CNMD - Earnings call transcript Q3 2024

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Operator

Good day, and thank you for standing by. Welcome to CONMED's Third Quarter Fiscal 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

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

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

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

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

Curt Hartman

commentary updated succession X.X% Todd quarterly the is will us offer total Operating Third Pat $XXX.X increase in Quarter progress, Officer; on million, Chief and share CONMED's financials call X% for as and and XXXX especially Financial that the Pat sincere for with the representing to Ernesto Executive emergency to you Josh. Todd announced hurricanes, to you, will and Officer. run then and operations Barnat, our sales third plan. AirSeal joining questions. With and and our Beyer, results specific appreciation will plan. our With thank team, We'll reported Today, afternoon, and our of manufacturing Good me will quarter Call. outlook. I for employees, and Thank want response has address tenure touch impacts cover and Vice on Chief and the Pat on you said, global the and Earnings later world-class our I President open a year-over-year the a my call the my preparedness for constant our facilities your who leader, currency. quarter were of logistics Garner,

our across of many hurricanes. From third of We $XX perspective, still totaled facing with XXXX. the hardships third employees and $XX.X to compares also income in are impacted million net local income that those by Southeast our net our GAAP acknowledge the during impacted are This the quarter, quarter the thoughts and million. earnings an

million, our comparability, capabilities, XX% of increased our that affected Overall, year-over-year, income our of Excluding we XX.X% below special I remain to growth. areas the leveraged our strong include setup accelerated in our our cash and ratio. top while confident growth growth, and quarter of $XX.X per share diluted had and adjusted earnings EPS to ability items increased our flow, in $X.XX, net leverage the several to line again adjusted financial line CONMED for finished top continuing net adjusted performance but year-over-year. return earnings

person program the XXth XXXX. have me and to in will of a role long having to XXXX the framework levels possible. in military investment hired offer belief Brown, gave XX had, took the to directly, more took like have this Ron engage you will in in and others of understands the of a selected and Sherry years. my strong planning the who of a in of Pat of could growth didn't very amount immense Company's who our to This comments industry over our the who innovation, plan perspective, first are if success. turnaround far utilize I public years here blessed was med From to the during Beyer I to over continue in means talent progress ever John importance decade. and deserves was and that constant Michigan. the and future. would lead There this and serve. I CONMED over my tech enough. Pat no CONMED start both XX repay. who allowed global process about Black, while one had I leadership began time current everyone a are utmost team Conchie a we CEO will bring him tenet an have on past joined in for has tech in ensuring I peers, philosophy markets. team to I the in with desire and more a created of succession February who of succession across selecting in full-time have They I joined appreciation journey, upon & my retire incredible we recently Barry I point thank career. which the leader the this on I'm Bertner learned in chance strong full my a Board for presence key without grateful whom took took industry when been of Conchie these a one as Kalamazoo, belief XXXX, frame. the Each and success I a supported there me. than substantial last established would many a the and areas succession long XXXX the company. the the success right on the first for its the a Board and and gave who people is want be of as family retired former of team, leaders and successes personal he have development including turnaround. then served last Associates, that role of anyone then later CONMED. can mark than very years long-term CONMED me, markets the that the my compete in comfort and brings Heather's follow. Getting its I Johnson. that incomplete the the timeline historical confidence a been I Elenbaas, in like today. planning of of and inform CONMED in that November the Board have in by industry. The not years If I revenue I long would XX out Si Heather and with in November of partners right who having hiring to most comments to been increased this my end advance and and to thought He spotlight for full-time ago, reality arrival, has that employees been the small was CEO our the pleased XX a I and in people. of me Next, year my to acquisition our invested of time engagement role, Further, did retained perspectives beyond her would having industry I Pat CEO be innovation, also customers and my chance evaluating coworkers, under the in announced we me med would the and and endorsement, responsible getting fresh the Brad grateful principal dependent role perform for is respecting instrumental and growth I after some Obviously, have some strategic past work at my we Head I'm company growth the company's professional their wife the ever all them offer that, me Any of finally, best in future and sincere acknowledge the credit am initiatives a Human few been tenure also a executives that the profitability how Bertner and instrumental effective of on I track this Resources and people-first record right industry. those tireless career and making much Advisors, would first customers has Cohen,

decisions proud the We that no are made always the of long-term were issue, we interest matter CONMED. right in the best that

the understood leadership to of the capable the building foundation technology our forward in our company that our but solid. team, flawless, been a pursuit supporting in employees always look not is has and and continuing and strategy by medical team world-class well success our execution the investors, company Pat this CONMED's This is of of. I are future. is transition through and Our of entire both continued owners management proud

