Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CONMED Corporation Announces Fourth Quarter and Full-Year 2023 Financial Results By: CONMED Corporation via Business Wire January 31, 2024 at 16:05 PM EST CONMED Corporation (NYSE: CNMD) today announced financial results for the fourth quarter and full-year ended December 31, 2023. Fourth Quarter 2023 Highlights Sales of $327.0 million increased 30.4% year over year as reported and 31.5% in constant currency Domestic revenue increased 33.3% year over year. International revenue increased 26.5% year over year as reported and 29.0% in constant currency. Diluted net earnings per share (GAAP) were $1.05 compared to diluted net earnings per share (GAAP) of $0.86 in the fourth quarter of 2022. Adjusted diluted net earnings per share(1) were $1.06, an increase of 152.4% compared to the fourth quarter of 2022. Full-Year 2023 Highlights Sales of $1,244.7 million increased 19.1% year over year as reported and 20.9% in constant currency. Acquisitions contributed approximately 250 basis points of growth. Domestic revenue increased 20.9% year over year. International revenue increased 16.7% year over year as reported and 20.9% in constant currency. Diluted net earnings per share (GAAP) were $2.04 compared to diluted net loss per share (GAAP) of $2.68 in 2022. Adjusted diluted net earnings per share(1) were $3.45, an increase of 30.2% compared to 2022. “2023 was a great year for CONMED, and I am proud that our global business delivered record revenue in both the fourth quarter and for the full year,” commented Curt R. Hartman, CONMED’s Chair of the Board, President, and Chief Executive Officer. “The balanced growth we saw across our various businesses and geographies is a testament to the strength of the portfolio that we have built. As we shift our focus to 2024, we are very excited to continue delivering innovative technology solutions to our customers and patients across both the General Surgery and Orthopedics categories.” 2024 Outlook The Company expects full-year 2024 reported revenue between $1.340 billion and $1.365 billion. This represents year-over-year growth of approximately 8% to 10%. The Company expects full-year 2024 adjusted diluted net earnings per share(2) in the range of $4.30 to $4.40. This represents year-over-year growth of approximately 25% to 28%. The impact of foreign currency exchange rates in 2024 is expected to be immaterial. Supplemental Financial Disclosures (1) A reconciliation of reported diluted net earnings (loss) per share to adjusted diluted net earnings per share, a non-GAAP financial measure, appears below. (2) Information reconciling forward-looking adjusted diluted net earnings per share to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below. Conference Call The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its fourth quarter and full-year 2023 results. To participate in the conference call via telephone, please click here to pre-register and obtain the dial-in number and passcode. This conference call will also be webcast and can be accessed from the “Investors” section of CONMED's website at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call. Consolidated Condensed Statements of Income (Loss) (in thousands except per share amounts, unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net sales $ 327,045 $ 250,867 $ 1,244,744 $ 1,045,472 Cost of sales 144,870 119,005 568,499 474,227 Gross profit 182,175 131,862 676,245 571,245 % of sales 55.7 % 52.6 % 54.3 % 54.6 % Selling & administrative expense 117,960 120,737 503,040 454,039 Research & development expense 14,028 12,220 52,602 47,152 Income (loss) from operations 50,187 (1,095 ) 120,603 70,054 % of sales 15.3 % -0.4 % 9.7 % 6.7 % Interest expense 9,505 9,443 39,775 28,905 Other expense - - - 112,011 Income (loss) before income taxes 40,682 (10,538 ) 80,828 (70,862 ) Provision (benefit) for income taxes 7,611 (37,122 ) 16,369 9,720 Net income (loss) $ 33,071 $ 26,584 $ 64,459 $ (80,582 ) Basic EPS $ 1.08 $ 0.87 $ 2.10 $ (2.68 ) Diluted EPS 1.05 0.86 2.04 (2.68 ) Basic shares 30,759 30,484 30,668 30,040 Diluted shares 31,502 30,931 31,548 30,040 Sales Summary (in millions, unaudited) Three Months Ended December 31, % Change Domestic International 2023 2022 As Reported Impact of Foreign Currency Constant Currency As Reported As Reported Impact of Foreign Currency Constant Currency Orthopedic Surgery $ 136.5 $ 115.2 18.5 % 0.9 % 19.4 % 6.0 % 27.8 % 2.0 % 29.8 % General Surgery 190.5 135.7 40.4 % 1.3 % 41.7 % 47.6 % 24.4 % 3.4 % 27.8 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % 33.3 % 26.5 % 2.5 % 29.0 % Single-use Products $ 271.3 $ 211.9 28.1 % 1.1 % 29.2 % 33.1 % 20.6 % 2.6 % 23.2 % Capital Products 55.7 39.0 42.9 % 0.9 % 43.8 % 34.5 % 49.3 % 1.9 % 51.2 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % 33.3 % 26.5 % 2.5 % 29.0 % Domestic $ 190.3 $ 142.8 33.3 % 0.0 % 33.3 % International 136.7 108.1 26.5 % 2.5 % 29.0 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % Year Ended December 31, % Change Domestic International 2023 2022 As Reported Impact of Foreign Currency Constant Currency As Reported As Reported Impact of Foreign Currency Constant Currency Orthopedic Surgery $ 533.1 $ 461.5 15.5 % 2.2 % 17.7 % 15.2 % 15.7 % 3.5 % 19.2 % General Surgery 711.6 584.0 21.9 % 1.5 % 23.4 % 23.4 % 18.4 % 5.1 % 23.5 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % 20.9 % 16.7 % 4.2 % 20.9 % Single-use Products $ 1,038.5 $ 874.9 18.7 % 1.8 % 20.5 % 21.3 % 15.2 % 4.3 % 19.5 % Capital Products 206.2 170.6 20.9 % 1.9 % 22.8 % 18.5 % 22.8 % 3.6 % 26.4 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % 20.9 % 16.7 % 4.2 % 20.9 % Domestic $ 700.1 $ 579.0 20.9 % 0.0 % 20.9 % International 544.6 466.5 16.7 % 4.2 % 20.9 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % Reconciliation of Reported Net Income to Adjusted Net Income (in thousands, except per share amounts, unaudited) Three Months Ended December 31, 2023 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Tax Expense Effective Tax Rate Net Income Basic EPS Adjustments Diluted EPS As reported $ 182,175 $ 117,960 $ 50,187 $ 9,505 $ 7,611 18.7 % $ 33,071 $ - $ 33,071 % of sales 55.7 % 36.1 % 15.3 % EPS $ 1.08 $ 1.05 Shares 30,759 743 31,502 Acquisition and integration costs(1) 2,154 - 2,154 - (162 ) 2,316 Contingent consideration fair value adjustment(2) - 9,370 (9,370 ) - 703 (10,073 ) $ 184,329 $ 127,330 $ 42,971 $ 9,505 $ 8,152 $ 25,314 Adjusted gross profit % 56.4 % Amortization(3) $ 1,500 (7,295 ) 8,795 (1,500 ) 2,458 7,837 As adjusted $ 120,035 $ 51,766 $ 8,005 $ 10,610 24.2 % $ 33,151 $ - $ 33,151 % of sales 36.7 % 15.8 % Adjusted diluted EPS $ 1.06 Shares 30,759 743 31,502 Convertible note hedges(4) (110 ) Adjusted diluted shares 31,392 Three Months Ended December 31, 2022 Gross Profit Selling & Administrative Expense Operating Income (Loss) Interest Expense Tax Expense (Benefit) Effective Tax Rate Net Income Basic EPS Adjustments(7) Diluted EPS As reported $ 131,862 $ 120,737 $ (1,095 ) $ 9,443 $ (37,122 ) 352.3 % $ 26,584 $ - $ 26,584 % of sales 52.6 % 48.1 % -0.4 % EPS $ 0.87 $ 0.86 Shares 30,484 447 30,931 