CONMED Corporation Announces Second Quarter 2024 Financial Results
CONMED (NYSE: CNMD) reported its Q2 2024 financial results, showing sales of $332.1 million, a 4.5% year-over-year increase (5.2% in constant currency). Domestic revenue rose 6.1%, while international revenue grew 2.6% (4.0% in constant currency). The company's diluted net earnings per share (GAAP) reached $0.96, up from $0.43 in Q2 2023. Adjusted diluted net earnings per share increased by 18.1% to $0.98.
However, CONMED revised its 2024 outlook due to ongoing supply chain challenges. The company now expects full-year revenue between $1.305 billion and $1.315 billion, down from the previous range of $1.330-$1.355 billion. The adjusted diluted net earnings per share forecast was lowered to $3.95-$4.02, from the prior range of $4.25-$4.35.
CONMED (NYSE: CNMD) ha riportato i risultati finanziari del Q2 2024, mostrando vendite di 332,1 milioni di dollari, con un aumento del 4,5% rispetto all'anno precedente (5,2% a valuta costante). Il fatturato domestico è aumentato del 6,1%, mentre il fatturato internazionale è cresciuto del 2,6% (4,0% a valuta costante). Gli utili netti per azione diluiti (GAAP) dell'azienda hanno raggiunto $0,96, rispetto a $0,43 del Q2 2023. Gli utili netti per azione diluiti aggiustati sono aumentati del 18,1%, arrivando a $0,98.
Tuttavia, CONMED ha rivisto le sue previsioni per il 2024 a causa delle sfide nella catena di fornitura. L'azienda ora prevede un fatturato per l'intero anno compreso tra 1,305 miliardi e 1,315 miliardi di dollari, in diminuzione rispetto all'intervallo precedente di 1,330-1,355 miliardi di dollari. La previsione degli utili per azione diluiti aggiustati è stata ridotta a $3,95-$4,02, rispetto all'intervallo precedente di $4,25-$4,35.
CONMED (NYSE: CNMD) informó sus resultados financieros del Q2 2024, mostrando ventas de 332,1 millones de dólares, un aumento del 4,5% interanual (5,2% en moneda constante). Los ingresos domésticos aumentaron un 6,1%, mientras que los ingresos internacionales crecieron un 2,6% (4,0% en moneda constante). Las ganancias netas por acción diluidas (GAAP) de la compañía alcanzaron $0,96, frente a $0,43 en el Q2 2023. Las ganancias netas por acción diluidas ajustadas aumentaron un 18,1% a $0,98.
No obstante, CONMED revisó su perspectiva para 2024 debido a los continuos desafíos en la cadena de suministro. La compañía ahora espera ingresos para el año completo entre 1,305 y 1,315 mil millones de dólares, una disminución respecto al rango anterior de 1,330-1,355 mil millones. La previsión de ganancias por acción diluidas ajustadas se redujo a $3,95-$4,02, desde el rango anterior de $4,25-$4,35.
CONMED (NYSE: CNMD)는 2024년 2분기 재무 결과를 보고하며 판매액이 3억 3,212만 달러로 전년 대비 4.5% 증가했다고 발표했습니다 (환율 변동을 고려할 경우 5.2% 증가). 국내 매출은 6.1% 증가했으며, 해외 매출은 2.6% 증가했습니다 (환율 변동을 고려할 경우 4.0% 증가). 회사의 희석 조정 후 주당 순이익(GAAP)은 $0.96에 도달하며, 2023년 2분기의 $0.43에서 증가했습니다. 조정된 희석 주당 순이익은 18.1% 증가하여 $0.98에 도달했습니다.
그러나 CONMED는 지속적인 공급망 문제로 인해 2024년 전망을 수정했습니다. 회사는 이제 연간 매출이 13억 5천만 달러에서 13억 5천 5백만 달러가 될 것으로 예상하며, 이전의 13억 3천만 달러에서 13억 5천 5백만 달러의 범위에서 감소했습니다. 조정된 희석 주당 순이익 전망은 $3.95-$4.02로 낮춰졌으며, 이전의 $4.25-$4.35 범위에서 감소했습니다.
