Edgar Filing: CONMED CORP

Filed Pursuant to Rule 424(b)(4)
Registration No. 333-87300

PROSPECTUS

3,000,000 SHARES

[CONMED CORPORATION LOGO]

CONMED CORPORATION
COMMON STOCK
$23.50 PER SHARE
------------------
We are selling 3,000,000 shares of our common stock in this offering. We
have granted the underwriters an option to purchase up to 450,000 additional
shares of our common stock to cover any over-allotments.

Our common stock is quoted on the Nasdaq National Market under the symbol
"CNMD." The last reported sale price of our common stock on the Nasdaq National
Market on May 22, 2002 was $24.97 per share.
------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 7.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------

PER SHARE TOTAL
--------- -----------

Public Offering Price $23.50 $70,500,000
Underwriting Discount $ 1.29 $ 3,877,500
Proceeds to CONMED (before expenses) $22.21 $66,622,500

The underwriters expect to deliver the shares to purchasers on or about May
29, 2002.

------------------

SALOMON SMITH BARNEY
UBS WARBURG
NEEDHAM & COMPANY, INC.
FIRST ALBANY CORPORATION
May 22, 2002

[PICTURES OF CERTAIN PRODUCTS OF
CONMED CORPORATION'S ARTHROSCOPY, POWERED SURGICAL
INSTRUMENTS AND ELECTROSURGERY UNITS]

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE OR OTHER JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT
ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS.
------------------

TABLE OF CONTENTS

PAGE
----

Summary..................................................... 1
Risk Factors................................................ 7
Cautionary Statement Concerning Forward-Looking
Statements................................................ 13
Price Range of Our Common Stock............................. 14
Dividend Policy............................................. 14
Use of Proceeds............................................. 14
Capitalization.............................................. 15
Selected Financial Data..................................... 16
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 18
Business.................................................... 28
Management.................................................. 40
Description of Capital Stock................................ 43
Shares Eligible for Future Sale............................. 44
Underwriting................................................ 45
Validity of Common Stock.................................... 47
Experts..................................................... 47
Where You Can Find More Information......................... 47
Index to Financial Statements............................... F-1

SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this prospectus or
incorporated by reference herein. An investment in the common stock involves
significant risks. See "Risk Factors."

CONMED CORPORATION

CONMED Corporation is a medical technology company specializing in
instruments, implants and video equipment for arthroscopic sports medicine, and
powered surgical instruments, such as drills and saws, for orthopedic, ENT,
neuro-surgery and other surgical specialties. We are also a leading developer,
manufacturer and supplier of advanced surgical devices, including radio
frequency, or RF, electrosurgery systems used routinely to cut and cauterize
tissue in nearly all types of surgical procedures worldwide, and endoscopy
products, such as trocars, clip appliers, scissors and surgical staplers. We
also manufacture and sell a full line of ECG electrodes for heart monitoring and
other patient care products.

The following table sets forth the percentage of net sales for each
category of our products for 1999, 2000 and 2001:

YEAR ENDED DECEMBER 31,
--------------------------------
1999 2000 2001
-------- -------- --------

Arthroscopy........................................ 38% 36% 36%
Powered surgical instruments....................... 23 29 27
Electrosurgery..................................... 17 16 16
Patient Care....................................... 21 17 16
Endoscopy.......................................... 1 2 5
-------- -------- --------
Total............................................ 100% 100% 100%
======== ======== ========
Net sales (in thousands)........................... $376,226 $395,873 $428,722
======== ======== ========

Our products are used in a variety of clinical settings such as operating
rooms, surgery centers, physicians' offices and critical care areas of
hospitals. We employ a razor/razor blade business model whereby we sell capital
equipment and the associated single-use disposable products. During 2001, we
derived approximately 75% of our revenues from single-use disposable products
and the remainder from capital equipment. We believe the sale of disposable
products provides a recurring revenue stream that helps insulate us from
temporary market downturns.

We have used strategic business acquisitions to broaden our product
offerings, to increase our market share in certain product lines and to realize
economies of scale. Since 1997, we have completed six significant business
acquisitions. The completed acquisitions, together with internal growth, have
resulted in a compound annual growth rate in net sales of 32% between 1997 and
2001.

INDUSTRY

The growth in the markets for our products is primarily driven by:

- Favorable Demographics. The number of surgical procedures performed is
increasing. This growth in surgical procedures reflects demographic
trends, such as the aging of the population, and technological
advancements, such as safer and less invasive surgical procedures. Sales
of our surgical products represented over 85% of our total 2001 sales.

- Continued Pressure to Reduce Health Care Costs. In response to rising
health care costs, managed care companies and other third-party payers
have placed pressure on health care providers to reduce costs. In turn,
health care providers are increasingly purchasing single-use disposable
products, which reduce the costs associated with sterilizing surgical
instruments and products following surgery.

- Increased Global Medical Spending. We believe that foreign markets offer
growth opportunities for our products. We currently distribute our
products through our own sales subsidiaries or through local dealers in
over 100 foreign countries. International sales represented approximately
29% of total sales in 2001.

COMPETITIVE STRENGTHS

We believe that we have a top two or three market share position in each of
our five key product areas and have established our position as a market leader
by capitalizing on the following competitive strengths:

- Strong Brand Recognition. Our products are sold under leading brand
names, including CONMED(R), Linvatec(R) and Hall Surgical(R). These brand
names are well recognized by physicians for quality and service, and we
believe that brand recognition helps drive demand for our products.

- Breadth of Product Offering. The breadth of our product lines in our key
product areas enables us to meet a wide range of customer requirements
and preferences. In three of our five key product areas, we are only one
of two providers that offers a full line of products.

- Successful Integration of Acquisitions. Since 1997, we have completed
six acquisitions, including the 1997 acquisition of Linvatec Corporation,
which more than doubled our size. Our management team, which averages
more than 15 years of experience in the health care industry, has
demonstrated the ability to identify complementary acquisitions and to
integrate acquired companies into our operations.

- Extensive Marketing and Distribution Infrastructure. We market our
products domestically through our sales force consisting of approximately
210 employee sales representatives and an additional 90 sales
professionals employed by eight non-stocking sales agent groups, seven of
which are exclusive. Additionally, we have an international presence
through sales subsidiaries and branches located in key international
markets. The size and coverage of our distribution infrastructure assists
in driving our sales.

- Vertically Integrated Manufacturing. We manufacture most of our products
and components. Our vertically integrated manufacturing process has
allowed us to provide quality products, to react quickly to changes in
demand and to generate manufacturing efficiencies.

- Research and Development Expertise. Our research and development effort
is focused on introducing new products, enhancing existing products and
developing new technologies. During the last two years, we have
introduced more than 24 products and product enhancements, many of which
were "first-to-market" products.

BUSINESS STRATEGY

Our business strategy is to continue to strengthen our position as a market
leader in our key product areas. The elements of our strategy include:

- Introduce New Products and Product Enhancements. We will continue to
pursue organic growth by developing new products and enhancing existing
products to respond to customer needs and preferences.

- Pursue Strategic Acquisitions. We believe that strategic acquisitions
represent a cost-effective means of broadening our product line. We have
historically targeted companies with proven technologies and established
brand names that provide potential sales, marketing and manufacturing
synergies.

- Realize Manufacturing and Operating Efficiencies. We will continue to
review opportunities for consolidating product lines and streamlining
production. We believe our vertically integrated manufacturing processes
can produce further opportunities to reduce overhead and to increase
operating efficiencies and capacity utilization.

- Maintain Strong International Sales Growth. We intend to maintain our
international sales growth and increase our penetration into
international markets by utilizing our relationships with foreign
surgeons, hospitals and third-party payers, as well as foreign
distributors.

RECENT DEVELOPMENT

PURCHASE AND CANCELLATION OF WARRANT ISSUED TO BRISTOL-MYERS SQUIBB

In 1997, in connection with the acquisition of Linvatec, we issued to
Bristol-Myers Squibb Company a warrant that was exercisable in whole or in part
for up to 1,500,000 shares of our common stock at a price of $22.82 per share.
On May 3, 2002, we purchased the warrant for $2 million in cash and cancelled
it.

THE OFFERING

Common stock offered by us.... 3,000,000 shares

Common stock outstanding after
this offering................. 28,549,358 shares

Use of proceeds............... We will use the estimated net proceeds of
approximately $66.0 million that we will
receive from this offering to repay outstanding
debt under our credit agreement. See "Use of
Proceeds."

Nasdaq National Market
symbol........................ CNMD

The number of shares of common stock to be outstanding after this offering
is based upon 25,549,358 shares of common stock that were outstanding on March
29, 2002 and does not include the following:

- 3,440,829 shares of common stock issuable based upon the exercise of
outstanding stock options as of March 29, 2002 under our stock option
plans, of which 1,719,932 shares were exercisable.

- 450,000 shares of common stock issuable in this offering to the
underwriters pursuant to an over-allotment option.

Our executive offices are located at 525 French Road, Utica, New York
13502-5994. Our telephone number is (315) 797-8375 and our internet address is
www.conmed.com. The information contained on our website is not part of this
prospectus.

SUMMARY FINANCIAL DATA

The information below sets forth summary financial data as of and for each
of the three years in the period ended December 31, 2001 and the three months
ended March 31, 2001 and 2002. The data for the three years in the period ended
December 31, 2001 and as of December 31, 2000 and 2001 has been derived from and
should be read in conjunction with our consolidated financial statements,
including the notes thereto, included in this prospectus beginning on page F-1,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" beginning on page 18. The information as of December 31, 1999 has
been derived from our audited financial statements not incorporated by reference
or included herein. The summary financial data for the three months ended March
31, 2001 and 2002 are unaudited but, in the opinion of management, reflect all
adjustments (comprising only normal recurring accruals) necessary for a fair
presentation of our consolidated operating results and financial position for
such interim periods. Results for interim periods are not necessarily indicative
of results for the full year or for any other period. We have never paid any
cash dividends.

THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------ ----------------------
1999 2000 2001 2001 2002
-------- -------- -------- -------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA)
(UNAUDITED)

STATEMENT OF INCOME DATA(1):
Net sales.............................. $376,226 $395,873 $428,722 $105,909 $113,205
Cost of sales(2)....................... 178,480 188,223 204,374 49,674 54,104
Selling and administrative
expense(3)(4)........................ 110,842 128,316 140,560 34,829 34,468
Research and development expense....... 12,108 14,870 14,830 3,696 3,824
-------- -------- -------- -------- --------
Income from operations............... 74,796 64,464 68,958 17,710 20,809
Interest expense, net.................. 32,360 34,286 30,824 8,331 6,628
-------- -------- -------- -------- --------
Income before income taxes and
extraordinary item................ 42,436 30,178 38,134 9,379 14,181
Provision for income taxes............. 15,277 10,864 13,728 3,376 5,105
-------- -------- -------- -------- --------
Net income........................... $ 27,159 $ 19,314 $ 24,406 $ 6,003 $ 9,076
======== ======== ======== ======== ========
EARNINGS PER SHARE:
Basic.................................. $ 1.19 $ 0.84 $ 1.02 $ 0.26 $ 0.36
Diluted................................ $ 1.17 $ 0.83 $ 1.00 $ 0.26 $ 0.35

WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
USED IN CALCULATING:
Basic earnings per share............... 22,862 22,967 24,045 23,057 25,397
Diluted earnings per share............. 23,145 23,271 24,401 23,307 25,969

OTHER FINANCIAL DATA:
Depreciation and amortization.......... $ 26,291 $ 29,487 $ 30,148 $ 7,566 $ 5,403
Capital expenditures................... 9,352 14,050 14,443 3,867 3,208

AS OF
AS OF DECEMBER 31, MARCH 31,
------------------------------ -----------
1999 2000 2001 2002
-------- -------- -------- -----------
(IN THOUSANDS)
(UNAUDITED)

BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ 3,747 $ 3,470 $ 1,402 $ 2,634
Working capital.................................... 109,526 113,755 44,712 47,434
Total assets....................................... 662,161 679,571 701,608 706,950
Long-term debt (including current portion)......... 394,669 378,748 335,929 325,991
Total shareholders' equity......................... 211,261 230,603 283,634 295,211

(footnotes on following page)
5

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(1) Includes, based on the purchase method of accounting, the results of (i) the
powered instrument product line acquired from 3M Company, from August 1999;
and (ii) the minimally invasive surgical product lines acquired from Imagyn
Medical Technologies, Inc. in November 2000 and July 2001, in each such case
from the date of acquisition.

(2) Includes for 1999, $1,600,000 of incremental expense related to the excess
of the fair value at the acquisition date over the cost to produce inventory
related to the powered instrument product line acquired from 3M; and
includes for 2001, $1,567,000 of transition expenses related to the July
2001 acquisition from Imagyn.

(3) Included in selling and administrative expense for 1999 is a $1,256,000
benefit related to a previously recorded litigation accrual which was
settled on favorable terms. Included in selling and administrative expense
for 2000 is a severance charge of $1,509,000 related to the restructuring of
our arthroscopy sales force.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You
should carefully consider the following factors, in addition to the other
information contained in this prospectus, in deciding whether to invest in our
common stock. This prospectus and documents incorporated by reference herein
contain forward-looking statements that involve risks and uncertainties. Our
actual results may differ significantly from the results discussed in the
forward-looking statements. See "Cautionary Statement Concerning Forward-Looking
Statements" below. Factors that might cause such differences include those
discussed below.

OUR FINANCIAL PERFORMANCE IS SUBJECT TO THE RISK OF BUSINESS ACQUISITIONS,
INCLUDING THE EFFECTS OF INCREASED BORROWING AND THE INTEGRATION OF BUSINESSES

A key element of our business strategy has been to expand through
acquisitions and we may seek to pursue additional acquisitions in the future.
Our success is dependent in part upon our ability to integrate acquired
companies or product lines into our existing operations. We may not have
sufficient management and other resources to accomplish the integration of our
past and future acquisitions, and implementing our acquisition strategy may
strain our relationship with customers, suppliers, distributors, manufacturing
personnel or others. There can be no assurance that we will be able to identify
and make acquisitions on acceptable terms or that we will be able to obtain
financing for such acquisitions on acceptable terms. In addition, while we are
generally entitled to customary indemnification from sellers of businesses for
any difficulties that may have arisen prior to our acquisition of each business,
acquisitions may involve exposure to unknown liabilities and the amount and time
for claiming under these indemnification provisions is often limited. As a
result, our financial performance is now and will continue to be subject to
various risks associated with the acquisition of businesses, including the
financial effects associated with any increased borrowing required to fund such
acquisitions or with the integration of such businesses.

FAILURE TO COMPLY WITH REGULATORY REQUIREMENTS COULD RESULT IN RECALLS, FINES OR
MATERIALLY ADVERSE IMPLICATIONS FOR OUR BUSINESS

All of our products are classified as medical devices subject to regulation
by the Food and Drug Administration. As a manufacturer of medical devices, our
manufacturing processes and facilities are subject to on-site inspection and
continuing review by the FDA for compliance with the Quality System Regulations.
Manufacturing and sales of our products outside the United States are also
subject to foreign regulatory requirements that vary from country to country.
The time required to obtain approvals from foreign countries may be longer or
shorter than that required for FDA approval, and requirements for foreign
approvals may differ from FDA requirements. Failure to comply with applicable
domestic and/or foreign requirements can result in:

- fines or other enforcement actions;

- recall or seizure of products;

- total or partial suspension of production;

- withdrawal of existing product approvals or clearances;

- refusal to approve or clear new applications or notices;

- increased quality control costs; or

- criminal prosecution.

The failure to comply with Quality System Regulations and applicable
foreign regulations could have a material adverse effect on our business,
financial condition or results of operations.

IF WE ARE NOT ABLE TO MANUFACTURE PRODUCTS IN COMPLIANCE WITH REGULATORY
STANDARDS, WE MAY DECIDE TO CEASE MANUFACTURE OF THOSE PRODUCTS AND MAY BE
SUBJECT TO PRODUCT RECALL

In addition to the Quality System Regulations, many of our products are
also subject to industry-set standards. We may not be able to comply with these
regulations and standards due to deficiencies in component parts or our
manufacturing processes. If we are not able to comply with the Quality System
Regulations or industry-set standards, we may not be able to fill customer
orders and we may decide to cease production of non-compliant products. Failure
to produce products could affect our profit margins and could lead to loss of
customers.

Our products are subject to product recall and product recalls have been
made in the past. Although no recall has had a material adverse effect on our
business, financial condition or results of operations, we cannot assure you
that regulatory issues will not have a material adverse effect in the future or
that product recall will not harm our reputation and our relationships with our
customers.

THE HIGHLY COMPETITIVE MARKET FOR OUR PRODUCTS MAY CREATE ADVERSE PRICING
PRESSURES

The market for our products is highly competitive and our customers have
numerous alternatives of supply. Many of our competitors offer a range of
products in areas other than those in which we compete, which may make such
competitors more attractive to surgeons, hospitals, group purchasing
organizations, or GPOs, and others. In addition, many of our competitors are
larger and have greater financial resources than we do and offer a range of
products broader than our products. Competitive pricing pressures or the
introduction of new products by our competitors could have an adverse effect on
our revenues. Because our customers are not bound by long-term supply
arrangements with us, we may not be able to shift our production to other
products following a loss of customers to our competitors, leading to an
accompanying adverse effect on our profitability. See "Business--Competition"
for a further discussion of these competitive forces.

Factors that could lead our customers to choose products offered by our
competitors include:

- changes in surgeon preferences;

- increases or decreases in health care spending related to medical
devices;

- our inability to furnish products to them, such as a result of product
recall or back-order;

- the introduction by competitors of new products or new features to
existing products;

- the introduction by competitors of alternative surgical technology; and

- advances in surgical procedures and discoveries or developments in the
health care industry.

COST REDUCTION EFFORTS IN THE HEALTH CARE INDUSTRY COULD PUT PRESSURE ON OUR
PRICES AND MARGINS

In recent years, the health care industry has undergone significant change
driven by various efforts to reduce costs, including efforts at national health
care reform, trends toward managed care, cuts in Medicare, consolidation of
health care distribution companies, and collective purchasing arrangements by
GPOs and integrated health networks, or IHNs. Demand and prices for our products
may be adversely affected by these trends.

WE MAY NOT BE ABLE TO KEEP PACE WITH TECHNOLOGICAL CHANGE OR TO SUCCESSFULLY
DEVELOP NEW PRODUCTS WHICH COULD CAUSE US TO LOSE BUSINESS TO COMPETITORS

The market for our products is characterized by rapidly changing
technology. Our future financial performance will in part be dependent on our
ability to develop and manufacture new products on a cost-effective basis, to
introduce them to the market on a timely basis and to have them accepted by
surgeons.

We may not be able to keep pace with technological change or to develop
viable new products. Factors which could cause delay in releasing new products
or even cancellation of our plans to produce and market these new products
include:

- research and development delays;

- delays in securing regulatory approvals; or

- changes in the competitive landscape, including the emergence of
alternative products or solutions which reduce or eliminate the markets
for pending products.

OUR NEW PRODUCTS MAY FAIL TO ACHIEVE EXPECTED LEVELS OF MARKET ACCEPTANCE

Any new products we launch may fail to achieve market acceptance. The
degree of market acceptance of any of our products will depend on a number of
factors, including:

- our ability to develop and introduce new products and product
enhancements in the time frames we currently estimate;

- our ability to successfully implement new technologies;

- the market's readiness to accept new products, such as our PowerPro(R)
Battery System;

- having adequate financial and technological resources for future product
development and promotion;

- the efficacy of our products; and

- the prices of our products compared to the prices of our competitors'
products.

If our new products do not achieve market acceptance, we may be unable to
recoup our investments and may lose business to competitors.

In addition, some of the companies with which we now compete or may compete
in the future have or may have more extensive research, marketing and
manufacturing capabilities and significantly greater technical and personnel
resources than we do, and may be better positioned to continue to improve their
technology in order to compete in an evolving industry. See
"Business--Competition" for a further discussion of these competitive forces.

OUR CREDIT AGREEMENT CONTAINS COVENANTS THAT MAY LIMIT OUR FLEXIBILITY OR
PREVENT US FROM TAKING ACTIONS TO RESPOND TO CHANGES IN OUR BUSINESS OR THE
COMPETITIVE ENVIRONMENT

Our credit agreement contains, and future credit facilities are expected to
contain, certain restrictive covenants which will affect, and in many respects
significantly limit or prohibit, among other things, our ability to:

- incur indebtedness;

- make prepayments of certain indebtedness;

- make investments;

- engage in transactions with affiliates;

- pay dividends;

- sell assets; and

- pursue acquisitions.

These covenants may prevent us from pursuing acquisitions, significantly
limit our operating and financial flexibility, and limit our ability to respond
to changes in our business or competitive activities. Our ability to comply with
such provisions may be affected by events beyond our control. In the event of

any default under our credit agreement, the credit agreement lenders could elect
to declare all amounts borrowed under our credit agreement, together with
accrued interest, to be due and payable. If we were unable to repay such
borrowings, the credit agreement lenders could proceed against the collateral
securing the credit agreement, which consists of substantially all of our
property and assets, except for our accounts receivable and related rights which
are sold in connection with the accounts receivable sales agreement. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" for a discussion of the accounts
receivable sales agreement.

OUR SUBSTANTIAL LEVERAGE AND DEBT SERVICE REQUIREMENTS MAY FORCE US TO ADOPT
ALTERNATIVE BUSINESS STRATEGIES

We have indebtedness that is substantial in relation to our shareholders'
equity, as well as interest and debt service requirements that are significant
compared to our cash flow from operations. On a pro forma basis, after giving
effect to the application of the net proceeds of this offering and assuming net
proceeds from this offering of approximately $66.0 million, as of March 31,
2002, we would have had $260.0 million of debt outstanding, representing 42% of
total capitalization. This amount includes the current portion of our long-term
debt, but does not include the $40 million of receivables sold to a conduit
purchaser under the accounts receivable sales agreement described below under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources," the proceeds of which were used to
repay indebtedness.

