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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CONMED Corporation | NASDAQ:CNMD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 101.41 | 100.00 | 106.01 | 0 | 01:00:00 |
For the quarter ended
|
Commission File Number
|
June 30, 2016
|
0-16093
|
New York
(State or other jurisdiction of
incorporation or organization)
|
16-0977505
(I.R.S. Employer
Identification No.)
|
525 French Road, Utica, New York
(Address of principal executive offices)
|
13502
(Zip Code)
|
PART I FINANCIAL INFORMATION
|
||
Item Number
|
|
Page
|
|
|
|
|
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|
|
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||
|
|
|
|
||
|
|
|
|
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|
|
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||
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|
|
|
|
|
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|
|
|
|
PART II OTHER INFORMATION
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
June 30,
|
|
June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
$
|
193,433
|
|
|
$
|
181,027
|
|
|
$
|
374,634
|
|
|
$
|
358,967
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
91,011
|
|
|
87,529
|
|
|
174,472
|
|
|
173,187
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
102,422
|
|
|
93,498
|
|
|
200,162
|
|
|
185,780
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Selling and administrative expense
|
86,729
|
|
|
73,581
|
|
|
172,672
|
|
|
148,367
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Research and development expense
|
8,009
|
|
|
7,501
|
|
|
16,267
|
|
|
14,043
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses
|
94,738
|
|
|
81,082
|
|
|
188,939
|
|
|
162,410
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income from operations
|
7,684
|
|
|
12,416
|
|
|
11,223
|
|
|
23,370
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other expense
|
—
|
|
|
—
|
|
|
2,942
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
3,757
|
|
|
1,489
|
|
|
7,587
|
|
|
2,949
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
3,927
|
|
|
10,927
|
|
|
694
|
|
|
20,421
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Provision for income taxes
|
1,043
|
|
|
3,466
|
|
|
75
|
|
|
6,648
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2,884
|
|
|
$
|
7,461
|
|
|
$
|
619
|
|
|
$
|
13,773
|
|
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
1,345
|
|
|
$
|
8,630
|
|
|
$
|
2,132
|
|
|
$
|
4,915
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Per share data:
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.10
|
|
|
$
|
0.27
|
|
|
$
|
0.02
|
|
|
$
|
0.50
|
|
Diluted
|
0.10
|
|
|
0.27
|
|
|
0.02
|
|
|
0.49
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Dividends per share of common stock
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
27,776
|
|
|
27,620
|
|
|
27,753
|
|
|
27,603
|
|
||||
Diluted
|
27,941
|
|
|
27,857
|
|
|
27,926
|
|
|
27,839
|
|
|
Six Months Ended
|
||||||
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
619
|
|
|
$
|
13,773
|
|
Adjustments to reconcile net income
|
|
|
|
|
|||
to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation
|
9,941
|
|
|
9,196
|
|
||
Amortization
|
17,350
|
|
|
11,885
|
|
