CNMD - Earnings call transcript Q2 2020

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Operator

Good afternoon, everyone.

Before the conference call begins, let me remind you that during this call, management will be making comments and statements regarding its financial outlook and its plans and objectives, which represent forward-looking statements that involve risks and uncertainties as those terms are defined under the federal securities laws. Investors are cautioned that any such forward-looking statements are not guarantees of future events, performance or results, and the company’s actual results may differ materially from its current expectations. Please refer to the risks and uncertainties disclosure under forward-looking information in today’s press release, as well as the company’s SEC filings for more details on the risks and uncertainties that may cause actual results to differ materially. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call, except as may be required by applicable law.

management certain hear during adjusted also discussion. this will refer non-GAAP to measurements You

are substitute medical excluding per special credits the the not share outside or management earnings figures that supporting company’s for adjusted the measure year-to-year these While a the earnings the basis regular Adjusted ongoing by filings performance quarter-to-quarter and aid net on financial be and income a use the website. to are items in normal against company its for to company, to adjusting in companies. are ongoing or of of monitoring other considered company’s company’s These the posted benchmarking from charges operations. releases and technology specified these measurements, GAAP income reconciliations

announcements With Officer Chief and will opening remarks. I CONMED’s, call Mr. the for turn Executive Hartman, Curt over Board completed, Hartman? these required to President and of Chairman the

Curt Hartman

for for operating share Michelle. Good call Garner, you, Thank and and me Executive through on Today walk our our Vice results call. on Chief is, thoughts you us afternoon, quarter quarter second the Todd we’ll President you thank current you XXXX earnings Officer. With Financial with joining the CONMED’s and second environment.

to that to is your as exists goal questions. We’ll be still open uncertainty while call the Our across transparent markets. recognizing the possible then the global

a million decrease our the decrease results, of $XXX.X constant quarter representing XX.X% year-over-year in currency. to as Turning total for and XX.X% sales of were reported a second

and safety in the throughout were in of more improvement to the enthusiasm the April. March clinical general quarter sequential second protocols our The solid surgical accelerate orthopedics quarter Buffalo that trend by sequential represented education, I quarter business June driven enhanced products begin technology. same orthopedics continued and resilience trends. improving gave AirSeal and But XX.X% call facilities of our to demonstrated global Global access the demonstrate the the noted medical to first the Filter upgraded experiencing in with quarter. surgery business that also overall Our for opportunity and to increasing the exited May sales during continuing throughout declines salesforce

we As clinical the believe continues in awareness the these products past, of to in we’ve that community discussed increase.

and take this call, to of our families, We second with of COVID-XX want our sustainable address we their as continuing outcomes actions environment. this the taking moment as in workforce like drive expect safety on comments longer the Consistent the of early to of a new our address environment. company the and awareness on the you company and and benefit finally, well-being the security to priorities. would in business three I and improved results operating the are ultimately term, health on trend. operate executing safety that and reflect quarter QX financial employees. our I update believe now to the to we continue focus remained and has They’re a our the

cases high-risk these employees recorded on geographic X, XX currently they paid XX leave global company from we recovery. and of number in local in given under CONMED a remaining XX had quarantine across had fall voluntary high guidance. risk elect considerations separation defined as per the categories the confirmed had cases workforce. cleared have As our of COVID-XX Majority with July small We’ve

noted CONMED remains and I end work much quarter remain priority. our first at the safety and of call, the top the very As at employees’ well-being

the well as company, the we debt the us to financial security half As bank and have second amendment, of quarter financial the the strong second covenant outcomes year. throughout it discipline enter improving of relates the positioned

feel position to our uncertainty higher across to but leveraged efforts our has provide a more volumes remains virus Based and available our while when we over detailed uncertainty made caseloads. our advanced XXXX slowdowns, customers team the demonstrated well volumes. who Further renewed markets innovation a changing certain what education, regional made will period. Surgical the We focus. to of time the now call the this rates in were volumes further this Todd our turn and governments for efforts on we’re adjust our market the we continue nature caseloads the and COVID them with quarter. cautious the providers the the improve year understand impact over resilience XXXX proud of cast saw of of I’m and CONMED closing, in the that will Todd? into given us believe through on and our beyond. but second and COVID-XX specialties mindful remain as sales of In did unemployment have I’ll also the of procedure We QX, optimistic financial team requested the positioned care the of a trend may out, health for to will are customers impact surgical We half regional we’ve similar possibility quarter. visibility basis during we on we performance. surgical training our in our and analysis progress serve