The degree to which we are leveraged could have important consequences to
investors, including but not limited to the following:

- a substantial portion of our cash flow from operations must be dedicated
to debt service and will not be available for operations, capital
expenditures, acquisitions, dividends and other purposes;

- our ability to renegotiate our revolving credit facility and obtain
additional financing in the future for working capital, capital
expenditures, acquisitions or general corporate purposes may be limited
or impaired, or may be at higher interest rates;

- we may be at a competitive disadvantage when compared to competitors that
are less leveraged;

- we may be hindered in our ability to adjust rapidly to market conditions;

- our degree of leverage could make us more vulnerable in the event of a
downturn in general economic conditions or other adverse circumstances
applicable to us; and

- our interest expense could increase if interest rates in general increase
because some of our borrowings, including our borrowings under our credit
agreement, are and will continue to be at variable rates of interest.

WE MAY NOT BE ABLE TO GENERATE SUFFICIENT CASH TO SERVICE OUR INDEBTEDNESS,
WHICH COULD REQUIRE US TO REDUCE OUR EXPENDITURES, SELL ASSETS, RESTRUCTURE OUR
INDEBTEDNESS OR SEEK ADDITIONAL EQUITY CAPITAL

Our ability to satisfy our obligations will depend upon our future
operating performance, which will be affected by prevailing economic conditions
and financial, business and other factors, many of which are beyond our control.
We may not have sufficient cash flow available to enable us to meet our
obligations. If we are unable to service our indebtedness, we will be forced to
adopt an alternative strategy that may include actions such as foregoing
acquisitions, reducing or delaying capital expenditures, selling assets,
restructuring or refinancing our indebtedness or seeking additional equity
capital. We cannot assure you that any of these strategies could be implemented
on terms acceptable to us, if at all. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources" for a discussion of our indebtedness and its implications.

WE MAY BE UNABLE TO CONTINUE TO SELL OUR ACCOUNTS RECEIVABLE, WHICH COULD
REQUIRE US TO SEEK ALTERNATIVE SOURCES OF FINANCING

Under our receivables agreement, there are certain statistical ratios which
must be maintained relating to the pool of receivables in order for us to
continue selling to the conduit purchaser and the conduit purchaser can cease
its purchase of our receivables. These ratios relate to sales dilution and
losses on accounts receivable. If new accounts receivable arising in the normal
course of business do not qualify for sale or the conduit purchaser otherwise
ceases its purchase of our receivables, we would need to access alternative
sources of working capital, which could be more expensive or difficult to
obtain.

WE MAY BE UNABLE TO SUCCESSFULLY RENEGOTIATE OUR CREDIT FACILITY ON TERMS WE
DEEM ACCEPTABLE

Our $100 million revolving credit facility terminates on December 31, 2002.
We are currently negotiating with our bank group to extend the revolving credit
facility, or in the alternative, to renegotiate our entire senior credit
facility. We may be unable to obtain credit arrangements on terms we deem
acceptable. If we are unable to successfully negotiate a new senior credit
arrangement that provides sufficient capital for our business, we could be
forced to sell assets, alter our business strategy or obtain alternative sources
of financing.

THE LOSS OR INVALIDITY OF OUR PATENTS MAY REDUCE OUR COMPETITIVE ADVANTAGE

Much of the technology used in the markets in which we compete is covered
by patents. We have numerous U.S. patents and corresponding foreign patents on
products expiring at various dates from 2002 through 2019 and have additional
patent applications pending. See "Business--Research and Development Activities"
for a further description of our patents. The loss of our patents could reduce
the value of the related products and any related competitive advantage.
Competitors may also be able to design around our patents and to compete
effectively with our products. Also, our competitors may allege that our
products infringe their patents, leading to voluntary or involuntary loss of
sales from those products. In addition, the cost to prosecute infringements of
our patents or the cost to defend our products against patent infringement
actions by others could be substantial. We cannot assure you that:

- pending patent applications will result in issued patents;

- patents issued to or licensed by us will not be challenged by
competitors;

- our patents will be found to be valid or sufficiently broad to protect
our technology or provide us with a competitive advantage; and

- we will be successful in defending against pending or future patent
infringement claims asserted against our products.

ORDERING PATTERNS OF OUR CUSTOMERS MAY CHANGE RESULTING IN REDUCTIONS IN SALES

Our hospital and surgery center customers purchase our products in
quantities sufficient to meet their anticipated demand. Likewise, our health
care distributor customers purchase our products for ultimate resale to health
care providers in quantities sufficient to meet the anticipated requirements of
the distributors' customers. Should inventories of our products owned by our
hospital, surgery center and distributor customers grow to levels higher than
their requirements, our customers may reduce the ordering of products from us.
This could cause a reduction in our sales in a financial accounting period.

OUR SIGNIFICANT INTERNATIONAL OPERATIONS SUBJECT US TO RISKS ASSOCIATED WITH
OPERATING IN FOREIGN COUNTRIES

A portion of our operations are conducted outside the United States. About
29% of our 2001 net sales constituted foreign sales. As a result of our
international operations, we are subject to risks associated with operating in
foreign countries, including:

- devaluations and fluctuations in currency exchange rates;

- imposition of limitations on conversions of foreign currencies into
dollars or remittance of dividends and other payments by foreign
subsidiaries;

- imposition or increase of withholding and other taxes on remittances and
other payments by foreign subsidiaries;

- trade barriers;

- political risks, including political instability;

- reliance on third parties to distribute our products;

- hyperinflation in certain foreign countries; and

- imposition or increase of investment and other restrictions by foreign
governments.

We cannot assure you that such risks will not have a material adverse
effect on our business and results of operations.

WE CAN BE SUED FOR PRODUCING DEFECTIVE PRODUCTS AND OUR INSURANCE COVERAGE MAY
BE INSUFFICIENT TO COVER THE NATURE AND AMOUNT OF ANY PRODUCT LIABILITY CLAIMS

The nature of our products as medical devices and today's litigious
environment should be regarded as potential risks that could significantly and
adversely affect our financial condition and results of operations. The
insurance we maintain to protect against claims associated with the use of our
products may not adequately cover the amount or nature of any claim asserted
against us, and we are exposed to the risk that our claims may be excluded and
that our insurers may become insolvent. See "Item 3: Legal Proceedings" in our
Form 10-K for a further discussion of the risk of product liability actions and
our insurance coverage.

CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS MADE IN THIS PROSPECTUS

In this prospectus, we make forward-looking statements about our financial
condition, results of operations and business. Forward-looking statements are
statements made by us concerning events that may or may not occur in the future.
These statements may be made directly in this document or may be "incorporated
by reference" from other documents. You can find many of these statements by
looking for words like "believes," "expects," "anticipates," "estimates" or
similar expressions.

FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE

Forward-looking statements involve known and unknown risks, uncertainties
and other factors, including those that may cause our actual results,
performance or achievements, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include those identified under
"Risk Factors" above and those set forth elsewhere and incorporated by reference
in this prospectus, among others, including the following:

- general economic and business conditions;

- changes in customer preferences;

- changes in technology;

- the introduction of new products;

- changes in business strategy;

- the possibility that United States or foreign regulatory and/or
administrative agencies might initiate enforcement actions against us or
our distributors;

- quality of our management and business abilities and the judgment of our
personnel; and

- the availability, terms and deployment of capital.

See "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" below for a further discussion of these
factors. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. We do not undertake any
obligation to publicly release any revisions to these forward-looking statements
to reflect events or circumstances after the date of this prospectus or to
reflect the occurrence of unanticipated events.

PRICE RANGE OF OUR COMMON STOCK

Our common stock, par value $.01 per share, is traded on the Nasdaq
National Market under the symbol "CNMD." At March 29, 2002, there were 1,213
registered holders of our common stock and approximately 6,100 accounts held in
"street name."

The following table shows certain high-low last sales prices for our common
stock, as reported by the Nasdaq National Market. These sales prices have been
adjusted for a three-for-two split of our common stock effected in the form of a
common stock dividend and paid on September 7, 2001 to shareholders of record on
August 21, 2001.

COMMON STOCK PRICE
------------------
YEAR ENDED DECEMBER 31, 2000: HIGH LOW
----------------------------- ------- -------

First Quarter............................................... $20.50 $15.04
Second Quarter.............................................. 18.37 15.75
Third Quarter............................................... 17.41 8.08
Fourth Quarter.............................................. 12.04 8.62

YEAR ENDED DECEMBER 31, 2001: HIGH LOW
----------------------------- ------ ------

First Quarter............................................... $15.92 $10.83
Second Quarter.............................................. 18.00 13.08
Third Quarter............................................... 21.21 15.73
Fourth Quarter.............................................. 21.01 16.53

YEAR ENDING DECEMBER 31, 2002: HIGH LOW
------------------------------ ------ ------

First Quarter............................................... $25.00 $19.29
Second Quarter (through May 22, 2002)....................... $27.00 $24.11

On May 22, 2002, the last sale price for our common stock on the Nasdaq
National Market was $24.97.

DIVIDEND POLICY

We have never paid cash dividends on our common stock. Our board of
directors presently intends to retain future earnings to finance the development
of our business and does not intend to declare cash dividends. Should this
policy change, the declaration of dividends will be determined by our board in
light of conditions then existing, including our financial requirements and
condition and the limitation on the declaration and payment of cash dividends
contained in debt agreements.

USE OF PROCEEDS

The net proceeds from this offering, after payment of our fees and expenses
incurred in connection with this offering, are estimated to be approximately
$66.0 million (assuming the underwriters' over-allotment option is not
exercised). We will use the net proceeds from this offering to repay outstanding
debt under our credit agreement.

The borrowings under our credit agreement, of which $172.8 million was
outstanding as of March 31, 2002, include a term portion that bears interest at
a weighted average of LIBOR plus 2.13% (4.20% at March 31, 2002) and a revolving
portion that bears interest at LIBOR plus 1.50% (3.70% at March 31, 2002).

CAPITALIZATION

The following table sets forth our consolidated capitalization, which
includes the current portion of our long-term debt, as of March 31, 2002, and as
adjusted to give pro forma effect to our sale of 3,000,000 shares of our common
stock offered hereby at the offering price of $23.50 per share and the
application of the net proceeds therefrom as described under "Use of Proceeds":

MARCH 31, 2002
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)

DEBT:
Current portion of long-term debt(1)...................... $ 73,914 $ 73,914
Long-term debt (less current portion)(1).................. 252,077 186,029
SHAREHOLDERS' EQUITY:
Preferred stock, par value $.01 per share; authorized
500,000 shares; none outstanding....................... -- --
Common stock, par value $.01 per share; authorized
100,000,000 shares; outstanding 25,549,358 shares
actual and 28,549,358 shares as adjusted............... 255 285
Paid-in capital........................................... 162,740 228,758
Retained earnings......................................... 137,316 137,316
Accumulated and other comprehensive loss.................. (4,681) (4,681)
Less 37,500 shares of common stock in treasury, at cost... (419) (419)
-------- --------
Total shareholders' equity............................. 295,211 361,259
-------- --------
Total capitalization.............................. $621,202 $621,202
======== ========

---------------
(1) Because the revolving commitment under our credit agreement terminates on
December 31, 2002, the entire amount borrowed under our revolver is
classified as short term.

SELECTED FINANCIAL DATA

The information below sets forth selected financial data as of and for each
of the five years in the period ended December 31, 2001 and the three months
ended March 31, 2001 and 2002. The data for the three years in the period ended
December 31, 2001 and as of December 31, 2000 and 2001 has been derived from and
should be read in conjunction with our consolidated financial statements,
including the notes thereto, included in this prospectus beginning on page F-1,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" beginning on page 18. The information for the years ended December
31, 1997 and 1998 and as of December 31, 1997, 1998 and 1999 has been derived
from our audited financial statements not incorporated by reference or included
herein. The selected financial data for the three months ended March 31, 2001
and 2002 are unaudited but, in the opinion of management, reflect all
adjustments (comprising only normal recurring accruals) necessary for a fair
presentation of our consolidated operating results and financial position for
such interim periods. Results for interim periods are not necessarily indicative
of results for the full year or for any other period. We have never paid any
cash dividends.

THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
---------------------------------------------------- -------------------
1997 1998 1999 2000 2001 2001 2002
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA)
(UNAUDITED)

STATEMENTS OF INCOME (LOSS)
DATA(1):
Net sales.......................... $139,632 $339,270 $376,226 $395,873 $428,722 $105,909 $113,205
Cost of sales(2)................... 74,220 169,599 178,480 188,223 204,374 49,674 54,104
Selling and administrative
expense(3)(4).................... 36,661 96,475 110,842 128,316 140,560 34,829 34,468
Research and development expense... 3,037 12,029 12,108 14,870 14,830 3,696 3,824
Unusual items(3)................... 37,242 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Income (loss) from operations.... (11,528) 61,167 74,796 64,464 68,958 17,710 20,809
Interest income (expense), net..... 823 (30,891) (32,360) (34,286) (30,824) (8,331) (6,628)
-------- -------- -------- -------- -------- -------- --------
Income (loss) before income taxes
and extraordinary item......... (10,705) 30,276 42,436 30,178 38,134 9,379 14,181
Provision (benefit) for income
taxes............................ (3,640) 10,899 15,277 10,864 13,728 3,376 5,105
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
extraordinary item............. (7,065) 19,377 27,159 19,314 24,406 6,003 9,076
Extraordinary item, net of income
taxes(5)......................... -- (1,569) -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income (loss)................ $ (7,065) $ 17,808 $ 27,159 $ 19,314 $ 24,406 $ 6,003 $ 9,076
======== ======== ======== ======== ======== ======== ========
EARNINGS (LOSS) PER SHARE BEFORE
EXTRAORDINARY ITEM:
Basic............................ $ (0.31) $ 0.86 $ 1.19 $ 0.84 $ 1.02 $ 0.26 $ 0.36
Diluted.......................... $ (0.31) $ 0.84 $ 1.17 $ 0.83 $ 1.00 $ 0.26 $ 0.35

EARNINGS (LOSS) PER SHARE:
Basic............................ $ (0.31) $ 0.79 $ 1.19 $ 0.84 $ 1.02 $ 0.26 $ 0.36
Diluted.......................... $ (0.31) $ 0.77 $ 1.17 $ 0.83 $ 1.00 $ 0.26 $ 0.35

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES IN CALCULATING:
Basic earnings (loss) per share.... 22,496 22,628 22,862 22,967 24,045 23,057 25,397
Diluted earnings (loss) per
share............................ 22,496 22,982 23,145 23,271 24,401 23,307 25,969

OTHER FINANCIAL DATA:
Depreciation and amortization...... $ 6,954 $ 23,601 $ 26,291 $ 29,487 $ 30,148 $ 7,566 $ 5,403
Capital expenditures............... 8,178 12,924 9,352 14,050 14,443 3,867 3,208

(footnotes on following page)
16

AT
AT DECEMBER 31, MARCH 31,
--------------------------------------------------- -----------
1997 1998 1999 2000 2001 2002
------- -------- -------- -------- -------- -----------
(IN THOUSANDS) (UNAUDITED)

BALANCE SHEET DATA(6):
Cash and cash equivalents................... $13,452 $ 5,906 $ 3,747 $ 3,470 $ 1,402 $ 2,634
Working capital............................. 95,333 93,424 109,526 113,755 44,712 47,434
Total assets................................ 561,637 628,784 662,161 679,571 701,608 706,950
Long-term debt (including current
portion).................................. 365,000 384,872 394,669 378,748 335,929 325,991
Total shareholders' equity.................. 162,736 182,168 211,261 230,603 283,634 295,211

---------------
(1) Includes, based on the purchase method of accounting, the results of (i) the
surgical suction product line acquired from the Davol subsidiary of C.R.
Bard, Inc., from July 1997; (ii) Linvatec Corporation acquired from
Bristol-Myers Squibb Company, from December 1997; (iii) the arthroscopy
product line acquired from 3M Company, from November 1998; (iv) the powered
instrument product line acquired from 3M, from August 1999; and (v) the
minimally invasive surgical product lines acquired from Imagyn Medical
Technologies, Inc. in November 2000 and July 2001, in each such case from
the date of acquisition.

(2) Includes for 1998, $3,000,000 of incremental expense related to the excess
of the fair value at the acquisition date of Linvatec inventory over the
cost to produce; includes for 1999, $1,600,000 of incremental expense
related to the excess of the fair value at the acquisition date over the
cost to produce inventory related to the powered instrument product line
acquired from 3M; and includes for 2001, $1,567,000 of transition expenses
related to the July 2001 acquisition from Imagyn.

(3) Included in unusual items for 1997 are a $34,000,000 non-cash acquisition
charge for the write-off of all of the in-process research and development
products (comprised of products in the development stage) acquired in the
Linvatec acquisition, a $914,000 write-off of deferred financing fees
resulting from refinancing our loan agreements in connection with the
Linvatec acquisition, and a $2,328,000 charge for the closing of our Dayton,
Ohio manufacturing facility. Included in selling and administrative expense
for 1999 is a $1,256,000 benefit related to a previously recorded litigation
accrual which was settled on favorable terms. Included in selling and
administrative expense for 2000 is a severance charge of $1,509,000 related
to the restructuring of our arthroscopy sales force.

(4) Effective January 1, 2002, the provisions of SFAS 142 were adopted relative
to the cessation of amortization for goodwill and certain intangibles. Had
we accounted for goodwill and certain intangibles in accordance with SFAS
142 for all periods presented, income (loss) before extraordinary item would
have been $(5,502,000) in 1997, $24,011,000 in 1998, $32,227,000 in 1999,
$24,969,000 in 2000, $30,061,000 in 2001 and $7,416,000 in the three months
ended March 31,2001. Had we accounted for goodwill and certain intangibles
in accordance with SFAS 142 for all periods presented, net income (loss)
would have been $(5,502,000) in 1997, $24,011,000 in 1998, $32,227,000 in
1999, $24,969,000 in 2000, $30,061,000 in 2001 and $7,416,000 in the three
months ended March 31, 2001.

(5) In March 1998, we recorded an extraordinary item of $1,569,000 net of income
taxes related to the write-off of deferred financing fees.

(6) Linvatec is included in the Balance Sheet Data as of December 31, 1997, its
date of acquisition, after a one-time non-cash acquisition charge of
$34,000,000.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our "Selected
Financial Data" and our consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

The accounting policies discussed below are considered by management to be
critical to understanding our financial condition and results of operations.

ACCOUNTS RECEIVABLE SALE

There are certain statistical ratios, primarily related to sales dilution
and losses on accounts receivable, which must be calculated and maintained on
the pool of receivables in order to continue selling to the conduit purchaser.
We believe that additional accounts receivable arising in the normal course of
business will be of sufficient quality and quantity to qualify for sale under
the accounts receivable sales agreement. In the event that new accounts
receivable arising in the normal course of business do not qualify for sale,
then collections on sold receivables will flow to the conduit purchaser rather
than being used to fund new receivable purchases. If this were to occur, we
would need to access an alternate source of working capital.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill represents the excess of purchase price over fair value of
identifiable net assets of acquired businesses. Other intangible assets
primarily represent allocations of purchase price to identifiable intangible
assets of acquired businesses. Goodwill and other intangible assets have been
amortized over periods ranging from 5 to 40 years. Because of our history of
growth through acquisitions, goodwill and other intangible assets comprise a
substantial portion (62.4% at March 31, 2002) of our total assets.

In June 2001, the Financial Accounting Standards Board approved Statement
of Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," or SFAS 142. We adopted SFAS 142 effective January 1, 2002. Under this
standard, amortization of goodwill and certain intangible assets, including
certain intangibles recorded as a result of past business combinations, is to be
discontinued upon adoption of SFAS 142. In addition, in accordance with the
transition provisions of SFAS 142, goodwill recorded as a result of our
acquisition of certain product lines from Imagyn Medical Technologies, Inc. in
July 2001 (the "second Imagyn acquisition") has not been amortized.

During the quarter ended March 31, 2002, we performed tests of goodwill and
indefinite-lived intangible assets as of January 1, 2002. We tested for
impairment using the two-step process prescribed in SFAS 142. The first step is
a screen for potential impairment. The second step, which has been determined
not to be necessary, measures the amount of any impairment. No impairment losses
have been

recognized as a result of these tests. During the quarter ended March 31, 2002,
net income increased by approximately $1.4 million, or $.05 per share, as a
result of the adoption of SFAS 142.

DERIVATIVE FINANCIAL INSTRUMENTS

Effective January 1, 2001, we adopted Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities," or SFAS 133. SFAS 133 requires that derivatives be recorded on the
balance sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from the changes in the values of the derivatives are accounted for
depending on whether the derivative qualifies for hedge accounting. Upon
adoption of SFAS 133, we recorded a net-of-tax cumulative-effect-type loss
adjustment of $1.0 million in accumulated other comprehensive income to
recognize at fair value an interest rate swap which we have designated as a
cash-flow hedge and which effectively converts $50.0 million of LIBOR-based
floating rate debt under our credit agreement into fixed rate debt with a base
interest rate of 7.01%. During the quarter ended March 31, 2002, gross holding
gains were $0.1 million, before income taxes, while holding losses of $0.6
million, before income taxes, were reclassified and included in net income.
Including the cumulative effect loss adjustment related to the adoption of SFAS
133, total gross holding losses during 2001 related to the interest rate swap
aggregated $4.4 million before income taxes, of which $1.3 million, before
income taxes, has been reclassified and included in net income.

