- Sales Up 6.4% to $104.2 million
- EPS Up 27.6% to $.37
UTICA, N.Y., July 19 /PRNewswire/ -- CONMED Corporation (Nasdaq: CNMD)
today reported financial results for the three and six months ended June 30,
2001.
Sales for the second quarter increased 6.4% to $104.2 million compared to
$97.9 million in the second quarter of 2000. Net income was $5.7 million, an
increase of 26.7% over the $4.5 million earned in the June quarter of 2000.
Diluted earnings per share were $.37 compared to $.29, a 27.6% increase.
Excluding goodwill and related amortization, earnings per share would have
been $.09 higher for the quarter, or $.46. Additionally, negative foreign
currency translation fluctuations compared to the second quarter of 2000,
caused sales and pre-tax income to be $1.1 million less than would have been
the case had the rates remained constant.
Sales of the Company's orthopedic products in the second quarter grew 5.9%
to $66.4 million compared to $62.7 million in last year's second quarter.
Without the effects of foreign currency, the growth rate would have been 7.7%.
Arthroscopy sales increased to $38.0 million from $36.1 million in the same
period last year, while Powered Instrument sales grew to $28.4 million from
$26.6 million.
Electrosurgery revenues were $17.1 million, an increase of 1.8% over the
$16.8 million in last year's second quarter. Sales of Patient Care products
increased to $17.6 million, a 4.8% increase over revenues of $16.8 million in
the second quarter of 2000. Including the contribution of the Company's
November 2000 acquisition of the Imagyn disposable product line, sales of
Minimally Invasive Surgery (MIS) products nearly doubled to $3.0 million in
the second quarter of 2001 compared to $1.6 million in the same period last
year. Substantially all of the MIS increase was a result of the acquisition.
On July 6, 2001, the Company completed the acquisition of additional MIS
products from Imagyn. Sales of the newly acquired products, with expected
revenues of $18 - 20 million in the first twelve months, will be included in
the Company's revenues commencing in the third quarter of 2001. In the third
and fourth quarters of 2001, the Company will record a nonrecurring charge to
expense totaling approximately $1.2 million for incremental transition costs.
Mr. Joseph J. Corasanti, President and Chief Operating Officer, commented,
"We are pleased with our solid performance in the second quarter. Sales
increased 6.4%, up sequentially from the 3% increase in the first quarter of
2001. Our gross margin improved compared to the second quarter of 2000, and
our operating margin improved to 16.1% compared to 15.6%. Over the last year,
our strategy has been focused on improving our sales and product development
activities to encourage greater internal revenue growth. While there is still
room for improvement, an upward momentum shift has definitely occurred in our
growth numbers. We believe that these positive results confirm our emphasis on
more effective sales, marketing and product development activities."
For the six months ended June 30, 2001, sales increased 4.7% to
$210.1 million compared to $200.7 in the first six months of 2000, net income
decreased 1.8% to $11.7 million compared to $11.9 million and earnings per
share decreased to $.75 from $.77. Excluding goodwill and related
amortization, earnings per share would have been $.18 higher for the six
months, or $.93.
The second quarter and first six months of 2000 amounts referenced above
exclude the effects of a $1.5 million severance charge taken in the second
quarter last year. Including the effects of the charge in the year 2000
amounts, net income and earnings per share increased 61% for the quarter and
7% for the six months.
Mr. Corasanti continued, "Our outlook for the remainder of the year
remains consistent with our earlier guidance. We anticipated 2001 total year
internal revenue growth of approximately 6%. Including the effects of the
just completed Imagyn product line acquisition, we expect 2001 sales of
$423 - 428 million for a total growth of 8 - 9%. We also continue to expect
2001 annual diluted earnings per share growth of 15 - 20%, excluding the
$1.2 million nonrecurring transition charge referred to above. During our
third quarter 2001, traditionally our cyclically softest period, earnings per
share are expected to be $.29 - .34 excluding the effects of the transition
charge."
CONMED is a medical technology company specializing in instruments and
implants for arthroscopic sports medicine, and powered surgical instruments
for orthopedic, ENT, neuro-surgery, and other surgical specialties. The
Company is also a leading developer, manufacturer and supplier of advanced
medical devices, including RF electrosurgery systems used in all types of
surgery, ECG electrodes for heart monitoring and minimally invasive surgical
devices. Headquartered in Utica, New York, the Company's 2,400 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, including those relating to the
timing and costs of the transition, 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, 2000; (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 ended For six months ended
June June June June
2000 2001 2000 2001
Net sales $97,878 $104,171 $200,689 $210,080
Cost of sales 47,327 49,965 95,988 99,639
Selling and
administrative -
Note A 33,247 33,922 64,009 68,751
Research and
development 3,572 3,476 6,978 7,172
84,146 87,363 166,975 175,562
Income from operations 13,732 16,808 33,714 34,518
Interest expense, net 8,238 7,848 16,643 16,179
Income before
income taxes 5,494 8,960 17,071 18,339
Provision for
income taxes 1,978 3,226 6,146 6,602
Net income $ 3,516 $5,734 $10,925 $11,737
Per share data:
Net Income
Basic $.23 $.37 $.71 $.76
Diluted .23 .37 .70 .75
Weighted average
common shares
Basic 15,311 15,407 15,298 15,389
Diluted 15,551 15,599 15,535 15,568
Note A - Selling and administrative expense for the three and six months
ended June 2000 includes a one-time severance charge of approximately
$1.5 million or $0.06 per diluted share related to the restructuring of
the Company's arthroscopy sales force.
CONMED CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
ASSETS
(unaudited)
December June
2000 2001
Current assets:
Cash and cash equivalents $3,470 $924
Accounts receivable, net 78,626 84,657
Inventories 104,612 103,194
Other current assets 5,323 5,609
Total current assets 192,031 194,384
Property, plant and equipment, net. 62,450 66,758
Goodwill and other assets, net 425,090 421,223
Total assets $679,571 $682,365
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 36,068 $ 37,665
Accrued interest 5,130 5,192
Other current liabilities 37,078 35,503
Total current liabilities 78,276 78,360
Long-term debt 342,680 330,033
Other long-term liabilities 28,012 33,453
Total liabilities 448,968 441,846
Shareholders' equity:
Capital accounts 127,796 128,303
Retained earnings 103,834 115,571
Accumulated other comprehensive loss (1,027) (3,355)
Total shareholders' equity 230,603 240,519
Total liabilities and
shareholders' equity $679,571 $682,365
OTHER FINANCIAL INFORMATION
(unaudited, in thousands)
Three months ended Six months ended
June June
2000 2001 2000 2001
EBITDA (excluding
non-recurring items) $ 22,198 $ 23,931 $ 48,930 $ 48,853
Depreciation 2,306 2,160 4,612 4,345
Amortization 4,651 4,963 9,095 9,990
Capital expenditures 3,804 4,788 7,602 8,655
SOURCE CONMED Corporation
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Related links:
http://www.conmed.com
Company News On-Call:
http://www.prnewswire.com/gh/cnoc/comp/201850.html
CONTACT:
Robert Shallish, Chief Financial Officer of
CONMED Corporation, 315-797-8375, Ext. 2219; Investors - Theresa
Vogt, or Sarah Torres, or Media - Dan Budwick, all of
Morgen-Walke Associates, 212-850-5600, for CONMED Corporation
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