CONMED (NYSE:CNMD) FY Conference January 12, 2026 06:00 PM ET Company ParticipantsPat Beyer - President of International and Global OrthopedicsTodd Garner - CFOConference Call ParticipantsRobbie Marcus - AnalystRobbie MarcusGreat. Thanks, everyone. Very happy to introduce our next session. I'm Robbie Marcus, the MedTech analyst at J.P. Morgan. We have Pat Beyer, CEO of CONMED. He's going to do a presentation followed by some Q&A. Pat?Pat BeyerThanks, Robbie, and thank you for joining me here today to give m ...

Key Takeaways CONMED sees growth in BioBrace, AirSeal and Buffalo Filter as adoption strengthens across key platforms.Robotics expansion and rising ASC penetration support multi-year growth and increased AirSeal usage.Tariffs and slower supply-chain recovery weigh on gross margin, with dV5 integration delaying AirSeal demand.CONMED Corporation (CNMD) is well-positioned for growth on the back of rising adoption of its high-margin, differentiated platforms like AirSeal, Buffalo Filter and BioBrace. The compan ...

A month has gone by since the last earnings report for Conmed (CNMD) . Shares have added about 0.1% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Conmed due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for CONMED Corporation before we dive into how investors and analysts have reacted as of late.CONMED Q3 Earnings and Revenues Beat ...

Core Insights - CONMED Corporation (CNMD) is positioned for growth due to the rising adoption of its high-margin platforms like AirSeal, Buffalo Filter, and BioBrace, alongside increasing robotic procedure volumes and the expansion of Ambulatory Surgery Centers (ASCs) [1][4][5] - The company faces challenges from tariff impacts on gross margins and the launch of Intuitive Surgical's da Vinci 5, which delays AirSeal demand [2][11][13] - CONMED has a market capitalization of $1.38 billion and projects a 6.3% earnings growth for 2026, with a history of surpassing earnings estimates [3] Growth Drivers - The adoption of high-margin platforms is strong, with BioBrace expanding to over 70 procedures, AirSeal gaining traction for its clinical benefits, and Buffalo Filter benefiting from smoke-evacuation mandates [4][7] - The expansion of robotic surgery and ASC penetration is expected to provide structural long-term growth opportunities [5][8] - Supply chain improvements are unlocking lost revenue and margin, with significant progress reported in orthopedic supply chain recovery [9] Strategic Focus - A comprehensive portfolio review is ongoing, focusing on high-return segments such as minimally invasive surgery, robotic platforms, and orthopedic soft-tissue repair [10] - Management aims to concentrate resources on these areas to improve margins and enhance shareholder value [10] Challenges - Tariffs are compressing gross margins, with an expected impact of 150 basis points in the fourth quarter [11] - The supply chain recovery is taking longer than anticipated, which may delay revenue recovery and affect market share [12] - The integration of the dV5 system limits the immediate opportunity for AirSeal adoption [13] Financial Outlook - There is a rising estimate revision trend for 2025, with the Zacks Consensus Estimate for earnings moving up to $4.49 per share [14]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors identify stocks with the potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each targeting different investment strategies [3][4][5][6] - Value Score focuses on identifying undervalued stocks using financial ratios [3] - Growth Score emphasizes a company's financial health and future growth potential [4] - Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points [5] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [6] Zacks Rank and Its Importance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions [7] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +23.93% since 1988 [7] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9] Company Spotlight: Conmed Corporation - Conmed Corporation is a global medical technology company specializing in surgical devices for orthopedics and general surgery [11] - The company operates in two segments: Orthopedics and General Surgery, offering innovative products like BioBrace and advanced energy devices [11] - Conmed holds a Zacks Rank of 2 (Buy) and a VGM Score of A, indicating strong growth potential [12] - The company is projected to achieve year-over-year earnings growth of 7.7% for the current fiscal year, with recent earnings estimates revised upward [12][13]

