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What changed in CONMED Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CONMED Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+278 added−200 removedSource: 10-K (2026-02-17) vs 10-K (2025-02-18)

Top changes in CONMED Corp's 2025 10-K

278 paragraphs added · 200 removed · 182 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

30 edited+6 added−1 removed47 unchanged
Biggest changeWe compete with Smith & Nephew, plc; Arthrex, Inc.; Stryker Corporation; Johnson & Johnson: DePuy Mitek, Inc.; Zimmer Biomet, Inc.; Paragon 28, Inc. and Treace Medical Concepts, Inc. We also provide our customers with a comprehensive line of battery-powered, autoclavable, large and small bone power tool systems for use in orthopedic, arthroscopic, oral/maxillofacial, podiatric, spinal and cardiothoracic surgeries.
Biggest changeWe also provide our customers with a comprehensive line of battery-powered, autoclavable, large and small bone power tool systems for use in orthopedic, arthroscopic, oral/maxillofacial, podiatric, spinal and cardiothoracic surgeries. These products are marketed under the Hall ® surgical brand name, a pioneer in power surgical tools in the United States.
We have contracts with many such organizations and believe that the loss of any individual group purchasing contract would not materially impact our business. We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk. 5 Manufacturing Raw material costs constitute a substantial portion of our cost of production.
We have contracts with many such organizations and believe that the loss of any individual group purchasing contract would not materially impact our business. We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk. Manufacturing Raw material costs constitute a substantial portion of our cost of production.
We believe our policies, practices and procedures are properly designed to comply, in all material respects, with applicable environmental laws and regulations. We do not expect internal compliance with these requirements to have a material effect on purchases of property, plant and equipment, cash flows, net income (loss) or our competitive position.
We believe our policies, practices and procedures are properly designed to comply, in all material respects, with applicable environmental laws and regulations. We do not expect internal compliance with these requirements to have a material effect on purchases of property, plant and equipment, cash flows, net income or our competitive position.
Diversity and Inclusion A demonstrated commitment to diversity and inclusion is vital to CONMED's success as we seek out individuals who bring their unique capabilities to our Company. We believe that diverse teams stimulate innovation, enhance our understanding 7 of the needs of our global customer base and ultimately deliver better results for our stakeholders.
Diversity and Inclusion A demonstrated commitment to diversity and inclusion is vital to CONMED's success as we seek out individuals who bring their unique capabilities to our Company. We believe that diverse teams stimulate innovation, enhance our understanding of the needs of our global customer base and ultimately deliver better results for our stakeholders.
Business Forward Looking Statements This Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Form 10-K”) contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to CONMED Corporation (“CONMED”, the “Company”, “we” or “us” — references to “CONMED”, the “Company”, “we” or “us” shall be deemed to include our direct and indirect subsidiaries unless the context otherwise requires) which are based on the beliefs of our management, as well as assumptions made by and information currently available to our management.
Business Forward Looking Statements This Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“Form 10-K”) contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to CONMED Corporation (“CONMED”, the “Company”, “we” or “us” — references to “CONMED”, the “Company”, “we” or “us” shall be deemed to include our direct and indirect subsidiaries unless the context otherwise requires) which are based on the beliefs of our management, as well as assumptions made by and information currently available to our management.
Our sales professionals provide surgeons and other healthcare professionals with information relating to the technical features and benefits of our products. Our healthcare systems organization is responsible for interacting with large regional and national accounts (e.g. GPOs, IDNs, etc.).
Our sales professionals provide surgeons and other healthcare professionals with information relating to the technical features and benefits of our products. 5 Our healthcare systems organization is responsible for interacting with large regional and national accounts (e.g. GPOs, IDNs, etc.).
EU MDR 6 imposes stricter requirements for the marketing and sale of medical devices, including in the areas of clinical evaluation requirements, quality systems, labeling and post-market surveillance with an effective date of May 2021.
EU MDR imposes stricter requirements for the marketing and sale of medical devices, including in the areas of clinical evaluation requirements, quality systems, labeling and post-market surveillance with an effective date of May 2021.
Our benefits offerings vary from country to country, dependent on local market practices. We regularly evaluate our benefits offerings to ensure their competitiveness as well as equity and fairness. CONMED is committed to pay equity for all employees.
Our benefits offerings vary from country to country, dependent on local market practices. We regularly evaluate our benefits offerings to ensure their competitiveness as well as equity and fairness. 7 CONMED is committed to pay equity for all employees.
The Buffalo Filter acquisition complemented the CONMED portfolio of smoke removal devices, which provides the Company with the broadest portfolio of single-use and capital smoke evacuation products available in the medical device market today.
The Buffalo Filter, LLC acquisition complemented the CONMED portfolio of smoke removal devices, which provides the Company with the broadest portfolio of single-use and capital smoke evacuation products available in the medical device market today.
Products marketed in the member countries of the European Union ("EU") and other countries require preparation of technical files and design dossiers which demonstrate compliance with applicable international regulations.
Products marketed in the member countries of the European Union ("EU") and other countries require preparation of technical files and design dossiers which demonstrate 6 compliance with applicable international regulations.
We distribute our products through sales subsidiaries and branches with offices located in Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Italy, Japan, Korea, the Netherlands, Poland, Spain, Sweden and the United Kingdom. In these countries, our sales are denominated in the local currency and amounted to approximately 32% of our consolidated net sales in 2024.
We distribute our products through sales subsidiaries and branches with offices located in Australia, Austria, Belgium, Brazil, Canada, China, Denmark, Finland, France, Germany, Italy, Japan, Korea, the Netherlands, Poland, Spain, Sweden and the United Kingdom. In these countries, our sales are denominated in the local currency and amounted to approximately 32% of our consolidated net sales in 2025.
Marketing A significant portion of our products are distributed domestically directly to more than 6,000 hospitals, surgery centers and other healthcare institutions as well as through medical specialty distributors. We are not dependent on any single customer and no single customer accounted for more than 10% of our net sales in 2024, 2023 and 2022.
Marketing A significant portion of our products are distributed domestically directly to more than 6,000 hospitals, surgery centers and other healthcare institutions as well as through medical specialty distributors. We are not dependent on any single customer and no single customer accounted for more than 10% of our net sales in 2025, 2024 and 2023.
As of December 31, 2024, we had approximately 3,900 full-time employees, including approximately 2,400 in operations and the remaining in sales, marketing, research and development and administration. We know that our people are our most important assets and crucial to our ability to deliver on our mission.
As of December 31, 2025, we had approximately 3,900 full-time employees, including approximately 2,400 in operations and the remaining in sales, marketing, research and development and administration. We know that our people are our most important assets and crucial to our ability to deliver on our mission.
Such factors include, among others, the following: • general economic and business conditions, including, without limitation, a potential economic downturn, supply chain challenges and constraints, including the availability and cost of materials, the effects of inflation, and increased interest rates; • compliance with and changes in regulatory requirements; • the failure of any enterprise-wide software programs or information technology systems, or potential disruption associated with updating or implementing new software programs or information technology systems; • the risk of an information security breach, including a cybersecurity breach; • pandemics and health crises, and the responses thereto by governments and hospitals; • the possibility that United States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors; • the introduction and acceptance of new products; • the ability to advance our product lines, including challenges and uncertainties inherent in product research and development, and the uncertain impact, outcome and cost of ongoing and future clinical trials and market studies; • competition; • laws and government regulations; • changes in customer preferences; • changes in technology; • cyclical customer purchasing patterns due to budgetary, staffing and other constraints; • environmental compliance risks, including lack of availability of sterilization with Ethylene Oxide (“EtO”) or other compliance costs associated with the use of EtO; • the quality of our management and business abilities and the judgment of our personnel, as well as our ability to attract, motivate, and retain employees at all levels of the Company; • the availability, terms and deployment of capital; • current and future levels of indebtedness and capital spending; • changes in foreign exchange and interest rates; • the ability to evaluate, finance and integrate acquired businesses, products and companies; • changes in business strategy; • the risk of a lack of allograft tissues due to reduced donations of such tissues or due to tissues not meeting the appropriate high standards for screening and/or processing of such tissues; • the ability to defend and enforce intellectual property, including the risks related to theft or compromise of intellectual property in connection with our international operations; • the risk of patent, product and other litigation as well as the cost associated with such litigation; • trade protection measures, tariffs and other border taxes, and import or export licensing requirements; • weather related events which may disrupt our operations; and • various other factors referenced in this Form 10-K.
Such factors include, among others, the following: • general economic and business conditions, including, without limitation, a potential economic downturn, supply chain challenges and constraints, including the availability and cost of materials, the effects of inflation, and increased interest rates; • compliance with and changes in laws and regulatory requirements; • the failure of any enterprise-wide software programs or information technology systems, or potential disruption associated with updating or implementing new software programs or information technology systems; • the risk of an information security breach, including a cybersecurity breach; • the possibility that United States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors; • the introduction and acceptance of new products; • the ability to advance our product lines, including challenges and uncertainties inherent in product research and development, and the uncertain impact, outcome and cost of ongoing and future clinical trials and market studies; • competition; • changes in customer preferences; • changes in technology; • cyclical customer purchasing patterns due to budgetary, staffing and other constraints; • environmental compliance risks, including lack of availability of sterilization with Ethylene Oxide (“EtO”) or other compliance costs associated with the use of EtO; • natural or man-made disasters or other public health crises; • the quality of our management and business abilities and the judgment of our personnel, as well as our ability to attract, motivate, and retain employees at all levels of the Company; • the availability, terms and deployment of capital; • current and future levels of indebtedness and capital spending; • changes in foreign exchange and interest rates; • the ability to evaluate, finance and integrate acquired businesses, products and companies; • changes in business strategy; • the impact of divestitures of products or product portfolios; • the risk of a lack of allograft tissues due to reduced donations of such tissues or due to tissues not meeting the appropriate high standards for screening and/or processing of such tissues; • the ability to defend and enforce intellectual property, including the risks related to theft or compromise of intellectual property in connection with our international operations; • the risk of patent, product and other litigation as well as the cost associated with such litigation; • trade protection measures, tariffs and other border taxes, and import or export licensing requirements; • weather related events which may disrupt our operations; and • various other factors referenced in this Form 10-K.
In 2024, approximately 91% of general surgery revenue came from single-use products that are expected to be recurring. International Expanding our international presence is an important component of our long-term growth plan. Our products are sold in over 100 countries. International sales efforts are coordinated through local country dealers (including sub-distributors or sales agents) or through direct in-country sales.
In 2025, approximately 92% of general surgery revenue came from single-use products that are expected to be recurring. International Expanding our international presence is an important component of our long-term growth plan. Our products are sold in over 100 countries. International sales efforts are coordinated through local country dealers (including sub-distributors or sales agents) or through direct in-country sales.
In May 2024, 98% of our global workforce participated in the survey, and all team members were invited to participate in subsequent team action planning sessions. During these sessions, survey results are reviewed and discussed. Additionally, the team agrees upon action items they can take to improve their engagement and make CONMED an even better place to work.
In May 2025, 99% of our global workforce participated in the survey, and all team members were invited to participate in subsequent team action planning sessions. During these sessions, survey results are reviewed and discussed. Additionally, the team agrees upon action items they can take to improve their engagement and make CONMED an even better place to work.
We pursue organic growth through developing new products and enhancing existing products. We seek to develop new technologies which improve the durability, performance and usability of existing products. In addition to our internal research and development efforts, we receive new ideas for products and technologies, particularly in procedure-specific areas, from surgeons, inventors and other healthcare professionals. • Pursue Strategic Acquisitions.
We pursue organic growth through developing new products and enhancing existing products. We seek to develop new technologies which improve the durability, performance and usability of existing products. In addition to our internal research and development efforts, we receive new ideas for products and technologies, particularly in procedure-specific areas, from surgeons, inventors and other healthcare professionals. • Leveraging growth drivers.
Substantially all of our facilities have attained certification under the ISO international quality standards and other domestic and international quality accreditations.
Substantially all of our facilities have attained certification under the International Organization for Standardization ("ISO") international quality standards and other domestic and international quality accreditations.
Food and Drug Administration ("FDA") and comparable foreign counterparts. In the United States, these regulations were enacted under the Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act and its subsequent amendments, and the regulations issued or proposed thereunder.
In the United States, these regulations were enacted under the Medical Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act and its subsequent amendments, and the regulations issued or proposed thereunder.
("Biorez") in August 2022. • Realize Manufacturing and Operating Efficiencies. We continually review our production systems for opportunities to reduce operating costs, consolidate product lines or process flows, reduce inventory and optimize existing processes. • Geographic Diversification. We believe that significant growth opportunities exist for our surgical products outside the United States.
We continually review our production systems for opportunities to reduce operating costs, consolidate product lines or process flows, reduce inventory and optimize existing processes. • Geographic Diversification. We believe that significant growth opportunities exist for our surgical products outside the United States.
As noted above, our facilities are subject to periodic inspection by the United States Food and Drug Administration (“FDA”) and foreign regulatory agencies or notified bodies for, among other things, conformance to Quality System Regulation and Current Good Manufacturing Practice (“CGMP”) requirements and foreign or international standards. Refer to Note 14 for further discussion.