||
Stock-based compensation
|
4,583
|
|
|
3,779
|
|
||
Deferred income taxes
|
(4,342
|
)
|
|
2,176
|
|
||
Loss on early extinguishment of debt
|
254
|
|
|
—
|
|
||
Increase (decrease) in cash flows
|
|
|
|
|
|
||
from changes in assets and liabilities, net of acquired assets:
|
|
|
|
|
|
||
Accounts receivable
|
4,929
|
|
|
(3,571
|
)
|
||
Inventories
|
(10,486
|
)
|
|
(8,003
|
)
|
||
Accounts payable
|
(7,633
|
)
|
|
3,863
|
|
||
Accrued compensation and benefits
|
(4,758
|
)
|
|
(6,078
|
)
|
||
Other assets
|
(5,374
|
)
|
|
2,603
|
|
||
Other liabilities
|
(5,206
|
)
|
|
(4,568
|
)
|
||
|
(742
|
)
|
|
11,282
|
|
||
Net cash provided by (used in) operating activities
|
(123
|
)
|
|
25,055
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|||
Purchases of property, plant and equipment
|
(7,667
|
)
|
|
(7,783
|
)
|
||
Payments related to business acquisitions, net of cash acquired
|
(256,450
|
)
|
|
(6,104
|
)
|
||
Net cash used in investing activities
|
(264,117
|
)
|
|
(13,887
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|||
Payments on senior credit agreement
|
(4,376
|
)
|
|
—
|
|
||
Proceeds from senior credit agreement
|
253,015
|
|
|
19,000
|
|
||
Payments related to distribution agreement
|
(16,667
|
)
|
|
(16,667
|
)
|
||
Payments related to contingent consideration
|
(200
|
)
|
|
(2,423
|
)
|
||
Payments related to debt issuance costs
|
(5,556
|
)
|
|
(1,410
|
)
|
||
Dividends paid on common stock
|
(11,088
|
)
|
|
(11,026
|
)
|
||
Other, net
|
209
|
|
|
1,461
|
|
||
Net cash provided by (used in) financing activities
|
215,337
|
|
|
(11,065
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(306
|
)
|
|
(4,219
|
)
|
||
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
(49,209
|
)
|
|
(4,116
|
)
|
||
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
72,504
|
|
|
66,332
|
|
||
|
|
|
|
||||
Cash and cash equivalents at end of period
|
$
|
23,295
|
|
|
$
|
62,216
|
|
|
|
|
|
||||
Non-cash financing activities:
|
|
|
|
||||
Dividends payable
|
$
|
5,561
|
|
|
$
|
5,539
|
|
Cash
|
$
|
1,305
|
|
Other current assets
|
16,681
|
|
|
Current assets
|
17,986
|
|
|
Property, plant & equipment
|
3,332
|
|
|
Goodwill
|
136,358
|
|
|
Customer and distributor relationships
|
76,420
|
|
|
Developed technology
|
49,600
|
|
|
Trademarks & tradenames
|
4,780
|
|
|
Other non-current assets
|
302
|
|
|
Total assets acquired
|
$
|
288,778
|
|
|
|
||
Current liabilities assumed
|
10,586
|
|
|
Deferred income taxes
|
20,009
|
|
|
Other long-term liabilities
|
454
|
|
|
Total liabilities assumed
|
31,049
|
|
|
Net assets acquired
|
$
|
257,729
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net sales
|
$
|
193,433
|
|
|
$
|
194,565
|
|
|
$
|
374,634
|
|
|
$
|
381,889
|
|
Net income
|
6,337
|
|
|
(808
|
)
|
|
12,659
|
|
|
(7,665
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
2,884
|
|
|
$
|
7,461
|
|
|
$
|
619
|
|
|
$
|
13,773
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Pension liability, net of income tax (income tax expense of $257 and $297 for the three months ended June 30, 2016 and 2015, respectively, and $514 and $598 for the six months ended June 30, 2016 and 2015, respectively)
|
438
|
|
|
507
|
|
|
876
|
|
|
1,019
|
|
||||