CONMED (NYSE: CNMD) a annoncé ses résultats financiers du 2ème trimestre 2024, affichant des ventes de 332,1 millions de dollars, soit une augmentation de 4,5% par rapport à l'année précédente (5,2% à taux de change constant). Les revenus nationaux ont augmenté de 6,1%, tandis que les revenus internationaux ont crû de 2,6% (4,0% à taux de change constant). Le bénéfice net par action diluée (GAAP) de l'entreprise a atteint 0,96 $, contre 0,43 $ au 2ème trimestre 2023. Le bénéfice net par action diluée ajusté a augmenté de 18,1 %, atteignant 0,98 $.
Cependant, CONMED a révisé ses prévisions pour 2024 en raison des défis persistants de la chaîne d'approvisionnement. L'entreprise s'attend désormais à des revenus annuels compris entre 1,305 milliard et 1,315 milliard de dollars, en baisse par rapport à la fourchette précédente de 1,330 à 1,355 milliard de dollars. La prévision des bénéfices dilués ajustés par action a été abaissée à 3,95 $ - 4,02 $, contre la fourchette précédente de 4,25 $ - 4,35 $.
CONMED (NYSE: CNMD) hat seine Finanzzahlen für das 2. Quartal 2024 veröffentlicht und zeigt Umsätze von 332,1 Millionen Dollar, was einem Anstieg von 4,5% gegenüber dem Vorjahr entspricht (5,2% bei konstanten Währungsbedingungen). Der Umsatz im Inland stieg um 6,1%, während der internationale Umsatz um 2,6% wuchs (4,0% bei konstanten Währungsbedingungen). Der verwässerte Nettogewinn pro Aktie (GAAP) des Unternehmens betrug $0,96, ein Anstieg von $0,43 im 2. Quartal 2023. Der bereinigte verwässerte Nettogewinn pro Aktie stieg um 18,1% auf $0,98.
Allerdings hat CONMED seine Prognose für 2024 aufgrund anhaltender Herausforderungen in der Lieferkette revidiert. Das Unternehmen erwartet nun Jahresumsätze zwischen 1,305 Milliarden und 1,315 Milliarden Dollar, was einem Rückgang gegenüber dem vorherigen Bereich von 1,330-1,355 Milliarden Dollar entspricht. Die Prognose für den bereinigten verwässerten Nettogewinn pro Aktie wurde auf $3,95-$4,02 gesenkt, gegenüber dem vorherigen Bereich von $4,25-$4,35.
- Sales increased 4.5% year-over-year to $332.1 million
- Domestic revenue grew 6.1% compared to the previous year
- Diluted net earnings per share (GAAP) more than doubled from $0.43 to $0.96
- Adjusted diluted net earnings per share rose 18.1% year-over-year
- Supply chain challenges continue to impact the company's performance
- Full-year revenue guidance lowered by approximately $25-$40 million
- Adjusted diluted net earnings per share forecast reduced by about $0.30-$0.33
- Commercial reacceleration delayed due to ongoing supply chain issues
Insights
CONMED's Q2 2024 results present a mixed picture, with some positive growth but also signs of ongoing challenges. The company reported sales of
The domestic market showed stronger performance with a
A significant bright spot is the improvement in profitability. Diluted earnings per share (GAAP) more than doubled from
However, the company's forward guidance is concerning. The revised full-year revenue forecast of
Investors should closely monitor CONMED's progress in resolving these supply chain issues, as they appear to be the primary obstacle to the company's growth trajectory. While the Q2 results show resilience, the lowered guidance indicates that CONMED may face headwinds in maintaining its growth momentum in the near term.
CONMED's Q2 2024 results highlight the ongoing impact of supply chain challenges on the medical device industry. Despite posting growth, the company's performance and outlook are clearly hampered by these issues.
The statement that they "have not yet fully recovered from our supply chain challenges" is particularly telling. This suggests that CONMED is still grappling with issues such as component shortages, logistics disruptions, or supplier constraints. These challenges are likely affecting the company's ability to meet demand efficiently, potentially leading to lost sales opportunities or increased costs.
