CONMED Corporation Announces Second Quarter 2022 Financial Results

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	...