CONMED (NYSE: CNMD) lifts Q2 profit, exits gastro line and cuts notes
CONMED Corporation reported Q2 2026 net sales of $343.5 million, roughly flat year over year, while net income rose to $23.1 million and diluted EPS to $0.77. For the first six months, net sales were $660.5 million and net income $36.9 million, or $1.22 per diluted share.
Gross margin expanded to 57.5% in Q2 and 57.7% year to date, helped by an $8.5 million IEEPA tariff refund and favorable mix, partly offset by a $6.9 million charge to write down inventory, equipment and tooling for discontinued products. Selling and administrative expense rose to 42.4% of sales in Q2, reflecting a $4.4 million loss and $9.8 million goodwill write-off on the sale of a gastroenterology business, higher consulting and optimization costs, and advisory compensation, partially offset by prior‑year CEO advisory costs and gains on earlier gastro asset sales. R&D increased to 4.5% of sales in Q2, including European Union Medical Device Regulation compliance spending.
Orthopedic surgery sales grew 8.2% in Q2 on powered instruments, sports medicine, visualization and BioBrace, while general surgery declined as gastroenterology sales fell to $4.7 million from $25.3 million. Total debt was $834.2 million, including a new $450.0 million Term A‑2 loan and $193.0 million drawn on the revolver. The company repurchased $645.2 million principal of its 2.250% Notes for $637.2 million, recording an $8.1 million extinguishment gain, and ended the quarter with $37.3 million in cash and $455.5 million of revolver availability, stating that existing resources are expected to cover needs for at least 12 months.
Positive
- None.
Negative
- None.
Filing Explained
Dividend payments are suspended, the buyback authorization remains, and convertible notes are due June 15, 2027.
This Form 10-Q is an unaudited quarterly report; it records that CONMED has suspended dividend payments while its board-authorized common-stock repurchase program remains available at
The program is an authorization rather than a commitment to spend the remaining amount: CONMED says it may suspend, modify or discontinue the program, while the board will consider future dividends from time to time.
Separately, the company reports remaining 2.250% convertible notes due
The named resolution points are whether the board declares future dividends and how the
Key Figures
Net sales Q2 2026: $343.488 million
Net income Q2 2026: $23.071 million
Gross margin Q2 2026: 57.5%
+5 more
8 metrics
Net sales Q2 2026
$343.488 million
Consolidated net sales for the three months ended June 30, 2026
Net income Q2 2026
$23.071 million
Net income for the three months ended June 30, 2026
Gross margin Q2 2026
57.5%
Gross profit as a percentage of net sales in Q2 2026
Net sales 1H 2026
$660.534 million
Consolidated net sales for the six months ended June 30, 2026
Total debt
$834.249 million
Total debt outstanding as of June 30, 2026
Cash and cash equivalents
$37.328 million
Cash and cash equivalents balance at June 30, 2026
2.250% Notes repurchased
$645.2 million principal
Principal amount of 2.250% convertible notes repurchased in Q2 2026
Gastroenterology sales Q2 2026
$4.7 million
Gastroenterology product sales, including $2.7M under a supply agreement, in Q2 2026
Key Terms
IEEPA tariff refunds, 2.250% Notes, contingent consideration, cash flow hedges, +1 more
5 terms
IEEPA tariff refunds regulatory
"received $10.2 million of IEEPA tariff refunds during the second quarter of 2026"
Refunds under the International Emergency Economic Powers Act (IEEPA) are repayments of import duties, fees, or penalties that were charged because of trade restrictions or sanctions put in place under emergency authority and later reversed, modified, or found inapplicable. For investors, these refunds can change a company’s past cash outflows and future cost structure—similar to getting a billed charge returned after a rule change—affecting reported earnings or cash available for other uses.
2.250% Notes financial
"issued $800.0 million aggregate principal amount of 2.250% Notes"
contingent consideration financial
"non-cash adjustments to fair value of contingent consideration liability"
Contingent consideration is an additional payment agreed when one company buys another that will be paid later only if specific future targets are met, such as revenue, profit, or regulatory milestones. It matters to investors because it shifts risk between buyer and seller and affects the acquiring company's future cash flow and reported value — like promising a bonus after results are proven.
cash flow hedges financial
"We account for these forward contracts as cash flow hedges"
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
Term Secured Overnight Financing Rate financial
"Interest rates are at the Term Secured Overnight Financing Rate"
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FAQ
How did CONMED (CNMD) perform financially in Q2 2026?
CONMED generated Q2 2026 net sales of $343.5 million and net income of $23.1 million, or $0.77 diluted EPS. Gross margin improved to 57.5%, up from 55.0%, reflecting tariff refunds and a more favorable product and geographic mix.
What were CONMED (CNMD) segment trends and revenue mix in Q2 2026?
Orthopedic surgery sales rose 8.2% to $152.3 million, driven by powered instruments, sports medicine, visualization and BioBrace. General surgery fell 5.2% to $191.2 million, mainly from exiting many gastroenterology products, partly offset by growth in AirSeal and smoke evacuation offerings.
How did exiting gastroenterology affect CONMED (CNMD) in 1H 2026?
Gastroenterology sales fell to $4.7 million in Q2 and $14.1 million year to date, versus $25.3 million and $50.3 million a year earlier. The business sale triggered a $4.4 million loss and $9.8 million goodwill write-off, and CONMED signed a 12‑month manufacturing and supply agreement.
What capital structure moves did CONMED (CNMD) make in 1H 2026?
CONMED repurchased $645.2 million principal of its 2.250% Notes for $637.2 million, booking an $8.1 million gain. It funded this largely with a new $450.0 million Term A‑2 loan and increased revolver borrowings, ending with total debt of $834.2 million.
What is CONMED’s (CNMD) liquidity position as of June 30, 2026?
CONMED held $37.3 million in cash and cash equivalents and had working capital of $220.3 million. Borrowings on its revolver were $193.0 million with $455.5 million of additional capacity. Management states existing resources should meet needs for at least the next 12 months.
How much stock did CONMED (CNMD) repurchase in Q2 2026 and year to date?
In Q2 2026, CONMED repurchased 171,691 shares at an average price of $36.49 under its $150.0 million authorization. For the first six months of 2026, total repurchases were about 1.0 million shares for $43.7 million, inclusive of excise tax.
What special items affected CONMED’s (CNMD) margins in Q2 2026?
Gross margin benefited from an $8.5 million IEEPA tariff refund and a $1.9 million gain from terminating a Gore distribution agreement, but was reduced by a $6.9 million inventory, equipment and tooling charge tied to product discontinuations, along with portfolio and mix shifts.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
or
| For the quarterly period ended | Commission File Number | ||||
(Exact name of the registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(727 ) 392-6464
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one).
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
The number of shares outstanding of registrant's common stock, as of July 27, 2026 is 29,951,248 shares.
CONMED CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2026
| PART I FINANCIAL INFORMATION | ||||||||
| Item Number | Page | |||||||
Item 1. | Financial Statements (unaudited) | |||||||
– Consolidated Condensed Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025 | 1 | |||||||
– Consolidated Condensed Balance Sheets as of June 30, 2026 and December 31, 2025 | 2 | |||||||
– Consolidated Condensed Statements of Shareholders' Equity for the three and six months ended June 30, 2026 and 2025 | 3 | |||||||
– Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2026 and 2025 | 4 | |||||||
– Notes to Consolidated Condensed Financial Statements | 5 | |||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 20 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 27 | ||||||
Item 4. | Controls and Procedures | 28 | ||||||
| PART II OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 28 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 28 | ||||||
Item 5. | Other Information | 29 | ||||||
Item 6. | Exhibits | 30 | ||||||
Signatures | 31 | |||||||
Table of Contents
PART I FINANCIAL INFORMATION
Item 1.
CONMED CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands except per share amounts)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling and administrative expense | |||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other (income) / expense | ( | ( | |||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
| Per share data: | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Weighted average common shares | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See notes to consolidated condensed financial statements.