Todd Garner

release. impact selling currency. be number unprecedented of one numbers situation. We the constant All will is is press given sales Curt. quarter, have reference included the prior Thank growth to of day dynamics the in given which our broader reconciliation QX this I immaterial year The last did GAAP in you, in to today compared

quarter lows quarter continued has the through second the the in trend XX.X%. of total our For months three that of from the July. improvement April and sales decreased into improved each XXXX, of Revenues of steadily

versus decreased prior year quarter. XX.X% Our domestic the QX sales

for are the quarter around and performing full resulting the Geographies government as Our virus the to globe decreased uniform. levels responses sales XX.X% year. varying at international prior compared not are the impact

out low much a following in at and Asia decline all trend did revenue see rebounding especially orthopedics the XX.X% improvement of the our In during internationally decreased on QX. the Latin in expected, the Again the April decreased Europe in US second the As has point saw sales and quarter. rebound US of orthopedics side. America The single-use good declined slope are in the XX.X%. region smallest XX.X% quarter. been not and orthopedics Worldwide

rate region Filter sales surgery revenue general remainder in to on are expect a However is year. both year-over-year solutions grew And of Both grow seen general have the of second in posting quarter product on pressure basis the we the with lines as for XX.X%. that second and decreased decreased these procedures sales are hospitals for to The growth the the decreased in second the our room capital safety. revenue general ahead quarter XX.X% demand the at globally continued general they surgery. Buffalo and growth underlying seeing total increasingly looking Internationally quarter. incremental worldwide to US surgery AirSeal XX.X% improve in European of well actually surgery revenue of year-to-date. support. continued a operating

production treatment. we rule is because QX to rather include commission in expense and in refinancing P&L being numbers A Now charge income principles in be debt reconciliation integrations, social charge kept in costs only expenses to for QX period rationalization This be recognized to sold fixed from relates amortization let’s cost, process restructuring with as expensed to consolidation, adjusted our include hygiene fixed absorbed which decided cost results. to with when we the assets sudden Accordingly, for amortization abnormal is move and result want this planned these the team. the decision discount normally volumes due than portion quarter include as this have accounting drop debt would. does facilities, decrease overhead remain related systems faced impact our QX side the cost, the tax. development a underutilization of of the for to basis increase as I and the exclude levels. production significant approach intangible our press an to quarter year expensed to and overhead current To basis COVID-XX. our abnormal occurred. recognizing would a We’ve make release. of distancing performance which points rather Research second lower impossible in increased of and the to acquisitions from rule our adjusted note we this from it support the COVID additional normal quarter of manufacturing GAAP XX efforts a from support that We of required than gross requires to COVID-XX. results sales items improving the second and also any excluding cost of and These We when incremental exclude to charge to cost manufacturing treatment ASC from specific return to inventory cost prior not production trend have financing and net special made accounted including margin fees XX.X%, in in the our product can prior margin prior lower and cost has general sales, we the pleased charges rule sales. of XXX-XX-XX margin expense start, cost and work the within the deferred a was present quarter This point quarter our the year decision related that included total deals for were COVID. of X.X% XXX on that statement. on COVID-related year a to believe of increased for with underlying We drop operating Adjusted to when related was of and expenses not not enhanced remote

XXXX did income in to for for SG&A the negative from of $XX.X quarter. were the strong Second QX, prior million and QX, XX.X% on $X.X to salesforce periods. quarter significant pandemic. cost a we in The in despite reductions QX after controls, the small these income an rate increases because quarter expense made that XXXX This net QX the positive comparable was implemented we demonstrates impact expenses a from not basis of represents that the adjusted expense Interest adjusted XXXX on Due was pandemic. basis adjusted decrease to is we severe number year. the to effective due million the this the QX, produce operating tax even

diluted million or a net ago. $XX.X diluted totaled $X.XX per net share GAAP $X.X year a of reported income million $X.XX compared or quarter, per to loss Second share

XXXX. of adjusted income adjusted special Excluding second quarter of of impact in an compared million items million net the earlier, $XX.X we $X.X discussed loss the of to net reported

