NEWS RELEASE
   
  CONTACT:
  CONMED Corporation
  Todd Garner
  Chief Financial Officer
  315-624-3317
  ToddGarner@conmed.com

 

 

CONMED Corporation Announces First Quarter 2019 Financial Results

 

Utica, New York, April 24, 2019 --- CONMED Corporation (Nasdaq: CNMD) today announced financial results for the first quarter of 2019.

 

First Quarter 2019 Highlights

 

·Sales of $218.4 million increased 8.1% year over year as reported and 9.3% in constant currency. Acquisitions contributed approximately 300 basis points of growth.
·Domestic revenue increased 10.1% year over year.
·International revenue increased 5.8% as reported and 8.3% in constant currency.
·Diluted net earnings per share (GAAP) were $0.04, compared to diluted net earnings per share of $0.37 in the first quarter of 2018.
·Adjusted diluted net earnings per share(1) were $0.57 versus $0.53 in the first quarter of 2018, an increase of 7.5%. 
·Closed Buffalo Filter transaction on February 11, 2019.

 

 

“We are pleased to report continued strength and momentum in the business this quarter,” commented Curt R. Hartman, CONMED’s President and Chief Executive Officer. “Our expanding new product pipeline, combined with our solid execution during the first quarter, positions us well to deliver on our increased expectations for 2019.”

 

2019 Outlook

 

The Company is increasing its full-year 2019 financial guidance. The Company now expects full-year 2019 reported sales growth in the range of 9% to 10%, which includes an increase to its organic constant currency sales growth to a range of 5.25% to 6.25% from the original range of 5% to 6%, as well as the addition of the Buffalo Filter acquisition. Based on recent exchange rates, the negative impact to 2019 sales from foreign exchange is now expected to be approximately 75 basis points, a reduction from the original estimate of 100 basis points.

 

The Company is also increasing its guidance for adjusted diluted net earnings per share to the range of $2.47 to $2.52 from the original range of $2.42 to $2.47. This represents growth over 2018 of approximately 13% to 16%. The adjusted diluted net earnings per share estimates for 2019 exclude amortization of intangible assets, amortization of deferred financing fees and debt discount, which are estimated in the range of $34 to $36 million, net of tax. Also excluded are the costs of special items, including acquisition costs, restructuring costs and debt refinancing costs, which are estimated in the range of $16 to $18 million, net of tax.

 

Page 1 of 8 

 

 

Supplemental Financial Disclosures

 

(1) A reconciliation of reported diluted net earnings per share to adjusted diluted net earnings per share, a non-GAAP financial measure, appears below.

 

Conference Call

 

The Company’s management will host a conference call today at 4:30 p.m. ET to discuss its first quarter 2019 results.

 

To participate in the conference call, dial 844-889-7792 (domestic) or 661-378-9936 (international) and refer to the passcode 9275258.

 

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.

 

A recording of the call will also be available from 7:30 p.m. ET on Wednesday, April 24, 2019, until 7:30 p.m. ET on Thursday, May 9, 2019. To hear this recording, dial 855-859-2056 (domestic) or 404-537-3406 (international) and enter the passcode 9275258.

 

 

Page 2 of 8 

 

 

Consolidated Condensed Statements of Income

(in thousands, except per share amounts, unaudited)

 

   Three Months Ended
   March 31,
   2019  2018
       
Net sales  $218,378   $202,064 
Cost of sales   96,940    92,507 
Gross profit   121,438    109,557 
% of sales   55.6%    54.2% 
Selling and administrative expense   99,226    84,568 
Research & development expense   10,575    7,711 
Income from operations   11,637    17,278 
% of sales   5.3%    8.6% 
Interest expense   9,369    4,818 
Other expense   4,225     
Income (loss) before income taxes   (1,957)   12,460 
Provision (benefit) for income taxes   (2,978)   1,803 
Net income  $1,021   $10,657 
           
Basic EPS  $0.04   $0.38 
Diluted EPS   0.04    0.37 
           
Basic shares   28,173    28,008 
Diluted shares   29,034    28,573 

 

 

Page 3 of 8 

 

Sales Summary

(in millions, unaudited)

 

 

   Three Months Ended March 31,
         % Change
                  Domestic  International
   2019  2018  As
Reported
  Impact of
Foreign
Currency
  Constant
Currency
  As
Reported
  As
Reported
  Impact of
Foreign
Currency
  Constant
Currency
Orthopedic Surgery  $113.4   $108.9    4.2%    1.5%    5.7%    4.9%    3.8%    2.4%    6.2% 
General Surgery   105.0    93.2    12.6%    0.8%    13.4%    13.7%    10.2%    2.6%    12.8% 
   $218.4   $202.1    8.1%    1.2%    9.3%    10.1%    5.8%    2.5%    8.3% 
                                              
Single-use Products  $172.4   $161.7    6.6%    1.2%    7.8%    11.3%    1.3%    2.5%    3.8% 
Capital Products   46.0    40.4    13.9%    1.4%    15.3%    5.3%    22.6%    2.8%    25.4% 
   $218.4   $202.1    8.1%    1.2%    9.3%    10.1%    5.8%    2.5%    8.3% 
                                              