As noted above, our facilities are subject to periodic inspection by the FDA and foreign regulatory agencies or notified bodies for, among other things, conformance to Quality System Regulation and Current Good Manufacturing Practice (“CGMP”) requirements and foreign or international standards. Refer to Note 13 for further discussion.
We pursue strategic acquisitions, distribution and similar arrangements in existing and new growth markets to achieve increased operating efficiencies, geographic diversification and market penetration. Targeted companies have historically included those with proven technologies and established brand names which provide potential sales, marketing and manufacturing synergies. This includes the acquisitions of In2Bones Global, Inc. ("In2Bones") in June 2022 and Biorez, Inc.
We pursue strategic acquisitions, distribution and similar arrangements in existing and new growth markets to achieve increased operating efficiencies, geographic diversification and market penetration. Targeted companies have historically included those with proven technologies and established brand names which provide potential sales, marketing and manufacturing synergies.
Our advanced endoscopic technologies offering includes a comprehensive line of therapeutic and diagnostic products used in gastroenterology procedures which utilize flexible endoscopes, as well as patient monitoring products. In addition to these offerings, we offer a unique energy platform specifically designed for gastroenterology and pulmonology procedures. Devices include products for dilation, hemostasis, biliary, stricture management, infection prevention and patient monitoring.
Our advanced endoscopic technologies offering includes a comprehensive line of therapeutic and diagnostic products used in gastroenterology procedures which utilize flexible endoscopes, as well as patient monitoring products. In addition to 1 Anchor is a trademark of the Anchor Products Company, Addison, Illinois. 4 these offerings, we offer a unique energy platform specifically designed for gastroenterology and pulmonology procedures.
In addition, we are an active sponsor of medical education both in the United States and internationally, offering training on new and innovative surgical techniques as well as other medical education programs on the use of our products. 3 Products The following table sets forth the percentage of net sales for each of our product lines during each of the three years ended December 31: Year Ended December 31, 2024 2023 2022 Orthopedic surgery 42 % 43 % 44 % General surgery 58 57 56 Consolidated net sales 100 % 100 % 100 % Net sales (in thousands) $ 1,307,015 $ 1,244,744 $ 1,045,472 Orthopedic Surgery We design, manufacture and globally distribute products which enable orthopedic surgeons to surgically address sports medicine injuries in the knee, hip, shoulder and lower extremities.
Products The following table sets forth the percentage of net sales for each of our product lines during each of the three years ended December 31: Year Ended December 31, 2025 2024 2023 Orthopedic surgery 42 % 42 % 43 % General surgery 58 58 57 Consolidated net sales 100 % 100 % 100 % Net sales (in thousands) $ 1,374,724 $ 1,307,015 $ 1,244,744 Orthopedic Surgery We design, manufacture and globally distribute products which enable orthopedic surgeons to surgically address sports medicine injuries in the knee, hip, shoulder and lower extremities.
These products are marketed under the Hall ® surgical brand name, a pioneer in power surgical tools in the United States. In powered instruments, our competition includes Stryker Corporation; Medtronic plc; Johnson & Johnson: DePuy Synthes, Inc.; and Zimmer Biomet, Inc. In 2024, approximately 77% of orthopedic surgery revenue came from single-use products that are expected to be recurring.
In powered instruments, our competition includes Stryker Corporation; Medtronic plc; Johnson & Johnson: DePuy Synthes, Inc.; and Zimmer Biomet, Inc. In 2025, approximately 78% of orthopedic surgery revenue came from single-use products that are expected to be recurring.
Patient monitoring includes ECG electrodes, EEG electrodes and cardiac defibrillation pads. Our competition includes Boston 1 Anchor is a trademark of the Anchor Products Company, Addison, Illinois. 4 Scientific Corporation - Endoscopy; Cook Medical, Inc.; Merit Medical Endotek; Olympus Corporation; STERIS Corporation - U.S. Endoscopy; Cantel Medical- Medivators, Inc.; Cardinal Health Inc. and 3M Company.
Devices include products for dilation, hemostasis, biliary, stricture management, infection prevention and patient monitoring. Patient monitoring includes ECG electrodes, EEG electrodes and cardiac defibrillation pads. Our competition includes Boston Scientific Corporation - Endoscopy; Cook Medical, Inc.; Merit Medical Endotek; Olympus Corporation; STERIS Corporation - U.S. Endoscopy; Cantel Medical- Medivators, Inc.; Cardinal Health Inc.; and 3M Company.
Annual royalty expense approximated $6.8 million, $5.3 million and $3.2 million in 2024, 2023 and 2022, respectively. Amounts expended for Company research and development were approximately $54.4 million, $52.6 million and $47.2 million during 2024, 2023 and 2022, respectively. Intellectual Property Patents and other proprietary rights, in general, are important to our business.
Annual royalty expense approximated $7.3 million, $6.8 million and $5.3 million in 2025, 2024 and 2023, respectively. Amounts expended for Company research and development were approximately $55.9 million, $54.4 million and $52.6 million during 2025, 2024 and 2023, respectively.
Our product offering for the extremity market includes a portfolio of arthroplasty, biologic, fracture and fixation systems for foot and ankle surgery with products such as the Quantum ® Total Ankle System and the CoLink ® plating system.
Our product offering for the extremity market includes a portfolio of arthroplasty, biologic, fracture and fixation systems for foot and ankle surgery with products such as the CoLink ® plating system. We compete with Smith & Nephew, plc; Arthrex, Inc.; Stryker Corporation; Johnson & Johnson: DePuy Mitek, Inc.; Zimmer Biomet, Inc.; Globus Medical, Inc.; and Treace Medical Concepts, Inc.
We believe that the development of new products and technological and design improvements to existing products will continue to be important to our competitive position. Government Regulation and Quality Systems The development, manufacture, sale and distribution of our products are subject to regulation by numerous agencies and legislative bodies, including the U.S.
Government Regulation and Quality Systems The development, manufacture, sale and distribution of our products are subject to regulation by numerous agencies and legislative bodies, including the U.S. Food and Drug Administration ("FDA") and comparable foreign counterparts.
We have rights to intellectual property, including United States patents and foreign equivalent patents which cover a wide range of our products with expiration dates from 2025 to 2043. We own a majority of these patents and have exclusive and non-exclusive licensing rights to the remainder.
Intellectual Property Patents and other proprietary rights, including trademarks, tradenames, copyrights, trade secrets, and agreements (such as employee and non-disclosure agreements) are important to our business. We have rights to intellectual property, including United States patents and foreign equivalent patents which cover a wide range of our products with expiration dates from 2026 to 2043.
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Active participation allows us to quickly respond to the changing needs of physicians and patients.
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We also pursue organic growth by focusing on our differentiated products. These products allow us to reach more surgeons and physicians and in turn also introduce other products in our portfolios. • Conduct Product Portfolio Review and Optimization. We continuously review our product portfolio.
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During our assessment, we may also identify products that no longer align with our strategy and therefore may discontinue or divest such products to focus on portfolio optimization, reallocate capital to grow meaningful innovation, and expand margins. • Realize Manufacturing and Operating Efficiencies.
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Active participation allows us to quickly respond to the changing needs of physicians and patients. In addition, we are an active sponsor of 3 medical education both in the United States and internationally, offering training on new and innovative surgical techniques as well as other medical education programs on the use of our products.
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Under the terms of our Distribution Agreement with W. L. Gore & Associates, Inc. (“Gore®”), CONMED had exclusive distribution rights to the Gore® VIABIL® Biliary Endoprosthesis for endoscopic placement (“VIABIL® device”) in the United States and Canada (“Distribution Agreement”) through December 31, 2026.
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Following a strategic review, the Company elected to accelerate this timeline, concluding the agreement effective January 1, 2026. In addition, we intend to exit the remaining gastroenterology product line. Refer to the Business Environment section of Management's Discussion and Analysis of Financial Condition and Results of Operations for further information.
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We own a majority of these patents and have exclusive and non-exclusive licensing rights to the remainder. We believe that the development of new products and technological and design improvements to existing products will continue to be important to our competitive position.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

76 edited+61 added−10 removed106 unchanged
Biggest changeThe interactions with domestic health care providers are subject to various federal and state laws and regulations, including the federal Anti-Kickback Statute, which prohibits entities from knowingly and willfully soliciting, offering, receiving or paying remuneration (including kickbacks or bribes) in exchange for or to induce the referral of an individual for the purchase, order, lease or recommendation of any good, item or service for which payment may be made under federal healthcare programs; and the federal civil False Claims Act, which prohibits individuals or entities from knowingly presenting or causing to be presented false or fraudulent claims for payment or knowingly using false statements to obtain payment from the federal government.
Biggest changeThe interactions with domestic healthcare providers are subject to various federal and state laws and regulations, including the federal civil False Claims Act, which prohibits individuals or entities from knowingly presenting or causing to be presented false or fraudulent claims for payment or knowingly using false statements to obtain payment from the federal government.
The senior credit agreement contains, and future credit facilities are expected to contain, a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to respond to changes in our business or competitive activities, or to otherwise engage in acts that may be in our long-term best interest, including restrictions on our ability to: • incur indebtedness; • allow for liens to be placed on our assets; • make investments; • engage in transactions with affiliates; • make certain restricted payments or enter into certain restrictive agreements; • enter into certain swap agreements; • change our line of business; • pay dividends or make other distributions on, or redeem or repurchase, capital stock; • consolidate, merge or sell all or substantially all of our assets; • prepay and/or modify the terms of certain indebtedness; and 12 • pursue acquisitions.
The senior credit agreement contains, and future credit facilities are expected to contain, a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to respond to changes in our business or competitive activities, or to otherwise engage in acts that may be in our long-term best interest, including restrictions on our ability to: • incur indebtedness; • allow for liens to be placed on our assets; • make investments; • engage in transactions with affiliates; • make certain restricted payments or enter into certain restrictive agreements; • enter into certain swap agreements; • change our line of business; • pay dividends or make other distributions on, or redeem or repurchase, capital stock; • consolidate, merge or sell all or substantially all of our assets; • prepay and/or modify the terms of certain indebtedness; and • pursue acquisitions.
In addition, while we are generally entitled to customary indemnification from sellers of businesses or coverage from representation and warranty insurance for any difficulties that may have arisen prior to our acquisition of each business, 14 acquisitions may involve exposure to unknown liabilities and the amount and time for claiming under these indemnification provisions is often limited.
In addition, while we are generally entitled to customary indemnification from sellers of businesses or coverage from representation and warranty insurance for any difficulties that may have arisen prior to our acquisition of each business, acquisitions may involve exposure to unknown liabilities and the amount and time for claiming under these indemnification provisions is often limited.
The degree to which we are leveraged could have important consequences to investors, including but not limited to the following: • a portion of our cash flow from operations must be dedicated to debt service and will not be available for operations, capital expenditures, acquisitions, dividends and other purposes; • our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or general corporate purposes may be limited or impaired or may be at higher interest rates; • we may be at a competitive disadvantage when compared to competitors that are less leveraged; • we may be hindered in our ability to adjust rapidly to market conditions; • our degree of leverage could make us more vulnerable in the event of a downturn in general economic conditions or other adverse circumstances applicable to us; and • our interest expense could increase if interest rates in general increase because a portion of our borrowings, including our borrowings under our credit agreement, are and will continue to be at variable rates of interest.
The degree to which we are leveraged could have important consequences to investors, including but not limited to the following: • a portion of our cash flow from operations must be dedicated to debt service and will not be available for operations, capital expenditures, acquisitions, dividends, share repurchases and other purposes; • our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions or general corporate purposes may be limited or impaired or may be at higher interest rates; • we may be at a competitive disadvantage when compared to competitors that are less leveraged; • we may be hindered in our ability to adjust rapidly to market conditions; • our degree of leverage could make us more vulnerable in the event of a downturn in general economic conditions or other adverse circumstances applicable to us; and • our interest expense could increase if interest rates in general increase because a portion of our borrowings, including our borrowings under our credit agreement, are and will continue to be at variable rates of interest.
The highly competitive market for our products may create adverse pricing pressures. 10 The market for our products is highly competitive and our customers have alternative suppliers. Many of our competitors offer a range of products in areas other than those in which we compete, which may make such competitors more attractive to surgeons, hospitals, group purchasing organizations and others.
The highly competitive market for our products may create adverse pricing pressures. The market for our products is highly competitive and our customers have alternative suppliers. Many of our competitors offer a range of products in areas other than those in which we compete, which may make such competitors more attractive to surgeons, hospitals, group purchasing organizations and others.
Any of these effects, or others that we are not able to predict, could adversely affect our business, financial condition or results of operations. Any deterioration in global economic conditions could also have material adverse effects on our business, financial condition or results of operations, even if our direct exposure to the affected region is limited.
Any of these effects, or others that we are not able to predict, could adversely affect our business, financial condition or results of operations. Any deterioration in global 8 economic conditions could also have material adverse effects on our business, financial condition or results of operations, even if our direct exposure to the affected region is limited.
The convertible notes hedge transactions are expected generally to reduce the potential dilution upon conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be. We also entered into warrant transactions with each Option Counterparty.
