Net | 133,961 | 133,858 | | 2.625% Convertible Senior Notes, Net | 69,768 | 69,568 | | 2.250% Convertible Senior Notes, Net | 783,292 | 781,166 | | Finance Leases | 86 | 230 | | Total Debt | 1,041,107 | 1,054,822 | | Less: Current Portion | 69,632 | 69,746 | | Total Long-Term Debt | 971,475 | 985,076 | - As of June 30, 2023, outstanding borrowings under the term loan were $134.6 million, revolving credit facility borrowings were $54.0 million, and available borrowing capacity was $529.4 million; the company is in full compliance with covenants and restrictions under its senior credit agreement[126][153] - In June 2022, the company repurchased and cancelled $275 million principal amount of its 2.625% Convertible Senior Notes and issued $800 million principal amount of 2.250% Convertible Senior Notes, used to repurchase a portion of the 2.625% notes, repay revolving credit facility, repay term loan, and partially fund the In2Bones acquisition[155][157] Note 12 - Guarantees - The company provides standard and extended warranties on its products, with standard warranties typically lasting one year and extended warranties one to three years; as of June 30, 2023, the standard warranty liability balance was $1.871 million[136][163] Note 13 - Pension Plan Net Periodic Pension Cost | Metric (USD in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service Cost | 194 | 269 | 388 | 538 | | Interest Cost on Projected Benefit Obligation | 911 | 537 | 1,822 | 1,074 | | Expected Return on Plan Assets | (1,032) | (1,324) | (2,064) | (2,648) | | Net Amortization and Deferral | 532 | 648 | 1,064 | 1,296 | | Net Periodic Pension Cost | 605 | 130 | 1,210 | 260 | - The company does not anticipate making any pension contributions in 2023; non-service pension costs/(benefits) were not material for the three and six months ended June 30, 2023, and 2022[139] Note 14 - Business Segment - The company accounts for and reports as a single operating segment entity, engaged globally in the development, manufacture, and sale of surgical instruments and related equipment, with product lines including orthopedic surgery and general surgery[164] Consolidated Net Sales by Product Line | Product Line (USD in thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Orthopedic Surgery | 140,790 | 120,182 | 271,966 | 227,698 | | General Surgery | 176,862 | 157,008 | 341,155 | 291,818 | | Consolidated Net Sales | 317,652 | 277,190 | 613,121 | 519,516 | Note 15 - Legal Proceedings - The company faces various enforcement actions related to interactions with medical device manufacturers and healthcare providers, as well as claims related to product liability, patent infringement, and environmental regulations; the company is defending two lawsuits in Georgia state court related to ethylene oxide exposure and has obtained insurance coverage for indemnity claims[141][142][167][197][198] - The Italian government enacted a medical device tax law in 2015, taxing revenues from sales to public hospitals; the company is challenging the imposition of this tax, arguing the law was never properly implemented, and currently cannot estimate the range of potential loss nor has it recorded related expenses[199][200] PART II OTHER INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's discussion and analysis of the company's financial condition and results of operations, covering forward-looking statements, business overview, macroeconomic environment impact, critical accounting policies, consolidated results of operations, and liquidity and capital resources, detailing financial performance, key drivers, and future outlook for the reporting period Overview - CONMED Corporation is a medical technology company providing surgical equipment and instruments, with approximately 84% of revenue derived from single-use product sales; international sales accounted for 45% of consolidated net sales in the first half of 2023 and 46% in the first half of 2022[176][177] - The company continues to be impacted by the macroeconomic environment, facing inflationary pressures and supply chain challenges leading to increased manufacturing and operating costs, which are expected to persist into 2023; a warehouse management system implemented in Q4 2022 caused shipping delays and increased costs, but significantly improved in the first half of 2023[178][179] Consolidated Results of Operations Consolidated Results of Operations as a Percentage of Net Sales | Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | 100.0 % | 100.0 % | 100.0 % | 100.0 % | | Cost of Sales | 46.3 % | 45.2 % | 46.8 % | 44.6 % | | Gross Profit | 53.7 % | 54.8 % | 53.2 % | 55.4 % | | Selling and Administrative Expense | 40.8 % | 41.8 % | 42.4 % | 42.1 % | | Research and Development Expense | 4.3 % | 4.1 % | 4.3 % | 4.3 % | | Operating Income | 8.6 % | 8.8 % | 6.5 % | 9.0 % | | Interest Expense | 3.1 % | 2.1 % | 3.3 % | 2.1 % | | Other Expense | — | 40.4 % | — | 21.6 % | | Income (Loss) Before Income Taxes | 5.5 % | (33.7)% | 3.2 % | (14.6)% | | Provision for Income Taxes | 1.2 % | 27.0 % | 0.7 % | 14.9 % | | Net Income (Loss) | 4.3 % | (60.7)% | 2.5 % | (29.5)% | Net Sales - Net sales increased by 14.6% and 18.0% for the three and six months ended June 30, 2023, respectively, primarily driven by products acquired from In2Bones and Biorez, growth in existing product lines, and significant improvements in warehouse management system performance[184] Net Sales Growth by Product Line (Six Months) | Product Line | 2023 (USD in millions) | 2022 (USD in millions) | Reported Growth Rate | Foreign Currency Impact | Constant Currency Growth Rate | | :----------- | :--------------------- | :--------------------- | :------------------- | :---------------------- | :---------------------------- | | Orthopedic Surgery | 272.0 | 227.7 | 19.4 % | 3.3 % | 22.7 % | | General Surgery | 341.1 | 291.8 | 16.9 % | 2.0 % | 18.9 % | | Net Sales | 613.1 | 519.5 | 18.0 % | 2.6 % | 20.6 % | | Single-Use Products | 514.0 | 431.8 | 19.0 % | 2.6 % | 21.6 % | | Capital Products | 99.1 | 87.7 | 13.0 % | 2.6 % | 15.6 % | - Orthopedic surgery sales grew by 17.1% and 19.4% for the three and six months, respectively, while general surgery sales increased by 12.6% and 16.9%, respectively[211][230] Cost of Sales - Cost of sales increased to $147 million and $287.1 million for the three and six months ended June 30, 2023, respectively; gross margin decreased by 110 basis points to 53.7% and 220 basis points to 53.2%, respectively, primarily