REVENUE RECOGNITION

Revenue is recognized when title to the goods and risk of loss pass to our
customers. Amounts billed to customers related to shipping and handling costs
are included in net sales. We assess the risk of loss on accounts receivable and
adjust the allowance for doubtful accounts based on this risk assessment.
Historically, losses on accounts receivable have not been material. Management
believes the allowance for doubtful accounts of $1.5 million at March 31, 2002
is adequate to provide for any potential losses from accounts receivable.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31,
2001

The following table presents, as a percentage of net sales, certain
categories included in our unaudited consolidated statements of income for the
periods indicated:

THREE MONTHS
ENDED MARCH 31,
----------------
2001 2002
------ ------
(UNAUDITED)

Net sales................................................... 100.0% 100.0%
Cost of sales............................................... 46.9 47.8
----- -----
Gross margin.............................................. 53.1 52.2
Selling and administrative expense.......................... 32.9 30.4
Research and development expense............................ 3.5 3.4
----- -----
Income from operations.................................... 16.7 18.4
Interest expense, net....................................... 7.8 5.9
----- -----
Income before income taxes................................ 8.9 12.5
Provision for income taxes.................................. 3.2 4.5
----- -----
Net income................................................ 5.7% 8.0%
===== =====

Sales for the quarter ended March 31, 2002 were $113.2 million, an increase
of 6.9% compared to sales of $105.9 million in the same quarter a year ago.
Excluding the effects of the second Imagyn acquisition, sales would have grown
by approximately 1.0%. Fluctuations in foreign currency exchange

rates in the first quarter of 2002 as compared to the same period a year ago did
not have a significant effect on sales.

- Sales in our orthopedic businesses decreased 1.6% to $69.7 million from
$70.8 million in the comparable quarter last year.

- Arthroscopy sales, which represented approximately 59.3% of total first
quarter of 2002 orthopedic revenues, grew 2.7% to $41.3 million from
$40.2 million in the same period a year ago on strength in sales of
disposable products and video equipment.

- Powered surgical instrument sales, which represented approximately 40.7%
of orthopedic revenues, decreased 7.2% to $28.4 million in the first
quarter of 2002 from $30.6 million in the same quarter last year, which
was a record quarter for powered surgical instrument sales. In the last
three quarters of 2001, powered surgical instrument sales averaged $27.9
million per quarter. We introduced our PowerPro(R) battery powered
instrument product line in February 2002, replacing older versions of
battery powered instruments. First shipments of this new product line
occurred in March 2002.

- Patient care sales for the three months ended March 31, 2002 were $17.3
million, a 1.7% decline from $17.6 million in the same period a year ago,
driven primarily by declines in sales of our surgical suction product
lines as a result of significant competition and pricing pressures. Sales
of ECG and other patient care products were largely stable in the first
quarter of 2002 as compared with the same period a year ago.

- Electrosurgery sales for the three months ended March 31, 2002 were $16.8
million, an increase of 12.0% from $15.0 million in the first quarter of
last year, driven by strong increases in disposable electrosurgical
pencil and ground pad sales.

- Sales of endoscopy products increased to $9.4 million in the three months
ended March 31, 2002 from $2.5 million in the same period a year ago,
primarily as a result of the second Imagyn acquisition. Sales of the
Imagyn product lines contributed approximately $6.5 million in sales in
the quarter ended March 31, 2002. Excluding the impact of the second
Imagyn acquisition, endoscopy sales increased approximately 16.0%. In
July 2001, concurrent with the second Imagyn acquisition, we created a
separate sales force focused on selling endoscopy products. Previously,
endoscopy products were sold through the electrosurgery sales force. We
believe the continued strong sales growth we have experienced in the
endoscopy product lines was enhanced by the focus provided by a separate,
dedicated sales force.

Cost of sales increased to $54.1 million in the first quarter of 2002 as
compared to $49.7 million in the same quarter a year ago as a result of the
increased sales described above, while gross margin percentage declined slightly
to 52.2% in the first quarter of 2002 compared to 53.1% in the first quarter of
2001, primarily as a result of decreased sales of powered surgical instruments
which carry higher gross margins than certain of our other product lines.

Selling and administrative expense decreased to $34.5 million in the first
quarter of 2002 as compared to $34.8 million in the first quarter of 2001. As a
percentage of sales, selling and administrative expense totaled 30.4% in the
first quarter of 2002 compared to 32.9% in the first quarter of 2001. During the
quarter ended March 31, 2002, selling and administrative expense decreased by
approximately $2.2 million as a result of the adoption of SFAS 142. Excluding
the impact of the adoption of SFAS 142, selling and administrative expense in
the first quarter of 2002 would have been approximately $36.7 million, or 32.4%
as a percentage of sales, declining slightly when compared with the same period
a year ago, as a result of the increase in sales.

Research and development expense increased to $3.8 million in the first
quarter of 2002 as compared to $3.7 million in the first quarter of 2001. This
increase represents continued research and development efforts primarily focused
on new product development in the orthopedic product lines. As a percentage of

sales, research and development expense decreased to 3.4% in the first quarter
compared to 3.5% in the same quarter a year ago as a result of higher sales
levels.

Interest expense in the first quarter of 2002 was $6.6 million compared to
$8.3 million in the first quarter of 2001. The decrease in interest expense is a
result of lower total borrowings during the first quarter as compared to the
same period a year ago, as well as lower weighted average interest rates on the
term loans and revolving credit facility under our credit agreement, which
declined to 4.20% and 3.70% at March 31, 2002 as compared to 7.94% and 8.14% at
March 31, 2001.

2001 COMPARED TO 2000

The following table presents, as a percentage of net sales, certain
categories included in our consolidated statements of income for the periods
indicated:

YEAR ENDED
DECEMBER 31,
-------------
2000 2001
----- -----

Net sales................................................... 100.0% 100.0%
Cost of sales............................................... 47.5 47.7
----- -----
Gross margin.............................................. 52.5 52.3
Selling and administrative expense.......................... 32.4 32.8
Research and development expense............................ 3.8 3.5
----- -----
Income from operations.................................... 16.3 16.0
Interest expense, net....................................... 8.7 7.2
----- -----
Income before income taxes................................ 7.6 8.8
Provision for income taxes.................................. 2.7 3.1
----- -----
Net income................................................ 4.9% 5.7%
===== =====

Sales for 2001 were $428.7 million, an increase of 8.3% compared to sales
of $395.9 million in 2000. Excluding our acquisition of certain product lines
from Imagyn in November 2000 (the "Imagyn acquisition") and July 2001, and
adjusting for constant foreign currency exchange rates, sales would have grown
by approximately 5.2%.

- Sales in our orthopedic businesses grew 4.3% to $269.9 million in 2001
from $258.8 million from 2000.

- Arthroscopy sales, which represented approximately 57.7% of total 2001
orthopedic revenues, grew 7.2% in 2001 to $155.6 million from $145.1
million in 2000, on strength in sales of disposable products and video
equipment.

- Powered surgical instrument sales, which represented approximately 42.3%
of total 2001 orthopedic revenues, grew 1.0% to $114.3 million in 2001
from $113.7 million in 2000. We believe the weakness in sales in the
powered surgical instrument product line was a result of our aging
battery-powered product offering, which has since been replaced by our
new PowerPro(R) battery-powered instrument product line, as we describe
above. Adjusted for constant foreign currency exchange rates, orthopedic
sales growth in 2001 would have been approximately 5.5% compared with
2000, as the value of the Canadian dollar and certain European
currencies weakened in comparison with the dollar.

- Patient care sales for 2001 were $69.1 million, a 1.3% increase from
$68.2 million in 2000, as modest increases in sales of our ECG and other
patient care product lines more than offset declines in sales of surgical
suction product lines which occurred as a result of significant
competition and pricing pressure.

- Electrosurgery sales for 2001 were $66.9 million, an increase of 7.0%
from $62.5 million in 2000, driven by increases in electrosurgical pencil
and other disposable product sales.

- Endoscopy sales for 2001 were $22.8 million, an increase of 256% from
$6.4 million in 2000. Excluding the impact of the Imagyn acquisitions in
November 2000 and July 2001, as described in Note 2 to our consolidated
financial statements, the increase in endoscopy sales was approximately
13.0%.

Cost of sales increased to $204.4 million in 2001 compared to $188.2
million in 2000, primarily as a result of the increased sales volumes described
above. As discussed in Notes 2 and 11 to our consolidated financial statements,
during 2001, we incurred various nonrecurring charges in connection with the
July 2001 Imagyn acquisition. These costs were primarily related to the
transition in manufacturing of the Imagyn product lines from Imagyn's Richland,
Michigan facility to our manufacturing plants in Utica, New York. Such costs
totaled approximately $1.6 million and are included in cost of sales. Excluding
the impact of these nonrecurring expenses, cost of sales for 2001 was $202.8
million. Gross margin percentage for 2001, excluding the Imagyn-related charges,
was 52.7%, a slight improvement as a result of increased sales volumes, compared
with 52.5% in 2000. Including the Imagyn-related charges, gross margin
percentage for 2001 was 52.3%.

Selling and administrative expense increased to $140.6 million in 2001 as
compared to $128.3 million in 2000. As a percentage of sales, selling and
administrative expense totaled 32.8% in 2001 compared to 32.4% in 2000.
Excluding a nonrecurring severance charge of $1.5 million recorded in 2000
related to the restructuring of our orthopedic direct sales force, as described
in Note 11 to our consolidated financial statements, selling and administrative
expense as a percentage of sales was 32.0% in 2000. This restructuring involved
replacing our orthopedic direct sales force with non-stocking exclusive sales
agent groups in certain geographic regions of the United States. This plan
resulted in greater sales force coverage in the affected geographic regions. The
increase in selling and administrative expense in 2001 as compared to 2000 is a
result of higher commission and other costs in 2001 as compared to 2000
associated with the change to exclusive sales agent groups as well as increased
spending on sales and marketing programs.

Research and development expense totaled $14.8 million in 2001, consistent
with $14.9 million in 2000. As a percentage of sales, research and development
expense decreased to 3.5% in 2001 compared to 3.8% in 2000, as a result of
higher sales levels. Our research and development efforts are focused primarily
on new product development in the orthopedic product lines.

Interest expense in 2001 was $30.8 million compared to $34.3 million in
2000. The decrease in interest expense is primarily a result of lower weighted
average interest rates on the term loans and revolving credit facility under our
credit agreement, as described in Note 5 to our consolidated financial
statements, which have declined, to 4.43% and 3.93% at December 31, 2001 as
compared to 8.73% and 9.06% at December 31, 2000 resulting in decreased interest
expense.

2000 COMPARED TO 1999

The following table presents, as a percentage of net sales, certain
categories included in our consolidated statements of income for the periods
indicated:

YEAR ENDED
DECEMBER 31,
--------------
1999 2000
----- -----

Net sales................................................... 100.0% 100.0%
Cost of sales............................................... 47.4 47.5
----- -----
Gross margin.............................................. 52.6 52.5
Selling and administrative expense.......................... 29.5 32.4
Research and development expense............................ 3.2 3.8
----- -----
Income from operations.................................... 19.9 16.3
Interest expense, net....................................... 8.6 8.7
----- -----
Income before income taxes................................ 11.3 7.6
Provision for income taxes.................................. 4.1 2.7
----- -----
Net income................................................ 7.2% 4.9%
===== =====

Sales for 2000 were $395.9 million, an increase of 5.2% compared to sales
of $376.2 million in 1999. Excluding our acquisitions of a powered instrument
line from 3M in August 1999 and certain product lines from Imagyn in November
2000, and adjusting for constant foreign currency exchange rates, sales would
have grown by approximately 1.3%.

- Sales in our orthopedic businesses grew 12.0% to $258.8 million in 2000
from $231.0 million in 1999.

- Arthroscopy sales, which represented approximately 56.1% of total 2000
orthopedic revenues, grew 1.0% to $145.1 million in 2000 from $144.1
million in 1999, as increases in sales of video equipment more than
offset slight declines in sales of disposable products.

- Powered surgical instrument sales, which represented approximately 43.9%
of total 2000 orthopedic revenues, grew 30.8% to $113.7 million in 2000
from $86.9 million in 1999. Excluding the impact of the acquisition of
the powered surgical instrument business from 3M in August 1999, as
described in Note 2 to our consolidated financial statements, the
increase in powered surgical instrument sales in 2000 compared to 1999
was approximately 12.1%. Adjusted for constant foreign currency exchange
rates, orthopedic sales growth in 2000 would have been approximately
13.4% compared with 1999 as the value of the Canadian dollar and certain
European currencies weakened in comparison with the dollar.

- Patient care sales for 2000 were $68.2 million, a 12.6% decrease from
$78.0 million in 1999, reflecting declines in sales of our ECG and
surgical suction product lines as a result of increased competition and
pricing pressure.

- Electrosurgery sales for 2000 were $62.5 million, consistent with the
$62.4 million in 1999, reflecting generally flat generator and disposable
product sales.

- Endoscopy sales for 2000 were $6.4 million, an increase of 33.3% from
$4.8 million in 1999. Excluding the impact of the Imagyn acquisition in
November 2000, as described in Note 2 to our consolidated financial
statements, the increase in endoscopy sales in 2000 was approximately
20.8%.

Cost of sales increased to $188.2 million in 2000 compared to $178.5
million in 1999. Gross margin percentage for 2000 was 52.5%. In connection with
the August 1999 acquisition of the powered surgical instrument business from 3M,
as described in Note 2 to our consolidated financial statements, we increased
the acquired value of inventory by $1.6 million; this inventory was sold in 1999
and served to increase cost of sales by $1.6 million. Excluding the impact of
this nonrecurring purchase accounting
23

adjustment, cost of sales was $176.9 million in 1999 and gross margin percentage
for 1999 was 52.9%. The slight decline in gross margin percentage in 2000 as
compared to 1999 is primarily a result of the negative impact of foreign
currency exchange rate fluctuations discussed above. Excluding the negative
impact of foreign currency exchange rate fluctuations, gross margin percentage
in 2000 would have been 52.8%.

Selling and administrative expense increased to $128.3 million in 2000 as
compared to $110.8 million in 1999. As a percentage of sales, selling and
administrative expense totaled 32.4% in 2000 compared to 29.5% in 1999. During
2000, we recorded under selling and administrative expense a nonrecurring
severance charge of $1.5 million related to the restructuring of our orthopedic
direct sales force, as described in Note 11 to our consolidated financial
statements. This restructuring involved replacing our orthopedic direct sales
force with non-stocking exclusive sales agent groups in certain geographic
regions of the United States. This plan resulted in greater sales force coverage
in the affected geographic regions. During 1999, we recorded in selling and
administrative expense the nonrecurring $1.3 million benefit of a previously
recorded litigation accrual which was settled on favorable terms. Excluding
these nonrecurring items, as a percentage of sales, selling and administrative
expense increased to 32.0% in 2000 as compared to 29.8% in 1999. This increase,
as a percentage of sales, is a result of increased spending on sales and
marketing programs, including higher commission and other costs associated with
the change to exclusive sales agent groups.

Research and development expense was $14.9 million in 2000 as compared to
$12.1 million in 1999. As a percentage of sales, research and development
expense increased to 3.8% in 2000 as compared to 3.2% in 1999. This increase
represents expanded research and development efforts primarily focused on new
product development in the orthopedic product lines.

Interest expense in 2000 was $34.3 million compared to $32.4 million in
1999. The increase in interest expense is primarily a result of higher weighted
average interest rates on the term loans and revolving credit facility under our
credit agreement, as described in Note 5 to our consolidated financial
statements, which increased to 8.73% and 9.06% at December 31, 2000 as compared
to 8.00% and 7.45% at December 31, 1999, resulting in increased interest
expense.

LIQUIDITY AND CAPITAL RESOURCES

Cash generated from our operations and borrowings under our revolving
credit facility have traditionally provided the working capital for our
operations, debt service under our credit facility and the funding of our
capital expenditures. In addition, we have used term borrowings, including:

- borrowings under our credit facility;

- Senior Subordinated Notes issued to refinance borrowings under our credit
facility, in the case of the Linvatec acquisition in 1997; and

- borrowings under separate loan facilities, in the case of real property
acquisitions, to finance our acquisitions. Following the use of the
proceeds of the offering to repay term loan borrowings under our credit
facility, we expect to continue to use cash flow from our operations and
borrowings under our revolving credit facility to finance our operations,
our debt service under our credit facility and the funding of our capital
expenditures.

Our term loans under our credit facility at March 31, 2002 aggregated
$115.9 million. Our term loans are repayable quarterly over remaining terms of
approximately three years. Our credit facility also includes a $100.0 million
revolving credit facility which expires December 2002, of which $43.0 million
was available at March 31, 2002. The borrowings under the credit facility carry
interest rates based on a spread over LIBOR or an alternative base interest
rate. The weighted average interest rates at March 31, 2002 under the term loans
and the revolving credit facility were 4.20% and 3.70%.

The Senior Subordinated Notes are in aggregate principal amount of $130.0
million, have a maturity date of March 15, 2008 and bear interest at 9.0% per
annum which is payable semiannually.

We used term loans to purchase the property in Largo, Florida utilized by
our Linvatec subsidiary. The term loans consist of a Class A note bearing
interest at 7.50% per annum with semiannual payments of principal and interest
through June 2009, a Class C note bearing interest at 8.25% per annum compounded
semiannually through June 2009, after which semiannual payments of principal and
interest will commence, continuing through June 2019, and a seller-financed note
bearing interest at 6.50% per annum with monthly payments of principal and
interest through July 2013. The principal balances outstanding on the Class A
note, Class C note and seller-financed note aggregated $11.7 million, $6.5
million and $4.1 million at March 31, 2002.

Our net working capital position was $47.4 million at March 31, 2002 as
compared to $44.7 million at December 31, 2001. Included in net working capital
is $57.0 million owed on our revolving credit facility which terminates on
December 31, 2002. We have begun discussions with our bank group regarding
extending the revolving credit facility or, as an alternative, renegotiating the
entire senior credit agreement. Based on our current discussions, we believe
that we will be able to successfully complete a senior credit arrangement which
will provide sufficient capital for our business. However, because of changed
economic conditions compared to market conditions in 1997 when our present
credit agreement was completed, we expect, based on discussions with our bank
group and current market conditions, that any new facility will carry interest
costs 75 to 100 basis points higher than our present credit agreement. Based on
the amounts outstanding at March 31, 2002 under the credit agreement, an
increase of 75 to 100 basis points would result in an increase in annual
interest expense of approximately $1.3 million to $1.7 million.

On November 1, 2001, we entered into a five-year accounts receivable sales
agreement pursuant to which we and certain of our subsidiaries sell on an
ongoing basis certain accounts receivable to CONMED Receivables Corporation, a
wholly-owned special-purpose subsidiary. CRC may in turn sell up to an aggregate
$50.0 million undivided percentage ownership interest in those receivables to a
commercial paper conduit. As of March 31, 2002, the undivided percentage
ownership interest in receivables sold by CRC to a commercial paper conduit
aggregated $40.0 million, which has been accounted for as a sale and reflected
in the balance sheet as a reduction in accounts receivable. We used the initial
$40.0 million in proceeds from the sale of accounts receivable in November 2001
to repay a portion of our term loans under our credit agreement described in
Note 5 to our consolidated financial statements. The sale of accounts receivable
is expected to enable us to lower our cost of capital by approximately $0.5
million annually by effectively accessing the commercial paper market. There are
certain statistical ratios primarily related to sales dilution and losses on
accounts receivable which must be calculated and maintained on the pool of
receivables in order to continue selling to the conduit purchaser. Management
believes that additional accounts receivable arising in the normal course of
business will be of sufficient quality and quantity to qualify for sale under
the accounts receivable sales agreement. In the event that new accounts
receivable arising in the normal course of business do not qualify for sale,
then collections on sold receivables will flow to the conduit purchaser rather
than being used to fund new receivable purchases. If this were to occur, we
would need to access an alternate source of working capital.

Net cash provided by operations, which we also refer to as "operating cash
flow," increased to $12.4 million for the first three months of 2002 compared to
$11.1 million for the same period in 2001, primarily as a result of higher net
income. In reconciling net income to operating cash flow, operating cash flow in
the first quarter of 2002 was positively impacted by depreciation, amortization
and increases in accounts payable and deferred income taxes and negatively
impacted primarily by an increase in inventory and decreases in accrued
compensation and accrued interest. The increase in inventory is primarily
related to expected increases in sales. The increases in accounts payable and
deferred income taxes and decreases in accrued compensation and interest are
primarily related to the timing of the payment of these liabilities.

Net cash provided by operations was $77.1 million in 2001. Operating cash
flow increased substantially in 2001 compared with 2000 and 1999 as a result of
the sale of accounts receivable as noted above, which increased operating cash
flows by $40.0 million. Excluding the effects of the receivable sale, operating
cash flow was $37.1 million in 2001. In reconciling net income to operating cash
flow, operating cash flow in 2001 was positively impacted primarily by
depreciation, amortization and deferred income taxes and negatively impacted
primarily as a result of increases in inventory and accounts receivable
25

(excluding the effects of the receivables sale) as a result of the second Imagyn
acquisition and overall higher sales levels experienced in 2001.

Net cash provided by operations was $36.0 million in 2000. Operating cash
flow in 2000 declined compared with $37.4 million in 1999 primarily as a result
of lower net income in 2000 as compared to 1999. In reconciling net income to
operating cash flow, operating cash flow in 2000 was positively impacted
primarily by depreciation, amortization and deferred income taxes and negatively
impacted primarily as a result of increased inventories and accounts receivable
as a result of overall higher sales levels in 2000 than 1999.

Net cash provided by operations was $37.4 million in 1999. Operating cash
flow in 1999 was positively impacted primarily by depreciation, amortization and
deferred income taxes. In reconciling net income to operating cash flow,
operating cash flow in 1999 was negatively impacted primarily as a result of
increases in accounts receivable and inventories. The increase in accounts
receivable and inventories was primarily related to the increase in sales
compared with the prior year.

