SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended June 30, 1998 Commission File Number 0-16093
CONMED CORPORATION
(Exact name of the registrant as specified in its charter)
New York 16-0977505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
310 Broad Street, Utica, New York 13501
(Address of principal executive offices) (Zip Code)
(315) 797-8375
(Registrant's telephone number, including area code)
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.
Yes [ X ] No [ ]
The number of shares outstanding of registrant's common stock, as of
August 1, 1998 is 15,102,283 shares.
<PAGE>
CONMED CORPORATION
TABLE OF CONTENTS
FORM 10-Q
PART I FINANCIAL INFORMATION
Item Number
Item 1. Financial Statements
- Consolidated Statements of Income
- Consolidated Balance Sheets
- Consolidated Statements of Cash Flows
- Notes to Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
<PAGE>
<TABLE>
<CAPTION>
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share amounts)
(unaudited)
For three months ended For six months ended
June June June June
1997 1998 1997 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales ...................... $ 30,707 $ 80,513 $ 62,179 $ 160,755
--------- --------- --------- ---------
Cost and expenses:
Cost of sales ................ 16,259 40,874 32,734 85,264
Selling and administrative ... 8,596 21,995 16,932 43,774
Facility consolidation
expense (Note 6) ........... -- -- 2,328 --
Research and development ..... 791 2,874 1,542 5,601
--------- --------- --------- ---------
Total operating expenses ... 25,646 65,743 53,536 134,639
--------- --------- --------- ---------
Income from operations ......... 5,061 14,770 8,643 26,116
Interest income (expense),net .. 366 (7,666) 628 (15,181)
--------- --------- --------- ---------
Income before income taxes
and extraordinary item ....... 5,427 7,104 9,271 10,935
Provision for income taxes ..... (1,954) (2,557) (3,338) (3,936)
--------- --------- --------- ---------
Income before extraordinary
item ......................... 3,473 4,547 5,933 6,999
Extraordinary item, net of
income taxes (Note 5) ........ -- -- -- (1,569)
--------- --------- --------- ---------
Net income ..................... $ 3,473 $ 4,547 $ 5,933 $ 5,430
========= ========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except per share amounts)
(unaudited)
(continued)
For three months ended For six months ended
June June June June
1997 1998 1997 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Per share data:
Income before extraordinary item
Basic ................. $ .23 $ .30 $ .40 $ .46
Diluted ............... .23 .30 .39 .46
Extraordinary item - (Note 5)
Basic ................. $ -- $ -- $ -- $ (.10)
Diluted ............... -- -- -- (.10)
Net Income
Basic ................. $ .23 $ .30 $ .40 $ .36
Diluted ............... .23 .30 .39 .36
Weighted average common shares
Basic ................. 15,005 15,057 14,999 15,047
Diluted ............... 15,193 15,326 15,227 15,286
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONMED CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
ASSETS
December June
1997 1998
--------- ---------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents ............................. $ 13,452 $ 4,454
Accounts receivable, net .............................. 47,188 49,055
Income taxes receivable ............................... 245 1,326
Inventories (Note 3) .................................. 61,971 68,774
Deferred income taxes ................................. 1,898 1,898
Prepaid expenses and other current assets ............. 1,186 2,573
--------- ---------
Total current assets ........................... 125,940 128,080
Property, plant and equipment, net ...................... 55,339 57,442
Deferred income taxes ................................... 10,783 11,665
Goodwill, net ........................................... 153,360 158,489
Patents, trademarks, and other assets, net .............. 216,215 214,996
--------- ---------
Total assets ...................................... $ 561,637 $ 570,672
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (Note 5) ............ $ 11,000 $ 15,011
Accounts payable ...................................... 9,556 18,259
Accrued interest ...................................... -- 4,832
Accrued payroll and withholdings ...................... 6,831 8,269
Other current liabilities ............................. 3,220 1,774
--------- ---------
Total current liabilities ......................... 30,607 48,145
Long-term debt (Note 5) ................................. 354,000 340,375
Deferred compensation ................................... 1,235 1,347
Accrued pension ......................................... 3,276 3,276
Long-term leases ........................................ 2,651 2,366
Other long-term liabilities ............................. 7,132 6,581
--------- ---------
Total liabilities .............................. 398,901 402,090
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONMED CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands except share amounts)
(continued)
December June
1997 1998
--------- ---------
(unaudited)
<S> <C> <C>
Shareholders' equity:
Preferred stock, par value $.01 per share;
authorized 500,000 shares; none outstanding ....... -- --
Common stock, par value $.01 per share;
40,000,000 authorized; 15,036,553 and
15,076,050 issued and outstanding,in
1997 and 1998, respectively ....................... 151 151
Paid-in capital ....................................... 123,451 123,867
Retained earnings ..................................... 39,553 44,983
Less 25,000 shares of common stock in treasury,
at cost ............................................. (419) (419)
--------- ---------
Total equity ................................... 162,736 168,582
--------- ---------
Total liabilities and shareholders' equity ........ $ 561,637 $ 570,672
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30 1997 and 1998
(in thousands)
(unaudited)
1997 1998
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income ..................................... $ 5,933 $ 5,430
--------- ---------
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation ............................ 1,916 3,944
Amortization ............................ 1,604 7,849
Extraordinary item, net of
income taxes (Note 5) ................. -- 1,569
Increase (decrease) in cash flows
from changes in assets and liabilities:
Accounts receivable ............ 1,041 (1,867)
Income taxes receivable ........ -- (1,081)
Inventories .................... 230 (8,192)
Prepaid expenses and
other current assets ......... (593) (1,387)
Other assets ................... (147) (574)
Accounts payable ............... (106) 8,703
Income taxes payable ........... 1,876 --
Accrued interest ............... -- 4,832
Accrued payroll and withholdings (742) 1,438
Other current liabilities ...... 2,130 (1,731)
Deferred compensation and
other long-term liabilities .. 105 (439)
--------- ---------
7,314 13,064
Net cash provided by operations .............. 13,247 18,494
--------- ---------
Cash flows from investing activities:
Payment srelated to acquisition of Linvatec .... -- (6,996)
Acquisition of property, plant,
and equipment ............................. (1,488) (6,663)
--------- ---------
Net cash used by investing activities ........ (1,488) (13,659)
--------- ---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONMED CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30 1997 and 1998
(in thousands)
(unaudited)
(continued)
1997 1998
--------- ---------
<S> <C> <C>
Cash flows from financing activities:
Proceeds of long-term debt ..................... -- 126,100
Proceeds from issuance of common stock ......... 89 416
Payments related to issuance of long-term debt . -- (4,635)
Payments on long-term debt and
other obligations ............................ (37) (135,714)
--------- ---------
Net cash provided (used)
by financing activities ................. 52 (13,833)
--------- ---------
Net increase (decrease) in cash
and cash equivalents .......................... 11,811 (8,998)
Cash and cash equivalents at beginning of period . 20,173 13,452
--------- ---------
Cash and cash equivalents at end of period ....... $ 31,984 $ 4,454
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONMED CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Consolidation
The consolidated financial statements include the accounts of CONMED
Corporation (the "Company"), and its subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation. The Company is
a leading developer, manufacturer and supplier of a range of medical instruments
and systems used in surgical and other medical procedures. The Company's product
offerings include electrosurgical systems, electrocardiogram ("ECG") electrodes
and accessories, surgical suction instruments, intravenous ("IV") therapy
accessories and wound care products. Through its acquisition of Linvatec
Corporation (Note 4), the Company has expanded its arthroscopic surgery product
line and broadened its product offerings to include powered surgical instruments
and imaging products for minimally invasive surgery. The Company's products are
used in a variety of clinical settings, such as operating rooms, surgery
centers, physicians' offices and critical care areas of hospitals.
Note 2 - Interim financial information
The financial statements for the three and six months ended June 1997
and June 1998 are unaudited; in the opinion of the Company such unaudited
statements include all adjustments (which comprise only normal recurring
accruals) necessary for a fair presentation of the results for such periods. The
consolidated financial statements for the year ending December 1998 are subject
to adjustment at the end of the year when they will be audited by independent
accountants. The results of operations for the three and six months ended June
1997 and 1998 are not necessarily indicative of the results of operations to be
expected for any other quarter nor for the year ending December 31, 1998. The
consolidated financial statements and notes thereto should be read in
conjunction with the financial statements and notes for the year ended December
1997 included in the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K. Certain 1997 amounts previously reported have been
reclassified to conform with the current year presentation.
