ConMed reports better-than-expected Q2 profit

UTICA — ConMed Corp. (NASDAQ: CNMD), a Utica–based surgical-device maker recently reported net earnings of $8.7 million in the second quarter, up 42 percent from $6.1 million in the year-ago period, led by strong revenue growth and margin expansion. The firm’s earnings per share rose 36 percent to 30 cents from 22 cents a year before.

Excluding the costs of special items, such as acquisitions, restructurings, legal matters, asset-sales gains, and tax adjustments, ConMed reported adjusted net earnings of $13.3 million in the second quarter, up more than 16 percent from $11.4 million in the year-earlier quarter. The company’s net earnings per share rose 12 percent to 46 cents in this year’s second quarter from 41 cents in the second quarter of 2017. That beat the consensus analysts’ estimate of 45 cents, according to Zacks Equity Research.

ConMed reported sales of $212.8 million in the second quarter, up 7.9 percent from a year prior (up 7.4 percent on a constant-currency basis). That surpassed the Zacks consensus estimate of nearly $207 million.

The medical-device maker’s gross margin increased by 1.5 percent and adjusted gross margin jumped by 1.9 percent in the last year. 

“We are very pleased with our second quarter, as we achieved strong constant-currency revenue growth, significant gross margin expansion, and solid double-digit growth in profitability,” Curt R. Hartman, ConMed’s president and CEO, said in the firm’s earnings report, issued on Aug. 1. “Looking to the second half of the year, we are confident in our ability to build on this momentum and are increasing our revenue guidance. We remain focused on investing in our business, bringing innovative new products to market, and positioning ConMed for long-term revenue and earnings growth.”

The company said it now expects full-year 2018 constant-currency sales growth in the range of 6 percent to 7 percent, compared to its previous range of 4.5 percent to 5.5 percent. 

ConMed continues to forecast full-year 2018 adjusted net earnings per share in the range of $2.15 to $2.20. This represents growth of about 14 percent to 16 percent from 2017. 

ConMed finished the second quarter “on a solid note, with earnings and revenues beating the consensus mark. Strong performances across Orthopedic and General surgery units and the company’s product portfolio are encouraging. Significant expansion in the gross and operating margins buoys optimism. The company has invested significantly in R&D, which reflects focus on innovation. A raised full-year guidance also paints a bright picture,” Zacks Equity Research said in a research note. “On the flip side, [the company] operates in a highly competitive environment, especially with respect to the General Surgery business. The company’s high long-term debt is a concern.”

ConMed is a medical technology company that provides surgical devices and equipment for minimally invasive procedures. Its products are used by surgeons and physicians in a variety of specialties, including orthopedics, general surgery, gynecology, neurosurgery, thoracic surgery and gastroenterology. ConMed has a direct selling presence in 19 countries, and international sales make up more than half of its total sales. The company employs about 3,100 people total. 

ConMed’s stock price gained 45 percent in the first seven months of this year.