Cash flow hedging gain (loss), net of income tax (income tax expense (benefit) of $666 and ($1,499) for the three months ended June 30, 2016 and 2015, respectively, and ($633) and ($349) for the six months ended June 30, 2016 and 2015, respectively)
|
1,137
|
|
|
(2,557
|
)
|
|
(1,080
|
)
|
|
(595
|
)
|
||||
Foreign currency translation adjustment
|
(3,114
|
)
|
|
3,219
|
|
|
1,717
|
|
|
(9,282
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
1,345
|
|
|
$
|
8,630
|
|
|
$
|
2,132
|
|
|
$
|
4,915
|
|
|
|
|
|
|
|
|
|
|
Cash Flow
Hedging
Gain (Loss)
|
|
Pension
Liability
|
|
Cumulative
Translation
Adjustments
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2015
|
$
|
1,201
|
|
|
$
|
(25,982
|
)
|
|
$
|
(29,113
|
)
|
|
$
|
(53,894
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
(750
|
)
|
|
—
|
|
|
1,717
|
|
|
967
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss) before tax
a
|
(524
|
)
|
|
1,390
|
|
|
—
|
|
|
866
|
|
||||
Income tax provision (benefit)
|
194
|
|
|
(514
|
)
|
|
—
|
|
|
(320
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net current-period other comprehensive income (loss)
|
(1,080
|
)
|
|
876
|
|
|
1,717
|
|
|
1,513
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance, June 30, 2016
|
$
|
121
|
|
|
$
|
(25,106
|
)
|
|
$
|
(27,396
|
)
|
|
$
|
(52,381
|
)
|
|
Cash Flow
Hedging
Gain (Loss)
|
|
Pension
Liability
|
|
Cumulative
Translation
Adjustments
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2014
|
$
|
3,276
|
|
|
$
|
(30,760
|
)
|
|
$
|
(12,338
|
)
|
|
$
|
(39,822
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
2,583
|
|
|
—
|
|
|
(9,282
|
)
|
|
(6,699
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income before tax
a
|
(5,040
|
)
|
|
1,617
|
|
|
—
|
|
|
(3,423
|
)
|
||||
Income tax provision (benefit)
|
1,862
|
|
|
(598
|
)
|
|
—
|
|
|
1,264
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net current-period other comprehensive income (loss)
|
(595
|
)
|
|
1,019
|
|
|
(9,282
|
)
|
|
(8,858
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance, June 30, 2015
|
$
|
2,681
|
|
|
$
|
(29,741
|
)
|
|
$
|
(21,620
|
)
|
|
$
|
(48,680
|
)
|
June 30, 2016
|
Asset
Balance Sheet
Location
|
|
Fair
Value
|
|
Liabilities
Balance Sheet
Location
|
|
Fair
Value
|
|
|
Net
Fair
Value
|
||||||
Derivatives designated as hedged instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
2,111
|
|
|
Prepaid expenses and other current assets
|
|
$
|
(1,920
|
)
|
|
|
$
|
191
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
10
|
|
|
Prepaid expenses and other current assets
|
|
(56
|
)
|
|
|
(46
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total derivatives
|
|
|
$
|
2,121
|
|
|
|
|
$
|
(1,976
|
)
|
|
|
$
|
145
|
|
December 31, 2015
|
Asset
Balance Sheet
Location
|
|
Fair
Value
|
|
Liabilities
Balance Sheet
Location
|
|
Fair
Value
|
|
|
Net
Fair
Value
|
||||||
Derivatives designated as hedged instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
2,931
|
|
|
Prepaid expenses and other current assets
|
|
$
|
(1,026
|
)
|
|
|
$
|
1,905
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
4
|
|
|
Prepaid expenses and other current assets
|
|
(38
|
)
|
|
|
(34
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total derivatives
|
|
|
$
|
2,935
|
|
|
|
|
$
|
(1,064
|
)
|
|
|
$
|
1,871