Capital expenditures in the three months ended March 31, 2002 were $3.2
million compared to $3.9 million in the same period a year ago. Capital
expenditures for 2001, 2000 and 1999 amounted to $14.4 million, $14.1 million,
and $9.4 million. These capital expenditures represent the ongoing capital
investment requirements of our business and are expected to continue at the rate
of approximately $12.0 million to $14.0 million annually.

Net cash used by investing activities in 2000 included $6.0 million paid
related to the Imagyn acquisition. Net cash used by investing activities in 1999
included $40.6 million paid related to the acquisition of the powered surgical
instrument business from 3M in August 1999, as described in Note 2 to our
consolidated financial statements.

Financing activities in the three months ended March 31, 2002 consisted
primarily of scheduled payments of $8.9 million on our term loans and $1.0
million in repayments under our revolving credit facility. Financing activities
in the three months ended March 31, 2001 consisted primarily of scheduled
payments of $9.0 million on our term loans and $3.0 million in borrowings under
our revolving credit facility. Proceeds from the issuance of common stock
related to our employee incentive stock option plans totaled $2.0 million in the
three months ended March 31, 2002 as compared to $.5 million in the three months
ended March 31, 2001.

Financing activities in 2001 included $11.0 million in borrowings under the
revolving credit facility, $36.4 million in scheduled payments on our term
loans, and $40.0 million in additional payments on our term loans with the
proceeds from the accounts receivable sale discussed above. Financing activities
in 2000 included $17.0 million in borrowings under the revolving credit facility
and $32.9 million in scheduled payments on our term loans. Financing activities
during 1999 included a $40.0 million term loan used to fund the acquisition of
the powered surgical instrument business from 3M Company in August 1999,
scheduled payments of $23.1 million on our previously existing term loans and
$8.0 million in repayments on our revolving credit facility. Proceeds from the
issuance of common stock related to our employee incentive stock option plans
totaled $1.8 million in 2001, $0.4 million in 2000 and $1.6 million in 1999.

Assuming the successful renegotiation of the revolving credit facility
discussed above, management believes that cash generated from operations, our
current cash resources and funds available under our revolving credit facility
will provide sufficient liquidity to ensure continued working capital for
operations, debt service and funding of capital expenditures in the foreseeable
future.

CONTRACTUAL OBLIGATIONS

There were no capital lease obligations or unconditional purchase
obligations as of March 31, 2002. The following table summarizes our contractual
obligations related to operating leases and long-term debt as of March 31, 2002:

2002 2003 2004 2005 2006 THEREAFTER
------- ------- ------- ------- ------ ----------
(IN THOUSANDS)

Long-term debt......... $63,368 $43,364 $36,749 $35,181 $1,943 $145,386
Operating lease
obligations.......... 1,300 1,255 1,036 962 933 1,950
------- ------- ------- ------- ------ --------
Total contractual cash
obligations.......... $64,668 $44,619 $37,785 $36,143 $2,876 $147,336
======= ======= ======= ======= ====== ========

Included in long-term debt obligations in 2002 is $57.0 million due under
our revolving credit facility.

As indicated under "-- Liquidity and Capital Resources," we have begun
discussions with our bank group regarding extending our revolving credit
facility or, as an alternative, renegotiating our entire senior credit
agreement. If those negotiations are successful, payments on a portion of our
long-term debt due in 2002 through 2005, including the current portion of that
long-term debt represented by our revolving credit facility, would be due at
later dates.

As indicated under "Use of Proceeds," we will use the net proceeds from
this offering to repay outstanding debt under our credit agreement. On a pro
forma basis, with net proceeds from this offering of approximately $66.0
million, after giving effect to the application of the net proceeds from this
offering to repay term loans and without considering any changes to payment
dates as a result of a negotiation of our credit facility, the amount of
long-term debt due in 2003 would be reduced to about $32 million and the amount
of long-term debt due in 2004 would be reduced to about $8.3 million.

BUSINESS

GENERAL

We have used strategic business acquisitions to broaden our product
offerings, to increase our market share in certain product lines and to realize
economies of scale. Since 1997, we have completed six strategic business
acquisitions. The completed acquisitions, together with internal growth, have
resulted in a compound annual growth rate in net sales of 32% between 1997 and
2001.

INDUSTRY

The growth in the markets for our products is primarily driven by:

- FAVORABLE DEMOGRAPHICS. The number of surgical procedures performed is
increasing. This growth in surgical procedures reflects demographic
trends, such as the aging of the population, and technological
advancements, which result in safer and less invasive surgical
procedures. Additionally, as people are living longer, more active lives,
they are engaging in contact sports and activities such as running,
skiing, rollerblading, golf and tennis which result in injuries with
greater frequency and at an earlier age than ever before. Sales of our
surgical products represented over 85% of our total 2001 sales. See
"--Our Products."

- CONTINUED PRESSURE TO REDUCE HEALTH CARE COSTS. In response to rising
health care costs, managed care companies and other third-party payers
have placed pressure on health care providers to reduce costs. As a
result, health care providers have focused on the high cost areas such as
surgery. To reduce costs, health care providers use minimally invasive
techniques, which generally reduce patient trauma, recovery time and
ultimately the length of hospitalization. Many of our products are
designed for use in minimally invasive surgical procedures. See "--Our
Products." Health care providers are also increasingly purchasing
single-use disposable products, which reduce the costs associated with
sterilizing surgical instruments and products following surgery. The
single-use nature of disposable products lowers the risk of incorrectly
sterilized instruments spreading infection into the patient and
increasing the cost of post-operative care. Approximately 75% of our
sales are derived from single-use disposable products.

In the United States, the pressure on health care providers to contain
costs has altered their purchasing patterns for general surgical
instruments and disposable medical products. Many health care providers
have entered into comprehensive purchasing contracts with fewer
suppliers, which offer a broader array of products at lower prices. In
addition, many health care providers have aligned themselves with GPOs or
IHNs, which aggregate the purchasing volume of their members in order to
negotiate competitive pricing with suppliers, including manufacturers of
surgical products. We believe that these trends will favor entities that
offer a broad product portfolio. See "--Business Strategy" below.

- INCREASED GLOBAL MEDICAL SPENDING. We believe that foreign markets offer
growth opportunities for our products. We currently distribute our
products through our own sales subsidiaries or through local dealers in
over 100 foreign countries. International sales represented approximately
29% of total sales in 2001.

COMPETITIVE STRENGTHS

- STRONG BRAND RECOGNITION. We are a leading provider of arthroscopic
surgery devices, electrosurgical systems, powered surgical instruments
and ECG electrodes. Our products are sold under leading brand names,
including CONMED(R), Linvatec(R) and Hall Surgical(R). These brand names
are well recognized by physicians for quality and service. We believe
that brand recognition helps drive demand for our products by enabling us
to build upon the reputation for quality and service associated with
these brands and gain faster acceptance when introducing new branded
products.

- BREADTH OF PRODUCT OFFERING. The breadth of our product lines in our key
product areas enables us to meet a wide range of customer requirements
and preferences. In three of our five key product areas, we are only one
of two providers that offers a full line of products. For example, we
offer a complete set of the arthroscopy products a surgeon requires for
most arthroscopic procedures, including instrument and repair sets,
implants, shaver consoles and handpieces, video systems and related
disposables. This in turn has enhanced our ability to market our products
to surgeons, hospitals, surgery centers, GPOs, IHNs and other customers,
particularly as institutions seek to reduce costs and to minimize the
number of suppliers.

- SUCCESSFUL INTEGRATION OF ACQUISITIONS. Since 1997, we have completed
six acquisitions, including the 1997 acquisition of Linvatec Corporation
which more than doubled our size. These acquisitions have enabled us to
broaden our product categories, expand our sales and distribution
capabilities and increase our international presence. Our management
team, which averages more than 15 years of experience in the health care
industry, has demonstrated a historical ability to identify complementary
acquisitions and to integrate acquired companies into our operations.

- EXTENSIVE MARKETING AND DISTRIBUTION INFRASTRUCTURE. We market our
products domestically through our sales force consisting of approximately
210 employee sales representatives and an additional 90 sales
professionals employed by eight non-stocking sales agent groups, seven of
which are exclusive. All of our sales professionals are highly trained
and educated in the applications or procedures for the products they
sell. They call directly on surgeons, hospital departments, outpatient
surgery centers and physician offices. Additionally, we have an
international presence through sales subsidiaries and branches located in
key international markets. We sell direct to hospital customers in these
markets with an employee-based international sales force of approximately
40 sales representatives. We also maintain distributor relationships
domestically and in numerous countries worldwide. See "--Marketing."

- VERTICALLY INTEGRATED MANUFACTURING. We manufacture most of our products
and components. Our vertically integrated manufacturing process has
allowed us to provide quality products, to react quickly to changes in
demand and to generate manufacturing efficiencies, including purchasing
raw materials used in a variety of disposable products in bulk. We
believe that these manufacturing capabilities allow us to contain costs,
control quality and maintain security of proprietary processes. We
continually evaluate our manufacturing processes with the objective of
increasing automation, streamlining production and enhancing efficiency
in order to achieve cost savings, while seeking to improve quality.

- RESEARCH AND DEVELOPMENT EXPERTISE. Our research and development effort
is focused on introducing new products, enhancing existing products and
developing new technologies. During the last two years, we have
introduced more than 24 products and product enhancements. Our reputation
as an innovator is exemplified by our "first-to-market" product
introductions, which include the Envision(TM) Autoclavable Three Chip
Camera Head, Advantage(TM) drive system, the Trident(TM)resection
ablator, the SureCharge(TM) battery sterilization system and the 2.9
millimeter arthroscopy scope. Research and development expenditures were
$14.8 million in 2001.

BUSINESS STRATEGY

Our business strategy is to continue to strengthen our position as a market
leader in our key product areas. The elements of our strategy include:

- INTRODUCE NEW PRODUCTS AND PRODUCT ENHANCEMENTS. We will continue to
pursue organic growth by developing new products and enhancing existing
products to respond to customer needs and preferences. We are continually
seeking to develop new technologies to improve durability, performance
and usability of existing products. In addition to our research and
development, we receive new ideas for products and technologies,
especially in procedure-specific areas, from surgeons, inventors and
operating room personnel.

- PURSUE STRATEGIC ACQUISITIONS. We believe that strategic acquisitions
represent a cost-effective means of broadening our product line. We have
historically targeted companies with proven technologies and established
brand names that provide potential sales, marketing and manufacturing
synergies. Since 1997, we have completed six acquisitions, expanding our
product line to include arthroscopy products, powered surgical
instruments and most recently endoscopy products.

- REALIZE MANUFACTURING AND OPERATING EFFICIENCIES. We will continue to
review opportunities for consolidating product lines and streamlining
production. We believe our vertically integrated manufacturing processes
can produce further opportunities to reduce overhead and to increase
operating efficiencies and capacity utilization.

- MAINTAIN STRONG INTERNATIONAL SALES GROWTH. We believe there are
significant sales opportunities for our surgical products outside the
United States. We intend to maintain our international sales growth and
increase our penetration into international markets by utilizing our
relationships with foreign surgeons, hospitals and third-party payers, as
well as foreign distributors. In 2001, our sales outside the United
States grew by 14% and represented 29% of our 2001 sales.

OUR PRODUCTS

The following table sets forth the percentage of net sales for each
category of our products for 1999, 2000 and 2001:

YEAR ENDED DECEMBER 31,
------------------------------
1999 2000 2001
-------- -------- --------

Arthroscopy.......................................... 38% 36% 36%
Powered surgical instruments......................... 23 29 27
Electrosurgery....................................... 17 16 16
Patient Care......................................... 21 17 16
Endoscopy............................................ 1 2 5
-------- -------- --------
Total.............................................. 100% 100% 100%
======== ======== ========
Net sales (in thousands)............................. $376,226 $395,873 $428,722
======== ======== ========

ARTHROSCOPY

We offer a broad line of devices and products for use in arthroscopic
surgery. Arthroscopy refers to diagnostic and therapeutic surgical procedures
performed on joints with the use of minimally-invasive arthroscopes and related
instruments. Minimally-invasive arthroscopy procedures enable surgical repairs
to be completed with less trauma to the patient, resulting in shorter recovery
times and cost savings. About 75% of all arthroscopy is performed on the knee,
although arthroscopic procedures are increasingly performed on shoulders and
smaller joints, such as the wrist and ankle.

Our arthroscopy products include powered resection instruments,
arthroscopes, reconstructive systems, tissue repair sets, fluid management
systems, imaging products, implants and related disposable products.

It is our standard practice to transfer some of these products, such as shaver
consoles and pumps, to certain customers at no charge. These capital
"placements" allow for and accommodate the use of a variety of disposable
products, such as shaver blades, burs and pump tubing. We have benefited from
the introduction of new products and new technologies in the arthroscopic area,
such as bioresorbable screws, ablators, "push-in" and "screw-in" suture anchors,
resection shavers and cartilage repair implants.

The majority of arthroscopic procedures are performed to repair injuries
that have occurred in the joint areas of the body. Many of these injuries are
the result of sports related events or other traumas. This explains why
arthroscopy is sometimes referred to as "sports medicine."

ARTHROSCOPY
-------------------------------------------------------------------------------------------
PRODUCT DESCRIPTION BRAND NAME
-------------------------------- ------------------------------ ------------------------

Ablators and Shaver Ablators Electrosurgical ablators and Advantage(TM)
resection ablators to resect ESA(TM)
and remove soft tissue and Sterling(R)
bone; used in knee, shoulder UltrAblator(TM)
and small joint surgery. Heatwave(TM)
Trident(R)
Knee Reconstructive Systems Products used in cruciate Paramax(R)
reconstructive surgery; Pinn-ACL(R)
includes instrumentation, GraFix(TM)
screws, pins and ligament
harvesting and preparation
devices.
Soft Tissue Repair Systems Instrument systems designed to Spectrum(R)
attach specific torn or Inteq(R)
damaged soft tissue to bone or Shuttle Relay(TM)
other soft tissue in the knee, Blitz(R)
shoulder and wrist; includes
instrumentation, guides, hooks
and suture devices.
Fluid Management Systems Disposable tubing sets, Apex(R)
disposable and reusable inflow Quick-Flow(R)
devices, pumps and Quick-Connect(R)
suction/waste management
systems for use in
arthroscopic and general
surgeries.
Imaging Surgical video systems for Apex(R)
endoscopic procedures; 8180 Series
includes autoclavable single Envision(TM)
and three-chip camera heads Autoclavable Three
and consoles, endoscopes, Chip Camera Head
light sources, monitors, VCRs
and printers.
Implants Products including BioScrew(R)
bioabsorbable and metal BioStinger(R)
interference screws and suture BioAnchor(R)
anchors for attaching soft BioTwist(R)
tissue to bone in the knee, Ultrafix(R)
shoulder and wrist as well as Revo(R)
miniscal repair. Super Revo(R)
Other Instruments and Forceps, graspers, punches, Shutt(R)
Accessories probes, sterilization cases Concept(R)
and other general instruments TractionTower(R)
for arthroscopic procedures.

POWERED SURGICAL INSTRUMENTS

Powered surgical instruments are used to perform orthopedic, arthroscopic
and other surgical procedures, such as cutting, drilling or reaming, and are
driven by electric, battery or pneumatic power. Each instrument consists of one
or more handpieces and related accessories as well as disposable and limited
reuse items (e.g., burs, saw blades, drills and reamers). Powered instruments
are generally

categorized as either small bone, large bone or specialty powered instruments.
Specialty powered instruments include surgical applications such as spine,
neurosurgery, otolaryngology (ENT), oral/maxillofacial surgery, and
cardiothoracic surgery.

Our line of powered instruments is sold principally under the Hall(R)
Surgical brand name, for use in large and small bone orthopedic, arthroscopic,
oral/maxillofacial, podiatric, plastic, otolaryngologic, neurological, spine and
cardiothoracic surgeries. Large bone, neurosurgical, spine and cardiothoracic
powered instruments are sold primarily to hospitals, while small bone
arthroscopic, otolaryngological and oral/maxillofacial powered instruments are
sold to hospitals, outpatient facilities and physician offices. Our Linvatec
subsidiary has devoted substantial resources to developing a new technology base
for large bone, small bone, arthroscopic, neurosurgical, spine and
otolaryngological instruments that can be easily adapted and modified for new
procedures.

Our powered instruments line also includes our recently introduced
PowerPro(R) Battery System, which is a full function orthopedic power system
specifically designed to meet the requirements of most orthopedic applications.
The PowerPro(R) Battery System has a Surecharge(TM) option that allows the user
to sterilize the battery before it is charged. This ensures that the battery
will be fully charged when delivered to the operating room, unlike other battery
systems currently available on the market. The PowerPro(R) uses a process we
invented for maintaining sterility during the charging process, thus avoiding
the loss of battery charge during sterilization, a problem frequently
encountered by competing battery systems during sterilization.

POWERED SURGICAL INSTRUMENTS
------------------------------------------------------------------------------------------
PRODUCT DESCRIPTION BRAND NAME
--------------------------- ----------------------------------------- ------------------

Large Bone Powered saws, drills and related Hall(R) Surgical
disposable accessories for use primarily MaxiDriver(TM)
in total knee and hip joint replacements VersiPower(R) Plus
and trauma surgical procedures. Series 4(R)
PowerPro(R)
Advantage(TM)
SureCharge(TM)
Small Bone Powered saws, drills and related Hall(R) Surgical
disposable accessories for small bones E9000(R)
and joint surgical procedures. MiniDriver(TM)
MicroChoice(R)
Micro 100(TM)
Advantage(TM)
Otolaryngology Neurosurgery Specialty powered saws, drill and related Hall(R) Surgical
Spine disposable accessories for use in E9000(R)
neurosurgery, spine, and otolaryngologic UltraPower(R)
procedures. Hall Osteon(R)
Hall Ototome(R)
Cardiothoracic Powered sternum saws, drills, and related Hall(R) Surgical
Oral/Maxillofacial disposable accessories for use by E9000(R)
cardiothoracic and oral/maxillofacial UltraPower(R)
surgeons. Micro 100(TM)
VersiPower(R)Plus

Electrosurgery is the technique of using a high-frequency electric current
which, when applied to tissue through special instruments, can be used to cut
tissue, coagulate, or cut and coagulate simultaneously. Radio frequency ("RF")
is the form of high frequency electric current that is used in electrosurgery.
An electrosurgical system consists of a generator, an active electrode in the
form of a cautery pencil or other instrument, which the surgeon uses to apply
the current from the generator to the

target tissue, and a ground pad to safely return the current to the generator.
Electrosurgery is routinely used in most forms of surgery, including general,
dermatologic, thoracic, orthopedic, urologic, neurosurgical, gynecological,
laparoscopic, arthroscopic and other endoscopic procedures.

Our electrosurgical products include electrosurgical pencils and blades,
ground pads, generators, the argon-beam coagulation system (ABC(R)) and related
disposable products. ABC(R) technology is a special method of electrosurgery,
which allows a faster and more complete coagulation of many tissues as compared
to conventional electrosurgery. Unlike conventional electrosurgery, the
electrical current travels in a beam of ionized argon gas, allowing the current
to be dispersed onto the bleeding tissue without the instrument touching the
tissue. Clinicians have reported notable benefits of ABC(R) over traditional
electrosurgical coagulation in certain clinical situations, including
open-heart, liver, spleen and trauma surgery.

ELECTROSURGERY
------------------------------------------------------------------------------------------
PRODUCT DESCRIPTION BRAND NAME
--------------------------- ----------------------------------------- ------------------

Pencils Disposable and reusable instruments Hand-trol(R)
designed to deliver high-frequency Gold Line(R)
electric current to cut and/or coagulate Clear Vac(R)
tissue.
Ground Pads Disposable ground pads to safely return Macrolyte(R)
the current to the generator; available Bio-gard(R)
in adult, pediatric and infant sizes. SureFit(R)
Blades Surgical blades and accessory electrodes UltraClean(TM)
that use a proprietary coating to
eliminate tissue buildup on the blade
during surgery.
Generators Monopolar and bipolar generators for EXCALIBUR Plus
surgical procedures performed in a PC(R)
hospital, physician's office or clinical SABRE(R)
setting. Hyfrecator(R)2000
Argon Beam Coagulation Specialized electrosurgical generators, ABC(R)
Systems disposable hand pieces and ground pads Beamer Plus(R)
for enhanced non-contact coagulation of System 7500(TM)
tissue. ABC Flex(R)

PATIENT CARE

We manufacture a variety of patient care products for use in monitoring
cardiac rhythms, wound care management and IV therapy. These products include
ECG electrodes and cables, wound dressings and catheter stabilization dressings.
Our patient care product lines also include disposable surgical suction
instruments and connecting tubing. The majority of our sales in this category
are derived from the sale of ECG electrodes and surgical suction instruments and
tubing. Although wound management and intravenous therapy product sales are
comparatively small, the application of these products in the operating room
complements our surgical product offerings.

PATIENT CARE PRODUCTS
------------------------------------------------------------------------------------------
PRODUCT DESCRIPTION BRAND NAME
--------------------------- ----------------------------------------- ------------------

ECG Monitoring Line of disposable electrodes, monitoring CONMED(R)
cables, lead wire products and Ultratrace(R)
accessories designed to transmit ECG Cleartrace(R)
signals from the heart to an ECG monitor
or recorder.
Wound Care Disposable transparent wound dressings ClearSite(R)
comprising proprietary hydrogel; able to Hydrogauze(R)
absorb 2 1/2 times its weight in wound SportPatch(TM)
exudate.
Patient Positioners Products that properly and safely Airsoft(TM)
position patients while in surgery.
Surgical Suction Disposable surgical suction instruments CONMED(R)
Instruments and Tubing and connecting tubing, including
Yankauer, Poole, Frazier and
Sigmoidoscopic instrumentation, for use
by physicians in the majority of open
surgical procedures.
Intravenous Therapy Disposable IV drip rate gravity Veni-Gard(R)
controller and disposable catheter MasterFlow(R)
stabilization dressing designed to hold Stat 2(R)
and secure an IV needle or catheter for
use in IV therapy.
Defibrillator Pads and Stimulation electrodes for use in PadPro(TM)
Accessories emergency cardiac response and for
conduction studies of the heart.