The convertible notes hedge transactions are expected generally to reduce the potential dilution upon conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be. We also entered into warrant transactions 15 with each Option Counterparty.
For example, China has implemented a volume-based procurement (“VBP”) process designed to reduce medical spending, which has in the past resulted in, and could in the future result in, reduced margins on covered devices and products, required renegotiation of distributor arrangements, and incurrence of inventory-related charges.
For example, China has implemented a volume-based procurement (“VBP”) process designed to reduce medical spending, which has in the past resulted in, and could in the future result in, reduced 12 margins on covered devices and products, required renegotiation of distributor arrangements, and incurrence of inventory-related charges.
The SCCs are required to be used for new agreements involving the cross-border transfer of personal data from the EEA and must be supplemented by an assessment and due diligence of the legal and regulatory landscape of the jurisdiction of the data importer, the channels used to transmit personal data and any sub-processors that may receive personal data.
The SCCs are required to be used for new agreements involving the cross-border transfer of personal data from the EEA and must be supplemented by an assessment and due diligence of the legal and regulatory landscape of the jurisdiction of the data importer, the channels used to transmit 17 personal data and any sub-processors that may receive personal data.
If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as foregoing acquisitions, reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.
If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as foregoing acquisitions, reducing or delaying capital 14 expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.
If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income (loss) and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.
Any increase in the frequency or severity of natural disaster events could result in increased insurance premiums. 17 Further, while insurance reimburses us for our lost gross earnings during a business interruption, if we are unable to supply our customers with our products for an extended period of time, there can be no assurance that we will regain the customers’ business once the product supply is returned to normal.
Any increase in the frequency or severity of natural disaster events could result in increased insurance premiums. 20 Further, while insurance reimburses us for our lost gross earnings during a business interruption, if we are unable to supply our customers with our products for an extended period of time, there can be no assurance that we will regain the customers’ business once the product supply is returned to normal.
Factors which may influence our customers’ choice of competitor products include: • changes in surgeon preferences; • increases or decreases in healthcare spending related to medical devices; • our inability to supply products as a result of product recall, market withdrawal or back-order; • the introduction by competitors of new products or new features to existing products such as a replacement for AirSeal ® ; • the introduction by competitors of alternative surgical technology; and • advances in surgical procedures, discoveries or developments in the healthcare industry.
Factors that may influence our customers’ choice of competitor products include: • changes in surgeon preferences; • increases or decreases in healthcare spending related to medical devices; • our inability to supply products as a result of product recall, market withdrawal or back-order; • the introduction by competitors of new products or new features to existing products such as a replacement for AirSeal ® ; • the introduction by competitors of alternative surgical technology; and • advances in surgical procedures, discoveries or developments in the healthcare industry.
In addition, many of our competitors are substantially larger with greater financial resources which may allow them to more rapidly develop or acquire new products.
In addition, many of our competitors are substantially 13 larger with greater financial resources which may allow them to more rapidly develop or acquire new products.
Any adverse outcome in one or more of these investigations could include the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, including exclusion from government reimbursement programs and/or entry into Corporate Integrity Agreements (CIAs) with governmental agencies. In addition, resolution of any of these matters could involve the imposition of additional, costly compliance obligations.
Any adverse outcome in one or more of these investigations could include the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, including 9 exclusion from government reimbursement programs and/or entry into Corporate Integrity Agreements with governmental agencies. In addition, resolution of any of these matters could involve the imposition of additional, costly compliance obligations.
The Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. companies and their representatives from offering or making payments to foreign officials for the purpose of securing a business advantage; and in many countries, the healthcare professionals with whom we regularly interact may meet the definition of a foreign government official for purposes of this law.
The Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. companies and their representatives from offering or making payments to foreign officials for the purpose of securing an improper business advantage; and in many countries, the healthcare professionals with whom we regularly interact may meet the definition of a foreign government official for purposes of this law.
(iii) Risks Related to Our Acquisition Strategy Our financial performance is subject to the risks inherent in any acquisition, including the effects of increased borrowing and integration of newly acquired businesses or product lines . A key element of our business strategy has been to expand through acquisitions and we may seek to pursue additional acquisitions in the future.
(iii) Risks Related to Our Strategic Transactions Our financial performance is subject to the risks inherent in any acquisition, including the effects of increased borrowing and integration of newly acquired businesses or product lines . A key element of our business strategy has been to expand through acquisitions and we may seek to pursue additional acquisitions in the future.
The UK has developed its own set of SCCs that must be used for transfers of personal data from the UK to the U.S. In July 2023, the European Commission determined that the Data Privacy Framework (“DPF”), a replacement for the invalidated EU-US Privacy Shield, ensures an adequate level of protection for EU personal data transferred to the United States.
The UK has developed its own set of SCCs that must be used for transfers of personal data from the UK to the U.S. In July 2023, the European Commission determined that the Data Privacy Framework (“DPF”), a replacement for the invalidated EU-US Privacy Shield, ensures an adequate level of protection for EU personal data transferred to the U.S.
We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Canada, China, Japan, and Korea. In those countries in which we have a direct presence, our sales are denominated in the local currency and those sales denominated in local currency amounted to approximately 32% of our total net sales in 2024.
We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Canada, China, Japan, and Korea. In those countries in which we have a direct presence, our sales are denominated in the local currency and those sales denominated in local currency amounted to approximately 32% of our total net sales in 2025.
Our international presence exposes us to certain other inherent risks, including: • imposition of limitations on conversions of foreign currencies into dollars or remittance of dividends and other payments by international subsidiaries; • imposition or increase of withholding and other taxes on remittances and other payments by international subsidiaries; • trade barriers and tariffs; • compliance with economic sanctions, trade embargoes, export controls, and the customs laws and regulations of the many countries in which we operate; • political risks, including political instability; • reliance on third parties to distribute our products; • hyperinflation in certain countries outside the United States; and • imposition or increase of investment and other restrictions by foreign governments.
Our international presence exposes us to certain other inherent risks, including: • imposition of limitations on conversions of foreign currencies into dollars or remittance of dividends and other payments by international subsidiaries; • imposition or increase of withholding and other taxes on remittances and other payments by international subsidiaries; • trade barriers and tariffs; • compliance with economic sanctions, trade embargoes, export controls, and the customs laws and regulations of the many countries in which we operate; • political risks, including political instability; • reliance on third parties to distribute our products; • hyperinflation in certain countries outside the U.S.; and • imposition or increase of investment and other restrictions by foreign governments.
For example, the European Union ("EU") General Data Protection Regulation ("GDPR") requires us to manage personal data in the EU and may impose fines of up to four percent of our global revenue in the event of certain violations.
For example, the EU General Data Protection Regulation ("GDPR") requires us to manage personal data in the EU and may impose fines of up to four percent of our global revenue in the event of certain violations.
In addition, our senior credit agreement may restrict our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit dividend payments.
In addition, our senior credit agreement restricts our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit dividend payments.
To the extent MTF’s performance does not meet customer expectations or otherwise fails, we may be unable to increase the allograft service fees or to find a suitable replacement for MTF on terms that are acceptable. The FDA and several states have statutory authority to regulate allograft processing and allograft-based materials.
To the extent MTF’s performance does not meet customer expectations or otherwise fails, we may be unable to increase the allograft service fees or to find a suitable replacement for MTF on terms that are acceptable. The FDA and several states regulate allograft processing and allograft-based materials.
Similar anti-bribery laws are in effect in many of the countries in which we operate. The FCPA also imposes obligations on manufacturers listed on U.S. stock exchanges to maintain accurate books and records, and maintain internal accounting controls sufficient to provide assurance that transactions are accurately recorded, lawful and in accordance with management’s authorization.
Similar anti-bribery laws are in effect in many of the countries in which we operate. The FCPA also imposes obligations on companies listed on U.S. stock exchanges to keep accurate books and records and maintain internal accounting controls sufficient to provide assurance that transactions are accurately recorded and in accordance with management’s authorization.
Our ability to attract and retain qualified employees is critical to our success . Our employees are our most important resource, and in many areas of the medical industry, competition for qualified personnel is intense. We seek to attract talented and diverse new employees and retain and motivate our existing employees.
Our employees are our most important resource, and in many areas of the medical industry, competition for qualified personnel is intense. We seek to attract talented and diverse new employees and retain and motivate our existing employees.
Because a significant portion of our operations consist of sales activities in jurisdictions outside the United States, our financial results may be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the markets in which we distribute products.
Because a significant portion of our operations consist of sales activities in jurisdictions outside the U.S., our financial results may be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the markets in which we distribute products.
In addition, legal requirements standards for cross-border personal data transfers from outside the United States are constantly changing, including the revisions made by the European Economic Area (“EEA”) that require the use of revised Standard Contractual Clauses (“SCCs”) for international data transfers from the EEA.
In addition, legal requirements standards for cross-border personal data transfers from outside the U.S. are constantly changing, including the revisions made by the European Economic Area (“EEA”) that require the use of revised Standard Contractual Clauses (“SCCs”) for international data transfers from the EEA.
If we fail to comply with applicable regulatory requirements, we may be subject to a range of sanctions, including substantial fines, warning letters that require corrective action, product seizures, recalls, import restrictions, the suspension of product manufacturing or sales, revocation of approvals, exclusion from future participation in government healthcare programs, substantial fines and criminal prosecution.
If we fail to comply with applicable regulatory requirements, we may be subject to a range of sanctions, including substantial fines, warning letters, product seizures, recalls, import restrictions, the suspension of product manufacturing or sales, revocation of approvals or clearances, exclusion from future participation in government healthcare programs, substantial fines and criminal prosecution.
Manufacturers of medical devices have been the subject of various investigations and enforcement actions relating to interactions with health care providers, both domestically and internationally.
Manufacturers of medical devices have been the subject of various investigations and enforcement actions relating to interactions with healthcare providers, both domestically and internationally.
Approximately 31% of our products when measured in terms of revenues for 2024, are sterilized by third-party sterilizers using ethylene oxide, a chemical which, when present or used in high levels or concentrations, has raised some environmental concerns in some areas within the United States, with the result that some EtO sterilization facilities have closed, or are threatened with closure, either temporarily or permanently, in connection with government enforcement actions or enhanced regulations prompted by environmental concerns.
Approximately 31% of our products, when measured in terms of revenues for 2025, are sterilized by third-party sterilizers using EtO, a chemical which, when present or used in high levels or concentrations, has raised some environmental concerns in some areas within the U.S., with the result that some EtO sterilization facilities have closed, or are threatened with closure, either temporarily or permanently, in connection with government enforcement actions or enhanced regulations prompted by environmental concerns.
Also, many states have enacted laws similar to the federal Anti-Kickback Statute and the False Claims Act, and some of these may be broader in scope in that some extend to all payors.
Also, many states have enacted laws similar to the False Claims Act, and some of these may be broader in scope in that some extend to all payors.
Moreover, we are generally required to obtain regulatory clearance or approval prior to marketing a new product. The time required to obtain approvals from foreign countries may be longer or shorter than that required for FDA clearance, and requirements for such approvals may differ from FDA requirements.
Moreover, we are generally required to obtain regulatory clearance or approval prior to marketing a new product or making certain changes to our existing products. The time required to obtain approvals from foreign countries may be longer or shorter than that required for FDA clearance, and requirements for such approvals may differ from FDA requirements.
For example, the path of Hurricane Helene temporarily impacted our manufacturing facility in Largo, Florida and our distribution center in Lithia Springs, Georgia. Any disruption resulting from these events could cause significant delays in shipments of products and the loss of sales and customers. We may not have insurance to adequately compensate us for any of these events.
For example, the path of Hurricane Milton temporarily impacted our manufacturing facility in Largo, Florida. Any disruption resulting from these events could cause significant delays in shipments of products and the loss of sales and customers. We may not have insurance to adequately compensate us for any of these events.
Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described above. We may incur substantial additional indebtedness, including secured indebtedness. As of December 31, 2024, we have $583.4 million of availability under the senior credit agreement.
Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described above. We may incur substantial additional indebtedness, including secured indebtedness. As of December 31, 2025, we had $648.5 million of availability under the senior credit agreement.
We believe that the health care industry will continue to be impacted by judicial decisions, increasing regulation, political and legal action at both the federal and state/local levels in the United States and internationally, and US executive orders, and it is uncertain how such developments will affect our business.
We believe that the healthcare industry will continue to be impacted by judicial decisions, increasing regulation, political and legal action at both the federal and state/local levels in the U.S. and internationally, and U.S. executive orders, and it is uncertain how such developments will affect our business.
If such tissue cannot be obtained, is not accepted by the market or is not accepted under numerous government regulations, our results of operations could be negatively impacted.
If such tissue cannot be obtained, is not accepted by the market or is not compliant with applicable government regulations, our results of operations could be negatively impacted.
We may not be able to generate sufficient cash to service our indebtedness and other obligations, and, our leverage and debt service requirements may require us to adopt alternative business strategies . As of December 31, 2024, we had $914.6 million of debt outstanding, representing 48% of total capitalization.
We may not be able to generate sufficient cash to service our indebtedness and other obligations, and, our leverage and debt service requirements may require us to adopt alternative business strategies . As of December 31, 2025, we had $840.0 million of debt outstanding, representing 44% of total capitalization.