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
||||
Raw materials
|
$
|
44,071
|
|
|
$
|
47,681
|
|
Work-in-process
|
15,627
|
|
|
13,922
|
|
||
Finished goods
|
120,215
|
|
|
105,291
|
|
||
Total
|
$
|
179,913
|
|
|
$
|
166,894
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
2,884
|
|
|
$
|
7,461
|
|
|
$
|
619
|
|
|
$
|
13,773
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic – weighted average shares outstanding
|
27,776
|
|
|
27,620
|
|
|
27,753
|
|
|
27,603
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Effect of dilutive potential securities
|
165
|
|
|
237
|
|
|
173
|
|
|
236
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Diluted – weighted average shares outstanding
|
27,941
|
|
|
27,857
|
|
|
27,926
|
|
|
27,839
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Net income (per share)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.10
|
|
|
$
|
0.27
|
|
|
$
|
0.02
|
|
|
$
|
0.50
|
|
Diluted
|
0.10
|
|
|
0.27
|
|
|
0.02
|
|
|
0.49
|
|
Balance as of December 31, 2015
|
$
|
260,651
|
|
|
|
||
Goodwill resulting from business acquisitions
|
136,358
|
|
|
|
|
||
Foreign currency translation
|
1,145
|
|
|
|
|
||
Balance as of June 30, 2016
|
$
|
398,154
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Customer and distributor relationships
|
$
|
213,308
|
|
|
$
|
(69,795
|
)
|
|
$
|
136,871
|
|
|
$
|
(64,423
|
)
|
|
|
|
|
|
|
|
|
||||||||
Promotional, marketing and distribution rights
|
149,376
|
|
|
(27,000
|
)
|
|
149,376
|
|
|
(24,000
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Patents and other intangible assets
|
71,435
|
|
|
(43,888
|
)
|
|
66,688
|
|
|
(42,885
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Developed technology
|
49,600
|
|
|
(620
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Unamortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Trademarks and tradenames
|
86,544
|
|
|
—
|
|
|
86,544
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
$
|
570,263
|
|
|
$
|
(141,303
|
)
|
|
$
|
439,479
|
|
|
$
|
(131,308
|
)
|
|
Amortization included in expense
|
|
Amortization recorded as a reduction of revenue
|
|
Total
|
||||||
Remaining, 2016
|
$
|
6,988
|
|
|
$
|
3,000
|
|
|
$
|
9,988
|
|
2017
|
15,428
|
|
|
6,000
|
|
|
21,428
|
|
|||
2018
|
15,762
|
|
|
6,000
|
|
|
21,762
|
|
|||
2019
|
15,617
|
|
|
6,000
|
|
|
21,617
|
|
|||
2020
|
15,307
|
|
|
6,000
|
|
|
21,307
|
|
|||
2021
|
14,031
|
|
|
6,000
|
|
|
20,031
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Balance as of January 1,
|
$
|
2,509
|
|
|
$
|
2,286
|
|
|
|
|
|
|
|||
Provision for warranties
|
1,692
|
|
|
1,950
|
|
||
|
|
|
|
|
|||
Claims made
|
(1,770
|
)
|
|
(1,716
|
)
|
||
|
|
|
|
|
|||
Balance as of June 30,
|
$
|
2,431
|
|
|
$
|
2,520
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
$
|
113
|
|
|
$
|
52
|
|
|
$
|
226
|
|
|
$
|
120
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest cost on projected benefit obligation
|
719
|
|
|
810
|
|
|
1,438
|
|
|
1,697
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Expected return on plan assets
|
(1,297
|
)
|
|
(1,380
|
)
|
|
(2,594
|
)
|
|
(2,849
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Net amortization and deferral
|
695
|
|
|
805
|
|
|
1,390
|
|
|
1,617
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Net periodic pension cost