ENDOSCOPY

Endoscopic surgery (also called laparoscopic surgery) is surgery performed
without a major incision, which results in less trauma for the patient and
produces important cost savings as a result of reduced hospitalization and
therapy. Endoscopic surgery is performed on organs in the abdominal cavity such
as the gallbladder, appendix and female reproductive organs. During a procedure,
devices called "trocars" are used to puncture the abdominal wall and then are
removed, leaving in place a trocar cannula. The trocar cannula provides access
into the abdomen for camera systems and surgical instruments. Some of our
endoscopic instruments are "reposable," which means that the instrument has a
disposable and a reusable component.

Our endoscopy products include the Reflex(R) clip applier for vessel and
duct ligation, Universal S/I(TM) (suction/irrigation) and Universal Plus(R)
laparoscopic instruments, and specialized, suction/irrigation electrosurgical
instrument systems for use in laparoscopic surgery and the Trogard Finesse(R)
which incorporates a blunt-tipped version of a trocar. The Trogard Finesse(R)
dilates access through the body wall rather than cutting with the sharp, pointed
tips of conventional trocars. This results in smaller wounds and less bleeding.
We also market cutting trocars, suction/irrigation accessories, laparoscopic
scissors, active electrodes, insufflation needles, linear cutters and staplers,
and ABC(R) handpieces for use in laparoscopic surgery. Disposable skin staplers
are used to close large skin incisions with surgical staples eliminating the
time consuming suturing process.

ENDOSCOPY
--------------------------------------------------------------------------------------------
PRODUCT DESCRIPTION BRAND NAME
--------------------------------- ------------------------------ ------------------------

Trocars Disposable and reposable Finesse(R)
devices used to puncture the Reflex(R)
abdominal wall to provide Detach a Port(R)
access to the abdominal cavity
for camera systems and
instruments.
Multi-Functional
Electrosurgery and Suction/
Irrigation Instruments Instruments for cutting and Universal(TM)
coagulating tissue by Universal Plus(TM)
delivering high-frequency FloVac(R)
current. Instruments that
deliver irrigating fluid to
the tissue and remove blood
and fluids from the internal
operating field.

Clip Appliers Disposable devices for Reflex(R)
ligating blood vessels and
ducts by placing a titanium
clip on the vessel.
Laparoscopic Instruments Scissors, graspers. Detach a Tip(R)
Skin Staplers Disposable devices that place Reflex(R)
surgical staples to close a
surgical incision.
Microlaparoscopy scopes and
Instruments Small laparoscopes and MicroLap(R)
instruments for performing
surgery through very small
incisions.

MARKETING

In the United States, most of the Company's products are marketed directly
to more than 6,000 hospitals, and to surgeons and other health care facilities.

Approximately 24% of the Company's net sales in 2001 were to customers
affiliated with GPOs, IHNs and other large national or regional accounts and 1%
of 2001 net sales were to the Veterans Administration and other hospitals
operated by the federal government. For hospital inventory management purposes,
certain of our customers prefer to purchase our products through independent,
third-party medical product distributors. Approximately 26% of our 2001 net
sales were made through such distributors.

In order to provide a high level of expertise to the medical specialties we
serve, our domestic sales force consists of the following:

- 180 sales representatives selling arthroscopy and orthopedic powered
surgical instrument products, including 90 employee sales representatives
and 90 sales professionals employed by eight sales agent groups.

- 60 employee sales representatives selling electrosurgery products.

- 30 employee sales representatives selling endoscopy products.

- 30 employee sales representatives selling patient care products.

Each employee sales representative has a defined geographic area and is
compensated on a commission basis or through a combination of salary and
commission. The sales force is supervised and supported by area directors. Sales
agent groups are used in the eight largest metropolitan areas of the United
States to sell our orthopedic products in their geographic territories. All of
these sales agent groups, except one, sell CONMED products exclusively. None
stock product for resale to customers as we ship

product directly to customers and carry the receivable for that group. The sales
agent groups are all paid a commission for sales made to customers in their
exclusive geographic areas. Home office sales and marketing management provide
the overall direction for the sales of our products.

We also have a corporate sales department that is responsible for
interacting with GPOs and IHNs. We have contracts with many such organizations
and believe that the lack of any individual group purchasing contract will not
adversely impact our competitiveness in the marketplace. Our sales professionals
are required to work closely with distributors where applicable and to maintain
close relationships with end-users.

The sale of our products is accompanied by initial and ongoing in-service
training of the end-user. Our sales professionals are trained in the technical
aspects of our products and their uses and the procedures in which they are
used. Our sales professionals, in turn, provide surgeons and medical personnel
with information relating to the technical features and benefits of our
products.

Our international sales accounted for approximately 29% of total revenues
in 2001. Products are sold in over 100 foreign countries. International sales
efforts are coordinated through local country dealers or with direct sales
efforts. We distribute our products through sales subsidiaries and branches with
offices located in Australia, Belgium, Canada, France, Germany, Korea, Spain and
the United Kingdom. In these countries, our sales are denominated in the local
currency. In the remaining countries where our products are sold through
independent distributors, sales are denominated in United States dollars.

We sell to a diversified base of customers around the world and, therefore,
believe there is no material concentration of credit risk.

MANUFACTURING

We manufacture most of our products and assemble them primarily from
components we produce. We believe our vertically integrated manufacturing
process allows us to provide quality products and generate manufacturing
efficiencies by purchasing raw materials for our disposable products in bulk. We
also believe that our manufacturing capabilities allow us to contain costs,
control quality and maintain security of proprietary processes. We use various
manual and automated equipment for fabrication and assembly of our products and
are continuing to further automate our facilities.

We use a variety of raw materials in our manufacturing processes. We work
to maintain multiple suppliers for each of our raw materials and components.
None of our critical raw materials are sourced from a single supplier.

All of our products are classified as medical devices subject to regulation
by the Food and Drug Administration. As a manufacturer of medical devices, our
manufacturing processes and facilities are subject to on-site inspection and
continuing review by the FDA for compliance with its Quality System Regulations.
Manufacturing and sales of our products outside the United States are also
subject to foreign regulatory requirements that vary from country to country.
The time required to obtain approvals from foreign countries may be longer or
shorter than that required for FDA approval, and requirements for foreign
approvals may differ from FDA requirements.

The following table provides information regarding our primary
manufacturing and administrative facilities. We believe our facilities are
adequate in terms of space and suitability for our needs over the next several
years.

LOCATION SQUARE FEET OWN OR LEASE LEASE EXPIRATION
-------- ----------- ------------ ----------------

Utica, NY (two facilities)................. 650,000 Own --
Largo, FL.................................. 278,000 Own --
Rome, NY................................... 120,000 Own --
Englewood, CO.............................. 65,000 Own --
Irvine, CA ................................ 31,000 Lease August 2003
El Paso, TX................................ 29,000 Lease April 2005
Juarez, Mexico............................. 25,000 Lease December 2004
Santa Barbara, CA.......................... 18,000 Lease December 2003

We believe our production and inventory practices are generally reflective
of conditions in the industry. Our products are not generally made to order or
to individual customer specifications. Accordingly, we schedule production and
stock inventory on the basis of experience and our knowledge of customer order
patterns, and our judgment as to anticipated demand. Since customer orders must
generally be filled promptly for immediate shipment, backlog of unfilled orders
is not significant to an understanding of our business.

RESEARCH AND DEVELOPMENT ACTIVITIES

During the years ended December 31, 1999, 2000 and 2001, we spent
approximately $12.1 million, $14.9 million and $14.8 million for research and
development. Our research and development department has 116 employees.

Our research and development programs focus on the development of new
products, as well as the enhancement of existing products with the latest
technology and updated designs. We are continually seeking to develop new
technologies to improve durability, performance and usability of existing
products. In addition to our own research and development, we receive new
product and technology disclosures, especially in procedure-specific areas, from
surgeons, inventors and operating room personnel. For disclosures that we deem
promising from a clinical and commercial perspective, we seek to obtain rights
to these ideas by negotiating agreements, which typically compensate the
originator of the idea through royalty payments based on a percentage of net
sales of licensed products.

We have rights to numerous U.S. patents and corresponding foreign patents
covering a wide range of our products. We own a majority of these patents and
have licensed rights to the remainder, both on an exclusive and non-exclusive
basis. In addition, certain patents are currently licensed to third parties on a
non-exclusive basis. Due to technological advancements, we do not rely on our
patents to maintain our competitive position, and we believe that development of
new products and improvement of existing ones is and will continue to be more
important than patent protection in maintaining our competitive position.

COMPETITION

The following chart identifies our principal competitors in each of our key
business areas:

BUSINESS AREA COMPETITOR
----------------------------- ------------------------------------------------------

Arthroscopy Smith & Nephew plc
Arthrex
Stryker Corporation
Arthrocare
Johnson & Johnson's Mitek division

Powered Surgical Instruments Stryker Corporation
Medtronic, Inc.'s Midas Rex and Xomed divisions
Anspach

Electrosurgery Tyco International Ltd.'s Valleylab division
3M Company
Johnson & Johnson

Patient Care Tyco International Ltd.'s Kendall division
3M Company

Endoscopy Tyco International Ltd.'s U.S. Surgical division
Johnson & Johnson's Ethicon division

We believe that product design, development and improvement, customer
acceptance, marketing strategy, customer service and price are critical elements
to compete in our industry. Other alternatives, such as medical procedures or
pharmaceuticals, could at some point prove to be interchangeable alternatives to
our products.

GOVERNMENT REGULATION

Most if not all of our products are classified as medical devices subject
to regulation by the Food and Drug Administration. Our new products generally
require FDA clearance under a procedure known as 510(k) premarketing
notification. A 510(k) premarketing notification clearance indicates FDA
agreement with an applicant's determination that the product for which clearance
has been sought is substantially equivalent to another medical device that was
on the market prior to 1976 or that has received 510(k) premarketing
notification clearance. Some products have been continuously produced, marketed
and sold since May 1976 and require no 510(k) premarketing clearance. Our
products generally are either Class I or Class II products with the FDA, meaning
that our products must meet certain FDA standards and are subject to the 510(k)
premarketing notification clearance discussed above, but are not required to be
approved by the FDA. FDA clearance is subject to continual review, and later
discovery of previously unknown problems may result in restrictions on a
product's marketing or withdrawal of the product from the market.

We have quality control/regulatory compliance groups that are tasked with
monitoring compliance with design specifications and relevant government
regulations for all of our products. We and substantially all of our products
are subject to the provisions of the Federal Food, Drug and Cosmetic Act of
1938, as amended by the Medical Device Amendments of 1976, and the Safe Medical
Device Act of 1990, as amended in 1992, and similar foreign regulations.

As a manufacturer of medical devices, our manufacturing processes and
facilities are subject to periodic on-site inspections and continuing review by
the FDA to insure compliance with Quality System Regulations as specified in
Title 21, Code of Federal Regulation (CFR) part 820. Many of our products are
subject to industry-set standards. Industry standards relating to our products
are generally formulated by committees of the Association for the Advancement of
Medical Instrumentation. We believe that our products presently meet applicable
standards. We market our products in a number of foreign markets. Requirements
pertaining to our products vary widely from country to country, ranging from
simple product

registrations to detailed submissions such as those required by the FDA. We
believe that our products currently meet applicable standards for the countries
in which they are marketed.

We are subject to product recall and have made product recalls in the past.
No recall has had a material effect on our financial condition, but there can be
no assurance regulatory issues may not have a material adverse effect in the
future.

Any change in existing federal, state or foreign laws or regulations, or in
the interpretation or enforcement thereof, or the promulgation of any additional
laws or regulations could have an adverse effect on our financial condition or
results of operations.

EMPLOYEES

As of December 2001, we had 2,560 full-time employees, of whom 1,754 were
in manufacturing, 116 in research and development, and the balance were in
sales, marketing, executive and administrative positions. None of our employees
are represented by a union, and we consider our employee relations to be
excellent. We have never experienced any strikes or work stoppages.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Our executive officers and the members of our board of directors are as
follows:

NAME AGE POSITION
---- --- --------

Eugene R. Corasanti................... 71 Chairman of the Board and Chief
Executive Officer
Joseph J. Corasanti................... 38 President and Chief Operating Officer;
Director
William W. Abraham.................... 70 Senior Vice President
Robert D. Shallish, Jr. .............. 53 Chief Financial Officer
Gerald G. Woodard..................... 54 President -- Linvatec
Daniel S. Jonas....................... 38 Vice President -- Legal Affairs and
General Counsel
Luke A. Pomilio....................... 37 Vice President; Controller
Thomas M. Acey........................ 55 Secretary and Treasurer
Frank R. Williams..................... 53 Vice President -- Sales and Marketing
for Endoscopy
John J. Stotts........................ 45 Vice President -- Marketing and Sales
for Patient Care Products
Eugene T. Starr....................... 56 President -- CONMED Electrosurgery
Robert E. Remmell..................... 71 Director
Bruce F. Daniels...................... 67 Director
William D. Matthews................... 67 Director
Stuart J. Schwartz.................... 65 Director

EUGENE R. CORASANTI has served as our Chairman of the Board since our
incorporation in 1970. Mr. Corasanti is also our Chief Executive Officer. Prior
to that time he was an independent public accountant. Mr. Corasanti holds a
B.B.A. degree in Accounting from Niagara University.

JOSEPH J. CORASANTI has served as our President and Chief Operating Officer
since August 1999 and as a Director since May 1994. He also served as our
General Counsel and Vice President-Legal Affairs from March 1993 to August 1998
and our Executive Vice-President/General Manager from August 1998 to August
1999. Prior to that time he was an Associate Attorney with the law firm of
Morgan, Wenzel & McNicholas, Los Angeles, California from 1990 to March 1993.
Mr. Corasanti holds a B.A. degree in Political Science from Hobart College and a
J.D. degree from Whittier College School of Law. Joseph J. Corasanti is the son
of Eugene R. Corasanti, Chairman and Chief Executive Officer of the Company.

WILLIAM W. ABRAHAM joined us in May 1977 as General Manager. He has served
as our Vice President -- Manufacturing and Engineering since June 1983. In
November of 1989 he was named Executive Vice President and in March 1993, he was
named Senior Vice President. Mr. Abraham holds a B.S. degree in Industrial
Management from Utica College.

ROBERT D. SHALLISH, JR. joined us as Chief Financial Officer and Vice
President-Finance in December 1989 and has also served as an Assistant Secretary
since March 1995. Prior to this he was employed as Controller of Genigraphics
Corporation in Syracuse, New York since 1984. He was employed by Price
Waterhouse LLP as a certified public accountant and senior manager from 1972
through 1984. Mr. Shallish graduated with a B.A. degree in Economics from
Hamilton College and holds a Master's degree in Accounting from Syracuse
University.

GERALD G. WOODARD joined us as President of Linvatec Corporation, our
wholly-owned subsidiary, in May 2000. Prior to his employment with us, Mr.
Woodard served as the President of Elekta Holdings, Inc. from March 1998 to May
2000. Previous to this position Mr. Woodard was the President of the

Monitoring and Information Systems Division of Marquette Medical Systems from
November 1995 to March 1998. Mr. Woodard holds a B.G.S. degree from Indiana
University.

DANIEL S. JONAS joined us as General Counsel in August 1998 and in addition
became our Vice President -- Legal Affairs in March 1999. In September 1999, Mr.
Jonas assumed responsibility for certain of our Regulatory Affairs and Quality
Assurance. Prior to his employment with us he was a partner with the law firm of
Harter, Secrest & Emery, LLP in Syracuse from January 1998 to August 1998,
having joined the firm as an Associate Attorney in 1995. Prior to that he was an
Associate Attorney at Miller, Alfano & Raspanti, P.C. in Philadelphia from 1992
to 1995 as well as an adjunct professor of law at the University of Pennsylvania
Law School from 1991 to 1995. Mr. Jonas holds an A.B. degree from Brown
University and a J.D. from the University of Pennsylvania Law School.

LUKE A. POMILIO joined us as Controller in September 1995. In addition, in
September 1999, Mr. Pomilio became a Vice President with responsibility for
certain of our manufacturing and research and development activities. Prior to
his employment with us, Mr. Pomilio served for two years as Controller of Rome
Cable Corporation, a wire and cable manufacturer. He was also employed as a
certified public accountant for seven years with Price Waterhouse LLP where he
served most recently as an audit manager. Mr. Pomilio graduated with a B.S.
degree in Accounting and Law from Clarkson University.

THOMAS M. ACEY has been employed by us since August 1980 and has served as
our Treasurer since August 1988 and as our Secretary since January 1993. Mr.
Acey holds a B.S. degree in Public Accounting from Utica College and prior to
joining us was employed by the certified public accounting firm of Tartaglia &
Benzo in Utica, New York.

FRANK R. WILLIAMS joined us in 1974 as Sales Manager and Director of
Marketing and became Vice President -- Marketing and Sales in June 1983. In
September 1989, he became Vice President -- Business Development, in November
1995, he became Vice President -- Technology Assessment and in January 2000, he
also became Vice President -- Research and Development and Marketing for
Minimally Invasive Surgical Products, which is now known as CONMED Endoscopy.
Mr. Williams graduated with a B.A. degree from Hartwick College in 1970 as a
biology major and did his graduate study in Human Anatomy at the University of
Rochester College of Medicine.

JOHN J. STOTTS joined us as Vice President -- Marketing and Sales for
Patient Care in July 1993 and became Vice President -- Marketing in December
1996. In January 2000, Mr. Stotts became Vice President -- Marketing and Sales
for Patient Care Products. Prior to his employment with us, Mr. Stotts served as
Director of Marketing and Sales for Medtronic Andover Medical, Inc. Mr. Stotts
holds a B.A. degree in Business Administration from Ohio University.

EUGENE T. STARR joined us as President of CONMED Electrosurgery in July
2001. Prior to his employment with us, Mr. Starr served as President of TYCO
Healthcare Group, Canada from October 1999 (when TYCO acquired U.S. Surgical
Corporation) to January 2001. Before his position with TYCO, Mr. Starr spent 17
years with U.S. Surgical, the most recent being Vice President and General
Manager of Auto Suture Co., U.S. Surgical's Canadian subsidiary. Mr. Starr holds
a B.S. degree in Business Administration from the University of Charleston.

ROBERT E. REMMELL has served as a Director since June 1983. Mr. Remmell
also served as our Assistant Secretary and as a non-employee officer of several
of our subsidiaries from June 1983 until March 1, 2000, when he resigned from
his position as Assistant Secretary, and from the positions he had held in our
subsidiaries. Mr. Remmell has been a partner since January 1961 of Steates
Remmell Steates & Dziekan, Utica, New York, which has served as counsel to the
Company. Mr. Remmell holds a B.A. degree from Utica College and an L.L.B. from
Syracuse University School of Law.

BRUCE F. DANIELS has served as a Director since August 1992. From August
1974 to June 1997, Mr. Daniels held various executive positions, including a
position as Controller with Chicago Pneumatic Tool Company and he is currently
retired. Mr. Daniels holds a B.S. degree in Business from Utica College.

WILLIAM D. MATTHEWS has served as a Director since August 1997. From 1986
until retiring from the positions in 1999, Mr. Matthews was the Chairman of the
Board and the Chief Executive Officer of Oneida Ltd. Mr. Matthews is a director
of Oneida Financial Corporation and formerly served as a director of Coyne
Textile Services. Mr. Matthews holds a B.A. degree from Union College and an
L.L.B. degree from Cornell University School of Law.

STUART J. SCHWARTZ has served as a Director since May 1998. Dr. Schwartz is
a retired physician. From 1969 to December 1997 he was engaged in private
practice as an urologist. Dr. Schwartz holds a B.A. degree from Cornell
University and a M.D. degree from SUNY Upstate Medical College, Syracuse.

As of March 29, 2002, our executive officers and directors beneficially
owned 2,165,794 shares of our common stock, representing 8.48% of the
outstanding shares of common stock, and are record owners of 521,525 shares of
our common stock, representing 2.04% of the outstanding shares of our common
stock. Giving effect to the offering, and assuming no exercise of the
underwriters' over-allotment option, these ownership percentages would decline
to 7.59% and 1.83%.

DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock currently consists of 100,000,000 shares of
common stock, par value $0.01 per share, and 500,000 shares of preferred stock,
par value $0.01 per share.

COMMON STOCK

As of March 29, 2002, there were 25,549,358 shares of our common stock
issued and outstanding held of record by 1,213 shareholders. As of March 29,
2002, an additional 424,860 shares of common stock were reserved for issuance
under our stock option plans. At our annual meeting of shareholders held on May
14, 2002, our shareholders approved an amendment to our 1999 Long Term Incentive
Plan to increase the number of shares of common stock authorized for issuance by
1,000,000 shares and an amendment to our Stock Option Plan for Non-Employee
Directors to increase the number of shares of common stock authorized for
issuance by 100,000 shares.

Subject to the preferences, limitations and relative rights of holders of
our preferred stock described below, the holders of our common stock are
entitled, among other things,

- to share ratably in dividends if, when, and as declared by our board of
directors out of funds legally available therefore,

- to one vote for each share held of record on all matters at all meetings
of shareholders, and

- in the event of our liquidation, dissolution or winding-up, to share
ratably in the distribution of assets remaining after payment of debts
and expenses.

Holders of shares of our common stock have no cumulative voting rights or
preemptive rights to subscribe for or purchase any additional shares of capital
stock issued by us. Our transfer agent and registrar is Registrar and Transfer
Company.

