UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): July 25, 2006
CONMED
CORPORATION
(Exact
name of registrant as specified in its charter)
|
New
York
|
0-16093
|
16-0977505
|
|
(State
or other jurisdiction of
|
(Commission
|
(I.R.S.
Employer
|
|
incorporation
or organization)
|
File
Number)
|
Identification
No.)
|
525
French Road
Utica,
New York 13502
(Address
of principal executive offices, including zip code)
(315)
797-8375
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligations of the registrant under any of the following
provisions (See General Instruction A.2 below):
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
2 Financial
Information
Item
2.02 Results
of Operations and Financial Condition.
On
July
25, 2006, CONMED Corporation issued a press release announcing financial results
for the second quarter of 2006. A copy of this press release is attached hereto
as Exhibit 99.1.
The
information in this Current Report on Form 8-K that is furnished under “Item
2.02. Results of Operations and Financial Condition” and Exhibit 99.1 attached
hereto shall not be deemed “filed” for purposes of Section 18 of the Securities
Act of 1934, nor shall they be deemed incorporated by reference in any filing
under the Securities Act of 1933, except as shall be expressly set forth by
specific reference in such filing.
Section
9 Financial
Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits.
|
(c)
|
Exhibits
|
The
following exhibit is included herewith:
|
Exhibit
No.
|
Description
of Exhibit
|
|
|
Press
Release dated July 25, 2006, issued by CONMED
Corporation.
|
Signature
Pursuant
to the requirements 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.
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CONMED
CORPORATION
|
||
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(Registrant)
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||
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By:
Robert D. Shallish, Jr.
|
||
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Vice
President-Finance and
|
||
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Chief
Financial Officer
|
Date: July
25,
2006
EXHIBIT
INDEX
|
Exhibit
|
|
|
Number
|
Exhibit
Description
|
|
99.1
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Press
Release, dated July 25, 2006, issued by CONMED
Corporation.
|
 |
NEWS
RELEASE
|
|
CONTACT:
|
|
|
CONMED
Corporation
|
|
|
Robert
Shallish
|
|
|
Chief
Financial Officer
|
|
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315-624-3206
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|
|
|
|
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Financial
Dynamics
|
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Investors:
Julie Huang/Theresa Kelleher
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212-850-5600
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FOR
RELEASE: 7:00 AM (Eastern) July 25, 2006
CONMED
Corporation Announces Second Quarter 2006 Results
-
Sales
Grow to $163.5 million, Sets New Quarterly Record -
-
Arthroscopy
Sales Grow 7.3% -
Utica,
New York, July 25, 2006 ----- CONMED Corporation (Nasdaq:
CNMD) today
announced financial results for the second quarter ended June 30, 2006. Sales
for the 2006 second quarter were $163.5 million compared to $158.3 million
in
the second quarter of 2005. Net income equaled $3.4 million, or $0.12 per
diluted share for the quarter, compared to $10.5 million, or $0.35 per diluted
share in the second quarter of 2005, based on a diluted weighted average share
count of 28.3 million shares for the quarter ended June 30, 2006.
Excluding
transition charges related to an acquisition and other unusual charges (see
commentary below and attached reconciliation for additional information),
non-GAAP net income for the second quarter was $6.6 million, or $0.23 per
non-GAAP diluted share, compared to second quarter 2005 non-GAAP net income
of
$13.4 million, or $0.45 per non-GAAP diluted share. In January 2006, the Company
adopted Statement of Financial
Accounting Standards No. 123R, “Share-Based Payment” (“SFAS 123R”), which
requires companies to recognize the cost of stock options and other stock-based
payments as compensation expense. As a result of adopting SFAS 123R, the
diluted
earnings per share and non-GAAP diluted earnings per share were reduced by
approximately $0.03 per share in the June 2006 quarter.
Mr.
Joseph J. Corasanti, President and Chief Operating Officer, noted, “We are
pleased the positive sales momentum from the first quarter has carried over
to
the second quarter of 2006, exceeding our expectations and setting a record
for
quarterly sales. Our capital equipment business was particularly strong growing
11% over the second quarter of 2005 due to increases in video imaging products
and electrosurgical generator sales. These sales results are particularly
impressive since the second quarter of last year’s sales were also exceptionally
strong.”
Sales
outside the United States were $62.8 million in the second quarter of 2006
growing 5.3% overall and 3.6% on a constant currency basis compared to the
second quarter of 2005. International sales grew to 38.4% of the Company’s total
sales in the June 2006 quarter continuing the trend for higher growth in
international markets.