|
$
|
230
|
|
|
$
|
287
|
|
|
$
|
460
|
|
|
$
|
585
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Facility consolidation costs
|
$
|
127
|
|
|
$
|
1,534
|
|
|
$
|
991
|
|
|
$
|
3,863
|
|
Termination of a product offering
|
4,546
|
|
|
—
|
|
|
4,546
|
|
|
—
|
|
||||
Restructuring costs included in cost of sales
|
$
|
4,673
|
|
|
$
|
1,534
|
|
|
$
|
5,537
|
|
|
$
|
3,863
|
|
|
|
|
|
|
|
|
|
||||||||
Restructuring costs
|
$
|
953
|
|
|
$
|
2,284
|
|
|
$
|
3,744
|
|
|
$
|
8,464
|
|
Business acquisition costs
|
4,996
|
|
|
—
|
|
|
14,041
|
|
|
—
|
|
||||
Acquisition, restructuring and other expense included in selling and administrative expense
|
$
|
5,949
|
|
|
$
|
2,284
|
|
|
$
|
17,785
|
|
|
$
|
8,464
|
|
|
|
|
|
|
|
|
|
||||||||
Debt refinancing costs included in other expense
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,942
|
|
|
$
|
—
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Balance as of January 1,
|
$
|
7,175
|
|
|
$
|
8,254
|
|
|
|
|
|
||||
Expenses incurred
|
4,735
|
|
|
12,327
|
|
||
|
|
|
|
||||
Payments made
|
(9,755
|
)
|
|
(12,897
|
)
|
||
|
|
|
|
||||
Balance at June 30,
|
$
|
2,155
|
|
|
$
|
7,684
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Orthopedic surgery
|
$
|
92,742
|
|
|
$
|
96,801
|
|
|
$
|
186,183
|
|
|
$
|
195,398
|
|
General surgery
|
87,570
|
|
|
71,111
|
|
|
163,470
|
|
|
137,173
|
|
||||
Surgical visualization
|
13,121
|
|
|
13,115
|
|
|
24,981
|
|
|
26,396
|
|
||||
Consolidated net sales
|
$
|
193,433
|
|
|
$
|
181,027
|
|
|
$
|
374,634
|
|
|
$
|
358,967
|
|
|
December 31, 2015
|
||||||||||
|
As Previously Filed
|
|
Reclass
|
|
As Adjusted
|
||||||
Current deferred income tax assets
|
$
|
14,150
|
|
|
$
|
(14,150
|
)
|
|
$
|
—
|
|
Long-term deferred income tax assets
|
1,332
|
|
|
2,906
|
|
|
4,238
|
|
|||
Long-term deferred income tax liabilities
|
(114,623
|
)
|
|
11,244
|
|
|
(103,379
|
)
|
|||
|
$
|
(99,141
|
)
|
|
$
|
—
|
|
|
$
|
(99,141
|
)
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Revolving line of credit
|
$
|
344,314
|
|
|
$
|
265,609
|
|
Term loan, net of deferred debt issuance costs of $700 and $0 in 2016 and 2015, respectively
|
169,925
|
|
|
—
|
|
||
Mortgage notes
|
4,545
|
|
|
5,201
|
|
||
Total debt
|
518,784
|
|
|
270,810
|
|
||
Less: Current portion
|
10,145
|
|
|
1,339
|
|
||
Total long-term debt
|
$
|
508,639
|
|
|
$
|
269,471
|
|
July 1, 2016 - June 30, 2017
|
$
|
10,145
|
|
July 1, 2017 - June 30, 2018
|
12,449
|
|
|
July 1, 2018 - June 30, 2019
|
16,951
|
|
|
July 1, 2019 - June 30, 2020
|
17,500
|
|
|
July 1, 2020 - June 30, 2021
|
462,439
|
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
|
|
•
|
general economic and business conditions;
|
•
|
changes in foreign exchange and interest rates;
|
•
|
cyclical customer purchasing patterns due to budgetary and other constraints;
|
•
|
changes in customer preferences;
|
•
|
competition;
|
•
|
changes in technology;
|
•
|
the introduction and acceptance of new products;
|
•
|
the ability to evaluate, finance and integrate acquired businesses, products and companies;
|
•
|
changes in business strategy;
|
•
|
the availability and cost of materials;
|
•
|
the possibility that United States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors;
|
•
|
