CONMED Corp Q1 FY2025 earnings call

Pat Beyer noted total sales were better than guidance, with adjusted net income up 19.6% Y/Y. Orthopedics saw growth in foot and ankle and BioBrace, with BioBrace having 14 peer-reviewed publications and 9 clinical studies. General surgery had strong demand for AirSeal and smoke evacuation. Supply chain initiatives are ongoing with expected $20M annual savings by 2026. R&D expense was 4.0% of sales, 40 basis points lower Y/Y, and SG&A expenses were 38.7% of sales, consistent Y/Y.

Total sales for the quarter were $321.3 million, a year-over-year increase of 2.9% as reported and 3.8% in constant currency. Constant currency sales growth was 3.9% in orthopedics, led by double-digit sales growth in foot and ankle products and strong demand for BioBrace. General surgery had constant currency sales growth of 3.8%, led by AirSeal and smoke evacuation with double-digit demand.

Full-year constant currency growth expected 4%-6%, with revenue guidance adjusted to $1.35B-$1.378B due to FX improvement. Adjusted EPS guidance raised to $4.45-$4.60. Tariffs: Mexico products exempt, estimated $5.5M supply chain exposure in 2025, with $0.02 in Q3 and $0.12 in Q4 from China tariffs.

Macro-economic and policy uncertainties affecting customers, supply chain challenges, and tariff impacts on costs and margins.

Q: About guidance and top line shifting, A: Year guidance remains 4%-6%, Q1 beat but year view unchanged.

Q: Tariffs reconciliation, A: Mexico products exempt, China tariff impact detailed, mitigation efforts discussed.

Q: Supply chain improvement, A: Focus on procurement, production planning, production. BioBrace progress mentioned.

Q: Portfolio deep dive, A: Four growth drivers (BioBrace, Foot & Ankle, AirSeal, Smoke) strong, early days of portfolio review.

Q: Capital trends at AirSeal, A: AirSeal adoption continues, one SKU for da Vinci robots grew double-digits.

Q: Supply chain impact on growth, A: Supply chain issues keep growth at lower end of range, aiming for higher.

Q: Currency benefit in P&L, A: FX impact spread in gross margin and operating expenses.