The
Company’s cash flow continued to be strong with cash from operations totaling
$27.5 million for the six months ended June 30, 2006. This enabled the Company
to reduce its senior credit lines and other borrowings by $6.9 million.
Additionally, the Company repurchased $7.8 million of its common stock during
the first six months of 2006.
|
CONMED
News Release Continued
|
Page
2 of
10
|
July
25, 2006
|
Following
is a summary of the Company’s sales by product line for the three months ended
June 30, 2006 (in millions):
|
Three
Months Ended June 30,
|
||||||||||||||
|
Constant
|
||||||||||||||
|
Currency
|
||||||||||||||
|
2005
|
2006
|
Growth
|
Growth
|
|||||||||||
|
(in
millions)
|
||||||||||||||
|
Arthroscopy
|
$
|
54.8
|
$
|
58.8
|
7.3
|
%
|
6.1
|
%
|
||||||
|
Powered
Surgical Instruments
|
33.9
|
33.3
|
-1.8
|
%
|
-2.9
|
%
|
||||||||
|
Electrosurgery
|
22.6
|
24.2
|
7.1
|
%
|
7.1
|
%
|
||||||||
|
Endoscopic
Technologies
|
15.0
|
14.7
|
-2.0
|
%
|
-2.0
|
%
|
||||||||
|
Endosurgery
|
12.9
|
13.3
|
3.1
|
%
|
3.1
|
%
|
||||||||
|
Patient
Care
|
19.1
|
19.2
|
0.5
|
%
|
0.5
|
%
|
||||||||
|
$
|
158.3
|
$
|
163.5
|
3.3
|
%
|
2.6
|
%
|
|||||||
As
has
been previously discussed, the Company’s profitability in the latter half of
2005 and in 2006 has been impacted by several factors including increased costs
of production caused by higher petroleum based plastic raw materials and
transportation, litigation costs, quality initiatives, greater research and
development expenditures, and higher interest costs. Management has initiated
a
number of profit improvement initiatives resulting in sequential operating
margin improvement. For the second quarter 2006, operating margin excluding
acquisition and other unusual charges, was 9.1% of sales compared to 7.5% in
the
fourth quarter of 2005 and 8.5% in the first quarter of 2006.
Acquisition
and Unusual Charges
As
a
result of the acquisition of Endoscopic Technologies, the Company had been
purchasing the finished goods of the product line from the former owner until
adequate safety stock had been accumulated to facilitate an orderly transfer
of
the manufacturing process to the Company’s facilities. As of March 31, 2006 all
of the required safety stock had been accumulated. During the second quarter
of
2006, manufacturing of the vast majority of the products had begun, at least
on
a pilot run basis, in the Company’s facilities. However, first-in first-out
(FIFO) inventory accounting requires that the higher cost safety stock inventory
be sold before the expected lower-cost self-manufactured inventory is sold.
The
Company has noted this difference in cost, as well as certain other costs
associated with the start-up of production, as a pro-forma adjustment to GAAP
income amounts.
In
April
2006, the Company refinanced its debt, resulting in a reduced interest rate
and
increased availability. The deferred financing fees associated with the previous
debt were written off in the second quarter of 2006 amounting to
$678,000.
During
the second quarter of 2006, the Company was notified that the supplier of
certain of its pulse oximetry products could no longer provide product because
of the settlement of a patent dispute with a third party. Because the Company
can no longer assure customers of a continuing supply of these products, the
Company has discontinued their marketing and charged off inventory valued at
$595,000. The discontinuation of these products is not expected to have a
material impact on the Company’s sales or results of operations. This matter
does not affect the vast majority of the Company’s pulse oximetry products and
also does not affect sales of its proprietary Pro2® pulse oximetry
line.
|
CONMED
News Release Continued
|
Page 3
of
10
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July
25, 2006
|
Six
Month Results
For
the
six months ended June 30, 2006, CONMED reported revenues of $321.9 million,
a
2.5% increase from the $314.1 million in the first six months of last year.
Net
income for the first six months of 2006 was $7.8 million, $0.27 per diluted
share, compared to $21.3 million and $0.71 per share in the first six months
of
2005. Non-GAAP net income for the first six months of 2006 was $12.5 million,
or
$0.44 per diluted share, (excluding acquisition transition and other charges)
compared to non-GAAP net income of $26.9 million, or $0.90 per diluted share,
for the six months ended June 30, 2005 (please
see attached schedule for full explanation of transition and other charges).