Acquisition and integration costs(1) 2,096 (3,757 ) 5,853 - 12,873 (7,020 ) Restructuring and related costs(5) 1,955 (786 ) 2,741 - 6,029 (3,288 ) Software implementation costs(6) - (6,769 ) 6,769 - 14,889 (8,120 ) Contingent consideration fair value adjustment(2) - (2,518 ) 2,518 - 5,538 (3,020 ) $ 135,913 $ 106,907 $ 16,786 $ 9,443 $ 2,207 $ 5,136 Adjusted gross profit % 54.2 % Amortization(3) $ 1,500 (7,228 ) 8,728 (1,506 ) 2,446 7,788 As adjusted $ 99,679 $ 25,514 $ 7,937 $ 4,653 26.5 % $ 12,924 $ - $ 12,924 % of sales 39.7 % 10.2 % Adjusted diluted EPS $ 0.42 Shares 30,484 447 30,931 Convertible note hedges(4) - Adjusted diluted shares 30,931 (1) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc. In 2022, the Company incurred charges related to the amortization of inventory step-up to fair value and consulting fees, legal fees, and other integration costs associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. (2) In 2023 and 2022, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. (3) Includes amortization of intangible assets and deferred financing fees. (4) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. (5) In 2022, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. (6) In 2022, the Company incurred incremental freight, professional fees and other costs related to the implementation of a warehouse management software. (7) The Company adopted ASU 2020-06, effective January 1, 2022. As a result of the adoption, the Company is required to compute diluted EPS using the if-converted method. Under the if-converted method, the numerator is adjusted for interest expense applicable to its convertible notes (net of tax) and the denominator includes additional common shares assuming conversion premium and principal portion of the notes (when permitted or required) are settled in shares. Subsequent to June 6, 2022, the Company is required to settle the principal value of its convertible notes in cash. Reconciliation of Reported Net Income (Loss) to Adjusted Net Income (in thousands, except per share amounts, unaudited) Year Ended December 31, 2023 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Other Expense Tax Expense Effective Tax Rate Net Income Basic EPS Adjustments Diluted EPS As reported $ 676,245 $ 503,040 $ 120,603 $ 39,775 $ - $ 16,369 20.3 % $ 64,459 $ - $ 64,459 % of sales 54.3 % 40.4 % 9.7 % EPS $ 2.10 $ 2.04 Shares 30,668 880 31,548 Acquisition and integration costs(1) 8,617 (752 ) 9,369 - - 1,207 8,162 Termination of distributor agreements(2) - (2,098 ) 2,098 - - 417 1,681 Restructuring and related costs(3) 2,035 (1,578 ) 3,613 - - 930 2,683 Software implementation costs(4) - (6,056 ) 6,056 - - 1,453 4,603 Contingent consideration fair value adjustment(5) - 2,421 (2,421 ) - - 2,037 (4,458 ) $ 686,897 $ 494,977 $ 139,318 $ 39,775 $ - $ 22,413 $ 77,130 Adjusted gross profit % 55.2 % Amortization(6) $ 6,000 (29,068 ) 35,068 (6,058 ) - 9,969 31,157 As adjusted $ 465,909 $ 174,386 $ 33,717 $ - $ 32,382 23.0 % $ 108,287 $ - $ 108,287 % of sales 37.4 % 14.0 % Adjusted diluted EPS $ 3.45 Shares 30,668 880 31,548 Convertible note hedges(7) (142 ) Adjusted diluted shares 31,406 Year Ended December 31, 2022 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Other Expense Tax Expense Effective Tax Rate Net Income (Loss) Basic EPS Adjustments(12) Diluted EPS As reported $ 571,245 $ 454,039 $ 70,054 $ 28,905 $ 112,011 $ 9,720 -13.7 % $ (80,582 ) $ - $ (80,582 ) % of sales 54.6 % 43.4 % 6.7 % EPS $ (2.68 ) $ (2.68 ) Shares 30,040 - 30,040 Acquisition and integration costs(1) 4,540 (10,063 ) 14,603 - - 46,965 (32,362 ) Legal matters(8) - (775 ) 775 - - (462 ) 1,237 Restructuring and related costs(3) 1,955 (786 ) 2,741 - - 6,029 (3,288 ) Software implementation costs(4) - (6,769 ) 6,769 - - 14,889 (8,120 ) Contingent consideration fair value adjustment(5) - (2,518 ) 2,518 - - 5,538 (3,020 ) Convertible notes premium on extinguishment(9) - - - - (103,125 ) (61,521 ) 164,646 Change in fair value of convertible notes hedges upon settlement(10) - - - - (5,460 ) (3,257 ) 8,717 Loss on early extinguishment of debt(11) - - - - (3,426 ) (2,044 ) 5,470 $ 577,740 $ 433,128 $ 97,460 $ 28,905 $ - $ 15,857 $ 52,698 Adjusted gross profit % 55.3 % Amortization(6) $ 6,000 (27,791 ) 33,791 (4,910 ) - 9,381 29,320 As adjusted $ 405,337 $ 131,251 $ 23,995 $ - $ 25,238 23.5 % $ 82,018 $ 2,978 $ 84,996 % of sales 38.8 % 12.6 % Adjusted diluted EPS $ 2.65 Shares 30,040 2,656 32,696 Convertible note hedges(7) (578 ) Adjusted diluted shares 32,118 (1) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc., and integration costs and professional fees associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. In 2022, the Company incurred charges related to the amortization of inventory step-up to fair value and consulting fees, legal fees, and other integration costs associated with the acquisition of In2Bones Global, Inc. and Biorez, Inc. (2) In 2023, the Company incurred costs related to the termination of distributor agreements. (3) In 2023 and 2022, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. (4) In 2023 and 2022, the Company incurred additional freight, labor and travel costs as well as professional fees related to the implementation of a warehouse management software. (5) In 2023 and 2022, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. (6) Includes amortization of intangible assets and deferred financing fees. (7) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. (8) In 2022, the Company incurred costs related to a legal settlement. (9) In 2022, the Company incurred costs related to the conversion premium on the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes. (10) In 2022, the Company incurred costs related to the settlement of convertible notes hedge transactions associated with the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes. (11) In 2022, the Company incurred costs related to the write-off of deferred financing fees associated with the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes and term loan paydown. (12) The Company adopted ASU 2020-06, effective January 1, 2022. As a result of the adoption, the Company is required to compute diluted EPS using the if-converted method. Under the if-converted method, the numerator is adjusted for interest expense applicable to its convertible notes (net of tax) and the denominator includes additional common shares assuming conversion premium and principal portion of the notes (when permitted or required) are settled in shares. Subsequent to June 6, 2022, the Company is required to settle the principal value of its convertible notes in cash. Adjustments in 2022 are applicable on a non-GAAP basis only since GAAP results are in a loss position and therefore exclude dilutive potential shares. Reconciliation of Reported Net Income (Loss) to EBITDA & Adjusted EBITDA (in thousands, unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ 33,071 $ 26,584 $ 64,459 $ (80,582 ) Provision (benefit) for income taxes 7,611 (37,122 ) 16,369 9,720 Interest expense 9,505 9,443 39,775 28,905 Depreciation 4,052 4,026 16,200 16,055 Amortization 13,950 13,709 55,674 53,464 