AirSeal Pat, our Todd, been financial partner a who seeing out leadership. I'll me Pat's guidance. incredible supply XXXX our comments, team progress QX look Pat? a take true business will our been detailed and to an chain. and will provide over joining continued arrival. To through Finally, I full our as update now team they and thought has who's updated this and want to provide from close then call mission since a my directly since the to performance in exceptional quick I our under of thank on of analysis advance addition more you the leaders year to Todd turn his forward January

Patrick Beyer

for excellent in also his which XXX% I by being on join operating Curt. a with operating years, an XX the been has was December pillar innovative foundational cash Under the thrived. advance grown sales on to XX%, tripled. Thanks, stones more CONMED than clinical Those talented Curt's past delivering joined solutions and leadership organization excited grown connect flow I next story. At leadership, a Executive Officer. and for is built. When focus the patients, have with EPS to employees CONMED XXXX, a to improving engaged of patient approximately delivering part to has thank and shareholders. advancing to and to trust commitment focus continue Curt I of to mission outcomes. the center for be while continuing as to me Board of the growth a employees, will and of and was care. passion were honor announced I to forward confidence. have CONMED over results Under look almost want months customers, CONMED's excellence for our It personally Chief is and an opportunity. their also this committed that be I CONMED's and transitioning for customers coming new our the CONMED's great patient story, My to I'm employees

Turning and back share quarter. more information I the our appreciate regarding opportunity to to businesses. AirSeal Orthopedic

As the to are to into we in AirSeal, some wanted I field. give it relates insights what seeing

AirSeal During quarter, third continued U.S. capital sales of saw strong the growth.

not in AirSeal have the any seen U.S. the for any demand We disposables. we have seen capital orders in in slowdown nor slowdown

new some the in now monitor to moving their robots periods. continuing these use are locations trial We are of where robots initial as are past

insufflation see continue surgeons robot, return AirSeal clinical last quarter. complex talked we the new with a in to especially using We to and procedures more that for longer about precision

clinical We including continue recovery. pain postsurgical length to shortened insufflation validates for reduced AirSeal surgeons' for postoperative results, stay, associated and this quicker the and of believe preferences

our supply We We the our win in in facility, manufacturing our the quarter, the the on We third communicated earnings very progress quarter orthopedic had commercial of some our positive at our that chain end the to business resulting market the trend in quarter the during last in fronts At Hurricane to to hit weeks expect that Now X grow mentioned slowdown the business' shutdown teams many made we of X of quarter's on ability position quarter. Largo where Hurricane Largo getting Largo turning Orthopedics. products headquarters additional our market. Approximately make. and remain a to manufactured, the in We a to orthopedic to for improve Helene you and steps and had of took to area, focused Milton plant committed suffered manufacturing hit. improvements in end as days. third and continue quarter are take call to with share. fourth that these our Orthopedic later,

ramp While up our facilities, more for the of we our with took personal the on fully attendance several it reopen hurricane impact work many quickly that had were dealing life. to to days as their employees

turn were share employees with of Our third that, more on quarter most storm facilities the who and accounted issue. weathered results will I'll the for. With our call our over And outlook. safe importantly, our Todd, you details without and all to

Todd Garner

Curt leadership release. growth reference also currency. and is congratulations. him to and reconciliation wish be press numbers partnership for thank I Pat, and numbers in sales in constant want you, to will I GAAP Thank given included our retirement. All The well his in today

have that website versus we additional the guidance. included usual, summarizes an XXXX QX As deck the XXXX. have quarter and updated one in QX of did day We our results investor on our sales

our third the For total of quarter increased XXXX, sales X.X%.