Adoption
of SFAS 123R regarding expensing of stock options and other stock-based payments
in 2006 caused diluted earnings per share and non-GAAP diluted earnings per
share to be reduced by $0.05 for the six months ended June 2006.
Following
is a summary of the first six months of 2006 sales by product line in millions
of dollars:
|
Six
Months Ended June 30,
|
||||||||||||||
|
Constant
|
||||||||||||||
|
Currency
|
||||||||||||||
|
2005
|
2006
|
Growth
|
Growth
|
|||||||||||
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(in
millions)
|
||||||||||||||
|
Arthroscopy
|
$
|
108.8
|
$
|
113.5
|
4.3
|
%
|
4.4
|
%
|
||||||
|
Powered
Surgical Instruments
|
69.4
|
67.5
|
-2.7
|
%
|
-2.6
|
%
|
||||||||
|
Electrosurgery
|
43.5
|
47.5
|
9.2
|
%
|
9.2
|
%
|
||||||||
|
Endoscopic
Technologies
|
29.2
|
29.4
|
0.7
|
%
|
0.7
|
%
|
||||||||
|
Endosurgery
|
25.2
|
25.2
|
0.0
|
%
|
0.0
|
%
|
||||||||
|
Patient
Care
|
38.0
|
38.8
|
2.1
|
%
|
2.1
|
%
|
||||||||
|
$
|
314.1
|
$
|
321.9
|
2.5
|
%
|
2.6
|
%
|
|||||||
Outlook
Mr.
Corasanti concluded, “The Company’s results for the second quarter of 2006
exceeded our expectations for both sales and profitability. As a result, we
continue to believe that we are on track to achieve 5% organic sales growth
for
2006 compared to 2005 and that non-GAAP diluted earnings per share should
approximate $0.85 - $0.90 including the non-cash charge for stock option and
other share-based payments expense. We also continue to believe that our
operating margin in 2007 will improve to approximately 14% of sales as growing
revenues leverage the Company’s fixed-cost structure and as we realize measures
to improve margins and reduce costs.”
For
the
third quarter 2006, CONMED anticipates revenues in the range of $152 - $157
million and diluted earnings per share on a non-GAAP basis (including SFAS
123R
expense) of $0.16 - $0.20 per share.
|
CONMED
News Release Continued
|
Page 4
of
10
|
July
25, 2006
|
Conference
Call
The
Company will webcast its second quarter 2006 conference call live over the
Internet on Tuesday, July 25, 2006 at 10:00 a.m. Eastern Time. This broadcast
can be accessed from CONMED's web site at www.conmed.com. Replays of the call
will be made available through August 1, 2006.
CONMED
Profile
CONMED
is
a medical technology company with an emphasis on surgical devices and equipment
for minimally invasive procedures and monitoring. The Company’s products serve
the clinical areas of arthroscopy, powered surgical instruments, electrosurgery,
cardiac monitoring disposables, endosurgery and endoscopic technologies. They
are used by surgeons and physicians in a variety of specialties including
orthopedics, general surgery, gynecology, neurosurgery, and gastroenterology.
Headquartered in Utica, New York, the Company’s 3,100 employees distribute its
products worldwide from several manufacturing locations.
Forward
Looking Information
This
press release contains forward-looking statements based on certain assumptions
and contingencies that involve risks and uncertainties. The forward-looking
statements are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995 and relate to the Company’s performance
on a going-forward basis. The forward-looking statements in this press release
involve risks and uncertainties which could cause actual results, performance
or
trends, to differ materially from those expressed in the forward-looking
statements herein or in previous disclosures. The Company believes that all
forward-looking statements made by it have a reasonable basis, but there can
be
no assurance that management’s expectations, beliefs or projections as expressed
in the forward-looking statements will actually occur or prove to be correct.