EBITDA $ 68,189 $ 16,640 $ 192,477 $ 27,562 Stock based compensation 5,923 5,758 24,257 21,729 Acquisition and integration costs 2,154 5,853 9,369 14,603 Contingent consideration fair value adjustment (9,370 ) 2,518 (2,421 ) 2,518 Termination of distributor agreements - - 2,098 - Restructuring and related costs - 2,741 3,613 2,741 Software implementation costs - 6,769 6,056 6,769 Legal matters - - - 775 Convertible notes premium on extinguishment - - - 103,125 Change in fair value of convertible notes hedges upon settlement - - - 5,460 Loss on early extinguishment of debt - - - 3,426 Adjusted EBITDA $ 66,896 $ 40,279 $ 235,449 $ 188,708 EBITDA Margin EBITDA 20.9 % 6.6 % 15.5 % 2.6 % Adjusted EBITDA 20.5 % 16.1 % 18.9 % 18.1 % About CONMED Corporation CONMED is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology. For more information, visit www.conmed.com. Forward-Looking Statements This press release and associated conference call may contain forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. For example, in addition to general industry and economic conditions, factors that could cause actual results to differ materially from those in the forward-looking statements may include, but are not limited to the risk factors discussed in the Company's Annual Report on Form 10-K for the full year ended December 31, 2022, listed under the heading Forward-Looking Statements in the Company’s most recently filed Form 10-Q and other risks and uncertainties, which may be detailed from time to time in reports filed by CONMED with the SEC. Any and all forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct. Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures The Company supplements the reporting of its financial information determined under generally accepted accounting principles in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; adjusted gross profit; cost of sales excluding specified items; adjusted selling and administrative expenses; adjusted operating income; adjusted interest expense; adjusted other expense; adjusted income tax expense; adjusted effective income tax rate; adjusted net income, adjusted diluted shares and adjusted diluted net earnings per share (EPS). The Company believes that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding its financial results and assessing its prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of its operations because they exclude items that may not be indicative of, or are unrelated to, its core operating results and provide a baseline for analyzing trends in the Company’s underlying business. Further, the presentation of EBITDA is a non-GAAP measurement that management considers useful for measuring aspects of the Company’s cash flow. Management uses these non-GAAP financial measures for reviewing the operating results and analyzing potential future business trends in connection with its budget process and bases certain management incentive compensation on these non-GAAP financial measures. Net sales on a constant currency basis is a non-GAAP measure. The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales. To measure earnings performance on a consistent and comparable basis, the Company excludes certain items that affect the comparability of operating results and the trend of earnings. These adjustments are irregular in timing, may not be indicative of past and future performance and are therefore excluded to allow investors to better understand underlying operating trends. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, cost of sales, selling and administrative expenses, operating income (loss), interest expense, other expense, income tax expense (benefit), effective income tax rate, net income (loss), diluted shares and diluted net earnings (loss) per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures above, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. We are unable to present a quantitative reconciliation of our expected diluted net earnings per share to expected adjusted diluted net earnings per share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisition, integration and other charges. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our consolidated condensed statements of income. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131915000/en/Contacts CONMED Corporation Todd W. Garner Chief Financial Officer 727-214-2975 ToddGarner@conmed.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CONMED Corporation Announces Fourth Quarter and Full-Year 2023 Financial Results By: CONMED Corporation via Business Wire January 31, 2024 at 16:05 PM EST CONMED Corporation (NYSE: CNMD) today announced financial results for the fourth quarter and full-year ended December 31, 2023. Fourth Quarter 2023 Highlights Sales of $327.0 million increased 30.4% year over year as reported and 31.5% in constant currency Domestic revenue increased 33.3% year over year. International revenue increased 26.5% year over year as reported and 29.0% in constant currency. Diluted net earnings per share (GAAP) were $1.05 compared to diluted net earnings per share (GAAP) of $0.86 in the fourth quarter of 2022. Adjusted diluted net earnings per share(1) were $1.06, an increase of 152.4% compared to the fourth quarter of 2022. Full-Year 2023 Highlights Sales of $1,244.7 million increased 19.1% year over year as reported and 20.9% in constant currency. Acquisitions contributed approximately 250 basis points of growth. Domestic revenue increased 20.9% year over year. International revenue increased 16.7% year over year as reported and 20.9% in constant currency. Diluted net earnings per share (GAAP) were $2.04 compared to diluted net loss per share (GAAP) of $2.68 in 2022. Adjusted diluted net earnings per share(1) were $3.45, an increase of 30.2% compared to 2022. “2023 was a great year for CONMED, and I am proud that our global business delivered record revenue in both the fourth quarter and for the full year,” commented Curt R. Hartman, CONMED’s Chair of the Board, President, and Chief Executive Officer. “The balanced growth we saw across our various businesses and geographies is a testament to the strength of the portfolio that we have built. As we shift our focus to 2024, we are very excited to continue delivering innovative technology solutions to our customers and patients across both the General Surgery and Orthopedics categories.” 