For the fiscal year ended December 31, 2012
|
Commission file number 0-16093
|
New York
|
16-0977505
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
525 French Road, Utica, New York
|
13502
|
(Address of principal executive offices)
|
(Zip Code)
|
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Page
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Part II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV
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Item 15.
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Item 1.
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Business
|
•
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general economic and business conditions;
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•
|
changes in foreign exchange and interest rates;
|
•
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cyclical customer purchasing patterns due to budgetary and other constraints;
|
•
|
changes in customer preferences;
|
•
|
competition;
|
•
|
changes in technology;
|
•
|
the introduction and acceptance of new products;
|
•
|
the ability to evaluate, finance and integrate acquired businesses, products and companies;
|
•
|
changes in business strategy;
|
•
|
the availability and cost of materials;
|
•
|
the possibility that United States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors;
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•
|
future levels of indebtedness and capital spending;
|
•
|
quality of our management and business abilities and the judgment of our personnel;
|
•
|
the availability, terms and deployment of capital;
|
•
|
the risk of litigation, especially patent litigation as well as the cost associated with patent and other litigation;
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•
|
the risk of a lack of allograft tissues due to reduced donations of such tissues or due to tissues not meeting the appropriate high standards for screening and/or processing of such tissues;
|
•
|
changes in regulatory requirements; and
|
•
|
various other factors referenced in this Form 10-K.
|
•
|
Favorable Demographics
. The number of surgical procedures performed is increasing and we believe the long term demographic trend will be continued growth in surgical procedures as a result of the aging of the population, and technological advancements, which result in safer and less invasive (or non-invasive) surgical procedures. Additionally, as people are living longer, more active lives, they are engaging in contact sports and activities such as running, skiing, rollerblading, golf and tennis which result in injuries with greater frequency and at an earlier age than ever before. Sales of surgical products aggregate to approximately 90% of our total net revenues in
2012
. See “Products.”
|
•
|
Continued Pressure to Reduce Health Care Costs
. In response to rising health care costs, managed care companies and other third-party payers have placed pressures on health care providers to reduce costs. As a result, health care providers have focused on the high cost areas such as surgery. To reduce costs, health care providers use minimally invasive techniques, which generally reduce patient trauma, recovery time and ultimately the length of hospitalization. Approximately 50% of our products are designed for use in minimally invasive surgical procedures. See “Products.” Health care providers are also increasingly purchasing single-use, disposable products, which reduce the costs associated with sterilizing surgical instruments and products following surgery. The single-use nature of disposable products lowers the risk of incorrectly sterilized instruments spreading infection into the patient and increasing the cost of post-operative care. Approximately
80%
of our sales are derived from single-use disposable products.
|
•
|
Increased Global Medical Spending
. We believe that foreign markets offer significant growth opportunities for our products. We currently distribute our products through our own sales subsidiaries or through local dealers in over 100 foreign countries.
|
•
|
Brand Recognition.
Our products are marketed under leading brand names, including CONMED
®
, CONMED Linvatec
®
and Hall Surgical
®
. These brand names are recognized by physicians and healthcare professionals for quality and service. It is our belief that brand recognition facilitates increased demand for our products in the marketplace, enables us to build upon the brand’s associated reputation for quality and service, and realize increased market acceptance of new branded products.
|
•
|
Breadth of Product Offering.
The breadth of our product lines in our key product areas enables us to meet a wide range of customer requirements and preferences. This has enhanced our ability to market our products to surgeons, hospitals,
|
•
|
Successful Integration of Acquisitions.
We seek to build growth platforms around our core markets through focused acquisitions of complementary businesses and product lines. These acquisitions have enabled us to diversify our product portfolio, expand our sales and marketing capabilities and strengthen our presence in key geographical markets.
|
•
|
Strategic Marketing and Distribution Channels.
We market our products domestically through five focused sales force groups consisting of approximately
275
employee sales representatives and
260
sales professionals employed by independent sales agent groups. Our dedicated sales professionals are highly knowledgeable in the applications and procedures for the products they sell. Our sales representatives foster close professional relationships with physicians, surgeons, hospitals, outpatient surgery centers and physicians’ offices. Additionally, we maintain a global presence through sales subsidiaries and branches located in key international markets. We directly service hospital customers located in these markets through an employee-based international sales force of approximately
190
sales representatives. We also maintain distributor relationships domestically and in numerous countries worldwide. See “Marketing.”
|
•
|
Operational Improvements and Manufacturing.
We are focused on continuously improving our supply chain effectiveness, strengthening our manufacturing processes and optimizing our plant network to increase operational efficiencies within the organization. Substantially all of our products are manufactured and assembled from components we produce. Our strategy has historically been to vertically integrate our manufacturing facilities in order to develop a competitive advantage. This integration provides us with cost efficient and flexible manufacturing operations which permit us to allocate capital more efficiently. Additionally, we attempt to exploit commercial synergies between operations, such as the procurement of common raw materials and components used in production.
|
•
|
Technological Leadership.
Research and development efforts are closely aligned with our key business objectives, namely developing and improving products and processes, applying innovative technology to the manufacture of products for new global markets and reducing the cost of producing core products. These efforts are evidenced by recent product introductions, such as the Genesys PressFT™
Suture Anchor, Y-Knot™
All-suture Anchor, M-Class Blades, DetachaTip
®
III Endoscopic manual instruments, Hip Preservation System™
from access to repair, the Hall
®
Surgical Lithium Power Battery System and Altrus
®
Thermal Tissue Fusion System.
|
•
|
Introduction of New Products and Product Enhancements.
We continually pursue organic growth through the development of new products and enhancements to existing products. We seek to develop new technologies which improve the durability, performance and usability of existing products. In addition to our internal research and development efforts, we receive new ideas for products and technologies, particularly in procedure-specific areas, from surgeons, inventors and other healthcare professionals.
|
•
|
Pursue Strategic Acquisitions
. We pursue strategic acquisitions, distribution and similar arrangements in existing and new growth markets to achieve increased operating efficiencies, geographic diversification and market penetration. Targeted companies have historically included those with proven technologies and established brand names which provide potential sales, marketing and manufacturing synergies.
|
•
|
Realize Manufacturing and Operating Efficiencies.
We continually review our production systems for opportunities to reduce operating costs, consolidate product lines or identical process flows, reduce inventory requirements and optimize existing processes. Our vertically integrated manufacturing facilities allow for further opportunities to reduce overhead, increase operating efficiencies and capacity utilization.
|
•
|
Geographic Diversification.
We believe that significant growth opportunities exist for our surgical products outside the United States. Principal foreign markets for our products include Europe, Latin America and Asia/Pacific Rim. Critical elements of our future sales growth in these markets include leveraging our existing relationships with
|
•
|
Active Participation In The Medical Community.
We believe that excellent working relationships with physicians and others in the medical industry enable us to gain an understanding of new therapeutic and diagnostic alternatives, trends and emerging opportunities. Active participation allows us to quickly respond to the changing needs of physicians and patients. In addition, we are an active sponsor of medical education both in the United States and internationally, offering new and innovative surgical techniques as well as other medical education materials for use with our products.
|
|
Year Ended December 31,
|
||||||||||
|
2010
|
|
2011
|
|
2012
|
||||||
Arthroscopy
|
40
|
%
|
|
40
|
%
|
|
43
|
%
|
|||
Powered Surgical Instruments
|
20
|
|
|
20
|
|
|
20
|
|
|||
Electrosurgery
|
14
|
|
|
14
|
|
|
12
|
|
|||
Endosurgery
|
9
|
|
|
10
|
|
|
10
|
|
|||
Patient Care
|
10
|
|
|
9
|
|
|
8
|
|
|||
Endoscopic Technologies
|
7
|
|
|
7
|
|
|
7
|
|
|||
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|||
Net Sales (in thousands)
|
$
|
713,723
|
|
|
$
|
725,077
|
|
|
$
|
767,140
|
|
|
||
Arthroscopy
|
||
Product
|
Description
|
Brand Name
|
Sports Medicine Implants
|
Products including bioabsorbable and metal screws, pins and suture anchors for attaching soft tissue to bone in the knee, shoulder, wrist, and hip as well as meniscal repair.
|
BioScrew
®
Bio-Anchor
®
BioTwist
®
UltraFix
®
Revo
®
Super Revo
®
Bionx™
Meniscus Arrow™
SmartNail
®
SmartPin
®
The Wedge™
Bio Stinger
®
Hornet
®
ThRevo
®
Duet™
Impact™
Bio Mini Revo
®
XO Button
®
Paladin
®
Presto
®
SRS™
PopLok
®
CrossFT™
Y-Knot™
|
|
|
|
Knee Reconstructive Systems
|
Products used in cruciate reconstructive surgery; includes instrumentation, screws, pins and ligament harvesting and preparation devices.
|
Pinn-ACL
®
Grafix
®
Matryx
®
Bioscrew
™
EndoPearl
®
XtraLok
®
Sequent™
|
|
|
|
Soft Tissue Repair Systems
|
Instrument systems designed to attach specific torn or damaged soft tissue to bone or other soft tissue in the knee, shoulder and wrist; includes instrumentation, guides, hooks and suture devices.
|
Spectrum
®
Inteq
®
Shuttle Relay™
Blitz
®
Hi-Fi
®
Suture Saver™
Spectrum
®
MVP
Super Shuttle
®
|
|
|
|
Ablators and Shaver Ablators
|
Electrosurgical ablators and resection ablators to resect and remove soft tissue and bone; used in knee, shoulder and small joint surgery.
|
Lightwave
®
Trident
®
|
|
|
|
Fluid Management Systems
|
Disposable tubing sets, disposable and reusable inflow devices, pumps and suction/waste management systems for use in arthroscopic and general surgeries.
|
Apex
®
Quick-Flow
®
Quick-Connect
®
87K™
10K
®
24K
®
|
|
|
|
Arthroscopy
|
||
Product
|
Description
|
Brand Name
|
|
|
|
Video
|
Surgical video systems for endoscopic procedures; includes high definition (HD) and 3DHD, autoclavable three-chip camera heads as well as camera consoles, endoscopes, light sources, monitors, image capture devices and printers.
|
Quicklatch
™
scopes
Shock Flex™ prism mount
TrueHD™ IM4000 HD camera system
Viking
®
3DHD
|
|
|
|
Arthroscopic Shaver Systems
|
Electrically powered shaver handpieces that accommodate a large variety of shaver blade disposables specific to clinical specialty and technological precision.
|
Advantage
®
Turbo™
Gator
®
Great White
®
Mako™
Merlin
®
Sterling
®
Ultracut
®
Zen
®
ReAct
®
Ergo™
|
|
|
|
Promotion rights to allograft tissue for sports medicine
|
We have exclusive promotional rights to Musculoskeletal Transplant Foundation's ("MTF") allograft tissue for sports medicine
|
Musculoskeletal Transplant Foundation
|
|
|
|
Platelet-Rich Plasma Therapy Products
|
Platelet-rich therapies which include platelet rich plasma, membrane and matrix applications.
|
Cascade
®
Autologous Platelet System
|
|
|
|
Other Instruments and Accessories
|
Forceps, graspers, punches, probes, sterilization cases and other general instruments for arthroscopic procedures.
|
Shutt
®
Concept
®
TractionTower
®
Clearflex™
SE™
Dry-Doc
®
Cannulae
Hip Preservation System™
|
Powered Surgical Instruments
|
||
Product
|
Description
|
Brand Name
|
Large Bone
|
Powered saws, drills and related disposable accessories for use primarily in total knee and hip joint replacements and trauma surgical procedures.
|
Hall
®
Surgical
PowerPro
®
PowerProMax™
MPower
®
|
|
|
|
Small Bone
|
Powered saws, drills and related disposable accessories for hand, foot, and other small bone related surgical procedures.
|
Hall
®
Surgical
MicroPower
®
Micro 100™
Surgairtome Two
®
MPower
®
|
|
|
|
Otolaryngology Neurosurgery
Spine
Oral/maxillofacial
|
Specialty powered saws, drills and related disposable accessories for use in neurosurgery, spine, otolaryngologic and oral/maxillofacial procedures.
|
Hall
®
Surgical
E9000
®
UltraPower
®
Hall
®
Osteon
Hall
®
Ototome
Coolflex
®
Surgairtome Two
®
SmartGuard
®
|
|
|
|
Cardiothoracic
|
Powered sternum saws and related disposable accessories for use by cardiothoracic surgeons.
|
Hall
®
Surgical
MicroPower
®
Micro 100™
PowerPro
®
PowerProMax™
MPower
®
|
Electrosurgery
|
||
Product
|
Description
|
Brand Name
|
Pencils
|
Disposable and reusable surgical instruments designed to deliver high-frequency electrical energy to cut and/or coagulate tissue.
