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CONMED Corporation Announces Second Quarter 2022 Financial Results

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LARGO, Fla., July 27, 2022--(BUSINESS WIRE)--CONMED Corporation (NYSE: CNMD) today announced financial results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights

  • Sales of $277.2 million increased 8.6% year over year as reported and 9.8% in constant currency. Acquisitions contributed approximately 80 basis points of growth.

  • Domestic revenue increased 3.9% year over year.

  • International revenue increased 14.7% year over year as reported and 17.2% in constant currency.

  • Diluted net loss per share (GAAP) was $5.65 compared to diluted net earnings per share (GAAP) of $0.41 in the second quarter of 2021.

  • Adjusted diluted net earnings per share(1) were $0.76, an increase of 7.0% over the second quarter of 2021.

  • Closed In2Bones transaction on June 13, 2022.

"I’m proud that our team drove strong revenue growth in the second quarter while also refinancing our debt and closing the acquisition of In2Bones," commented Curt R. Hartman, CONMED’s Chair of the Board, President, and Chief Executive Officer. "We continue navigating the challenges of hospital staffing and inflation while remaining committed to enhancing the company’s long-term growth and profitability profiles."

2022 Outlook

Due to changes in foreign exchange rates, the Company is lowering its revenue guidance for the full year 2022 and now expects revenue between $1.095 billion and $1.140 billion compared to its prior guidance of between $1.105 billion and $1.150 billion. Based on recent exchange rates, the Company now expects foreign exchange to have a 100 to 150 bps negative impact on full-year 2022 revenue growth.

The Company now expects full-year 2022 adjusted diluted net earnings per share in the range of $3.40 to $3.55, down from the prior range of $3.50 to $3.65 to account for a $0.10 currency headwind.

Supplemental Financial Disclosures

(1) A reconciliation of reported diluted net loss per share to adjusted diluted net earnings per share, a non-GAAP financial measure, appears below.

Conference Call

The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its second quarter 2022 results.

To participate in the conference call via telephone, please click here to pre-register and obtain the dial-in number and passcode.

This conference call will also be webcast and can be accessed from the "Investors" section of CONMED's website at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

Consolidated Condensed Statements of Income (Loss)

(in thousands except per share amounts, unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2022

2021

2022

2021

Net sales

$

277,190

$

255,161

$

519,516

$

487,837

Cost of sales

125,413

113,737

231,748

217,964

Gross profit

151,777

141,424

287,768

269,873

% of sales

54.8

%

55.4

%

55.4

%

55.3

%

Selling & administrative expense

115,826

104,399

218,701

202,739

Research & development expense

11,493

11,318

22,165

21,344

Income from operations

24,458

25,707

46,902

45,790

% of sales

8.8

%

10.1

%

9.0

%

9.4

%

Interest expense

5,928

9,420

10,926

19,772

Other expense

112,011

-

112,011

-

Income (loss) before income taxes

(93,481

)

16,287

(76,035

)

26,018

Provision for income taxes

74,810

2,997

77,281

2,868

Net income (loss)

$

(168,291

)

$

13,290

$

(153,316

)

$

23,150

Basic EPS

$

(5.65

)

$

0.46

$

(5.18

)

$

0.80

Diluted EPS

(5.65

)

0.41

(5.18

)

0.72

Basic shares

29,775

29,125

29,601

29,052

Diluted shares

29,775

32,464

29,601

31,964

Sales Summary

(in millions, unaudited)