QX, sales increased and quarter, our U.S. the year international For sales the versus X.X% in our grew prior X.X%.

sales XXXX grew of Worldwide U.S., the quarter. In XX.X%. X.X% third Orthopedics internationally, was very sales X.X%. X.X% in The orthopedic growing the internationally, strong quarter orthopedic grew third increased and

Hurricanes quarter. I'll into talk revenue increased states General we internationally but impact, the medicine know U.S. space. It's difficult longer revenue the about XX% of bit the and of guidance. Total X.X%. from hurricanes that United delayed said, get which at comes Surgery and the while we October. early on ankle the in Pat the period storms. our Surgery of U.S. too precise the impacted a foot September progress remain revenue part rescheduled and levels in grew improving on for end General Worldwide declined were about States sports the As includes more our Helene to because when that the a Also, Southeastern potential the X.X%, Surgery The Milton. X.X% region, affecting General be Southeast procedures I our business service of financial in focused by

internationally, of The third same Surgery was XX.X%. trend very AirSeal against growing continued of even XXXX for General that high strong internationally the quarter growth comparable.

growth also disposable continued As trends. AirSeal and Pat show in to mentioned, strong in U.S., revenue, the capital prior consistent both with

in note AirSeal U.S. quarter, U.S. strong growth. was above quarter QX with the a the for for Just sales and next XXXX in very globally XX% a capital

statement. Now to let's side the move expense the of income

and third discuss items, of margin and quarter, and quarter quarter Adjusted points acquisitions Research basis profitability for and prior assets, the charges matters, contingent the higher of increase year than prior XX.X%, of financing of which deferred amortization in expenses amortization to quarter. tax. XX the net will for development an the sales, We excluding consideration, fees legal include third quarter. compared X.X% for gross points third of basis intangible was XX expense was the year special

quarter. XX Third million quarter adjusted interest SG&A the than QX effective an expense basis was adjusted expenses was in tax were The XX.X% On points adjusted basis, in lower of year prior rate XX.X%. sales, $X.X the third quarter.

$XX.X Third ago. income compared were XXXX. this quarter to compares This QX earnings $XX.X GAAP a million of diluted year to net in quarter income $X.XX share GAAP was million. GAAP per net $X.XX

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

quarter. prior compared adjusted net QX increase Our $X.XX, share diluted XX.X% year per the of an earnings to were

sheet. balance the to Turning

quarter slower September at June XX at XXX ago. year Our also XX. end million as reducing XXX inventory $XX.X moving million million quarter We're versus faster-moving quarter. as the at XX cash days made debt million at levels of items were XX XX focused for to end of of and to XX. $XXX Long-term our Accounts June compared We the safety was the XX of a days receivable the stocks end balance on progress $XXX this the compared quarter on end as Inventory for ago. compared June at was XXX a of to June of $XX.X and were year the items.

to in were million was the quarter on flow million quarter compared X.Xx. third from to the ratio a Cash provided quarter Capital in in million million third September operations XXXX. ago. $X.X of XX the $XX.X was expenditures $XX.X leverage Our compared $X.X year

delayed We guidance. financial Helene's med player that has supplies Carolina to a which IV turn surgical devastation let's affected already key in solutions, procedures. Now know tech Hurricane that North

we the on December, working those of try to to fourth are in we've up able updated incorporating what going And not facilities. guidance impact and Milton Pat are be we're hard our hours project Helene make likely today. quarter. to make impacts November production, our the lost on mentioned seen While that Hurricanes all won't we already and in of while up the we and

growth to We the our revenue reported and full the between also between full full With to and were $X.X I'll immaterial between Josh. now procedures XX.X% open guidance due billion storms. between looking QX it context, XX%. XX% $XXX $X.XX fourth year. know our for for put region questions, we'd $XXX put foreign that represents growth That between We deferred year new guidance your representing expect project $X exchange we to EPS revenue would $X.XX, and like and $X.XX, which reported million. back to the in That the be EPS call adjusted that be to billion, and that, and would with XX.X%. With and hand between $X.XXX year to quarter million

Operator

first Stewart CL [Operator with Instructions] Our from question comes Kristen King.

