UTICA — ConMed Corp. (NASDAQ: CNMD), a Utica–based surgical-device maker, is moving ahead with new leadership after its CEO stepped down and its founder retired. The company on July 23 announced that Joseph (Joe) Corasanti resigned as CEO, president, and board member, effective immediately. The company provided no reason for Corasanti’s departure. The board has […]
UTICA — ConMed Corp. (NASDAQ: CNMD), a Utica–based surgical-device maker, is moving ahead with new leadership after its CEO stepped down and its founder retired.
The company on July 23 announced that Joseph (Joe) Corasanti resigned as CEO, president, and board member, effective immediately. The company provided no reason for Corasanti’s departure.
The board has appointed Curt Hartman, an independent director of ConMed and the former interim CEO and CFO of Stryker Corporation, as interim CEO.
In addition, founder Eugene (Gene) Corasanti has decided to retire, effective immediately, from the board and as an employee after nearly 44 years with ConMed, the company said in a news release.
Joe Corasanti has been “integral” to ConMed for more than two decades and the firm is “extremely grateful” for his contributions, Mark Tryniski, chairman of ConMed’s board of directors, said in the release.
“Joe’s leadership has been instrumental in growing ConMed into a leading global supplier of medical-technology devices. Under his tenure, the company expanded revenues, earnings, cash flow and its return to shareholders through internal growth and the completion of more than twenty acquisitions. We are also grateful to Gene Corasanti, a true entrepreneur who founded the company in 1970 with one product idea and strategic vision that became the foundation for the worldwide organization that ConMed is today,” said Tryniski.
Hartman is the former interim CEO and CFO of Kalamazoo, Mich.–based Stryker Corporation (NYSE: SYK) and brings more than 22 years of medical-device industry experience to ConMed.
During his tenure at Stryker, Hartman focused on initiatives that included the completion of multiple acquisitions, debt offerings, share buybacks, and an enhanced-dividend policy while “innovating” the business model to address the changing health-care landscape, according to ConMed.
As ConMed moves forward, the board has formed a search committee comprised of independent board members Mark Tryniski, Jerome Lande, Stephen Mandia, Brian Concannon and Charles Farkas to identify candidates for the permanent CEO position.
The ConMed board also announced the appointment of Farkas, a senior partner at Bain & Company and former North American leader of Bain’s healthcare practice, as a new independent director, effective immediately.
The board intends to retain an executive-search firm to assist in the process, the company said.
In addition to the leadership announcement, ConMed also announced it is ending its review of “strategic alternatives,” deciding instead to have the board work with management to focus on further developing and executing ConMed’s strategic plan to grow revenues and margins, the firm said.
ConMed’s stock plummeted by $3.98, or more than 9 percent, on the day it announced the news that it’s no longer seeking a buyer and that its CEO has resigned.
Earnings and guidance adjustment
In its quarterly financial report, also issued the same day, ConMed said it earned more than $10.2 million in the second quarter that ended June 30, up from the more than $9.5 million earned during the same period in 2013.
The firm generated sales of more than $188 million, a decrease of more than 2 percent over the prior-year period caused “principally” by weaker sales of general-surgery devices, surgical-visualization capital products, and the discontinuance of the Cascade PRP product line, according to the earnings news release.
Even though ConMed has plans to launch two new products during second half of 2014, “it may take more time than the [year’s] final six months” for the products to reach their potential, the company noted.
As a result, the firm now forecasts full-year revenue to total between $735 million and $745 million, compared to prior guidance of a range between $770 million and $780 million.
It also changed its full-year adjusted earnings per share guidance to a range between $1.85 and $1.95 compared to prior guidance of $1.90 and $2.00.
However, going forward ConMed said it would no longer provide specific financial guidance on a quarterly basis in order to avoid misinterpretation of quarterly fluctuations.
The adjusted estimates for the full year 2014 exclude special items such as manufacturing and restructuring costs that it expects to incur in 2014 due to the relocation of manufacturing activities, litigation, severance, and other costs, according to its earnings news release.
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, ConMed employs 3,600 people with a direct sales presence in 16 countries outside the U.S.
Investor concern
ConMed on July 29 announced that a California–based investor rejected its offer regarding the board-member election at ConMed’s upcoming annual meeting in September.
In its news release, ConMed announced that it recently contacted San Francisco, Calif.–based Voce Capital Management LLC seeking a “mutually agreeable resolution” to avoid a “costly and distracting” proxy contest.
Voce Capital owns about 0.3 percent of the outstanding shares of ConMed common stock, according to the California firm’s “most recent” disclosure to ConMed, the Utica company said.
Voce earlier this year delivered to ConMed a notice of its intention to nominate four directors for election to the company’s board of directors at the upcoming annual meeting scheduled for Sept. 10.
ConMed said it believes that it is in the “best interests” of the company and its shareholders to focus on improving the firm’s operating performance. So, in order to avoid the “distraction” of a proxy contest, ConMed said it offered to nominate Voce’s nominee, Josh Levine, to ConMed’s board.
Voce rejected ConMed’s offer and “insisted” that the company’s director nominees include J. Daniel Plants, Voce’s managing partner, as part of any settlement agreement, according to ConMed.
ConMed listed in its news release the steps it has taken in the past year, which it contends “significantly strengthened the quality of its leadership.”
Contact Reinhardt at ereinhardt@cnybj.com