Core Insights - CONMED Corporation (CNMD) reported adjusted earnings per share (EPS) of $1.08 for Q3 2025, reflecting a 2.9% year-over-year increase and surpassing the Zacks Consensus Estimate by 2.9% [1] - The company’s revenues reached $337.9 million in Q3 2025, marking a 6.7% year-over-year growth and exceeding the Zacks Consensus Estimate by 0.4% [2][7] - Gross profit decreased by 7.2% year-over-year to $166.1 million, with gross margin contracting by 736 basis points to 49.2% [6][7] Revenue Breakdown - Revenues from Orthopedic Surgery totaled $138.2 million, up 5.9% year-over-year, driven by strong clinical adoption of BioBrace [3] - General Surgery revenues were $199.7 million, reflecting a 7.3% year-over-year increase [4] - Domestic revenues amounted to $194 million, up 5.9% year-over-year, while international revenues reached $143.9 million, up 7.8% [5] Margin Analysis - Operating margin fell significantly by 1723 basis points to 3.5%, with total operating profit dropping 81.9% year-over-year to $11.9 million [8][7] - Selling and administrative expenses surged by 40.7% year-over-year to $140.3 million, while research and development expenses increased by 2.5% to $13.9 million [8] Financial Position - At the end of Q3 2025, CONMED had a cash balance of $38.9 million, up from $33.9 million at the end of Q2 2025, and long-term debt decreased to $853 million from $881.1 million [9] Guidance - For 2025, CONMED narrowed its revenue outlook to a range of $1.365 billion to $1.372 billion, with adjusted EPS projected between $4.48 and $4.53 [10] Market Outlook - Management expressed optimism regarding the performance of its Orthopedics and General Surgery portfolios, particularly products like BioBrace and Buffalo Filter [12] - Despite the positive revenue growth, the contraction in margins raises concerns about future performance [12]

Financial Data and Key Metrics Changes - Total sales for Q3 2025 were approximately $338 million, representing a 6.7% year-over-year growth as reported and 6.3% growth in constant currency [4][12] - Adjusted net income for the quarter was $33.4 million, up 2.2% year over year, while adjusted diluted earnings per share increased by 2.9% to $1.08 [5][15] - Adjusted gross margin for Q3 was 56.1%, slightly ahead of projections, despite a 40 basis point decline compared to Q3 2024 [13] Business Line Data and Key Metrics Changes - General Surgery sales grew 6.9% globally on a constant currency basis, while Orthopedics delivered 5.3% constant currency growth globally [5] - U.S. orthopedic sales increased by 5.5%, and international orthopedic sales grew by 5.2% [12] - Total worldwide general surgery sales increased by 6.9%, with U.S. general surgery sales growing by 6.0% and international sales increasing by 9.2% [12] Market Data and Key Metrics Changes - U.S. sales increased by 5.9% year over year, while international sales grew by 6.8% [12] - The company noted a significant opportunity in the Foot & Ankle franchise, focusing on driving growth through expanded adoption and innovation [6] Company Strategy and Development Direction - The company is undergoing a comprehensive strategic review to sharpen focus, improve margin profiles, and position for long-term growth [9] - The review has identified strong growth opportunities in minimally invasive robotic and laparoscopic surgery, smoke evacuation, and orthopedic soft tissue repair [9] - A new $150 million share repurchase program has been authorized, transitioning from a legacy dividend policy to enhance financial flexibility [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering top-line growth and margin expansion supported by a focused portfolio and operational discipline [10] - The company is optimistic about its ability to meet demand and improve supply chain issues, with record manufacturing volumes achieved in Q3 [32] Other Important Information - The company expects Q4 revenue to be between $363 million and $370 million, indicating mid-single-digit constant currency growth [17] - Adjusted EPS guidance for Q4 is projected to be between $1.30 and $1.35, with full-year guidance at $4.48-$4.53 [17] Q&A Session Summary Question: What drove the shift in capital allocation strategy and should we expect any other changes? - Management indicated that no other changes are expected and that the shift was made to align with peers and return cash to shareholders through share repurchases instead of dividends [20][21] Question: Can you talk about supply and demand for 2026? - Management refrained from providing guidance for 2026 at this time, indicating that they will address it in the future [22][23] Question: Was there any incremental tariff headwind? - Management clarified that the tariff impact has been consistent with previous forecasts and explained how tariffs affect manufacturing variances [24][25] Question: How is AirSeal performing in the market? - Management noted that AirSeal is seeing early adoption, but hospitals must meet commitment volumes before fully utilizing it [26][30] Question: What initiatives strengthened the supply chain in Q3? - Management highlighted improvements in procurement, planning, and production areas, leading to record manufacturing volumes [32] Question: What are the latest thoughts on share loss and recapture? - Management expressed that while they are not declaring victory, they are optimistic about regaining market share as supply chain issues resolve [41]

