CONMED Corporation Announces Third Quarter 2013 Financial Results
(firmenpresse) - UTICA, NY -- (Marketwired) -- 10/24/13 -- (NASDAQ: CNMD)
(NASDAQ: CNMD) today announced financial results for the third quarter ended September 30, 2013.
"Adjusted earnings per share for the third quarter 2013, equal to $0.40, met our expectations as a result of positive sales growth of single-use products, improved adjusted gross margins and favorable income tax adjustments," commented Mr. Joseph J. Corasanti, President and CEO. "The favorable growth in single-use devices, comprising over 80% of sales, demonstrates an encouraging sign of surgical procedure growth. The 1.3% sales increase (2.4% constant currency increase) of single-use devices in the third quarter 2013 is the best quarter we have experienced so far this year. Capital equipment reported sales, however, were volatile with a year-over-year decline of 11.9% in the third quarter as compared to an increase of 8.6% experienced in the preceding second quarter of 2013."
Sales were $179.3 million, a constant currency decrease of 0.4% over the third quarter of 2012, consisting of a 2.4% increase in single-use devices offset by an 11.1% decline in capital products.
Diluted earnings per share (GAAP) were $0.20 compared to $0.32 in the third quarter of 2012 (excluding the Medical Device Excise Tax, "MDET," EPS would have been $0.23 in 2013).
Adjusted diluted earnings per share were $0.40 in the third quarter of 2013 compared to $0.43 in the same quarter of 2012 (excluding the MDET, adjusted EPS would have been $0.43 in 2013).
Adjusted EBITDA margin was 16.7%, a decrease of 70 basis points, caused by the negative effect from the MDET.
Sales were $559.3 million, a constant currency decrease of 0.5% compared to the first nine months of 2012 consisting of a 0.1% decline in single-use products and a 2.1% decline in capital equipment.
Diluted earnings per share (GAAP) were $0.91 in the nine months ended September 2013 compared to $1.03 in the same period of 2012 (excluding the MDET, EPS would have been $1.01 in 2013).
Adjusted diluted earnings per share were $1.28 in the nine-month periods of both 2013 and 2012 (excluding the MDET, adjusted EPS would have been $1.38 in 2013).
Adjusted EBITDA margin was 16.9%, a decrease of 30 basis points, even with an 80 basis point negative effect from the MDET offset by operating improvements.
International sales in the third quarter of 2013 were $90.1 million, representing 50.3% of total sales. Foreign currency exchange rates including the effects of the FX hedging program caused sales to be $1.9 million less in the third quarter of 2013 compared to sales in the third quarter of 2012.
Cash provided by operating activities in the third quarter of 2013 equaled $30.5 million and increased sequentially from the second quarter of 2013. For the nine months ended September 2013, cash provided by operating activities was $53.6 million, more than double the net income for this period. The Company repurchased 1,431,000 shares of its common stock in the first nine months of 2013 for $44.7 million, all of which were repurchased as of June 30, 2013.
"Looking at the quarterly progression of sales over the first nine months of 2013, we have seen encouraging improvement in sales of single-use surgical devices leading us to be somewhat optimistic about continued improvement in surgical procedure growth in both domestic and international markets. This optimism is tempered by the volatility we have experienced in sales of the Company's capital products due to continued budgetary restraints by hospitals in the United States and public healthcare systems in other countries. Given these factors, we believe it is prudent to forecast a year-over-year fourth quarter decline in capital equipment revenue, although we anticipate modest increases in fourth quarter 2013 sales of single-use devices which typically comprise approximately 80% of our sales. Accordingly, we are forecasting fourth quarter 2013 sales of $195 - $200 million resulting in a total year 2013 sales forecast of $754 - $759 million versus our prior range of $770 - $775 million. At these sales levels, we forecast fourth quarter 2013 adjusted earnings per share of $0.47 - $0.52 resulting in a total year 2013 adjusted earnings per share forecast of $1.75 - $1.80 as compared to the previous total year guidance range of $1.80 - $1.85. This forecast contemplates the effects of the medical device tax and less favorable FX exchange rates, which will cost the company about $0.20 for full year 2013," said Mr. Corasanti.
