CONMED Corp Q4 FY2025 earnings call

• Quarterly and Annual Results: Total sales Q4 $373.2M (+7.9% Y/Y, +7.1% constant currency), full-year $1.375B (+5.2% Y/Y, +5.1% constant currency). Adjusted EPS Q4 $1.43 (+6.7%), full-year $4.59 (+10.1%).
• Portfolio Review: In December 2025, exited gastroenterology product lines to align resources with growth drivers, expected to improve long-term margin by ~80 basis points.
• Supply Chain Progress: Resolved sports medicine chain constraints, backorder value and SKUs at 3-year low, making progress towards world-class supply chain.
• High-Growth Platforms:
  • AirSeal: Used in ~1.6M procedures in 2025, growth in robotic and laparoscopic surgery, potential in ambulatory surgery centers and traditional laparoscopy.
  • Buffalo Filter: Surgical smoke evacuation market, next-gen PlumeSafe x5 launched, growing adoption with smoke-free OR legislation.
  • BioBrace: Used in over 70 procedures, BioBrace RC delivery system launched, growing evidence and utilization in foot and ankle procedures.
• Balance Sheet: Leverage 2.9 times in Q4, Board suspended dividend, approved $150M share repurchase.

Total sales for the quarter were $373.2 million, representing a year-over-year increase of 7.9% as reported and 7.1% in constant currency. For the full year, sales were $1.375 billion, representing year-over-year growth of 5.2% as reported, and 5.1% in constant currency. Orthopedic sales increased 12.1% in the fourth quarter and 5.5% for the full year on a constant currency basis, contributing to a significant portion of the revenue. General surgery sales increased 3.8% in the fourth quarter and 4.7% for the full year in constant currency.

• Revenue: Full-year reported revenue $1.345B-$1.375B, constant currency organic growth 4.5%-6% with FX tailwind 0-50bps.
• Gross Margin: Guided net improvement of 50-100bps for full-year 2026 despite tariff headwinds.
• SG&A: Expected 38%-38.5% of sales in 2026 due to GI exit and growth investments.
• R&D: Expected 4.5%-5% of sales in 2026.
• Interest Expense: $25M-$27M in 2026.
• Tax Rate: Mid-24% range in 2026.
• EPS: $4.30-$4.45 in 2026.
• Cash Flow: Operating cash flow $145M-$155M, cap ex $20M-$30M, free cash flow ~$125M.
• Q1 2026: Reported revenue $308M-$313M, adjusted EPS $0.80-$0.83.

• Tariff Impact: Adjusted gross margin affected by tariffs in Q4 2025, though full-year margin improved.
• GI Exit Impact: Near-term earnings dilution from exiting gastroenterology product lines.
• Supply Chain Risks: Not yet at world-class supply chain, though progress made.

Q: Talk about rest of 2026 cadence and selling day differences A: No selling day differences, normal seasonality for med tech quarters.

Q: CFO search progress and criteria A: Actively searching, looking for CFO focused on shareholder value, team player, steward of shareholders.

Q: Organic revenue numbers difference from JPMorgan conference A: More precise guidance now with final 2025 numbers, organic growth range 4.5%-6% vs prior wider range.

Q: Ortho vs general surgery performance in 2026 A: Ortho strong due to supply chain improvement, BioBrace strength, global approvals; General surgery impacted by portfolio management and GI exit.

Q: AirSeal growth confidence and market penetration A: Confident in high single-digit to low double-digit growth due to clinical outcomes, laparoscopic robotic and non-robotic opportunities.

Q: GI divestiture and potential future divestitures A: Portfolio management ongoing, but no major divestitures planned currently as focused on growth drivers.

Q: AirSeal OUS growth trends and US laparoscopic penetration A: AirSeal performing in expected range, global growth in laparoscopic robotic and non-robotic, US laparoscopic underpenetrated but growing.

Q: M&A appetite and organic investments A: Continued balanced approach, leveraging down makes M&A more feasible, continued organic R&D investment in growth platforms.