The delay in "commercial reacceleration" mentioned by CEO Curt Hartman indicates that supply chain problems are not just operational issues, but are directly impacting CONMED's growth strategy. This could mean delays in new product launches, difficulties in scaling production for existing products, or inability to capitalize on market opportunities due to supply constraints.
The lowered guidance for both revenue and earnings suggests that CONMED expects these supply chain challenges to persist through the remainder of 2024. This is a clear signal that resolving these issues is proving more complex and time-consuming than initially anticipated.
For investors, this situation underscores the importance of supply chain resilience in the medical device sector. Companies that can effectively navigate these challenges and build more robust, flexible supply chains may gain a significant competitive advantage. CONMED's focus on "getting back on offense" will likely involve substantial efforts to diversify suppliers, improve inventory management and potentially re-evaluate its global supply chain strategy.
Moving forward, key metrics to watch will be gross margins (as an indicator of supply chain efficiency) and inventory levels (which may provide insights into the company's ability to meet demand). Additionally, any announcements regarding strategic partnerships or investments in supply chain technology could signal CONMED's approach to addressing these persistent challenges.
Second Quarter 2024 Highlights
-
Sales of
$332.1 million 4.5% year-over-year as reported and5.2% in constant currency. -
Domestic revenue increased
6.1% year-over-year. -
International revenue increased
2.6% year-over-year as reported and4.0% in constant currency. -
Diluted net earnings per share (GAAP) were
$0.96 $0.43 -
Adjusted diluted net earnings per share(1) were
$0.98 18.1% compared to the second quarter of 2023.
“Our second quarter and first half of 2024 played out largely as expected. Looking forward, we have not yet fully recovered from our supply chain challenges, which has delayed the commercial reacceleration that we had contemplated in our plan at the beginning of the year,” commented Curt R. Hartman, CONMED’s Chair of the Board, President, and Chief Executive Officer. “We remain highly focused on getting back on offense to serve our customers and driving above-market, long-term growth.”
2024 Outlook
Full year reported revenue is now expected to be between
The Company now expects full-year adjusted diluted net earnings per share(2) in the range of
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.
(2) Information reconciling forward-looking adjusted diluted net earnings per share to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below.
Conference Call
The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its second quarter 2024 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 |
|||||||||||
(in thousands except per share amounts, unaudited) |
|||||||||||
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
June 30, |
|
June 30, |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
|
|
|
|
|
|
||||
Net sales |
$ |
332,097 |
|
$ |
317,652 |
|
$ |
644,371 |
|
$ |
613,121 |
Cost of sales |
|
148,368 |
|
|
146,962 |
|
|
288,677 |
|
|
287,110 |
Gross profit |
|
183,729 |
|
|
170,690 |
|
|
355,694 |
|
|
326,011 |
% of sales |
|
|
|
|
|
|
|
|
|
|
|
Selling & administrative expense |
|
122,524 |
|
|
129,700 |
|
|
245,881 |
|
|
259,784 |
Research & development expense |
|
14,098 |
|
|
13,572 |