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CONMED CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, in thousands except share and per share amounts)
| June 30, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued compensation and benefits | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred income taxes | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Shareholders' equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
authorized | |||||||||||
Common stock, par value $ issued in 2026 and 2025, respectively | |||||||||||
| Paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
Less: in treasury, at cost, in 2026 and 2025, respectively | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
See notes to consolidated condensed financial statements.
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CONMED CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited, in thousands except per share amounts)
| Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Shareholders’ Equity | ||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Common stock issued under employee plans | ( | ||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
Repurchases of common stock (a) | ( | ( | |||||||||||||||||||||
| Comprehensive income: | |||||||||||||||||||||||
Cash flow hedging gain, net | |||||||||||||||||||||||
| Pension liability, net | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||
Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Common stock issued under employee plans | ( | ||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
Repurchases of common stock (a) | ( | ( | |||||||||||||||||||||
| Settlement of convertible notes hedge transactions | |||||||||||||||||||||||
| Settlement of warrants | ( | ( | |||||||||||||||||||||
| Comprehensive income: | |||||||||||||||||||||||
| Cash flow hedging gain, net | |||||||||||||||||||||||
| Pension liability, net | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||
Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
(a) Inclusive of excise taxes
| Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Shareholders’ Equity | ||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Common stock issued under employee plans | ( | ( | |||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
Dividends on common stock ($ | ( | ( | |||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||
Cash flow hedging loss, net | ( | ||||||||||||||||||||||
| Pension liability, net | |||||||||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Total comprehensive income | |||||||||||||||||||||||
Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Common stock issued under employee plans | |||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
Dividends on common stock ($ | ( | ( | |||||||||||||||||||||
Comprehensive income: | |||||||||||||||||||||||
Cash flow hedging loss, net | ( | ||||||||||||||||||||||
| Pension liability, net | |||||||||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Total comprehensive income | |||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
See notes to consolidated condensed financial statements.
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CONMED CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | |||||||||||
| Amortization of deferred debt issuance costs | |||||||||||
| Amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Gain on sale of product offerings, net | ( | ||||||||||
Non-cash adjustments to fair value of contingent consideration liability | |||||||||||
| (Gain) loss on early extinguishment of debt, net | ( | ||||||||||
| Increase (decrease) in cash flows from changes in assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Inventories | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Accrued compensation and benefits | ( | ||||||||||
| Other assets | ( | ( | |||||||||
| Other liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Proceeds from sale of product offerings | |||||||||||
| Purchases of property, plant and equipment | ( | ( | |||||||||
| Other | |||||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Payments on term loan | ( | ||||||||||
| Proceeds from term loan | |||||||||||
| Payments on revolving line of credit | ( | ( | |||||||||
| Proceeds from revolving line of credit | |||||||||||
Repurchases of common stock | ( | ||||||||||
| Payments to repurchase convertible notes | ( | ||||||||||
| Payments related to contingent consideration | ( | ( | |||||||||
| Payments related to debt issuance costs | ( | ( | |||||||||
| Dividends paid on common stock | ( | ||||||||||
| Other, net | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
Non-cash financing activities: | |||||||||||
| Dividends payable | $ | $ | |||||||||
See notes to consolidated condensed financial statements.
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CONMED CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited, in thousands except per share amounts)
Note 1 - Operations
CONMED Corporation (“CONMED”, the “Company”, “we” or “us”) is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, and thoracic surgery.
During the quarter ended March 31, 2026, the Company sold certain assets related to our gastroenterology product offerings for $7.0 million and we recorded a gain of $3.9 million on this asset sale to selling and administrative expense. During the quarter ended June 30, 2026, we recorded an additional gain of $1.9 million to selling and administrative expense.
During the quarter ended June 30, 2026, the Company completed the sale of additional assets related to our gastroenterology product offerings for $14.0 million. This sale was accounted for as a sale of a business which resulted in a $4.4 million loss as further described in Note 9.
Note 2 - Interim Financial Information
The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary to fairly state the results for the periods presented. The consolidated condensed financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. Results for the periods ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.
The consolidated condensed financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2025 included in our Annual Report on Form 10-K.
Use of Estimates
Note 3 - New Accounting Pronouncements
Recently Issued Accounting Standards, Not Yet Adopted
In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06 - Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard removes all references to software development stages. It also requires that an entity capitalizes software when both: (1) management has authorized and committed funding to the project and (2) it is probable that the project will be completed and the software is used to perform the intended function. This ASU may be adopted prospectively, retrospectively, or on a modified transition approach based on the status of the project and whether software costs were capitalized before the date of adoption. It is effective for annual periods beginning after December 15,
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2027 and interim periods within fiscal years beginning after December 15, 2027 with early adoption permitted. We are currently evaluating the impact this ASU will have on our consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03 - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) as clarified by ASU 2025-01. The standard requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes on an annual and interim basis. Any relevant expense caption presented on the face of the income statement within continuing operations are required to be disaggregated by the following natural expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation, and (4) intangible asset amortization. This ASU can be adopted prospectively or retrospectively and is effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. We expect this ASU to only impact our disclosures.
Note 4 - Revenues
The following tables present revenue disaggregated by primary geographic market where the products are sold, by product line and timing of revenue recognition:
| Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Orthopedic Surgery | General Surgery | Total | Orthopedic Surgery | General Surgery | Total | ||||||||||||||||||||||||||||||
| Primary Geographic Markets | |||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Europe, Middle East & Africa | |||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||
| Americas (excluding the United States) | |||||||||||||||||||||||||||||||||||
| Total sales from contracts with customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||||||||
| Goods transferred at a point in time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Services transferred over time | |||||||||||||||||||||||||||||||||||
| Total sales from contracts with customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Six Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||||||||||||||
| Orthopedic Surgery | General Surgery | Total | Orthopedic Surgery | General Surgery | Total | ||||||||||||||||||||||||||||||
| Primary Geographic Markets | |||||||||||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Europe, Middle East & Africa | |||||||||||||||||||||||||||||||||||
| Asia Pacific | |||||||||||||||||||||||||||||||||||
| Americas (excluding the United States) | |||||||||||||||||||||||||||||||||||
| Total sales from contracts with customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Timing of Revenue Recognition | |||||||||||||||||||||||||||||||||||
| Goods transferred at a point in time | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Services transferred over time | |||||||||||||||||||||||||||||||||||
| Total sales from contracts with customers | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
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Contract liability balances related to the sale of extended warranties to customers are as follows:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Contract liability | $ | $ | |||||||||
Revenue recognized during the six months ended June 30, 2026 and June 30, 2025 from amounts included in contract liabilities at the beginning of the periods were $9.4 million and $8.9 million, respectively. There were no material contract assets as of June 30, 2026 and December 31, 2025.
Note 5 - Comprehensive Income
Comprehensive income consists of the following:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Cash flow hedging gain (loss), net of income tax (income tax expense (benefit) of $ | ( | ( | |||||||||||||||||||||
Pension liability, net of income tax (income tax expense of $ | |||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Accumulated other comprehensive loss consists of the following:
Cash Flow Hedging Gain (Loss) | Pension Liability | Cumulative Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
| Balance, December 31, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss) before reclassifications, net of tax | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) before taxa | ( | ( | |||||||||||||||||||||
| Income tax | ( | ||||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
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Cash Flow Hedging Gain (Loss) | Pension Liability | Cumulative Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Other comprehensive gain (loss) before reclassifications, net of tax | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) before taxa | ( | ||||||||||||||||||||||
| Income tax | ( | ( | |||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Balance, June 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(a) The cash flow hedging gain (loss) and pension liability accumulated other comprehensive loss components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 6 and Note 12, respectively, for further details.
Note 6 - Fair Value Measurement
We enter into derivative instruments for risk management purposes only. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We use forward contracts, a type of derivative instrument, to manage certain foreign currency exposures.
By nature, all financial instruments involve market and credit risks. We enter into forward contracts with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties. While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties.
Foreign Currency Forward Contracts. We hedge forecasted intercompany sales denominated in foreign currencies through the use of forward contracts. We account for these forward contracts as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss. These changes in fair value will be recognized into earnings as a component of sales or cost of sales when the forecasted transaction occurs.