Core Insights - CONMED Corporation (CNMD) reported second-quarter 2025 adjusted earnings per share (EPS) of $1.15, exceeding the Zacks Consensus Estimate of $1.13 by 1.8%, and reflecting a 17.3% year-over-year improvement [1] - The company also raised its 2025 EPS guidance to a range of $4.40-$4.55, up from the previous range of $4.31-$4.46, indicating strong operational performance [11] Revenue Performance - CONMED's total revenues for the quarter reached $342.3 million, marking a 3.1% increase year-over-year and surpassing the Zacks Consensus Estimate by 0.8% [2] - Revenue growth was primarily driven by high-growth product areas such as BioBrace, AirSeal, and Foot & Ankle, despite some supply constraints and international market softness [2][13] Segment Analysis - The Orthopedic Surgery segment generated revenues of $140.7 million, a 0.9% increase year-over-year, with a slight decline of 0.8% in the U.S. but a 1.9% increase in international markets [3] - The General Surgery segment reported revenues of $201.6 million, up 4.7% year-over-year, with U.S. sales increasing by 4.3% and international sales rising by 5.7% [4] Geographic Sales Breakdown - U.S. sales totaled $190.6 million, reflecting a 2.8% year-over-year increase, while international sales amounted to $151.7 million, up 3.4% year-over-year [5] Profitability Metrics - Adjusted gross profit improved by 5.3% year-over-year to $193.4 million, with a gross margin increase of 120 basis points to 56.5% [6] - Adjusted operating income rose to $45.1 million from $39.8 million in the prior-year quarter, resulting in an operating margin of 15.7%, up 110 basis points [6] Financial Position - At the end of the second quarter, CONMED had a cash balance of $33.9 million, down from $35.5 million in the previous quarter [7] Future Guidance - The company raised its revenue guidance for 2025 to a range of $1.356 billion to $1.378 billion, with the Zacks Consensus Estimate at $1.37 billion [10] - For the third quarter of 2025, CONMED expects reported sales between $330 million and $337 million, with adjusted EPS estimated between $1.03 and $1.08 [11] Strategic Outlook - CONMED maintains a positive long-term growth outlook, targeting mid- to high-single-digit revenue increases through strategic drivers such as AirSeal, Buffalo Filter, BioBrace, and Foot & Ankle [14] - The company is focused on transforming its supply chain into a strategic asset to enhance procurement, planning, and production efficiency [14]