In
addition to general industry and economic conditions, factors that could cause
actual results to differ materially from those discussed in the forward-looking
statements in this press release include, but are not limited to: (i) the
failure of any one or more of the assumptions stated above, to prove to be
correct; (ii) the risks relating to forward-looking statements discussed in
the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2005; (iii) cyclical purchasing patterns from customers, end-users and dealers;
(iv) timely release of new products, and acceptance of such new products by
the
market; (v) the introduction of new products by competitors and other
competitive responses; (vi) the possibility that any new acquisition or other
transaction may require the Company to reconsider its financial assumptions
and
goals/targets; and/or (vii) the Company’s ability to devise and execute
strategies to respond to market conditions.
|
CONMED
News Release Continued
|
Page 5
of
10
|
July
25, 2006
|
CONMED
CORPORATION
CONSOLIDATED
STATEMENTS OF INCOME
(in
thousands except per share amounts)
(unaudited)
|
Three
months ended
|
Six
months ended
|
||||||||||||
|
|
June
30,
|
June
30,
|
|||||||||||
|
|
2005
|
2006
|
2005
|
2006
|
|||||||||
|
Net
sales
|
$
|
158,276
|
$
|
163,473
|
$
|
314,135
|
$
|
321,939
|
|||||
|
Cost
of sales
|
74,325
|
82,939
|
147,371
|
161,676
|
|||||||||
|
Cost
of sales, acquisition-transition -
|
|||||||||||||
|
Note
A
|
1,827
|
2,760
|
4,165
|
4,589
|
|||||||||
|
|
|||||||||||||
|
Gross
profit
|
82,124
|
77,774
|
162,599
|
155,674
|
|||||||||
|
Selling
and administrative - Note B
|
53,559
|
58,123
|
106,091
|
116,497
|
|||||||||
|
Research
and development
|
6,375
|
7,498
|
12,224
|
15,323
|
|||||||||
|
Other
expense - Note C
|
2,576
|
1,584
|
4,476
|
2,154
|
|||||||||
|
|
62,510
|
67,205
|
122,791
|
133,974
|
|||||||||
|
Income
from operations
|
19,614
|
10,569
|
39,808
|
21,700
|
|||||||||
|
Loss
on early extinguishment of debt
|
-
|
678
|
-
|
678
|
|||||||||
|
Interest
expense
|
3,571
|
4,675
|
7,330
|
9,541
|
|||||||||
|
|
|||||||||||||
|
Income
before income taxes
|
16,043
|
5,216
|
32,478
|
11,481
|
|||||||||
|
Provision
for income taxes
|
5,535
|
1,802
|
11,205
|
3,727
|
|||||||||
|
Net
income
|
$
|
10,508
|
$
|
3,414
|
$
|
21,273
|
$
|
7,754
|
|||||
|
Per
share data:
|
|||||||||||||
|
Net
Income
|
|||||||||||||
|
Basic
|
$
|
.36
|
$
|
.12
|
$
|
.73
|
$
|
.28
|
|||||
|
Diluted
|
.35
|
.12
|
.71
|
.27
|
|||||||||
|
Weighted
average common shares
|
|||||||||||||
|
Basic
|
29,494
|
28,061
|
29,301
|
28,068
|
|||||||||
|
Diluted
|
30,060
|
28,266
|
29,830
|
28,312
|
|||||||||
Note
A
-
Included in cost of sales in the three and six months ended June 30, 2005 are
approximately $1.8 million and $4.2 million, respectively, in
acquisition-transition related costs. Included in cost of sales in the three
and
six months ended June 30, 2006 are approximately $2.8 million and $4.6 million,
respectively, in acquisition-transition related costs.
Note
B
-
Included in selling and administrative expense in the three and six months
ended
June 30, 2006 are approximately $0.8 million and $1.6 million, respectively,
of
share-based payment expense.
Note
C
-
Included in other expense in the three months ended June 30, 2005 are the
following: $0.7 million in environmental settlement costs, $0.4 million in
costs
related to the termination of a product offering and $1.4 million in
acquisition-related costs. Included in other expense in the six months ended
June 30, 2005 are the following: $0.7 million in environmental
|
CONMED
News Release Continued
|
Page 6
of
10
|
July
25, 2006
|
settlement
costs, $0.9 million in costs related to the termination of a product offering
and $2.8 million in acquisition-related costs.