We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables designated in foreign currencies. These forward contracts settle each month at month-end, at which time we enter into new forward contracts. We have not designated these forward contracts as hedges and have not applied hedge accounting to them.
The following table presents the notional contract amounts for forward contracts outstanding:
| As of | |||||||||||||||||
| FASB ASC Topic 815 Designation | June 30, 2026 | December 31, 2025 | |||||||||||||||
| Forward exchange contracts | Cash flow hedge | $ | $ | ||||||||||||||
| Forward exchange contracts | Non-designated | ||||||||||||||||
The remaining time to maturity as of June 30, 2026 is within two years for hedge designated foreign exchange contracts and approximately one month for non-hedge designated forward exchange contracts.
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Statement of comprehensive income presentation
Derivatives designated as cash flow hedges
Foreign exchange contracts designated as cash flow hedges had the following effects on accumulated other comprehensive income (loss) ("AOCI") and net earnings on our consolidated condensed statements of comprehensive income and our consolidated condensed balance sheets:
Amount of Gain (Loss) Recognized in AOCI | Consolidated Condensed Statements of Comprehensive Income | Amount of Gain (Loss) Reclassified from AOCI | |||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| Total Amount of Line Item Presented | |||||||||||||||||||||||||||||||||||||||||
| Derivative Instrument | 2026 | 2025 | Location of amount reclassified | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | $ | $ | ( | Net Sales | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
| Cost of Sales | ( | ||||||||||||||||||||||||||||||||||||||||
Pre-tax gain (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
Tax expense (benefit) | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net gain (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
| Amount of Gain (Loss) Recognized in AOCI | Consolidated Condensed Statements of Comprehensive Income | Amount of Gain (Loss) Reclassified from AOCI | |||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||
| Total Amount of Line Item Presented | |||||||||||||||||||||||||||||||||||||||||
| Derivative Instrument | 2026 | 2025 | Location of amount reclassified | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Foreign exchange contracts | $ | $ | ( | Net Sales | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Cost of Sales | ( | ||||||||||||||||||||||||||||||||||||||||
Pre-tax gain (loss) | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
Tax expense (benefit) | ( | ||||||||||||||||||||||||||||||||||||||||
Net gain (loss) | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
At June 30, 2026, $3.5 million of net unrealized gain on forward contracts accounted for as cash flow hedges, and included in accumulated other comprehensive loss, are expected to be recognized in earnings in the next twelve months.
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Derivatives not designated as cash flow hedges
Net losses from derivative instruments not accounted for as hedges and gains (losses) on our intercompany receivables on our consolidated condensed statements of comprehensive income were:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
| Derivative Instrument | Location on Consolidated Condensed Statements of Comprehensive Income | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||
Net loss on currency forward contracts | Selling and administrative expense | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
Net gain (loss) on currency transaction exposures | Selling and administrative expense | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||
Balance sheet presentation
We record these forward foreign exchange contracts at fair value. The following tables summarize the fair value for forward foreign exchange contracts outstanding at June 30, 2026 and December 31, 2025:
| June 30, 2026 | Location on Consolidated Condensed Balance Sheet | Asset Fair Value | Liabilities Fair Value | Net Fair Value | |||||||||||||||||||
| Derivatives designated as hedged instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | Prepaid expenses and other current assets | $ | $ | ( | $ | ||||||||||||||||||
| Foreign exchange contracts | Other assets | ( | |||||||||||||||||||||
| $ | $ | ( | $ | ||||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | Other current liabilities | ( | ( | ||||||||||||||||||||
| Total derivatives | $ | $ | ( | $ | |||||||||||||||||||
| December 31, 2025 | Location on Consolidated Condensed Balance Sheet | Asset Fair Value | Liabilities Fair Value | Net Fair Value | |||||||||||||||||||
| Derivatives designated as hedged instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | Other current liabilities | $ | $ | ( | $ | ( | |||||||||||||||||
| Foreign exchange contracts | Other long-term liabilities | ( | ( | ||||||||||||||||||||
| $ | $ | ( | $ | ( | |||||||||||||||||||
| Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
| Foreign exchange contracts | Other current liabilities | ( | ( | ||||||||||||||||||||
| Total derivatives | $ | $ | ( | $ | ( | ||||||||||||||||||
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Our forward foreign exchange contracts are subject to a master netting agreement and qualify for netting in the consolidated condensed balance sheets.
Fair Value Disclosure. FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. This guidance applies when fair value measurements are required or permitted. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is defined based upon an exit price model.
Valuation Hierarchy. A valuation hierarchy was established for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. There have been no significant changes in the assumptions.
Valuation Techniques. Assets and liabilities carried at fair value and measured on a recurring basis as of June 30, 2026 consist of forward foreign exchange contracts and contingent consideration. The Company values its forward foreign exchange contracts using quoted prices for similar assets. The most significant assumption is quoted currency rates. The value of the forward foreign exchange contract assets and liabilities were valued using Level 2 inputs and are listed in the table above.
The Company values contingent consideration from its acquisitions of In2Bones, Global Inc. ("In2Bones") and Biorez, Inc. ("Biorez") using Level 3 inputs. The contingent consideration was recorded at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value. The fair value of contingent consideration is measured using projected payment dates, discount rates, revenue volatilities and projected revenues. The earn-out period for In2Bones ended on June 30, 2026. The recurring Level 3 fair value measurements of contingent consideration for which the Biorez liability is recorded includes the following significant unobservable inputs as of June 30, 2026:
| Unobservable Input | Biorez | |||||||
| Discount rate | ||||||||
| Revenue volatility | ||||||||
| Projected year of payment | 2026 | |||||||
Adjustments to the fair value of contingent consideration for In2Bones were driven principally by the level of In2Bones revenue resulting in the elimination of the liability upon the completion of the earn-out period at June 30, 2026. Adjustments to the fair value of contingent consideration for Biorez mainly relate to the passage of time. Changes in the fair value of contingent consideration liabilities for the six months ended June 30, 2026 and 2025 are as follows:
| In2Bones | Biorez | |||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||
| Balance as of January 1, | $ | $ | $ | $ | ||||||||||||||||
Payments | ( | ( | ||||||||||||||||||
| Changes in fair value of contingent consideration | ( | ( | ||||||||||||||||||
| Balance as of June 30, | $ | $ | $ | $ | ||||||||||||||||
Contingent consideration of $33.2 million and $61.4 million is included in other current liabilities in the consolidated condensed balance sheet at June 30, 2026 and December 31, 2025, respectively.
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Note 7 - Inventories
Inventories consist of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Raw materials | $ | $ | |||||||||
| Work-in-process | |||||||||||
| Finished goods | |||||||||||
| Total | $ | $ | |||||||||
Note 8 - Earnings Per Share
Basic earnings per share (“basic EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares.
The following tables set forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Basic weighted average shares outstanding | ||||||||||||||||||||||||||
Stock-based awards | ||||||||||||||||||||||||||
Diluted weighted average shares outstanding | ||||||||||||||||||||||||||
Net income (per share) | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||
The shares used in the calculation of diluted EPS exclude stock options, stock appreciation rights, restricted stock units, and performance share units to purchase shares where the exercise price was greater than the average market price of common shares for the period and the effect of the inclusion would be anti-dilutive. Such shares aggregated approximately 4.5 million and 4.4 million for the three and six months ended June 30, 2026, respectively, and 4.1 million and 3.9 million for the three and six months ended June 30, 2025, respectively.
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Note 9 - Goodwill and Other Intangible Assets
The changes in the net carrying amount of goodwill for the six months ended June 30, 2026 are as follows:
| Balance as of December 31, 2025 | $ | ||||
| Write-off related to sale of a business | ( | ||||
| Foreign currency translation | ( | ||||
| Balance as of June 30, 2026 | $ | ||||
Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition. Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.
During the quarter ended June 30, 2026, the Company completed the sale of additional assets, which constituted a business, related to the gastroenterology product offerings for $14.0 million. As this transaction was determined to be the sale of a business, we wrote off $9.8 million of goodwill, which resulted in a $4.4 million loss on the sale recorded to selling and administrative expense.
