CONMED Corp. (CNMD, Financial) filed Quarterly Report for the period ended 2009-03-31.
CONMED Corporation is a medical technology company specializing in instruments and implants for arthroscopic sports medicine and powered surgical instruments such as drills and saws for orthopaedic ENT and neurosurgery. The company is also a leading developer manufacturer and supplier of advanced medical devices including electrosurgical systems electrodes for heart monitoring. 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. CONMED Corp. has a market cap of $381.74 million; its shares were traded at around $13.15 with a P/E ratio of 9.89 and P/S ratio of 0.51. CONMED Corp. had an annual average earning growth of 1.5% over the past 10 years.
Net cash provided by financing activities in the three months ended March 31, 2009 consist principally of $12.0 million in borrowings on our revolving credit facility under our senior credit agreement, a $3.2 million net change in cash overdrafts, and a $7.8 million repurchase of our 2.50% convertible senior subordinated notes. See Note 15 to the Consolidated Condensed Financial Statements for further discussion of the repurchase of the Notes.
Our $235.0 million senior credit agreement (the "senior credit agreement") consists of a $100.0 million revolving credit facility and a $135.0 million term loan. There were $16.0 million in borrowings outstanding on the revolving credit facility as of March 31, 2009. Our available borrowings on the revolving credit facility at March 31, 2009 were $77.0 million with approximately $7.0 million of the facility set aside for outstanding letters of credit. There were $57.3 million in borrowings outstanding on the term loan at March 31, 2009.
We have outstanding $115.1 million in 2.50% convertible senior subordinated notes due 2024 (“the Notes”). During the three months ended March 31, 2009, we repurchased and retired $9.9 million of the Notes for $7.8 million and recorded a gain on the early extinguishment of debt of $1.1 million net of the write-offs of $0.1 million in unamortized deferred financing costs and $1.0 million in unamortized debt discount. The Notes represent subordinated unsecured obligations and are convertible under certain circumstances, as defined in the bond indenture, into a combination of cash and CONMED common stock. Upon conversion, the holder of each Note will receive the conversion value of the Note payable in cash up to the principal amount of the Note and CONMED common stock for the Note s conversion value in excess of such principal amount. Amounts in excess of the principal amount are at an initial conversion rate, subject to adjustment, of 26.1849 shares per $1,000 principal amount of the Note (which represents an initial conversion price of $38.19 per share). As of March 31, 2009, there was no value assigned to the conversion feature because the Company s share price was below the conversion price. The Notes mature on November 15, 2024 and are not redeemable by us prior to November 15, 2011. Holders of the Notes will be able to require that we repurchase some or all of the Notes on November 15, 2011, 2014 and 2019.
As of March 31, 2009, we have incurred $7.5 million (including $3.5 million in the first quarter of 2009) in costs associated with the restructuring. Approximately $5.4 million (including $2.9 million in the first quarter of 2009) of the total $7.5 million in restructuring costs have been charged to cost of goods sold. The $5.4 million charged to cost of goods sold includes $2.9 million in under utilization of production facilities (including $1.7 million in the first quarter of 2009), $0.7 million in accelerated depreciation (including $0.3 million in the first quarter of 2009), $0.4 million in severance related charges (including $0.3 million in the first quarter of 2009), and $1.4 million in other charges (including $0.6 million in the first quarter of 2009).
We estimate the total costs of the restructuring plan will approximate $9.4 million during 2009, including $2.1 million related to employee termination costs, $3.7 million in expense related to abnormally low production levels at certain of our plants (as we transfer production to alternate sites), $1.4 million in accelerated depreciation at one of the two Utica, New York area facilities which are expected to close and $2.2 million in other restructuring related activities. We estimate approximately $2.0 million of the total anticipated $9.4 million in restructuring costs will be reported in other expense (income) with the remaining $7.4 million charged to cost of goods sold. The restructuring plan impacts Corporate manufacturing and distribution facilities which support multiple reporting segments. As a result, costs associated with the restructuring plan will be reflected in the Corporate line within our business segment reporting.