Three Months Ended June 30,

% Change

Domestic

International

2022

2021

As

Reported

Impact of

Foreign

Currency

Constant

Currency

As

Reported

As

Reported

Impact of

Foreign

Currency

Constant

Currency

Orthopedic Surgery

$

120.2

$

107.9

11.4

%

1.3

%

12.7

%

-0.8

%

18.8

%

1.9

%

20.7

%

General Surgery

157.0

147.3

6.6

%

1.1

%

7.7

%

5.7

%

8.6

%

3.4

%

12.0

%

$

277.2

$

255.2

8.6

%

1.2

%

9.8

%

3.9

%

14.7

%

2.5

%

17.2

%

Single-use Products

$

230.3

$

208.9

10.2

%

1.1

%

11.3

%

7.8

%

13.5

%

2.5

%

16.0

%

Capital Products

46.9

46.3

1.4

%

1.3

%

2.7

%

-16.0

%

19.6

%

2.5

%

22.1

%

$

277.2

$

255.2

8.6

%

1.2

%

9.8

%

3.9

%

14.7

%

2.5

%

17.2

%

Domestic

$

149.2

$

143.6

3.9

%

0.0

%

3.9

%

International

128.0

111.6

14.7

%

2.5

%

17.2

%

$

277.2

$

255.2

8.6

%

1.2

%

9.8

%

Six Months Ended June 30,

% Change

Domestic

International

2022

2021

As

Reported

Impact of

Foreign

Currency

Constant

Currency

As

Reported

As

Reported

Impact of

Foreign

Currency

Constant

Currency

Orthopedic Surgery

$

227.7

$

215.0

5.9

%

0.7

%

6.6

%

0.6

%

8.9

%

1.0

%

9.9

%

General Surgery

291.8

272.8

7.0

%

0.7

%

7.7

%

6.5

%

8.0

%

2.2

%

10.2

%

$

519.5

$

487.8

6.5

%

0.7

%

7.2

%

4.8

%

8.5

%

1.5

%

10.0

%

Single-use Products

$

431.8

$

396.3

8.9

%

0.7

%

9.6

%

7.1

%

11.4

%

1.5

%

12.9

%

Capital Products

87.7

91.5

-4.1

%

0.7

%

-3.4

%

-7.2

%

-1.5

%

1.3

%

-0.2

%

$

519.5

$

487.8

6.5

%

0.7

%

7.2

%

4.8

%

8.5

%

1.5

%

10.0

%

Domestic

$

280.4

$

267.5

4.8

%

0.0

%

4.8

%

International

239.1

220.3

8.5

%

1.5

%

10.0

%

$

519.5

$

487.8

6.5

%

0.7

%

7.2

%

Reconciliation of Reported Net Income (Loss) to Adjusted Net Income

(in thousands, except per share amounts, unaudited)

Three Months Ended June 30, 2022

Gross

Profit

Selling &

Administrative

Expense

Operating

Income

Interest

Expense

Other

Expense

Tax

Expense

Effective

Tax Rate

Net Income

(Loss)

Basic

EPS

Adjustments(8)

Diluted

EPS

As reported

$151,777

$115,826

$24,458

$5,928

$112,011

$74,810

-80.0%

$(168,291)

$-

$(168,291)

% of sales

54.8%

41.8%

8.8%

EPS

$(5.65)

$(5.65)

Shares

29,775

-

29,775

Acquisition costs(1)

349

(2,600)

2,949

-

-

(1,760)

4,709

Legal matters(2)

-

(775)

775

-

-

(462)

1,237

Convertible notes premium on extinguishment(3)

-

-

-

-

(103,125)

(61,521)

164,646

Change in fair value of convertible notes hedges upon settlement(4)

-

-

-

-

(5,460)

(3,257)

8,717

Loss on early extinguishment of debt(5)

-

-

-

-

(3,426)

(2,044)

5,470

$152,126

$112,451

$28,182

$5,928

$-

$5,766

$16,488

Adjusted gross profit %

54.9%

Amortization(6)

$1,500

(6,808)

8,308

(1,036)

-

2,291

7,053

As adjusted

$105,643

$36,490

$4,892

$-

$8,057

25.5%

$23,541

$1,263

$24,804

% of sales

38.1%

13.2%

Adjusted Diluted EPS

$0.76

Shares

29,775

3,820

33,595

Convertible notes hedges(7)

(856)

Adjusted Diluted Shares

32,739

Three Months Ended June 30, 2021

Gross

Profit

Selling &

Administrative

Expense

Operating

Income

Interest

Expense

Other

Expense

Tax

Expense

Effective

Tax Rate

Net

Income

Basic

EPS

Adjustments(8)

Diluted

EPS

As reported

$141,424

$104,399

$25,707

$9,420

$-

$2,997

18.4%

$13,290

$-

$13,290

% of sales

55.4%

40.9%

10.1%

EPS

$0.46

...