|
|
27,692 |
|
|
26,110 |
Income from operations |
|
47,107 |
|
|
27,418 |
|
|
82,121 |
|
|
40,117 |
% of sales |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
9,593 |
|
|
9,997 |
|
|
19,188 |
|
|
20,252 |
Income before income taxes |
|
37,514 |
|
|
17,421 |
|
|
62,933 |
|
|
19,865 |
Provision for income taxes |
|
7,538 |
|
|
3,689 |
|
|
13,248 |
|
|
4,314 |
Net income |
$ |
29,976 |
|
$ |
13,732 |
|
$ |
49,685 |
|
$ |
15,551 |
|
|
|
|
|
|
|
|
||||
Basic EPS |
$ |
0.97 |
|
$ |
0.45 |
|
$ |
1.61 |
|
$ |
0.51 |
Diluted EPS |
|
0.96 |
|
|
0.43 |
|
|
1.59 |
|
|
0.49 |
|
|
|
|
|
|
|
|
||||
Basic shares |
|
30,813 |
|
|
30,662 |
|
|
30,792 |
|
|
30,587 |
Diluted shares |
|
31,106 |
|
|
31,795 |
|
|
31,170 |
|
|
31,499 |
Sales Summary |
|||||||||||||||
(in millions, unaudited) |
|||||||||||||||
|
|||||||||||||||
Three Months Ended June 30, |
|||||||||||||||
% Change |
|||||||||||||||
Domestic |
International |
||||||||||||||
2024 |
2023 |
As Reported |
Impact of Foreign Currency |
Constant Currency |
As Reported |
As Reported |
Impact of Foreign Currency |
Constant Currency |
|||||||
Orthopedic Surgery |
$ |
139.5 |
$ |
140.8 |
- |
|
- |
- |
- |
|
|
||||
General Surgery |
|
192.6 |
|
176.9 |
|
|
|
|
|
|
|
||||
$ |
332.1 |
$ |
317.7 |
|
|
|
|
|
|
|
|||||
Single-use Products |
$ |
279.3 |
$ |
264.8 |
|
|
|
|
|
|
|
||||
Capital Products |
|
52.8 |
|
52.9 |
- |
|
|
- |
|
|
|
||||
$ |
332.1 |
$ |
317.7 |
|
|
|
|
|
|
|
|||||
Domestic |
$ |
185.4 |
$ |
174.7 |
|
|
|
||||||||
International |
|
146.7 |
|
143.0 |
|
|
|
||||||||
$ |
332.1 |
$ |
317.7 |
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Six Months Ended June 30, |
|||||||||||||||
% Change |
|||||||||||||||
Domestic |
International |
||||||||||||||
2024 |
2023 |
As Reported |
Impact of Foreign Currency |
Constant Currency |
As Reported |
As Reported |
Impact of Foreign Currency |
Constant Currency |
|||||||
Orthopedic Surgery |
$ |
274.5 |
$ |
272.0 |
|
|
|
|
- |
|
- |
||||
General Surgery |
|
369.9 |
|
341.1 |
|
|
|
|
|
|
|
||||
$ |
644.4 |
$ |
613.1 |
|
|
|
|
|
|
|
|||||
Single-use Products |
$ |
544.0 |
$ |
514.0 |
|
|
|
|
|
|
|
||||
Capital Products |
|
100.4 |
|
99.1 |
|
|
|
|
|
|
|
||||
$ |
644.4 |
$ |
613.1 |
|
|
|
|
|
|
|
|||||
Domestic |
$ |
361.8 |
$ |
339.3 |
|
|
|
||||||||
International |
|
282.6 |
|
273.8 |
|
|
|
||||||||
$ |
644.4 |
$ |
613.1 |
|
|
|
|||||||||
Reconciliation of Reported Net Income to Adjusted Net Income |
||||||||||||||||||||||
(in thousands, except per share amounts, unaudited) |
||||||||||||||||||||||
|
||||||||||||||||||||||
Three Months Ended June 30, 2024 |
||||||||||||||||||||||
Gross Profit |
Selling & Administrative Expense |
Operating Income |
Interest
|
Tax
|
Effective Tax Rate |
Net Income |
Diluted EPS |
|||||||||||||||
As reported |
$ |
183,729 |
$ |
122,524 |
$ |
47,107 |
$ |
9,593 |
$ |
7,538 |
|
$ |
29,976 |
$ |
0.96 |
|||||||
% of sales |
|
|
|
|
|
|
||||||||||||||||
Legal matters(1) |
|
- |
|
(1,343) |
|
1,343 |
|
- |
|
61 |
|
1,282 |
||||||||||
Contingent consideration fair value adjustments(2) |
|
- |
|
8,673 |
|
(8,673) |
|
- |
|
(391) |
|
|
(8,282) |
|||||||||
$ |
183,729 |
$ |
129,854 |
$ |
39,777 |
$ |
9,593 |
$ |
7,208 |
|
$ |
22,976 |
||||||||||
Adjusted gross profit % |
|
|
||||||||||||||||||||
Amortization(3) |
$ |
1,500 |
|
(7,157) |
|
8,657 |
|
(1,407) |
|
2,436 |
|
7,628 |
||||||||||
As adjusted |
$ |
122,697 |
$ |
48,434 |
$ |
8,186 |
$ |
9,644 |
|
$ |
30,604 |
$ |
0.98 |
|||||||||
% of sales |
|
|
|
|
|
|||||||||||||||||
Shares |
|
31,106 |
||||||||||||||||||||