Included
in other expense in the three months ended June 30, 2006 are the following:
$0.6
million in costs related to the write-off of inventory in settlement of a patent
dispute and $1.0 million in acquisition-related costs. Included in other expense
in the six months ended June 30, 2006 are the following: $0.6 million in costs
related to the write-off of inventory in settlement of a patent dispute, $0.1
million in costs related to the termination of a product offering and $1.5
million in acquisition-related costs.
|
CONMED
News Release Continued
|
Page 7
of
10
|
July
25, 2006
|
CONMED
CORPORATION
CONSOLIDATED
CONDENSED BALANCE SHEETS
(in
thousands)
(unaudited)
ASSETS
|
|
December
31,
|
June
30,
|
|||||
|
|
2005
|
2006
|
|||||
|
Current
assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
3,454
|
$
|
5,080
|
|||
|
Accounts
receivable, net
|
83,327
|
80,920
|
|||||
|
Inventories
|
152,428
|
153,661
|
|||||
|
Deferred
income taxes
|
12,887
|
12,341
|
|||||
|
Other
current assets
|
3,419
|
3,902
|
|||||
|
Total
current assets
|
255,515
|
255,904
|
|||||
|
Property,
plant and equipment, net
|
104,224
|
109,058
|
|||||
|
Goodwill
and other intangible assets, net
|
527,053
|
527,406
|
|||||
|
Other
assets
|
16,991
|
15,210
|
|||||
|
Total
assets
|
$
|
903,783
|
$
|
907,578
|
|||
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
|
Current
liabilities:
|
|||||||
|
Current
portion of long-term debt
|
$
|
4,208
|
$
|
3,053
|
|||
|
Other
current liabilities
|
57,924
|
58,987
|
|||||
|
Total
current liabilities
|
62,132
|
62,040
|
|||||
|
Long-term
debt
|
302,643
|
296,902
|
|||||
|
Deferred
income taxes
|
62,554
|
65,597
|
|||||
|
Other
long-term liabilities
|
23,448
|
25,982
|
|||||
|
Total
liabilities
|
450,777
|
450,521
|
|||||
|
Shareholders'
equity:
|
|||||||
|
Capital
accounts
|
202,810
|
197,785
|
|||||
|
Retained
earnings
|
259,932
|
267,686
|
|||||
|
Accumulated
other comprehensive loss
|
(9,736
|
)
|
(8,414
|
)
|
|||
|
Total
equity
|
453,006
|
457,057
|
|||||
|
|
|||||||
|
Total
liabilities and shareholders' equity
|
$
|
903,783
|
$
|
907,578
|
|||
|
CONMED
News Release Continued
|
Page 8
of
10
|
July
25, 2006
|
CONMED
CORPORATION
CONSOLIDATED
CONDENSED STATEMENT OF CASH FLOWS
(in
thousands)
(unaudited)
|
Six
months ended
|
|||||||
|
June
30,
|
|||||||
|
2005
|
2006
|
||||||
|
Cash
flows from operating activities:
|
|||||||
|
Net
income
|
$
|
21,273
|
$
|
7,754
|
|||
|
Adjustments
to reconcile net income
|
|||||||
|
to
net cash provided by operating activities:
|
|||||||
|
Depreciation
and amortization
|
15,282
|
14,670
|
|||||
|
Share-based
payment expense
|
-
|
1,585
|
|||||
|
Deferred
income taxes
|
7,365
|
3,650
|
|||||
|
Sale
of accounts receivable
|
(3,000
|
)
|
-
|
||||
|
Other,
net
|
(11,025
|
)
|
(194
|
)
|
|||
|
Net
cash provided by operating activities
|
29,895
|
27,465
|
|||||
|
Cash
flow from investing activities:
|
|||||||
|
Purchases
of property, plant, and equipment, net
|
(8,098
|
)
|
(10,247
|
)
|
|||
|
Payments
related to business acquisitions net
of cash acquired
|
(364
|
)
|
(2,458
|
)
|
|||
|
Proceeds
from sale of equity investment
|
-
|
1,205
|
|||||
|
Net
cash used in investing activities
|
(8,462
|
)
|
(11,500
|
)
|
|||
|
Cash
flow from financing activities:
|
|||||||
|
Payments
on debt
|
(28,979
|
)
|
(141,896
|
)
|
|||
|
Proceeds
of debt
|
8,000
|
135,000
|
|||||
|
Payments
related to issuance of debt
|
-
|
(1,260
|
)
|
||||
|
Net
proceeds from common stock issued under employee plans
|
13,020
|
1,238
|
|||||
|
Repurchase
of common stock
|
(7,759
|
)
|
(7,848
|
)
|
|||
|
Other,
net
|
