CONMED Corporation Reports 2.9% Revenue Growth but Declines in Net Income for Q1 2025

CONMED Corporation reported its financial results for the first quarter of 2025, revealing a net sales increase of 2.9% to $321.3 million, compared to $312.3 million in the same period of 2024. The growth was driven by a 2.5% rise in orthopedic surgery sales, attributed to strong performance in procedure-specific products, and a 3.2% increase in general surgery sales, primarily from the AirSeal® and Buffalo Filter® product lines. However, net income fell to $6.0 million, or $0.19 per diluted share, down from $19.7 million, or $0.63 per diluted share, in the prior year, reflecting a significant decline in profitability.

The company's gross profit margin improved slightly to 55.3% from 55.1% year-over-year, despite an increase in cost of sales to $143.5 million from $140.3 million. Selling and administrative expenses surged to $148.8 million, up from $123.4 million, largely due to increased compensation costs related to advisory services and fair value adjustments to contingent consideration. Research and development expenses decreased to $12.9 million, while interest expenses also declined to $8.3 million, reflecting lower average borrowings and interest rates.

In terms of operational metrics, CONMED's cash and cash equivalents rose to $35.5 million from $24.5 million at the end of 2024. The company reported a net cash provided by operating activities of $41.5 million, a notable increase from $29.1 million in the same quarter last year. The total assets decreased slightly to $2.3 billion, while total liabilities also fell to $1.3 billion. The company maintained a strong liquidity position with available borrowings of $583.4 million under its revolving credit facility.

Strategically, CONMED continues to focus on enhancing its supply chain and manufacturing operations, engaging a consulting firm to identify improvements amid ongoing inflationary pressures and supply chain challenges. The company has not reported any significant impacts from geopolitical conflicts in Ukraine and the Middle East, as its operations in those regions are limited to third-party distributor sales. Looking ahead, CONMED anticipates that macroeconomic factors, including potential tariffs and inflation, may continue to affect its operations and financial performance throughout 2025.

Overall, while CONMED experienced revenue growth in the first quarter, the decline in net income and increased operational costs highlight the challenges the company faces in maintaining profitability amid a complex economic landscape. The management remains focused on strategic initiatives to navigate these challenges and enhance operational efficiency.