$X.XX Our per second prior quarter of adjusted this $X.XX was year share net versus the earnings in period. of quarter diluted earnings a loss

fully $X.X is job days is balance in situation million million XXXX. we XX, We’ve were due this to as Accounts balance of last March March only this Long-term Turning at as increase than were better receivable than controlling days this it was million months our to in XX to quarter was of $XX.X the higher good at of end year as year. the thought dollar days million compared as The June the during quarter XX to inventory ago the levels sheet, of $X.X March a compared XXX quarter a the than year only of days million XX, XX, days higher balance sales XXX June end Inventory and $XXX drop was cash our end might at the ago. to compared a unprecedented three done of year. $XXX $XX.X which ago. million volume. debt versus days

than was XXXX our XX, June times X.X at lower original covenant. ratio still leverage Our

We’re agreement favorably banks. amended our performing very with the to

to was XXXX. $X.X our second Our million of for the is to million compared $XXX million. the second year at $X.X to of prior operations of our quarter X.X in agreement compared X.X compared $XX.X expenditures from in versus quarter fixed Capital Cash million minimum million our is flow were and XX $XXX $X.X quarter million in quarter. the charge agreement liquidity coverage June, provided the

our So we’re well pleased are lows with April. profitability and the in flow trending cash from

new we’re and and We’re our in environment poised products. this levels. as grow our continuing of We customers the to procedures to continue invest be unprecedented than continuing safety in normal faster prioritizing to health still believe while while our serving spending return to prudent markets with to development

not do with given Lastly, stability weeks. enough provide guidance to of you resurgence the this virus macro time. We the COVID-XX in recent financial at see

I you in I trends my experienced monthly the improving with can we that April. as earlier we’re since in seen the lows we’ve However, tell remarks, mentioned pleased

continued hand have open sales trajectory. Additionally, we’re positive the to that that, encouraged to With July like that call it to questions your Michelle. and month-over-month back we’d I’ll

Operator

[Operator Stewart question Instructions] from our first Kristen of comes Barclays.

open. is line Your

Kristen Stewart

sequential July. I environment. extent that with just monthly on color and wondering do maybe just willing was context to to putting on in provide the color COVID a good you’re with bit into on the quarter, obviously Congrats so if the little trends maybe you us some more then could

us year-over-year basis on July to whether be give exit might If or in or down what you’re were willing on just a sales a not context in the little July. up rate

and I helpful think that follow-up. then be a I would have

Todd Garner

monthly of provide month. our last April the Right, Obviously, that’s did or a estimates Yes Kristen. one the talk uncertainty call. practice April the days left in this the that the back not sales and so height felt of report were at with couple early entire Sure so on into kind in with We only month were to to space virus. right. normal about of when helpful ones we quarter, our it would be the to new so we to

later and instructive. on the sure we updates you on a you survey procedures trajectory and can other call has we’ve quarter month did you’ve what the as good. we we seen, now of of and the be quarterly - So and that on weekly numbers But almost months we’ve June because you I been surgical We all doing a reports were of to need July color the with and and may I’m there’s see to on part provided continued what by today did, plethora quarter the get trajectory even actually results. on just think are very than practice which good give the tell May see providing the disclosing kind results so normal vary not from to April that, helpful don’t going is sales a we’re the been

Kristen Stewart

commentary it and be accelerating just kind of there of you’re than to of there, talk any kind kind seeing color to but you AirSeal on guess is at was run maybe just of sort through demand, Would you’re Buffalo relative that’s commentary how it? Okay. around in I rate just give Filter, as bit of pre-COVID, I in you know the more said the little looking levels just what coming now. trends willing terms a tracking

Todd Garner

They with our growing the in put both fastest lines in drop expect Those didn’t of But Sure. did. two to were dramatic both frankly, those procedures product grow pre-COVID. And QX. growth I which QX for if demand positive for know is Kurt, wanted global mention a drivers I think strong ours. of really anything. in to you don’t telling growth I the those two they

Curt Hartman

start not technology, front as has in been from the on region. those is I of in would The just kind educated restate products to geographic the has global and those safety technology utilization sales where getting and technology there people message as that that out cadence of concern mentioned surgical gone the of with products. to customers back exposure one I’ve further have staff demonstrating the cases reps to the it’s awareness for finish accelerated isolated of and

that Todd pretty read-through good so and in the of the actually surgery strong Filter other noted general markets quarter Europe had the and in and in that’s US think I Europe we in a candidly. market Buffalo good grew acceptance, strength in in the through quarter his traction AirSeal script

actually we’re excited both those of the So We pulling is because COVID-XX. the much as on bit doing share heightened gain think of I first it’s little what disease awareness market We the were remain state call. about encouraged a COVID. before more said forward part because and platforms the of the

Kristen Stewart

very much. Thanks

Operator

of Marcus Our from Robbie next JPMorgan. question comes

Your line is open.