|
Hand-Trol
®
GoldLine™
GoldVac
®
|
|
|
|
Ground Pads
|
Disposable ground pads which disperse electrosurgical energy and safely return it to the generator; available in adult, pediatric and infant sizes.
|
MacroLyte
®
ThermoGard
®
SureFit™
|
|
|
|
Active Electrodes
|
Surgical accessory electrodes that are inserted into electrosurgical pencils. These electrodes are available with and without the proprietary UltraClean™ coating which provides an easy to clean electrode surface during surgery.
|
UltraClean
®
|
|
|
|
Generators
|
Monopolar and bipolar clinical energy sources for surgical procedures performed in a hospital, physician's office or clinical setting.
|
System 5000™
System 2450™
Hyfrecator
®
Sabre Genesis
®
|
|
|
|
Argon Beam
Coagulation Systems
|
Specialized electrosurgical generators, disposable hand pieces and ground pads for Argon Enhanced non-contact coagulation of tissues.
|
ABC
®
System 7550
™
ABC
®
Flex
Bend-A-Beam
®
ABC
®
Dissecting Electrodes™
|
|
|
|
Smoke Evacuation System
|
Dedicated unit and integrated hand pieces designed for the removal of surgical smoke in both open and laparoscopic procedures where electrosurgery is utilized.
|
GoldVac
®
ClearVac
®
AER DEFENSE
®
|
|
|
|
Vessel Sealing System
|
A direct thermal based multi-functional surgical tool that seals, cuts, grasps and dissects vessels and tissue bundles.
|
Altrus
®
|
Endosurgery
|
||
Product
|
Description
|
Brand Name
|
Trocars
|
Disposable and reposable devices used to puncture the abdominal wall providing access to the abdominal cavity for camera systems and instruments.
|
OnePort
®
TroGard Finesse
®
Reflex
®
Detach a Port
™
CORE Entree
®
|
|
|
|
Multi-functional Electrosurgery and Suction/Irrigation Instruments
|
Instruments for cutting and coagulating tissue by delivering high-frequency current. Instruments which deliver irrigating fluid to the tissue and remove blood and fluids from the internal operating field.
|
Universal™
Universal Plus™
FloVac
®
|
|
|
|
Clip Appliers
|
Disposable and reposable devices for ligating blood vessels and ducts by placing a titanium clip on the vessel.
|
Reflex
®
PermaClip™
|
|
|
|
Laparoscopic Instruments
|
Scissors, graspers
|
DetachaTip
®
|
|
|
|
Skin Staplers
|
Disposable devices which place surgical staples for closing a surgical incision.
|
Reflex
®
|
|
|
|
Uterine Manipulators
|
Specialized elevator, retractor, manipulator for laparoscopic hysterectomy and other laparoscopic gynecological procedures.
|
VCARE
®
|
Endoscopic Technologies
|
||
Product
|
Description
|
Brand Name
|
Pulmonary
|
Transbronchial Cytology and Histology Aspiration Needles, Disposable Biopsy Forceps, Cytology Brushes and Bronchoscope Cleaning Brushes
|
Wang
®
Blue Bullet
®
Precisor
®
Precisor BRONCHO
®
Precisor
®
EXL™
GARG™
|
|
|
|
Biopsy
|
Disposable biopsy forceps, Percutaneous Liver Biopsy instrument, Disposable Cytology Brushes
|
Precisor
®
OptiBite
®
Monopty
®
(C.R. Bard, Inc.)
|
|
|
|
Polypectomy
|
Disposable Polypectomy Snares, Retrieval Nets, Polyp Traps
|
Singular
®
Optimizer
®
Spider-Net
®
Orbit-Snare
®
|
|
|
|
Biliary
|
Triple Lumen Stone Removal Balloons, Advanced Cannulation Triple Lumen Papillotomes, High Performance Biliary Guidewires, Cannulas, Biliary Balloon Dilators, Plastic and Self Expanding Metal Endoscopic Biliary Stents (SEMS)
|
Apollo
®
Apollo 3
®
Apollo 3AC
®
FXWire
®
XWire
®
Director
®
Duraglide™
Duraglide 3™
Flexxus
®
ProForma
®
HYDRODUCT
®
Viabil
®
(W. L. Gore & Associates, Inc.)
|
|
|
|
Dilation
|
Multi-Stage Balloon Dilators, American Dilation System
|
Eliminator
®
|
|
|
|
Hemostasis
|
Endoscopic Injection Needles, Endoscopic and Multi-Band Ligators, Sclerotherapy Needle, Bipolar Hemostasis Probes
|
SureShot
®
Stiegmann-Goff™
Bandito™
Flexitip™
BICAP
®
BICAP SUPERCONDUCTOR
®
Click-Tip™
Beamer
®
Beamer
®
Mate
Beamer
®
Plus
|
|
|
|
Endoscopic Ultrasound
|
Fine Needle Aspiration
|
Vizeon
®
Clearview™
|
|
|
|
Enteral Feeding
|
Initial Percutaneous Endoscopic Gastrostomy (PEG) systems, Replacement Tri-Funnel G-Tube
|
EnTake™
|
|
|
|
Accessories
|
Disposable Bite Blocks, Cleaning Brushes, Biopsy Caps, Biopsy Valves
|
Scope Saver
®
Channel Master™
Blue Bullet
®
Whistle
®
ClearGuard™
|
•
|
40
employee sales representatives and
260
sales representatives working for independent sales agent groups selling arthroscopy and powered surgical instrument products;
|
•
|
40
employee sales representatives promoting Musculoskeletal Transplant Foundation's ("MTF") allograft tissue for sports medicine;
|
•
|
60
employee sales representatives selling electrosurgery products;
|
•
|
45
employee sales representatives selling endosurgery products;
|
•
|
50
employee sales representatives selling patient care products;
|
•
|
40
employee sales representatives selling endoscopic technologies products.
|
Business Area
|
Competitor
|
Arthroscopy
|
Smith & Nephew, plc
Arthrex, Inc.
Stryker Corporation
ArthroCare Corporation
Johnson & Johnson: DePuy Mitek, Inc.
Biomet, Inc.
|
|
|
Powered Surgical Instruments
|
Stryker Corporation
Medtronic, Inc. Midas Rex and Xomed divisions
Synvasive Technology, Inc.
Synthes, Inc.
MicroAire Surgical Instruments, LLC
Zimmer Holdings, Inc.
|
|
|
Electrosurgery
|
Covidien Ltd.; Valleylab
Medline Industries, Inc.
ERBE Elektromedizin GmbH
Megadyne
|
|
|
Patient Care
|
Covidien Ltd.: Kendall
3M Company
|
|
|
Endosurgery
|
Johnson & Johnson: Ethicon Endo-Surgery, Inc.
Covidien Ltd.; U.S.Surgical
Applied Medical Resources Corporation
|
|
|
Endoscopic Technologies
|
Boston Scientific Corporation – Endoscopy
Wilson-Cook Medical, Inc.
Olympus America, Inc.
STERIS Corporation - U.S. Endoscopy
|
•
|
imposition of limitations on conversions of foreign currencies into dollars or remittance of dividends and other payments by international subsidiaries;
|
•
|
imposition or increase of withholding and other taxes on remittances and other payments by international subsidiaries;
|
•
|
trade barriers;
|
•
|
political risks, including political instability;
|
•
|
reliance on third parties to distribute our products;
|
•
|
hyperinflation in certain foreign countries; and
|
•
|
imposition or increase of investment and other restrictions by foreign governments.
|
•
|
fines or other enforcement actions;
|
•
|
recall or seizure of products;
|
•
|
total or partial suspension of production;
|
•
|
loss of certification;
|
•
|
withdrawal of existing product approvals or clearances;
|
•
|
refusal to approve or clear new applications or notices;
|
•
|
increased quality control costs; or
|
•
|
criminal prosecution.
|
•
|
capital constraints;
|
•
|
research and development delays;
|
•
|
delays in securing regulatory approvals; or
|
•
|
changes in the competitive landscape, including the emergence of alternative products or solutions which reduce or eliminate the markets for pending products.
|
•
|
our ability to develop and introduce new products and product enhancements in the time frames we currently estimate;
|
•
|
our ability to successfully implement new technologies;
|
•
|
the market’s readiness to accept new products;
|
•
|
having adequate financial and technological resources for future product development and promotion;
|
•
|
the efficacy of our products; and
|
•
|
the prices of our products compared to the prices of our competitors’ products.
|
•
|
a portion of our cash flow from operations must be dedicated to debt service and will not be available for operations, capital expenditures, acquisitions, dividends and other purposes;
|
•
|
our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or general corporate purposes may be limited or impaired, or may be at higher interest rates;
|
•
|
we may be at a competitive disadvantage when compared to competitors that are less leveraged;
|
•
|
we may be hindered in our ability to adjust rapidly to market conditions;
|
•
|
our degree of leverage could make us more vulnerable in the event of a downturn in general economic conditions or other adverse circumstances applicable to us; and
|
•
|
our interest expense could increase if interest rates in general increase because a portion of our borrowings, including our borrowings under our credit agreement, are and will continue to be at variable rates of interest.
|
•
|
pending patent applications will result in issued patents;
|
•
|
patents issued to or licensed by us will not be challenged by competitors;
|
•
|
our patents will be found to be valid or sufficiently broad to protect our technology or provide us with a competitive advantage; or
|
•
|
we will be successful in defending against pending or future patent infringement claims asserted against our products.