Financial Data and Key Metrics Changes - Total sales for Q2 2025 were $342 million, slightly above the high end of guidance, with year-over-year growth of 3.1% as reported and 2.9% in constant currency [6][19] - Adjusted net income for Q2 was $35.6 million, an increase of 16.4% year-over-year, and adjusted diluted net earnings per share were $1.15, up 17.3% year-over-year [7][22] - Adjusted gross margin for Q2 was 56.5%, which is 120 basis points higher than the prior year [20] Business Line Data and Key Metrics Changes - Worldwide general surgery sales grew by 4.4%, while worldwide orthopedic sales increased by 0.8% year-over-year [6][19] - AirSeal remains the largest contributor to general surgery growth, with a recurring revenue profile of 92% [8] - Buffalo Filter experienced double-digit growth, supported by legislative adoption and new product introductions [10] Market Data and Key Metrics Changes - U.S. general surgery sales grew by 4.3%, while international general surgery sales increased by 4.7% [19] - U.S. orthopedic sales decreased by 0.8%, while international orthopedic sales grew by 1.8% [19] - The global smoke evacuation market is estimated to be approximately $300 million today, with potential growth to $2 billion in the coming years [11] Company Strategy and Development Direction - The company is focused on building a stronger operational foundation to support long-term growth and deliver value [14] - Key priorities include stabilizing and scaling operations, driving efficiencies, and building a high-performance supply chain [15][16] - The company aims to maintain a strong balance sheet and reduce debt, expecting the leverage ratio to fall below 3.0 by the end of 2025 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in business fundamentals and long-term strategy, actively optimizing the portfolio towards higher margin opportunities [17] - The company anticipates gradual improvement in growth rates in the second half of the year, with expectations of lower capital headwinds [43] - Management noted that supply chain challenges are being addressed, with expectations of a significantly improved position by the end of the year [33] Other Important Information - The company is committed to maintaining a strong balance sheet and reducing debt, with a focus on higher margin, high growth opportunities [17][16] - Capital expenditures in Q2 were $5.7 million, compared to $3.6 million a year ago [23] Q&A Session Summary Question: Has there been increased competition in the Buffalo Filter market? - Management noted that there have not been new players entering the market, and competition remains the same despite legislative tailwinds [30] Question: What is the current status of supply chain constraints and Salesforce expansion? - Management indicated progress in resolving supply chain issues and mentioned that sales professionals are typically added dynamically throughout the year [32][34] Question: How is the capital market performing, and what trends are being observed? - Management stated that capital demand from hospitals remains strong, but supply chain challenges have impacted capital flow [38] Question: How does the company view its share position in orthopedics amid supply constraints? - Management acknowledged a loss of market share but emphasized ongoing innovation and the strength of the Biobrace platform [40][41] Question: Can you clarify the guidance for the next two quarters? - Management expects gradual improvement in growth rates and has raised the bottom end of the revenue guidance while keeping the top end the same [43][44] Question: What factors contributed to the increase in EPS guidance? - The increase in EPS guidance was attributed to improvements in margins, currency effects, and operational performance [45]

Financial Performance - Q2 2025 - Worldwide revenue reached $342.3 million, representing a 2.9% increase in constant currency compared to the prior year period[22] - Orthopedic surgery revenue was $140.7 million, with a constant currency growth of 0.8%[22] - General surgery revenue amounted to $201.6 million, showing a constant currency growth of 4.4%[22] - GAAP EPS was $0.69, a decrease of 28.1% year-over-year, while adjusted EPS was $1.15, an increase of 17.3%[22] - Single-use products accounted for $297.8 million in revenue, while capital products generated $44.5 million[24] - Single-use products represent 87% of the total revenue[24] Financial Performance - June 2025 YTD - Worldwide revenue totaled $663.6 million, a 3.3% increase in constant currency[28] - Orthopedic surgery revenue was $279.0 million, with a constant currency growth of 2.3%[28] - General surgery revenue reached $384.6 million, showing a constant currency growth of 4.1%[28] - GAAP EPS was $0.88, a decrease of 44.7% year-over-year, while adjusted EPS was $2.09, an increase of 17.4%[28] - Single-use products accounted for $574.1 million in revenue, while capital products generated $89.5 million[30] - Single-use products represent 87% of the total revenue[30] Updated Financial Guidance for 2025 - The company updated its revenue guidance to a range of $1.356 billion to $1.378 billion, with immaterial currency impact[32] - Adjusted diluted EPS is expected to be between $4.59 and $4.74, with an estimated foreign currency impact of $(0.10)[32] - The estimated tariff impact is $(0.09), resulting in a total adjusted diluted EPS of $4.40 to $4.55[32]