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CONMED Corporation is a medical technology company specializing in instruments and implants for arthroscopic sports medicine and powered surgical instruments such as drills and saws for orthopaedic ENT and neurosurgery. The company is also a leading developer manufacturer and supplier of advanced medical devices including electrosurgical systems electrodes for heart monitoring. 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. CONMED Corp. has a market cap of $381.74 million; its shares were traded at around $13.15 with a P/E ratio of 9.89 and P/S ratio of 0.51. CONMED Corp. had an annual average earning growth of 1.5% over the past 10 years.
Highlight of Business Operations:
Net cash provided by operating activities decreased by $14.0 million in 2009 as compared to 2008 on a $5.8 million decrease in net income in the current quarter as compared to the same period a year ago. In addition to the decrease in net income, the noncash nature of certain components of current period net income including a $1.1 million non-cash gain on the repurchase and retirement of our 2.50% convertible senior subordinated notes, a $1.9 million non-cash net pension gain and a net $5.0 million decrease in the sale of accounts receivable from the same period a year ago all contributed to the reduction in net cash provided by operating activities.Net cash provided by financing activities in the three months ended March 31, 2009 consist principally of $12.0 million in borrowings on our revolving credit facility under our senior credit agreement, a $3.2 million net change in cash overdrafts, and a $7.8 million repurchase of our 2.50% convertible senior subordinated notes. See Note 15 to the Consolidated Condensed Financial Statements for further discussion of the repurchase of the Notes.
Our $235.0 million senior credit agreement (the "senior credit agreement") consists of a $100.0 million revolving credit facility and a $135.0 million term loan. There were $16.0 million in borrowings outstanding on the revolving credit facility as of March 31, 2009. Our available borrowings on the revolving credit facility at March 31, 2009 were $77.0 million with approximately $7.0 million of the facility set aside for outstanding letters of credit. There were $57.3 million in borrowings outstanding on the term loan at March 31, 2009.
We have outstanding $115.1 million in 2.50% convertible senior subordinated notes due 2024 (“the Notes”). During the three months ended March 31, 2009, we repurchased and retired $9.9 million of the Notes for $7.8 million and recorded a gain on the early extinguishment of debt of $1.1 million net of the write-offs of $0.1 million in unamortized deferred financing costs and $1.0 million in unamortized debt discount. The Notes represent subordinated unsecured obligations and are convertible under certain circumstances, as defined in the bond indenture, into a combination of cash and CONMED common stock. Upon conversion, the holder of each Note will receive the conversion value of the Note payable in cash up to the principal amount of the Note and CONMED common stock for the Note s conversion value in excess of such principal amount. Amounts in excess of the principal amount are at an initial conversion rate, subject to adjustment, of 26.1849 shares per $1,000 principal amount of the Note (which represents an initial conversion price of $38.19 per share). As of March 31, 2009, there was no value assigned to the conversion feature because the Company s share price was below the conversion price. The Notes mature on November 15, 2024 and are not redeemable by us prior to November 15, 2011. Holders of the Notes will be able to require that we repurchase some or all of the Notes on November 15, 2011, 2014 and 2019.
As of March 31, 2009, we have incurred $7.5 million (including $3.5 million in the first quarter of 2009) in costs associated with the restructuring. Approximately $5.4 million (including $2.9 million in the first quarter of 2009) of the total $7.5 million in restructuring costs have been charged to cost of goods sold. The $5.4 million charged to cost of goods sold includes $2.9 million in under utilization of production facilities (including $1.7 million in the first quarter of 2009), $0.7 million in accelerated depreciation (including $0.3 million in the first quarter of 2009), $0.4 million in severance related charges (including $0.3 million in the first quarter of 2009), and $1.4 million in other charges (including $0.6 million in the first quarter of 2009).
We estimate the total costs of the restructuring plan will approximate $9.4 million during 2009, including $2.1 million related to employee termination costs, $3.7 million in expense related to abnormally low production levels at certain of our plants (as we transfer production to alternate sites), $1.4 million in accelerated depreciation at one of the two Utica, New York area facilities which are expected to close and $2.2 million in other restructuring related activities. We estimate approximately $2.0 million of the total anticipated $9.4 million in restructuring costs will be reported in other expense (income) with the remaining $7.4 million charged to cost of goods sold. The restructuring plan impacts Corporate manufacturing and distribution facilities which support multiple reporting segments. As a result, costs associated with the restructuring plan will be reflected in the Corporate line within our business segment reporting.
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