|
Location
|
|
Square Feet
|
|
Own or Lease
|
|
Lease Expiration
|
|
|
|
|
|
|
|
|
|
Utica, NY
|
|
500,000
|
|
|
Own
|
|
—
|
Largo, FL
|
|
278,000
|
|
|
Own
|
|
—
|
Centennial, CO
|
|
87,500
|
|
|
Own
|
|
—
|
Tampere, Finland
|
|
5,662
|
|
|
Own
|
|
—
|
Chihuahua, Mexico
|
|
207,720
|
|
|
Lease
|
|
September 2019
|
Lithia Springs, GA
|
|
188,400
|
|
|
Lease
|
|
December 2019
|
Brussels, Belgium
|
|
45,531
|
|
|
Lease
|
|
June 2015
|
Mississauga, Canada
|
|
22,378
|
|
|
Lease
|
|
December 2013
|
Westborough, MA
|
|
18,210
|
|
|
Lease
|
|
September 2015
|
Frenchs Forest, Australia
|
|
16,909
|
|
|
Lease
|
|
July 2015
|
Tampere, Finland
|
|
15,855
|
|
|
Lease
|
|
Open Ended
|
Seoul, Korea
|
|
15,554
|
|
|
Lease
|
|
January 2014
|
Anaheim, CA
|
|
14,037
|
|
|
Lease
|
|
September 2015
|
Frankfurt, Germany
|
|
13,606
|
|
|
Lease
|
|
March 2023
|
Milan, Italy
|
|
13,024
|
|
|
Lease
|
|
March 2017
|
Swindon, Wiltshire, UK
|
|
8,562
|
|
|
Lease
|
|
December 2015
|
Askim, Sweden
|
|
8,353
|
|
|
Lease
|
|
May 2016
|
Rungis Cedex, France
|
|
7,406
|
|
|
Lease
|
|
December 2016
|
Montreal, Canada
|
|
7,232
|
|
|
Lease
|
|
March 2016
|
Copenhagen, Denmark
|
|
5,899
|
|
|
Lease
|
|
April 2014
|
Shepshed, Leicestershire, UK
|
|
5,770
|
|
|
Lease
|
|
October 2015
|
Barcelona, Spain
|
|
5,382
|
|
|
Lease
|
|
December 2013
|
New York, NY
|
|
3,473
|
|
|
Lease
|
|
September 2022
|
Beijing, China
|
|
3,456
|
|
|
Lease
|
|
June 2014
|
Warsaw, Poland
|
|
3,222
|
|
|
Lease
|
|
February 2018
|
Espoo, Finland
|
|
3,078
|
|
|
Lease
|
|
Open Ended
|
San Mateo, CA
|
|
3,068
|
|
|
Lease
|
|
December 2013
|
Shanghai, China
|
|
2,269
|
|
|
Lease
|
|
February 2015
|
Edison, NJ
|
|
2,000
|
|
|
Lease
|
|
December 2014
|
Innsbruck, Austria
|
|
1,820
|
|
|
Lease
|
|
June 2020
|
|
2011
|
||||||
Period
|
High
|
|
Low
|
||||
First Quarter
|
$
|
27.47
|
|
|
$
|
25.33
|
|
Second Quarter
|
29.00
|
|
|
25.99
|
|
||
Third Quarter
|
29.38
|
|
|
20.81
|
|
||
Fourth Quarter
|
27.83
|
|
|
24.19
|
|
|
2012
|
||||||
Period
|
High
|
|
Low
|
||||
First Quarter
|
$
|
30.47
|
|
|
$
|
26.00
|
|
Second Quarter
|
30.42
|
|
|
26.03
|
|
||
Third Quarter
|
29.25
|
|
|
25.85
|
|
||
Fourth Quarter
|
29.33
|
|
|
25.71
|
|
Period
|
|
(a) Total Number of Shares Purchased
|
|
(b) Average Price Paid per Share
1
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Program
2
|
|
(d) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
|
||||||
|
|
|
|
|
|
|
|
|
||||||
October 1, 2012 to
|
|
|
|
|
|
|
|
|
||||||
October 31, 2012
|
|
30,297
|
|
|
$
|
27.22
|
|
|
30,297
|
|
|
$
|
107,956,000
|
|
|
|
|
|
|
|
|
|
|
||||||
November 1, 2012 to
|
|
|
|
|
|
|
|
|
||||||
November 30, 2012
|
|
114,104
|
|
|
$
|
27.15
|
|
|
114,104
|
|
|
104,858,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
December 1, 2012 to
|
|
|
|
|
|
|
|
|
||||||
December 31, 2012
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
104,858,000
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
|
144,401
|
|
|
|
|
144,401
|
|
|
|
Equity Compensation Plan Information
|
|||||||
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(a)
|
Weighted-average exercise price of outstanding options, warrants and rights
(b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
2,289,951
|
|
|
$25.35
|
|
1,424,766
|
|
Equity compensation plans not approved by security holders
|
—
|
|
—
|
|
—
|
|
|
Total
|
2,289,951
|
|
|
$25.35
|
|
1,424,766
|
|
|
|
Years Ended December 31,
|
||||||||||||||||||
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
||||||||||
|
|
(in thousands, except per share data)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statements of Operations Data (2):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
742,183
|
|
|
$
|
694,739
|
|
|
$
|
713,723
|
|
|
$
|
725,077
|
|
|
$
|
767,140
|
|
Cost of sales (3)
|
|
359,802
|
|
|
357,407
|
|
|
348,339
|
|
|
350,143
|
|
|
361,297
|
|
|||||
Gross profit
|
|
382,381
|
|
|
337,332
|
|
|
365,384
|
|
|
374,934
|
|
|
405,843
|
|
|||||
Selling and administrative
|
|
272,437
|
|
|
266,310
|
|
|
276,463
|
|
|
276,615
|
|
|
302,469
|
|
|||||
Research and development
|
|
33,108
|
|
|
31,837
|
|
|
29,652
|
|
|
28,651
|
|
|
28,214
|
|
|||||
Impairment of goodwill (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
60,302
|
|
|
—
|
|
|||||
Other expense (5)
|
|
1,577
|
|
|
10,916
|
|
|
2,176
|
|
|
1,092
|
|
|
9,950
|
|
|||||
Income from operations
|
|
75,259
|
|
|
28,269
|
|
|
57,093
|
|
|
8,274
|
|
|
65,210
|
|
|||||
Gain (loss) on early extinguishment of debt (6)
|
|
1,947
|
|
|
1,083
|
|
|
(79
|
)
|
|
—
|
|
|
—
|
|
|||||
Amortization of debt discount
|
|
4,823
|
|
|
4,111
|
|
|
4,244
|
|
|
3,903
|
|
|
—
|
|
|||||
Interest expense
|
|
10,372
|
|
|
7,086
|
|
|
7,113
|
|
|
6,676
|
|
|
5,730
|
|
|||||
Income (loss) before income taxes
|
|
62,011
|
|
|
18,155
|
|
|
45,657
|
|
|
(2,305
|
)
|
|
59,480
|
|
|||||
Provision (benefit) for income taxes
|
|
22,022
|
|
|
6,018
|
|
|
15,311
|
|
|
(3,057
|
)
|
|
18,999
|
|
|||||
Net income
|
|
$
|
39,989
|
|
|
$
|
12,137
|
|
|
$
|
30,346
|
|
|
$
|
752
|
|
|
$
|
40,481
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Per Share Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
1.39
|
|
|
$
|
.42
|
|
|
$
|
1.06
|
|
|
$
|
.03
|
|
|
$
|
1.43
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
|
|
$
|
1.37
|
|
|
$
|
.42
|
|
|
$
|
1.05
|
|
|
$
|
.03
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Dividends per share of common stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
.60
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted Average Number of Common Shares In Calculating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
28,796
|
|
|
29,074
|
|
|
28,715
|
|
|
28,246
|
|
|
28,301
|
|
|||||
Diluted earnings per share
|
|
29,227
|
|
|
29,142
|
|
|
28,911
|
|
|
28,633
|
|
|
28,653
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
$
|
37,159
|
|
|
$
|
41,283
|
|
|
$
|
41,807
|
|
|
$
|
42,687
|
|
|
$
|
46,616
|
|
Capital expenditures
|
|
35,879
|
|
|
21,444
|
|
|
14,732
|
|
|
17,552
|
|
|
21,532
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
11,811
|
|
|
$
|
10,098
|
|
|
$
|
12,417
|
|
|
$
|
26,048
|
|
|
$
|
23,720
|
|
Total assets
|
|
931,661
|
|
|
958,413
|
|
|
985,773
|
|
|
935,594
|
|
|
1,084,462
|
|
|||||
Long-term obligations
|
|
316,532
|
|
|
302,791
|
|
|
219,344
|
|
|
231,339
|
|
|
354,956
|
|
|||||
Total shareholders’ equity
|
|
540,215
|
|
|
576,515
|
|
|
586,563
|
|
|
573,071
|
|
|
606,998
|
|
(1)
|
In May 2008, the FASB issued guidance which specifies that issuers of convertible debt instruments that permit or require the issuer to pay cash upon conversion should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. The Company is required to apply the guidance retrospectively to all past periods presented. We adopted this guidance on January 1, 2009 related to our 2.50% convertible senior subordinated notes due 2024 (“the Notes”).
|
(2)
|
Results of operations of acquired businesses have been recorded in the financial statements since the date of acquisition.
|
(3)
|
Includes acquisition and acquisition-transition related charges of $1.0 million in 2008. Also in
2009
,
2010
,
2011
and
2012
, charges related to the restructuring of certain of our operations of $11.9 million,
$2.4 million
,
$3.5 million
and
$7.1 million
, respectively; in
2010
charges of
$2.5 million
related to the termination of a product offering in our CONMED Linvatec operating segment. See additional discussion in Note 15 to the Consolidated Financial Statements.
|
(4)
|
During
2011
, we recorded a
$60.3 million
charge for the impairment of goodwill related to the Patient Care business unit. Refer to Note 4 to the Consolidated Financial Statements for further details.
|
(5)
|
Other expense includes the following:
|
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
New plant/facility consolidation
|
|
$
|
1,577
|
|
|
$
|
2,726
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net pension gain
|
|
—
|
|
|
(1,882
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Product recall
|
|
—
|
|
|
5,992
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Administrative consolidation costs
|
|
—
|
|
|
4,080
|
|
|
2,176
|
|
|
792
|
|
|
6,497
|
|
|||||
Costs associated with purchase of a distributor
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|
704
|
|
|||||
Costs associated with legal arbitration
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,555
|
|
|||||
Costs associated with purchase of a business
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,194
|
|
|||||
Other expense
|
|
$
|
1,577
|
|
|
$
|
10,916
|
|
|
$
|
2,176
|
|
|
$
|
1,092
|
|
|
$
|
9,950
|
|
(6)
|
Includes in
2010
, a charge of
$0.1 million
related to a loss on early extinguishment of debt. Includes in
2008
and
2009
, gains of
$1.9 million
and
$1.1 million
, respectively, on early extinguishment of debt. See additional discussion in Note 5 to the Consolidated Financial Statements.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
2010
|
|
2011
|
|
2012
|
|||
Arthroscopy
|
40
|
%
|
|
40
|
%
|
|
43
|
%
|
Powered Surgical Instruments
|
20
|
|
|
20
|
|
|
20
|
|
Electrosurgery
|
14
|
|
|
14
|
|
|
12
|
|
Endosurgery
|
9
|
|
|
10
|
|
|
10
|
|
Patient Care
|
10
|
|
|
9
|
|
|
8
|
|
Endoscopic Technologies
|
7
|
|
|
7
|
|
|
7
|
|
Consolidated Net Sales
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
Sales to customers are evidenced by firm purchase orders. Title and the risks and rewards of ownership are transferred to the customer when product is shipped under our stated shipping terms. Payment by the customer is due under fixed payment terms.
|
•
|
We place certain of our capital equipment with customers on a loaned basis in return for commitments to purchase related single-use products over time periods generally ranging from one to three years. In these circumstances, no revenue is recognized upon capital equipment shipment as the equipment is loaned and subject to return if certain minimum single-use purchases are not met. Revenue is recognized upon the sale and shipment of the related single-use products. The cost of the equipment is amortized over its estimated useful life.
|
•
|
Service revenues earned by the Company related to the sale of sports medicine allograft tissue are recorded in accordance with the contractual terms of our agreement with Musculoskeletal Transplant Foundation ("MTF"). These revenues are recorded net of amortization of the acquired assets.
|
•
|
Product returns are only accepted at the discretion of the Company and in accordance with our “Returned Goods Policy”. Historically the level of product returns has not been significant. We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.
|
•
|
Our terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are provided for capital equipment sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.
|
•
|
Amounts billed to customers related to shipping and handling have been included in net sales. Shipping and handling costs included in selling and administrative expense were
$12.1 million
,
$13.0 million
and
$12.8 million
for
2010
,
2011
and
2012
, respectively.
|
•
|
We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk.
|
•
|
We assess the risk of loss on accounts receivable and adjust the allowance for doubtful accounts based on this risk assessment. Historically, losses on accounts receivable have not been material. Management believes that the allowance for doubtful accounts of
$1.2 million
at
December 31, 2012
is adequate to provide for probable losses resulting from accounts receivable.
|
|
Year Ended December 31,
|
|||||||
|
2010
|
|
2011
|
|
2012
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
48.8
|
|
|
48.3
|
|
|
47.1
|
|
Gross margin
|
51.2
|
|
|
51.7
|
|
|
52.9
|
|
Selling and administrative expense
|
38.7
|
|
|
38.1
|
|
|
39.4
|
|
Research and development expense
|
4.2
|
|
|
4.0
|
|
|
3.7
|
|
Impairment of goodwill
|
—
|
|
|
8.3
|
|
|
—
|
|
Other expense
|
0.3
|
|
|
0.2
|
|
|
1.3
|
|
Income from operations
|
8.0
|
|
|
1.1
|
|
|
8.5
|
|
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of debt discount
|
0.6
|
|
|
0.5
|
|
|
—
|
|
Interest expense
|
1.0
|
|
|
0.9
|
|
|
0.7
|
|
Income (loss) before income taxes
|
6.4
|
|
|
(0.3
|
)
|
|
7.8
|
|
Provision (benefit) for income taxes
|
2.1
|
|
|
(0.4
|
)
|
|
2.5
|
|
Net income
|
4.3
|
%
|
|
0.1
|
%
|
|
5.3
|
%
|
|
2010
|
|
2011
|
|
2012
|
||||||
Net sales
|
$
|
596,923
|
|
|
$
|
610,075
|
|
|
$
|
650,273
|
|
Income from operations
|
77,271
|
|
|
89,093
|
|
|
81,848
|
|
|||
Operating margin
|
12.9
|
%
|
|
14.6
|
%
|
|
12.6
|
%
|
•
|
Arthroscopy sales increased $
40.6 million
(
14.0%
) in
2012
to $
330.5 million
from $
289.9 million
in
2011
mainly due to the distribution agreement with MTF and increased sales of procedure specific products. In local currency, excluding the effects of the hedging program, sales increased
14.0%
. Sales of capital equipment increased
$0.1 million
(
0.2%
) to
$63.1 million
in
2012
from
$63.0 million
in
2011
; sales of single-use products increased
$40.5 million
(
17.8%
) to
$267.4 million
in
2012
from
$226.9 million
in
2011
. In local currency, excluding the effects of the hedging program, sales of capital equipment increased
0.8%
and single-use products increased
17.7%
. Arthroscopy sales increased
$1.5 million
(
0.5%
) in
2011
to
$289.9 million
from
$288.4 million
in
2010
due to higher procedure specific product sales offset by lower sales of our video imaging products for arthroscopy and general surgery. In local currency, excluding the effects of the hedging program, sales decreased
0.7%
. Sales of capital equipment decreased
$12.2 million
(
-16.2%
) to
$63.0 million
in
2011
from
$75.2 million
in
2010
; sales of single-use products increased
$13.7 million
(
6.4%
) to
$226.9 million
in
2011
from
$213.2 million
in
2010
. In local currency, excluding the effects of the hedging program, sales of capital equipment decreased
17.0%
while single-use products increased
5.1%
.