2024 Outlook The Company expects full-year 2024 reported revenue between $1.340 billion and $1.365 billion. This represents year-over-year growth of approximately 8% to 10%. The Company expects full-year 2024 adjusted diluted net earnings per share(2) in the range of $4.30 to $4.40. This represents year-over-year growth of approximately 25% to 28%. The impact of foreign currency exchange rates in 2024 is expected to be immaterial. Supplemental Financial Disclosures (1) A reconciliation of reported diluted net earnings (loss) per share to adjusted diluted net earnings per share, a non-GAAP financial measure, appears below. (2) Information reconciling forward-looking adjusted diluted net earnings per share to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below. Conference Call The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its fourth quarter and full-year 2023 results. To participate in the conference call via telephone, please click here to pre-register and obtain the dial-in number and passcode. This conference call will also be webcast and can be accessed from the “Investors” section of CONMED's website at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call. Consolidated Condensed Statements of Income (Loss) (in thousands except per share amounts, unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net sales $ 327,045 $ 250,867 $ 1,244,744 $ 1,045,472 Cost of sales 144,870 119,005 568,499 474,227 Gross profit 182,175 131,862 676,245 571,245 % of sales 55.7 % 52.6 % 54.3 % 54.6 % Selling & administrative expense 117,960 120,737 503,040 454,039 Research & development expense 14,028 12,220 52,602 47,152 Income (loss) from operations 50,187 (1,095 ) 120,603 70,054 % of sales 15.3 % -0.4 % 9.7 % 6.7 % Interest expense 9,505 9,443 39,775 28,905 Other expense - - - 112,011 Income (loss) before income taxes 40,682 (10,538 ) 80,828 (70,862 ) Provision (benefit) for income taxes 7,611 (37,122 ) 16,369 9,720 Net income (loss) $ 33,071 $ 26,584 $ 64,459 $ (80,582 ) Basic EPS $ 1.08 $ 0.87 $ 2.10 $ (2.68 ) Diluted EPS 1.05 0.86 2.04 (2.68 ) Basic shares 30,759 30,484 30,668 30,040 Diluted shares 31,502 30,931 31,548 30,040 Sales Summary (in millions, unaudited) Three Months Ended December 31, % Change Domestic International 2023 2022 As Reported Impact of Foreign Currency Constant Currency As Reported As Reported Impact of Foreign Currency Constant Currency Orthopedic Surgery $ 136.5 $ 115.2 18.5 % 0.9 % 19.4 % 6.0 % 27.8 % 2.0 % 29.8 % General Surgery 190.5 135.7 40.4 % 1.3 % 41.7 % 47.6 % 24.4 % 3.4 % 27.8 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % 33.3 % 26.5 % 2.5 % 29.0 % Single-use Products $ 271.3 $ 211.9 28.1 % 1.1 % 29.2 % 33.1 % 20.6 % 2.6 % 23.2 % Capital Products 55.7 39.0 42.9 % 0.9 % 43.8 % 34.5 % 49.3 % 1.9 % 51.2 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % 33.3 % 26.5 % 2.5 % 29.0 % Domestic $ 190.3 $ 142.8 33.3 % 0.0 % 33.3 % International 136.7 108.1 26.5 % 2.5 % 29.0 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % Year Ended December 31, % Change Domestic International 2023 2022 As Reported Impact of Foreign Currency Constant Currency As Reported As Reported Impact of Foreign Currency Constant Currency Orthopedic Surgery $ 533.1 $ 461.5 15.5 % 2.2 % 17.7 % 15.2 % 15.7 % 3.5 % 19.2 % General Surgery 711.6 584.0 21.9 % 1.5 % 23.4 % 23.4 % 18.4 % 5.1 % 23.5 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % 20.9 % 16.7 % 4.2 % 20.9 % Single-use Products $ 1,038.5 $ 874.9 18.7 % 1.8 % 20.5 % 21.3 % 15.2 % 4.3 % 19.5 % Capital Products 206.2 170.6 20.9 % 1.9 % 22.8 % 18.5 % 22.8 % 3.6 % 26.4 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % 20.9 % 16.7 % 4.2 % 20.9 % Domestic $ 700.1 $ 579.0 20.9 % 0.0 % 20.9 % International 544.6 466.5 16.7 % 4.2 % 20.9 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % Reconciliation of Reported Net Income to Adjusted Net Income (in thousands, except per share amounts, unaudited) Three Months Ended December 31, 2023 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Tax Expense Effective Tax Rate Net Income Basic EPS Adjustments Diluted EPS As reported $ 182,175 $ 117,960 $ 50,187 $ 9,505 $ 7,611 18.7 % $ 33,071 $ - $ 33,071 % of sales 55.7 % 36.1 % 15.3 % EPS $ 1.08 $ 1.05 Shares 30,759 743 31,502 Acquisition and integration costs(1) 2,154 - 2,154 - (162 ) 2,316 Contingent consideration fair value adjustment(2) - 9,370 (9,370 ) - 703 (10,073 ) $ 184,329 $ 127,330 $ 42,971 $ 9,505 $ 8,152 $ 25,314 Adjusted gross profit % 56.4 % Amortization(3) $ 1,500 (7,295 ) 8,795 (1,500 ) 2,458 7,837 As adjusted $ 120,035 $ 51,766 $ 8,005 $ 10,610 24.2 % $ 33,151 $ - $ 33,151 % of sales 36.7 % 15.8 % Adjusted diluted EPS $ 1.06 Shares 30,759 743 31,502 Convertible note hedges(4) (110 ) Adjusted diluted shares 31,392 Three Months Ended December 31, 2022 Gross Profit Selling & Administrative Expense Operating Income (Loss) Interest Expense Tax Expense (Benefit) Effective Tax Rate Net Income Basic EPS Adjustments(7) Diluted EPS As reported $ 131,862 $ 120,737 $ (1,095 ) $ 9,443 $ (37,122 ) 352.3 % $ 26,584 $ - $ 26,584 % of sales 52.6 % 48.1 % -0.4 % EPS $ 0.87 $ 0.86 Shares 30,484 447 30,931 Acquisition and integration costs(1) 2,096 (3,757 ) 5,853 - 12,873 (7,020 ) Restructuring and related costs(5) 1,955 (786 ) 2,741 - 6,029 (3,288 ) Software implementation costs(6) - (6,769 ) 6,769 - 14,889 (8,120 ) Contingent consideration fair value adjustment(2) - (2,518 ) 2,518 - 5,538 (3,020 ) $ 135,913 $ 106,907 $ 16,786 $ 9,443 $ 2,207 $ 5,136 Adjusted gross profit % 54.2 % Amortization(3) $ 1,500 (7,228 ) 8,728 (1,506 ) 2,446 7,788 As adjusted $ 99,679 $ 25,514 $ 7,937 $ 4,653 26.5 % $ 12,924 $ - $ 12,924 % of sales 39.7 % 10.2 % Adjusted diluted EPS $ 0.42 Shares 30,484 447 30,931 Convertible note hedges(4) - Adjusted diluted shares 30,931 (1) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc. In 2022, the Company incurred charges related to the amortization of inventory step-up to fair value and consulting fees, legal fees, and other integration costs associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. (2) In 2023 and 2022, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. (3) Includes amortization of intangible assets and deferred financing fees. (4) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. (5) In 2022, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. (6) In 2022, the Company incurred incremental freight, professional fees and other costs related to the implementation of a warehouse management software. (7) The Company adopted ASU 2020-06, effective January 1, 2022. As a result of the adoption, the Company is required to compute diluted EPS using the if-converted method. Under the if-converted method, the numerator is adjusted for interest expense applicable to its convertible notes (net of tax) and the denominator includes additional common shares assuming conversion premium and principal portion of the notes (when permitted or required) are settled in shares. Subsequent to June 6, 2022, the Company is required to settle the principal value of its convertible notes in cash. Reconciliation of Reported Net Income (Loss) to Adjusted Net Income (in thousands, except per share amounts, unaudited) Year Ended December 31, 2023 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Other Expense Tax Expense Effective Tax Rate Net Income Basic EPS Adjustments Diluted EPS As reported $ 676,245 $ 503,040 $ 120,603 $ 39,775 $ - $ 16,369 20.3 % $ 64,459 $ - $ 64,459 % of sales 54.3 % 40.4 % 9.7 % EPS $ 2.10 $ 2.04 Shares 30,668 880 31,548 Acquisition and integration costs(1) 8,617 (752 ) 9,369 - - 1,207 8,162 Termination of distributor agreements(2) - (2,098 ) 2,098 - - 417 1,681 Restructuring and related costs(3) 2,035 (1,578 ) 3,613 - - 930 2,683 Software implementation costs(4) - (6,056 ) 6,056 - - 1,453 4,603 Contingent consideration fair value adjustment(5) - 2,421 (2,421 ) - - 2,037 (4,458 ) $ 686,897 $ 494,977 $ 139,318 $ 39,775 $ - $ 22,413 $ 77,130 Adjusted gross profit % 55.2 % Amortization(6) $ 6,000 (29,068 ) 35,068 (6,058 ) - 9,969 31,157 As adjusted $ 465,909 $ 174,386 $ 33,717 $ - $ 32,382 23.0 % $ 108,287 $ - $ 108,287 % of sales 37.4 % 14.0 % Adjusted diluted EPS $ 3.45 Shares 30,668 880 31,548 Convertible note hedges(7) (142 ) Adjusted diluted shares 31,406 Year Ended December 31, 2022 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Other Expense Tax Expense Effective Tax Rate Net Income (Loss) Basic EPS Adjustments(12) Diluted EPS As reported $ 571,245 $ 454,039 $ 70,054 $ 28,905 $ 112,011 $ 9,720 -13.7 % $ (80,582 ) $ - $ (80,582 ) % of sales 54.6 % 43.4 % 6.7 % EPS $ (2.68 ) $ (2.68 ) Shares 30,040 - 30,040 Acquisition and integration costs(1) 4,540 (10,063 ) 14,603 - - 46,965 (32,362 ) Legal matters(8) - (775 ) 775 - - (462 ) 1,237 Restructuring and related costs(3) 1,955 (786 ) 2,741 - - 6,029 (3,288 ) Software implementation costs(4) - (6,769 ) 6,769 - - 14,889 (8,120 ) Contingent consideration fair value adjustment(5) - (2,518 ) 2,518 - - 5,538 (3,020 ) Convertible notes premium on extinguishment(9) - - - - (103,125 ) (61,521 ) 164,646 Change in fair value of convertible notes hedges upon settlement(10) - - - - (5,460 ) (3,257 ) 8,717 Loss on early extinguishment of debt(11) - - - - (3,426 ) (2,044 ) 5,470 $ 577,740 $ 433,128 $ 97,460 $ 28,905 $ - $ 15,857 $ 52,698 Adjusted gross profit % 55.3 % Amortization(6) $ 6,000 (27,791 ) 33,791 (4,910 ) - 9,381 29,320 As adjusted $ 405,337 $ 131,251 $ 23,995 $ - $ 25,238 23.5 % $ 82,018 $ 2,978 $ 84,996 % of sales 38.8 % 12.6 % Adjusted diluted EPS $ 2.65 Shares 30,040 2,656 32,696 Convertible note hedges(7) (578 ) Adjusted diluted shares 32,118 (1) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc., and integration costs and professional fees associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. In 2022, the Company incurred charges related to the amortization of inventory step-up to fair value and consulting fees, legal fees, and other integration costs associated with the acquisition of In2Bones Global, Inc. and Biorez, Inc. (2) In 2023, the Company incurred costs related to the termination of distributor agreements. (3) In 2023 and 2022, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. (4) In 2023 and 2022, the Company incurred additional freight, labor and travel costs as well as professional fees related to the implementation of a warehouse management software. (5) In 2023 and 2022, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. (6) Includes amortization of intangible assets and deferred financing fees. (7) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. (8) In 2022, the Company incurred costs related to a legal settlement. (9) In 2022, the Company incurred costs related to the conversion premium on the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes. (10) In 2022, the Company incurred costs related to the settlement of convertible notes hedge transactions associated with the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes. (11) In 2022, the Company incurred costs related to the write-off of deferred financing fees associated with the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes and term loan paydown. (12) The Company adopted ASU 2020-06, effective January 1, 2022. As a result of the adoption, the Company is required to compute diluted EPS using the if-converted method. Under the if-converted method, the numerator is adjusted for interest expense applicable to its convertible notes (net of tax) and the denominator includes additional common shares assuming conversion premium and principal portion of the notes (when permitted or required) are settled in shares. Subsequent to June 6, 2022, the Company is required to settle the principal value of its convertible notes in cash. Adjustments in 2022 are applicable on a non-GAAP basis only since GAAP results are in a loss position and therefore exclude dilutive potential shares. Reconciliation of Reported Net Income (Loss) to EBITDA & Adjusted EBITDA (in thousands, unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ 33,071 $ 26,584 $ 64,459 $ (80,582 ) Provision (benefit) for income taxes 7,611 (37,122 ) 16,369 9,720 Interest expense 9,505 9,443 39,775 28,905 Depreciation 4,052 4,026 16,200 16,055 Amortization 13,950 13,709 55,674 53,464 EBITDA $ 68,189 $ 16,640 $ 192,477 $ 27,562 Stock based compensation 5,923 5,758 24,257 21,729 Acquisition and integration costs 2,154 5,853 9,369 14,603 Contingent consideration fair value adjustment (9,370 ) 2,518 (2,421 ) 2,518 Termination of distributor agreements - - 2,098 - Restructuring and related costs - 2,741 3,613 2,741 Software implementation costs - 6,769 6,056 6,769 Legal matters - - - 775 Convertible notes premium on extinguishment - - - 103,125 Change in fair value of convertible notes hedges upon settlement - - - 5,460 Loss on early extinguishment of debt - - - 3,426 Adjusted EBITDA $ 66,896 $ 40,279 $ 235,449 $ 188,708 EBITDA Margin EBITDA 20.9 % 6.6 % 15.5 % 2.6 % Adjusted EBITDA 20.5 % 16.1 % 18.9 % 18.1 % About CONMED Corporation CONMED is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology. For more information, visit www.conmed.com. Forward-Looking Statements This press release and associated conference call may contain forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. For example, in addition to general industry and economic conditions, factors that could cause actual results to differ materially from those in the forward-looking statements may include, but are not limited to the risk factors discussed in the Company's Annual Report on Form 10-K for the full year ended December 31, 2022, listed under the heading Forward-Looking Statements in the Company’s most recently filed Form 10-Q and other risks and uncertainties, which may be detailed from time to time in reports filed by CONMED with the SEC. Any and all forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct. Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures The Company supplements the reporting of its financial information determined under generally accepted accounting principles in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; adjusted gross profit; cost of sales excluding specified items; adjusted selling and administrative expenses; adjusted operating income; adjusted interest expense; adjusted other expense; adjusted income tax expense; adjusted effective income tax rate; adjusted net income, adjusted diluted shares and adjusted diluted net earnings per share (EPS). The Company believes that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding its financial results and assessing its prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of its operations because they exclude items that may not be indicative of, or are unrelated to, its core operating results and provide a baseline for analyzing trends in the Company’s underlying business. Further, the presentation of EBITDA is a non-GAAP measurement that management considers useful for measuring aspects of the Company’s cash flow. Management uses these non-GAAP financial measures for reviewing the operating results and analyzing potential future business trends in connection with its budget process and bases certain management incentive compensation on these non-GAAP financial measures. Net sales on a constant currency basis is a non-GAAP measure. The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales. To measure earnings performance on a consistent and comparable basis, the Company excludes certain items that affect the comparability of operating results and the trend of earnings. These adjustments are irregular in timing, may not be indicative of past and future performance and are therefore excluded to allow investors to better understand underlying operating trends. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, cost of sales, selling and administrative expenses, operating income (loss), interest expense, other expense, income tax expense (benefit), effective income tax rate, net income (loss), diluted shares and diluted net earnings (loss) per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures above, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. We are unable to present a quantitative reconciliation of our expected diluted net earnings per share to expected adjusted diluted net earnings per share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisition, integration and other charges. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our consolidated condensed statements of income. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131915000/en/Contacts CONMED Corporation Todd W. Garner Chief Financial Officer 727-214-2975 ToddGarner@conmed.com
CONMED Corporation (NYSE: CNMD) today announced financial results for the fourth quarter and full-year ended December 31, 2023. Fourth Quarter 2023 Highlights Sales of $327.0 million increased 30.4% year over year as reported and 31.5% in constant currency Domestic revenue increased 33.3% year over year. International revenue increased 26.5% year over year as reported and 29.0% in constant currency. Diluted net earnings per share (GAAP) were $1.05 compared to diluted net earnings per share (GAAP) of $0.86 in the fourth quarter of 2022. Adjusted diluted net earnings per share(1) were $1.06, an increase of 152.4% compared to the fourth quarter of 2022. Full-Year 2023 Highlights Sales of $1,244.7 million increased 19.1% year over year as reported and 20.9% in constant currency. Acquisitions contributed approximately 250 basis points of growth. Domestic revenue increased 20.9% year over year. International revenue increased 16.7% year over year as reported and 20.9% in constant currency. Diluted net earnings per share (GAAP) were $2.04 compared to diluted net loss per share (GAAP) of $2.68 in 2022. Adjusted diluted net earnings per share(1) were $3.45, an increase of 30.2% compared to 2022. “2023 was a great year for CONMED, and I am proud that our global business delivered record revenue in both the fourth quarter and for the full year,” commented Curt R. Hartman, CONMED’s Chair of the Board, President, and Chief Executive Officer. “The balanced growth we saw across our various businesses and geographies is a testament to the strength of the portfolio that we have built. As we shift our focus to 2024, we are very excited to continue delivering innovative technology solutions to our customers and patients across both the General Surgery and Orthopedics categories.” 2024 Outlook The Company expects full-year 2024 reported revenue between $1.340 billion and $1.365 billion. This represents year-over-year growth of approximately 8% to 10%. The Company expects full-year 2024 adjusted diluted net earnings per share(2) in the range of $4.30 to $4.40. This represents year-over-year growth of approximately 25% to 28%. The impact of foreign currency exchange rates in 2024 is expected to be immaterial. Supplemental Financial Disclosures (1) A reconciliation of reported diluted net earnings (loss) per share to adjusted diluted net earnings per share, a non-GAAP financial measure, appears below. (2) Information reconciling forward-looking adjusted diluted net earnings per share to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed below. Conference Call The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its fourth quarter and full-year 2023 results. To participate in the conference call via telephone, please click here to pre-register and obtain the dial-in number and passcode. This conference call will also be webcast and can be accessed from the “Investors” section of CONMED's website at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call. Consolidated Condensed Statements of Income (Loss) (in thousands except per share amounts, unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net sales $ 327,045 $ 250,867 $ 1,244,744 $ 1,045,472 Cost of sales 144,870 119,005 568,499 474,227 Gross profit 182,175 131,862 676,245 571,245 % of sales 55.7 % 52.6 % 54.3 % 54.6 % Selling & administrative expense 117,960 120,737 503,040 454,039 Research & development expense 14,028 12,220 52,602 47,152 Income (loss) from operations 50,187 (1,095 ) 120,603 70,054 % of sales 15.3 % -0.4 % 9.7 % 6.7 % Interest expense 9,505 9,443 39,775 28,905 Other expense - - - 112,011 Income (loss) before income taxes 40,682 (10,538 ) 80,828 (70,862 ) Provision (benefit) for income taxes 7,611 (37,122 ) 16,369 9,720 Net income (loss) $ 33,071 $ 26,584 $ 64,459 $ (80,582 ) Basic EPS $ 1.08 $ 0.87 $ 2.10 $ (2.68 ) Diluted EPS 1.05 0.86 2.04 (2.68 ) Basic shares 30,759 30,484 30,668 30,040 Diluted shares 31,502 30,931 31,548 30,040 Sales Summary (in millions, unaudited) Three Months Ended December 31, % Change Domestic International 2023 2022 As Reported Impact of Foreign Currency Constant Currency As Reported As Reported Impact of Foreign Currency Constant Currency Orthopedic Surgery $ 136.5 $ 115.2 18.5 % 0.9 % 19.4 % 6.0 % 27.8 % 2.0 % 29.8 % General Surgery 190.5 135.7 40.4 % 1.3 % 41.7 % 47.6 % 24.4 % 3.4 % 27.8 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % 33.3 % 26.5 % 2.5 % 29.0 % Single-use Products $ 271.3 $ 211.9 28.1 % 1.1 % 29.2 % 33.1 % 20.6 % 2.6 % 23.2 % Capital Products 55.7 39.0 42.9 % 0.9 % 43.8 % 34.5 % 49.3 % 1.9 % 51.2 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % 33.3 % 26.5 % 2.5 % 29.0 % Domestic $ 190.3 $ 142.8 33.3 % 0.0 % 33.3 % International 136.7 108.1 26.5 % 2.5 % 29.0 % $ 327.0 $ 250.9 30.4 % 1.1 % 31.5 % Year Ended December 31, % Change Domestic International 2023 2022 As Reported Impact of Foreign Currency Constant Currency As Reported As Reported Impact of Foreign Currency Constant Currency Orthopedic Surgery $ 533.1 $ 461.5 15.5 % 2.2 % 17.7 % 15.2 % 15.7 % 3.5 % 19.2 % General Surgery 711.6 584.0 21.9 % 1.5 % 23.4 % 23.4 % 18.4 % 5.1 % 23.5 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % 20.9 % 16.7 % 4.2 % 20.9 % Single-use Products $ 1,038.5 $ 874.9 18.7 % 1.8 % 20.5 % 21.3 % 15.2 % 4.3 % 19.5 % Capital Products 206.2 170.6 20.9 % 1.9 % 22.8 % 18.5 % 22.8 % 3.6 % 26.4 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % 20.9 % 16.7 % 4.2 % 20.9 % Domestic $ 700.1 $ 579.0 20.9 % 0.0 % 20.9 % International 544.6 466.5 16.7 % 4.2 % 20.9 % $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % Reconciliation of Reported Net Income to Adjusted Net Income (in thousands, except per share amounts, unaudited) Three Months Ended December 31, 2023 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Tax Expense Effective Tax Rate Net Income Basic EPS Adjustments Diluted EPS As reported $ 182,175 $ 117,960 $ 50,187 $ 9,505 $ 7,611 18.7 % $ 33,071 $ - $ 33,071 % of sales 55.7 % 36.1 % 15.3 % EPS $ 1.08 $ 1.05 Shares 30,759 743 31,502 Acquisition and integration costs(1) 2,154 - 2,154 - (162 ) 2,316 Contingent consideration fair value adjustment(2) - 9,370 (9,370 ) - 703 (10,073 ) $ 184,329 $ 127,330 $ 42,971 $ 9,505 $ 8,152 $ 25,314 Adjusted gross profit % 56.4 % Amortization(3) $ 1,500 (7,295 ) 8,795 (1,500 ) 2,458 7,837 As adjusted $ 120,035 $ 51,766 $ 8,005 $ 10,610 24.2 % $ 33,151 $ - $ 33,151 % of sales 36.7 % 15.8 % Adjusted diluted EPS $ 1.06 Shares 30,759 743 31,502 Convertible note hedges(4) (110 ) Adjusted diluted shares 31,392 Three Months Ended December 31, 2022 Gross Profit Selling & Administrative Expense Operating Income (Loss) Interest Expense Tax Expense (Benefit) Effective Tax Rate Net Income Basic EPS Adjustments(7) Diluted EPS As reported $ 131,862 $ 120,737 $ (1,095 ) $ 9,443 $ (37,122 ) 352.3 % $ 26,584 $ - $ 26,584 % of sales 52.6 % 48.1 % -0.4 % EPS $ 0.87 $ 0.86 Shares 30,484 447 30,931 Acquisition and integration costs(1) 2,096 (3,757 ) 5,853 - 12,873 (7,020 ) Restructuring and related costs(5) 1,955 (786 ) 2,741 - 6,029 (3,288 ) Software implementation costs(6) - (6,769 ) 6,769 - 14,889 (8,120 ) Contingent consideration fair value adjustment(2) - (2,518 ) 2,518 - 5,538 (3,020 ) $ 135,913 $ 106,907 $ 16,786 $ 9,443 $ 2,207 $ 5,136 Adjusted gross profit % 54.2 % Amortization(3) $ 1,500 (7,228 ) 8,728 (1,506 ) 2,446 7,788 As adjusted $ 99,679 $ 25,514 $ 7,937 $ 4,653 26.5 % $ 12,924 $ - $ 12,924 % of sales 39.7 % 10.2 % Adjusted diluted EPS $ 0.42 Shares 30,484 447 30,931 Convertible note hedges(4) - Adjusted diluted shares 30,931 (1) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc. In 2022, the Company incurred charges related to the amortization of inventory step-up to fair value and consulting fees, legal fees, and other integration costs associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. (2) In 2023 and 2022, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. (3) Includes amortization of intangible assets and deferred financing fees. (4) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. (5) In 2022, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. (6) In 2022, the Company incurred incremental freight, professional fees and other costs related to the implementation of a warehouse management software. (7) The Company adopted ASU 2020-06, effective January 1, 2022. As a result of the adoption, the Company is required to compute diluted EPS using the if-converted method. Under the if-converted method, the numerator is adjusted for interest expense applicable to its convertible notes (net of tax) and the denominator includes additional common shares assuming conversion premium and principal portion of the notes (when permitted or required) are settled in shares. Subsequent to June 6, 2022, the Company is required to settle the principal value of its convertible notes in cash. Reconciliation of Reported Net Income (Loss) to Adjusted Net Income (in thousands, except per share amounts, unaudited) Year Ended December 31, 2023 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Other Expense Tax Expense Effective Tax Rate Net Income Basic EPS Adjustments Diluted EPS As reported $ 676,245 $ 503,040 $ 120,603 $ 39,775 $ - $ 16,369 20.3 % $ 64,459 $ - $ 64,459 % of sales 54.3 % 40.4 % 9.7 % EPS $ 2.10 $ 2.04 Shares 30,668 880 31,548 Acquisition and integration costs(1) 8,617 (752 ) 9,369 - - 1,207 8,162 Termination of distributor agreements(2) - (2,098 ) 2,098 - - 417 1,681 Restructuring and related costs(3) 2,035 (1,578 ) 3,613 - - 930 2,683 Software implementation costs(4) - (6,056 ) 6,056 - - 1,453 4,603 Contingent consideration fair value adjustment(5) - 2,421 (2,421 ) - - 2,037 (4,458 ) $ 686,897 $ 494,977 $ 139,318 $ 39,775 $ - $ 22,413 $ 77,130 Adjusted gross profit % 55.2 % Amortization(6) $ 6,000 (29,068 ) 35,068 (6,058 ) - 9,969 31,157 As adjusted $ 465,909 $ 174,386 $ 33,717 $ - $ 32,382 23.0 % $ 108,287 $ - $ 108,287 % of sales 37.4 % 14.0 % Adjusted diluted EPS $ 3.45 Shares 30,668 880 31,548 Convertible note hedges(7) (142 ) Adjusted diluted shares 31,406 Year Ended December 31, 2022 Gross Profit Selling & Administrative Expense Operating Income Interest Expense Other Expense Tax Expense Effective Tax Rate Net Income (Loss) Basic EPS Adjustments(12) Diluted EPS As reported $ 571,245 $ 454,039 $ 70,054 $ 28,905 $ 112,011 $ 9,720 -13.7 % $ (80,582 ) $ - $ (80,582 ) % of sales 54.6 % 43.4 % 6.7 % EPS $ (2.68 ) $ (2.68 ) Shares 30,040 - 30,040 Acquisition and integration costs(1) 4,540 (10,063 ) 14,603 - - 46,965 (32,362 ) Legal matters(8) - (775 ) 775 - - (462 ) 1,237 Restructuring and related costs(3) 1,955 (786 ) 2,741 - - 6,029 (3,288 ) Software implementation costs(4) - (6,769 ) 6,769 - - 14,889 (8,120 ) Contingent consideration fair value adjustment(5) - (2,518 ) 2,518 - - 5,538 (3,020 ) Convertible notes premium on extinguishment(9) - - - - (103,125 ) (61,521 ) 164,646 Change in fair value of convertible notes hedges upon settlement(10) - - - - (5,460 ) (3,257 ) 8,717 Loss on early extinguishment of debt(11) - - - - (3,426 ) (2,044 ) 5,470 $ 577,740 $ 433,128 $ 97,460 $ 28,905 $ - $ 15,857 $ 52,698 Adjusted gross profit % 55.3 % Amortization(6) $ 6,000 (27,791 ) 33,791 (4,910 ) - 9,381 29,320 As adjusted $ 405,337 $ 131,251 $ 23,995 $ - $ 25,238 23.5 % $ 82,018 $ 2,978 $ 84,996 % of sales 38.8 % 12.6 % Adjusted diluted EPS $ 2.65 Shares 30,040 2,656 32,696 Convertible note hedges(7) (578 ) Adjusted diluted shares 32,118 (1) In 2023, the Company incurred charges related to the amortization of inventory step-up to fair value associated with the acquisition of In2Bones Global, Inc., and integration costs and professional fees associated with the acquisitions of In2Bones Global, Inc. and Biorez, Inc. In 2022, the Company incurred charges related to the amortization of inventory step-up to fair value and consulting fees, legal fees, and other integration costs associated with the acquisition of In2Bones Global, Inc. and Biorez, Inc. (2) In 2023, the Company incurred costs related to the termination of distributor agreements. (3) In 2023 and 2022, the Company incurred consulting fees related to an operational cost improvement initiative and severance related to the elimination of certain positions. (4) In 2023 and 2022, the Company incurred additional freight, labor and travel costs as well as professional fees related to the implementation of a warehouse management software. (5) In 2023 and 2022, the Company incurred income/(expense) related to the fair value adjustments of contingent consideration. (6) Includes amortization of intangible assets and deferred