Under New York law, a corporation may declare and pay dividends or make
other distributions in cash or its bonds or its property on its outstanding
shares, except when the corporation is insolvent or would thereby be made
insolvent, or when the declaration, payment or distribution would be contrary to
any restriction contained in the certificate of incorporation. Our certificate
of incorporation contains no such restriction. In general, dividends may be
declared or paid and other distributions may be made out of surplus only, so
that the net assets of the corporation remaining after such declaration, payment
or distribution shall at least equal the amount of its stated capital.

Our board of directors presently intends to retain future earnings to
finance the development of our business and does not presently intend to declare
cash dividends. Should this policy change, the declaration of cash dividends
will be determined by our board of directors in the light of conditions then
existing, including our financial requirements and condition and provisions
affecting the declaration and payment of dividends contained in debt agreements.
Our credit agreement prohibits the payment of cash dividends and further
subjects us to compliance with various financial covenants.

PREFERRED STOCK

We are currently authorized to issue up to 500,000 shares of our preferred
stock, none of which is issued and outstanding. Our preferred stock may be
issued in one or more series by our board of directors without further action by
shareholders. Our board of directors is authorized to fix as to any such series
the dividend rate or rates, redemption prices, preferences on liquidation,
dissolution and winding-up, sinking fund terms, if any, conversion or exchange
rights, if any, voting rights and any other preferences or special rights and
qualifications.

Depending upon the rights of any preferred stock, its issuance could have
an adverse effect on holders of our common stock by delaying or preventing a
change in control, making removal of our present

management more difficult or resulting in restrictions upon the payment of
dividends and other distributions to the holders of our common stock.

PURCHASE AND CANCELLATION OF WARRANT ISSUED TO BRISTOL-MYERS SQUIBB

SHARES ELIGIBLE FOR FUTURE SALE

As of March 29, 2002, we had outstanding 25,549,358 shares of common stock.
Of those outstanding shares of common stock, 521,525 are beneficially owned by
certain persons who may be deemed "affiliates" of ours for purposes of Rule 144
under the Securities Act of 1933, as amended, and are not freely tradeable
without restriction or further registration under the Securities Act. All of
these shares are eligible for sale in the open market in accordance with Rule
144 under the Securities Act.

In general, under Rule 144 as currently in effect, any person who has
beneficially owned shares for at least one year, including persons who may be
deemed an "affiliate" of ours, is entitled to sell within any three-month period
a number of shares of our common stock that does not exceed the greater of (i)
1% of the then outstanding shares of our common stock or (ii) the average weekly
trading volume in our common stock during the four calendar weeks preceding such
sale. Such sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and to the availability of our current public
information. In addition, any person who is not deemed our "affiliate," and who
has beneficially owned his or her shares for at least two years, is entitled to
sell such shares under Rule 144 without regard to the volume limitations, manner
of sale provisions or notice requirements.

While no predictions can be made of any effect that open market sales of
shares or the availability of shares for sale will have on the market price
prevailing from time to time, sales of substantial amounts of our common stock
in the public market, or the perception that such sales will occur, could
adversely affect market prices and trading activities in our common stock.

UNDERWRITING

Salomon Smith Barney Inc. is acting as sole bookrunning manager and joint
lead manager of the offering, UBS Warburg LLC is acting as joint lead manager
and Salomon Smith Barney Inc. and UBS Warburg LLC, together with Needham &
Company, Inc. and First Albany Corporation, are acting as representatives of the
underwriters named below. Subject to the terms and conditions stated in the
underwriting agreement dated the date of this prospectus, each underwriter named
below has agreed to purchase, and we have agreed to sell to that underwriter,
the number of shares set forth opposite the underwriter's name.

NUMBER
UNDERWRITER OF SHARES
----------- ---------

Salomon Smith Barney Inc. .................................. 1,350,000
UBS Warburg LLC............................................. 960,000
Needham & Company, Inc. .................................... 510,000
First Albany Corporation.................................... 180,000
---------
Total..................................................... 3,000,000
=========

The underwriting agreement provides that the obligations of the
underwriters to purchase the shares included in this offering are subject to
approval of legal matters by counsel and to other conditions. The underwriters
are obligated to purchase all the shares (other than those covered by the
over-allotment option described below) if they purchase any of the shares.

The underwriters propose to offer some of the shares directly to the public
at the public offering price set forth on the cover page of this prospectus and
some of the shares to dealers at the public offering price less a concession not
to exceed $0.8401 per share. The underwriters may allow, and dealers may
reallow, a concession not to exceed $0.1000 per share on sales to other dealers.
If all of the shares are not sold at the initial offering price, the
representatives may change the public offering price and the other selling
terms.

We have granted to the underwriters an option, exercisable for 30 days from
the date of this prospectus, to purchase up to 450,000 additional shares of
common stock at the public offering price less the underwriting discount. The
underwriters may exercise the option solely for the purpose of covering
over-allotments, if any, in connection with this offering. To the extent the
option is exercised, each underwriter must purchase a number of additional
shares approximately proportionate to that underwriter's initial purchase
commitment.

We and certain of our officers and directors have agreed that, for a period
of 90 days from the date of this prospectus, subject to certain exceptions, we
and they will not, without the prior written consent of Salomon Smith Barney,
dispose of or hedge any shares of our common stock or any securities convertible
into or exchangeable for our common stock. Salomon Smith Barney in its sole
discretion may release any of the securities subject to these lock-up agreements
at any time without notice.

The common stock is quoted on the Nasdaq National Market under the symbol
"CNMD."

The following table shows the underwriting discounts and commissions that
we are to pay to the underwriters in connection with this offering. These
amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase additional shares of common stock.

PAID BY CONMED
----------------------------
NO EXERCISE FULL EXERCISE
----------- -------------

Per share................................................... $ 1.2925 $ 1.2925
Total....................................................... $3,877,500 $4,459,125

In connection with the offering, Salomon Smith Barney, on behalf of the
underwriters, may purchase and sell shares of common stock in the open market.
These transactions may include short sales, syndicate covering transactions and
stabilizing transactions. Short sales involve syndicate sales of common stock in

excess of the number of shares to be purchased by the underwriters in the
offering, which creates a syndicate short position. "Covered" short sales are
sales of shares made in an amount up to the number of shares represented by the
underwriters' over-allotment option. In determining the source of shares to
close out the covered syndicate short position, the underwriters will consider,
among other things, the price of shares available for purchase in the open
market as compared to the price at which they may purchase shares through the
over-allotment option. Transactions to close out the covered syndicate short
involve either purchases of the common stock in the open market after the
distribution has been completed or the exercise of the over-allotment option.
The underwriters may also make "naked" short sales of shares in excess of the
over-allotment option. The underwriters must close out any naked short position
by purchasing shares of common stock in the open market. A naked short position
is more likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the shares in the open market after pricing
that could adversely affect investors who purchase in the offering. Stabilizing
transactions consist of bids for or purchases of shares in the open market while
the offering is in progress.

The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney repurchases shares originally sold by that syndicate member
in order to cover syndicate short positions or make stabilizing purchases.

Any of these activities may have the effect of preventing or retarding a
decline in the market price of the common stock. They may also cause the price
of the common stock to be higher than the price that would otherwise exist in
the open market in the absence of these transactions. The underwriters may
conduct these transactions on the Nasdaq National Market or in the
over-the-counter market, or otherwise. If the underwriters commence any of these
transactions, they may discontinue them at any time.

In addition, in connection with this offering, some of the underwriters
(and selling group members) may engage in passive market making transactions in
the common stock on the Nasdaq National Market, prior to the pricing and
completion of this offering. Passive market making consists of displaying bids
on the Nasdaq National Market no higher than the bid prices of independent
market makers and making purchases at prices no higher than those independent
bids and effected in response to order flow. Net purchases by a passive market
maker on each day are limited to a specified percentage of the passive market
maker's average daily trading volume in the common stock during a specified
period and must be discontinued when the limit is reached. Passive market making
may cause the price of the common stock to be higher than the price that
otherwise would exist in the open market in the absence of those transactions.
If the underwriters commence passive market making transactions, they may
discontinue them at any time.

We estimate that our portion of the total expenses of this offering will be
$575,000.

The underwriters have performed investment banking and advisory services
for us from time to time for which they have received customary fees and
expenses. An affiliate of Salomon Smith Barney is a lender and documentation
agent under our credit facility. The underwriters may, from time to time, engage
in transactions with and perform services for us in the ordinary course of their
business.

A prospectus in electronic format may be made available on the websites
maintained by one or more of the underwriters. The representatives may agree to
allocate a number of shares to underwriters for sale to their online brokerage
account holders. The representatives will allocate shares to underwriters that
may make Internet distributions on the same basis as other allocations. In
addition, shares may be sold by the underwriters to securities dealers who
resell shares to online brokerage account holders.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make because of any of those
liabilities.

VALIDITY OF COMMON STOCK

The validity of the common stock offered hereby will be passed on for us by
Sullivan & Cromwell, New York, New York, special counsel to the Company, and for
the underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New York.

EXPERTS

The consolidated financial statements of CONMED Corporation as of December
31, 2000 and 2001 and for each of the three years in the period ended December
31, 2001, incorporated herein by reference from our Form 10-K, have been so
included on the reliance on the reports of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

THE REGISTRATION STATEMENT

We have filed a registration statement with the SEC that registers the
shares offered by this prospectus.

The registration statement that we filed with the SEC, including the
attached exhibits and schedules, contains additional relevant information about
CONMED and its shares of common stock. The SEC allows us to omit some
information included in the registration statement from this prospectus. You
should read the entire registration statement in order to obtain this additional
information.

FILINGS WITH THE SEC

In addition, we file reports, proxy statements and other information with
the SEC on a regular basis. You may read and copy this information at the
following location of the SEC:

PUBLIC REFERENCE ROOM
450 FIFTH STREET, N.W.
ROOM 1024
WASHINGTON, D.C. 20549

You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Further information on the operation of the
SEC's Public Reference Room in Washington, D.C. can be obtained by calling the
SEC at l-800-SEC-0330.

The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like CONMED, who
file electronically with the SEC. The address of that site is
http://www.sec.gov.

DOCUMENTS INCORPORATED BY REFERENCE

THE SEC ALLOWS US TO "INCORPORATE BY REFERENCE" INFORMATION INTO THIS
PROSPECTUS. THIS MEANS THAT WE CAN DISCLOSE IMPORTANT INFORMATION TO YOU BY
REFERRING YOU TO ANOTHER DOCUMENT FILED SEPARATELY WITH THE SEC. This
information incorporated by reference is a part of this prospectus, unless we
provide you with different information in this prospectus.

This prospectus incorporates by reference the documents listed below that
we have previously filed with the SEC. They contain important information about
CONMED and its financial condition.

- CONMED's Annual Report on Form 10-K for the year ended December 31, 2001
(our "Form 10-K").

- CONMED's Quarterly Report on Form 10-Q for the quarter ended March 31,
2002.
47

- The description of our common stock contained in our Registration
Statement on Form 8-A, dated August 5, 1987, filed with the SEC under
Section 12(b) of the Exchange Act, including any amendment or reports
filed under the Exchange Act for the purpose of updating such
description.

This prospectus also incorporates by reference additional documents that we
may file with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act after the time of filing of the initial registration statement and before
effectiveness of the registration statement, and after the date of this
prospectus and before the termination of this offering. These documents include
annual reports, quarterly reports and other current reports, as well as proxy
statements.

You can obtain any of the documents incorporated by reference in this
prospectus from us or from the SEC through the SEC's web site at the address
described above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless we specifically
incorporated by reference the exhibit in this prospectus. You can obtain these
documents from us by requesting them in writing or by telephone at the following
address or number:

SECRETARY
CONMED CORPORATION
525 FRENCH ROAD
UTICA, NEW YORK 13502-5994
TELEPHONE: (315) 624-3207

INDEX TO FINANCIAL STATEMENTS

Report of Independent Accountants........................... F-2
Consolidated Balance Sheets at December 31, 2000 and 2001... F-3
Consolidated Statements of Income for the Years Ended
December 1999, 2000 and 2001.............................. F-4
Consolidated Statements of Shareholders' Equity for the
Years Ended December 1999, 2000 and 2001.................. F-5
Consolidated Statements of Cash Flows for the Years Ended
December 1999, 2000 and 2001.............................. F-6
Notes to Consolidated Financial Statements.................. F-7

F-1

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of CONMED Corporation

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of income, of cash flows and of shareholders'
equity present fairly, in all material respects, the financial position of
CONMED Corporation and its subsidiaries at December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP

Syracuse, New York
February 5, 2002

F-2

CONMED CORPORATION

CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2000 AND 2001
(IN THOUSANDS EXCEPT SHARE AMOUNTS)

2000 2001
-------- --------

ASSETS
Current assets:
Cash and cash equivalents................................. $ 3,470 $ 1,402
Accounts receivable, less allowance for doubtful accounts
of $1,479 in 2000 and $1,553 in 2001................... 78,626 51,188
Inventories............................................... 104,612 107,390
Deferred income taxes..................................... 1,761 1,105
Prepaid expenses and other current assets................. 3,562 3,464
-------- --------
Total current assets................................... 192,031 164,549
-------- --------
Property, plant and equipment, net.......................... 62,450 91,026
Goodwill, net............................................... 225,801 251,140
Other intangible assets, net................................ 195,008 189,752
Other assets................................................ 4,281 5,141
-------- --------
Total assets........................................... $679,571 $701,608
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt......................... $ 36,068 $ 73,429
Accounts payable.......................................... 20,350 19,877
Accrued compensation...................................... 9,913 11,863
Income taxes payable...................................... 1,979 2,507
Accrued interest.......................................... 5,130 4,954
Other current liabilities................................. 4,836 7,207
-------- --------
Total current liabilities.............................. 78,276 119,837
-------- --------
Long-term debt.............................................. 342,680 262,500
Deferred income taxes....................................... 12,154 18,655
Other long-term liabilities................................. 15,858 16,982
-------- --------
Total liabilities...................................... 448,968 417,974
-------- --------
Shareholders' equity:
Preferred stock, par value $.01 per share; authorized
500,000 shares, none outstanding....................... -- --
Common stock, par value $.01 per share; 100,000,000
authorized; 23,028,279 and 25,261,590, issued and
outstanding in 2000 and 2001, respectively............. 230 253
Paid-in capital........................................... 127,985 160,757
Retained earnings......................................... 103,834 128,240
Accumulated other comprehensive loss...................... (1,027) (5,197)
Less 37,500 shares of common stock in treasury, at cost... (419) (419)
-------- --------
Total shareholders' equity............................. 230,603 283,634
-------- --------
Total liabilities and shareholders' equity............. $679,571 $701,608
======== ========

See notes to consolidated financial statements.
F-3

CONMED CORPORATION

CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 1999, 2000 AND 2001
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1999 2000 2001
-------- -------- --------

Net sales.................................................. $376,226 $395,873 $428,722
-------- -------- --------
Cost of sales.............................................. 178,480 188,223 204,374
Selling and administrative expense......................... 110,842 128,316 140,560
Research and development expense........................... 12,108 14,870 14,830
-------- -------- --------
301,430 331,409 359,764
-------- -------- --------
Income from operations..................................... 74,796 64,464 68,958
Interest expense, net...................................... 32,360 34,286 30,824
-------- -------- --------
Income before income taxes................................. 42,436 30,178 38,134
Provision for income taxes................................. 15,277 10,864 13,728
-------- -------- --------
Net income................................................. $ 27,159 $ 19,314 $ 24,406
======== ======== ========
Per share data:
Net income
Basic.................................................... $ 1.19 $ 0.84 $ 1.02
Diluted.................................................. 1.17 0.83 1.00

See notes to consolidated financial statements.
F-4

CONMED CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 1999, 2000 AND 2001
(IN THOUSANDS)

ACCUMULATED
COMMON STOCK OTHER
--------------- PAID-IN RETAINED COMPREHENSIVE TREASURY SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INCOME (LOSS) STOCK EQUITY
------ ------ -------- -------- ------------- -------- -------------

Balance at December 1998...... 22,775 $228 $124,963 $ 57,361 $ 35 $(419) $182,168
Exercise of stock options... 182 2 1,610 1,612
Tax benefit arising from
exercise of stock
options................... 744 744
Comprehensive income:
Foreign currency
translation
adjustments............ (422)
Net income................ 27,159
Total comprehensive income.... 26,737
------ ---- -------- -------- ------- ----- --------
Balance at December 1999...... 22,957 230 127,317 84,520 (387) (419) 211,261
Exercise of stock options... 72 449 449
Tax benefit arising from
exercise of stock
options................... 219 219
Comprehensive income:
Foreign currency
translation
adjustments............ (640)
Net income................ 19,314
Total comprehensive
income.................... 18,674
------ ---- -------- -------- ------- ----- --------
Balance at December 2000...... 23,029 230 127,985 103,834 (1,027) (419) 230,603
Exercise of stock options..... 259 3 1,827 1,830
Tax benefit arising from
exercise of stock options... 604 604
Stock issued in connection
with business
acquisitions................ 1,974 20 30,341 30,361
Comprehensive income:
Foreign currency translation
adjustments............... (1,142)
Cash flow hedging (net of
income tax benefit of
$1,106)................... (1,966)
Minimum pension liability
(net of income tax benefit
of $597).................. (1,062)
Net income.................. 24,406
Total comprehensive income.... 20,236
------ ---- -------- -------- ------- ----- --------
Balance at December 2001...... 25,262 $253 $160,757 $128,240 $(5,197) $(419) $283,634
====== ==== ======== ======== ======= ===== ========

See notes to consolidated financial statements.
F-5

CONMED CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 1999, 2000 AND 2001
(IN THOUSANDS)

1999 2000 2001
-------- -------- --------

Cash flows from operating activities:
Net income................................................ $ 27,159 $ 19,314 $ 24,406
-------- -------- --------
Adjustments to reconcile net income to net cash provided
by operations:
Depreciation............................................ 9,207 9,434 9,055
Amortization............................................ 17,084 20,053 21,093
Deferred income taxes................................... 8,978 7,974 8,562
Increase (decrease) in cash flows from changes in assets
and liabilities, net of effects from acquisitions:
Proceeds from accounts receivable the sale of......... -- -- 40,000
Accounts receivable................................... (9,192) (2,166) (12,508)
Inventories........................................... (9,086) (18,035) (4,235)
Prepaid expenses and other current assets............. (799) 1,811 46
Accounts payable...................................... (3,060) 3,824 (516)
Income taxes payable.................................. 1,242 2,295 (281)
Income tax benefit of stock option exercises.......... 744 219 604
Accrued compensation.................................. (7) 255 1,950
Accrued interest...................................... (1,481) 542 (290)
Other assets/liabilities, net......................... (3,348) (9,570) (10,737)
-------- -------- --------
10,282 16,636 52,743
-------- -------- --------
Net cash provided by operations....................... 37,441 35,950 77,149
-------- -------- --------
Cash flows from investing activities:
Payments related to business acquisitions................. (40,585) (6,042) --
Purchases of property, plant and equipment................ (9,352) (14,050) (14,443)
-------- -------- --------
Net cash used by investing activities................... (49,937) (20,092) (14,443)
-------- -------- --------
Cash flows from financing activities:
Proceeds of long-term debt................................ 40,900 -- --
Borrowings (repayments) under revolving credit facility... (8,000) 17,000 11,000
Proceeds from issuance of common stock.................... 1,612 449 1,830
Payments related to issuance of long-term debt............ (661) -- --
Payments on long-term debt................................ (23,103) (32,921) (76,423)
-------- -------- --------
Net cash provided (used) by financing activities........ 10,748 (15,472) (63,593)
-------- -------- --------
Effect of exchange rate changes on cash and cash
equivalents............................................... (411) (663) (1,181)
-------- -------- --------
Net decrease in cash and cash equivalents................... (2,159) (277) (2,068)
Cash and cash equivalents at beginning of year.............. 5,906 3,747 3,470
-------- -------- --------
Cash and cash equivalents at end of year.................... $ 3,747 $ 3,470 $ 1,402
======== ======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest.................................................. $ 32,662 $ 33,788 $ 31,135
Income taxes.............................................. 4,502 4,141 2,098

Supplemental disclosures of non-cash investing and financing activities:

As more fully described in Note 2, we acquired a business in 2001 through the
exchange of 1,950,000 shares of our common stock valued at $29.9 million.

As more fully described in Note 2, we acquired certain property in 2001
through the assumption of approximately $22.7 million of debt and accrued
interest.

See notes to consolidated financial statements.
F-6

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -- OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND OPERATIONS

The consolidated financial statements include the accounts of CONMED
Corporation and its subsidiaries ("CONMED", the "Company", "we" or "us"). All
intercompany accounts and transactions have been eliminated. CONMED Corporation
is a medical technology company specializing in instruments, implants and video
equipment for arthroscopic sports medicine, and powered surgical instruments
(drills and saws), for orthopaedic, ENT, neuro-surgery and other surgical
specialties. We are also a leading developer, manufacturer and supplier of
advanced medical devices, including RF electrosurgery systems used routinely to
cut and cauterize tissue in nearly all types of surgical procedures worldwide,
endoscopy products such as trocars, clip appliers, scissors and surgical
staplers, and a full line of ECG electrodes for heart monitoring and other
patient care products. Our products are used in a variety of clinical settings,
such as operating rooms, surgery centers, physicians' offices and critical care
areas of hospitals.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

CASH EQUIVALENTS

We consider all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE SALE

There are certain statistical ratios which must be maintained relating to
the pool of receivables in order to continue selling to the purchaser.
Management believes that additional accounts receivable arising in the normal
course of business will be of sufficient quality and quantity to qualify for
sale under the accounts receivable sales agreement. In the event that new
accounts receivable arising in the normal course of business do not qualify for
sale, then collections on sold receivables will flow to the purchaser rather
than being used to fund new receivable purchases. If this were to occur, we
would need to access an alternate source of working capital.