Other intangible assets consist of the following:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||
| Weighted Average Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||||
| Intangible assets with definite lives: | ||||||||||||||||||||||||||
| Customer and distributor relationships | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Sales representation, marketing and promotional rights | ( | ( | ||||||||||||||||||||||||
| Developed technology | ( | ( | ||||||||||||||||||||||||
| Patents and other intangible assets | ( | ( | ||||||||||||||||||||||||
| Intangible assets with indefinite lives: | ||||||||||||||||||||||||||
| Trademarks and tradenames | — | — | ||||||||||||||||||||||||
| $ | $ | ( | $ | $ | ( | |||||||||||||||||||||
Customer and distributor relationships, trademarks and tradenames, developed technology and patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Sales representation, marketing and promotional rights represent intangible assets created under our agreement with Musculoskeletal Transplant Foundation.
Amortization expense related to intangible assets which are subject to amortization totaled $8.7 17.5 million and $17.3 million for the six months ended June 30, 2026 and 2025, respectively, and is included as a reduction of revenue (for amortization related to our sales representation, marketing and
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promotional rights) and in selling and administrative expense (for all other intangible assets) in the consolidated condensed statements of comprehensive income.
The estimated intangible asset amortization expense remaining for the year ending December 31, 2026 and for each of the five succeeding years is as follows:
| Amortization included in expense | Amortization recorded as a reduction of revenue | Total | |||||||||||||||
Remaining, 2026 | $ | $ | $ | ||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| 2030 | |||||||||||||||||
| 2031 | |||||||||||||||||
Note 10 - Long-Term Debt
Long-term debt consists of the following:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Revolving line of credit | $ | $ | |||||||||
Term A-1 Loan, net of deferred debt issuance costs of $ | |||||||||||
Term A-2 Loan, net of deferred debt issuance costs of $ | |||||||||||
Finance leases | |||||||||||
| Total debt | |||||||||||
| Less: Current portion | |||||||||||
| Total long-term debt | $ | $ | |||||||||
Eighth Amended and Restated Senior Credit Agreement
On June 10, 2025, we entered into an eighth amended and restated senior credit agreement consisting of: (a) a $100.0 million term loan facility ("Term A-1 Loan") and (b) a $650.0 million revolving credit facility. On May 27, 2026, we entered into the first amendment to the eighth amended and restated senior credit agreement to obtain additional commitments for a senior secured delayed draw term loan facility of $450 million ("Term A-2 Loan"). The revolving credit facility will terminate and the loans outstanding under both term loan facilities will expire on June 10, 2030.
The Term A-1 Loan was payable in quarterly installments increasing over the term of the facility with the remaining outstanding balance due at maturity. During 2025, we made $60 million in prepayments on the Term A-1 Loan facility resulting in the elimination of such quarterly payments. Proceeds from the Term A-1 Loan facility and borrowings under the revolving credit facility were used to repay the then existing senior credit agreement. On June 12, 2026, we borrowed $450.0 million under the Term A-2 Loan. The Term A-2 Loan is payable in quarterly installments increasing over the term of the facility with the remaining outstanding balance due at maturity. Proceeds from the Term A-2 Loan facility and borrowings under the revolving credit facility were used to repurchase a portion of the 2.250 % convertible notes (the "2.250 % Notes").
Interest rates are at the Term Secured Overnight Financing Rate (3.688 % at June 30, 2026) plus an interest rate margin of 1.125 % (4.813 % at June 30, 2026) for the Term A-1 Loan and revolving credit facility. For borrowings where we elect to use the alternate base rate, the initial base rate is the greatest of (i) the Prime Rate, (ii) the New York Federal Reserve Bank Rate plus 0.50 % or (iii) the one-month Term SOFR plus 1.00 %, plus, in each case, an interest rate margin. For the Term A-2 Loan the interest rate is at the Term Secured Overnight Financing Rate priced at origination (3.625 %) plus an interest rate margin of 1.750 % (5.375 % at June 30, 2026).
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There were $40.0 million in borrowings outstanding on the Term A-1 Loan and $450.0 million in borrowings outstanding on the Term A-2 Loan as of June 30, 2026. There were $193.0 million in borrowings outstanding under the revolving credit facility as of June 30, 2026. Our available borrowings on the revolving credit facility at June 30, 2026 were $455.5 million with approximately $1.5 million of the facility set aside for outstanding letters of credit. The carrying amounts of the term loan and revolving credit facility approximate fair value.
The eighth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The eighth amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in full compliance with these covenants and restrictions as of June 30, 2026. We are also required, under certain circumstances, to make mandatory prepayments with net cash proceeds from the incurrence of certain additional indebtedness, certain asset sales, or insurance proceeds or condemnation awards, in each case, subject to certain exceptions and reinvestment rights.
On June 6, 2022, we issued $800.0 million aggregate principal amount of 2.250 % convertible notes (the "2.250 % Notes"). Interest is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2022. The 2.250 % Notes will mature on June 15, 2027, unless earlier repurchased or converted. The 2.250 % Notes represent subordinated unsecured obligations and are convertible under certain circumstances, as defined in the indenture, into a combination of cash and CONMED common stock, with the principal required to be paid in cash. The 2.250 % Notes may be converted at an initial conversion rate of 6.8810 shares of our common stock per $1,000 principal amount of the 2.250 % Notes (equivalent to an initial conversion price of approximately $145.33 per share of common stock). Holders of the 2.250 % Notes may convert the 2.250 % Notes at their option at any time on or after March 15, 2027 through the second scheduled trading day preceding the maturity date. Holders of the 2.250 % Notes will also have the right to convert the 2.250 % Notes prior to March 15, 2027, but only upon the occurrence of specified events. The conversion rate is subject to anti-dilution adjustments if certain events occur. A portion of these proceeds were used to repurchase a portion of our then-outstanding 2.625 % Convertible Notes (the "2.625 % Notes"), pay off our then outstanding balance on our revolving line of credit, pay down of $90.0 million of our then outstanding term loan and partially pay for the In2Bones Global, Inc. acquisition. In addition, approximately $115.6 million of the proceeds were used to pay the cost of certain convertible notes hedge transactions related to the 2.250 % Notes.
On June 15, 2026, the Company repurchased $645.2 million principal amount of the 2.250 % Notes for cash consideration of $637.2 million. During the three and six months ended June 30, 2026, the Company recorded a gain on extinguishment of $8.1 million to other income. We also recorded to other expense a write-off of unamortized debt issuance costs related to the 2.250 % Notes of $3.5 million and professional fees of $1.8 million.
For the three months ended June 30, 2026 and 2025, we have recorded interest expense on the 2.250 % Notes of $3.9 million and $4.5 million, respectively, and for the six months ended June 30, 2026 and 2025 we have recorded interest expense on the 2.250 % Notes of $8.4 million and $9.0 million, respectively, at the contractual coupon rate of 2.250 %.
The estimated fair value of the remaining 2.250 % Notes was approximately $151.3 million as of June 30, 2026 based on a market approach which represents a Level 2 valuation in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the 2.250 % Notes in an over-the-counter market transaction on the last business day of the period.
Convertible Notes Hedge Transactions
In connection with the offering of the 2.250 % Notes, we entered into convertible notes hedge transactions with a number of financial institutions (each, an “option counterparty”). The convertible notes hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2.250 % Notes, the number of shares of our common stock underlying the 2.250 % Notes. Concurrent with entering into the convertible notes hedge transactions, we also entered into separate warrant transactions with each option counterparty whereby we sold to such option counterparty warrants to purchase, subject to customary anti-dilution adjustments, the same number of shares of our common stock.
In connection with the repurchase of $645.2 million principal amount of the 2.250 % Notes, the Company entered into agreements with the option counterparties to terminate a corresponding portion of the hedges and warrants on the 2.250 % Notes. The transactions had an immaterial net fair value due to the Company which was recorded as an adjustment to Paid-in
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Capital.
