CONMED Corporation Announces Third Quarter 2022 Financial Results

LARGO, Fla., October 26, 2022--(BUSINESS WIRE)--CONMED Corporation (NYSE: CNMD) today announced financial results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

• Sales of $275.1 million increased 10.6% year over year as reported and 12.1% in constant currency. Acquisitions contributed approximately 420 basis points of growth.

• Domestic revenue increased 14.2% year over year.

• International revenue increased 6.2% year over year as reported and 9.6% in constant currency.

• Diluted net earnings per share (GAAP) were $1.48, compared to diluted net earnings per share (GAAP) of $0.47 in the third quarter of 2021.

• Adjusted diluted net earnings per share⁽¹⁾ were $0.77, a decrease of 3.8% compared to adjusted diluted net earnings per share of $0.80 in the third quarter of 2021.

• Closed Biorez transaction on August 9, 2022.

• Published ESG Sustainability Report subsequent to quarter end.

"I’m proud that our third quarter results delivered strong top-line growth in a tougher-than-expected environment," commented Curt R. Hartman, CONMED’s Chair of the Board, President, and Chief Executive Officer. "During the quarter we closed on our acquisition of Biorez, and I am pleased that both our In2Bones and Biorez integrations are off to fantastic starts. I am confident that both of these businesses will add to our future outlook of sustained growth in revenue and profitability."

2022 Outlook

The Company is narrowing its revenue guidance for the full year 2022 and now expects revenue between $1.1 billion and $1.115 billion compared to its prior guidance of between $1.095 billion and $1.140 billion. Based on recent exchange rates, the Company now expects foreign exchange to have a 150 to 180 bps negative impact on full-year 2022 revenue growth compared to its prior estimate of 100 to 150 bps negative impact.

The Company now expects full-year 2022 adjusted diluted net earnings per share in the range of $3.21 to $3.28, down from the prior range of $3.25 to $3.45.

Supplemental Financial Disclosures

⁽¹⁾ A reconciliation of reported diluted net earnings 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 third 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							Nine Months Ended
		September 30,							September 30,
			2022			2021				2022			2021
Net sales		$	275,088		$	248,827			$	794,605		$	736,665
Cost of sales			123,473			106,521				355,222			324,485
Gross profit			151,615			142,306				439,383			412,180
% of sales			55.1	%		57.2	%			55.3	%		56.0	%
Selling & administrative expense			114,600			104,736				333,302			307,476
Research & development expense			12,767			10,859				34,932			32,203
Income from operations			24,248			26,711				71,149			72,501
% of sales			8.8	%		10.7	%			9.0	%		9.8	%
Interest expense			8,536			8,145				19,462			27,917
Other expense			-			1,127				112,011			1,127
Income (loss) before income taxes			15,712			17,439				(60,324	)		43,457
Provision (benefit) for income taxes			(30,438	)		2,491				46,842			5,359
Net income (loss)		$	46,150		$	14,948			$	(107,166	)	$	38,098
Basic EPS		$	1.51		$	0.51			$	(3.59	)	$	1.31
Diluted EPS			1.48			0.47				(3.59	)		1.19
Basic shares			30,473			29,179				29,892			29,097
Diluted shares			31,103			32,143				29,892			32,020

Sales Summary
(in millions, unaudited)
	Three Months Ended September 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	$	118.6	$	105.7		12.2	%	1.8	%	14.0	%		20.4	%		7.6	%	2.8	%	10.4	%
General Surgery		156.5		143.1		9.4	%	1.3	%	10.7	%		11.8	%		4.0	%	4.5	%	8.5	%
	$	275.1	$	248.8		10.6	%	1.5	%	12.1	%		14.2	%		6.2	%	3.4	%	9.6	%
Single-use Products	$	231.3	$	200.9		15.1	%	1.6	%	16.7	%		18.8	%		10.2	%	3.8	%	14.0	%
Capital Products		43.8		47.9		-8.5	%	1.2	%	-7.3	%		-9.0	%		-8.0	%	2.3	%	-5.7	%
	$	275.1	$	248.8		10.6	%	1.5	%	12.1	%		14.2	%		6.2	%	3.4	%	9.6	%
Domestic	$	155.7	$	136.4		14.2	%	0.0	%	14.2	%
International		119.4		112.4		6.2	%	3.4	%	9.6	%
	$	275.1	$	248.8		10.6	%	1.5	%	12.1	%

	Nine Months Ended September 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	$	346.3	$	320.8		8.0	%	1.0	%	9.0	%		7.1	%		8.4	%	1.7	%	10.1	%
General Surgery		448.3		415.9		7.8	%	0.9	%	8.7	%		8.3	%		6.6	%	3.0	%	9.6	%
	$	794.6	$	736.7		7.9	%	0.9	%	8.8	%		8.0	%		7.7	%	2.2	%	9.9	%
Single-use Products	$	663.1	$	597.3		11.0	%	1.0	%	12.0	%		11.0	%		11.0	%	2.3	%	13.3	%
Capital Products		131.5		139.4		-5.6	%	0.9	%	-4.7	%		-7.8	%		-3.7	%	1.7	%	-2.0	%
	$	794.6	$	736.7		7.9	%	0.9	%	8.8	%		8.0	%		7.7	%	2.2	%	9.9	%
Domestic	$	436.1	$	404.0		8.0	%	0.0	%	8.0	%
International		358.5		332.7		7.7	%	2.2	%	9.9	%
	$	794.6	$	736.7		7.9	%	0.9	%	8.8	%

Reconciliation of Reported Net Income to Adjusted Net Income
(in thousands, except per share amounts, unaudited)
	Three Months Ended September 30, 2022
	Gross Profit			Selling & Administrative Expense			Operating Income			Interest Expense			Other Expense			Tax Expense/ (Benefit)			Effective Tax Rate		Net Income			Basic EPS		Adjustments(4)			Diluted EPS
As reported	$	151,615		$	114,600		$	24,248		$	8,536		$	-		$	(30,438	)	-193.7	%	$	46,150				$	-		$	46,150
% of sales		55.1	%		41.7	%		8.8	%
EPS																								$	1.51				$	1.48
Shares																									30,473		630			31,103
Acquisition costs(1)		2,096			(3,706	)		5,802			-			-			35,852					(30,050	)
	$	153,711		$	110,894		$	30,050		$	8,536		$	-		$	5,414				$	16,100
Adjusted gross profit %		55.9	%
Amortization(2)	$	1,500			(7,193	)		8,693			(1,488	)		-			2,484					7,697
As adjusted				$	103,701		$	38,743		$	7,048		$	-		$	7,898		24.9	%	$	23,797				$	-		$	23,797
% of sales					37.7	%		14.1	%
Adjusted Diluted EPS																													$	0.77
Shares																									30,473		630			31,103
Convertible notes hedges(3)																														(45	)
Adjusted Diluted Shares																														31,058
	Three Months Ended September 30, 2021
	Gross Profit			Selling & Administrative Expense			Operating Income			Interest Expense			Other Expense			Tax Expense			Effective Tax Rate		Net Income			Basic EPS		Adjustments			Diluted EPS
As reported	$	142,306		$	104,736		$	26,711		$	8,145		$	1,127		$	2,491		14.3	%	$	14,948				$	-		$	14,948
% of sales		57.2	%		42.1	%		10.7	%
EPS																								$	0.51				$	0.47
Shares																									29,179		2,964			32,143
Loss on early extinguishment of debt(5)		-			-			-