(396
|
)
|
(572
|
)
|
|||
|
Net
cash provided by financing activities
|
(16,114
|
)
|
(15,338
|
)
|
|||
|
Effect
of exchange rate change
|
|||||||
|
on
cash and cash equivalents
|
(3,002
|
)
|
999
|
||||
|
Net
increase in cash and cash equivalents
|
2,317
|
1,626
|
|||||
|
|
|||||||
|
Cash
and cash equivalents at beginning of period
|
4,189
|
3,454
|
|||||
|
|
|||||||
|
Cash
and cash equivalents at end of period
|
$
|
6,506
|
$
|
5,080
|
|||
|
CONMED
News Release Continued
|
Page 9
of
10
|
July
25, 2006
|
CONMED
CORPORATION
RECONCILIATION
OF REPORTED NET INCOME TO NET INCOME
BEFORE
UNUSUAL ITEMS
(In
thousands except per share amounts)
(unaudited)
|
|
Three
months ended
|
||||||
|
|
June
30,
|
||||||
|
|
2005
|
2006
|
|||||
|
|
|||||||
|
Reported
net income
|
$
|
10,508
|
$
|
3,414
|
|||
|
Acquisition-transition
related costs included
|
|||||||
|
in
cost of sales
|
1,827
|
2,760
|
|||||
|
Write-off
of inventory in settlement of a patent dispute
|
-
|
595
|
|||||
|
Environmental
settlement costs
|
698
|
-
|
|||||
|
Termination
of product offering
|
429
|
27
|
|||||
|
Other
acquisition-related costs
|
1,449
|
962
|
|||||
|
Total
other expense
|
2,576
|
1,584
|
|||||
|
Loss
on early extinguishment of debt
|
-
|
678
|
|||||
|
Unusual
expense before income taxes
|
4,403
|
5,022
|
|||||
|
Provision
(benefit) for income taxes on unusual expense
|
(1,519
|
)
|
(1,808
|
)
|
|||
|
|
|||||||
|
Net
income before unusual items
|
$
|
13,392
|
$
|
6,628
|
|||
|
|
|||||||
|
Per
share data:
|
|||||||
|
Reported
net income
|
|||||||
|
Basic
|
$
|
0.36
|
$
|
0.12
|
|||
|
Diluted
|
0.35
|
0.12
|
|||||
|
Net
income before unusual items
|
|||||||
|
Basic
|
$
|
0.45
|
$
|
0.24
|
|||
|
Diluted
|
0.45
|
0.23
|
|||||
Management
has provided the above reconciliation of net income before unusual items as
an
additional measure that investors can use to compare operating performance
between reporting periods. Management believes this reconciliation provides
a
useful presentation of operating performance.
|
CONMED
News Release Continued
|
Page 10
of
10
|
July
25, 2006
|
CONMED
CORPORATION
RECONCILIATION
OF REPORTED NET INCOME TO NET INCOME
BEFORE
UNUSUAL ITEMS
(In
thousands except per share amounts)
(unaudited)
|
|
Six
months ended
|
||||||
|
|
June
30,
|
||||||
|
|
2005
|
2006
|
|||||
|
|
|||||||
|
Reported
net income
|
$
|
21,273
|
$
|
7,754
|
|||
|
Acquisition-transition
related costs included
|
|||||||
|
in
cost of sales
|
4,165
|
4,589
|
|||||
|
Write-off
of inventory in settlement of a patent dispute
|
-
|
595
|
|||||
|
Environmental
settlement costs
|
698
|
-
|
|||||
|
Termination
of product offering
|
949
|
83
|
|||||
|
Other
acquisition-related costs
|
2,829
|
1,476
|
|||||
|
|
|||||||
|
Total
other expense
|
4,476
|
2,154
|
|||||
|
|
|||||||
|
Loss
on early extinguishment of debt
|
-
|
678
|
|||||
|
Unusual
expense before income taxes
|
8,641
|
7,421
|
|||||
|
Provision
(benefit) for income taxes on unusual expense
|
(2,981
|
)
|
(2,672
|
)
|
|||
|
Net
income before unusual items
|
$
|
26,933
|
$
|
12,503
|
|||
|
|
|||||||
|
Per
share data:
|
|||||||
|
Reported
net income
|
|||||||
|
Basic
|
$
|
0.73
|
$
|
0.28
|
|||
|
Diluted
|
0.71
|
0.27
|
|||||
|
Net
income before unusual items
|
|||||||
|
Basic
|
$
|
0.92
|
$
|
0.45
|
|||
|
Diluted
|
0.90
|
0.44
|
|||||
Management
has provided the above reconciliation of net income before unusual items as
an
additional measure that investors can use to compare operating performance
between reporting periods. Management believes this reconciliation provides
a
useful presentation of operating performance.