Note 3 - Inventories
The components of inventory are as follows (in thousands):
December June
1997 1998
-------- --------
Raw materials............... $ 28,097 $ 30,706
Work-in-process............ 6,569 8,378
Finished goods.............. 27,305 29,690
-------- --------
Total................. $ 61,971 $ 68,774
======== ========
Note 4 - Business acquisitions
On July 1, 1997, the Company completed the acquisition of the surgical
suction instrument and tubing product line from Davol, Inc., a subsidiary of
C.R. Bard, Inc., for a cash purchase price of $24,000,000. This acquisition is
being accounted for using the purchase method. Accordingly, the results of
<PAGE>
operations of the acquired product line are included in the consolidated results
of the Company from the date of acquisition. Goodwill associated with the
acquisition is being amortized on a straight-line basis over a 40-year period.
On December 31, 1997, the Company acquired the business and certain
assets of Linvatec Corporation, a wholly-owned subsidiary of Bristol-Myers
Squibb Company, for a cash purchase price of $370,000,000 and the assumption of
$16,608,000 of liabilities. Bristol-Myers Squibb Company also received a warrant
to purchase 1,000,000 shares of the Company's common stock at $34.23 per share.
This warrant expires December 31, 2007, and was valued at $10,625,000.
The acquisition of Linvatec Corporation is being accounted for using
the purchase method. The allocation of purchase price resulted in identifiable
intangible assets, including patents and technology ($9,500,000), trademarks and
tradenames ($96,000,000) and customer relationships ($97,000,000), aggregating
$204,000,000, which will be amortized over periods from 5 to 40 years. Goodwill
associated with the Linvatec acquisition approximated $75,000,000 and will be
amortized on a straight-line basis over a 40-year period. Additionally, a
portion of the purchase price was allocated to purchased in-process research and
development ("R&D"). Purchased in-process R & D includes the value of products
in the development stage and not considered to have reached technological
feasibility. In accordance with applicable accounting rules, purchased
in-process R&D is required to be expensed. Accordingly, $34,000,000 of the
acquisition cost was expensed on December 31, 1997.
In connection with the Linvatec acquisition, the Company entered into
agreements with Zimmer, Inc., a wholly-owned subsidiary of Bristol-Myers Squibb
Company, pursuant to which Zimmer has agreed to distribute certain of Linvatec's
products for periods ranging from six months to three years.
The allocation of the purchase price for the Linvatec acquisition is
based on management's preliminary estimates. It is possible that re-allocations
will be required as additional information becomes available. Management does
not believe that such re-allocations will have a material effect on the
Company's financial position or results of operations.
On an unaudited pro forma basis, assuming the Davol and Linvatec acquisitions
had occurred as of January 1, 1997, the consolidated results of the Company for
the three and six months ended June, 1997 are estimated to be as follows (in
thousands, except per share amounts):
For the Three For the Six
Months Ended Months Ended
June 1997 June 1997
--------- ---------
Pro forma revenues.................... $ 75,760 $152,284
Pro forma net income (loss)........... $ 3,544 $(16,213)
Pro forma earnings per share:
Basic........................ $ .24 $ (1.08)
Diluted...................... $ .23 $ (1.08)
<PAGE>
Note 5 - Subordinated Note Offering
As discussed under "Liquidity and Capital Resources", the Company
completed a subordinated note offering in the aggregate principal amount of
$130.0 million in March 1998. Proceeds from the offering amounting to $126.1
million were used to reduce the Company's term loans under its Credit Facility.
Deferred financing fees related to the portion of the Credit Facility repaid
amounting to $2.5 million ($1.6 million net of income taxes) were written-off as
an extraordinary charge.
Note 6 - Facility Consolidation
During the first quarter of 1997, the Company recorded a pre-tax charge
of $2,328,000 related to the closure of the Company's Dayton, Ohio manufacturing
facility. Operations of the Dayton facility, were transferred to the Company's
manufacturing location in Rome, New York in 1997. The components of the charge
consisted primarily of costs associated with employee severance and termination,
and the impairment of the carrying value of fixed assets.