|
•
|
Powered surgical instrument sales increased
$2.1 million
(
1.4%
) in
2012
to
$150.0 million
from
$147.9 million
in
2011
mainly driven by increases in our large bone burs and blades and small bone handpiece products. In local currency, excluding the effects of the hedging program, sales increased
1.3%
. Sales of capital equipment decreased
$1.8 million
(
-2.6%
) to
$67.6 million
in
2012
from
$69.4 million
in
2011
; sales of single-use products increased
$3.9 million
(
5.0%
) in
2012
to
$82.4 million
compared to
$78.5 million
in
2011
. In local currency, excluding the effects of the hedging program, sales of capital equipment decreased
2.7%
while single-use products increased
4.9%
. Powered surgical instrument sales increased
$5.6 million
(
3.9%
) in
2011
to
$147.9 million
from
$142.3 million
in
2010
mainly driven by increases in our large bone handpiece products. In local currency, excluding the effects of the hedging program sales increased
2.6%
. Sales of capital equipment increased
$5.0 million
(
7.8%
) to
$69.4 million
in
2011
from
$64.4 million
in
2010
; sales of single-use products increased
$0.6 million
(
0.8%
) in
2011
to
$78.5 million
compared to
$77.9 million
in
2010
. In local currency, excluding the effects of the hedging program, sales of capital equipment increased
6.9%
while single-use products decreased
0.9%
.
|
•
|
Electrosurgery sales decreased
$2.9 million
(
-2.9%
) in
2012
to
$95.7 million
from
$98.6 million
in
2011
mainly due to lower generator sales offset by sales of our new vessel sealing products and increased sales of our smoke management products. In local currency, excluding the effects of the hedging program sales decreased
3.0%
. Sales of capital equipment decreased
$4.6 million
(
-16.7%
) to
$22.9 million
in
2012
from
$27.5 million
in
2011
; sales of single-use products increased
$1.7 million
(
2.4%
) to
$72.8 million
in
2012
from
$71.1 million
in
2011
. In local currency, excluding the effects of the hedging program, sales of capital equipment decreased
17.0%
while single-use products increased
2.4%
. Electrosurgery sales increased
$1.4 million
(
1.4%
) in
2011
to
$98.6 million
from
$97.2 million
in
2010
mainly due to higher generator sales and our new smoke evacuation accessories. In local currency, excluding the effects of the hedging program sales increased
1.0%
. Sales of capital equipment increased
$1.9 million
(
7.4%
) to
$27.5 million
in
2011
from
$25.6 million
in
2010
; sales of single-use products decreased
$0.5 million
(
-0.7%
) to
$71.1 million
in
2011
from
$71.6 million
in
2010
. In local currency, excluding the effects of the hedging program, sales of capital equipment increased
7.5%
while single-use products decreased
1.3%
.
|
•
|
Endosurgery sales remained relatively flat with a
$0.3 million
(
0.4%
) increase in
2012
to
$74.0 million
from
$73.7 million
in
2011
. In local currency, excluding the effects of the hedging program sales increased
0.1%
. Endosurgery sales increased
$4.7 million
(
6.8%
) in
2011
to
$73.7 million
from
$69.0 million
in
2010
mainly due to increased unit volumes of single-use products. In local currency, excluding the effects of the hedging program, sales increased
6.4%
.
|
•
|
Operating margins as a percentage of net sales decreased
2.0
percentage points to
12.6%
in
2012
compared to
14.6%
in
2011
. The decrease in operating margins is principally a result of administrative consolidation expenses in our CONMED Linvatec operating segment, costs associated with the acquisition of our former distributor for the Nordic region of Europe, costs associated with a contractual dispute with a former distributor, higher selling expenses and costs associated with the purchase of Viking Systems, Inc. (3.0 percentage points). These increases are offset by higher gross margins mainly due to the distribution agreement with MTF (1.0 percentage points).
|
•
|
Operating margins as a percentage of net sales increased 1.7 percentage points to
14.6%
in
2011
compared to
12.9%
in
2010
. The increase in operating margins is primarily due to higher gross margins (1.0 percentage points) mainly driven by favorable foreign currency exchange rates on sales and product mix resulting from lower capital sales in our Arthroscopy product line and higher sales in our Endosurgery operating unit, lower research and development spending on our
|
|
2010
|
|
2011
|
|
2012
|
||||||
Net sales
|
$
|
68,283
|
|
|
$
|
65,651
|
|
|
$
|
63,697
|
|
Income (loss) from operations
|
(38
|
)
|
|
(62,878
|
)
|
|
(2,210
|
)
|
|||
Operating margin
|
(0.1
|
)%
|
|
(95.8
|
)%
|
|
(3.5
|
)%
|
•
|
Patient Care sales decreased
$2.0 million
(
-3.0%
) in
2012
to
$63.7 million
compared to
$65.7 million
in
2011
principally due to decreased sales of ECG electrodes. In local currency, excluding the effects of the hedging program, sales decreased
3.0%
. Patient Care sales decreased
$2.6 million
(
-3.8%
) in
2011
to
$65.7 million
compared to
$68.3 million
in
2010
principally due to decreased sales of ECG electrodes and IV devices. In local currency, excluding the effects of the hedging program, sales decreased
4.1%
.
|
•
|
Operating margins as a percentage of net sales increased
92.3
percentage points to
-3.5%
in
2012
compared to
-95.8%
in
2011
. The increase in operating margins is primarily driven by the prior year including a
$60.3 million
charge for the impairment of goodwill (91.9 percentage points) and $0.6 million in administrative restructuring charges (0.9 percentage points), and lower research and development spending (1.4 percentage points) offset by decreases in gross margins mainly due to lower sales volumes (1.1 percentage points) and higher selling expenses (0.8 percentage points).
|
•
|
Operating margins as a percentage of net sales decreased 95.7 percentage points to
-95.8%
in
2011
compared to
-0.1%
in
2010
. The decrease in operating margins is primarily driven by the
$60.3 million
charge for the impairment of goodwill (91.9 percentage points), $0.6 million in administrative restructuring charges (0.9 percentage points) and decreases in gross margins mainly due to lower sales volumes (6.3 percentage points) offset by lower selling and administrative expenses (2.9 percentage points) and lower research and development spending (0.5 percentage points).
|
|
2010
|
|
2011
|
|
2012
|
||||||
Net sales
|
$
|
48,517
|
|
|
$
|
49,351
|
|
|
$
|
53,170
|
|
Income (loss) from operations
|
(1,315
|
)
|
|
273
|
|
|
2,738
|
|
|||
Operating margin
|
(2.7
|
)%
|
|
0.6
|
%
|
|
5.1
|
%
|
•
|
Endoscopic Technologies sales increased
$3.9 million
(
7.9%
) in
2012
to
$53.2 million
from
$49.3 million
in
2011
due to higher sales across most product lines. In local currency, excluding the effects
|
•
|
Operating margins as a percentage of net sales increased
4.5
percentage points to
5.1%
in
2012
from
0.6%
in
2011
. The increase in operating margins of
4.5
percentage points in
2012
is primarily due to higher gross margins (1.1 percentage points), the prior year including $0.2 million in administrative restructuring charges (0.4 percentage points) and lower overall selling and administrative expenses as a percentage of sales during 2012 (3.0 percentage points).
|
•
|
Operating margins as a percentage of net sales increased 3.3 percentage points to
0.6%
in
2011
from (
-2.7%
) in
2010
. The increase in operating margins of 3.3 percentage points in
2011
is primarily due to overall lower selling and administrative
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3
Years
|
|
3-5
Years
|
|
More than
5 Years
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt
|
$
|
161,852
|
|
|
$
|
1,050
|
|
|
$
|
2,601
|
|
|
$
|
2,791
|
|
|
$
|
155,410
|
|
Contingent consideration
|
84,000
|
|
|
34,000
|
|
|
33,333
|
|
|
16,667
|
|
|
—
|
|
|||||
Purchase obligations
|
40,058
|
|
|
39,720
|
|
|
338
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
32,749
|
|
|
7,128
|
|
|
10,788
|
|
|
6,806
|
|
|
8,027
|
|
|||||
Total contractual obligations
|
$
|
318,659
|
|
|
$
|
81,898
|
|
|
$
|
47,060
|
|
|
$
|
26,264
|
|
|
$
|
163,437
|
|
Index to Financial Statements
|
|
|
|
|
|
(a)(1)
|
List of Financial Statements
|
Page in Form 10-K
|
|
|
|
|
Management’s Report on Internal Control Over Financial Reporting
|
49
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
50
|
|
|
|
|
Consolidated Balance Sheets at December 31, 2011 and 2012
|
51
|
|
|
|
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2010, 2011 and 2012
|
52
|
|
|
|
|
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2010, 2011 and 2012
|
53
|
|
|
|
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2010, 2011 and 2012
|
55
|
|
|
|
|
Notes to Consolidated Financial Statements
|
57
|
|
|
|
(2)
|
List of Financial Statement Schedules
|
|
|
|
|
|
Valuation and Qualifying Accounts (Schedule II)
|
84
|
|
|
|
|
All other schedules have been omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto.
|
|
|
|
|
(3)
|
List of Exhibits
|
|
|
|
|
|
The exhibits listed on the accompanying Exhibit Index on page 46 below are filed as part of this Form 10-K.
|
|
|
|
|
|
|
|
CONMED CORPORATION
|
|
By: /s/ Joseph J. Corasanti
|
Joseph J. Corasanti
|
(President and Chief
|
Executive Officer)
|
|
Date:
|
February 25, 2013
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ EUGENE R. CORASANTI
|
|
Chairman of the Board
|
|
|
Eugene R. Corasanti
|
|
of Directors
|
|
February 25, 2013
|
|
|
|
|
|
/s/ JOSEPH J. CORASANTI
|
|
President, Chief Executive
|
|
|
Joseph J. Corasanti
|
|
Officer and Director
|
|
February 25, 2013
|
|
|
|
|
|
/s/ ROBERT D. SHALLISH, JR.
|
|
Vice President-Finance
|
|
|
Robert D. Shallish, Jr.
|
|
and Chief Financial Officer (Principal Financial Officer)
|
|
February 25, 2013
|
|
|
|
|
|
/s/ LUKE A. POMILIO
|
|
Vice President-
|
|
|
Luke A. Pomilio
|
|
Controller and Corporate General Manager (Principal Accounting Officer)
|
|
February 25, 2013
|
|
|
|
|
|
/s/ BRUCE F. DANIELS
|
|
|
|
|
Bruce F. Daniels
|
|
Director
|
|
February 25, 2013
|
|
|
|
|
|
/s/ JO ANN GOLDEN
|
|
|
|
|
Jo Ann Golden
|
|
Director
|
|
February 25, 2013
|
|
|
|
|
|
/s/ STEPHEN M. MANDIA
|
|
|
|
|
Stephen M. Mandia
|
|
Director
|
|
February 25, 2013
|
|
|
|
|
|
/s/ STUART J. SCHWARTZ
|
|
|
|
|
Stuart J. Schwartz
|
|
Director
|
|
February 25, 2013
|
|
|
|
|
|
/s/ MARK E. TRYNISKI
|
|
|
|
|
Mark E. Tryniski
|
|
Director
|
|
February 25, 2013
|
Exhibit No.
|
|
Description
|
|
|
|
3.1
|
-
|
Amended and Restated By-Laws, as adopted by the Board of Directors on April 29, 2011 (Incorporated by reference to the Company’s Current Report on Form 10-Q filed with the Securities and Exchange Commission on May 2, 2011).
|
|
|
|
3.2
|
-
|
1999 Amendment to Certificate of Incorporation and Restated Certificate of Incorporation of CONMED Corporation (Incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1999).
|
|
|
|
4.1
|
-
|
See Exhibit 3.1.
|
|
|
|
4.2
|
-
|
See Exhibit 3.2.
|
|
|
|
4.3
|
-
|
Guarantee and Collateral Agreement, dated August 28, 2002, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002).