Convertible note hedges(4) |
|
- |
||||||||||||||||||||
Adjusted diluted shares |
|
31,106 |
||||||||||||||||||||
Three Months Ended June 30, 2023 |
||||||||||||||||||||||
Gross Profit |
Selling & Administrative Expense |
Operating Income |
Interest
|
Tax
|
Effective Tax Rate |
Net Income |
Diluted EPS |
|||||||||||||||
As reported |
$ |
170,690 |
$ |
129,700 |
$ |
27,418 |
$ |
9,997 |
$ |
3,689 |
|
$ |
13,732 |
$ |
0.43 |
|||||||
% of sales |
|
|
|
|
|
|
||||||||||||||||
Acquisition and integration costs(5) |
|
2,173 |
|
(303) |
|
2,476 |
|
- |
|
492 |
|
1,984 |
||||||||||
Termination of distributor agreements(6) |
|
- |
|
(2,098) |
|
2,098 |
|
- |
|
417 |
|
1,681 |
||||||||||
Software implementation costs(7) |
|
- |
|
(1,797) |
|
1,797 |
|
- |
|
357 |
|
1,440 |
||||||||||
Contingent consideration fair value adjustments(2) |
|
- |
|
636 |
|
(636) |
|
- |
|
(126) |
|
|
(510) |
|||||||||
$ |
172,863 |
$ |
126,138 |
$ |
33,153 |
$ |
9,997 |
$ |
4,829 |
|
$ |
18,327 |
||||||||||
Adjusted gross profit % |
|
|
||||||||||||||||||||
Amortization(3) |
$ |
1,500 |
|
(7,270) |
|
8,770 |
|
(1,506) |
|
2,490 |
|
7,786 |
||||||||||
As adjusted |
$ |
118,868 |
$ |
41,923 |
$ |
8,491 |
$ |
7,319 |
|
$ |
26,113 |
$ |
0.83 |
|||||||||
% of sales |
|
|
|
|
|
|||||||||||||||||
Shares |
|
31,795 |
||||||||||||||||||||
Convertible note hedges(4) |
|
(214) |
||||||||||||||||||||
Adjusted diluted shares |
|
31,581 |
||||||||||||||||||||
| (1) In 2024, the Company incurred costs for third party services pertaining to potential issues with certain royalty payments to design surgeons. |
(2) In 2024 and 2023, the Company recorded income related to the fair value adjustments of contingent consideration. |
(3) Includes amortization of intangible assets and deferred financing fees. |
(4) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. |
(5) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc., and integration costs and professional fees associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. |
(6) In 2023, the Company incurred costs related to the termination of distributor agreements. |
(7) In 2023, the Company incurred additional freight, labor and travel costs as well as professional fees related to the implementation of a warehouse management software. |
Reconciliation of Reported Net Income to Adjusted Net Income |
|||||||||||||||||||||||
(in thousands, except per share amounts, unaudited) |
|||||||||||||||||||||||
|
|||||||||||||||||||||||
Six Months Ended June 30, 2024 |
|
||||||||||||||||||||||
Gross Profit |
Selling & Administrative Expense |
Operating Income |
Interest
|
Tax
|
Effective Tax Rate |
Net Income |
Diluted EPS |
|
|||||||||||||||
As reported |
$ |
355,694 |
$ |
245,881 |
$ |
82,121 |
$ |
19,188 |
$ |
13,248 |
|
$ |
49,685 |
$ |
1.59 |
|
|||||||
% of sales |
|
|
|
|
|
|
|
||||||||||||||||
Legal matters(1) |
|
- |
|
(2,680) |
|
2,680 |
|
- |
|
253 |
|
2,427 |
|
||||||||||
Restructuring and related costs(2) |
|
235 |
|
(1,539) |
|
1,774 |
|
- |
|
255 |
|
|
1,519 |
|
|
||||||||
Asset impairment costs (3) |
|
1,414 |
|
- |
|
1,414 |
|
- |
|
203 |
|
|
1,211 |
|
|
||||||||
Termination of distributor agreement(4) |
|
- |
|
970 |
|
(970) |
|
- |
|
(139) |
|
|
(831) |
|
|
||||||||
Contingent consideration fair value adjustments(5) |
|
- |
|
15,219 |
|
(15,219) |
|
- |
|
(1,331) |
|
(13,888) |
|
||||||||||
$ |
357,343 |
$ |
257,851 |
$ |
71,800 |
$ |
19,188 |
$ |
12,489 |
|
$ |
40,123 |
|
||||||||||
Adjusted gross profit % |
|
|
|
||||||||||||||||||||
Amortization(6) |