There can be no assurance that the costs of responding to such inspections will not be material. Additionally, the availability of designated European notified body services to certify compliance with the new EU MDR requirements is limited, which may delay the marketing approval for some of our products under the EU MDR (and, potentially, the UK MDR).
There can be no assurance that the consequences and costs of responding to such inspections will not be material. Additionally, the availability of independent third-party organizations that certify compliance with the new EU MDR requirements is limited, which may delay the marketing approval for some of our products under the EU MDR (and, potentially, the UK MDR).
A portion of our orthopedic revenues relate to our share of the service fees from the Musculoskeletal Transplant Foundation ("MTF") allograft tissues for which we have exclusive worldwide sales representation, marketing and promotion rights, as further described in our revenue recognition policy in Note 1.
A portion of our orthopedic revenues relate to our share of the service fees from the Musculoskeletal Transplant Foundation ("MTF") allograft tissues for which we have exclusive worldwide sales representation, marketing and promotion rights, as further described in our revenue recognition policy in Note 1 to our consolidated financial statements in this Annual Report on Form 10-K.
While we have a hedging strategy involving foreign currency forward contracts for 2024, our revenues and earnings are only partially protected from foreign currency translation if the United States dollar strengthens as compared with currencies such as the Euro. Further, as of the date of this Form 10-K, we have not entered into any foreign currency forward contracts beyond 2026.
While we have a hedging strategy involving foreign currency forward contracts, our revenues and earnings are only partially protected from foreign currency translation if the U.S. dollar strengthens as compared with currencies such as the Euro. Further, as of the date of this Annual Report on Form 10-K, we have not entered into any foreign currency forward contracts beyond 2027.
Where possible, we have addressed increasing supply chain costs in pricing, yet continued cost pressures and raw material availability have had and may continue to have an adverse effect on our business, financial condition or results of operations.
Where possible, we have addressed increasing supply chain costs in pricing, yet continued cost pressures and raw material availability have had and may continue to have an adverse effect on our business, financial condition or results of operations. The U.S. Department of the Treasury’s Office of Foreign Assets Control and the U.S.
Global political trends could increase the probability of a deterioration in global economic conditions. In this regard, approximately 15% of our 2024 revenues are derived from the sale of capital products.
Global political trends could increase the probability of a deterioration in global economic conditions. In this regard, approximately 14% of our 2025 revenues were derived from the sale of capital products.
If we fail or are perceived to have failed to comply with corporate 19 responsibility laws and regulations, meet evolving expectations or accurately disclose our progress, we could face legal and regulatory proceedings and our reputation, business, financial condition and results of operations could be adversely impacted.
If we fail or are perceived to have failed to comply with corporate responsibility laws and regulations, meet evolving expectations or accurately disclose our progress, we could face legal and regulatory proceedings and our reputation, business, financial condition and results of operations could be adversely impacted. 22 Our ability to attract and retain qualified employees is critical to our success .
Our significant international operations subject us to foreign currency fluctuations and other risks associated with operating in countries outside the United States . A significant portion of our revenues, approximately 43% of 2024 consolidated net sales, were to customers outside the United States.
Our significant international operations subject us to foreign currency fluctuations and other risks associated with operating in countries outside the U.S . A significant portion of our revenues, approximately 44% of 2025 consolidated net sales, were to customers outside the U.S.
The FCPA can pose unique challenges for manufacturers that operate in foreign cultures where conduct prohibited by the FCPA may not be viewed as illegal in local jurisdictions and because, in some cases, a United States manufacturer may face risks under the FCPA based on the conduct of third parties (i.e., distributors) over whom the manufacturer may not have complete control.
The FCPA can pose unique challenges for manufacturers that operate in foreign countries where conduct prohibited by the FCPA may not be viewed as illegal in local jurisdictions. In addition, a U.S. manufacturer may face risks under the FCPA based on the conduct of third parties (e.g., distributors) over whom the manufacturer may not have complete control.
While we seek to take reasonable steps to avoid infringing on patents we do not own or license, we cannot be sure that our services and products do not infringe on the intellectual property rights of third parties, and we may have infringement claims asserted against us.
In addition, the cost of enforcing our patents against third parties and defending our products against patent infringement actions by others could be substantial, and we may not prevail. 19 While we seek to take reasonable steps to avoid infringing on patents we do not own or license, we cannot be sure that our services and products do not infringe on the intellectual property rights of third parties, and we may have infringement claims asserted against us.
While these third-parties may have business reasons for contracting with us to distribute their products, we may face the risk that the third-parties may seek alternate distribution partners when their distribution contracts with us expire or are scheduled for renewal.
While these third-parties may have business reasons for contracting with us to distribute their products, we may face the risk that the third-parties may seek alternate distribution partners when their distribution contracts with us expire or are scheduled for renewal. For instance, in December 2025, we announced that we were terminating our distribution agreement with W.L.
In addition, increased inflation in wages and materials and the imposition of 11 tariffs may also increase our costs, or retaliatory tariffs imposed by other governments would also increase our costs. We believe that our supply management practices are based on an appropriate balancing of the foreseeable risks and the costs of alternative practices.
Retaliatory tariffs imposed by other governments would also increase our costs. We believe that our supply management practices are based on an appropriate balancing of the foreseeable risks and the costs of alternative practices.
We cannot be certain that any of these strategies could be implemented on terms acceptable to us, if at all. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 8.
We cannot be certain that any of these strategies could be implemented on terms acceptable to us, if at all. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 7 to our consolidated financial statements in this Annual Report on Form 10-K.
The remaining 11% of sales to customers outside the United States was on an export basis and transacted in United States dollars.
The remaining 12% of sales to customers outside the U.S. was on an export basis and transacted in U.S. dollars.
Refer to Note 8 for further details on the Convertible Notes. The convertible notes hedge and warrant transactions that we entered into in connection with the offering of the Convertible Notes may affect the value of the Convertible Notes and our common stock.
Refer to Note 7 to our consolidated financial statements in this Annual Report on Form 10-K for further details on the Convertible Notes. The convertible notes hedge and warrant transactions that we entered into in connection with the offering of the Convertible Notes may affect the value of the Convertible Notes and our common stock.
Although we have obtained property damage and business interruption insurance where we deem appropriate, a major catastrophe (such as a fire, flood, hurricane or other natural disaster) in any of the areas where we or our suppliers conduct operations could result in a prolonged interruption of all or a substantial portion of our business.
Although we have obtained property damage and business interruption insurance where we deem appropriate, a natural or man-made disaster or public health crisis in any of the areas where we or our suppliers conduct operations could result in a prolonged interruption of all or a substantial portion of our business.
The increases in costs or availability of raw materials may be exacerbated as a result of the conflicts in Ukraine and the Middle East and ongoing global supply chain challenges.
The increases in costs or availability of raw materials may be exacerbated as a result of the conflicts in Ukraine, the Middle East and elsewhere, and ongoing global supply chain challenges. In addition, increased inflation in wages and materials and the imposition of tariffs have increased, and may in the future increase our costs.
In the event the conditional conversion features of the 2.250% Notes issued on June 6, 2022 are triggered, holders of the Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
The conditional conversion features of our 2.250% Notes if triggered, may adversely affect our financial condition. In the event the conditional conversion features of the 2.250% Notes are triggered, holders of the Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
The loss of our patents could reduce the value of the related products and any related competitive advantage. Competitors may also be able to design around our patents and to compete effectively with our products.
See Item 1 Business “Research and Development” and “Intellectual Property” for a further description of our patents. The loss of our patents could reduce the value of the related products and any related competitive advantage. Competitors may also be able to design around our patents and to compete effectively with our products.
Although we are 9 currently unable to predict the outcome of the investigations or the potential impact, if any, on our business, financial condition, and results of operations, the impacts could potentially be significant and material.
When the Company is involved in disputes, litigation and regulatory matters we may be unable to predict the outcome of the investigations or the potential impact, if any, on our business, financial condition, and results of operations, the impacts could potentially be significant and material.
Our manufacturing facilities or our suppliers’ manufacturing facilities could be damaged or disrupted by, among other things, a natural disaster, terrorist activity, interruption of utilities or public health crises (such as the COVID-19 pandemic).
Our manufacturing facilities or our suppliers’ manufacturing facilities could be damaged or disrupted by, among other things, hurricanes, tornadoes, earthquakes, fires, droughts, extreme temperatures, flooding or other natural or man-made disasters, terrorist activity, interruption of utilities, epidemics, pandemics or public health crises (such as the COVID-19 pandemic).
If we lose the distribution rights to such products, we may not be able to find replacement products that are acceptable to our customers, or to us. 16 If we lose our patents or they are held to be invalid, or if our products or services infringe on third party patents, we could become subject to liability and our competitive position could be harmed.
If we lose our patents or they are held to be invalid, or if our products or services infringe on third party patents, we could become subject to liability and our competitive position could be harmed.
See “Products” in Item 1 - Business for a further discussion of these competitive forces. Our Board of Directors may, in the future, limit or discontinue payment of a dividend on common stock. 18 We have paid a quarterly dividend to our shareholders since 2012.
See “Products” in Item 1 - Business for a further discussion of these competitive forces. Our Board of Directors may, in the future, not approve payment of a dividend on common stock.
Cost reduction efforts in the healthcare industry could put pressures on our prices and margins. In recent years, the healthcare industry has undergone significant change driven by various efforts to reduce costs.
Any failure to comply with these laws and regulations could subject us or our officers and employees to criminal and civil financial penalties. Cost reduction efforts in the healthcare industry could put pressures on our prices and margins. In recent years, the healthcare industry has undergone significant change driven by various efforts to reduce costs.
Compliance with the CCPA, the CPRA, and other state statutes, common law, 15 or regulations designed to protect consumer, employee, or job applicant personal information could potentially require substantive technology infrastructure and process changes across many of our businesses. Other jurisdictions are also implementing or proposing a variety of data privacy laws and regulations.
Compliance with the CCPA, the CPRA, and other state statutes, common law, or regulations designed to protect consumer, employee, or job applicant personal information could potentially require substantive technology infrastructure and process changes across many of our businesses. Any perceived failure to comply with these regulatory standards could subject us to legal and reputational risks.
Our senior credit agreement restricts our ability to incur additional indebtedness, including secured indebtedness, but if the facilities mature or are repaid, we may not be subject to such restrictions under the terms of any subsequent indebtedness. 13 The conditional conversion features of our 2.250% Notes if triggered, may adversely affect our financial condition.
If new debt or other liabilities are added to our current debt levels, the related risks that we now face could intensify. Our senior credit agreement restricts our ability to incur additional indebtedness, including secured indebtedness, but if the facilities mature or are repaid, we may not be subject to such restrictions under the terms of any subsequent indebtedness.
The sales of such products may be negatively impacted if hospitals and other healthcare providers are unable to secure the financing necessary to purchase these products or otherwise defer purchases. 8 Public health crises have had, and may continue to have, an adverse effect on certain aspects of our business, financial condition, or results of operations.
The sales of such products may be negatively impacted if hospitals and other healthcare providers are unable to secure the financing necessary to purchase these products or otherwise defer purchases. Limitations on the availability of Ethylene Oxide (“EtO”) sterilization services may limit our ability to sell certain sterile products.
The products and services we design, develop, manufacture and market are subject to rigorous regulation by the FDA and numerous other supranational, national, federal, regional, state and local governmental authorities. We have ongoing responsibilities under FDA regulations, the EU MDR and other supranational, national, federal, regional, state and local requirements.
As a manufacturer of medical devices, we are governed by a global regulatory environment that is increasingly stringent, unpredictable and complex. The products and services we design, develop, manufacture and market are subject to rigorous regulation by the FDA and numerous other supranational, national, federal, regional, state and local governmental authorities.
We have been able to secure EtO sterilization services to date, and do not currently expect sterilization availability to have a material impact on our business. If, however, there are further restrictions on capacity or further government actions adverse to EtO sterilization, it is possible that we could be impacted materially in the future.
If, however, there are further restrictions on capacity of sterilization services providers or further government actions adverse to EtO sterilization, we may be unable to transition to other contract sterilizers or sterilization methods in a timely or cost-effective manner or at all, and it is possible that we could be impacted materially in the future.
See “Item 3 - Legal Proceedings” for a further discussion of the risk of product liability actions and our insurance coverage. Damage to our physical properties as a result of hurricanes, tornadoes, earthquakes, fires, droughts, extreme temperatures, flooding or other natural or man-made disaster may cause a financial loss and a loss of customers.
See “Item 3 - Legal Proceedings” for a further discussion of the risk of product liability actions and our insurance coverage. Our business may be damaged or disrupted as a result of natural or man-made disasters, or public health crises.
If any of these were to occur, our future results and performance could be adversely impacted. Limitations on the availability of Ethylene Oxide (“EtO”) sterilization services may limit our ability to sell certain sterile products.
If any of these events were to occur, our future results and performance could be adversely impacted.
If we are not able to comply with the QSR or industry-defined standards, we may not be able to fill customer orders and we may decide to cease production or sale of non-compliant products. Failure to produce products could affect our business, financial condition or results of operations and could lead to loss of customers.