Robbie Marcus

by around pretty thought better things in know minute surprised, your a products. a I than I spend products actually not deal. it are of could ASP considered equipment. your lot would a you hoping did good high I the comments it capital on was quarter all was I capital

hospital tags you’re So I and revenue lower give products seeing suites any are and others non-revenue for could you at price to distinction level. there maybe on the C little Thanks. what [ph] was the just more the are with a and hoping especially some us here you willingness generating those in generating flavor If for is for you. spend capital

Todd Garner

try. Yes, it I with you. give Robbie I’ll agree a

think XX%. between feared it XX% bad might think it having I be, that said and as as down I it I wasn’t was

So we’re and seeing and good commentary made think right. a a great would that new customers still pretty decrease you fact on be our while the I end buy on the is capital still ours point amount, the lower that dollar of

rebound. the pretty use cautious the in we the a on As steep on remain stream capital single see revenue side. We disposable

still thought would the this until So future stability lot year better than hospitals predictability through have really a rest cautious some might I and state. I even the QX. it though think and us economic their say it in do of of did on

we for So remain cautious forward. going capital

Curt Hartman

and bandwidth And the capital to think statement don’t super is that just you add Robbie think which that would big-ticket the item customers sell from in capital shutoff. nail one we’ve hit heard I I items. The I head. is not the we

what is the we’ve we’re capital get time we procedures to back lot hearing to and need other for a get technology think into we from got is to of facilities. priorities revenue right evaluating generating customers now need I into the back not now surgery, be us and

about right now. that Let’s worry

now. not to capital. customers hard just hear It’s what not on So us pushing we’re want right from

Robbie Marcus

and spending how deferred of what better later that numbers from of seen then Thanks. and the it’s now year? impressive stick any seeing of One, rate the of I actually also, the much we’ve but much on larger How my peers? pretty a OpEx Todd this is if cap around a Great lower to pricing than in and change until could follow-up impact your not some two huge dollar you baseline still in here. are is world cut

Todd Garner

job prioritized so sure anything still pricing change, the look We very [ph] that customer we We’ve on seen customer as of volume side, there be maintain it’s no when obviously and you nimble we you part of customers talk part really hard and go that and that to would you kind throws I live to going QX expenses the similar to responsive the as stay and well that expect about back We’ve we’ve X% to and make We’ve Robbie. comes is, and headwind real direction model, mean ready level. so then to on job the hard revenues at at return my the a so servicing. world and QX baseline, closer expenses that being that as be OpEx, are know to its in and if I everything of COVID. facing X.X% move strategic. else. I model. taken tell don’t guys and and stayed of to in level. The part probably the between we tried our But serve at at revenue haven’t your tried will level those to Sure normal we’re

better expenses revenue expect and revenue. come to that than therefore be with meaningfully will back We so

Robbie Marcus

lot. Thanks a

Operator

with question Our comes from Stifel. Rick next Wise

is open. line Your

Rick Wise

I’ll on during focus period, Maybe, salesforce and Curt. salesforce execution this

point CONMED’s [ph]. with execution revenue that The your opportunity largely the shared the all made slides in us. those thinking long-term I this share an that offered sense You’ve and story at the of point you you is this amounts impact you small believe about emphasizing

are How you the trying are you despite reflect the new additions the rethinking up revenue? to that are you quarter innovation first quarter the focusing you hospital. XXXX. I period team the are fourth the this made to now sales in to to given salesforce in etc as are and challenges? How XXXX all So in the - back you execution driving portfolio you sales How expanded open expand accounts, trying

Curt Hartman

different were in they with Rick. The was and and very anyway. frozen pretty to no go April salesforces procedures There get Great into anyway couldn’t work question, obviously environment were or visit customers hospitals.