Kristen Stewart

Congratulations, career. Curt, a on successful really

be definitely missed. You'll

Curt Hartman

Thank you, Kristen.

Kristen Stewart

noticed AirSeal, was I Is quarter. capital the bit just revenues little little contributor just Surgery. could there anticipating. in that like down not talking a I equipment so a more the a was start about sounds were anything lighter weaker? what I around if almost comments that a It were off was came in little I we wondering it also XX%. than hear bit General

if a detail. you Surgery little bit expand could wondering in more just just in General So upon

Todd Garner

year. of Kristen, Yes. function that's really a just last

that. in out a back were in swaths. large was of last QX big we getting ago, If And year order improvement you kind remember, a of year

-- prepared was Surgery the last from released the of back we I year. in General specifically, lot that last in in in as big international capital third quarter order remarks, really my strong had our products a And year. some said so And --

Curt Hartman

that a of of comprehensive which think has circuit both portfolio as board energy generators And serving those, pretty U.S. impact and Kristen, platforms, would market. availability CONMED and international

Kristen Stewart

just on some feel this there. making shift you the be constraints good on some then still the to into supply you're like it supply relegated And think like of that impact situation, progress -- XXXX? Do you could do that XXXX? sounds orthopedic Or will just the

Todd Garner

Yes.

we hurricanes of said, bump. speed The did little make Pat a bit progress. were As a

can. as offense back So getting we remain that our on continuing we and progress laser-focused on as soon teams

Operator

Our next question comes from Michael Needham. with Matson

Unknown Analyst

on This is Mike. for just Maybe Orthopedics on the another business. Joseph one

chain, being of of know more you in now? this talked maybe alternate suppliers the have guys supply and about right are isolated qualifying I guess, them. the point? I still And Just shoulders? some terms what Is it Or knees implants effect it is at pretty broad still to, and affected say, finding

So kind as progress wondering that of of I'm well. the just

Patrick Beyer

category improve had give on chain. increasing Pat thoughts It's getting made actually We've the vendors, supply continue to Yes. capability This it you is To we manufacturing laser-focused that made and one that. of really And expansion are product or or challenges characterize on Again, some path here. good on. be two-pronged. and here as with pretty all chain supply our and there out to here. categories the improvements we've the our not to on want of don't we've of to some improving the one I improvements improvements

Curt Hartman

Orthopedic spoke of some with script. market. the And in think what to quarter, related upper shipments to other I year at order little Again, in we working last that it, our QX to would and some Internationally that. I which say out a and the just clear back -- fair, grew business international of X.X%, be issues. end coming below some I that would terms Todd large be relates to of But we're tried of in and U.S. was the is on still the

work like more So in we're I definitely the it. feel and to team moving do, our right laser-focused direction, on is

Unknown Analyst

this us the retirement, on Curt. from question one Just time. Congrats

Curt Hartman

Thank you.

Operator

Robbie comes question Marcus JPMorgan. with next Our from

Unknown Analyst

you ] Robbie. comments Lilie and I'll for to missed, say, Curt, on and the everyone's Pat. This echo wish welcome and we is you'll [ best, be

growth line return would that to in Is can early you You any it's helpful. be color talked deliver think leveraged pushing had top can bit I profile? the year know thoughts double-digit able single to earnings still, about you that next year give for but accelerated and on growth. a you your confidence growth being XXXX little high

Curt Hartman

the I won't offering sitting that chair be in guidance.

largest So still shareholder. I will single be the

this will in love you're numbers. I and see to January think I'm in qualified Todd company we will our to here adjusted growth. best with we what I have the for to and was hands So It our and 'XX and of I offer level financial great always tried ratio it think they'll Pat, going It They down if not us in one And cash reference guidance guidance we're guidance. teen front for offer speak appropriate I quarter. what pursuing. performance But when to with performance was would leverage be of -- X.X. very And of, them. EPS

So make ratio great outlook continues the the progress. to on leverage

leverage about the But really got think And things reinvigorating that. doing built where portfolio right laser the focus top it's So deliver the and we're to it, right to we've do just now. that's is the to line. I we've all

