CONMED Corp. (NASDAQ:CNMD) filed Quarterly Report for the period ended 2010-03-31.
Conmed Corp. has a market cap of $652.4 million; its shares were traded at around $22.37 with a P/E ratio of 20.3 and P/S ratio of 0.9. CNMD is in the portfolios of Richard Pzena of Pzena Investment Management LLC, Stanley Druckenmiller of Duquesne Capital Management, LLC, Robert Olstein of Olstein Financial Alert Fund, Chuck Royce of Royce& Associates.
Highlight of Business Operations:Our net working capital position was $247.3 million at March 31, 2010. Net cash provided by operating activities was -$12.9 million in the quarterly period ended March 31, 2010 and $6.7 million in the quarterly period ended March 31, 2009.
Net cash provided by operating activities decreased by $19.6 million in 2010 as compared to 2009 on a $2.8 million increase in net income in the current quarter as compared to the same period a year ago. The decline in operating activities is driven by a new accounting pronouncement effective January 1, 2010, which requires our accounts receivable sold under our accounts receivable sale agreement be recorded as additional borrowings rather than as a reduction in accounts receivable. This change in accounting has been reflected on a prospective basis. Accordingly, cash collections on behalf of the purchaser of the $29.0 million undivided percentage ownership interest in accounts receivable sold prior to January 1, 2010 have been presented as a reduction in cash from operations while net sales of additional accounts receivable have been reflected as an increase in cash flows from financing activities. See Note 13 for further discussion of the change in accounting for the accounts receivable sales agreement.
Net cash used in investing activities in the quarterly period ended March 31, 2010 consisted of the purchase of a business and capital expenditures. The cash purchase price of a business acquired during the quarter approximated $5.0 million (see Note 15 further discussion). Capital expenditures were $7.4 million and $3.3 million for the quarterly periods ended March 31, 2009 and 2010, respectively. The decrease in capital expenditures in the quarterly period ended March 31, 2010 as compared to the same period a year ago is primarily due to the completion during the second quarter of 2009 of the implementation of an enterprise business software application as well certain other infrastructure improvements related to our restructuring efforts as more fully described in Note 14 and in “Restructuring” below. Capital expenditures are expected to approximate $22.0 million in 2010.
Net cash provided by financing activities in the three months ended March 31, 2010 consist principally of $33.0 million in net secured borrowings under our accounts receivable sales agreement (see Note 13), $9.0 million in payments on our revolving credit facility under our senior credit agreement, and a $2.5 million net change in cash overdrafts.
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 $1.0 million in borrowings outstanding on the revolving credit facility as of March 31, 2010. Our available borrowings on the revolving credit facility at March 31, 2010 were $90.6 million with approximately $8.4 million of the facility set aside for outstanding letters of credit. There were $56.0 million in borrowings outstanding on the term loan at March 31, 2010.
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, 2010, 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 have the right to put to us some or all of the Notes for repurchase on November 15, 2011, 2014 and 2019 and, provided the terms of the indenture are satisfied, we will be required to repurchase those Notes.
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