the customer candidly and I training. marketing to our and used trained some the training of done enhanced expansion create credit shows. really our of some our training together that to we salesforce And push any enhance came of that with it’s events fact had through of the teams is teams So trade our give that that best in webinars probably time salesforce ever ever even in-person and attendance best been all greatly global we’ve into digital inclusive

be So lot I done and we’ve a we lot a think as go leveraged learned of and some forward. will that

and we volumes procedural May June up. were got into and picking As

demand steer to. of I to speaking think not go natural go is off is which comfortable depending customer they’re where sales of instinct a we’re the rep salesforce that. on to to think where you’re I But people and the going

the a salesforce there’s Buffalo and covering you’re technology. lot of in If customer interest AirSeal Filter new that

lower All the to your do so after about have orthopedic as new on salesforce in be but back salesforces’ environment. we’re Filter up, in is Buffalo come started those I technology getting you’re in unless have just interest clinical new existing think procedures AirSeal a online clearly going able and going stop it’s If this to there be first back your new customers and technology customers. defined procedures like a something is that it’s advantage

think to all as I new ever and back the technology and we’re and first ready on our to we’re and we’re and come my customer better the go the then point go technology I them, offense out say we’ve support that been. than salesforces pulls new on So to going trained door customers existing of

So think those efficiency customers our come is going be better online. as new actually I

Rick Wise

maybe Todd margin. And Great. back to gross

cost much. of again pure on now get for focus you beyond slower, Is inevitable and for can leverage obviously Your reduction product ongoing are innovation. be instead Thanks there cost explanation prepare, incorrect availability have going recovery and is efficiencies impression - was not ready as that reduction clear had the and very focus opportunity cost factor on imagine you the I I’ve recovery reduction big maybe aggressively and as in [indiscernible] fast what on initiative recent maybe preferring just to from there so reduction to an or years cost focused you ahead? to the you

Todd Garner

as a with side a I’ll great add that, the new for on focus maybe products on products context familiar our is delivering time. What the Rick’s question referring Rick. more not been who new little those story. just and has those, to this that’s Yes manufacturing

And burner things. make kind of reductions front had the in sites. kind manufacturing drastic some to accelerated haven’t we of those cost of COVID so go our on Rick,

So of things we efficient I last weren’t and XXXX about things-to-do and kind things and four before. three so in a getting talks to our we and list was priority on that in changed more had more that of months the did have it Curt or learning’s get think March quicker that has than frankly been in

see that we’ve I rocks so as the those actually So been doing think you we’ll the because a of things. is you profile and volumes with have deal margin to and When rock that. return, water lower see better the

with that. pleased done We’re team how the has

think I it future for the back sets up when So us well get normalized once volumes. we to

Rick Wise

to so great thanks hear, much. That’s

Operator

of comes Mishan from next Keybanc. question Matthew Our

open. is Your line

Matthew Mishan

you’ve continuum some hospital. of acuity you orthopedics more hearing in mean the where portfolio general keep by fit about whole where your can as to got the difficult entering think CONMED about patients because segment fit. they would But acuity? and maybe a higher it’s We broad fairly I probably surgery versus say

Curt Hartman

patients be on and the thing statistical I think anecdotal to surgeries that because to than more going is deferred. able Matt, only I’m had offer

as the reliable at What I on that US. bit some I our and about in in a it’s surgery can’t percentage heard now outside bit a that little presenting business categories, blend is is universe and and our where US in. specific good XX% sports you market think little medicine that. the have of you give look with done instances surgeries the more the different number center taking is the longer. procedure we’re patient We the complications, a

those in patients rotating so quickly. And are and still pretty coming out

area. on in If higher they’re and general be side anything they��re if think. likely patients COVID hospital. the with in are issues surgery scientific, to offer for stay I surgical acuity patients But with more would compete would think is bed those anecdotal advance space that that presenting versus principally I I the co-morbidities,

Matthew Mishan

I it utilization the did was follow-up Filter do the And do helpful. this on new from from, the a going the quarter you XQ. on see Filter. it capital we’re placements if AirSeal said, Buffalo in that’s we’re in going or of it the and using Buffalo increased Okay, the still on of then hospital growth AirSeal for commentary was global sort of guess and of procedure equipment devices really second where existing to to lot

Todd Garner

would it’s data Our say both.

say technology Our procedural would certainly who customers and on we new AirSeal data Filter increasing technology data were customers the secured say had would utilization. our that and that the both Buffalo

Matthew Mishan

you. Thank

Operator

Our next question comes of from Richard Newitter SVB Leerink.

