CNMD Wrestles Supply Chains in Q1 2025

CONMED Corporation reported $321 million in sales and $16 million in operating profit for the quarter ending March 31, 2025, beating Wall Street’s estimates. Earnings per share, however, declined significantly from last year. On an adjusted basis, however, CONMED’s net income grew nearly 20% to $30 million.

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“We Have More Work to Do” – CONMED’s CEO Beyer

Pat Beyer, president and chief executive officer, and Todd Garner, executive vice president and chief financial officer of CONMED provided a financial update during the 2025 first quarter earnings call.

Total sales for the quarter were $321.3 million. This represented a year-over-year increase of 2.9% and 3.8% in constant currency, which was a little better than the company’s guidance, according to Beyer.

“While we have more work left to do with our supply chain initiatives, we are pleased that we are starting the year consistent with our full year growth expectations. From an earnings perspective, excluding special items that affected comparability, our adjusted net income of $29.6 million increased 19.6% year-over-year and our adjusted diluted net earnings per share of $0.95 increased 20.1% year-over-year,” he said.

Orthopedic product sales, on a constant currency basis, grew 3.9%. General surgery sales rose 3.8% year-over-year.

Growth in orthopedics was led by double-digit sales growth in foot and ankle and in BioBrace, which is being used for soft tissue repair in more than 50 procedures from the rotator cuff to the anterior cruciate ligament to the Achilles tendon.

AirSeal has also been a significant driver of growth.

Beyer added that they continue to make progress on their supply chain initiatives with the number of SKUs on back-order declining. He acknowledged though that they are not where they need to be just yet.

“We continue to believe we should be in a better position by the end of the year. I’m excited about our long-term future,” he explained.

Garner broke down the numbers for the quarter a little further. Sales in the U.S. increased 4.2% versus the prior year quarter, while international sales grew 3.4%. Total worldwide orthopedics sales grew 3.9% in the first quarter. In the U.S., orthopedics sales decreased 2.1%, and internationally, orthopedics sales increased 7.9%.

He added that despite the strong first quarter of the year, they continue to estimate a 4% to 6% constant currency growth for the whole year.

Analysts Concerned About Tariffs and Other Roadblocks

Phillip Dantoin of Piper Sandler asked for clarification for the conservative guidance range and whether there is any softness to worry about.

Garner offered reassurance. He explained, “No softness that we’re worried about. We guided the year to be 4% to 6% constant currency. If you do days adjusted, we’re well right in the middle of that range, a little—maybe a little better than the middle of that range for Q1. So that’s where we expect the year to be. We’re not going to get ahead of ourselves after Q1 and change how we see the year.”

Robbie Marcus of JPMorgan asked about mitigation efforts planned to make up the $250,000 tariff price tag.

Garner said that the good news is that Mexico tariffs won’t be an issue as previously thought, but the China tariff rate is higher than expected. Most of that though won’t hit in 2025.

“Pretty good news out of China last week with China saying that they intend to exempt medical devices products into China,” he added.

When it comes to mitigation efforts, he said, “the first thing is, we can pretty quickly stop the practice of shipping everything into the U.S. and then out to the world from our Atlanta distribution center. We can avoid the U.S. for the products that don’t need to come to the U.S.”

He added that price mitigation is another consideration.

“If we’re in the same boat as everybody else in a certain country, that gets easier. If for some reason, CONMED is an outlier, that gets harder, of course.”