Unknown Analyst

then evacuation. And you a had issue quality spoken in about a previously smoke as think I follow-up, transitory just

how Buffalo the quarter? did to whether still perform you? And So impacting in you Filter that's can speak

Todd Garner

where was that want not be. better, No, the all QX trend, QX. behind we way to that transitory good was to in us sign We heading Yes. our in And back was QX, back QX to but Lilie. normal a but got

Operator

[Operator from with Instructions] Wells Vik comes next Our Fargo. question Chopra

Unknown Analyst

echo want Pat Curt. everyone thank and to and also congratulate Just else's you to comments

guess, Just forward? question, are Pat, for to your ask a priorities What I it. related going wanted XXXX, X top to

Patrick Beyer

is had to customers, of advance to for last taking years. the for be employees connect with about spend continuing with our time I'm company. Curt CONMED has our super part time and and And excited a the cause and growth story focus XX the of over to and continue that shareholders success Boy, Curt, my spend over taking for -- my with then

Unknown Analyst

Vik ] [ is for this And on Chopra. Dino

on impacts question in Just quarter. the a the follow-up hurricane

expand or Have You re-bookings of if you were of And procedures could some result the there seen shortages? impact as a upon? fluid detail any mentioned you IV delays. there's

Todd Garner

we have already. Yes, that seen

think I interesting. it's

One sources ChatGPT of the actually. best is

can or allocating and the ask that a systems ChatGPT you'll deferring go You list. about to long get have procedures, list talked

in So it already -- that did October. we did see

in status of captured quarter. We've from it's for assumed our that guidance. if worse a We quo kind to have We project October better. to the or pretend going get don't

So we've kind kind seen already what in of with. that we're quarter dealing assumed what is of the we've

And so -- but sure they need yes, them products that is just and factual the that that hospitals have to deferring most. the the for have they patients already started make allocating need that

Operator

comes question with next Our from King. Stewart Kristen CL

Kristen Stewart

expecting Todd, see of pause of on that expansion you some anything I We on margins saw gives gross basis. the outlook for in seeing a just the wanted still and for gross just concern success to nice year-over-year expansion margins. quarter, continued Is in expansion? terms good in ask to there terms

Todd Garner

said gross January, thought looks we XX did about in should to talk going like that that's QX Kristen. we'll in 'XX ago. We're and still QX, XX% it margin I case. the Yes. days -- around be

And know a heading and quantify January. into structure for to good advantage, improve I got mix And has we'll in 'XX the better be to gross CONMED margins so a that able that we've future.

Kristen Stewart

little consideration. bit just what And quarter, to? related ask then on detail just provide you that the adjustment wanted contingent Could for a more that on the to was

Todd Garner

You bet.

to to doing slower of on We're ankle slower back that hard part is than year has and foot been really adjustment. is expected business than get that well it talked But working this wanted offense. as that we've about, currently. BioBrace be. being So we the

expect of the study with little out out, adjusted more than nature a time took We that But that's designed. more -- trial read was robust, little trial have acquisition. We're of adjusted anticipated our the it really robust happy bit. at to actually of we timing significant a the have and that's the we a when

that And get so little and us took longer off therefore, running. to that a

shift in signs kind outer years timing, the consideration. a affects that that but So just shift no negative also of timing contingent in in there,

everything think still really we acquisitions. So about we've are I both about of those feel good disclosed those appropriately. doing how And

Operator

call now to Hartman remarks. like back turn Curt would I any over to closing the for

Curt Hartman

thank want everybody succession be the not given I to will I the announcement, your Josh. you, plan next for call. Thank today. on time And

to And for opportunity so your want you my support take CONMED I this attention your thank during tenure. of to to and each

Todd, you said, You Pat with of call. to are evening. that and our next on speaking your they look thank forward in and and good With enjoy you, hands earnings with rest the

Operator

Thank concludes your conference. Thank you the for you. This participation.

You may now disconnect.

CONMED (CNMD) 30 Oct 242024 Q3 Earnings call transcript