The convertible notes hedge transactions are expected generally to reduce the potential dilution upon conversion of the 2.250 % Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2.250 % Notes, as the case may be, in the event that the market price per share of our common stock, as measured under the terms of the convertible notes hedge transactions, is greater than the strike price of the convertible notes hedge transactions, which initially corresponds to the conversion price of the 2.250 % Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the 2.250 % Notes. If, however, the market price per share of our common stock, as measured under the terms of the warrant transactions, exceeds the strike price ($251.53 ) of the warrants, there would nevertheless be dilution to the extent that such market price exceeds the strike price of the warrants, unless we elect to settle the warrants in cash.
The scheduled maturities of long-term debt outstanding at June 30, 2026 are as follows:
Remaining, 2026 | $ | ||||
2027 | |||||
2028 | |||||
2029 | |||||
2030 | |||||
The above amounts exclude deferred debt issuance costs and finance leases.
Note 11 - Guarantees
We provide warranties on certain of our products at the time of sale and sell extended warranties. The standard warranty period for our capital equipment is generally one year and our extended warranties typically vary from one to three years. Liability under service and warranty policies is based upon a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience warrant.
Changes in the liability for standard warranties for the six months ended June 30, are as follows:
| 2026 | 2025 | ||||||||||
| Balance as of January 1, | $ | $ | |||||||||
| Provision for warranties | |||||||||||
| Claims made | ( | ( | |||||||||
| Balance as of June 30, | $ | $ | |||||||||
Costs associated with extended warranty repairs are recorded as incurred and amounted to $2.4 million and $2.2 million for the six months ended June 30, 2026 and 2025, respectively.
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Note 12 - Pension Plan
Net periodic pension cost consists of the following:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost on projected benefit obligation | |||||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
| Net amortization and deferral | |||||||||||||||||||||||
| Net periodic pension cost | $ | $ | $ | $ | |||||||||||||||||||
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Note 13 - Business Segment
We operate and report our business as a single operating segment entity engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. The Company derives revenue globally and manages the business on a consolidated basis due to shared infrastructure and resources. Our chief operating decision maker ("CODM"), the President and Chief Executive Officer, evaluates the various global product portfolios on a net sales basis and evaluates profitability, investment, cash flow metrics and allocates resources on a consolidated worldwide basis.
Our product lines consist of orthopedic surgery and general surgery. Orthopedic surgery consists of sports medicine and lower extremities instrumentation and implants, small bone, large bone and specialty powered surgical instruments as well as imaging systems for use in minimally invasive surgical procedures and fees related to sales representation, promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic procedures, clinical insufflation, smoke evacuation devices, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. These product lines' net sales are as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Orthopedic surgery | $ | $ | $ | $ | |||||||||||||||||||
| General surgery | |||||||||||||||||||||||
| Consolidated net sales | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales(a) | |||||||||||||||||||||||
Salesforce and commission expense | |||||||||||||||||||||||
Marketing expense | |||||||||||||||||||||||
Distribution expense | |||||||||||||||||||||||
General and administrative expense | |||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||
Amortization expense | |||||||||||||||||||||||
| Non-cash adjustments to fair value of contingent consideration liability | ( | ( | |||||||||||||||||||||
Research and development expense(b) | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
| Other (income)/expense | ( | ( | |||||||||||||||||||||
Provision for income taxes | |||||||||||||||||||||||
Other segment items(c) | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
(a)Cost of sales in 2026 includes a charge for inventory, equipment, and tooling related to the discontinuation of certain products for the three and six months ended June 30, 2026 and a benefit from the early termination of our distribution agreement with W.L. Gore & Associates, Inc for the six months ended June 30, 2026.
(b)Research and development expense includes costs to comply with the European Union's Medical Device Regulations in the three and six months ended June 30, 2026.
(c)Other segment items consist of (i) consulting fees, legal fees, and other costs related to operational optimization in the three and six months ended June 30, 2026 and 2025; (ii) cash compensation costs related to advisory services provided by our former Chief Financial Officer and Chief Executive Officer in the six months ended June 30, 2026 and 2025, respectively; (iii) loss from the sale of additional assets related to the gastroenterology product offerings which was recorded as a sale of a business in the three and six months ended June 30, 2026; (iv) a gain from the sale of certain assets related to gastroenterology products in the three and six months ended June 30, 2026; (v) third party services pertaining to the review of potential issues with certain royalty payments to surgeons involved in design teams in three and six months ended June 30, 2025; and (vi) gain on the sale of a product offering in the six months ended June 30, 2025.
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Note 14 - Legal Proceedings
In the ordinary course of business, we are involved in various legal actions involving product liability, employment, intellectual property and commercial disputes, stockholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations. We do not expect that the resolution of any pending claims, investigations or reports of alleged misconduct will have a material adverse effect on our financial condition, results of operations or cash flows. There can be no assurance, however, that future claims, investigations, or reports of alleged misconduct, or the costs associated with responding to such claims, investigations or reports of alleged misconduct, especially when not covered by insurance, will not have a material adverse effect on our financial condition, results of operations or cash flows.
We record reserves sufficient to cover probable and estimable losses associated with pending claims. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded and actual results may differ from these estimates. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency.
For further description of our legal proceedings, reference is made to Note 13, “Legal Proceedings” in the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025.
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| Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |||||||
Forward-Looking Statements
In this Quarterly Report on Form 10-Q, we make forward-looking statements about our financial condition, results of operations and business. Forward-looking statements are statements made by us concerning events that may or may not occur in the future. These statements may be made directly in this document or may be “incorporated by reference” from other documents. Such statements may be identified by the use of words such as “anticipates”, “expects”, “estimates”, “intends” and “believes” and variations thereof and other terms of similar meaning.
Forward-looking statements involve known and unknown risks, uncertainties and other factors, including those that may cause our actual results, performance or achievements or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include those identified under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 and the following, among others:
•general economic and business conditions, including, without limitation, a potential economic downturn, supply chain challenges and constraints, including the availability and cost of materials, the effects of inflation, and increased interest rates;
•trade protection measures, tariffs and other border taxes, and import or export licensing requirements;
•compliance with and changes in laws and regulatory requirements;
•the failure of any enterprise-wide software programs or information technology systems, or potential disruption associated with updating or implementing new software programs or information technology systems;
•the risk of an information security breach, including a cybersecurity breach;
•pandemics and health crises, and the responses thereto by governments and hospitals;
•the possibility that United States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors;
•the introduction and acceptance of new products;
•the ability to advance our product lines, including challenges and uncertainties inherent in product research and development, and the uncertain impact, outcome and cost of ongoing and future clinical trials and market studies;
•competition;
•changes in customer preferences;
•changes in technology;
•cyclical customer purchasing patterns due to budgetary, staffing and other constraints;
•environmental compliance risks, including lack of availability of sterilization with Ethylene Oxide (“EtO”) or other compliance costs associated with the use of EtO;
•the quality of our management and business abilities and the judgment of our personnel, as well as our ability to attract, motivate and retain employees at all levels of the Company;
•the availability, terms and deployment of capital;
•current and future levels of indebtedness and capital spending;
•changes in foreign exchange and interest rates;
•the ability to evaluate, finance and integrate acquired businesses, products and companies;
•changes in business strategy;
•the impact of divestitures of products or product portfolios;
•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;
•the ability to defend and enforce intellectual property, including the risks related to theft or compromise of intellectual property in connection with our international operations;
•the risk of patent, product and other litigation, as well as the cost associated with such litigation; and
•weather related events which may disrupt our operations.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below and “Risk Factors” and “Business” in our Annual Report on Form 10-K for the year ended December 31, 2025 for a further discussion of these factors. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events.
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Amounts reported in millions within this Quarterly Report on Form 10-Q are computed based on the amounts in thousands. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.
Overview
CONMED Corporation is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, and thoracic surgery.