|
|
|
|
4.4
|
-
|
First Amendment to Guarantee and Collateral Agreement, dated June 30, 2003, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
|
|
|
|
4.5
|
-
|
Second Amendment to Guarantee and Collateral Agreement, dated April 13, 2006, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 19, 2006).
|
|
|
|
4.6*
|
-
|
Third Amendment to Guarantee and Collateral Agreement, dated as of January 17, 2013, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank.
|
|
|
|
4.7
|
-
|
Indenture dated November 10, 2004 between CONMED Corporation and The Bank of New York, as Trustee (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2004).
|
|
|
|
10.1+
|
-
|
Employment Agreement between the Company and Eugene R. Corasanti, dated October 31, 2006 (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 2, 2006).
|
|
|
|
10.2+
|
-
|
Amended and Restated Employment Agreement, dated October 30, 2009, by and between CONMED Corporation and Joseph J. Corasanti, Esq. (Incorporated by reference to the Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009).
|
|
|
|
10.3
|
-
|
Amended and Restated Employee Stock Option Plan (including form of Stock Option Agreement) (Incorporated by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1996).
|
|
|
|
10.4
|
-
|
Stock Option Plan for Non-Employee Directors of CONMED Corporation (Incorporated by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1996).
|
|
|
|
10.5
|
-
|
Amendment to Stock Option Plan for Non-employee Directors of CONMED Corporation (Incorporated by reference to the Company’s Definitive Proxy Statement for the 2002 Annual Meeting filed with the Securities and Exchange Commission on April 17, 2002).
|
|
|
|
10.6
|
-
|
1999 Long-term Incentive Plan (Incorporated by reference to the Company’s Definitive Proxy Statement for the 1999 Annual Meeting filed with the Securities and Exchange Commission on April 16, 1999).
|
|
|
|
10.7
|
-
|
Amendment to 1999 Long-term Incentive Plan (Incorporated by reference to the Company’s Definitive Proxy Statement for the 2002 Annual Meeting filed with the Securities and Exchange Commission on April 17, 2002).
|
|
|
|
10.8
|
-
|
2002 Employee Stock Purchase Plan (Incorporated by reference to the Company’s Definitive Proxy Statement for the 2002 Annual Meeting filed with the Securities and Exchange Commission on April 17, 2002).
|
|
|
|
10.9
|
-
|
Amendment to CONMED Corporation 2002 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005).
|
|
|
|
10.10
|
-
|
2006 Stock Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on August 8, 2006).
|
|
|
|
10.11
|
-
|
2007 Non-Employee Director Equity Compensation Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on August 8, 2007).
|
|
|
|
10.12
|
-
|
Amended and Restated 1999 Long Term Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on November 3, 2009).
|
|
|
|
10.13
|
-
|
Amended and Restated 2007 Non-Employee Director Equity Compensation Plan of CONMED Corporation (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on August 3, 2010).
|
|
|
|
10.14
|
-
|
Amended and Restated Long Term Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on July 27, 2012).
|
|
|
|
10.15
|
-
|
Amended and Restated Credit Agreement, dated January 17, 2013, among CONMED Corporation, JP Morgan Chase Bank and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 18, 2013).
|
|
|
|
10.16
|
-
|
Change in Control Severance Agreement for Joseph J. Corasanti (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
|
|
2011
|
|
2012
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
26,048
|
|
|
$
|
23,720
|
|
Accounts receivable, less allowance for doubtful
|
|
|
|
|
|
||
accounts of $1,183 in 2011 and $1,203 in 2012
|
135,641
|
|
|
139,124
|
|
||
Inventories
|
168,438
|
|
|
156,228
|
|
||
Income taxes receivable
|
—
|
|
|
191
|
|
||
Deferred income taxes
|
10,283
|
|
|
11,931
|
|
||
Prepaid expenses and other current assets
|
16,314
|
|
|
14,993
|
|
||
Total current assets
|
356,724
|
|
|
346,187
|
|
||
Property, plant and equipment, net
|
139,187
|
|
|
139,041
|
|
||
Deferred income taxes
|
2,389
|
|
|
1,057
|
|
||
Goodwill
|
234,815
|
|
|
256,821
|
|
||
Other intangible assets, net
|
195,531
|
|
|
190,809
|
|
||
Other assets
|
6,948
|
|
|
150,547
|
|
||
Total assets
|
$
|
935,594
|
|
|
$
|
1,084,462
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of long-term debt
|
$
|
54,557
|
|
|
$
|
1,050
|
|
Accounts payable
|
21,162
|
|
|
23,622
|
|
||
Accrued compensation and benefits
|
31,142
|
|
|
33,511
|
|
||
Income taxes payable
|
6,470
|
|
|
—
|
|
||
Other current liabilities
|
17,853
|
|
|
64,325
|
|
||
Total current liabilities
|
131,184
|
|
|
122,508
|
|
||
|
|
|
|
||||
Long-term debt
|
88,952
|
|
|
160,802
|
|
||
Deferred income taxes
|
92,785
|
|
|
107,518
|
|
||
Other long-term liabilities
|
49,602
|
|
|
86,636
|
|
||
Total liabilities
|
362,523
|
|
|
477,464
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
|
|
||
Preferred stock, par value $.01 per share; authorized
|
|
|
|
|
|
||
500,000 shares, none issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $.01 per share; 100,000,000
|
|
|
|
|
|
||
authorized; 31,299,203 and 31,299,194 issued
|
|
|
|
|
|
||
in 2011 and 2012, respectively
|
313
|
|
|
313
|
|
||
Paid-in capital
|
321,994
|
|
|
324,322
|
|
||
Retained earnings
|
354,439
|
|
|
377,907
|
|
||
Accumulated other comprehensive loss
|
(26,348
|
)
|
|
(27,581
|
)
|
||
Less: Treasury stock, at cost;
|
|
|
|
|
|
||
3,358,078 and 2,925,801 shares in
|
|
|
|
|
|
||
2011 and 2012, respectively
|
(77,327
|
)
|
|
(67,963
|
)
|
||
Total shareholders' equity
|
573,071
|
|
|
606,998
|
|
||
Total liabilities and shareholders' equity
|
$
|
935,594
|
|
|
$
|
1,084,462
|
|
|
|
|
|
|
|
||||||
|
2010
|
|
2011
|
|
2012
|
||||||
Net sales
|
$
|
713,723
|
|
|
$
|
725,077
|
|
|
$
|
767,140
|
|
Cost of sales
|
348,339
|
|
|
350,143
|
|
|
361,297
|
|
|||
|
|
|
|
|
|
||||||
Gross profit
|
365,384
|
|
|
374,934
|
|
|
405,843
|
|
|||
|
|
|
|
|
|
||||||
Selling and administrative expense
|
276,463
|
|
|
276,615
|
|
|
302,469
|
|
|||
Research and development expense
|
29,652
|
|
|
28,651
|
|
|
28,214
|
|
|||
Impairment of goodwill
|
—
|
|
|
60,302
|
|
|
—
|
|
|||
Other expense
|
2,176
|
|
|
1,092
|
|
|
9,950
|
|
|||
|
308,291
|
|
|
366,660
|
|
|
340,633
|
|
|||
|
|
|
|
|
|
||||||
Income from operations
|
57,093
|
|
|
8,274
|
|
|
65,210
|
|
|||
Loss on early extinguishment of debt
|
79
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt discount
|
4,244
|
|
|
3,903
|
|
|
—
|
|
|||
Interest expense
|
7,113
|
|
|
6,676
|
|
|
5,730
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) before income taxes
|
45,657
|
|
|
(2,305
|
)
|
|
59,480
|
|
|||
|
|
|
|
|
|
||||||
Provision (benefit) for income taxes
|
15,311
|
|
|
(3,057
|
)
|
|
18,999
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
30,346
|
|
|
$
|
752
|
|
|
$
|
40,481
|
|
|
|
|
|
|
|
||||||
Per share data:
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
||||||
Basic
|
$
|
1.06
|
|
|
$
|
0.03
|
|
|
$
|
1.43
|
|
Diluted
|
$
|
1.05
|
|
|
$
|
0.03
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
||||||
Dividends per share of common stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
$
|
65
|
|
|
$
|
(1,937
|
)
|
|
$
|
1,995
|
|
Pension liability
|
(3,489
|
)
|
|
(20,250
|
)
|
|
1,387
|
|
|||
Cash flow hedging gain (loss)
|
(2,096
|
)
|
|
6,690
|
|
|
(6,507
|
)
|
|||
Other comprehensive income (loss), before tax
|
24,826
|
|
|
(14,745
|
)
|
|
37,356
|
|
|||
Provision (benefit) for income taxes related to items of other comprehensive income
|
(2,064
|
)
|
|
(5,010
|
)
|
|
(1,892
|
)
|
|||
Comprehensive income (loss)
|
$
|
26,890
|
|
|
$
|
(9,735
|
)
|
|
$
|
39,248
|
|
|
Common Stock
|
|
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Shareholders’
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2009
|
31,299
|
|
|
$
|
313
|
|
|
$
|
317,366
|
|
|
$
|
325,370
|
|
|
$
|
(12,405
|
)
|
|
$
|
(54,129
|
)
|
|
$
|
576,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
under employee plans
|
|
|
|
|
|
|
(2,376
|
)
|
|
(1,696
|
)
|
|
|
|
|
5,791
|
|
|
1,719
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Repurchase of treasury stock
|
|
|
|
|
|
|
|
|
|
|
(22,977
|
)
|
|
(22,977
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Tax benefit arising from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
common stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
under employee plans
|
|
|
|
|
|
|
227
|
|
|
|
|
|
|
|
|
|
|
|
227
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Retirement of 2.50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
convertible notes
|
|
|
|
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
|
(34
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Stock-based compensation
|
|
|
|
|
|
|
4,223
|
|
|
|
|
|
|
|
|
|
|
|
4,223
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency
translation adjustments
|
|
|
|
|
|
|
|
|
65
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Pension liability (net of income tax
benefit of $1,289)
|
|
|
|
|
|
|
|
|
(2,200
|
)
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow hedging loss (net of income tax benefit of $775)
|
|
|
|
|
|
|
|
|
(1,321
|
)
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
30,346
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
income
|
|
|
|
|
|
|
|
|
|
|
|
|
26,890
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2010
|
31,299
|
|
|
$
|
313
|
|
|
$
|
319,406
|
|
|
$
|
354,020
|
|
|
$
|
(15,861
|
)
|
|
$
|
(71,315
|
)
|
|
$
|
586,563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
under employee plans
|
|
|
|
|
|
|
(3,849
|
)
|
|
(333
|
)
|
|
|
|
|
9,009
|
|
|
4,827
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Repurchase of treasury
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,021
|
)
|
|
(15,021
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Tax benefit arising from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
common stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
under employee plans
|
|
|
|
|
|
|
1,197
|
|
|
|
|
|
|
|
|
|
|
|
1,197
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Stock based compensation
|
|
|
|
|
|
|
5,240
|
|
|
|
|
|
|
|
|
|
|
|
5,240
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Stock
|
|
Shareholders’
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency
translation adjustments
|
|
|
|
|
|
|
|
|
(1,937
|
)
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Pension liability (net of income tax benefit of $7,482)
|
|
|
|
|
|
|
|
|
(12,768
|
)
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow hedging gain (net of income tax expense of $2,472)
|
|
|
|
|
|
|
|
|
4,218
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
752
