CONMED Corporation Announces Third Quarter 2015 Financial Results
Wednesday, October 21, 2015
CONMED Corporation (Nasdaq: CNMD) today announced financial results for the third quarter ended September 30, 2015.
Third Quarter 2015 Highlights
- Sales were $169.2 million, a decrease of 3.3% compared to the third quarter of 2014. On a constant currency basis, sales increased 0.5% over the prior-year period.
- Diluted earnings per share (GAAP) were $0.32, compared to $0.07 in the third quarter of 2014.
- Adjusted diluted earnings per share were $0.38 versus $0.44 in the prior-year period.
- Appointed Nathan Folkert as Vice President and General Manager of Orthopedics.
"While I am pleased to see total Company constant currency sales break back into positive growth, the overall results indicate the transformative changes we are pursuing are taking longer to implement than we had anticipated," commented Curt R. Hartman, CONMED's President and Chief Executive Officer. "Weaker than expected performance in our export markets and in our domestic General Surgery business slowed our progress this quarter. I remain confident that CONMED has the right team of leaders and the sense of urgency necessary to advance our turnaround efforts."
For the quarter ended September 30, 2015, domestic sales, which represented 51.9% of total revenue, increased 1.3%, driven by growth in capital equipment sales within Visualization and Orthopedics. International sales, which represented 48.1% of total revenue, declined 7.8% compared to the third quarter of 2014 on a reported basis. Foreign currency exchange rates, including the effects of the FX hedging program, had a negative impact of $6.6 million on third quarter sales. In constant currency, international sales decreased 0.4% versus the prior-year period as a result of a decline in sales of capital equipment, particularly within General Surgery and Visualization.
Reported net earnings totaled $8.9 million in the quarter, compared to reported net earnings of $2.0 million in the prior year. Reported diluted net earnings per share were $0.32 in the quarter, compared to $0.07 in the prior-year period. Reported net earnings for the third quarter of 2014 included substantially higher costs related to restructuring and shareholder activism. The effect of each of these items on reported net earnings appears in the reconciliation of GAAP to non-GAAP measures provided below.
Excluding the impact of the items described above, adjusted net earnings of $10.6 million decreased 13.2% year over year and adjusted diluted net earnings per share of $0.38 decreased 13.6% year over year. The decline in adjusted net earnings was largely attributable to weaker than anticipated international sales, the negative impact of foreign currency, and a higher tax rate, partially offset by improved gross margin and lower operating expenses during the quarter.
Based on weaker than expected third quarter sales, the Company has reduced its 2015 constant currency organic sales growth estimate to 0% to 1%, compared to the previous estimate of 1% to 3%.
Using current exchange rates, the Company now forecasts total reported 2015 sales to be in the range of $715 to $720 million, compared to prior guidance of $723 to $738 million. Adjusted earnings per diluted share are now expected to be in the range of $1.65 to $1.70, compared to prior guidance of $1.82 to $1.92.
The Company's management will host a conference call today at 4:30 p.m. ET to discuss its third quarter results.
To participate in the conference call, dial 800-884-5695 (domestic) or 617-786-2960 (international) and enter the passcode 44699196.
This conference call will also be webcast and can be accessed from the Investors section of CONMED's web site at www.conmed.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.
A recording of the call will also be available from 8:30 p.m. ET on Wednesday, October 21, 2015, until 11:59 p.m. ET on Wednesday, October 28, 2015. To hear this recording, dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter the passcode 88091814.