Resolution of any of these matters could involve the imposition of additional, costly compliance obligations. In addition, if we are not able to comply with applicable regulatory requirements or quality standards, we may not be able to fill customer orders, and we may decide to cease production or sale of non-compliant products.
Failure to comply with regulatory requirements may result in recalls, loss of revenues, fines or other materially adverse implications . As a manufacturer of medical devices, we are governed by a global regulatory environment that is increasingly stringent, unpredictable and complex.
We cannot be certain, however, that our compliance program will ensure compliance with the various complex laws and regulations to which we are subject now or in the future. Failure to comply with regulatory requirements may result in recalls, loss of revenues, fines or other materially adverse implications .
Our manufacturing processes and facilities are subject to FDA’s Quality System Regulations ("QSR"), and many of our products are subject to industry-defined standards. We may not be able to comply with these regulations and standards due to deficiencies in component parts or our manufacturing processes.
For example, our manufacturing processes and facilities, and those of third parties we contract with to provide regulated products and services, are subject to the FDA's Quality System Regulation ("QSR") and similar laws and regulations governing quality in other jurisdictions, and many of our products also are subject to industry-defined standards.
These requirements relate to quality systems, recordkeeping, labeling, promotional and marketing requirements, adverse event reporting regulations and other matters, which are subject to continual review and are monitored rigorously through periodic inspections by regulators, which may result in observations (such as on FDA Form 483), and in some cases warning letters, that require corrective action or other forms of enforcement.
We and third parties we contract with to provide regulated services are subject to periodic inspections by regulators to assess compliance with regulatory requirements, which may result in observations (such as on FDA Form 483), warning letters, or other forms of enforcement.
If a new health epidemic or outbreak were to occur, we could experience broad and varied impacts similar to the impact of COVID-19, including adverse impacts to our workforce and supply chain, inflationary pressures and increased costs, schedule or production delays, market volatility and other financial impacts.
Such events may also cause broad and varied impacts to our business, including adverse impacts to our workforce and supply chain, manufacturing, sales activities, research and development, and regulatory workstreams, inflationary pressures and increased costs, schedule or production delays, market volatility and other financial impacts.
As a medical device manufacturer that interacts with physicians and health care providers domestically and internationally, we face risks under domestic and foreign laws and regulations, including the Foreign Corrupt Practices Act and similar statutes in other countries, and government enforcement actions more generally.
As a medical device manufacturer that interacts with physicians and healthcare providers domestically and internationally, we face risks under domestic and foreign laws and regulations, including anti-bribery, anti-corruption, and false claims laws, globally, and could face substantial penalties if we fail to comply with such regulations and laws.
The techniques used in these attacks change frequently and may be difficult to detect for periods of time and difficult to anticipate by implementing adequate preventative measures. Our worldwide operations mean that we are subject to laws and regulations, including data protection and cybersecurity laws and regulations, in many jurisdictions.
Insurance policies that may provide coverage with regard to such incidents may not cover any or all of the resulting financial losses. Our worldwide operations mean that we are subject to laws and regulations, including data protection and cybersecurity laws and regulations, in many jurisdictions.
Our products are subject to product recall and we have conducted product recalls in the past.
Even if we are able to obtain approval or clearance, it may take a significant amount of time, require the expenditure of substantial resources, or be more limited than we anticipated. Our products are subject to product recall and we have conducted product recalls in the past.
Department of Justice ("DOJ") of potential issues with certain royalty payments related to surgeons involved in design teams. We are fully cooperating with the DOJ and their review of this matter.
Department of Justice ("DOJ") of potential issues with certain royalty payments related to surgeons involved in design teams. On September 5, 2025, the DOJ informed the Company that it was declining to prosecute the Company, civilly or criminally, for any conduct related to the voluntary disclosure and that it was closing its investigation without requiring anything further from the Company.
Removed
The nature and extent of future impacts are highly uncertain and unpredictable. We face a wide variety of risks related to public health crises, epidemics, pandemics or similar events, which could have an adverse effect on certain aspects of our business, financial condition, or results of operations .
Added
We have been able to secure EtO sterilization services to date, and do not currently expect sterilization availability to have a material impact on our business.
Removed
For example, during the COVID-19 pandemic, in some geographies or territories, our field-based sales representatives were limited in their ability to travel to service or call on customers. Further, some hospitals delayed certain procedures to reserve space for COVID-19 patients or experienced slowdowns due to staffing shortages.
Added
We are subject to various U.S. federal, state and foreign healthcare laws and regulations, which could increase compliance costs, and our failure to comply with these laws and regulations could harm our reputation, subject us to significant fines and liability or otherwise adversely affect our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

8 edited+4 added−0 removed7 unchanged
Biggest changeWe continue to invest in IT Security to improve technical capabilities, streamline response effectiveness, and harden preventive, detection, and response measures, while growing the core security organization to support business growth efforts. We build our security program with the intent of a global reach and a global customer base at the top of our minds.
Biggest changeWe engage in penetration testing, provided by external entities to ensure our internal processes and controls are validated. 23 We continue to invest in IT Security to improve technical capabilities, streamline response effectiveness, and harden preventive, detection, and response measures, while growing the core security organization to support business growth efforts.
Our CISO has extensive leadership and experience within the cybersecurity space. We invest in the growth and development of our security team's expertise through hands-on training, technical industry certifications and security domain specific conferences. Security is approached as a unified company strategy, where everyone in the organization plays a key role in the success of our programs.
Our cybersecurity leader has extensive leadership and experience within the cybersecurity space. We invest in the growth and development of our security team's expertise through hands-on training, technical industry certifications and security domain specific conferences. Security is approached as a unified company strategy, where everyone in the organization plays a key role in the success of our programs.
We manage cyber risk and assess internal maturity capabilities by leveraging the National Institute of Standards and Technology (NIST) framework, in conjunction with the Center for Internet Security (CIS) top 18 risk framework. Internal and external assessments are conducted for best practice benchmarking.
We manage cyber risk and assess internal maturity capabilities by leveraging the National Institute of Standards and Technology (NIST) framework and the ISO 27001 framework, in conjunction with the Center for Internet Security (CIS) top 18 risk framework. Internal and external assessments are conducted for best practice benchmarking.
During the fiscal year ended December 31, 2024 and through the date of the filing of this Form 10-K, we have not identified any specific risks from cybersecurity threats that have materially affected, or are reasonably likely to affect, our 20 business strategy, results of operations, or financial condition.
During the fiscal year ended December 31, 2025 and through the date of the filing of this Form 10-K, we have not identified any specific risks from cybersecurity threats that have materially affected, or are reasonably likely to affect, our business strategy, results of operations, or financial condition.
The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Our executive management team along with our Chief Information Security Officer (CISO) are responsible for managing cybersecurity risk, including assessing cyber maturity and development of short and long-term strategies.
The Board of Directors oversees management’s processes for identifying and mitigating risks, including cybersecurity risks, to help align our risk exposure with our strategic objectives. Our executive management team, inclusive of our Chief Information Officer (CIO), are responsible for managing cybersecurity risk, including assessing cyber maturity and development of short and long-term strategies.
Outputs from these assessments are used to develop strategic priorities, and to develop tactical action plans to continue to mature our cyber posture. CONMED leverages technologies, external consultants and vendors to support our risk management strategies, threat insights, trends, and mitigation approaches.
CONMED is certified and externally audited to the ISO 27001 framework and the NIST framework. Outputs from these assessments and audits are used to develop strategic priorities, and to develop tactical action plans to continue to mature our cyber posture. CONMED leverages technologies, external consultants and vendors to support our risk management strategies, threat insights, trends, and mitigation approaches.
Cybersecurity risk factors are evaluated, prioritized, and connected to annual strategic priorities. Strategic priorities are comprised of critical cybersecurity efforts in an ongoing effort to mitigate internal or external risks factors, and drive maturity objectives.
We build our security program with the intent of a global reach and a global customer base at the forefront of our minds. Cybersecurity risk factors are evaluated, prioritized, and connected to annual strategic priorities. Strategic priorities are comprised of critical cybersecurity efforts in an ongoing effort to mitigate internal or external risks factors, and drive maturity objectives.
Through required phishing training and awareness campaigns, policy and procedures training, and periodic multi-level tabletop exercise scenarios, we continue to improve identification, reporting, response, recovery, and prevention of threats. We engage in penetration testing, provided by external entities to ensure our internal processes and controls are validated.
Through required phishing training and awareness campaigns, policy and procedures training, and periodic multi-level tabletop exercise scenarios, we continue to improve identification, reporting, response, recovery, and prevention of threats.
Added
We maintain a third‑party information technology vendor risk management program designed to identify, assess, and manage risks associated with external parties that access or support our networks, systems, or digital assets. As part of this program, our IT security personnel evaluate third‑party vendors using a structured risk‑rating methodology to identify those that may present elevated cybersecurity or operational risks.
Added
The program incorporates input from internal commercial and operational teams, as well as our legal and compliance functions. Using an established assessment platform and industry‑recognized cybersecurity standards and frameworks, our IT security team conducts risk assessments of vendors determined to pose the greatest potential impact to our systems or data.
Added
This process includes working with internal stakeholders responsible for the applicable systems or applications, and with the vendors themselves, to obtain and review information necessary to evaluate associated risks. Where significant risks are identified, we communicate these findings to the vendor and document any required or proposed compensating controls in coordination with that vendor.
Added
Internal stakeholders then review the assessment results to evaluate whether the risks identified are appropriate in light of the business value of the relevant product or service.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Square Feet Own or Lease Lease Expiration Utica, NY 500,000 Own — Largo, FL 278,000 Own — Lithia Springs, GA 330,000 Lease September 2034 Chihuahua, Mexico 207,720 Lease October 2029 Chihuahua, Mexico 40,626 Lease March 2028 Brussels, Belgium 58,276 Lease June 2030 Mississauga, Canada 36,054 Lease July 2036 Greenwood Village, CO 27,763 Lease April 2025 Westborough, MA 19,533 Lease November 2025 Frenchs Forest, Australia 16,959 Lease July 2025 Our principal manufacturing facilities are located in Utica, NY, Largo, FL and Chihuahua, Mexico.
Biggest changeLocation Square Feet Own or Lease Lease Expiration Utica, NY 500,000 Own — Largo, FL 278,000 Own — Lithia Springs, GA 330,000 Lease September 2034 Chihuahua, Mexico 207,720 Lease October 2029 Greenwood Village, CO 50,405 Lease May 2036 Chihuahua, Mexico 40,626 Lease March 2028 Brussels, Belgium 58,276 Lease June 2030 Mississauga, Canada 36,054 Lease July 2036 Cordova, TN 26,110 Lease April 2032 Our principal manufacturing facilities are located in Utica, NY, Largo, FL and Chihuahua, Mexico.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings We are involved in various proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor and intellectual property and other matters that are more fully described in Note 14 .
Biggest changeItem 3. Legal Proceedings We are involved in various proceedings, legal actions and claims arising in the normal course of business, including proceedings related to product, labor and intellectual property and other matters that are more fully described in Note 13 .
We are not a party to any pending legal proceedings other than ordinary routine litigation incidental to our business. Item 4. Mine Safety Disclosures Not applicable. 21 PART II
We are not a party to any pending legal proceedings other than ordinary routine litigation incidental to our business. Item 4. Mine Safety Disclosures Not applicable. 24 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock, par value $.01 per share, is traded on the New York Stock Exchange ("NYSE") under the symbol “CNMD”. At January 31, 2025, there were 445 registered holders of our common stock and approximately 84,334 accounts held in “street name”.
Biggest changeItem 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock, par value $.01 per share, is traded on the New York Stock Exchange ("NYSE") under the symbol “CNMD”.
Risk Factors - Other Risk Factors Related to our Business - Our Board of Directors may, in the future, limit or discontinue payment of a dividend on common stock." Refer to Item 12 for information relating to compensation plans under which equity securities of CONMED Corporation are authorized for issuance. 22 Performance Graph The performance graph below compares the cumulative five-year total shareholder return on the Company’s Common Stock with the cumulative total return of the S&P 500 Index and the Standard & Poor’s Health Care Equipment Index.
Risk Factors - Other Risk Factors Related to our Business - Our Board of Directors may, in the future, not approve payment of a dividend on common stock." Refer to Item 12 for information relating to compensation plans under which equity securities of CONMED Corporation are authorized for issuance. 25 Performance Graph The performance graph below compares the cumulative five-year total shareholder return on the Company’s Common Stock with the cumulative total return of the S&P 500 Index and the Standard & Poor’s Health Care Equipment Index.
In each case, the cumulative total return assumes reinvestment of dividends into the same class of equity securities at the frequency with which dividends are paid on such securities during the applicable fiscal year. Item 6. [Reserved] 23
In each case, the cumulative total return assumes reinvestment of dividends into the same class of equity securities at the frequency with which dividends are paid on such securities during the applicable fiscal year. The stock price performance included in this graph is not necessarily indicative of future stock price performance. Item 6. [Reserved] 26
Removed
Our Board of Directors has authorized a share repurchase program; see Note 10 for further details. The Board of Directors declared a quarterly cash dividend of $0.20 per share in 2023 and 2024. The fourth quarter dividend for 2024 was paid on January 3, 2025 to shareholders of record as of December 20, 2024.