$ |
3,000 |
|
(14,309) |
|
17,309 |
|
(2,813) |
|
4,879 |
|
15,243 |
|
|
|||||||||
As adjusted |
$ |
243,542 |
$ |
89,109 |
$ |
16,375 |
$ |
17,368 |
|
$ |
55,366 |
$ |
1.78 |
|
|||||||||
% of sales |
|
|
|
|
|
||||||||||||||||||
|
|||||||||||||||||||||||
Shares |
|
31,170 |
|
||||||||||||||||||||
Convertible note hedges(7) |
|
- |
|
||||||||||||||||||||
Adjusted diluted shares |
|
31,170 |
|
||||||||||||||||||||
Six Months Ended June 30, 2023 |
|
||||||||||||||||||||||
Gross Profit |
Selling & Administrative Expense |
Operating Income |
Interest
|
Tax
|
Effective Tax Rate |
Net Income |
Diluted EPS |
|
|||||||||||||||
As reported |
$ |
326,011 |
$ |
259,784 |
$ |
40,117 |
$ |
20,252 |
$ |
4,314 |
|
$ |
15,551 |
$ |
0.49 |
|
|||||||
% of sales |
|
|
|
|
|
|
|
||||||||||||||||
Software implementation costs(8) |
|
- |
|
(6,056) |
|
6,056 |
|
- |
|
1,453 |
|
4,603 |
|
||||||||||
Acquisition and integration costs(9) |
|
4,269 |
|
(752) |
|
5,021 |
|
- |
|
1,147 |
|
|
3,874 |
|
|
||||||||
Contingent consideration fair value adjustments(5) |
|
- |
|
(3,799) |
|
3,799 |
|
- |
|
1,014 |
|
2,785 |
|
||||||||||
Restructuring and related costs(2) |
|
2,035 |
|
(1,578) |
|
3,613 |
|
- |
|
930 |
|
2,683 |
|
||||||||||
Termination of distributor agreements(4) |
|
- |
|
(2,098) |
|
2,098 |
|
- |
|
417 |
|
1,681 |
|
||||||||||
$ |
332,315 |
$ |
245,501 |
$ |
60,704 |
$ |
20,252 |
$ |
9,275 |
|
$ |
31,177 |
|
||||||||||
Adjusted gross profit % |
|
|
|
||||||||||||||||||||
Amortization(6) |
$ |
3,000 |
|
(14,535) |
|
17,535 |
|
(3,012) |
|
5,020 |
|
|
15,527 |
|
|
||||||||
As adjusted |
$ |
230,966 |
$ |
78,239 |
$ |
17,240 |
$ |
14,295 |
|
$ |
46,704 |
$ |
1.49 |
|
|||||||||
% of sales |
|
|
|
|
|
||||||||||||||||||
|
|||||||||||||||||||||||
Shares |
|
31,499 |
|
||||||||||||||||||||
Convertible note hedges(7) |
|
(138) |
|
||||||||||||||||||||
Adjusted diluted shares |
|
31,361 |
|
||||||||||||||||||||
(1) In 2024, the Company incurred costs for third party services pertaining to potential issues with certain royalty payments to design surgeons. |
(2) In 2024, the Company incurred severance costs related to the elimination of certain positions. In 2023, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. |
(3) In 2024, the Company wrote off inventory, tooling and equipment related to the cancellation of a planned new product line. |
(4) In 2024, the Company recorded an accrual adjustment related to the previous termination of a distributor agreement. In 2023, the Company incurred costs related to the termination of distributor agreements. |
(5) In 2024 and 2023, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. |
(6) Includes amortization of intangible assets and deferred financing fees. |
(7) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. |
(8) In 2023, the Company incurred additional freight, labor and travel costs as well as professional fees related to the implementation of a warehouse management software. |
(9) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc., and integration costs and professional fees associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. |
Reconciliation of Reported Net Income to EBITDA & Adjusted EBITDA |
|||||||||||
(in thousands, unaudited) |
|||||||||||
|
|||||||||||
Three Months Ended |
Six Months Ended |
||||||||||
June 30, |
June 30, |
||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
|
|
|
|
|
|
|
||||
Net income |
$ |
29,976 |
|
$ |
13,732 |
|
$ |
49,685 |
|
$ |
15,551 |
Provision for income taxes |
|
7,538 |
|
|
3,689 |
|
|
