CONMED Corp Q1 FY2026 earnings call

• Pat Beyer started by reviewing first quarter results, mentioned divestment of GI products to concentrate on higher growth areas.
• Highlighted key growth platforms: AirSeal, Buffalo Filter, BioBrace, discussed their market positions and developments.
• Operational progress: Finished 2025 strong, improved supply chain performance in Q1, expanding capacity for orthopedics.
• Capital allocation priorities: Balance organic investment, disciplined acquisitions, returning capital to shareholders

Total sales for the quarter were $317 million, a decrease of 1.3% compared to the prior year quarter. Excluding the impact of gastroenterology exit, total sales increased 3.8% year over year as reported, and 2.1% in constant currency. Orthopedics delivered sales growth of 4.5% on constant currency basis. General surgery sales declined 7.4% in constant currency, but were flat after adjusting for gastroenterology exit. Adjusted net income of $27.1 million decreased 8.5% year over year, and adjusted diluted net earnings per share of 89 cents decreased 6.3% year over year. AirSeal, Buffalo Filter, and BioBrace are key growth platforms. AirSeal has over 10,000 systems globally, laparoscopic opportunity under-penetrated. Buffalo Filter has 20 US states with smoke-free OR laws, PlumeSafe X5 gaining traction. BioBrace is performing well in orthopedics, with clinical validations ongoing

Raised organic growth expectation for 2026 to 5.0%-6.5% from prior 4.5%-6.0%. GI product lines 2026 revenue guidance now $14.5-$17.5 million, down from prior. Expected reported revenue 2026 $1.35B-$1.375B, Q2 revenue $336M-$340M. Intends to refinance debt in Q2, expects adjusted EPS 2026 $4.30-$4.45, Q2 adjusted EPS $1.09-$1.14

Forward-looking statements involve risks and uncertainties. Macro economic factors like inflation could impact costs, but efforts are in place to mitigate. Debt refinancing and its impact on interest expense is a risk area

Q: Debt refinancing strategy and EPS dilution mitigation, A: Discussed refinancing with banks, expecting increased interest expense impact at least 10 cents in 2026, but EPS guidance maintained.

Q: Inflation impact on margins, A: Some commodity price pressure, but working with supply chain to mitigate, no expected impact on guidance.

Q: AirSeal attach rate, A: In 10-20% range for DB5.

Q: State legislation impact on Buffalo Filter, A: Legislation in 13 states pending, Maryland and Massachusetts likely to pass, built into guidance.

Q: AirSeal laparoscopic market penetration, A: Over 3M laparoscopy procedures in US, penetration 6-7%, active programs to increase.

Q: Supply chain progress and lag in recouping business, A: Made progress, relationships strong, expect to regain market share over time.

Q: OEM business impact on Buffalo Filter, A: Direct business growing, OEM business a drag but expected to phase away.

Q: Interest expense impact in 2027, A: Uncertain, will provide guidance at right time