Note 7 - Subsidiary Guarantees
The Company's Credit Facility and subordinated notes (the "Notes") are
guaranteed (the "Subsidiary Guarantees") by each of the Company's subsidiaries
in existence on the closing dates of the Credit Facility and the Notes (the
"Subsidiary Guarantors"). The Subsidiary Guarantees provide that each Subsidiary
Guarantor will fully and unconditionally guarantee the Company's obligations on
a joint and several basis. Each Subsidiary Guarantor is wholly-owned by the
Company.
Separate financial statements and other disclosures concerning the Subsidiary
Guarantors are not presented because management has determined such financial
statements and other disclosures are not material to investors. The combined
condensed financial information of the Company's Subsidiary Guarantors is as
follows (in thousands):
December June
1997 1998
-------- --------
Current assets............................. $ 54,799 $ 71,062
Non-current assets......................... 327,751 333,603
Current liabilities........................ 15,339 22,906
Non-current liabilities.................... 345,826 344,915
For the Three For the Six
Months Ended Months Ended
June 1998 June 1998
---------- ---------
Revenues................................... $ 56,671 $113,579
Operating income........................... 10,586 17,973
Net income................................. 1,825 90
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion includes certain forward-looking statements.
Such forward-looking statements are subject to a number of factors, including
material risks, uncertainties and contingencies, which could cause actual
results to differ materially from the forward-looking statements.
Three months ended June 1998 compared to three months ended June 1997
Sales for the quarter ended March 1998 were $80,513,000, an increase of
162% compared to sales of $30,707,000 in the quarter ended June 1997. The
increase was the result of the acquisition of Linvatec on December 31, 1997 and
the surgical suction instrument and tubing product line acquired from Davol on
July 1, 1997.
In connection with the Linvatec acquisition, the Company entered into
agreements with Zimmer, Inc., a wholly-owned subsidiary of Bristol-Myers Squibb
Company, pursuant to which Zimmer agreed to distribute certain of Linvatec's
products for periods ranging from six months to three years. Zimmer's
distribution of the majority of these products ended in the second quarter of
1998 as the Company assumed responsibility for distribution of such products.
Cost of sales increased to $40,874,000 in the current quarter compared
to the $16,259,000 in the same quarter a year ago as a result of increased sales
volume. The Company's gross margin percentage was 49.2% for the second quarter
of 1998 as compared to 47.1% in the second quarter of 1997 reflecting the
overall higher gross margin percentage of the Linvatec product lines as compared
to the Company's other products.
Selling and administrative costs increased to $21,995,000 in the
current quarter as compared to $8,596,000 in the second quarter of 1997,
primarily as a result of the Linvatec acquisition. As a percentage of sales,
selling and administrative expense was 27.3% in the second quarter of 1998 as
compared to 28.0% in the comparable 1997 period.
Research and development expense was $2,874,000 in the second quarter
of 1998 as compared to $791,000 in the second quarter of 1997. The increase
reflects expense related to the Linvatec research and development activities.
The second quarter of 1998 had interest expense of $7,666,000 compared
to interest income of $366,000 in the second quarter of 1997. As discussed under
Liquidity and Capital Resources, the Company acquired Linvatec Corporation on
December 31, 1997 for $370 million that was borrowed under its Credit Facility.
The Company had no borrowings outstanding during the second quarter of 1997.
Six months ended June 1998 compared to six months ended June 1997
Sales for the six months ended June 1998 were $160,755,000, an increase
of 159% compared to sales of $62,179,000 in the six months ended June, 1997. The
increase was the result of the acquisition of Linvatec on December 31, 1997 and
the surgical suction instrument and tubing product line acquired from Davol on
July 1, 1997. Offsetting the incremental sales associated with these
acquisitions was decreased sales related to the Company's ECG electrode product
line. The Company believes that its line of ECG electrodes will continue to face
pricing and other competitive pressures due to cost containment efforts by
health care providers.