financing fees. (7) Non-GAAP adjusted dilutive weighted average shares outstanding exclude dilution that is expected to be offset by the Company’s convertible notes hedge transactions. (8) In 2022, the Company incurred costs related to a legal settlement. (9) In 2022, the Company incurred costs related to the conversion premium on the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes. (10) In 2022, the Company incurred costs related to the settlement of convertible notes hedge transactions associated with the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes. (11) In 2022, the Company incurred costs related to the write-off of deferred financing fees associated with the repurchase and extinguishment of $275.0 million of its 2.625% Convertible Notes and term loan paydown. (12) The Company adopted ASU 2020-06, effective January 1, 2022. As a result of the adoption, the Company is required to compute diluted EPS using the if-converted method. Under the if-converted method, the numerator is adjusted for interest expense applicable to its convertible notes (net of tax) and the denominator includes additional common shares assuming conversion premium and principal portion of the notes (when permitted or required) are settled in shares. Subsequent to June 6, 2022, the Company is required to settle the principal value of its convertible notes in cash. Adjustments in 2022 are applicable on a non-GAAP basis only since GAAP results are in a loss position and therefore exclude dilutive potential shares. Reconciliation of Reported Net Income (Loss) to EBITDA & Adjusted EBITDA (in thousands, unaudited) Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net income (loss) $ 33,071 $ 26,584 $ 64,459 $ (80,582 ) Provision (benefit) for income taxes 7,611 (37,122 ) 16,369 9,720 Interest expense 9,505 9,443 39,775 28,905 Depreciation 4,052 4,026 16,200 16,055 Amortization 13,950 13,709 55,674 53,464 EBITDA $ 68,189 $ 16,640 $ 192,477 $ 27,562 Stock based compensation 5,923 5,758 24,257 21,729 Acquisition and integration costs 2,154 5,853 9,369 14,603 Contingent consideration fair value adjustment (9,370 ) 2,518 (2,421 ) 2,518 Termination of distributor agreements - - 2,098 - Restructuring and related costs - 2,741 3,613 2,741 Software implementation costs - 6,769 6,056 6,769 Legal matters - - - 775 Convertible notes premium on extinguishment - - - 103,125 Change in fair value of convertible notes hedges upon settlement - - - 5,460 Loss on early extinguishment of debt - - - 3,426 Adjusted EBITDA $ 66,896 $ 40,279 $ 235,449 $ 188,708 EBITDA Margin EBITDA 20.9 % 6.6 % 15.5 % 2.6 % Adjusted EBITDA 20.5 % 16.1 % 18.9 % 18.1 % About CONMED Corporation CONMED is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery, and gastroenterology. For more information, visit www.conmed.com. Forward-Looking Statements This press release and associated conference call may contain forward-looking statements based on certain assumptions and contingencies that involve risks and uncertainties, which could cause actual results, performance, or trends to differ materially from those expressed in the forward-looking statements herein or in previous disclosures. For example, in addition to general industry and economic conditions, factors that could cause actual results to differ materially from those in the forward-looking statements may include, but are not limited to the risk factors discussed in the Company's Annual Report on Form 10-K for the full year ended December 31, 2022, listed under the heading Forward-Looking Statements in the Company’s most recently filed Form 10-Q and other risks and uncertainties, which may be detailed from time to time in reports filed by CONMED with the SEC. Any and all forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and relate to the Company’s performance on a going-forward basis. The Company believes that all forward-looking statements made by it have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections as expressed in the forward-looking statements will actually occur or prove to be correct. Supplemental Information - Reconciliation of GAAP to Non-GAAP Financial Measures The Company supplements the reporting of its financial information determined under generally accepted accounting principles in the United States (GAAP) with certain non-GAAP financial measures, including percentage sales growth in constant currency; adjusted gross profit; cost of sales excluding specified items; adjusted selling and administrative expenses; adjusted operating income; adjusted interest expense; adjusted other expense; adjusted income tax expense; adjusted effective income tax rate; adjusted net income, adjusted diluted shares and adjusted diluted net earnings per share (EPS). The Company believes that these non-GAAP measures provide meaningful information to assist investors and shareholders in understanding its financial results and assessing its prospects for future performance. Management believes percentage sales growth in constant currency and the other adjusted measures described above are important indicators of its operations because they exclude items that may not be indicative of, or are unrelated to, its core operating results and provide a baseline for analyzing trends in the Company’s underlying business. Further, the presentation of EBITDA is a non-GAAP measurement that management considers useful for measuring aspects of the Company’s cash flow. Management uses these non-GAAP financial measures for reviewing the operating results and analyzing potential future business trends in connection with its budget process and bases certain management incentive compensation on these non-GAAP financial measures. Net sales on a constant currency basis is a non-GAAP measure. The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales. To measure earnings performance on a consistent and comparable basis, the Company excludes certain items that affect the comparability of operating results and the trend of earnings. These adjustments are irregular in timing, may not be indicative of past and future performance and are therefore excluded to allow investors to better understand underlying operating trends. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported sales growth, gross profit, cost of sales, selling and administrative expenses, operating income (loss), interest expense, other expense, income tax expense (benefit), effective income tax rate, net income (loss), diluted shares and diluted net earnings (loss) per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures above, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. We are unable to present a quantitative reconciliation of our expected diluted net earnings per share to expected adjusted diluted net earnings per share as we are unable to predict with reasonable certainty and without unreasonable effort the impact and timing of acquisition, integration and other charges. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our consolidated condensed statements of income. View source version on businesswire.com: https://www.businesswire.com/news/home/20240131915000/en/