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total comprehensive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,735
|
)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2011
|
31,299
|
|
|
$
|
313
|
|
|
$
|
321,994
|
|
|
$
|
354,439
|
|
|
$
|
(26,348
|
)
|
|
$
|
(77,327
|
)
|
|
$
|
573,071
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Common stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
under employee plans
|
|
|
|
|
|
|
(4,377
|
)
|
|
|
|
|
|
|
|
13,287
|
|
|
8,910
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Repurchase of treasury
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,923
|
)
|
|
(3,923
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tax benefit arising from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
common stock issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
under employee plans
|
|
|
|
|
|
|
1,052
|
|
|
|
|
|
|
|
|
|
|
|
1,052
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock based compensation
|
|
|
|
|
|
|
5,653
|
|
|
|
|
|
|
|
|
|
|
|
5,653
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Dividends on common stock
|
|
|
|
|
|
|
(17,013
|
)
|
|
|
|
|
|
(17,013
|
)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Foreign currency
translation adjustments
|
|
|
|
|
|
|
|
|
1,995
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Pension liability (net of income tax expense of $512)
|
|
|
|
|
|
|
|
|
875
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Cash flow hedging loss (net of income tax benefit of $2,404)
|
|
|
|
|
|
|
|
|
(4,103
|
)
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
40,481
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,248
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2012
|
31,299
|
|
|
$
|
313
|
|
|
$
|
324,322
|
|
|
$
|
377,907
|
|
|
$
|
(27,581
|
)
|
|
$
|
(67,963
|
)
|
|
$
|
606,998
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
30,346
|
|
|
$
|
752
|
|
|
$
|
40,481
|
|
Adjustments to reconcile net income
|
|
|
|
|
|
|
|
|
|||
to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation
|
17,392
|
|
|
18,519
|
|
|
18,635
|
|
|||
Amortization of debt discount
|
4,244
|
|
|
3,903
|
|
|
—
|
|
|||
Amortization, all other
|
20,171
|
|
|
20,265
|
|
|
27,981
|
|
|||
Stock-based compensation
|
4,223
|
|
|
5,240
|
|
|
5,653
|
|
|||
Deferred income taxes
|
13,158
|
|
|
(13,098
|
)
|
|
12,946
|
|
|||
Sale of accounts receivable to (collections
|
|
|
|
|
|
|
|
|
|||
on behalf of) purchaser
|
(29,000
|
)
|
|
—
|
|
|
—
|
|
|||
Income tax benefit of stock
|
|
|
|
|
|
|
|
|
|||
option exercises
|
227
|
|
|
1,197
|
|
|
1,052
|
|
|||
Excess tax benefit from stock
|
|
|
|
|
|
|
|
|
|||
option exercises
|
(485
|
)
|
|
(1,363
|
)
|
|
(1,206
|
)
|
|||
Loss on early extinguishment of debt
|
79
|
|
|
—
|
|
|
—
|
|
|||
Impairment of goodwill
|
—
|
|
|
60,302
|
|
|
—
|
|
|||
Increase (decrease) in cash flows from changes in assets and
|
|
|
|
|
|
|
|
|
|||
liabilities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|||
Accounts receivable
|
9,342
|
|
|
8,464
|
|
|
1,687
|
|
|||
Inventories
|
(20,317
|
)
|
|
(7,850
|
)
|
|
3,810
|
|
|||
Accounts payable
|
(4,645
|
)
|
|
2,649
|
|
|
259
|
|
|||
Income taxes
|
(692
|
)
|
|
4,838
|
|
|
(6,497
|
)
|
|||
Accrued compensation and benefits
|
2,516
|
|
|
1,673
|
|
|
767
|
|
|||
Other assets
|
332
|
|
|
(4,243
|
)
|
|
(1,210
|
)
|
|||
Other liabilities
|
(8,648
|
)
|
|
1,745
|
|
|
(9,159
|
)
|
|||
|
7,897
|
|
|
102,241
|
|
|
54,718
|
|
|||
Net cash provided by operating activities
|
38,243
|
|
|
102,993
|
|
|
95,199
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Payments related to business acquisitions and distribution agreements,
|
|
|
|
|
|
|
|
|
|||
net of cash acquired
|
(5,289
|
)
|
|
(4,191
|
)
|
|
(86,253
|
)
|
|||
Proceeds from sale of property
|
—
|
|
|
—
|
|
|
1,836
|
|
|||
Purchases of property, plant and equipment
|
(14,732
|
)
|
|
(17,552
|
)
|
|
(21,532
|
)
|
|||
Net cash used in investing activities
|
(20,021
|
)
|
|
(21,743
|
)
|
|
(105,949
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Net proceeds from common stock issued
|
|
|
|
|
|
|
|
|
|||
under employee plans
|
2,452
|
|
|
6,117
|
|
|
10,165
|
|
|||
Repurchase of common stock
|
(22,977
|
)
|
|
(15,021
|
)
|
|
(3,923
|
)
|
|||
Excess tax benefit from stock option exercises
|
485
|
|
|
1,363
|
|
|
1,206
|
|
|||
Payments on senior credit agreement
|
(1,350
|
)
|
|
(1,350
|
)
|
|
(53,588
|
)
|
|||
Proceeds of senior credit agreement
|
12,000
|
|
|
58,000
|
|
|
73,000
|
|
|||
Payments on mortgage notes
|
(824
|
)
|
|
(894
|
)
|
|
(969
|
)
|
|||
Payments on senior subordinated notes
|
(2,933
|
)
|
|
(111,766
|
)
|
|
(100
|
)
|
|||
Payments related to issuance of debt
|
(2,525
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid on common stock
|
—
|
|
|
—
|
|
|
(12,862
|
)
|
|||
Other, net
|
66
|
|
|
(3,148
|
)
|
|
(1,576
|
)
|
|||
Net cash provided by (used in) financing activities
|
(15,606
|
)
|
|
(66,699
|
)
|
|
11,353
|
|
|
|
|
|
|
|
||||||
Effect of exchange rate changes
|
|
|
|
|
|
|
|
|
|||
on cash and cash equivalents
|
(297
|
)
|
|
(920
|
)
|
|
(2,931
|
)
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash
|
|
|
|
|
|
|
|
|
|||
and cash equivalents
|
2,319
|
|
|
13,631
|
|
|
(2,328
|
)
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents at beginning of year
|
10,098
|
|
|
12,417
|
|
|
26,048
|
|
|||
|
|
|
|
|
|
||||||
Cash and cash equivalents at end of year
|
$
|
12,417
|
|
|
$
|
26,048
|
|
|
$
|
23,720
|
|
|
|
|
|
|
|
||||||
Non-cash financing activities:
|
|
|
|
|
|
||||||
Dividends payable
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,256
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|||
Interest
|
$
|
6,025
|
|
|
$
|
5,797
|
|
|
$
|
5,038
|
|
Income taxes
|
3,257
|
|
|
4,760
|
|
|
10,953
|
|
|
Building and improvements
|
40 years
|
|
Leasehold improvements
|
Shorter of life of asset or life of lease
|
|
Machinery and equipment
|
2 to 15 years
|
•
|
Sales to customers are evidenced by firm purchase orders. Title and the risks and rewards of ownership are transferred to the customer when product is shipped under our stated shipping terms. Payment by the customer is due under fixed payment terms.
|
•
|
We place certain of our capital equipment with customers on a loaned basis in return for commitments to purchase related single-use products over time periods generally ranging from one to three years. In these circumstances, no revenue is recognized upon capital equipment shipment as the equipment is loaned and subject to return if certain minimum single-use purchases are not met. Revenue is recognized upon the sale and shipment of the related single-use products. The cost of the equipment is amortized over its estimated useful life.
|
•
|
Service revenues earned by the Company related to the sale of sports medicine allograft tissue are recorded in accordance with the contractual terms of our agreement with Musculoskeletal Transplant Foundation ("MTF"). These revenues are recorded net of amortization of the acquired assets.
|
•
|
Product returns are only accepted at the discretion of the Company and in accordance with our “Returned Goods Policy”. Historically the level of product returns has not been significant. We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.
|
•
|
Our terms of sale to customers generally do not include any obligations to perform future services. Limited warranties are provided for capital equipment sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.
|
•
|
Amounts billed to customers related to shipping and handling have been included in net sales. Shipping and handling costs included in selling and administrative expense were
$12.1 million
,
$13.0 million
and
$12.8 million
for
2010
,
2011
and
2012
, respectively.
|
•
|
We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk.
|
•
|
We assess the risk of loss on accounts receivable and adjust the allowance for doubtful accounts based on this risk assessment. Historically, losses on accounts receivable have not been material. Management believes that the allowance for doubtful accounts of
$1.2 million
at
December 31, 2012
is adequate to provide for probable losses resulting from accounts receivable.
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
30,346
|
|
|
$
|
752
|
|
|
$
|
40,481
|
|
|
|
|
|
|
|
||||||
Basic-weighted average shares outstanding
|
28,715
|
|
|
28,246
|
|
|
28,301
|
|
|||
|
|
|
|
|
|
||||||
Effect of dilutive potential securities
|
196
|
|
|
387
|
|
|
352
|
|
|||
|
|
|
|
|
|
||||||
Diluted-weighted average shares outstanding
|
28,911
|
|
|
28,633
|
|
|
28,653
|
|
|||
|
|
|
|
|
|
||||||
Basic EPS
|
$
|
1.06
|
|
|
$
|
0.03
|
|
|
$
|
1.43
|
|
|
|
|
|
|
|
||||||
Diluted EPS
|
$
|
1.05
|
|
|
$
|
0.03
|
|
|
$
|
1.41
|
|
|
Cash Flow
Hedging
Gain (Loss)
|
|
Pension
Liability
|
|
Cumulative
Translation
Adjustments
|
|
Accumulated
Other
Comprehensive
Loss
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2011
|
$
|
2,973
|
|
|
$
|
(31,250
|
)
|
|
$
|
1,929
|
|
|
$
|
(26,348
|
)
|
|
|
|
|
|
|
|
|
||||||||
Pension liability, net of income tax
|
—
|
|
|
875
|
|
|
—
|
|
|
875
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash flow hedging loss, net of income tax
|
(4,103
|
)
|
|
—
|
|
|
—
|
|
|
(4,103
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
1,995
|
|
|
1,995
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance, December 31, 2012
|
$
|
(1,130
|
)
|
|
$
|
(30,375
|
)
|
|
$
|
3,924
|
|
|
$
|
(27,581
|
)
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
Raw materials
|
$
|
52,351
|
|
|
$
|
45,115
|
|
Work in process
|
15,499
|
|
|
14,229
|
|
||
Finished goods
|
100,588
|
|
|
96,884
|
|
||
|
$
|
168,438
|
|
|
$
|
156,228
|
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
Land
|
$
|
4,367
|
|
|
$
|
4,243
|
|
Building and improvements
|
90,360
|
|
|
92,775
|
|
||
Machinery and equipment
|
163,923
|
|
|
176,102
|
|
||
Construction in progress
|
6,310
|
|
|
5,508
|
|
||
|
264,960
|
|
|
278,628
|
|
||
Less: Accumulated depreciation
|
(125,773
|
)
|
|
(139,587
|
)
|
||
|
$
|
139,187
|
|
|
$
|
139,041
|
|
2013
|
$
|
7,128
|
|
2014
|
5,787
|
|
|
2015
|
5,001
|
|
|
2016
|
3,531
|
|
|
2017
|
3,275
|
|
|
Thereafter
|
8,027
|
|
|
2011
|
|
2012
|
||||
Balance as of January 1,
|
$
|
295,068
|
|
|
$
|
234,815
|
|
|
|
|
|
||||
Goodwill impairment
|
(60,302
|
)
|
|
—
|
|
||
|
|
|
|
||||
Goodwill resulting from business acquisitions
|
—
|
|
|
22,021
|
|
||
|
|
|
|
||||
Foreign currency translation
|
49
|
|
|
(15
|
)
|
||
|
|
|
|
||||
Balance as of December 31,
|
$
|
234,815
|
|
|
$
|
256,821
|
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
CONMED Electrosurgery
|
$
|
16,645
|
|
|
$
|
16,645
|
|
|
|
|
|
||||
CONMED Endosurgery
|
42,439
|
|
|
42,439
|
|
||
|
|
|
|
||||
CONMED Linvatec
|
175,731
|
|
|