<PAGE>
Cost of sales increased to $85,264,000 in the first six months of 1998
as compared to the $32,734,000 in the same period a year ago as a result of
increased sales volume. The Company's gross margin percentage was 47.0% for the
first six months of 1998 as compared to 47.4% in the 1997 period. In connection
with purchase accounting for the Linvatec acquisition, the Company increased the
acquired value of inventory by $2.9 million over its production cost. This
inventory was sold during the quarter ended March 1998 and, accordingly, this
non-recurring adjustment served to reduce the Company's gross margin percentage
by 1.9 percentage points. Excluding the impact of this nonrecurring adjustment,
the Company's gross margin percentage was 48.9% in the first six months of 1998
reflecting the overall higher gross margin percentage of the Linvatec product
lines as compared to the Company's other products.
Selling and administrative costs increased to $43,774,000 in the first
six months of 1998 as compared to $16,932,000 in the first six months of 1997,
primarily as a result of the Linvatec acquisition. As a percentage of sales,
selling and administrative expense was 27.2% in the first six months of 1998 and
in the comparable 1997 period.
Research and development expense was $5,601,000 in the first six months
of 1998 as compared to $1,542,000 in the first six months of 1997. The increase
reflects expense related to the Linvatec research and development activities.
During the first quarter of 1997, the Company recorded a charge of
$2,328,000 related to the closure of its Dayton, Ohio manufacturing facility.
Operations of the Dayton facility were transferred to the Company's
manufacturing location in Rome, New York.
The first six months of 1998 had interest expense of $15,181,000
compared to interest income of $628,000 in the first six months of 1997. As
discussed under Liquidity and Capital Resources, the Company acquired Linvatec
Corporation on December 31, 1997 for $370 million that was borrowed under its
Credit Facility. The Company had no borrowings outstanding during the first six
months of 1997. The Company completed an offering of subordinated notes during
the quarter ended March 1998 and used the net proceeds to repay a portion of the
Company's term loans under its Credit Facility. Deferred financing fees relating
to the portion of the Credit Facility repaid amounting to $2.5 million ($1.6
million net of income taxes) were written-off as an extraordinary item.
Liquidity and Capital Resources
Net cash provided by operations was $18,494,000 for the first six
months of 1998 as compared to $13,247,000 for the first six months of 1997.
Operating cash flow for the first six months of 1998 was negatively impacted by
lower net income resulting from acquisition related charges as compared to the
first six months of 1997. Depreciation and amortization increased in 1998
primarily as a result of the completed acquisitions. Additionally, during the
first quarter of 1998, the Company recorded a non-cash extraordinary charge
related to the write-off of deferred financing fees. Operating cash flow for the
first six months of 1998 was positively impacted by an increase in accrued
interest and accounts payable. Adversely impacting operating cash flows for the
first six months of 1998 was an increase in inventories related primarily to a
buildup of Linvatec inventories in anticipation of an announced plant closing
and inventory requirements related to the startup of sales and distribution
operations previously managed by Zimmer.
<PAGE>
Net cash used by investing activities for the first six months of 1998
included $6,996,000 of transaction costs related to the Linvatec acquisition.
Capital expenditures for the first six months of 1998 and 1997 amounted to
$6,663,000 and $1,488,000, respectively.
Financing activities during the first six months of 1998 involved the
completion of a subordinated note offering in the aggregate principal amount of
$130.0 million in March 1998. Net proceeds from the offering amounting to $126.1
million were used to repay a portion of the Company's loans under its Credit
Facility. In addition to the net proceeds of the subordinated note offering, the
Company made payments on loans under its Credit Facility aggregating $9.6
million during the first six months of 1998.
In connection with the Linvatec acquisition, the Company borrowed
$350.0 million under its Credit Facility. Upon the application of mandatory
principal payments including the subordinated note proceeds, the Company's term
loans at June 30, 1998 aggregate $220.4 million and are repayable quarterly over
terms of five and seven years. The Company's Credit Facility also includes a
$100 million revolving credit facility which expires December 2002, of which $95
million was available on June 30, 1998. The Credit Facility borrowings carry
interest rates based on LIBOR plus 2.00% on the revolving credit facility and
five-year term loan, and LIBOR plus 2.25% on the seven-year term loan. The
interest rates at June 30, 1998 were 7.69%,7.94% and 7.69% for the five-year
term loan, the seven-year term loan and revolving credit facility, respectively.