Your is line open.

Unidentified Participant

on This of the But trend are could to I that the on a the about more is have seen you provide that guys ASC. procedures to Thanks trends more Maybe some Erin plan I questions. that us Rich. some medicine. was XX% you ASC. hoping [ph] then for how And procedures just that they’re do procedures taking maybe ASC. capitalize color. on was the are in for that noticed moving sports could an wondering you’ve know towards in a I trend done you shift

Curt Hartman

probably So more don’t again I I’ll those say, know percentage the there’s But business into sports of if we’re of are procedures XX%. a I north that medicine the ASC high that guess done environment. already never and would a never. in lot move

side I multi-speciality think come the onto surgery ambulatory centers general I on surgery play. as think

slower. that play You surgery bit But surgery little a to could moving see will the think center. general out cases I more

a total cases other and and moving is think obviously few related I sell would total more now used we items. right in hips is do what those knees, power be tools which

was of It through perhaps procedures as think that quarter dramatic system were sports the But second medicine look medicine accelerate. to don’t the versus So priority we the probably that it saw was versus the as getting trend I that more unfolding the to anything their a CONMED space COVID in hospitals specifically. in just sports could that shifting at has relates benefit direction if accelerated ASC. already moving

Unidentified Participant

if wondering [indiscernible] you like And patients thanks. was great patients and of backlog I of potentially were about just procedures and maybe or like just knew Okay, your rescheduling. the many in versus new percentage or kind terms in were a just follow-up. was how that it quick

Curt Hartman

I don’t have hearing an anecdotal. again some had in We’ve the was comfortable feedback customers we’re and second exact all number, from would say one Erin customers we’re [ph]. the quarter. backlog status tell the with I that was priority our you

feel backlog. say how customers and and they through backlog. into other many at think But up the fast all We’re the still is other they had customers comfortable how gets we’re working it procedures I ramp our priority had backlog. with. We’ve the We’ve

customers. Second is new

I that a think we through of as feeling we’re come the little quarter. end of second bit the still

Unidentified Participant

Okay, thank you.

Operator

question next comes Mike from and Matson Company. Needham Our of

Your line open. is

Mike Matson

with overall. areas I of areas to business these some just California the I and your and seeing regions? in you’re are seeing guess [indiscernible] you’ve seeing what of mean But I or actually COVID. wanted like know in of country you’re Texas Florida where resurgence impacting seen those up I in any that you’re start in you seeing

Todd Garner

interesting the not businesses I Mike. question question, same the come it’s team. had for the answers are that my great a That’s And all from uniform. back

see we’re pause. on upward fair I would to it’s pause. procedures is and hospitals frame capacity. pause where an of is were it a how do think somewhat say seeing approaching There those There that places They as I that’s you a a think ICU of that So trend I on accelerate. accelerating in

virus. lot but seeing with the anything had on those been of so to have we a right. to still resurge been that the they’re close dealing of the would country say experience, of I this better parts not We’re trajectory a in But safe trajectory not think it’s favorable even April

so and kind necessarily do giving answered I So A make and region-by-region to But trying as at can any the how think there businesses with danger whole very the our that and best question. too But customers it on that it on board. figure was really diseases definitive our it’s that’s of is the you interesting hospital-by-hospital, it public uniform greatest it. hotspots. the probably all be across wasn’t and soon to latest are declaration and It respectful COVID-XX the those out out serve the also are of to interesting. little deal

Mike Matson

have on this launching been know, to this fine. you the now comment on then that’s just from about to on happened delays? launches you at just impact the recent get have given that’s there’s And any past product pandemic That’s launches. may able procedural everything new and No lot a until headwind to we the been can perspective. right from delay new talk macro a execute Have other new products you of you products point not maybe helpful. I But chosen