Added
At January 26, 2026, there were 432 registered holders of our common stock and approximately 59,612 accounts held in “street name.” Effective as of October 31, 2025, our Board of Directors has authorized a $150.0 million share repurchase program (the "Modified Program") which modified our prior $200.0 million share repurchase program (the “Prior Program”), under which $37.4 million had remained available for repurchases prior to the establishment of the Modified Program.
Removed
The total dividend payable at December 31, 2024 was $6.2 million and is included in other current liabilities in the consolidated balance sheet. Future decisions as to the payment of dividends will be at the discretion of the Board of Directors. See "Item 1A.
Added
Through October 30, 2025, we repurchased a total of 6.1 million shares of common stock aggregating $162.6 million under the Prior Program. The Modified Program calls for shares to be purchased in the open market or in private transactions from time to time. We may suspend or discontinue the Modified Program at any time.
Added
We did not purchase any shares of common stock under the Prior Program or the Modified Program during 2025. The Company expects to repurchase at least $25.0 million in shares annually beginning in 2026. We have financed the repurchases and may finance additional repurchases through operating cash flow and from available borrowings under our revolving credit facility.
Added
With the decision to extend the share repurchase program, we have suspended our dividend payments and the Board of Directors will consider whether to declare dividends and the amount of such dividends from time to time in the future. We paid approximately $24.7 million of dividends during 2025. See Note 9 for further details. Also, refer to "Item 1A.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeConsolidated Results of Operations The following table presents, as a percentage of net sales, certain categories included in our consolidated statements of comprehensive income (loss) for the periods indicated: Years Ended December 31, 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 43.9 45.7 45.4 Gross profit 56.1 54.3 54.6 Selling and administrative expense 36.6 40.4 43.4 Research and development expense 4.2 4.2 4.5 Income from operations 15.3 9.7 6.7 Interest expense 2.9 3.2 2.8 Other expense — — 10.7 Income (loss) before income taxes 12.5 6.5 (6.8) Provision for income taxes 2.3 1.3 0.9 Net income (loss) 10.1 % 5.2 % (7.7) % Net Sales The following table presents net sales by product line for the years ended December 31, 2024, 2023 and 2022: % Change from 2023 to 2024 2024 2023 As Reported Impact of Foreign Currency Constant Currency a Orthopedic surgery $ 544.0 $ 533.1 2.0 % 0.5 % 2.5 % General surgery 763.0 711.6 7.2 % 0.3 % 7.5 % Net sales $ 1,307.0 $ 1,244.7 5.0 % 0.3 % 5.3 % Single-use products $ 1,112.1 $ 1,038.5 7.1 % 0.3 % 7.4 % Capital products 194.9 206.2 -5.5 % 0.4 % -5.1 % Net sales $ 1,307.0 $ 1,244.7 5.0 % 0.3 % 5.3 % 26 % Change from 2022 to 2023 2023 2022 As Reported Impact of Foreign Currency Constant Currency a Orthopedic surgery $ 533.1 $ 461.5 15.5 % 2.2 % 17.7 % General surgery 711.6 584.0 21.9 % 1.5 % 23.4 % Net sales $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % Single-use products $ 1,038.5 $ 874.9 18.7 % 1.8 % 20.5 % Capital products 206.2 170.6 20.9 % 1.9 % 22.8 % Net sales $ 1,244.7 $ 1,045.5 19.1 % 1.8 % 20.9 % (a) Refer to Non-GAAP Financial Measures below for further details.
Biggest changeConsolidated Results of Operations The following table presents, as a percentage of net sales, certain categories included in our consolidated statements of comprehensive income for the periods indicated: Years Ended December 31, 2025 2024 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 45.4 43.9 45.7 Gross profit 54.6 56.1 54.3 Selling and administrative expense 43.1 36.6 40.4 Research and development expense 4.1 4.2 4.2 Income from operations 7.5 15.3 9.7 Interest expense 2.3 2.9 3.2 Other expense — — — Income before income taxes 5.2 12.5 6.5 Provision for income taxes 1.8 2.3 1.3 Net income 3.4 % 10.1 % 5.2 % 29 Net Sales The following table presents net sales by product line for the years ended December 31, 2025, 2024 and 2023: % Change from 2024 to 2025 2025 2024 As Reported Impact of Foreign Currency Constant Currency a Orthopedic surgery $ 574.6 $ 544.0 5.6 % -0.1 % 5.5 % General surgery 800.1 763.0 4.9 % -0.2 % 4.7 % Net sales $ 1,374.7 $ 1,307.0 5.2 % -0.1 % 5.1 % Single-use products $ 1,183.8 $ 1,112.1 6.4 % -0.1 % 6.3 % Capital products 190.9 194.9 -2.1 % — % -2.1 % Net sales $ 1,374.7 $ 1,307.0 5.2 % -0.1 % 5.1 % % Change from 2023 to 2024 2024 2023 As Reported Impact of Foreign Currency Constant Currency a Orthopedic surgery $ 544.0 $ 533.1 2.0 % 0.5 % 2.5 % General surgery 763.0 711.6 7.2 % 0.3 % 7.5 % Net sales $ 1,307.0 $ 1,244.7 5.0 % 0.3 % 5.3 % Single-use products $ 1,112.1 $ 1,038.5 7.1 % 0.3 % 7.4 % Capital products 194.9 206.2 -5.5 % 0.4 % -5.1 % Net sales $ 1,307.0 $ 1,244.7 5.0 % 0.3 % 5.3 % (a) Refer to Non-GAAP Financial Measures below for further details.
The most significant areas involving management judgments and estimates are described 24 below and are considered by management to be critical to understanding the financial condition and results of operations of CONMED Corporation. Actual results may or may not differ from these estimates. Goodwill and Intangible Assets We have a history of growth through acquisitions.
The most significant areas involving management judgments and estimates are described below and are considered by management to be critical to understanding the financial condition and results of operations of CONMED Corporation. Actual results may or may not differ from these estimates. Goodwill and Intangible Assets We have a history of growth through acquisitions.
Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense within selling and administrative expense in the consolidated statements of comprehensive income (loss).
Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense within selling and administrative expense in the consolidated statements of comprehensive income.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Consolidated Financial Statements and related notes contained elsewhere in this report. This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Consolidated Financial Statements and related notes contained elsewhere in this report. This section of this Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Other Liquidity Matters Our cash balances and cash flows generated from operations may be used to fund strategic investments, business acquisitions, including contingent consideration payments, working capital needs, research and development, common stock repurchases and payments of dividends to our shareholders.
Other Liquidity Matters Our cash balances and cash flows generated from operations may be used to fund strategic investments, business acquisitions, including contingent consideration payments, working capital needs, repayment of debt, research and development, common stock repurchases and payments of dividends to our shareholders.
The identification and measurement of goodwill impairment involves the estimation of the fair value of our business. Estimates of fair value are based on the best information available as of the date of the assessment. We completed our goodwill impairment testing of our single reporting unit during the fourth quarter of 2024.
The identification and measurement of goodwill impairment involves the estimation of the fair value of our business. Estimates of fair value are based on the best information available as of the date of the assessment. We completed our goodwill impairment testing of our single reporting unit during the fourth quarter of 2025.
We performed our impairment test utilizing the market capitalization approach to determine whether the fair value of a reporting unit is less than its carrying amount. Based upon our assessment, the fair value of our reporting unit continues to exceed carrying value.
We performed our impairment test utilizing the market capitalization approach to determine whether the fair value of our single reporting unit is less than its carrying amount. Based upon our assessment, the fair value of our reporting unit continues to exceed carrying value.
See Note 16 for further discussion of contingent consideration. Pension Plan 25 We sponsor a defined benefit pension plan (the “pension plan”) that was frozen in 2009. It covered substantially all our United States based employees at the time it was frozen.
See Note 15 for further discussion of contingent consideration. Pension Plan We sponsor a defined benefit pension plan (the “pension plan”) that was frozen in 2009. It covered substantially all our United States based employees at the time it was frozen.
In performing a sensitivity analysis on the pension benefit obligation, a 0.25% increase in our discount rate would decrease the pension benefit obligation by $1.3 million and a 0.25% decrease in the discount rate would increase the pension benefit obligation by $1.4 million. See Note 13 for further discussion of the pension plan.
In performing a sensitivity analysis on the pension benefit obligation, a 0.25% increase in our discount rate would decrease the pension benefit obligation by $1.4 million and a 0.25% decrease in the discount rate would increase the pension benefit obligation by $1.4 million. See Note 12 for further discussion of the pension plan.
Overview of CONMED Corporation CONMED Corporation (“CONMED”, the “Company”, “we” or “us”) is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery and gastroenterology. Our product lines consist of orthopedic surgery and general surgery.
Overview of CONMED Corporation CONMED Corporation is a medical technology company that provides devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery and gastroenterology. Our product lines consist of orthopedic surgery and general surgery.
These product lines as a percentage of consolidated net sales are as follows: 2024 2023 2022 Orthopedic surgery 42 % 43 % 44 % General surgery 58 57 56 Consolidated net sales 100 % 100 % 100 % A significant amount of our products are used in surgical procedures with approximately 85% of our revenues derived from the sale of single-use products.
These product lines as a percentage of consolidated net sales are as follows: 2025 2024 2023 Orthopedic surgery 42 % 42 % 43 % General surgery 58 58 57 Consolidated net sales 100 % 100 % 100 % A significant amount of our products are used in surgical procedures with approximately 86% of our revenues derived from the sale of single-use products.
Stock-based Compensation We have reserved shares of common stock for issuance to employees and directors under two shareholder-approved share-based compensation plans (the "Plans"). The Plans provide for grants of stock options, stock appreciation rights (“SARs”), dividend equivalent rights, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and other equity-based and equity-related awards.
Stock-based Compensation We have reserved shares of common stock for issuance to employees and directors under one shareholder-approved share-based compensation plan (the "Plan"). The Plan provides for grants of stock options, stock appreciation rights (“SARs”), dividend equivalent rights, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and other equity-based and equity-related awards.
In addition, management believes we could access capital markets, as necessary, to fund future business acquisitions. We are also being impacted by the macro-economic environment and we are experiencing higher manufacturing and operating costs caused by inflationary pressures and ongoing supply chain challenges. We continue to monitor our spending and expenses in light of these factors.
In addition, management believes we could access capital markets, as necessary, to fund future business acquisitions. In recent years, the Company has been impacted by the macro-economic environment and we are experiencing higher manufacturing and operating costs caused by inflationary pressures, tariffs and ongoing supply chain challenges. We continue to monitor our spending and expenses in light of these factors.
“Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk” and Note 8). The above table also does not include unrecognized tax benefits of approximately $1.2 million, the timing and certainty of recognition for which is not known (See Note 9).
“Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk” and Note 7). The above table also does not include unrecognized tax benefits of approximately $0.5 million, the timing and certainty of recognition for which is not known (See Note 8).
In conjunction with the pension plan, we recorded a pension benefit obligation totaling $69.2 million as of December 31, 2024. In accounting for this pension plan, we are required to make a number of assumptions, including the discount rate and mortality.
In conjunction with the pension plan, we recorded a pension benefit obligation totaling $70.7 million as of December 31, 2025. In accounting for this pension plan, we are required to make a number of assumptions, including the discount rate and mortality.
We also have the ability to raise funds through the sale of stock or we may issue debt through a private placement or public offering. We had total cash on hand at December 31, 2024 of $24.5 million, of which approximately $20.2 million was held by our foreign subsidiaries outside the United States with unremitted earnings.
We also have the ability to raise funds through the sale of stock or we may issue debt through a private placement or public offering. We had total cash on hand at December 31, 2025 of $40.8 million, of which approximately $29.3 million was held by our foreign subsidiaries outside the United States with unremitted earnings.
During 2024, we redeployed $9.0 million of cash from certain non-U.S. subsidiaries primarily for U.S. debt reduction. We may repatriate funds from certain foreign subsidiaries in the future. Refer to Note 9 for further details. Operating Cash Flows Our net working capital position was $361.9 million at December 31, 2024.
During 2025, we redeployed $5.3 million of cash from certain non-U.S. subsidiaries primarily for U.S. debt reduction. We may repatriate funds from certain foreign subsidiaries in the future. Refer to Note 8 for further details. Operating Cash Flows Our net working capital position was $357.8 million at December 31, 2025.
The fair value of contingent consideration at December 31, 2024 was $11.2 million for the In2Bones acquisition and $61.0 million for the Biorez acquisition. Contingent consideration payments made soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows.
The fair value of contingent consideration at December 31, 2025 was $2.2 million for the In2Bones Global, Inc. acquisition and $59.2 million for the Biorez, Inc. acquisition. Contingent consideration payments made soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows.
The fair value of contingent consideration is measured using projected payment dates, discount rates, revenue volatilities, and projected revenues. Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans. The discount rate used is determined at the time of measurement in accordance with accepted valuation methodologies.