due to rising inflation in raw materials, freight, and other manufacturing costs, and increased inventory fair value amortization costs related to the In2Bones acquisition[185][231] Selling and Administrative Expense - Selling and administrative expenses increased to $129.7 million and $259.8 million for the three and six months ended June 30, 2023, respectively; the increase was primarily due to new warehouse management system implementation costs, distribution agreement termination costs, contingent consideration fair value adjustments, and severance-related expenses[213][251] - Selling and administrative expenses as a percentage of net sales decreased by 100 basis points to 40.8% for the three months and increased by 30 basis points to 42.4% for the six months[213] Research and Development Expense - Research and development expenses increased to $13.6 million and $26.1 million for the three and six months ended June 30, 2023, respectively; as a percentage of net sales, it increased by 20 basis points to 4.3% for the three months and remained unchanged at 4.3% for the six months, primarily influenced by the timing of R&D projects[233] Interest Expense - Interest expense increased to $10.0 million and $20.3 million for the three and six months ended June 30, 2023, respectively; the weighted-average borrowing rate increased from 2.37% to 3.09% for the three months and from 2.30% to 3.11% for the six months, primarily driven by the issuance of 2.250% notes in June 2022 and higher interest rates on the senior credit agreement[88] Other Expense - For the three and six months ended June 30, 2022, the company recorded $103.1 million in convertible premium expense for notes repurchased and cancelled, $5.5 million in hedge settlement expense, and $3.4 million in deferred financing cost write-offs[234] Provision for Income Taxes - Effective tax rates for the three and six months ended June 30, 2023, were 21.2% and 21.7%, respectively, compared to (80.0)% and (101.6)% for the same periods in 2022; the change in rates is primarily due to the comparison of income before taxes in 2023 versus losses before taxes in 2022, which included non-deductible convertible premium and hedge fair value changes[216] Liquidity and Capital Resources - The company's liquidity needs primarily stem from capital investments, working capital requirements, and debt service; management believes cash flows from operating activities, existing cash and cash equivalents, and available borrowing capacity under the senior credit agreement are sufficient to meet foreseeable operating working capital, debt service, capital expenditure, dividend payment, and common stock repurchase requirements[91][219] Operating Cash Flows - Net cash provided by operating activities for the six months ended June 30, 2023, was $22.8 million, compared to $19.1 million for the same period in 2022; key changes include decreased cash flow from accounts receivable, increased cash flow from inventories, decreased cash flow from other assets, increased cash flow from accounts payable, and decreased cash flow from other liabilities[252][218] Investing Cash Flows - Net cash used in investing activities decreased by $142.2 million for the six months ended June 30, 2023, primarily due to $142.6 million paid for the In2Bones acquisition in 2022[93] Financing Cash Flows - Net cash used in financing activities for the six months ended June 30, 2023, was $14.4 million, compared to $166.6 million for the same period in 2022; key changes include reduced net repayments on the revolving credit facility, $800 million proceeds from 2.250% notes in 2022, $275 million paid to repurchase 2.625% notes in 2022, $187.6 million paid for hedge transactions in 2022, and increased net cash proceeds from common stock issued under employee plans in 2023[219][94] Other Liquidity Matters - As of June 30, 2023, outstanding borrowings under the term loan were $134.6 million, revolving credit facility borrowings were $54.0 million, and available borrowing capacity was $529.4 million; the company's Board of Directors authorized a $200 million stock repurchase program, with $162.6 million repurchased as of June 30, 2023, leaving $37.4 million available for repurchase[240][241] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section discloses quantitative and qualitative information regarding the company's market risks; as of the end of the reporting period, there were no material changes in the company's primary market risk exposures or management approaches - For the six months ended June 30, 2023, there were no material changes in the company's primary market risk exposures or management approaches[242] Item 4. Controls and Procedures This section assesses the effectiveness of the company's disclosure controls and procedures and the status of internal control over financial reporting; management believes that as of the end of the reporting period, the company's disclosure controls and procedures were effective, and no material changes occurred in internal control over financial reporting - As of June 30, 2023, the company's Chief Executive Officer and Chief Financial Officer evaluated and concluded that disclosure controls and procedures were effective; no material changes occurred in internal control over financial reporting during the quarter[98] Item 5. Other Information This section provides other important information not detailed elsewhere in the report, including an executive's stock appreciation rights trading plan - On May 4, 2023, Heather Cohen, Executive Vice President, Chief Human Resources and Legal Officer, adopted a trading plan for 6,500 Stock Appreciation Rights (SARs) designed to satisfy the affirmative defense requirements of Rule 10b5-1(c), terminating on May 17, 2024[223] Item 6. Exhibits This section lists the exhibits filed with the report, including various certification documents and XBRL files - Exhibits include certifications by the Chief Executive Officer and Chief Financial Officer filed pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and XBRL taxonomy extension files (Schema, Label, Calculation, Presentation Linkbase Document, and Instance Document)[101][102][225][226][227][246] Signatures This section confirms the report has been signed by the registrant's authorized representative and specifies the signing date - This report was signed by Todd W. Garner, Executive Vice President and Chief Financial Officer of CONMED CORPORATION, on July 27, 2023[103][248]