Curt Hartman

those. new call XX and back on focused business on products to and things approach XXX% at kept roughly to next to focus our impact it going relook Mike and list really that the was our March April Our we’ve the on priority were months

proud that. inherent when things we little So we’ve XXXX that of the had this the and the done and that you exactly some the and out. you’re that third lot targeting But kept had all that we resources say the if and that to have be that of pipeline look if we’ve and in we’ve the in door for challenges pipeline second on of quarter in still intact those gone in navigating of of second were are our to R&D we further call get we not something There we’re XX. kept quarter the that will, into of quarter out was early But that third some are to on scheduled XX-month trying I’m and cadaveric R&D kind it’s launched remote work that as it’s quarter, launches in that to the track come a things with nature. with workshops deal pipeline

the stuff Now to that’s of we’ve here quarter and end some come out sit at supposed I got other track. on here today it’s third as the

the those things in got and we’ve on Now track. are quarter fourth

We’ll did projects spend be environment the in at for of right us. those turning are by the little was That dollars further Now as on is We them. the business. part appropriately pause time our slowdown improving R&D out. absolute

R&D. So approach to been that’s our

Mike Matson

you. Thank Okay, that was helpful.

Operator

Our Piper comes O’Brien of next Sandler. Matthew question from

open. is line Your

Matthew O’Brien

So Todd or Curt.

the more on both XX%. where has quarter, and quarter was You kind general that into of of down what digits. maybe on in of It kind approximation that down momentum the been Is range a I down think ended carried all and probably to of business where surgery like XX% then here the ortho fair again we’re Obviously, XX% a the is out last so the then exited April better of flat we’re seems July you good single to it you progression the surgery in and down up you numbers and was low look XX% you Based metrics. we exited maybe general like the far? trends through seeing down little said figure quarter half for is the the that realistic on somewhere be so when trying June. call ortho expect those based street XX%, on at and you’re something as

Todd Garner

the attempt, Matt. I applaud

seen, than you, give our with numbers. has and and will been April consistent continue that better than trend. me the much reports the specific things experience was which so not bless the You’re July plethora better May, very I What we’ve to of that June was tell much surveys and

going not as we’re here specific trend disclose that’s by today. we’re and business. all it’s numbers to going a on So to as get positive But much into

Matthew O’Brien

that’s Okay, fair.

AirSeal even be a flat to little last again. maybe of follow-up, year. reasonable on is to grow QX kind versus you think just that Just seems how fair well same Buffalo The bit you that streets the and QX given about QX, or to a year modeling in roughly flat doing? last in can little Filter’s bit it

Todd Garner

guidance. a Look I I’m position we give to very were giving comfortable in wish guidance and

not just We’re today.

going that. be not we’re doing to So

the giving than that, continue I’d able around could, But we you say be can feel uncertainties continued. latest don’t about different actually call been guys that don’t our be QX with we world month we’re I it’s very because baseline I’d seeing like point still world. wish just we QX. there’s But does think giving the too been of out experience. cautious CONMED give give at resurgence we’ve few don’t wise like. do and many consistent a I’d that trend might the far, forecast think what to in - very could think hope model we has I I over level. I look I thought talking So wise QX think data on QX, you on we few would has getting weeks the anything don’t internal half year, have are macro that and we we have this think not. of we might we and the ago just has and what either there and every people I the weeks. peers. tell the last to But a Like are it’s guidance talking been everything been said, more We and cautious guidance. themselves so better we’re the I’d that’s heard think have ahead new don’t that say I some as just comfortable because cautious a there’s in be our that about our ago experience this, from month with of I back

projections. and than trend But is that. So think can on I I better month every hope continues our count we don’t our again, I

Matthew O’Brien

That’s all and prudent. fair

commentary SG&A the the side manufacturing and were follow-up. a on side all the even you’re as Just The on about encouraging seeing as that improvements well.

to margins. You’ve in XXX talked points improvement about basis XX

basis margin XX side points on forward, operating to XXX total. the Going in

way normal, with end found that higher back the three about things? ranges to think here the months. As over things of or just we all four you’ve to you getting more last best given closer Is comfortable the those to are the get

Todd Garner

I if that just restate I question. can think

and through believe we I before. We gone I they the a to of think efficiencies. will as get have I agree margin where better return Curt about had I we what what volumes than with talked that we’ve profile you. when because smarter. increased to months believe last were, few did

offset than - we I once is, things the we’ll I be learning’s question do that, when and because we really but those wish a does and right time think with more favorable may yes, think storm this Right expectations us. added prior that versus profile the we some could which and Now hygiene social talked for with have expense is we of but and put behind so like I a that on happen? us we margin but think I that about focus while have a and distancing can’t.

