UTICA — ConMed Corp. (NASDAQ: CNMD), a Utica–based surgical-device maker, on Thursday reported that its third-quarter net income fell to $5.7 million, or 20 cents per share, from $9.3 million, or 32 cents, in the year-ago period.
ConMed continued its ongoing consolidation of certain administrative functions and manufacturing activities. It also incurred litigation costs related to a patent matter, the company said in a news release.
The firm also 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 taxes, during the third quarter, according to the firm’s financial statement.
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As a result, ConMed reported adjusted earnings per share of 40 cents, which met the firm’s expectations following “positive” sales growth of single-use products, improved adjusted-gross margins, and favorable income-tax adjustments, Joseph Corasanti, president and CEO of ConMed, said in the earnings news release.
“The favorable growth in single-use devices, comprising over 80 percent of sales, demonstrates an encouraging sign of surgical procedure growth,” Corasanti said.
ConMed generated revenue of $179.3 million in the third quarter, down 1.4 percent from $181.9 million in the year-earlier quarter.
The company’s sales included a two percent increase in single-use devices, which was offset by an 11 percent decline in capital products, the firm said.
Looking ahead, ConMed is forecasting fourth-quarter sales between $195 million and $200 million, resulting in a total-year sales forecast between $754 million and $759 million, which is down from its prior range of $770 million to $775 million, the company said.
At those sales levels, ConMed forecasts fourth quarter 2013 adjusted earnings per share between 47 cents and 52 cents, resulting in a full-year adjusted earnings per share forecast between $1.75 and $1.80 down from the previous full-year guidance range of $1.80 to $1.85 per share, the firm added.
Zacks Investment Research, commented on ConMed’s earnings in a research note, saying, “We are disappointed with ConMed’s third-quarter results, which missed the Zacks Consensus Estimate on both fronts. The persistent dismal macroeconomic conditions along with poor capital spending loom as causes of concern.”
Zacks added, “ConMed’s tempered guidance failed to impress us as well. However, the only positive factor we took note of was improving surgical procedure growth, which led to higher sales of single-use surgical offerings.”
Shares of ConMed fell almost 3 percent on Thursday, following the earnings report, and were down another 0.6 percent in early afternoon trading Friday.
ConMed employs 3,600 people who distribute products worldwide from several manufacturing locations.
ConMed has a direct selling presence in 16 countries outside the U.S., and international sales make up about 50 percent of the firm’s total sales, the company said.
Contact Reinhardt at ereinhardt@cnybj.com