Domestic  $117.0   $106.3    10.1%    0.0%    10.1%                     
International   101.4    95.8    5.8%    2.5%    8.3%                     
   $218.4   $202.1    8.1%    1.2%    9.3%                     
                                              

 

Page 4 of 8 

 

 

Reconciliation of Reported Net Income to Adjusted Net Income

(in thousands, except per share amounts, unaudited)

 

   Three Months Ended March 31, 2019
   Gross Profit  Selling &
Administrative
Expense
  Operating
Income
  Interest
Expense
  Other
Expense
  Tax
Expense/
(Benefit)
  Effective
Tax Rate
  Net Income  Diluted
EPS
As reported  $121,438   $99,226   $11,637   $9,369   $4,225   $(2,978)   152.2%   $1,021   $0.04 
% of sales   55.6%    45.4%    5.3%                               
Business acquisition costs (1)   660    (7,245)   7,905            2,327         5,578    0.19 
Debt refinancing costs (2)                   (3,904)   1,149         2,755    0.09 
   $122,098   $91,981   $19,542   $9,369   $321   $498        $9,354   $0.32 
Gross profit %   55.9%                                         
Amortization(3)  $1,500    (5,829)   7,329    (2,207)       2,408         7,128    0.25 
Adjusted net income       $86,152   $26,871   $7,162   $321   $2,906    15.0%   $16,482   $0.57 
% of sales        39.5%    12.3%                               

 

   Three Months Ended March 31, 2018
   Gross Profit  Selling &
Administrative
Expense
  Operating
Income
  Interest
Expense
  Other
Expense
  Tax
Expense/
(Benefit)
  Effective
Tax Rate
  Net Income  Diluted
EPS
As reported  $109,557   $84,568   $17,278   $4,818   $   $1,803    14.5%   $10,657   $0.37 
% of sales   54.2%    41.9%    8.6%                               
Tax reform (4)                       (301)        301    0.01 
   $109,557   $84,568   $17,278   $4,818   $   $1,502        $10,958   $0.38 
Adjusted gross profit %   54.2%                                         
Amortization(3)  $1,500    (4,021)   5,521            1,353         4,168    0.15 
Adjusted net income       $80,547   $22,799   $4,818   $   $2,855    15.9%   $15,126   $0.53 
% of sales        39.9%    11.3%                               

 

(1) In 2019, the Company incurred investment banking fees, consulting fees, legal fees and integration related costs associated with the acquisition of Buffalo Filter, LLC.

(2) In 2019, in conjunction with the acquisition of Buffalo Filter, LLC, the Company refinanced its existing credit facility and incurred one-time fees associated with an agreement between the Company and JP Morgan Chase Bank, N.A., as well as costs associated with the early extinguishment of debt.

(3) Includes amortization of intangible assets, deferred financing fees and debt discount.

(4) In 2018, the Company recorded tax expense resulting from the 2017 Tax Cuts and Jobs Act. The 2018 amounts are adjustments to the initial December 2017 deferred tax balances.

 

Page 5 of 8 

 

Reconciliation of Reported Net Income to EBITDA & Adjusted EBITDA

(in thousands, unaudited)

 

   Three Months Ended
   March 31,
   2019  2018
       
Net income  $1,021   $10,657 
Provision (benefit) for income taxes   (2,978)   1,803 
Interest expense   9,369    4,818 
Depreciation   4,442    4,502 
Amortization   12,208    10,488 
EBITDA  $24,062   $32,268 
           
Stock based compensation   2,703    2,303 
Business acquisition costs   7,905     
Debt refinancing costs   3,904     
Adjusted EBITDA  $38,574   $34,571 
           
           
EBITDA Margin          
     EBITDA   11.0%    16.0% 
     Adjusted EBITDA   17.7%    17.1% 

 

Page 6 of 8 

 

 

About CONMED Corporation

 

CONMED is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and physicians in a variety of specialties, including orthopedics, general surgery, gynecology, neurosurgery, thoracic surgery, and gastroenterology. For more information, visit www.conmed.com.

 

Forward-Looking Statements

 

This press release and today’s 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 fiscal year ended December 31, 2018, and listed under the heading Forward-Looking Statements in the Company’s most recently filed Form 10-Q. 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 accounting principles generally accepted 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 research and development expense; adjusted operating income; adjusted interest expense; adjusted other expense; adjusted income tax expense; adjusted effective income tax rate; adjusted net income 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.

 

Page 7 of 8 

 

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, research and development expense, operating income, interest expense, other expense, income tax expense (benefit), effective income tax rate, net income and diluted net earnings per share, the most directly comparable GAAP financial measures. These non-GAAP financial measures are an additional way of viewing aspects of the Company’s operations that, when viewed with GAAP results and the reconciliations to corresponding GAAP financial measures above, provide a more complete understanding of the business. The Company strongly encourages investors and shareholders to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

 

Page 8 of 8 

 


The following information was filed by Conmed Corp (CNMD) on Wednesday, April 24, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Conmed Corp's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Conmed Corp.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Log in with your credentials

or    

Forgot your details?

Create Account