- Second Quarter Sales Up 6.8% to $111.3 Million -
- Net Income Increases 58% to $9.0 Million -
UTICA, N.Y., July 18 /PRNewswire-FirstCall/ --
CONMED Corporation (Nasdaq: CNMD) today announced financial results for the
quarter ended June 30, 2002.
Sales for the second quarter increased to $111.3 million from
$104.2 million in the comparable quarter last year, an increase of 6.8%. Net
income was $9.0 million, 58% above the $5.7 million reported in last year's
second quarter. Earnings per diluted share grew 32% to $0.33 on approximately
four million additional shares outstanding compared to $0.25 in the 2001
second quarter. On January 1, 2002, the Company adopted the provisions of
FAS 142 relative to the cessation of goodwill amortization. This change
caused net income to increase $1.4 million for the quarter and earnings per
share to increase $.05.
Arthroscopy sales increased 8.4% to $41.2 million from $38.0 million in
the same period last year. Powered surgical instrument sales were
$27.0 million compared to $28.4 million in the second quarter of 2001. As
previously announced, the Company introduced its PowerPro(R) Battery Powered
Instrument line of powered surgical instruments in February 2002, replacing
its older versions of battery powered instruments. First shipments of the
product line were made in March 2002. During the second quarter 2002, the
Company's sales of the PowerPro(R) battery systems amounted to approximately
$2 million and were in line with the Company's expectations.
Electrosurgery revenues were $17.0 million, consistent with the
$17.1 million recorded in second quarter 2001. Endoscopy revenues tripled to
$9.0 million from $3.0 million in the same period last year, reflecting the
performance from the Imagyn product line acquired in July 2001. Sales of
Patient Care Products were $17.1 million compared to $17.6 million in the
second quarter 2001.
In the three months ended June 30, 2002, the Company reduced its balance
sheet debt by $68 million. The majority of the reduction, $64 million, came
from the net proceeds of the Company's three million primary share offering
net of the $2 million warrant repurchase from Bristol-Myers Squibb Company and
other offering expenses. Cash from operating activities reduced the balance
sheet debt by $4 million and the financing from the accounts receivable
facility by $4 million. Thus balance sheet debt and the receivable facility
were reduced a total of $8 million from operating cash flows. EBITDA amounted
to $25.6 million for the quarter.
For the six months ended June 30, 2002, CONMED reported revenues of
$224.5 million, a 6.9% increase from $210.1 million in the first six months of
2001. Net income, was $18.0 million, up 54% from $11.7 million last year.
Earnings per diluted share grew 36% to $0.68 compared to $0.50 last year. The
change for FAS 142 with respect to goodwill accounting caused net income for
the six months ended June 2002 to increase by $2.8 million and diluted
earnings per share to increase by $0.10.
Joseph J. Corasanti, President and Chief Operating Officer, commented, "I
am pleased with the performance of all our product groups for the first half
of 2002. Arthroscopy improved its growth rate in the second quarter to 8.4%,
with a particularly strong showing in our shoulder and imaging products. With
regard to powered surgical instruments, we expect to see rapid growth in the
third quarter as we continue to gain traction in the medical community with
sales of our PowerPro(R) Battery systems. Based on the feedback we've
received from the evaluation stages of PowerPro(R) Battery, we remain
confident with our full year revenue growth target of 7%. In addition, our
electrosurgery growth for the six months is in excess of 5% and patient care
and endoscopy continue to track in-line with our expectations."
Mr. Corasanti continued, "Looking ahead, we continue to believe that new
product launches and market growth in our existing product lines will produce
total revenue growth of 8% in 2002 over 2001, including the full year effects
of the Imagyn acquisition. For the third quarter, we anticipate revenues to
be in the range of $108 to $113 million with diluted earnings per share of
$0.30 to $0.34. For the full year of 2002, we expect diluted earnings per
share to be $1.37 to $1.42."
CONMED is a medical technology company specializing in instruments,
implants, and video equipment for arthroscopic sports medicine, and powered
surgical instruments, such as drills and saws, for orthopedic, ENT,
neuro-surgery, and other surgical specialties. The Company is also a leading
developer, manufacturer and supplier of RF electrosurgery systems used
routinely to cut and cauterize tissue in nearly all types of all surgical
procedures worldwide, and endoscopy products such as trocars, clip appliers,
scissors, and surgical staplers. The Company also manufactures and sells a
full line of ECG electrodes for heart monitoring and other patient care
products. Headquartered in Utica, New York, the Company's 2,500 employees
distribute its products worldwide from eight manufacturing locations.