future levels of indebtedness and capital spending;
|
•
|
quality of our management and business abilities and the judgment of our personnel;
|
•
|
the availability, terms and deployment of capital;
|
•
|
the risk of litigation, especially patent litigation, as well as the cost associated with patent and other litigation;
|
•
|
the risk of a lack of allograft tissue due to reduced donations of such tissues or due to tissues not meeting the appropriate high standards for screening and/or processing of such tissues; and
|
•
|
compliance with and changes in regulatory requirements.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
|
|
|
|
||
Orthopedic surgery
|
47.9
|
%
|
|
53.5
|
%
|
|
49.7
|
%
|
|
54.4
|
%
|
General surgery
|
45.3
|
%
|
|
39.3
|
%
|
|
43.6
|
%
|
|
38.2
|
%
|
Surgical visualization
|
6.8
|
%
|
|
7.2
|
%
|
|
6.7
|
%
|
|
7.4
|
%
|
Consolidated net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
revenue recognition;
|
•
|
inventory valuation;
|
•
|
goodwill and intangible assets;
|
•
|
pension plan;
|
•
|
stock-based compensation costs; and
|
•
|
income taxes.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
|
|
||||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
47.1
|
|
|
48.4
|
|
|
46.6
|
|
|
48.2
|
|
Gross profit
|
52.9
|
|
|
51.6
|
|
|
53.4
|
|
|
51.8
|
|
Selling and administrative expense
|
44.8
|
|
|
40.6
|
|
|
46.1
|
|
|
41.3
|
|
Research and development expense
|
4.1
|
|
|
4.1
|
|
|
4.3
|
|
|
3.9
|
|
Income from operations
|
4.0
|
|
|
6.9
|
|
|
3.0
|
|
|
6.6
|
|
Other expense
|
—
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
Interest expense
|
1.9
|
|
|
0.8
|
|
|
2.0
|
|
|
0.8
|
|
Income before income taxes
|
2.1
|
|
|
6.1
|
|
|
0.2
|
|
|
5.8
|
|
Provision for income taxes
|
0.5
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
Net income
|
1.6
|
%
|
|
4.2
|
%
|
|
0.2
|
%
|
|
3.9
|
%
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
|
|
|
|
% Change
|
|
|
|
|
|
% Change
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2016
|
|
2015
|
|
As Reported
|
|
Constant Currency
|
|
2016
|
|
2015
|
|
As Reported
|
|
Constant Currency
|
||||||||||||
Orthopedic surgery
|
$
|
92.7
|
|
|
$
|
96.8
|
|
|
-4.2
|
%
|
|
-1.3
|
%
|
|
$
|
186.2
|
|
|
$
|
195.4
|
|
|
-4.7
|
%
|
|
-1.3
|
%
|
General surgery
|
87.6
|
|
|
71.1
|
|
|
23.1
|
%
|
|
24.5
|
%
|
|
163.5
|
|
|
137.2
|
|
|
19.2
|
%
|
|
20.7
|
%
|
||||
Surgical visualization
|
13.1
|
|
|
13.1
|
|
|
—
|
%
|
|
2.6
|
%
|
|
24.9
|
|
|
26.4
|
|
|
-5.4
|
%
|
|
-2.6
|
%
|
||||
Net sales
|
$
|
193.4
|
|
|
$
|
181.0
|
|
|
6.9
|
%
|
|
9.2
|
%
|
|
$
|
374.6
|
|
|
$
|
359.0
|
|
|
4.4
|
%
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Single-use products
|
$
|
154.2
|
|
|
$
|
145.3
|
|
|
6.1
|
%
|
|
8.4
|
%
|
|
$
|
299.1
|
|
|
$
|
285.5
|
|
|
4.8
|
%
|
|
7.5
|
%
|
Capital products
|
39.2
|
|
|
35.7
|
|
|
10.1
|
%
|
|
12.5
|
%
|
|
75.5
|
|
|
73.5
|
|
|
2.8
|
%
|
|
5.5
|
%
|
||||
Net sales
|
$
|
193.4
|
|
|
$
|
181.0
|
|
|
6.9
|
%
|
|
9.2
|
%
|
|
$
|
374.6
|
|
|
$
|
359.0
|
|
|
4.4
|
%
|
|
7.1
|
%
|
•
|
Orthopedic surgery sales decreased
4.2%
and
4.7%
in the
three and six months ended
June 30, 2016
, respectively, primarily due to the impact of unfavorable constant currency exchange rates and lower sales in our capital products.
