UTICA — Sluggish sales and a hefty goodwill impairment charge hurt fourth-quarter earnings at ConMed Corp. (NASDAQ: CNMD), but company officials are counting on new products and a new partnership to boost 2012 results.
Net sales increased 0.8 percent in the fourth quarter to $185.6 million, but it wasn’t enough to offset the impact of a non-cash goodwill impairment charge of $38 million, net of tax, in the company’s patient-care segment.
In spite of a $1.3 million positive income-tax adjustment that boosted earnings-per-share by 5 cents, ConMed reported a net loss of
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$25.1 million, or a loss of 90 cents per share, for the quarter, compared with net income of $6.9 million, or 25 cents, for the fourth quarter of 2010.
For the year, ConMed reported net income of $752,000, or 3 cents per share, on sales of $725.1 million, compared with net income of $30.3 million, or $1.06 per share, on sales of $713.7 million in 2010.
In a Feb. 16 conference call with investors and analysts, President and CEO Joseph Corasanti said he expects a better 2012, especially as ConMed benefits from a recently inked partnership with the Musculoskeletal Transplant Foundation (MTF) tissue bank. ConMed’s Linvatec subsidiary will be the exclusive worldwide marketing representative for MTF’s sports-medicine allograft tissues. ConMed Linvatec will distribute MTF’s Cascade Platelet-Rich Plasma product, which uses a patient’s own blood components to aid the healing process.
MTF’s 35 employees have joined ConMed Linvatec, and Corasanti said he expects the partnership to boost ConMed’s earnings by about 15 to 18 cents a share.
ConMed paid MTF $63 million when the deal closed on Jan. 3. It would also make a series of future pending payments, based upon particular levels of tissue supply being maintained. If the targets are met, ConMed will pay $34 million in January 2013 and $16.7 million for the following three years for a total cost of $147 million.
Corasanti forecasts ConMed will produce full-year sales of $780 million to $790 million for 2012, with earnings per share of $1.75 to $1.88. For the first quarter, he estimates sales of $190 million to $195 million, with per-share earnings ranging from 42 to 47 cents. Those figures are up from his previous forecast of sales between $745 million and $755 million.