F-7

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INVENTORIES

Inventories are stated at the lower of cost or market, cost being
determined on the first-in, first-out basis.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost and depreciated using the
straight-line method over the following estimated useful lives:

Building and improvements................................... 40 years
Leasehold improvements...................................... Remaining life of lease
Machinery and equipment..................................... 2 to 15 years

GOODWILL AND OTHER INTANGIBLE ASSETS

In June 2001, the Financial Accounting Standards Board approved Statement
of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets"
("SFAS 142"). We adopted SFAS 142 effective January 1, 2002. Under this
standard, amortization of goodwill and certain intangibles, including certain
intangibles recorded as a result of past business combinations, is to be
discontinued upon adoption of SFAS 142. In addition, goodwill and certain
intangibles recorded as a result of business combinations completed during the
six-month period ending December 2001 have not been amortized. All goodwill and
intangible assets are being tested for impairment in accordance with the
provisions of SFAS 142. No impairment losses are expected to be recognized as a
result of the tests. While we are still assessing the effect of the adoption of
SFAS 142, management believes that had SFAS 142 been in effect during 2001, net
income would have increased by approximately $5.5 million or $.22 per share.

Accumulated amortization of goodwill amounted to $23,340,000 and
$29,941,000 at December 2000 and 2001, respectively. Other intangible assets are
comprised of the following (in thousands):

2000 2001
-------- --------

Customer relationships...................................... $ 96,712 $ 96,712
Trademarks and tradenames................................... 95,715 95,715
Patents and other intangible assets......................... 31,479 35,465
-------- --------
223,906 227,892
Less: Accumulated amortization.............................. (28,898) (38,140)
-------- --------
Other intangible assets, net................................ $195,008 $189,752
======== ========

DERIVATIVE FINANCIAL INSTRUMENTS

We do not trade in derivative securities. We do use interest rate swaps to
manage the interest risk associated with our variable rate debt. We accounted
for our interest rate swaps on the accrual method at December 2000, whereby the
net interest receivable or payable is recognized on a periodic basis and
included as a component of interest expense.

F-8

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Effective January 1, 2001, we adopted Statement of Financial Accounting
Standard No. 133, Accounting for Derivative Instruments and Hedging Activities,
("SFAS 133"). SFAS 133 requires that derivatives be recorded on the balance
sheet as assets or liabilities, measured at fair value. Gains or losses
resulting from the changes in the values of the derivatives are accounted for
depending on whether the derivative qualifies for hedge accounting. Upon
adoption of SFAS 133, we recorded a net-of-tax cumulative-effect-type loss
adjustment of $971,000 in accumulated other comprehensive income to recognize at
fair value an interest rate swap which we have designated as a cash-flow hedge
and which effectively converts $50,000,000 of LIBOR-based floating rate debt
under our credit facility into fixed rate debt with a base interest rate of
7.01%. Including the cumulative effect loss adjustment related to the adoption
of SFAS 133, total gross holding losses during 2001 related to the interest rate
swap aggregated $4,415,000 before income taxes, of which $1,343,000, before
income taxes, has been reclassified and included in net income. Management
estimates approximately $2,000,000, before income taxes, of gross holding losses
will be reclassified and included in net income in 2002.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of cash and cash equivalents, accounts receivable, accounts
payable, and interest rate swaps approximates their carrying amount. The
estimated fair values and carrying amounts of long-term debt are as follows (in
thousands):

2000 2001
----------------------- -----------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
--------- ---------- --------- ----------

Long-term debt (including current
maturities)....................... $(378,748) $(352,748) $(335,929) $(338,529)

Fair values were determined from quoted market prices or discounted cash
flow analysis.

TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS

Assets and liabilities of foreign subsidiaries have been translated into
United States dollars at the applicable rates of exchange in effect at the end
of the period reported. Revenues and expenses have been translated at the
applicable weighted average rates of exchange in effect during the period
reported. Translation adjustments are reflected in accumulated other
comprehensive income (loss). Any transaction gains and losses are included in
net income.

REVENUE RECOGNITION

Revenue is recognized when title to the goods and risk of loss pass to our
customers. Amounts billed to customers related to shipping and handling are
included in net sales. Shipping and handling costs were $9,450,000, $8,125,000
and $8,559,000 for the years ended December 1999, 2000 and 2001, respectively,
and are included in selling and administrative expense. We sell to a diversified
base of customers around the world and, therefore, believe there is no material
concentration of credit risk. We assess the risk of loss on accounts receivable
and adjust the allowance for doubtful accounts based on this risk assessment.
Historically, losses on accounts receivable have not been material. Management
believes the allowance for doubtful accounts of $1,553,000 at December 2001 is
adequate to provide for any potential losses from accounts receivable.

EARNINGS PER SHARE

Basic earnings per share ("EPS") is computed based on the weighted average
number of common shares outstanding for the period. Diluted EPS gives effect to
all dilutive potential shares outstanding (i.e.,

F-9

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

options and warrants) during the period. The following is a reconciliation of
the weighted average shares used in the calculation of basic and diluted EPS (in
thousands):

1999 2000 2001
------ ------ ------

Shares used in the calculation of basic EPS (weighted
average shares outstanding)............................ 22,862 22,967 24,045
Effect of dilutive potential securities.................. 283 304 356
------ ------ ------
Shares used in the calculation of diluted EPS............ 23,145 23,271 24,401
====== ====== ======

The shares used in the calculation of diluted EPS exclude warrants and
options to purchase shares where the exercise price was greater than the average
market price of common shares for the year. Such shares aggregated 1,989,000,
3,396,000 and 2,842,000 at December 1999, 2000 and 2001, respectively.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform with the
presentation used in 2001.

NOTE 2 -- BUSINESS ACQUISITIONS

On August 11, 1999, we purchased certain assets of the powered surgical
instrument business of 3M Company (the "Powered Instrument acquisition") for a
purchase price of $40.0 million. The purchase price was funded through
borrowings under our credit facility (Note 5). The Powered Instrument
acquisition was accounted for using the purchase method in which the results of
operations of the acquired business are included in our consolidated results
from the date of acquisition. The acquired products, with annual revenues of
approximately $20.0 million, complement our existing powered surgical instrument
business. Goodwill associated with the Powered Instrument acquisition aggregated
approximately $34.0 million and is being amortized on a straight-line basis over
a 40-year period. In connection with the Powered Instrument acquisition, we
increased the acquired value of inventory by $1.6 million. This inventory was
sold during the quarter ended September 1999 resulting in a nonrecurring
adjustment to increase cost of sales during 1999 by $1.6 million. As a result of
the adoption of SFAS 142, amortization of goodwill associated with the Powered
Instrument acquisition has been discontinued effective January 1, 2002 (Note 1).

On November 20, 2000 we acquired certain assets of the disposable minimally
invasive surgical business of Imagyn Medical Technologies, Inc. (the "Imagyn
acquisition") for a purchase price of $6.0 million. The Imagyn acquisition was
accounted for using the purchase method in which the results of operations of
the acquired business are included in our consolidated results from the date of
acquisition. The acquisition was funded through borrowings under our revolving
credit facility (Note 5). The acquired products, with annual sales of
approximately $5.0 million, complement our existing minimally invasive surgical
products business. Goodwill associated with the Imagyn acquisition aggregated
approximately $4.8 million and is being amortized on a straight-line basis over
a 40-year period. The Imagyn acquisition did not have a material effect on
earnings per share in the year ended December 2000. As a result of the adoption
of SFAS 142, amortization of goodwill associated with the Imagyn acquisition has
been discontinued effective January 1, 2002 (Note 1).

On June 11, 2001, we reached a definitive agreement to acquire the
remaining assets of the minimally invasive surgical business of Imagyn Medical
Technologies, Inc. that we did not acquire in November 2000 (the "second Imagyn
acquisition"). The results of operations of the acquired business are included
in our consolidated results from July 6, 2001, the date of acquisition. The new
products, with expected annual revenues of $18.0 to $20.0 million, complement
our existing minimally invasive surgical products business. Under the terms of
the acquisition agreement, we issued Imagyn 1,950,000 shares of

F-10

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONMED common stock, valuing the transaction at $29.9 million based on the
average market price of our common stock over the 2-day period before and after
the terms of the acquisition were agreed to and announced. Goodwill associated
with the second Imagyn acquisition aggregated approximately $26.7 million. In
accordance with the transition provisions of SFAS 142, this goodwill has not
been amortized. As discussed in Note 11, during the third and fourth quarters of
2001 we incurred certain nonrecurring costs aggregating approximately $1.5
million in connection with the second Imagyn acquisition which are included in
cost of sales. The second Imagyn acquisition did not have a material effect on
earnings per share in the year ended December 2001.

On August 3, 2001, we purchased the real estate partnerships which own the
Largo, Florida property leased by our Linvatec subsidiary for an aggregate
purchase price of $22.7 million (the "Largo acquisition"). In connection with
the acquisition, we assumed the existing debt on the property and financed the
remainder with the seller (Note 5).

NOTE 3 -- INVENTORIES

The components of inventory are as follows (in thousands):

2000 2001
-------- --------

Raw materials............................................... $ 38,278 $ 38,101
Work in process............................................. 12,612 11,921
Finished goods.............................................. 53,722 57,368
-------- --------
$104,612 $107,390
======== ========

NOTE 4 -- PROPERTY, PLANT AND EQUIPMENT

Details of property, plant and equipment are as follows (in thousands):

2000 2001
-------- --------

Land........................................................ $ 1,511 $ 4,004
Building and improvements................................... 27,686 67,951
Machinery and equipment..................................... 63,970 68,284
Construction in progress.................................... 12,283 1,955
-------- --------
105,450 142,194
Less: Accumulated depreciation............................ (43,000) (51,168)
-------- --------
$ 62,450 $ 91,026
======== ========

We lease various manufacturing and office facilities and equipment under
operating leases. Rental expense on these operating leases was approximately
$2,935,000, $3,376,000 and $2,756,000 for the years ended December 1999, 2000
and 2001, respectively. The aggregate future minimum lease commitments for
operating leases at December 2001 are as follows:

YEAR ENDING DECEMBER (IN THOUSANDS):
------------------------------------

2002........................................................ $1,624
2003........................................................ 1,255
2004........................................................ 1,036
2005........................................................ 962
2006........................................................ 933
Thereafter.................................................. 1,950

F-11

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5 -- LONG TERM DEBT

We have a credit agreement with several banks providing for a $490,000,000
senior credit facility. The senior credit facility is comprised of four
sub-facilities: (i) a $210,000,000 five-year term loan with quarterly principal
repayments; (ii) a $140,000,000 seven-year term loan with quarterly principal
repayments; (iii) a $40,000,000 six-year term loan with quarterly principal
repayments; and (iv) a $100,000,000 revolving credit facility. The revolving
credit facility expires on December 30, 2002 and therefore has been classified
in the current portion of long-term debt; it is expected to be renegotiated
during 2002. During the commitment period, we are obligated to pay a fee of
..375% per annum on the unused portion of the revolving credit facility. As of
December 2001, we had $13,300,000, $77,220,000, $34,340,000 and $58,000,000
outstanding under the five-year term loan, the seven-year term loan, the six
year term loan and the revolving credit facility, respectively.

The borrowings under the senior credit facility carry interest rates based
on a spread over LIBOR or an alternative base interest rate. The covenants of
the senior credit facility provide for increases and decreases to this interest
rate spread based on our operating results. Additionally, certain events of
default under the credit facility limit interest rate options available to us.
The weighted average interest rates at December 2001 under the five-year term
loan, the seven-year term loan, the six year term loan and the revolving credit
facility, were 4.00%, 4.43%, 4.60% and 3.93%, respectively.

The term debt and revolving credit facility are collateralized by
substantially all of our personal property and assets, except for our accounts
receivable and related rights which are pledged in connection with the accounts
receivable sales agreement discussed in Note 1. The agreement contains covenants
and restrictions which, among other things, require maintenance of certain
working capital levels and financial ratios, prohibit dividend payments and
restrict the incurrence of certain indebtedness and other activities, including
acquisitions and dispositions. We are also required to make mandatory
prepayments from net cash proceeds from any issue of equity and asset sales.
Mandatory prepayments are to be applied first to the prepayment of the term
loans and then to reduce borrowings under the revolving credit facility.

The debt assumed in connection with the Largo acquisition (Note 2),
consists of a note bearing interest at 7.50% per annum with semiannual payments
of principal and interest through June 2009 (the "Class A note"); and a note
bearing interest at 8.25% per annum compounded semiannually through June 2009,
after which semiannual payments of principal and interest will commence,
continuing through June 2019 (the "Class C note"). Additionally, there is a
seller-financed note which bears interest at 6.50% per annum with monthly
payments of principal and interest through July 2013 (the "Seller note"). The
principal balances assumed on the Class A note, Class C note and Seller note
aggregate $12,185,000, $6,191,000 and $4,228,000, respectively, at the date of
acquisition. The principal balances outstanding related to the Largo
acquisition, aggregated $11,724,000, $6,402,000 and $4,157,000, at December 2001
on the Class A note, Class C note and Seller note respectively. The Largo
acquisition related debt is collateralized by, among other things, recorded and
unrecorded mortgage liens on the Largo property.

We have $130,000,000 of 9% Senior Subordinated Notes (the "Notes")
outstanding. The Notes mature on March 15, 2008, unless previously redeemed by
us. Interest on the Notes is payable semi-annually on March 15 and September 15
of each year. The Notes are redeemable for cash at anytime on or after March 15,
2003, at our option, in whole or in part, at the redemption prices set forth
therein, plus accrued and unpaid interest to the date of redemption.

As discussed in Note 1, we use an interest rate swap, a form of derivative
financial instrument, to manage interest rate risk. We have designated as a
cash-flow hedge, an interest rate swap which effectively converts $50,000,000 of
LIBOR-based floating rate debt under our senior credit facility into fixed rate
debt with a base interest rate of 7.01%. The interest rate swap expires in June
2003 and is included in liabilities on the balance sheet with a fair value
approximating $3,072,000.

F-12

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Excluding the revolving credit facility which expires and is expected to be
renegotiated in 2002, the scheduled maturities of long-term debt outstanding at
December 2001 are as follows:

YEAR ENDING DECEMBER (IN THOUSANDS):

2002........................................................ $ 15,429
2003........................................................ 43,364
2004........................................................ 36,749
2005........................................................ 35,181
2006........................................................ 1,943
Thereafter.................................................. 145,263

NOTE 6 -- INCOME TAXES

The provision for income taxes consists of the following (in thousands):

1999 2000 2001
------- ------- -------

Current tax expense:
Federal........................................... $ 5,027 $ 1,634 $ 3,565
State............................................. 350 300 400
Foreign........................................... 922 956 1,201
------- ------- -------
6,299 2,890 5,166
Deferred income tax expense......................... 8,978 7,974 8,562
------- ------- -------
Provision for income taxes........................ $15,277 $10,864 $13,728
======= ======= =======

A reconciliation between income taxes computed at the statutory federal
rate and the provision for income taxes follows (in thousands):

1999 2000 2001
------- ------- -------

Tax provision at statutory rate based on income before
income taxes and extraordinary item................. $14,853 $10,562 $13,347
Foreign sales corporation............................. (543) (725) (894)
State taxes........................................... 257 180 270
Nondeductible intangible amortization................. 320 321 320
Other nondeductible permanent differences............. 270 200 220
Other, net............................................ 120 326 465
------- ------- -------
$15,277 $10,864 $13,728
======= ======= =======

F-13

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The tax effects of the significant temporary differences which comprise the
deferred tax assets and liabilities at December 2000 and 2001 are as follows (in
thousands):

2000 2001
-------- --------

Assets:
Receivables.............................................. $ 138 $ 225
Inventory................................................ 1,115 870
Deferred compensation.................................... 761 943
Employee benefits........................................ 221 428
Deferred rent............................................ 570 --
Additional minimum pension liability..................... -- 597
Interest rate swap....................................... -- 1,106
Other.................................................... 1,011 164
Net operating losses of acquired subsidiary.............. 3,834 3,410
Valuation allowance for deferred tax assets.............. (3,834) (3,410)
-------- --------
3,816 4,333
-------- --------
Liabilities:
Goodwill and intangible assets........................... 11,559 17,757
Depreciation............................................. 2,650 4,126
-------- --------
14,209 21,883
-------- --------
Net liability.............................................. $(10,393) $(17,550)
======== ========

Net operating losses related to an acquisition are subject to certain
limitations and expire over the period 2008 to 2010. Management has established
a valuation allowance of $3,410,000 to reflect the uncertainty of realizing the
benefit of certain of these carryforwards.

NOTE 7 -- SHAREHOLDERS' EQUITY

The shareholders have authorized 500,000 shares of preferred stock, par
value $.01 per share, which may be issued in one or more series by the Board of
Directors without further action by the shareholders. As of December 2001, no
preferred stock had been issued.

On August 8, 2001, our Board of Directors declared a three-for-two split of
our common stock to be effected in the form of a common stock dividend. This
dividend was payable on September 7, 2001 to shareholders of record on August
21, 2001. Accordingly, common stock, the number of shares outstanding, earnings
per share, incentive stock option activity and the number of shares used in the
calculation of earnings per share have all been restated to retroactively
reflect the split.

In connection with the 1997 acquisition of Linvatec Corporation, we issued
to Bristol-Myers Squibb Company a ten-year warrant to purchase 1.5 million
shares of our common stock at a price of $22.82 per share.

We have reserved shares of common stock for issuance to employees and
directors under four stock option plans (the "Plans"). The exercise price on all
outstanding options is equal to the quoted fair market value of the stock at the
date of grant. Stock options are non-transferable other than on death and
generally become exercisable over a five year period from date of grant and
expire ten years from date of grant.

F-14

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following is a summary of incentive stock option activity under the
Plans (in thousands, except per share amounts):

NUMBER OF WEIGHTED-AVERAGE
SHARES EXERCISE PRICE
--------- ----------------

Outstanding at December 1998.............................. 2,250 $11.93
Granted during 1999..................................... 602 19.75
Forfeited............................................... (14) 15.27
Exercised............................................... (182) 8.88
----- ------
Outstanding at December 1999.............................. 2,656 13.96
Granted during 2000..................................... 684 14.05
Forfeited............................................... (209) 17.20
Exercised............................................... (72) 6.23
----- ------
Outstanding at December 2000.............................. 3,059 13.91
Granted during 2001..................................... 709 15.59
Forfeited............................................... (75) 18.86
Exercised............................................... (259) 7.07
----- ------
Outstanding at December 2001.............................. 3,434 $14.69
===== ======
Exercisable:
December 1999........................................... 1,418 $10.89
December 2000........................................... 1,674 12.31
December 2001........................................... 1,954 13.59

WEIGHTED
STOCK OPTIONS AVERAGE WEIGHTED STOCK OPTIONS WEIGHTED
OUTSTANDING AT REMAINING LIFE AVERAGE EXERCISABLE AT AVERAGE
RANGE OF EXERCISE PRICES DECEMBER 2001 (YEARS) EXERCISE PRICE DECEMBER 2001 EXERCISE PRICE
------------------------ -------------- -------------- -------------- -------------- --------------

Less than $5.00 42,000 1.6 $3.57 42,000 $3.57
$5.00 to $7.50 392,000 1.5 7.05 392,000 7.05
$7.50 to $10.00 287,000 7.8 9.01 224,000 8.97
$10.00 to $15.00 905,000 8.0 13.83 287,000 13.25
$15.00 to $17.50 1,000,000 6.6 16.36 638,000 16.34
$17.50 to $20.00 471,000 7.6 19.05 222,000 19.31
$20.00 to $23.00 337,000 7.4 21.07 149,000 20.87

Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS 123") defines a fair value based method of
accounting for an employee stock option whereby compensation cost is measured at
the grant date based on the fair value of the award and is recognized over the
service period. A company may elect to adopt SFAS 123 or elect to continue
accounting for its stock option or similar equity awards using the method of
accounting prescribed by Accounting Principles Board Opinion ("APB") No. 25,
"Accounting for Stock Issued to Employees", where compensation cost is measured
at the date of grant based on the excess of the market value of the underlying
stock over the exercise price. We have elected to continue to account for our
stock-based compensation plans under the provisions of APB No. 25. No
compensation expense has been recognized in the accompanying financial
statements relative to our stock option plans.

Pro forma information regarding net income and earnings per share is
required by SFAS 123 and has been determined as if we had accounted for our
employee stock options under the fair value method of that statement. The
weighted average fair value of options granted in 1999, 2000 and 2001 was $8.85,

F-15

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$8.55 and $7.39, respectively. The fair value of these options was estimated at
the date of grant using a Black-Scholes options pricing model with the following
weighted-average assumptions for options granted in 1999, 2000 and 2001,
respectively: Risk-free interest rates of 6.46%, 5.06% and 4.38%; volatility
factors of the expected market price of the Company's common stock of 39.23%,
68.01% and 48.04%; a weighted-average expected life of the option of five years;
and that no dividends would be paid on common stock.

For purposes of the pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows (in thousands, except for earnings per share
information):

1999 2000 2001
------- ------- -------

Net income -- as reported............................. $27,159 $19,314 $24,406
Net income -- pro forma............................... 24,678 16,167 21,561
EPS -- as reported:
Basic............................................... 1.19 .84 1.02
Diluted............................................. 1.17 .83 1.00
EPS -- pro forma
Basic............................................... 1.08 .70 .90
Diluted............................................. 1.07 .69 .88

NOTE 8 -- BUSINESS SEGMENTS, GEOGRAPHIC AREAS AND MAJOR CUSTOMERS

CONMED's business is organized, managed and internally reported as a single
segment comprised of medical instruments and systems used in surgical and other
medical procedures. We believe our product lines have similar economic,
operating and other related characteristics.

