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CONMED reported 1Q22 orthopedic sales of $107.5 million, +0.3% compared to 1Q21.
The impact of Omicron was the strongest in January and dissipated throughout the quarter, according to the company. Asian markets, particularly Japan, got off to slower starts in the quarter. Europe and Latin American markets delivered solid performances despite macro challenges.
Those challenges have brought unexpected rising costs to CONMED. The increasing cost of oil impacts the cost of freight and resins. Company CFO Todd Garner said that freight costs will likely be 22% higher than expected in 2022. Material costs in the aggregate are expected to be 5% higher than originally forecasted for this year.
However, the company is committed to keeping the momentum going for its commercial channel. Garner said, “We are also being extremely judicious with any new commercial spending. However, I do want to emphasize that we do not think it would be wise to make wholesale cuts to our commercial infrastructure in an effort to offset these temporary inflationary pressures.”
CONMED became the latest company to jump into the foot/ankle market through its acquisition of In2Bones Global. That market is estimated at over $4 billion in global sales with a high single-digit growth rate. The transaction will close late in the second quarter, or early in the third. For the back half of the year, CONMED projects approximately $20 million in revenue from In2Bones.
The foot/ankle market features the largest orthopedic players as well as pure-play disruptors growing at many multiples of the market, but CONMED leadership feels up to the challenge. The company already faces many of those same competitors in its sports medicine business.
CONMED plans to leave In2Bones as a stand-alone platform in the U.S. while leveraging its own commercial team in international markets. While In2Bones does have some upper extremity products, CONMED is taking a wait-and-see approach for that smaller portion of the portfolio.
The company raised its total guidance, inclusive of non-orthopedic businesses, to the range of $1.085 billion to $1.130 billion, representing organic growth between +7% and +12%.
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. Orthopedic sales and growth rates are estimated on an as-reported basis.
Orthopedic Sales by Segment
| 1Q22 | 1Q21 | $ Chg | % Chg | |
|---|---|---|---|---|
| Sports Medicine | $107.5 | $107.2 | $0.4 | 0.3% |
Orthopedic Sales by Geography
| 1Q22 | 1Q21 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $37.9 | $37.1 | $0.8 | 2.2% |
| OUS | $69.6 | $70.0 | ($0.5) | (0.7%) |
| EMEA | $30.0 | $26.1 | $3.9 | 15.1% |
| Asia Pacific | $23.4 | $26.6 | ($3.2) | (12%) |
| Rest of World | $16.2 | $17.4 | ($1.2) | (7%) |
| Total | $107.5 | $107.2 | $0.4 | 0.3% |
Company Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $242.3 | |
| Cost of Sales | $106.3 | 43.9% |
| Selling and Admin | $102.9 | 42.5% |
| R&D | $10.7 | 4.4% |
| Other | $7.4 | 3.1% |
| Net Earnings | $15.0 | 6.2% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
CONMED reported 1Q22 orthopedic sales of $107.5 million, +0.3% compared to 1Q21.
The impact of Omicron was the strongest in January and dissipated throughout the quarter, according to the company. Asian markets, particularly Japan, got off to slower starts in the quarter. Europe and Latin American markets delivered solid performances despite...
CONMED reported 1Q22 orthopedic sales of $107.5 million, +0.3% compared to 1Q21.
The impact of Omicron was the strongest in January and dissipated throughout the quarter, according to the company. Asian markets, particularly Japan, got off to slower starts in the quarter. Europe and Latin American markets delivered solid performances despite macro challenges.
Those challenges have brought unexpected rising costs to CONMED. The increasing cost of oil impacts the cost of freight and resins. Company CFO Todd Garner said that freight costs will likely be 22% higher than expected in 2022. Material costs in the aggregate are expected to be 5% higher than originally forecasted for this year.
However, the company is committed to keeping the momentum going for its commercial channel. Garner said, “We are also being extremely judicious with any new commercial spending. However, I do want to emphasize that we do not think it would be wise to make wholesale cuts to our commercial infrastructure in an effort to offset these temporary inflationary pressures.”
CONMED became the latest company to jump into the foot/ankle market through its acquisition of In2Bones Global. That market is estimated at over $4 billion in global sales with a high single-digit growth rate. The transaction will close late in the second quarter, or early in the third. For the back half of the year, CONMED projects approximately $20 million in revenue from In2Bones.
The foot/ankle market features the largest orthopedic players as well as pure-play disruptors growing at many multiples of the market, but CONMED leadership feels up to the challenge. The company already faces many of those same competitors in its sports medicine business.
CONMED plans to leave In2Bones as a stand-alone platform in the U.S. while leveraging its own commercial team in international markets. While In2Bones does have some upper extremity products, CONMED is taking a wait-and-see approach for that smaller portion of the portfolio.
The company raised its total guidance, inclusive of non-orthopedic businesses, to the range of $1.085 billion to $1.130 billion, representing organic growth between +7% and +12%.
Orthopedic Sales Data
All orthopedic sales data is provided in USD millions unless otherwise noted. Orthopedic sales and growth rates are estimated on an as-reported basis.
Orthopedic Sales by Segment
| 1Q22 | 1Q21 | $ Chg | % Chg | |
|---|---|---|---|---|
| Sports Medicine | $107.5 | $107.2 | $0.4 | 0.3% |
Orthopedic Sales by Geography
| 1Q22 | 1Q21 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $37.9 | $37.1 | $0.8 | 2.2% |
| OUS | $69.6 | $70.0 | ($0.5) | (0.7%) |
| EMEA | $30.0 | $26.1 | $3.9 | 15.1% |
| Asia Pacific | $23.4 | $26.6 | ($3.2) | (12%) |
| Rest of World | $16.2 | $17.4 | ($1.2) | (7%) |
| Total | $107.5 | $107.2 | $0.4 | 0.3% |
Company Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $242.3 | |
| Cost of Sales | $106.3 | 43.9% |
| Selling and Admin | $102.9 | 42.5% |
| R&D | $10.7 | 4.4% |
| Other | $7.4 | 3.1% |
| Net Earnings | $15.0 | 6.2% |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