This press release contains forward-looking statements based on certain
assumptions and contingencies that involve risks and uncertainties. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and relate to the
Company's performance on a going-forward basis. The forward-looking
statements in this press release involve risks and uncertainties which could
cause actual results, performance or trends, including the above mentioned
anticipated revenues and earnings, to differ materially from those expressed
in the forward-looking statements herein or in previous disclosures. The
Company believes that all forward-looking statements made by it have a
reasonable basis, but there can be no assurance that management's
expectations, beliefs or projections as expressed in the forward-looking
statements will actually occur or prove to be correct. In addition to general
industry and economic conditions, factors that could cause actual results to
differ materially from those discussed in the forward-looking statements in
this press release include, but are not limited to: (i) the failure of any one
or more of the assumptions stated above, to prove to be correct; (ii) the
risks relating to forward-looking statements discussed in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2001 and the
Prospectus dated May 22, 2002; (iii) cyclical purchasing patterns from
customers, end-users and dealers; (iv) timely release of new products, and
acceptance of such new products by the market; (v) the introduction of new
products by competitors and other competitive responses; (vi) the possibility
that any new acquisition or other transaction may require the Company to
reconsider its financial assumptions and goals/targets; and/or (vii) the
Company's ability to devise and execute strategies to respond to market
conditions.
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share amounts)
(unaudited)
For three months For six months
ended ended
June June June June
2001 2002 2001 2002
Net sales $104,171 $111,269 $210,080 $224,474
Cost of sales 49,965 51,711 99,639 105,815
Selling and
administrative 33,922 35,141 68,751 69,609
Research and
development 3,476 4,078 7,172 7,902
87,363 90,930 175,562 183,326
Income from operations 16,808 20,339 34,518 41,148
Interest expense, net 7,848 6,355 16,179 12,983
Income before
income taxes 8,960 13,984 18,339 28,165
Provision for
income taxes 3,226 5,034 6,602 10,139
Net income $5,734 $8,950 $11,737 $18,026
Per share data:
Net Income
Basic $.25 $.34 $.51 $.70
Diluted .25 .33 .50 .68
Weighted average common shares
Basic 23,111 26,584 23,084 25,735
Diluted 23,399 27,359 23,352 26,422
CONMED CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
ASSETS
(unaudited)
December June
2001 2002
Current assets:
Cash and cash equivalents $1,402 $877
Accounts receivable, net 51,188 57,039
Inventories 107,390 114,869
Other current assets 4,569 4,765
Total current assets 164,549 177,550
Property, plant and equipment, net. 91,026 95,050
Goodwill and other assets, net 446,033 445,313
Total assets $701,608 $717,913
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $73,429 $78,727
Accrued interest 4,954 3,607
Other current liabilities 41,454 46,051
Total current liabilities 119,837 128,385
Long-term debt 262,500 179,006
Other long-term liabilities 35,637 38,820
Total liabilities 417,974 346,211
Shareholders' equity:
Capital accounts 160,591 228,718
Retained earnings 128,240 146,266
Accumulated other comprehensive loss (5,197) (3,282)
Total shareholders' equity 283,634 371,702
Total liabilities and
shareholders' equity $701,608 $717,913
OTHER FINANCIAL INFORMATION
(unaudited, in thousands)
Three months ended Six months ended
June June
2001 2002 2001 2002
EBITDA $23,931 $25,566 $48,853 $51,361
Depreciation 2,160 2,198 4,345 4,404
Amortization 4,963 3,029 9,990 5,809
Capital expenditures 4,788 5,220 8,655 8,428
SOURCE CONMED Corporation
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Related links:
http://www.conmed.com
Company News On-Call:
http://www.prnewswire.com/comp/201850.html
CONTACT:
Robert Shallish, Chief Financial Officer of
CONMED Corporation, +1-315-624-3206; or Investors - Lauren Levine
or Lanie Fladell, or Media - Dan Budwick, all of Morgen-Walke
Associates, +1-212-850-5600, for CONMED Corporation
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