Our product lines consist of orthopedic surgery and general surgery. Orthopedic surgery consists of sports medicine and lower extremities instrumentation and implants, small bone, large bone and specialty powered surgical instruments as well as imaging systems for use in minimally invasive surgery procedures and service fees related to the promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic procedures, clinical insufflation, smoke evacuation devices, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. These product lines as a percentage of consolidated net sales are as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Orthopedic surgery | 44 | % | 41 | % | 45 | % | 42 | % | |||||||||||||||
| General surgery | 56 | % | 59 | % | 55 | % | 58 | % | |||||||||||||||
| Consolidated net sales | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
A significant amount of our products are used in surgical procedures with approximately 86% of our revenues derived from the sale of single-use products. Our capital equipment offerings also facilitate the ongoing sale of related single-use products and accessories, thus providing us with a recurring revenue stream. We manufacture substantially all of our products in facilities located in the United States and Mexico. We market our products both domestically and internationally directly to customers and through distributors. International sales approximated 47% and 44% of our consolidated net sales during the six months ended June 30, 2026 and 2025, respectively.
Business Environment
In recent years, the Company has experienced higher manufacturing and operating costs as well as ongoing supply chain challenges. We continue to monitor our spending and expenses in light of these factors. We engaged a consulting firm during the past year to evaluate and propose improvements in our manufacturing operations. In addition, our results of operations are being impacted by tariffs placed on imported goods to the United States as well as exporting of products to other countries. During the first quarter of 2026, the Supreme Court ruled tariffs paid under the International Emergency Economic Powers Act ("IEEPA") were illegal. We have followed the process to submit refund claims for such payments and as a result received $10.2 million of IEEPA tariff refunds during the second quarter of 2026, of which $8.5 million was recorded in cost of goods sold and the remaining was recorded to inventory. See "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 for more information.
The Company has not been materially impacted by the conflicts in Ukraine and the Middle East. The Company has no direct operations in these regions with our business limited to selling to third party distributors. Total revenues and accounts receivable associated with sales to third party distributors in these regions are not material to the consolidated condensed financial statements. We will continue to monitor and adjust, if necessary, our business strategy in response to the conflicts in these regions.
On December 5, 2025, we announced our intent to exit our gastroenterology product offerings as part of our portfolio optimization strategy. This included the termination of our distribution agreement with W.L. Gore & Associates, Inc. ("Gore") for the Gore® VIABIL® biliary stent effective January 1, 2026; the sale of certain assets related to our gastroenterology product offerings during the first quarter of 2026; and the subsequent sale of additional assets related to the gastroenterology product offerings that was recorded as a sale of a business during the second quarter of 2026. In conjunction with the transaction in the second quarter, we entered into a manufacturing and supply agreement where CONMED will continue to manufacture certain gastroenterology products for the buyer for twelve months.
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Critical Accounting Policies
Preparation of our financial statements requires us to make estimates and assumptions which affect the reported amounts of assets, liabilities, revenues and expenses. Note 1 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025 describes the significant accounting policies used in preparation of the Consolidated Financial Statements. On an ongoing basis, we evaluate the critical accounting policies used to prepare our consolidated financial statements, including, but not limited to, those related to goodwill and intangible assets, contingent consideration and our pension benefit obligation.
Consolidated Results of Operations
The following table presents, as a percentage of net sales, certain categories included in our consolidated condensed statements of comprehensive income for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Cost of sales | 42.5 | 45.0 | 42.3 | 44.8 | |||||||||||||||||||
| Gross profit | 57.5 | 55.0 | 57.7 | 55.2 | |||||||||||||||||||
| Selling and administrative expense | 42.4 | 39.7 | 43.5 | 42.9 | |||||||||||||||||||
| Research and development expense | 4.5 | 4.1 | 4.8 | 4.1 | |||||||||||||||||||
| Income from operations | 10.6 | 11.1 | 9.4 | 8.2 | |||||||||||||||||||
| Interest expense | 2.3 | 2.3 | 2.3 | 2.4 | |||||||||||||||||||
| Other (income) / expense | (0.8) | 0.1 | (0.4) | 0.1 | |||||||||||||||||||
Income before income taxes | 9.1 | 8.7 | 7.5 | 5.7 | |||||||||||||||||||
Provision for income taxes | 2.4 | 2.5 | 1.9 | 1.5 | |||||||||||||||||||
Net income | 6.7 | % | 6.3 | % | 5.6 | % | 4.1 | % | |||||||||||||||
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Net Sales
The following table presents net sales by product line (in millions) for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended | |||||||||||||||||||||||||||||
| % Change | |||||||||||||||||||||||||||||
| 2026 | 2025 | As Reported | Impact of Foreign Currency | Constant Currency | |||||||||||||||||||||||||
| Orthopedic surgery | $ | 152.3 | $ | 140.7 | 8.2 | % | -1.4 | % | 6.8 | % | |||||||||||||||||||
| General surgery | 191.2 | 201.6 | -5.2 | % | -0.4 | % | -5.6 | % | |||||||||||||||||||||
| Net sales | $ | 343.5 | $ | 342.3 | 0.3 | % | -0.8 | % | -0.5 | % | |||||||||||||||||||
| Single-use products | $ | 295.1 | $ | 297.8 | -0.9 | % | -0.8 | % | -1.7 | % | |||||||||||||||||||
| Capital products | 48.4 | 44.5 | 8.6 | % | -1.0 | % | 7.6 | % | |||||||||||||||||||||
| Net sales | $ | 343.5 | $ | 342.3 | 0.3 | % | -0.8 | % | -0.5 | % | |||||||||||||||||||
| Six Months Ended | |||||||||||||||||||||||||||||
| % Change | |||||||||||||||||||||||||||||
| 2026 | 2025 | As Reported | Impact of Foreign Currency | Constant Currency | |||||||||||||||||||||||||
| Orthopedic surgery | $ | 300.0 | $ | 279.0 | 7.5 | % | -1.8 | % | 5.7 | % | |||||||||||||||||||
| General surgery | 360.5 | 384.6 | -6.2 | % | -0.8 | % | -7.0 | % | |||||||||||||||||||||
| Net sales | $ | 660.5 | $ | 663.6 | -0.5 | % | -1.2 | % | -1.7 | % | |||||||||||||||||||
| Single-use products | $ | 565.1 | $ | 574.1 | -1.6 | % | -1.2 | % | -2.8 | % | |||||||||||||||||||
| Capital products | 95.4 | 89.5 | 6.6 | % | -1.2 | % | 5.4 | % | |||||||||||||||||||||
| Net sales | $ | 660.5 | $ | 663.6 | -0.5 | % | -1.2 | % | -1.7 | % | |||||||||||||||||||
Net sales increased 0.3% in the three months ended June 30, 2026 and decreased 0.5% in the six months ended June 30, 2026 compared to the same periods a year ago. During 2026, we exited the gastroenterology product offerings, impacting net sales growth. Gastroenterology sales were $4.7 million, inclusive of $2.7 million from the manufacturing and supply agreement, in the three months ended June 30, 2026, as compared to $25.3 million in the three months ended June 30, 2025. Gastroenterology sales were $14.1 million, inclusive of $2.7 million from the manufacturing and supply agreement, in the six months ended June 30, 2026, as compared to $50.3 million in the six months ended June 30, 2025.
•Orthopedic surgery sales increased 8.2% and 7.5% in the three and six months ended June 30, 2026, respectively, primarily due to growth in our powered surgical instrument, sports medicine, visualization, and BioBrace® product offerings.
•General surgery sales decreased 5.2% and 6.2% in the three and six months ended June 30, 2026 primarily due to the exit from many products related to gastroenterology during the three and six months ended June 30, 2026 partially offset by growth in AirSeal® and smoke evacuation product offerings.
Cost of Sales
Cost of sales decreased to $146.0 million in the three months ended June 30, 2026 as compared to $154.0 million in the three months ended June 30, 2025 and decreased to $279.6 million in the six months ended June 30, 2026 compared to $297.5 million in the six months ended June 30, 2025. Gross profit margins increased 250 basis points to 57.5% in the three months ended June 30, 2026 as compared to 55.0% in the three months ended June 30, 2025. Gross profit margins increased 250 basis points to 57.7% in the six months ended June 30, 2026 compared to 55.2% in the six months ended June 30, 2025.
The 250 basis point increase in gross profit margins during the three months ended June 30, 2026 was primarily impacted by the following:
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•an $8.5 million benefit from IEEPA tariff refunds in the three months ended June 30, 2026;
•a $6.9 million charge for inventory, equipment and tooling related to the discontinuation of certain products in the three months ended June 30, 2026;
•a $5.1 million charge for the engagement of consultants to evaluate and propose improvements to our supply chain and manufacturing operations during the three months ended June 30, 2025; and
•favorable foreign exchange rates and product mix.