Matthew O’Brien

Got it, very so you Thank helpful. much.

Todd Garner

any have we do Michelle, others?

Operator

Stewart Barclays. Kristen Our next question is from a of follow-up

is line open. Your

Kristen Stewart

all that are believe A, lead Buffalo you’re you positive here. anything Is to monthly the because the sure comments AirSeal of across if wouldn’t your so comments curious like [indiscernible] see is feel direction Thanks. of continue the to But a comment guess continue want improvement confident to lot that with sequentially sequential anything pointing than that I’m there. of it other you that in of in July. over seems speak and attempt in with Filter. your I to want and I’m there would improvement some just moving But you business there’s that seeing the signs there’s not don’t to I not respect you map just kind would to to to less to on make I XX% as there anything seeing interpreting far? appreciate lead parts businesses your give you’re that guidance would businesses last

Curt Hartman

question. fair a It’s

to we’re be a started. gone a think period I is is, recurrence. what cautious not about has a trying We’ve recurrence through this where

know So going what we don’t is reaction to market the be.

put there. that out I So

I think by lack of than the things April. in in some driven surgery PPE. slowdown that the are different April Is of was

preparation the facility surgeries of COVID for was onslaught by of patients. driven slowdown Some

deal has understand resurgence way to largely we we a everybody remind to and isolated I’d know The want globally to the we fast willing all business is largely into how we four sequential June committing team just been to four numbers. July a over and are international May say Filter how products I where and I to think we’re overall the just improvement those is, have better is as issue market today. sells PPE nice facilities improvement has with categories. has deep so been you unique an going sufficient and treat into across The patients May forward What sequential It the our to Buffalo deal over just too process. that’s April, continued those think improvement before patients AirSeal. sequential businesses and the with get not addressed. to We created

continued procedure So center surgery because surgery there. where hospitals in certain all that in we’re down. seeing of has sequential really of fit Never couple slowed into out, dealing and that there’s high the We’ve slowdown that they’re our the seen get case day seen in patient kind we’re weeks environment a as businesses types and same Todd have recurrence. into with obviously said, improvements this July concentrations and

feel good about all this where the So our in and all work point I think time. businesses is we organization preparation, at the across

Kristen Stewart

think growth if that a single-digit CONMED maybe call in or terms like a should of can great wild Filter mid-to-high of Buffalo maybe then COVID kind the fundamental know see bit are Is that. there pretty underscores as XXXX win of comps AirSeal should really about and we COVID of be that and Okay, brings anything and those look a aside. that profile be But is to going you and one we you little creating importance to story with it comps all what anything you’re ahead, that putting changes I that obviously basis from more kind here business sales.

Curt Hartman

are that us logistics is structure be, sign COVID COVID can to but what from Well going I entry when to long-term forced business not outlook dig the want and global think we I has room And up the say and changed our business on play, distribution, don’t to, that our to spoke board be partners. the even on on the employee, they deeper the here. Todd be what we level channel cost focus think environment probably in product only what to and the has

everything the for it, on environment has has the during accelerate sharp to on name perhaps and and and You things. this us table environment come focus review allowed

that XXXX perhaps. we to platform great can think back are we’ll little we technologies. bit developing to and more that faster where going AirSeal own we’re in today, we when long-term or the platform mean to normal in platforms, Buffalo not regards, get maybe technologies acquisitions success. we get technologies so stop want doesn’t technologies, we some great if much other growth environment And We did be and if We critical our a globally a thought for are respective That so. the and looking to platform think believe as Filter XXXX

would So more two just some. internal to continuing feel, already CONMED and few a have and that we we’re ones excited we’re fit we that advance that those that same in had category

Kristen Stewart

Thanks, from that’s it me.

Operator

Hartman no are turn Mr. the to There over back call for questions. further Hartman. closing I’d Mr. now any like remarks. to

Curt Hartman

thank next your right, look for you, call. thank you All on everybody time Michelle. earnings you to And our with today. We forward speaking

a you thank good have evening. So and

Operator

for today’s concludes This Thank participating. call. conference you gentlemen. and Ladies

Everyone You disconnect. may great a day. have now

CONMED (CNMD) 29 Jul 202020 Q2 Earnings call transcript