Additionally, during the commitment period, the Company is obligated to pay a
fee of .5% per annum on the unused portion of the revolving credit facility.
The Company does not use derivative financial instruments for trading
or other speculative purposes. Interest rate swaps, a form of derivative, are
used to manage interest rate risk. Currently the Company has entered into two
interest rate swaps expiring in June 2001 which convert $100 million of floating
rate debt under the Company's Credit Facility into fixed rate debt at rates
ranging from 7.18% to 8.25%. Provisions in one of the interest rate swaps
cancels such agreement when LIBOR exceeds 7.35%.
The Credit Facility is collateralized by all the Company's personal
property. The Credit Facility contains covenants and restrictions which, among
other things, require maintenance of certain working capital levels and
financial ratios, prohibit dividend payments and restrict the incurrence of
indebtedness and certain other activities, including acquisitions and
dispositions. The Company is also required to make mandatory prepayments from
net cash proceeds from any issue of equity and asset sales and also from any
excess cash flow, as defined.
The subordinated notes are in aggregate principal amount of $130
million and have a maturity date of March 15, 2008. The subordinated notes bear
interest at 9.0% per annum which is payable semi-annually. The indenture
governing the subordinated notes has certain restrictive covenants and provides
for, among other things, mandatory and optional redemptions by the Company.
The Credit Facility and subordinated notes (the "Notes") are guaranteed
(the "Subsidiary Guarantees") by each of the Company's subsidiaries in existence
on the closing dates of the Credit Facility and the Notes (the "Subsidiary
Guarantors"). The Subsidiary Guarantees provide that each Subsidiary Guarantor
will fully and unconditionally guarantee the Company's obligations on a joint
and several basis. Each Subsidiary Guarantor is wholly-owned by the Company.
Under the Credit Facility and subordinated note indenture, the Company's
subsidiaries are subject to the same covenants and restrictions that apply to
the Company (except that the Subsidiary Guarantors are permitted to make
dividend payments and distributions, including cash dividend payments, to the
Company or another Subsidiary Guarantor).
Management believes that cash generated from operations, its current
cash resources and funds available under its Credit Facility will provide
sufficient liquidity to ensure continued working capital for operations, debt
service and funding of capital expenditures in the foreseeable future.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
List of Exhibits
Exhibit No. Description
----------- -----------
11 Computation of weighted average number
of shares of common stock
Reports on Form 8-K
None
<PAGE>
SIGNATURES
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.
CONMED CORPORATION
(Registrant)
Date: August 13, 1998
/s/Robert D. Shallish, Jr.
--------------------------
Robert D. Shallish, Jr.
Vice President - Finance
(Principal Financial Officer)
<PAGE>
Exhibit Index
Exhibit
11 - Computations of weighted average
number of shares of common stock
EXHIBIT 11
Computation of weighted average number of shares of common stock
For the three months For the six months
ended ended
June June June June
1997 1998 1997 1998
------ ------ ------ ------
Shares outstanding at
beginning of period
(net of 25,000 shares
held in treasury) .............. 14,999 15,043 14,989 15,037
Weighted average shares
issued .......................... 6 14 10 10
------ ------ ------ ------
Shares used in the
calculation of basic EPS
(weighted average shares
outstanding) .................... 15,005 15,057 14,999 15,047
Effect of dilutive
securities ...................... 188 269 228 239
------ ------ ------ ------
Shares used in the
calculation of diluted
EPS ............................. 15,193 15,326 15,227 15,286
====== ====== ====== ======
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 4,454
<SECURITIES> 0
<RECEIVABLES> 51,691
<ALLOWANCES> (2,636)
<INVENTORY> 68,774
<CURRENT-ASSETS> 128,080
<PP&E> 82,245
<DEPRECIATION> (24,803)
<TOTAL-ASSETS> 570,672
<CURRENT-LIABILITIES> 48,145
<BONDS> 355,386
0
0
<COMMON> 151
<OTHER-SE> 168,431
<TOTAL-LIABILITY-AND-EQUITY> 570,672
<SALES> 80,513
<TOTAL-REVENUES> 80,513
<CGS> 40,874
<TOTAL-COSTS> 40,874
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
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<INCOME-TAX> 2,557
<INCOME-CONTINUING> 4,547
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,547
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