The 250 basis point increase in gross profit margins during the six months ended June 30, 2026 was primarily impacted by the following:
•an $8.5 million benefit from IEEPA tariff refunds in the six months ended June 30, 2026;
•a $1.9 million benefit resulting from the termination of our distribution agreement with W.L. Gore & Associates, Inc. for the Gore® VIABIL® biliary stent during the six months ended June 30, 2026;
•a $6.9 million charge for inventory, equipment and tooling related to the discontinuation of certain products in the six months ended June 30, 2026;
•an $8.5 million charge for the engagement of consultants to evaluate and propose improvements to our supply chain and manufacturing operations during the six months ended June 30, 2025; and
•favorable foreign exchange rates and product mix.
Selling and Administrative Expense
Selling and administrative expense increased to $145.6 million in the three months ended June 30, 2026 as compared to $136.0 million in the three months ended June 30, 2025 and increased to $287.3 million in the six months ended June 30, 2026 as compared to $284.9 million in the six months ended June 30, 2025. Selling and administrative expense as a percentage of net sales increased 270 basis points to 42.4% in the three months ended June 30, 2026 as compared to 39.7% in the three months ended June 30, 2025 and increased 60 basis points to 43.5% in the six months ended June 30, 2026 compared to 42.9% in the six months ended June 30, 2025.
The increase in selling and administrative expense as a percentage of sales for the three and six months ended June 30, 2026 was primarily driven by:
•a $4.4 million loss on the sale of additional assets related to the gastroenterology product offerings which constituted a business, in the three and six months ended June 30, 2026 as further described in Note 9;
•$3.3 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Financial Officer in the six months ended June 30, 2026;
•an increase of $1.7 million in costs related to fair value adjustments to contingent consideration ($0.1 million of benefit for the three months ended June 30, 2026 compared to $1.8 million of benefit for the three months ended June 30, 2025), see Note 6;
•consulting fees, legal fees and other costs related to operational optimization of $7.1 million and $14.6 million during the three and six months ended June 30, 2026, respectively, compared to $2.5 million and $2.9 million for the three and six months ended June 30, 2025, respectively; and
•increased investment into our key growth drivers.
The increase in selling and administrative expense as a percentage of sales was partially offset by:
•$12.2 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Executive Officer in the six months ended June 30, 2025;
•$1.9 million and $5.9 million of benefit resulting from the gain on the sale of a product offering in the three and six months ended June 30, 2026, respectively; and
•a decrease of $1.6 million in costs related to fair value adjustments to contingent consideration ($0.6 million of expense for the six months ended June 30, 2026 compared to $2.2 million of expense for the six months ended June 30, 2025), see Note 6.
Amortization expense in the three and six months ended June 30, 2026 was in line with the three and six months ended June 30, 2025 as a percentage of sales.
Research and Development Expense
Research and development expense increased to $15.5 million in the three months ended June 30, 2026 as compared to $14.1 million in the three months ended June 30, 2025. As a percentage of net sales, research and development expense
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increased 40 basis points to 4.5% in the three months ended June 30, 2026 as compared to 4.1% in the three months ended June 30, 2025. The increase in research and development expense as a percentage of sales was mainly driven by $1.1 million in costs to comply with the European Union's Medical Device Regulations as well as increased investments into our key growth drivers in the three months ended June 30, 2026.
Research and development expense increased to $31.8 million in the six months ended June 30, 2026 as compared to $27.1 million in the six months ended June 30, 2025. As a percentage of net sales, research and development expense increased 70 basis points to 4.8% in the six months ended June 30, 2026 compared to 4.1% in the six months ended June 30, 2025. The increase in research and development expense as a percentage of sales was mainly driven by increased investments into our key growth drivers as well as $2.3 million in costs to comply with the European Union's Medical Device Regulations in the six months ended June 30, 2026.
Interest Expense
Interest expense increased to $7.9 million in the three months ended June 30, 2026 from $7.8 million in the three months ended June 30, 2025. The weighted average interest rates on our borrowings increased to 2.84% in the three months ended June 30, 2026 as compared to 2.80% in the three months ended June 30, 2025. The increase in interest expense in the three months ended June 30, 2026 was driven by higher weighted average interest rates offset by lower weighted average borrowings outstanding during the three months ended June 30, 2026.
Interest expense decreased to $14.9 million in the six months ended June 30, 2026 from $16.1 million in the six months ended June 30, 2025. The weighted average interest rates on our borrowings decreased to 2.80% in the six months ended June 30, 2026 as compared to 2.85% in the six months ended June 30, 2025. The change in interest expense in the six months ended June 30, 2026 was driven by lower weighted average borrowings outstanding and lower weighted average interest rates during the six months ended June 30, 2026.
Other (Income) / Expense
During the three and six months ended June 30, 2026, we recorded income of $8.1 million for the difference between the principal value of the 2.250% Notes and the amount paid to repurchase the 2.250% Notes; and expense of $3.5 million related to the write-off of deferred financing fees associated with the repurchase of $645.2 million of the 2.250% Notes and $1.8 million in related professional fees.
Provision for Income Taxes
The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate applied to its year-to-date earnings, and also adjusting for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter.
Income tax expense has been recorded at an effective tax rate of 26.4% for the three months ended June 30, 2026 compared to 28.4% for the three months ended June 30, 2025. Income tax expense has been recorded at an effective tax rate of 25.8% for the six months ended June 30, 2026 compared to 27.0% for the six months ended June 30, 2025. The lower effective tax rate for the three and six months ended June 30, 2026 was primarily the result of lower expenses that were not deductible for tax, including fair value adjustments to contingent consideration, incurred during 2026 as compared to the same periods during 2025. A reconciliation of the United States statutory income tax rate to our effective tax rate is included in our Annual Report on Form 10-K for the year ended December 31, 2025 under Note 8 to the consolidated financial statements.
Non-GAAP Financial Measures
Net sales on a "constant currency" basis is a non-GAAP measure. The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales.
Because non-GAAP financial measures are not standardized, it may not be possible to compare this financial measure with other companies' non-GAAP financial measures having the same or similar names. This adjusted financial measure should not be considered in isolation or as a substitute for reported net sales growth, the most directly comparable GAAP financial
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measure. This non-GAAP financial measure is an additional way of viewing net sales that, when viewed with our GAAP results, provides a more complete understanding of our business. The Company strongly encourages investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Liquidity and Capital Resources
Our liquidity needs arise primarily from capital investments, working capital requirements and payments on indebtedness under the eighth amended and restated senior credit agreement. We have historically met these liquidity requirements with funds generated from operations, borrowings under our revolving credit facility and issuances of debt in the capital markets. In addition, we have historically used term borrowings, including borrowings under the eighth amended and restated senior credit agreement and borrowings under separate loan facilities, in the case of real property purchases, to finance our acquisitions, including payments of contingent consideration. We also have the ability to raise funds through the sale of stock or we may issue debt through a private placement or public offering.
Operating cash flows
Our net working capital position was $220.3 million at June 30, 2026. Net cash provided by operating activities was $50.6 million and $70.7 million in the six months ended June 30, 2026 and June 30, 2025, respectively, generated on net income of $36.9 million and $27.5 million for the six months ended June 30, 2026 and 2025, respectively. Net income in the six months ended June 30, 2026 included a $4.6 million gain on extinguishment of the 2.250% Notes as well as a $1.5 million net gain on the sale of certain assets related to gastroenterology products. In addition, below is a summary of significant changes in assets and liabilities in the six months ended June 30, 2026:
•An increase in cash flows from accounts receivable due to timing of sales and cash receipts;
•A decrease in cash flows from inventory as we increased inventory to mitigate supply chain challenges;
•An increase in cash flows from accounts payable due to the timing of payments;
•A decrease in cash flows from accrued compensation and benefits as a result of higher incentive compensation payments during the period; and
•A decrease in cash flows from other assets due to the timing of payments on prepaid contracts and increases in field inventory.