197,737
|
|
||
|
|
|
|
||||
Balance as of December 31,
|
$
|
234,815
|
|
|
$
|
256,821
|
|
|
December 31, 2011
|
|
December 31, 2012
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Customer relationships
|
$
|
133,965
|
|
|
$
|
(45,112
|
)
|
|
$
|
135,690
|
|
|
$
|
(50,083
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Patents and other intangible assets
|
52,702
|
|
|
(34,368
|
)
|
|
54,412
|
|
|
(37,554
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unamortized intangible assets
:
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trademarks and tradenames
|
88,344
|
|
|
—
|
|
|
88,344
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
$
|
275,011
|
|
|
$
|
(79,480
|
)
|
|
$
|
278,446
|
|
|
$
|
(87,637
|
)
|
2012
|
$
|
7,807
|
|
2013
|
7,836
|
|
|
2014
|
7,211
|
|
|
2015
|
6,821
|
|
|
2016
|
6,719
|
|
|
2017
|
6,707
|
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
Revolving line of credit
|
$
|
80,000
|
|
|
$
|
153,000
|
|
|
|
|
|
|
|||
Term loan borrowings on senior credit facility
|
53,588
|
|
|
—
|
|
||
|
|
|
|
|
|
||
2.50% convertible senior subordinated notes
|
327
|
|
|
227
|
|
||
|
|
|
|
|
|
||
Mortgage notes
|
9,594
|
|
|
8,625
|
|
||
|
|
|
|
||||
Total long-term debt
|
143,509
|
|
|
161,852
|
|
||
|
|
|
|
||||
Less: Current portion
|
54,557
|
|
|
1,050
|
|
||
|
|
|
|
||||
|
$
|
88,952
|
|
|
$
|
160,802
|
|
2013
|
$
|
1,050
|
|
2014
|
1,367
|
|
|
2015
|
1,234
|
|
|
2016
|
1,339
|
|
|
2017
|
1,452
|
|
|
Thereafter
|
155,410
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
Current tax expense (benefit):
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Federal
|
$
|
(717
|
)
|
|
$
|
3,021
|
|
|
$
|
503
|
|
State
|
232
|
|
|
1,596
|
|
|
374
|
|
|||
Foreign
|
2,638
|
|
|
5,424
|
|
|
5,176
|
|
|||
|
2,153
|
|
|
10,041
|
|
|
6,053
|
|
|||
Deferred income tax expense (benefit)
|
13,158
|
|
|
(13,098
|
)
|
|
12,946
|
|
|||
Provision (benefit) for income taxes
|
$
|
15,311
|
|
|
$
|
(3,057
|
)
|
|
$
|
18,999
|
|
|
2010
|
|
2011
|
|
2012
|
|||
Tax provision (benefit) at statutory rate based
|
|
|
|
|
|
|
|
|
on income before income taxes
|
35.00
|
%
|
|
(35.00
|
)%
|
|
35.00
|
%
|
|
|
|
|
|
|
|
|
|
State income taxes, net of federal tax benefit
|
2.55
|
|
|
22.73
|
|
|
1.56
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
0.01
|
|
|
(1.61
|
)
|
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
Foreign income taxes
|
0.07
|
|
|
1.35
|
|
|
(5.44
|
)
|
|
|
|
|
|
|
|||
Impact of repatriation of foreign earnings
|
—
|
|
|
(57.51
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Research & development credit
|
(1.83
|
)
|
|
(32.25
|
)
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Settlement of taxing authority examinations
|
(3.27
|
)
|
|
(6.55
|
)
|
|
(0.80
|
)
|
|
|
|
|
|
|
|
|
|
Non deductible/non-taxable items
|
1.22
|
|
|
(13.28
|
)
|
|
1.33
|
|
|
|
|
|
|
|
|
|
|
Other, net
|
(0.22
|
)
|
|
(10.50
|
)
|
|
0.45
|
|
|
|
|
|
|
|
|||
|
33.53
|
%
|
|
(132.62
|
)%
|
|
31.94
|
%
|
|
2011
|
|
2012
|
||||
Assets:
|
|
|
|
||||
Inventory
|
$
|
4,288
|
|
|
$
|
4,370
|
|
Net operating losses
|
—
|
|
|
191
|
|
||
Capitalized research and development
|
4,561
|
|
|
2,410
|
|
||
Deferred compensation
|
2,631
|
|
|
2,905
|
|
||
Accounts receivable
|
2,968
|
|
|
2,759
|
|
||
Employee benefits
|
5,984
|
|
|
5,915
|
|
||
Accrued pension
|
9,530
|
|
|
9,020
|
|
||
Research and development credit
|
1,696
|
|
|
3,378
|
|
||
Other
|
2,604
|
|
|
3,973
|
|
||
|
34,262
|
|
|
34,921
|
|
||
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
||
Goodwill and intangible assets
|
101,514
|
|
|
111,770
|
|
||
Depreciation
|
9,500
|
|
|
13,146
|
|
||
State taxes
|
2,975
|
|
|
4,157
|
|
||
Contingent interest
|
386
|
|
|
378
|
|
||
|
|
|
|
||||
|
114,375
|
|
|
129,451
|
|
||
|
|
|
|
||||
Net liability
|
$
|
(80,113
|
)
|
|
$
|
(94,530
|
)
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
U.S. income
|
$
|
37,953
|
|
|
$
|
(20,521
|
)
|
|
$
|
33,121
|
|
Foreign income
|
7,704
|
|
|
18,216
|
|
|
26,359
|
|
|||
|
|
|
|
|
|
||||||
Total income
|
$
|
45,657
|
|
|
$
|
(2,305
|
)
|
|
$
|
59,480
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Balance as of January 1,
|
$
|
1,869
|
|
|
$
|
1,330
|
|
|
$
|
2,343
|
|
|
|
|
|
|
|
||||||
Increases for positions taken in prior periods
|
52
|
|
|
283
|
|
|
30
|
|
|||
|
|
|
|
|
|
||||||
Increases for positions taken in current periods
|
166
|
|
|
789
|
|
|
1,129
|
|
|||
|
|
|
|
|
|
||||||
Decreases in unrecorded tax positions related to settlement with the taxing authorities
|
(757
|
)
|
|
—
|
|
|
(1,857
|
)
|
|||
|
|
|
|
|
|
||||||
Decreases in unrecorded tax positions related to lapse of statute of limitations
|
—
|
|
|
(59
|
)
|
|
(58
|
)
|
|||
|
|
|
|
|
|
||||||
Balance as of December 31,
|
$
|
1,330
|
|
|
$
|
2,343
|
|
|
$
|
1,587
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
Fair value of options & SARs
|
$
|
7.72
|
|
|
$
|
10.43
|
|
|
$
|
7.38
|
|
Expected stock price volatility
|
36.72
|
%
|
|
35.52
|
%
|
|
35.84
|
%
|
|||
Risk-free interest rate
|
2.07
|
%
|
|
1.59
|
%
|
|
0.62
|
%
|
|||
Expected annual dividend yield
|
—
|
%
|
|
—
|
%
|
|
2.00
|
%
|
|||
Expected life of options (years)
|
6.4
|
|
|
6.3
|
|
|
6.4
|
|
|
Number
of
Shares
(in 000’s)
|
|
Weighted-
Average
Exercise
Price
|
|||
|
|
|
|
|||
Outstanding at December 31, 2011
|
2,129
|
|
|
$
|
24.58
|
|
|
|
|
|
|||
Granted
|
159
|
|
|
$
|
26.09
|
|
Forfeited
|
(31
|
)
|
|
$
|
23.20
|
|
Exercised
|
(488
|
)
|
|
$
|
22.22
|
|
|
|
|
|
|||
Outstanding at December 31, 2012
|
1,769
|
|
|
$
|
25.35
|
|
Exercisable at December 31, 2012
|
1,289
|
|
|
$
|
25.97
|
|
|
Number
of
Shares
(in 000’s)
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
|
|
|
|
|||
Outstanding at December 31, 2011
|
508
|
|
|
$
|
23.43
|
|
|
|
|
|
|||
Granted
|
272
|
|
|
$
|
26.18
|
|
Vested
|
(158
|
)
|
|
$
|
24.03
|
|
Forfeited
|
(101
|
)
|
|
$
|
25.83
|
|
|
|
|
|
|||
Outstanding at December 31, 2012
|
521
|
|
|
$
|
24.25
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Arthroscopy
|
$
|
288,421
|
|
|
$
|
289,878
|
|
|
$
|
330,567
|
|
Powered Surgical Instruments
|
142,288
|
|
|
147,849
|
|
|
149,968
|
|
|||
CONMED Linvatec
|
430,709
|
|
|
437,727
|
|
|
480,535
|
|
|||
CONMED Electrosurgery
|
97,210
|
|
|
98,632
|
|
|
95,743
|
|
|||
CONMED Endosurgery
|
69,004
|
|
|
73,716
|
|
|
73,995
|
|
|||
CONMED Linvatec, Electrosurgery,
|
|
|
|
|
|
|
|
|
|||
and Endosurgery
|
596,923
|
|
|
610,075
|
|
|
650,273
|
|
|||
CONMED Patient Care
|
68,283
|
|
|
65,651
|
|
|
63,697
|
|
|||
CONMED Endoscopic Technologies
|
48,517
|
|
|
49,351
|
|
|
53,170
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
713,723
|
|
|
$
|
725,077
|
|
|
$
|
767,140
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
CONMED Linvatec, Electrosurgery
|
|
|
|
|
|
||||||
and Endosurgery
|
$
|
77,271
|
|
|
$
|
89,093
|
|
|
$
|
81,848
|
|
CONMED Patient Care
|
(38
|
)
|
|
(62,878
|
)
|
|
(2,210
|
)
|
|||
CONMED Endoscopic Technologies
|
(1,315
|
)
|
|
273
|
|
|
2,738
|
|
|||
Corporate
|
(18,825
|
)
|
|
(18,214
|
)
|
|
(17,166
|
)
|
|||
|
|
|
|
|
|
||||||
Income from operations
|
57,093
|
|
|
8,274
|
|
|
65,210
|
|
|||
|
|
|
|
|
|
||||||
Loss on early extinguishment of debt
|
79
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Amortization of debt discount
|
4,244
|
|
|
3,903
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Interest expense
|
7,113
|
|
|
6,676
|
|
|
5,730
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) before income taxes
|
$
|
45,657
|
|
|
$
|
(2,305
|
)
|
|
$
|
59,480
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
United States
|
$
|
371,914
|
|
|
$
|
364,588
|
|
|
$
|
382,256
|
|
Canada
|
61,593
|
|
|
65,794
|
|
|
73,746
|
|
|||
United Kingdom
|
31,576
|
|
|
32,106
|
|
|
31,653
|
|
|||
Japan
|
32,226
|
|
|
34,178
|
|
|
33,997
|
|
|||
Australia
|
34,564
|
|
|
40,122
|
|
|
40,835
|
|
|||
All other countries
|
181,850
|
|
|
188,289
|
|
|
204,653
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
713,723
|
|
|
$
|
725,077
|
|
|
$
|
767,140
|
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
Accumulated Benefit Obligation
|
$
|
82,289
|
|
|
$
|
85,363
|
|
|
|
|
|
||||
Change in benefit obligation
|
|
|
|
|
|
||
Projected benefit obligation at beginning of year
|
$
|
66,136
|
|
|
$
|
82,289
|
|
Service cost
|
281
|
|
|
277
|
|
||
Interest cost
|
3,519
|
|
|
3,429
|
|
||
Actuarial loss
|
15,305
|
|
|
2,790
|
|
||
Benefits paid
|
(2,952
|
)
|
|
(3,422
|
)
|
||
|
|
|
|
||||
Projected benefit obligation at end of year
|
$
|
82,289
|
|
|
$
|
85,363
|
|
|
|
|
|
||||
Change in plan assets
|
|
|
|
|
|
||
Fair value of plan assets at beginning of year
|
$
|
55,309
|
|
|
$
|
51,822
|
|
Actual gain (loss) on plan assets
|
(2,145
|
)
|
|
5,866
|
|
||
Employer contributions
|
1,610
|
|
|
8,497
|
|
||
Benefits paid
|
(2,952
|
)
|
|
(3,422
|
)
|
||
Fair value of plan assets at end of year
|
$
|
51,822
|
|
|
$
|
62,763
|
|
|
|
|
|
||||
Funded status
|
$
|
(30,467
|
)
|
|
$
|
(22,600
|
)
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
Accrued long-term pension liability
|
$
|
30,467
|
|
|
$
|
22,600
|
|
Accumulated other comprehensive loss
|
(49,563
|
)
|
|
(48,176
|
)
|
|
2011
|
|
2012
|
||
|
|
|
|
||
Discount rate
|
4.30
|
%
|
|
3.90
|
%
|
Expected return on plan assets
|
8.00
|
%
|
|
8.00
|
%
|
Current year actuarial loss
|
$
|
(1,489
|
)
|
Amortization of actuarial loss
|
2,876
|
|
|
Total recognized in other comprehensive loss
|
$
|
1,387
|
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
219
|
|
|
$
|
281
|
|
|
$
|
277
|
|
Interest cost on projected benefit obligation
|
|
3,585
|
|
|
3,519
|
|
|
3,429
|
|
|||
Return on plan assets
|
|
(4,227
|
)
|
|
(4,378
|
)
|
|
(4,566
|
)
|
|||
Amortization of loss
|
|
1,313
|
|
|
1,578
|
|
|
2,876
|
|
|||
Net periodic pension cost
|
|
$
|
890
|
|
|
$
|
1,000
|
|
|
$
|
2,016
|
|
|
2010
|
|
2011
|
|
2012
|
|||
|
|
|
|
|
|
|||
Discount rate
|
5.86
|
%
|
|
5.41
|
%
|
|
4.30
|
%
|
Expected return on plan assets
|
8.00
|
%
|
|
8.00
|
%
|
|
8.00
|
%
|
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Percentage of Pension
Plan Assets
|
|
Target
Allocation
|
|||||
|
2011
|
|
2012
|
|
2013
|
|||
|
|
|
|
|
|
|||
Equity securities
|
69
|
%
|
|
76
|
%
|
|
75
|
%
|
Debt securities
|
31
|
|
|
24
|
|
|
25
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
2011
|
|
2012
|
||||
|
|
|
|
||||
Common Stock
|
$
|
21,893
|
|
|
$
|
25,124
|
|
Money Market Fund
|
12,461
|
|
|
5,209
|
|
||
Mutual Funds
|
14,112
|
|
|
22,810
|
|
||
Fixed Income Securities
|
3,356
|
|
|
9,620
|
|
||
|
|
|
|
||||
Total Assets at Fair Value
|
$
|
51,822
|
|
|
$
|
62,763
|
|
Common Stock:
|
Common stock is valued at the closing price reported on the common stock’s respective stock exchange and is classified within level 1 of the valuation hierarchy.