Projected revenues are based on the Company’s most recent internal operational budgets 28 and long-range strategic plans. The discount rate used is determined at the time of measurement in accordance with accepted valuation methodologies. Changes in projected revenues, revenue volatilities, discount rates, and projected payment dates may result in adjustments to the fair value measurements.
In addition, below is a summary of significant changes in assets and liabilities: • An increase in cash flows from accounts receivable due to timing of sales and cash receipts compared to the same period a year ago; • A decrease in cash flows from inventory as we increased inventory due to supply chain challenges; and 28 • A decrease in cash flows from accrued compensation and benefits as a result of higher incentive compensation payments during 2024 compared to 2023.
In addition, below is a summary of significant changes in assets and liabilities: • A decrease in cash flows from accounts receivable due to timing of sales and cash receipts compared to the same period a year ago; • A decrease in cash flows from inventory as we increased inventory to mitigate supply chain challenges; • A decrease in cash flows from accounts payable due to the timing of payments; • An increase in cash flows from accrued compensation and benefits due to lower incentive compensation payments during 2025 compared to 2024 and higher incentive compensation accruals in 2025; and • An increase in cash flows from other liabilities in 2025 compared to 2024 due to higher accruals mainly related to consulting fees.
The Company has not been materially impacted by the conflicts in Ukraine and the Middle East. The Company has no direct operations in these regions with our business limited to selling to third party distributors. Total revenues and accounts receivable associated with sales to third party distributors in these regions are not material to the consolidated financial statements.
The Company has no direct operations in these regions with our business limited to selling to third party distributors. Total revenues and accounts 27 receivable associated with sales to third party distributors in these regions are not material to the consolidated financial statements.
Net sales increased 5.0% in 2024 due to growth in both the orthopedic surgery and general surgery product lines. • Orthopedic surgery sales increased 2.0% in 2024 as a result of growth in our sports medicine and BioBrace ® product offerings. • General surgery sales increased 7.2% in 2024 as a result of growth in our AirSeal ® and biliary product offerings.
Net sales increased 5.2% in 2025 due to growth in both the orthopedic surgery and general surgery product lines. • Orthopedic surgery sales increased 5.6% in 2025 as a result of growth in our sports medicine and BioBrace ® product offerings. • General surgery sales increased 4.9% in 2025 as a result of growth in our AirSeal ® , specimen bags and biliary product offerings.
Salesforce and commissions, marketing, general & administrative costs and amortization expense in 2024 were in line with 2023 as a percentage of sales. Research and Development Expense Research and development expense was $54.4 million in 2024 and $52.6 million in 2023. As a percentage of net sales, research and development expense was 4.2% in both 2024 and 2023.
Salesforce and commissions, marketing, general & administrative costs and amortization expense in 2025 were in line with 2024 as a percentage of sales. Research and Development Expense Research and development expense was $55.9 million in 2025 and $54.4 million in 2024. As a percentage of net sales, research and development expense was 4.1% and 4.2% in 2025 and 2024, respectively.
Stock options, SARs, and RSUs are generally non-transferable other than on death and generally become exercisable over a four to five year period from date of grant. PSUs are generally non-transferable other than on death and cliff vest after three years from date of grant. Stock options and SARs expire ten years from date of grant.
Stock options, SARs, and RSUs are generally non-transferable other than on death and generally become exercisable over a four to five year period from date of grant. PSUs are generally non-transferable other than on death and vest over a three year period from date of grant, PSUs are not earned unless performance targets are achieved after the three year period.
Investing Cash Flows Net cash used in investing activities decreased by $6.9 million in the year ended December 31, 2024 mainly due to capital expenditures being lower at $13.1 million in 2024 compared to $19.0 million in the year ended December 31, 2023.
Investing Cash Flows Net cash used in investing activities increased by $7.9 million in the year ended December 31, 2025 mainly due to capital expenditures being higher at $19.8 million in 2025 compared to $13.1 million in the year ended December 31, 2024.
However, we may need to take further steps to reduce our costs, or to refinance our debt. See “Item 1A. Risk Factors - Risks Related to Our Indebtedness." There were $114.6 million in borrowings outstanding on the term loan facility as of December 31, 2024. There were no borrowings outstanding under the revolving credit facility as of December 31, 2024.
However, we may need to take further steps to reduce our costs, or to refinance our debt if we cannot mitigate these higher costs. See “Item 1A. Risk Factors - Risks Related to Our Indebtedness." There were $40.0 million in borrowings outstanding on the term loan facility as of December 31, 2025.
Management believes that cash flow from operations, including cash and cash equivalents on hand and available borrowing capacity under our seventh amended and restated senior credit agreement, will be adequate to meet our anticipated operating working capital requirements, debt service, funding of capital expenditures, dividend payments and common stock repurchases in the foreseeable future.
Management believes that cash flow from operations, including cash and cash equivalents on hand and available borrowing capacity under our eighth amended and restated senior credit agreement, will be adequate to meet our anticipated operating working capital requirements, debt service, funding of capital expenditures, dividend payments and common stock repurchases for at least the next twelve months from the filing of this annual report on Form 10-K.
We expect to use operating cash flows to satisfy capital spending requirements. The following table summarizes our contractual obligations for the next five years and thereafter (amounts in thousands) as of December 31, 2024. Purchase obligations represent purchase orders for goods and services placed in the ordinary course of business.
The following table summarizes our contractual obligations for the next five years and thereafter (amounts in thousands) as of December 31, 2025. Purchase obligations represent purchase orders for goods and services placed in the ordinary course of business.
International sales approximated 43% in 2024, 44% in 2023 and 45% in 2022. Business Environment The Company has been and continues to be impacted by the macro-economic environment and we are experiencing higher manufacturing and operating costs caused by inflationary pressures and ongoing supply chain challenges.
International sales approximated 44% in 2025, 43% in 2024 and 44% in 2023. Business Environment In recent years, the Company has been impacted by the macro-economic environment, including inflationary pressures, and we have been experiencing higher manufacturing and operating costs as well as ongoing supply chain challenges.
Financing Cash Flows Financing activities in 2024 used cash of $151.0 million compared to $110.4 million in 2023.
Financing Cash Flows Financing activities in 2025 used cash of $135.8 million compared to $151.0 million in 2024.
Our available borrowings on the revolving credit facility at December 31, 2024 were $583.4 million with approximately $1.6 million of the facility set aside for outstanding letters of credit.
There were no borrowings outstanding under the revolving credit facility as of December 31, 2025. Our available borrowings on the revolving credit facility at December 31, 2025 were $648.5 million with approximately $1.5 million of the facility set aside for outstanding letters of credit.
SARs are only settled in shares of the Company’s stock (See Note 10). Total pre-tax stock-based compensation expense recognized in the consolidated statements of comprehensive income (loss) was $25.6 million, $24.3 million and $21.7 million for the years ended December 31, 2024, 2023 and 2022, respectively. New Accounting Pronouncements See Note 2 for a discussion of new accounting pronouncements.
Stock options and SARs expire ten years from date of grant. SARs are only settled in shares of the Company’s stock (See Note 9). Total pre-tax stock-based compensation expense recognized in the consolidated statements of comprehensive income was $28.3 million, $25.6 million and $24.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.
As compared to the federal statutory rate of 21.0%, the 2024 effective tax rate was lower primarily due to the change in fair value of contingent consideration that is excluded from income for tax purposes, federal tax benefits from the research credit and US tax on worldwide earnings at different rates.
This expense was offset by federal tax benefits from research credits and the effect of cross-border tax laws. The 2024 effective tax rate was lower primarily due to change in fair value of contingent consideration that is excluded from income for tax purposes, federal tax benefits from research credits and U.S. tax on worldwide earnings at different rates.
We work with suppliers to mitigate these impacts; however, we expect these challenges to continue in 2025. This will likely continue to impact our results of operations and we therefore have engaged a consulting firm to evaluate and propose improvements in our manufacturing operations. See "Item 1A. Risk Factors" for more information.
This will likely continue to impact our results of operations and we therefore engaged a consulting firm in 2025 to evaluate and propose improvements in our manufacturing operations. We are actively working to mitigate this impact. See "Item 1A. Risk Factors" for more information. During 2025, we performed a product portfolio review.
Below is a summary of the significant financing activities impacting the change during 2024 compared to 2023: • During 2024, we repaid the remaining $70.0 million outstanding on the 2.625% Notes. • During 2024, we paid $56.9 million in contingent consideration related to the In2Bones and Biorez acquisitions compared to $13.9 million in 2023. • During 2024, we had net payments on our revolving line of credit of $2.0 million, compared to $68.0 million in 2023. • During 2024, we had net cash proceeds of $5.5 million related to stock issued under employee plans compared to $18.1 million in 2023. • During 2024, we did not make any payments on our term loan compared to $20.0 million in payments in 2023.
There were no net payments in 2024. 32 • During 2024, we repaid the remaining $70.0 million outstanding on the 2.625% Notes. • During 2025, we paid $33.8 million in contingent consideration related to the Biorez, Inc. acquisition compared to $56.9 million in 2024 for the In2Bones Global, Inc. and Biorez, Inc acquisitions. • During 2025, we did not have any net payments on our revolving line of credit, compared to $2.0 million in net payments in 2024. • During 2025, we had net cash proceeds of $1.9 million related to stock issued under employee plans compared to $5.5 million in 2024. • During 2025, we paid $2.9 million in debt issuance costs compared to $0.3 million in 2024.
The seventh amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in full compliance with these covenants and restrictions as of December 31, 2024.
The eighth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The eighth amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions.
The repurchase program calls for shares to be purchased in the open market or in private transactions from time to time. We may suspend or discontinue the share repurchase program at any time. We have not purchased any shares of common stock under the share repurchase program during 2024.
Through October 30, 2025, we repurchased a total of 6.1 million shares of common stock aggregating $162.6 million under the Prior Program. The Modified Program calls for shares to be purchased in the open market or in private transactions from time to time. We may suspend or discontinue the Modified Program at any time.
These benefits were offset by state tax expense and foreign tax expense from jurisdictions with higher statutory tax rates. A reconciliation of the United States statutory income tax rate to our effective tax rate is included in Note 9. Non-GAAP Financial Measures Net sales on a "constant currency" basis is a non-GAAP measure.
These benefits were offset by state tax expense and foreign tax expense from jurisdictions with higher statutory tax rates. A reconciliation of the United States statutory income tax rate to our effective tax rate is included in Note 8. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States.
Contingent Consideration Certain acquisitions involve potential payments of future consideration that is contingent upon the acquired businesses reaching certain performance milestones. The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value.
The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value. The fair value of contingent consideration is measured using projected payment dates, discount rates, revenue volatilities, and projected revenues.
Selling and Administrative Expense Selling and administrative expense was $478.3 million in 2024 compared to $503.0 million in 2023. Selling and administrative expense as a percentage of net sales was 36.6% in 2024 and 40.4% in 2023.
Selling and administrative expense as a percentage of net sales was 43.1% in 2025 and 36.6% in 2024.
Net cash provided by operating activities was $167.0 million in 2024 and $125.3 million in 2023 generated on net income of $132.4 million in 2024 and $64.5 million in 2023. The change in cash provided by operating activities in 2024 as compared to 2023 was mainly driven by higher net income.
Net cash provided by operating activities was $170.7 million in 2025 and $167.0 million in 2024 generated on net income of $47.1 million in 2025 and $132.4 million in 2024.
Because non-GAAP financial measures are not standardized, it may not be possible to compare this financial measure with other companies' non-GAAP financial measures having the same or similar names. This adjusted financial measure should not be considered in isolation or as a substitute for reported net sales growth, the most directly comparable GAAP financial measure.
To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales. Because non-GAAP financial measures are not standardized, it may not be possible to compare this financial measure with other companies' non-GAAP financial measures having the same or similar names.
We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales. In February 2024, we repaid the $70.0 million then outstanding of the 2.625% Notes through borrowings on our revolving credit facility and issued 0.1 million shares of our common stock.
We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales. On June 6, 2022, we issued $800.0 million aggregate principal amount of 2.250% Convertible Notes due 2027 (the "2.250% Notes").
The decrease in selling and administrative expense as a percentage of net sales in 2024 was primarily driven by: • a decrease of $38.6 million in costs related to fair value adjustments to contingent consideration ($41.0 million of income in 2024 compared to $2.4 million of income in 2023), see Note 16; • $6.8 million in costs related to the implementation of a new warehouse management system during 2023.
The increase in selling and administrative expense as a percentage of net sales in 2025 was primarily driven by: • an increase of $64.0 million in costs related to fair value adjustments to contingent consideration ($23.0 million of expense in 2025 compared to $41.0 million of income in 2024), see Note 15; • $12.2 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Executive Officer in 2025; and • $12.9 million of consulting fees and other costs related to operational optimization during 2025.
This non-GAAP financial measure is an additional way of viewing net sales that, when viewed with our GAAP results, provides a more complete understanding of our business. The Company strongly encourages investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
This adjusted financial measure should not be considered in isolation or as a substitute for reported net sales growth, the most directly comparable GAAP financial measure. This non-GAAP financial measure is an additional way of viewing net sales that, when viewed with our GAAP results, provides a more complete understanding of our business.