The following is net sales information for geographic areas (in thousands):

1999 2000 2001
-------- -------- --------

United States...................................... $285,048 $288,514 $306,306
All other countries................................ 91,178 107,359 122,416
-------- -------- --------
Total.............................................. $376,226 $395,873 $428,722
======== ======== ========

There were no significant investments in long-lived assets located outside
the United States at December 2000 and 2001.

NOTE 9 -- PENSION PLANS

We maintain defined benefit plans covering substantially all employees. We
make annual contributions to the plans equal to the maximum deduction allowed
for federal income tax purposes.

Net pension cost for 1999, 2000 and 2001 included the following components
(in thousands):

1999 2000 2001
------- ------- -------

Service cost -- benefits earned during the period....... $ 2,592 $ 2,658 $ 3,622
Interest cost on projected benefit obligation........... 1,349 1,608 1,785
Expected return on plan assets.......................... (1,090) (1,121) (1,211)
Net amortization and deferral........................... 41 21 166
------- ------- -------
Net pension cost........................................ $ 2,892 $ 3,166 $ 4,362
======= ======= =======

F-16

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the plans' funded status and amounts
recognized in the consolidated balance sheets at December 2000 and 2001 (in
thousands):

2000 2001
------- -------

Change In Benefit Obligation
Projected benefit obligation at beginning of year........... $19,737 $22,949
Service cost................................................ 2,658 3,622
Interest cost............................................... 1,608 1,785
Actuarial loss (gain)....................................... 2,834 4,597
Benefits paid............................................... (3,888) (3,205)
------- -------
Projected benefit obligation at end of year................. $22,949 $29,748
------- -------
Change In Plan Assets
Fair value of plan assets at beginning of year.............. $12,759 $13,077
Actual return on plan assets................................ 312 432
Employer contribution....................................... 3,894 6,659
Benefits paid............................................... (3,888) (3,205)
------- -------
Fair value of plan assets at end of year.................... $13,077 $16,963
------- -------
Change In Funded Status
Funded status............................................... $ 9,872 $12,785
Unrecognized net actuarial loss............................. (3,837) (9,062)
Unrecognized transition liability........................... (60) (56)
Unrecognized prior service cost............................. (151) (140)
Additional minimum pension liability........................ -- 1,659
------- -------
Accrued pension cost........................................ $ 5,824 $ 5,186
======= =======

For 1999, 2000 and 2001 actuarial calculation purposes, the weighted
average discount rate was 7.0%, 7.5% and 7.0%, respectively, the expected long
term rate of return was 8.0% and the rate of increase in future compensation
levels was 4.5%.

The projected benefit obligation, accumulated benefit obligation and fair
value of plan assets for the pension plan with accumulated benefit obligations
in excess of plan assets were $16,447,000, $11,672,000 and $8,087,000
respectively, as of December 2001. CONMED common stock valued at $315,000 and
$550,000 was held by the plans at December 2000 and 2001, respectively.

NOTE 10 -- LEGAL MATTERS

From time to time, we have been named as a defendant in certain lawsuits
alleging product liability, patent infringement, or other claims incurred in the
ordinary course of business. Certain of these claims are covered by various
insurance policies, subject to deductible amounts and maximum policy limits.
Ultimate liability with respect to these contingencies, if any, is not
considered to be material to the consolidated financial statements of the
Company.

NOTE 11 -- UNUSUAL ITEMS

During the quarter ended December 1999, we recognized a benefit related to
a previously recorded litigation accrual which was settled on favorable terms.
This nonrecurring benefit amounted to $1,256,000, before income taxes, or $.03
per diluted share and is included in selling and administrative expense.

During the quarter ended June 2000, we announced we would replace our
arthroscopy direct sales force with non-stocking, exclusive sales agent groups
in certain geographic regions of the United States. As
F-17

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

a result, we incurred a severance charge of $1,509,000, before income taxes, or
$.04 per diluted share, in the second quarter of 2000. This nonrecurring charge
is included in selling and administrative expense.

As discussed in Note 2, during the third and fourth quarters of 2001, we
incurred certain charges related to the second Imagyn acquisition. These costs
were primarily related to the transition in manufacturing of the Imagyn product
lines from Imagyn's Richland, Michigan facility to our manufacturing plants in
Utica, New York. Such costs totaled $886,000 and $681,000, respectively, before
income taxes, or $.02 per diluted share in each of the third and fourth quarters
of 2001. These nonrecurring charges are included in cost of sales.

NOTE 12 -- SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial data for 2000 and 2001 are as follows (in
thousands, except per share amounts):

THREE MONTHS ENDED
------------------------------------------
MARCH JUNE SEPTEMBER DECEMBER
-------- -------- --------- --------

2000
Net sales.................................. $102,811 $ 97,878 $ 92,838 $102,346
Gross profit............................... 54,150 50,551 48,702 54,247
Net income................................. 7,409 3,516 2,729 5,660
Earnings per share:
Basic.................................... 0.32 0.15 0.12 0.25
Diluted.................................. 0.32 0.15 0.12 0.24
2001
Net sales.................................. $105,909 $104,171 $105,318 $113,324
Gross profit............................... 56,235 54,206 53,986 59,921
Net income................................. 6,003 5,734 5,015 7,654
Earnings per share:
Basic.................................... 0.26 0.25 0.20 0.30
Diluted.................................. 0.26 0.25 0.20 0.30

As discussed in Note 11, during the quarter ended June 2000, we incurred a
severance charge of $1,509,000, before income taxes, or $.04 per diluted share,
related to a restructuring of our arthroscopy sales force. This nonrecurring
charge is included in selling and administrative expense.

As discussed in Notes 2 and 11, during the third and fourth quarters of
2001, we incurred certain transition charges related to the second Imagyn
acquisition. Such costs totaled $886,000 and $681,000, respectively, before
income taxes, or $.02 per diluted share in each of the third and fourth quarters
of 2001. These nonrecurring charges are included in cost of sales.

NOTE 13 -- GUARANTOR FINANCIAL STATEMENTS

Our credit facility and subordinated notes (the "Notes") are guaranteed
(the "Subsidiary Guarantees") by each of our subsidiaries (the "Subsidiary
Guarantors") except CRC (the "Non-Guarantor Subsidiary"). The Subsidiary
Guarantees provide that each Subsidiary Guarantor will fully and unconditionally
guarantee our obligations under the credit facility and the Notes on a joint and
several basis. Each Subsidiary Guarantor and Non-Guarantor Subsidiary is
wholly-owned by CONMED Corporation. The following supplemental financial
information sets forth on a condensed consolidating basis, consolidating balance
sheet, statement of income and statement of cash flows for the Parent Company
Only, Subsidiary Guarantors and Non-Guarantor Subsidiary and for the Company as
of December 2000 and 2001 and for the years ended December 1999, 2000 and 2001.

F-18

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED BALANCE SHEET
AT DECEMBER 31, 2000
(IN THOUSANDS)

PARENT
COMPANY SUBSIDIARY COMPANY
ONLY GUARANTORS ELIMINATIONS TOTAL
-------- ---------- ------------ --------

ASSETS
Current assets:
Cash and cash equivalents................... $ -- $ 3,470 $ -- $ 3,470
Accounts receivable, net.................... 35,218 43,408 -- 78,626
Inventories................................. 20,174 84,438 -- 104,612
Deferred income taxes....................... 1,761 -- -- 1,761
Prepaid expenses and other current assets... 598 2,964 -- 3,562
-------- -------- --------- --------
Total current assets..................... 57,751 134,280 -- 192,031
-------- -------- --------- --------
Property, plant and equipment, net............ 38,275 24,175 -- 62,450
Goodwill, net................................. 61,651 164,150 -- 225,801
Other intangible assets, net.................. 7,498 187,510 -- 195,008
Other assets.................................. 473,408 5,217 (474,344) 4,281
-------- -------- --------- --------
Total assets............................. $638,583 $515,332 $(474,344) $679,571
======== ======== ========= ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt........... $ 36,068 $ -- $ -- $ 36,068
Accounts payable............................ 4,398 15,952 -- 20,350
Accrued compensation........................ 2,147 7,766 -- 9,913
Income taxes payable........................ 1,338 641 -- 1,979
Accrued interest............................ 5,130 -- -- 5,130
Other current liabilities................... 1,890 2,946 -- 4,836
-------- -------- --------- --------
Total current liabilities................ 50,971 27,305 -- 78,276
-------- -------- --------- --------
Long-term debt................................ 342,680 -- -- 342,680
Deferred income taxes......................... 12,154 -- -- 12,154
Other long-term liabilities................... 2,175 349,295 (335,612) 15,858
-------- -------- --------- --------
Total liabilities........................ 407,980 376,600 (335,612) 448,968
-------- -------- --------- --------
Shareholders' equity:
Preferred stock............................. -- -- -- --
Common stock................................ 230 1 (1) 230
Paid-in capital............................. 127,985 -- -- 127,985
Retained earnings........................... 103,834 139,758 (139,758) 103,834
Accumulated other comprehensive loss........ (1,027) (1,027) 1,027 (1,027)
Less common stock in treasury, at cost...... (419) -- -- (419)
-------- -------- --------- --------
Total shareholders' equity............... 230,603 138,732 (138,732) 230,603
-------- -------- --------- --------
Total liabilities and shareholders'
equity................................. $638,583 $515,332 $(474,344) $679,571
======== ======== ========= ========

F-19

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED BALANCE SHEET
AT DECEMBER 31, 2001
(IN THOUSANDS)

PARENT NON-
COMPANY SUBSIDIARY GUARANTOR COMPANY
ONLY GUARANTORS SUBSIDIARY ELIMINATIONS TOTAL
-------- ---------- ---------- ------------ --------

ASSETS
Current assets:
Cash and cash equivalents............ $ -- $ 1,181 $ 221 $ -- $ 1,402
Accounts receivable, net............. -- 7,198 43,990 -- 51,188
Inventories.......................... 23,045 84,345 -- -- 107,390
Deferred income taxes................ 1,105 -- -- -- 1,105
Prepaid expenses and other current
assets............................ 831 2,633 -- -- 3,464
-------- -------- ------- --------- --------
Total current assets.............. 24,981 95,357 44,211 -- 164,549
-------- -------- ------- --------- --------
Property, plant and equipment, net..... 45,856 45,170 -- -- 91,026
Goodwill, net.......................... 86,412 164,728 -- -- 251,140
Other intangible assets, net........... 8,177 181,575 -- -- 189,752
Other assets........................... 477,798 2,376 -- (475,033) 5,141
-------- -------- ------- --------- --------
Total assets...................... $643,224 $489,206 $44,211 $(475,033) $701,608
======== ======== ======= ========= ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.... $ 72,241 $ 1,188 $ -- $ -- $ 73,429
Accounts payable..................... 5,078 14,799 -- -- 19,877
Accrued compensation................. 3,979 7,884 -- -- 11,863
Income taxes payable................. 2,372 135 -- -- 2,507
Accrued interest..................... 4,760 37 157 -- 4,954
Other current liabilities............ 4,634 2,573 -- -- 7,207
-------- -------- ------- --------- --------
Total current liabilities......... 93,064 26,616 157 -- 119,837
-------- -------- ------- --------- --------
Long-term debt......................... 241,404 21,096 -- -- 262,500
Deferred income taxes.................. 18,655 -- -- -- 18,655
Other long-term liabilities............ 6,467 285,329 41,947 (316,761) 16,982
-------- -------- ------- --------- --------
Total liabilities................. 359,590 333,041 42,104 (316,761) 417,974
-------- -------- ------- --------- --------
Shareholders' equity:
Preferred stock...................... -- -- -- -- --
Common stock......................... 253 1 -- (1) 253
Paid-in capital...................... 160,757 -- 2,000 (2,000) 160,757
Retained earnings.................... 128,240 158,333 107 (158,440) 128,240
Accumulated other comprehensive
loss.............................. (5,197) (2,169) -- 2,169 (5,197)
Less common stock in treasury, at
cost.............................. (419) -- -- -- (419)
-------- -------- ------- --------- --------
Total shareholders' equity........ 283,634 156,165 2,107 (158,272) 283,634
-------- -------- ------- --------- --------
Total liabilities and
shareholders' equity............ $643,224 $489,206 $44,211 $(475,033) $701,608
======== ======== ======= ========= ========

F-20

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 1999
(IN THOUSANDS)

PARENT SUBSIDIARY
COMPANY ONLY GUARANTORS ELIMINATIONS COMPANY TOTAL
------------ ---------- ------------ -------------

Net sales................................ $83,612 $292,614 $ -- $376,226
------- -------- -------- --------
Cost of sales............................ 47,178 131,302 -- 178,480
Selling and administrative expense....... 26,338 84,504 -- 110,842
Research and development expense......... 1,626 10,482 -- 12,108
------- -------- -------- --------
75,142 226,288 -- 301,430
------- -------- -------- --------
Income from operations................... 8,470 66,326 -- 74,796
Interest expense, net.................... -- 32,360 -- 32,360
------- -------- -------- --------
Income before income taxes............... 8,470 33,966 -- 42,436
Provision for income taxes............... 3,049 12,228 -- 15,277
------- -------- -------- --------
Income before equity in earnings of
unconsolidated subsidiaries............ 5,421 21,738 -- 27,159
Equity in earnings of unconsolidated
subsidiaries........................... 21,738 -- (21,738) --
------- -------- -------- --------
Net income............................... $27,159 $ 21,738 $(21,738) $ 27,159
======= ======== ======== ========

F-21

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 2000
(IN THOUSANDS)

PARENT SUBSIDIARY
COMPANY ONLY GUARANTORS ELIMINATIONS COMPANY TOTAL
------------ ---------- ------------ -------------

Net sales................................ $73,632 $322,241 $ -- $395,873
------- -------- -------- --------
Cost of sales............................ 42,461 145,762 -- 188,223
Selling and administrative expense....... 20,015 108,301 -- 128,316
Research and development expense......... 1,907 12,963 -- 14,870
------- -------- -------- --------
64,383 267,026 -- 331,409
------- -------- -------- --------
Income from operations................... 9,249 55,215 -- 64,464
Interest expense, net.................... -- 34,286 -- 34,286
------- -------- -------- --------
Income before income taxes............... 9,249 20,929 -- 30,178
Provision for income taxes............... 3,330 7,534 -- 10,864
------- -------- -------- --------
Income before equity in earnings of
unconsolidated subsidiaries............ 5,919 13,395 -- 19,314
Equity in earnings of unconsolidated
subsidiaries........................... 13,395 -- (13,395) --
------- -------- -------- --------
Net income............................... $19,314 $ 13,395 $(13,395) $ 19,314
======= ======== ======== ========

F-22

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
YEAR ENDED DECEMBER 2001
(IN THOUSANDS)

PARENT SUBSIDIARY NON-GUARANTOR
COMPANY ONLY GUARANTORS SUBSIDIARY ELIMINATIONS COMPANY TOTAL
------------ ---------- ------------- ------------ -------------

Net sales................. $91,609 $337,113 $ -- $ -- $428,722
------- -------- ----- -------- --------
Cost of sales............. 53,534 150,840 -- -- 204,374
Selling and administrative
expense................. 27,620 113,302 (362) -- 140,560
Research and development
expense................. 1,511 13,319 -- -- 14,830
------- -------- ----- -------- --------
82,665 277,461 (362) -- 359,764
------- -------- ----- -------- --------
Income from operations.... 8,944 59,652 362 -- 68,958
Interest expense, net..... -- 30,629 195 -- 30,824
------- -------- ----- -------- --------
Income before income
taxes................... 8,944 29,023 167 -- 38,134
Provision for income
taxes................... 3,220 10,448 60 -- 13,728
------- -------- ----- -------- --------
Income before equity in
earnings of
unconsolidated
subsidiaries............ 5,724 18,575 107 -- 24,406
Equity in earnings of
unconsolidated
subsidiaries............ 18,682 -- -- (18,682) --
------- -------- ----- -------- --------
Net income................ $24,406 $ 18,575 $ 107 $(18,682) $ 24,406
======= ======== ===== ======== ========

F-23

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 1999
(IN THOUSANDS)

PARENT SUBSIDIARY COMPANY
COMPANY ONLY GUARANTORS ELIMINATIONS TOTAL
------------ ---------- ------------ -------------

Net cash flows from operating activities.... $ 11,784 $ 25,657 $ -- $ 37,441
-------- -------- -------- --------
Cash flows from investing activities:
Distributions to subsidiaries............. (21,885) -- 21,885 --
Payments related to business
acquisitions........................... -- (40,585) -- (40,585)
Purchases of property, plant and
equipment.............................. (4,801) (4,551) -- (9,352)
-------- -------- -------- --------
Net cash provided (used) by investing
activities........................... (26,686) (45,136) 21,885 (49,937)
-------- -------- -------- --------
Cash flows from financing:
Proceeds of long-term debt................ 40,900 -- -- 40,900
Distributions from parent................. -- 21,885 (21,885) --
Repayments under revolving credit
facility............................... (8,000) -- -- (8,000)
Proceeds from issuance of common stock.... 1,612 -- -- 1,612
Payments related to issuance of long-term
debt................................... (661) -- -- (661)
Payments on long-term debt................ (23,103) -- -- (23,103)
-------- -------- -------- --------
Net cash provided (used) by financing
activities........................... 10,748 21,885 (21,885) 10,748
-------- -------- -------- --------
Effect of exchange rate changes on cash and
cash equivalents.......................... -- (411) -- (411)
-------- -------- -------- --------
Net decrease in cash and cash equivalents... (4,154) 1,995 -- (2,159)
Cash and cash equivalents at beginning of
period.................................... 4,752 1,154 -- 5,906
-------- -------- -------- --------
Cash and cash equivalents at end of
period.................................... $ 598 $ 3,149 $ -- $ 3,747
======== ======== ======== ========

F-24

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 2000
(IN THOUSANDS)

PARENT SUBSIDIARY COMPANY
COMPANY ONLY GUARANTORS ELIMINATIONS TOTAL
------------ ---------- ------------ -------------

Net cash flows from operating activities.... $ 18,238 $ 17,712 $ -- $ 35,950
-------- -------- -------- --------
Cash flows from investing activities:
Distributions from subsidiaries........... 13,618 -- (13,618) --
Payments related to business
acquisitions........................... (6,042) -- -- (6,042)
Purchases of property, plant and
equipment.............................. (10,940) (3,110) -- (14,050)
-------- -------- -------- --------
Net cash provided (used) by investing
activities........................... (3,364) (3,110) (13,618) (20,092)
-------- -------- -------- --------
Cash flows from financing:
Distributions to parent................... -- (13,618) 13,618 --
Borrowings under revolving credit
facility............................... 17,000 -- -- 17,000
Proceeds from issuance of common stock.... 449 -- -- 449
Payments on long-term debt................ (32,921) -- -- (32,921)
-------- -------- -------- --------
Net cash provided (used) by financing
activities........................... (15,472) (13,618) 13,618 (15,472)
-------- -------- -------- --------
Effect of exchange rate changes on cash and
cash equivalents.......................... -- (663) -- (663)
-------- -------- -------- --------
Net increase (decrease) in cash and cash
equivalents............................... (598) 321 -- (277)
Cash and cash equivalents at beginning of
period.................................... 598 3,149 -- 3,747
-------- -------- -------- --------
Cash and cash equivalents at end of
period.................................... $ -- $ 3,470 $ -- $ 3,470
======== ======== ======== ========

F-25

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

CONSOLIDATING STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 2001
(IN THOUSANDS)

PARENT SUBSIDIARY NON-GUARANTOR COMPANY
COMPANY ONLY GUARANTORS SUBSIDIARY ELIMINATIONS TOTAL
------------ ---------- ------------- ------------ --------

Net cash flows from operating
activities..................... $ 44,301 $ 74,574 $ 40,264 $(81,990) $ 77,149
-------- -------- -------- -------- --------
Cash flows from investing
activities:
Distributions from
subsidiaries................ 71,629 -- -- (71,629) --
Note payable from subsidiary... (41,947) -- -- 41,947 --
Net purchases of accounts
receivable.................. -- -- (81,990) 81,990 --
Purchases of property, plant
and equipment............... (10,390) (4,053) -- -- (14,443)
-------- -------- -------- -------- --------
Net cash provided (used) by
investing activities...... 19,292 (4,053) (81,990) 52,308 (14,443)
-------- -------- -------- -------- --------
Cash flows from financing:
Distributions to parent........ -- (71,629) -- 71,629 --
Note payable to parent
company..................... -- -- 41,947 (41,947) --
Borrowings under revolving
credit facility............. 11,000 -- -- -- 11,000
Proceeds from issuance of
common stock................ 1,830 -- -- -- 1,830
Payments on long-term debt..... (76,423) -- -- -- (76,423)
-------- -------- -------- -------- --------
Net cash provided (used) by
financing activities...... (63,593) (71,629) 41,947 29,682 (63,593)
-------- -------- -------- -------- --------
Effect of exchange rate changes
on cash and cash equivalents... -- (1,181) -- -- (1,181)
-------- -------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents........... -- (2,289) 221 -- (2,068)
Cash and cash equivalents at
beginning of period............ -- 3,470 -- -- 3,470
-------- -------- -------- -------- --------
Cash and cash equivalents at end
of period...................... $ -- $ 1,181 $ 221 $ -- $ 1,402
======== ======== ======== ======== ========

F-26

[PICTURES OF CERTAIN PRODUCTS OF
CONMED CORPORATION'S PATIENT CARE
AND ENDOSCOPY UNITS]

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3,000,000 SHARES

CONMED CORPORATION
COMMON STOCK

[CONMED CORPORATION LOGO]

------------
PROSPECTUS
May 22, 2002

------------

SALOMON SMITH BARNEY
UBS WARBURG
NEEDHAM & COMPANY, INC.
FIRST ALBANY CORPORATION
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