Investing cash flows
Net cash provided by investing activities in the six months ended June 30, 2026 increased $24.3 million from the same period a year ago mainly driven by cash proceeds of $21.5 million from the sale of assets and a business related to the gastroenterology product offerings. Capital expenditures were $5.8 million in the six months ended June 30, 2026 compared to $9.5 million in the same period a year ago.
Financing cash flows
Net cash used in financing activities in the six months ended June 30, 2026 was $68.8 million compared to net cash used in financing activities of $54.9 million during 2025. Below is a summary of the significant financing activities impacting the change during the six months ended June 30, 2026 compared to 2025:
•During the six months ended June 30, 2026, we paid $637.2 million to repurchase $645.2 million principal value of our 2.250% Notes.
•During the six months ended June 30, 2026, we had proceeds of $450.0 million in borrowings on the Term A-2 Loan to fund a portion of the 2.250% Notes repurchase.
•During the six months ended June 30, 2026, we had $193.0 million in net borrowings on our revolving line of credit compared to $4.0 million in net borrowings during the six months ended June 30, 2025. The increase in borrowings was mainly to fund a portion of the 2.250% Notes repurchase.
•During the six months ended June 30, 2026, we paid $43.2 million for repurchases of common stock.
•During the six months ended June 30, 2026, we paid $28.9 million in contingent consideration related to the Biorez acquisition compared to $14.1 million related to the Biorez acquisition in the same period a year ago.
•During the six months ended June 30, 2025, we had net payments on our Term A-1 Loan of $29.6 million, inclusive of a $25.2 million impact on both borrowings and repayments between independent counterparties associated with the eighth amended and restated senior credit agreement.
•During the six months ended June 30, 2025, we paid $12.4 million in dividends.
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Other Liquidity Matters
Our cash balances and cash flows generated from operations may be used to fund strategic investments, business acquisitions, including contingent consideration payments, working capital needs, research and development, common stock repurchases and payments of dividends to our shareholders. Management believes that cash flow from operations, including cash and cash equivalents on hand and available borrowing capacity under our eighth amended and restated senior credit agreement, will be adequate to meet our anticipated operating working capital requirements, debt service, funding of capital expenditures, and common stock repurchases in the foreseeable future. In addition, management believes we could access capital markets, as necessary, to fund future business acquisitions.
We are also being impacted by the macro-economic environment and we are experiencing higher manufacturing and operating costs caused by inflationary pressures and ongoing supply chain challenges. We continue to monitor our spending and expenses in light of these factors. However, we may need to take further steps to reduce our costs, or to refinance our debt. See “Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, for further discussion.
There were $40.0 million in borrowings outstanding on the Term A-1 Loan facility as of June 30, 2026. There were $193.0 million in borrowings outstanding under the revolving credit facility as of June 30, 2026. There was $450.0 million in borrowings outstanding under the Term A-2 Loan facility as of June 30, 2026. Our available borrowings on the revolving credit facility at June 30, 2026 were $455.5 million with approximately $1.5 million of the facility set aside for outstanding letters of credit.
The eighth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The eighth amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in full compliance with these covenants and restrictions as of June 30, 2026. We are also required, under certain circumstances, to make mandatory prepayments with net cash proceeds from the incurrence of certain additional indebtedness, certain asset sales, or insurance proceeds or condemnation awards, in each case, subject to certain exceptions and reinvestment rights.
On June 6, 2022, we issued $800.0 million aggregate principal amount of 2.250% Convertible Notes due 2027 (the "2.250% Notes"). Interest is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2022. The 2.250% Notes will mature on June 15, 2027, unless earlier repurchased or converted. During the quarter ended June 30, 2026, we repurchased $645.2 million principal amount of the 2.250% Notes for cash consideration of $637.2 million. We intend to fund the maturity of the remaining 2.250% Convertible Notes using cash flows from our operations, along with capacity on our revolving credit facility. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as foregoing acquisitions, reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.
See Note 10 for further information on our financing agreements and outstanding debt obligations.
Our Board of Directors has authorized a $150.0 million share repurchase program. Through June 30, 2026, we repurchased a total of 1.0 million shares of common stock aggregating $43.7 million, inclusive of excise tax, under this program. The program calls for shares to be purchased in the open market or in private transactions from time to time. Subject to applicable law, we may suspend, modify or discontinue the program at any time. The Company expects to repurchase at least $25.0 million in shares annually with $61.8 million planned for 2026. We have financed the repurchases and may finance additional repurchases through operating cash flow and from available borrowings under our revolving credit facility. With the authorization of the share repurchase program, we have suspended our dividend payments and the Board of Directors will consider whether to declare dividends and the amount of such dividends from time to time in the future.
New Accounting Pronouncements
See Note 3 to the consolidated condensed financial statements for a discussion of new accounting pronouncements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the potential loss arising from adverse changes in market rates and prices such as commodity prices, foreign currency exchange rates and interest rates. In the normal course of business, we are exposed to various market risks,
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including changes in foreign currency exchange rates and interest rates. We manage our exposure to these and other market risks through regular operating and financing activities and as necessary through the use of derivative financial instruments.
Foreign Currency Risk
There have been no significant changes in our foreign currency risk exposure or in how the exposure is managed during the six months ended June 30, 2026. Reference is made to Item 7A. of our Annual Report on Form 10-K for the year ended December 31, 2025 for a description of Qualitative and Quantitative Disclosures About Market Risk.
Interest Rate Risk
At June 30, 2026, we had approximately $683.0 million of variable rate debt outstanding under our senior credit agreement. Variable interest rates on our senior credit agreement are determined using a base rate of the Term Secured Overnight Financing rate plus the applicable margin. A change of 1.0% in variable interest rates would increase or decrease quarterly interest expense by $1.7 million based on our outstanding debt as of June 30, 2026.
Item 4. Controls and Procedures
As of the end of the period covered by this report, an evaluation was carried out by CONMED Corporation’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report. In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) occurred during the quarter ended June 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and to Note 14 of the Notes to Consolidated Condensed Financial Statements included in Part I of this Report for a description of certain legal matters.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
There were no unregistered sales of equity securities during the period covered by this report.
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Issuer Purchases of Equity Securities
The following table provides information on the Company's common stock repurchases during the second quarter of 2026:
Total Number of Shares Purchased | Average Price Paid Per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Approximate Dollar Amount of Shares That May Yet be Purchased Under the Program (1) | ||||||||||||||||||||
| April 1, 2026 to April 30, 2026 | 59,641 | $ | 37.72 | 59,641 | $ | 110,362,962 | |||||||||||||||||
| May 1, 2026 to May 31, 2026 | 59,024 | $ | 36.78 | 59,024 | $ | 108,192,066 | |||||||||||||||||
| June 1, 2026 to June 30, 2026 | 53,026 | $ | 34.79 | 53,026 | $ | 106,347,473 | |||||||||||||||||
Total | 171,691 | $ | 36.49 | 171,691 | |||||||||||||||||||
(1) Average price paid per share and dollar amount of shares purchased under the program includes cash paid for commissions and excise tax.
(2) In October 2025, our Board of Directors authorized a $150.0 million share repurchase program with no expiration.
Item 5. Other Information
Rule 10b5-1 Director and Officer Trading Arrangements
During the quarter ended June 30, 2026, none of the members of our Board of Directors or officers adopted terminated
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Item 6. Exhibits
| Exhibit Index | |||||
| Exhibit No. | Description of Exhibit | ||||
31.1* | Certification of Patrick J. Beyer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
31.2* | Certification of John E. Gallagher pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
32.1* | Certifications of Patrick J. Beyer and John E. Gallagher pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
101.SCH* | XBRL Taxonomy Extension Schema Document | ||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104* | Cover Page - Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101) | ||||
* | Filed herewith | ||||
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the date indicated below.
| CONMED CORPORATION | ||||||||
| By: /s/ John E. Gallagher | ||||||||
| John E. Gallagher | ||||||||
| Executive Vice President, Finance & Chief Financial Officer | ||||||||
| Date: | ||||||||
| July 29, 2026 | ||||||||
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