The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. To measure percentage sales growth in constant currency, the Company removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of net sales.
The impact was not material to the consolidated financial statements. 31 Non-GAAP Financial Measures Net sales on a "constant currency" basis is a non-GAAP measure. The Company analyzes net sales on a constant currency basis to better measure the comparability of results between periods.
An impairment loss is recognized by reducing the carrying amount of the intangible asset to its current fair value. For all other indefinite-lived intangible assets, we perform a qualitative impairment test. Based upon this assessment, we have determined that our indefinite-lived intangible assets are not impaired. See Note 7 for further discussion of goodwill and other intangible assets.
An impairment loss is recognized by reducing the carrying amount of the intangible asset to its current fair value. For all other indefinite-lived intangible assets, we performed our impairment testing as of the fourth quarter of 2025 utilizing the relief from royalty income based approach to determine whether the fair value is less that the carrying amount.
The increase in spending in 2024 compared to 2023 was related to the timing of projects. 27 Interest Expense Interest expense decreased to $37.3 million in 2024 compared to $39.8 million in 2023. The weighted average interest rates on our borrowings were 3.15% in 2024 increasing from 3.12% in 2023.
As a percentage of sales research and development expense decreased 0.1 percentage points mainly driven by the timing of research and development projects. Interest Expense Interest expense decreased to $31.1 million in 2025 compared to $37.3 million in 2024. The weighted average interest rates on our borrowings were 2.79% in 2025 decreasing from 3.15% in 2024.
See "Item 1A. Risk Factors - Other Risks Related to our Business - Our Board of Directors may, in the future, limit or discontinue payment of a dividend on common stock." We expect an increased level of capital spending during the year ending December 31, 2025 compared to 2024. Capital spending will be monitored and controlled as the year progresses.
We expect an increased level of capital spending during the year ending December 31, 2026 compared to 2025. Capital spending will be monitored and controlled as the year progresses. We expect to use operating cash flows to satisfy capital spending requirements.
Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Long-term debt $ 914,588 $ — $ 914,588 $ — $ — Contingent consideration payments 72,217 35,397 36,820 — — Purchase obligations 156,971 153,634 3,327 10 — Lease obligations 53,711 8,808 14,852 10,966 19,085 Total contractual obligations $ 1,197,487 $ 197,839 $ 969,587 $ 10,976 $ 19,085 In addition to the above contractual obligations, we are required to make periodic interest payments on our long-term debt obligations (see additional discussion under Item 7A.
Payments Due by Period Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Long-term debt $ 840,000 $ — $ 800,000 $ 40,000 $ — Contingent consideration payments 61,408 61,408 — — — Purchase obligations 178,875 156,438 15,096 3,674 3,667 Lease obligations 67,405 9,324 18,810 14,282 24,989 Total contractual obligations $ 1,147,688 $ 227,170 $ 833,906 $ 57,956 $ 28,656 In addition to the above contractual obligations, we are required to make periodic interest payments on our long-term debt obligations (see additional discussion under Item 7A.
EBITDA is also a non-GAAP measure and is defined as earnings before income tax, interest expense, depreciation and amortization. Liquidity and Capital Resources Our liquidity needs arise primarily from capital investments, working capital requirements and payments on indebtedness under the seventh amended and restated senior credit agreement and outstanding convertible notes.
The Company strongly encourages investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Liquidity and Capital Resources Our liquidity needs arise primarily from capital investments, working capital requirements and payments on indebtedness under the eighth amended and restated senior credit agreement and outstanding convertible notes.
Cost of Sales Cost of sales was $574.0 million in 2024 compared to $568.5 million in 2023. Gross profit margins were 56.1% in 2024 and 54.3% in 2023.
Cost of Sales Cost of sales was $624.2 million in 2025 compared to $574.0 million in 2024. Gross profit margins decreased by 1.5 percentage points to 54.6% in 2025 from 56.1% in 2024. During 2025 we incurred costs of $12.5 million for the engagement of consultants to evaluate and propose improvements to our supply chain and manufacturing operations.
We have financed the repurchases and may finance additional repurchases through operating cash flow and from available borrowings under our revolving credit facility. 29 The Board of Directors declared a quarterly cash dividend of $0.20 per share in 2023 and 2024. Future decisions as to the payment of dividends will be at the discretion of the Board of Directors.
We have not purchased any shares of common stock under the Prior Program or the Modified Program during 2025. The Company expects to repurchase at least $25.0 million in shares annually beginning in 2026. We have financed the repurchases and may finance additional repurchases through operating cash flow and 33 from available borrowings under our revolving credit facility.
The decrease in interest expense in 2024 was driven by lower weighted average borrowings outstanding during 2024. Provision for Income Taxes A provision for income taxes was recorded at an effective rate of 18.8% and 20.3% in 2024 and 2023, respectively.
These costs included $0.4 million related to a loss on early extinguishment and third party fees. Provision for Income Taxes A provision for income taxes was recorded at an effective rate of 33.8% and 18.8% in 2025 and 2024, respectively.
Removed
Changes in projected revenues, revenue volatilities, discount rates, and projected payment dates may result in adjustments to the fair value measurements.
Added
In addition, our results of operations are being impacted by tariffs placed on imported goods to the United States as well as exporting of products to other countries. We continue to monitor our spending and expenses in light of these factors.
Removed
The increase in gross profit margin of 1.8 percentage points in 2024 was mainly due to favorable product mix as well as during 2023 we incurred costs for the amortization of inventory step-up to fair value of $8.6 million related to the In2Bones acquisition.
Added
This resulted in the discontinuation of certain products and cancellation of planned new product lines as further described below. In addition, on December 5, 2025, we announced our intent to exit our gastroenterology product lines as part of our portfolio optimization strategy. This included the termination of our distribution agreement with W.L. Gore & Associates, Inc.
Removed
These costs mainly consisted of incremental freight, labor and professional fees; and • efficiency improvements in our distribution sites. These decreases were partially offset by $5.1 million in costs incurred during 2024 for third party services pertaining to the review of potential issues with certain royalty payments to surgeons involved in design teams.
Added
("Gore®") for the Gore® VIABIL® biliary stent effective January 1, 2026 and the expected exit from the remaining products in our gastroenterology product portfolio.
Removed
These benefits were offset by state tax expense and foreign tax expense from jurisdictions with higher statutory tax rates. The 2023 effective tax rate was lower primarily due to federal tax benefits from the research credit and US tax on worldwide earnings at different rates.
Added
While the Company is reviewing strategic options related to its decision to exit its gastroenterology product portfolio, there is no certainty on the timing of these options; therefore, the related assets do not require reclassification on the consolidated balance sheet. The Company has not been materially impacted by the conflicts in Ukraine and the Middle East.
Removed
See Note 8 for further information on our financing agreements and outstanding debt obligations. Our Board of Directors has authorized a $200.0 million share repurchase program. Through December 31, 2024, we have repurchased a total of 6.1 million shares of common stock aggregating $162.6 million under this authorization and have $37.4 million remaining available for share repurchases.
Added
A considerable amount of management judgment and assumptions are required in performing the impairment testing. The key assumptions used in the impairment testing were long-term revenue growth projections, royalty rates, discount rates and general industry, market and macro-economic conditions. Based upon this assessment, we have determined that our indefinite-lived intangible assets are not impaired.
Added
See Note 6 for further discussion of goodwill and other intangible assets. Contingent Consideration Certain acquisitions involve potential payments of future consideration that is contingent upon the acquired businesses reaching certain performance milestones.
Added
As a result of our consultations and internal review, we wrote off $22.2 million in inventory, equipment, tooling and patents related to the cancellation of planned new product lines and discontinuation of certain catalog numbers during 2025.
Added
These increases were partially offset by a benefit of $9.9 million resulting from the early termination of our distribution agreement with Gore ® during 2025 and $1.4 million of expense incurred in 2024 related to the write-off of inventory, tooling and equipment related to the cancellation of a planned new product line. 30 Selling and Administrative Expense Selling and administrative expense was $592.0 million in 2025 compared to $478.3 million in 2024.
Added
The decrease in interest expense in 2025 was driven by lower weighted average borrowings outstanding and lower weighted average interest rates during 2025. Other Expense Other expense during 2025 was related to costs associated with our eighth amended and restated senior credit agreement entered into June 10, 2025, as further described in Note 7.
Added
As compared to the federal statutory rate of 21.0%, the 2025 effective tax rate was higher primarily due to state tax expense, foreign tax expense from jurisdictions with higher statutory tax rates, the change in fair value of contingent consideration that is not deductible for income tax purposes and certain compensation expense and stock-based compensation costs related to advisory services provided by the former Chief Executive Officer that are not deductible for income tax purposes.
Added
The OBBBA permanently extends and modifies significant provisions of the Tax Cuts and Jobs Act. The Company has included the impact of the OBBBA in the income tax provision for the year ended December 31, 2025.
Added
Net income during 2024 included a $41.0 million non-cash gain related to the adjustment to fair value of the contingent consideration liability compared to a $23.0 million non-cash charge in 2025.
Added
Below is a summary of the significant financing activities impacting the change during 2025 compared to 2024: • During 2025, we had net payments on our term loan of $74.6 million, inclusive of a $25.2 million impact on both borrowings and repayments between independent counterparties associated with the eighth amended and restated senior credit agreement.
Added
It also includes a minimum liquidity covenant that commences 91 days prior to the earliest scheduled maturity date of the Company’s convertible notes.
Added
This covenant requires the Company to maintain liquidity of at least $75 million plus the aggregate principal amount of the early maturing debt so long as the aggregate principal amount of such early maturing debt exceeds $200 million. We were in full compliance with these covenants and restrictions as of December 31, 2025.
Added
Interest is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2022. The 2.250% Notes will mature on June 15, 2027, unless earlier repurchased or converted. We expect to seek incremental financing to fund the maturity of the 2.250% Convertible Notes.
Added
There can be no assurance we will be able to obtain such financing on acceptable terms. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as foregoing acquisitions, reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.
Added
See Note 7 for further information on our financing agreements and outstanding debt obligations.
Added
Effective October 31, 2025, our Board of Directors authorized a $150.0 million share repurchase program (the "Modified Program") which modified our prior $200.0 million share repurchase program (the “Prior Program”), under which $37.4 million had remained available for repurchases prior to the establishment of the Modified Program.
Added
With the decision to extend the share repurchase program, we have suspended our dividend payments and the Board of Directors will consider whether to declare dividends and the amount of such dividends from time to time in the future. We paid approximately $24.7 million of dividends during 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAssuming no repayments, if market interest rates for similar borrowings averaged 1.0% more in 2025 than they did in 2024, interest expense would increase, and income before income taxes would decrease by $1.1 million.
Biggest changeAssuming no repayments, if market interest rates for similar borrowings averaged 1.0% more in 2026 than they did in 2025, interest expense would increase, and income before income taxes would decrease by $0.4 million.
We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Brazil, Canada, China, Japan and 30 Korea. In those countries in which we have a direct presence, our sales are denominated in the local currency amounting to approximately 32% of our total net sales in 2024.
We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Brazil, Canada, China, Japan and Korea. In those countries in which we have a direct presence, our sales are denominated in the local currency amounting to approximately 32% of our total net sales in 2025.
Comparatively, if market interest rates for similar borrowings average 1.0% less in 2025 than they did in 2024, our interest expense would decrease, and income before income taxes would increase by $1.1 million.
Comparatively, if market interest rates for similar borrowings average 1.0% less in 2026 than they did in 2025, our interest expense would decrease, and income before income taxes would increase by $0.4 million.
The remaining 11% of sales to customers outside the United States was on an export basis and transacted in United States dollars.
The remaining 12% of sales to customers outside the United States was on an export basis and transacted in United States dollars.
We manage our exposure to these and other market risks through regular operating and financing activities and as necessary through the use of derivative financial instruments. Foreign Currency Risk Approximately 43% of our total 2024 consolidated net sales were to customers outside the United States.
We manage our exposure to these and other market risks through regular operating and financing activities and as necessary through the use of derivative financial instruments. Foreign Currency Risk 34 Approximately 44% of our total 2025 consolidated net sales were to customers outside the United States.
We have not designated these forward contracts as hedges and have not applied hedge accounting to them. Refer to Note 16 for further discussion. Interest Rate Risk At December 31, 2024, we had approximately $114.6 million of variable rate long-term debt outstanding under our senior credit agreement.
We have not designated these forward contracts as hedges and have not applied hedge accounting to them. Refer to Note 15 for further discussion. Interest Rate Risk At December 31, 2025, we had approximately $40.0 million of variable rate long-term debt outstanding under our senior credit agreement.
During 2024, foreign currency exchange rates, including the effects of the hedging program, caused sales to decrease by approximately $4.0 million. We hedge forecasted intercompany sales denominated in foreign currencies through the use of forward contracts. We account for these forward contracts as cash flow hedges.
During 2025, foreign currency exchange rates, including the effects of the hedging program, caused sales to increase by approximately $1.9 million. We hedge forecasted intercompany sales denominated in foreign currencies through the use of forward contracts. We account for these forward contracts as cash flow hedges.

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