"As we look forward to 2014, we believe that continuing modest improvement in the global economy should result in annual sales growth for our products in a range of 2.0% - 3.0% resulting in a forecasted sales range of $770 - $780 million. This forecast is based on continued improvement in single-use product sales growth and capital product sales improving due to our expectation of a more normal capital equipment replacement cycle. With this increase in sales, we believe 2014 adjusted earnings per share will expand to $1.90 - $2.00. This earnings growth would also equate to an improvement in adjusted operating and EBITDA margins of approximately 50 basis points, which is positive for CONMED although less than our annual goal for margin improvement," continued Mr. Corasanti
The adjusted estimates for the fourth quarter and full year 2014 exclude special items, such as manufacturing restructuring costs expected to be incurred due to relocation of manufacturing activities and patent litigation.
During the third quarter of 2013, the Company continued the on-going consolidation of certain administrative functions and manufacturing activities. Also incurred were litigation costs associated with a patent matter. Further, during the third quarter of 2013, the Company incurred losses on assets associated with the termination of a product offering within the patient monitoring product line. Expenses associated with these activities, including severance and relocation costs, amounted to $5.4 million, net of tax, in the third quarter of 2013. These charges are included in the GAAP earnings per share set forth above and are excluded from the adjusted results. For the remainder of 2013, the Company presently anticipates incurring additional pre-tax special costs of $3.7 - $4.7 million on projects currently in process.
Management has disclosed adjusted financial measurements in this press announcement that present financial information that is not in accordance with generally accepted accounting principles. These measurements are not a substitute for GAAP measurements, although Company management uses these measurements as aids in monitoring the Company's on-going financial performance from quarter-to-quarter and year-to-year on a regular basis, and for benchmarking against other medical technology companies. Adjusted net income, adjusted operating income and adjusted earnings per share measure the income of the Company excluding credits or charges that are considered by management to be outside of the normal on-going operations of the Company. Management uses and presents adjusted net income, adjusted operating margin and adjusted earnings per share because management believes that in order to properly understand the Company's short and long-term financial trends, the impact of special items should be eliminated from on-going operating activities. These adjustments for special items are derived from facts and circumstances that vary in frequency and impact on the Company's results of operations. Management uses adjusted net income, adjusted operating income and adjusted earnings per share to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consistent basis. Further, the presentation of EBITDA is a non-GAAP measurement that management considers useful for measuring aspects of the Company's cash flow. Adjusted financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Investors should consider adjusted measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.
The Company will webcast its third quarter 2013 conference call live over the Internet at 10:00 a.m. Eastern Time on Thursday, October 24, 2013. This webcast can be accessed from CONMED's web site at . Replays of the call will be made available through November 1, 2013.
CONMED is a medical technology company with an emphasis on surgical devices and equipment for minimally invasive procedures. The Company's products are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology. Headquartered in Utica, New York, the Company's 3,600 employees distribute its products worldwide from several manufacturing locations. CONMED has a direct selling presence in 16 countries outside the United States and international sales constitute approximately 50% of the Company's total sales.
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, 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, 2012; (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; (vii) increasing costs for raw material, transportation or litigation; (viii) the risk of a lack of allograft tissues due to reduced donations of such tissues or due to tissues not meeting the appropriate high standards for screening and/or processing of such tissues; and/or (ix) the Company's ability to devise and execute strategies to respond to market conditions.
Note A - Included in cost of sales, other in the three and nine months ended September 30, 2012 and 2013 are costs related to the consolidation of our production facilities. Also included in the three and nine months ended September 30, 2013 are costs associated with the termination of a product offering. Refer to the Reconciliation of Reported Net Income to Adjusted Net Income for further details.
Note B - Other expense in the three and nine months ended September 30, 2012 and 2013 includes a number of adjusted charges. Refer to the Reconciliation of Reported Net Income to Adjusted Net Income for further details.
Management has provided the above reconciliation of net income to adjusted net income as an additional measure that investors can use to compare operating performance between reporting periods. Management believes this reconciliation provides a useful presentation of operating performance as discussed in the section "Use of Non-GAAP Financial Measures" above.
Management has provided the above reconciliation as an additional measure that investors can use to compare financial results between reporting periods. Management believes this reconciliation provides a useful presentation of financial measures as discussed in the section "Use of Non-GAAP Financial Measures" above.
Management has provided the above reconciliations as additional measures that investors can use to compare financial results between reporting periods. Management believes these reconciliations provide a useful presentation of financial measures as discussed in the section "Use of Non-GAAP Financial Measures" above.
Management has provided the above reconciliations as additional measures that investors can use to compare financial results between reporting periods. Management believes these reconciliations provide a useful presentation of financial measures as discussed in the section "Use of Non-GAAP Financial Measures" above.
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Datum: 24.10.2013 - 05:00 Uhr
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