13,248 |
|
|
4,314 |
Interest expense |
|
9,593 |
|
|
9,997 |
|
|
19,188 |
|
|
20,252 |
Depreciation |
|
4,165 |
|
|
4,164 |
|
|
8,211 |
|
|
8,222 |
Amortization |
|
13,674 |
|
|
13,900 |
|
|
27,666 |
|
|
27,777 |
EBITDA |
$ |
64,946 |
|
$ |
45,482 |
|
$ |
117,998 |
|
$ |
76,116 |
|
|
|
|
|
|
|
|
||||
Stock based compensation |
|
6,974 |
|
|
6,422 |
|
|
13,214 |
|
|
12,148 |
Legal matters |
|
1,343 |
|
|
- |
|
|
2,680 |
|
|
- |
Contingent consideration fair value adjustments |
|
(8,673) |
|
|
(636) |
|
|
(15,219) |
|
|
3,799 |
Termination of distributor agreements |
|
- |
|
|
2,098 |
|
|
(970) |
|
|
2,098 |
Software implementation costs |
|
- |
|
|
1,797 |
|
|
- |
|
|
6,056 |
Acquisition and integration costs |
|
- |
|
|
2,476 |
|
|
- |
|
|
5,021 |
Restructuring and related costs |
|
- |
|
|
- |
|
|
1,774 |
|
|
3,613 |
Asset impairment costs |
|
- |
|
|
- |
|
|
1,414 |
|
|
- |
Adjusted EBITDA |
$ |
64,590 |
|
$ |
57,639 |
|
$ |
120,891 |
|
$ |
108,851 |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
EBITDA Margin |
|
|
|
|
|
|
|
||||
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
About CONMED Corporation
CONMED is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology. For more information, visit www.conmed.com.
Forward-Looking Statements
This press release and associated conference call may contain forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. For example, in addition to general industry and economic conditions, factors that could cause actual results to differ materially from those in the forward-looking statements may include, but are not limited to the risk factors discussed in the Company's Annual Report on Form 10-K for the full year ended December 31, 2023 and other risks and uncertainties, which may be detailed from time to time in reports filed by CONMED with the SEC. Any and all forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct.
Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures
The Company supplements the reporting of its financial information determined under generally accepted accounting principles in
Net sales on a constant currency basis is a non-GAAP measure. The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales. To measure earnings performance on a consistent and comparable basis, the Company excludes certain items that affect the comparability of operating results and the trend of earnings. These adjustments are irregular in timing, may not be indicative of past and future performance and are therefore excluded to allow investors to better understand underlying operating trends.
Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, cost of sales, selling and administrative expenses, operating income, interest expense, income tax expense, effective income tax rate, net income, diluted shares and diluted net earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures above, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure.
We are unable to present a quantitative reconciliation of our expected diluted net earnings per share to expected adjusted diluted net earnings per share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisition, integration and other charges. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our consolidated condensed statements of income.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240731944039/en/
CONMED Corporation
Todd W. Garner
Chief Financial Officer
727-214-2975
ToddGarner@conmed.com
Source: CONMED Corporation
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