|
•
|
General surgery sales increased
23.1%
and
19.2%
in the
three and six months ended
June 30, 2016
, respectively, mainly due to the SurgiQuest acquisition. Excluding SurgiQuest, general surgery sales decreased
2.9%
and
3.6%
in the
three and six months ended
June 30, 2016
, respectively, due primarily to the impact of unfavorable foreign currency exchange rates and lower sales in our advanced surgical and critical care product lines.
|
•
|
Surgical visualization sales remained flat in the
three months ended
June 30, 2016
, however decreased
5.4%
, in the
six months ended
June 30, 2016
, mainly due to the impact of unfavorable constant currency exchange rates.
|
•
|
Accounts receivable reflects continued strong collection efforts on SurgiQuest accounts receivable offset by higher sales levels during the
six months ended
June 30, 2016
compared with the same period a year ago;
|
•
|
An increase in inventories during the
six months ended
June 30, 2016
compared with year-end related to SurgiQuest finished goods and field inventories to support the acquisition integration and anticipated sales growth, and increases associated with anticipated new products launching in 2016.
|
•
|
Accounts payable resulted in a higher use of cash for the
six months ended
June 30, 2016
compared with the same period a year ago as we had a higher level of accounts payable at the beginning of 2016 due to the SurgiQuest acquisition. This accounts payable was paid down during the
six months ended
June 30, 2016
.
|
•
|
An increase in other assets due primarily to restricted cash in conjunction with the SurgiQuest acquisition; restricted cash will be paid out over the balance of the year to former employees of SurgiQuest.
|
|
|
|
Payments Due by Period
|
|
|
||||||||||||||
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than 5 Years
|
||||||||||
Long-term debt
|
$
|
519,484
|
|
|
$
|
10,145
|
|
|
$
|
29,400
|
|
|
$
|
479,939
|
|
|
$
|
—
|
|
Purchase obligations
|
33,537
|
|
|
32,648
|
|
|
863
|
|
|
26
|
|
|
—
|
|
|||||
Operating lease obligations
|
25,573
|
|
|
5,813
|
|
|
11,189
|
|
|
5,261
|
|
|
3,310
|
|
|||||
Total contractual obligations
|
$
|
578,594
|
|
|
$
|
48,606
|
|
|
$
|
41,452
|
|
|
$
|
485,226
|
|
|
$
|
3,310
|
|
Exhibit No.
|
Description of Exhibit
|
|
|
31.1
|
Certification of Curt R. Hartman pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of Luke A. Pomilio pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certifications of Curt R. Hartman and Luke A. Pomilio pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following materials from CONMED Corporation's Quarterly Report on Form 10-Q for the three and six months ended June 30, 2016 formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2015, (ii) the Consolidated Condensed Balance Sheets at June 30, 2016 and December 31, 2015, (iii) Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2016 and 2015, and (iv) Notes to Consolidated Condensed Financial Statements for the three and six months ended June 30, 2016. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
|
|
|
CONMED CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
By: /s/ Luke A. Pomilio
|
|
|
Luke A. Pomilio
|
|
|
Executive Vice President, Finance and
|
|
|
Chief Financial Officer
|
|
|
|
|
|
Date:
|
|
|
July 28, 2016
|
|
|
Sequential Page
|
Exhibit
|
|
Number
|
|
|
|
|
|
|
31.1
|
Certification of Curt R. Hartman pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
E-1
|
|
|
|
|
|
|
31.2
|
Certification of Luke A. Pomilio pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
E-2
|
|
|
|
|
|
|
32.1
|
Certifications of Curt R. Hartman and Luke A. Pomilio pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
E-3
|
|
|
|
|
|
|
101
|
The following materials from CONMED Corporation’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2016 formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June 30, 2016 and 2015, (ii) the Consolidated Condensed Balance Sheets at June 30, 2016 and December 31, 2015, (iii) Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2016 and 2015, and (iv) Notes to Consolidated Condensed Financial Statements for the three and six months ended June 30, 2016. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
|
|
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