CONMED (US:CNMD)2025-11-05 22:30Financial 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]