|
|
|
Money Market Fund:
|
These investments are public investment vehicles valued using $1 for the Net Asset Value (NAV). The money market fund is classified within level 2 of the valuation hierarchy.
|
|
|
Mutual Funds:
|
These investments are public investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and is classified within level 1 of the valuation hierarchy.
|
|
|
Fixed Income Securities:
|
Valued at the closing price reported on the active market on which the individual securities are traded and are classified within level 1 of the valuation hierarchy.
|
December 31, 2011
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Common Stock
|
$
|
21,893
|
|
|
$
|
—
|
|
|
$
|
21,893
|
|
Money Market Fund
|
—
|
|
|
12,461
|
|
|
12,461
|
|
|||
Mutual Funds
|
14,112
|
|
|
—
|
|
|
14,112
|
|
|||
Fixed Income Securities
|
3,356
|
|
|
—
|
|
|
3,356
|
|
|||
|
$
|
39,361
|
|
|
$
|
12,461
|
|
|
$
|
51,822
|
|
December 31, 2012
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
|
|
|
|
|
|
||||||
Common Stock
|
$
|
25,124
|
|
|
$
|
—
|
|
|
$
|
25,124
|
|
Money Market Fund
|
—
|
|
|
5,209
|
|
|
5,209
|
|
|||
Mutual Funds
|
22,810
|
|
|
—
|
|
|
22,810
|
|
|||
Fixed Income Securities
|
9,620
|
|
|
—
|
|
|
9,620
|
|
|||
|
$
|
57,554
|
|
|
$
|
5,209
|
|
|
$
|
62,763
|
|
2013
|
|
$2,503
|
|
2014
|
2,901
|
|
|
2015
|
2,989
|
|
|
2016
|
2,756
|
|
|
2017
|
3,359
|
|
|
2018-2022
|
21,336
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
Administrative consolidation costs
|
$
|
2,176
|
|
|
$
|
792
|
|
|
$
|
6,497
|
|
Costs associated with purchase of a distributor
|
—
|
|
|
300
|
|
|
704
|
|
|||
Costs associated with legal arbitration
|
—
|
|
|
—
|
|
|
1,555
|
|
|||
Costs associated with purchase of a business
|
—
|
|
|
—
|
|
|
1,194
|
|
|||
Other expense
|
$
|
2,176
|
|
|
$
|
1,092
|
|
|
$
|
9,950
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Balance as of January 1,
|
$
|
3,383
|
|
|
$
|
3,363
|
|
|
$
|
3,618
|
|
|
|
|
|
|
|
||||||
Provision for warranties
|
3,510
|
|
|
4,344
|
|
|
4,163
|
|
|||
Claims made
|
(3,530
|
)
|
|
(4,089
|
)
|
|
(4,145
|
)
|
|||
|
|
|
|
|
|
||||||
Balance as of December 31,
|
$
|
3,363
|
|
|
$
|
3,618
|
|
|
$
|
3,636
|
|
December 31, 2011
|
Asset
Balance Sheet
Location
|
|
Fair
Value
|
|
Liabilities
Balance Sheet
Location
|
|
Fair
Value
|
|
Net
Fair
Value
|
||||||
Derivatives designated as hedged instruments:
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
$
|
5,042
|
|
|
Prepaid expenses and other current assets
|
|
$
|
(326
|
)
|
|
$
|
4,716
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
|
41
|
|
|
Prepaid expenses and other current assets
|
|
(95
|
)
|
|
(54
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Total derivatives
|
|
|
$
|
5,083
|
|
|
|
|
$
|
(421
|
)
|
|
$
|
4,662
|
|
December 31, 2012
|
Asset
Balance Sheet Location |
|
Fair
Value |
|
Liabilities
Balance Sheet Location |
|
Fair
Value |
|
Net
Fair Value |
||||||
Derivatives designated as hedged instruments:
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Other current liabilities
|
|
$
|
(457
|
)
|
|
Other current liabilities
|
|
$
|
2,249
|
|
|
$
|
1,792
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Foreign exchange contracts
|
Other current liabilities
|
|
—
|
|
|
Other current liabilities
|
|
150
|
|
|
150
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Total derivatives
|
|
|
$
|
(457
|
)
|
|
|
|
$
|
2,399
|
|
|
$
|
1,942
|
|
|
2010
|
|
2011
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Facility consolidation costs
|
$
|
2,397
|
|
|
$
|
3,467
|
|
|
$
|
7,052
|
|
Termination of a product offering
|
2,489
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Restructuring costs included in cost of sales
|
$
|
4,886
|
|
|
$
|
3,467
|
|
|
$
|
7,052
|
|
|
|
|
|
|
|
||||||
Administrative consolidation costs
|
$
|
2,176
|
|
|
$
|
792
|
|
|
$
|
6,497
|
|
|
|
|
|
|
|
||||||
Restructuring costs included in other expense
|
$
|
2,176
|
|
|
$
|
792
|
|
|
$
|
6,497
|
|
Cash
|
|
$
|
390
|
|
Accounts receivable
|
|
1,349
|
|
|
Inventory
|
|
2,562
|
|
|
Prepaid expenses and other current assets
|
|
151
|
|
|
Property, plant & equipment, net
|
|
117
|
|
|
Customer relationships
|
|
1,725
|
|
|
Patents
|
|
1,100
|
|
|
Goodwill
|
|
22,021
|
|
|
Total assets acquired
|
|
29,415
|
|
|
|
|
|
||
Accounts payable
|
|
1,324
|
|
|
Deferred income taxes
|
|
827
|
|
|
Other liabilities
|
|
4,736
|
|
|
Total liabilities assumed
|
|
6,887
|
|
|
|
|
|
||
Net assets acquired
|
|
$
|
22,528
|
|
|
2011
|
|
2012
|
||||
Net sales
|
$
|
735,857
|
|
|
$
|
774,239
|
|
Net income
|
(2,176
|
)
|
|
38,018
|
|
||
|
|
|
|
||||
Earnings per share:
|
|
|
|
||||
Basic
|
$
|
(0.08
|
)
|
|
$
|
1.34
|
|
Diluted
|
(0.08
|
)
|
|
1.33
|
|
|
Three Months Ended
|
||||||||||||||
|
March
|
|
June
|
|
September
|
|
December
|
||||||||
2011
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
183,450
|
|
|
$
|
183,236
|
|
|
$
|
172,814
|
|
|
$
|
185,577
|
|
Gross profit
|
95,716
|
|
|
91,455
|
|
|
91,311
|
|
|
96,452
|
|
||||
Net income (loss)
|
8,995
|
|
|
8,680
|
|
|
8,211
|
|
|
(25,134
|
)
|
||||
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
.32
|
|
|
.31
|
|
|
.29
|
|
|
(.90
|
)
|
||||
Diluted
|
.31
|
|
|
.30
|
|
|
.29
|
|
|
(.90
|
)
|
|
Three Months Ended
|
||||||||||||||
|
March
|
|
June
|
|
September
|
|
December
|
||||||||
2012
|
|
|
|
|
|
|
|
||||||||
Net sales
|
$
|
194,316
|
|
|
$
|
189,695
|
|
|
$
|
181,885
|
|
|
$
|
201,244
|
|
Gross profit
|
100,911
|
|
|
99,732
|
|
|
97,913
|
|
|
107,287
|
|
||||
Net income
|
9,968
|
|
|
10,296
|
|
|
9,320
|
|
|
10,897
|
|
||||
EPS:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
.36
|
|
|
.36
|
|
|
.33
|
|
|
.38
|
|
||||
Diluted
|
.35
|
|
|
.36
|
|
|
.32
|
|
|
.38
|
|
|
|
|
|
Column C
|
|
|
|
|
||||||||||||
|
|
|
|
Additions
|
|
|
|
|
||||||||||||
|
|
Column B
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Balance at
Beginning of
Period
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
|
|
Column E
|
||||||||||
Column A
|
|
|
|
|
Column D
|
|
Balance at End
of Period
|
|||||||||||||
Description
|
|
|
|
|
Deductions
|
|
||||||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for bad debts
|
|
$
|
1,183
|
|
|
$
|
530
|
|
|
$
|
—
|
|
|
$
|
(510
|
)
|
|
$
|
1,203
|
|
Sales returns and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
allowance
|
|
4,097
|
|
|
317
|
|
|
—
|
|
|
(805
|
)
|
|
3,609
|
|
|||||
Deferred tax asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
valuation allowance
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for bad debts
|
|
$
|
1,066
|
|
|
$
|
3,935
|
|
|
$
|
—
|
|
|
$
|
(3,818
|
)
|
|
$
|
1,183
|
|
Sales returns and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
allowance
|
|
3,980
|
|
|
291
|
|
|
—
|
|
|
(174
|
)
|
|
4,097
|
|
|||||
Deferred tax asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
valuation allowance
|
|
226
|
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for bad debts
|
|
$
|
1,175
|
|
|
$
|
397
|
|
|
$
|
—
|
|
|
$
|
(506
|
)
|
|
$
|
1,066
|
|
Sales returns and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
allowance
|
|
3,356
|
|
|
721
|
|
|
—
|
|
|
(97
|
)
|
|
3,980
|
|
|||||
Deferred tax asset
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
valuation allowance
|
|
1,058
|
|
|
226
|
|
|
—
|
|
|
(1,058
|
)
|
|
226
|
|
By:
|
/s/ Jean Lamardo
Name: Jean Lamardo Title: Underwriter III |
Name
|
State or Country of Incorporation
|
|
|
|
|
Aspen Laboratories, Inc.
|
|
Colorado
|
CONMED Andover Medical, Inc.
|
|
New York
|
CONMED Endoscopic Technologies, Inc.
|
|
Massachusetts
|
CONMED Italia SrL
|
|
Italy
|
CONMED Receivables Corporation
|
|
New York
|
CONMED Linvatec Australia PTY LTD
|
|
Australia
|
CONMED Linvatec (Beijing) Medical Appliances Co., Ltd
|
|
China
|
CONMED Linvatec Biomaterials OY
|
|
Finland
|
CONMED Linvatec France SAS
|
|
France
|
Consolidated Medical Equipment Company S. de R.L. de C.V.
|
|
Mexico
|
Consolidated Medical Equipment International, Inc.
|
|
New York
|
Envision Medical Corporation
|
|
California
|
GWH Limited Partnership
|
|
Florida
|
Largo Lakes I Limited Partnership
|
|
Delaware
|
Linvatec Corporation
|
|
Florida
|
Linvatec Austria GmbH
|
|
Austria
|
Linvatec Belgium NV
|
|
Belgium
|
Linvatec Canada ULC
|
|
Canada
|
Linvatec Denmark ApS
|
|
Denmark
|
Linvatec Deutschland GmbH
|
|
Germany
|
Linvatec Europe SPRL
|
|
Belgium
|
Linvatec Finland OY
|
|
Finland
|
Linvatec Korea Ltd.
|
|
Korea
|
Linvatec Nederland B.V.
|
|
Netherlands
|
Linvatec Polska Sp. z.o.o
|
|
Poland
|
Linvatec Spain S.L.
|
|
Spain
|
Linvatec Sweden AB
|
|
Sweden
|
Linvatec U.K. Ltd.
|
|
United Kingdom
|
Viking Systems, Inc.
|
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of CONMED Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Joseph J. Corasanti
|
Joseph J. Corasanti
|
President and
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of CONMED Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting;
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Robert D. Shallish Jr.
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Robert D. Shallish, Jr.
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Vice President - Finance and
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Chief Financial Officer
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Date:
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February 25, 2013
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/s/Joseph J. Corasanti
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Joseph J. Corasanti
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President and
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Chief Executive Officer
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Date:
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February 25, 2013
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/s/Robert D. Shallish, Jr.
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Robert D. Shallish, Jr.
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Vice President-Finance and
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|
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Chief Financial Officer
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