10-K

United States

Securities and Exchange Commission

Washington, D.C.

20549

Form 10-K

Annual Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2015 Commission file number 0-16093

CONMED CORPORATION

(Exact name of registrant as specified in its charter)

New York	16-0977505
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
525 French Road, Utica, New York	13502
(Address of principal executive offices)	(Zip Code)

(315) 797-8375

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act).

Yes ý      No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes o      No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x     No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§232.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer ý    Accelerated filer o    Non-accelerated filer o    Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o      No x

As of June 30, 2015, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the shares of voting common stock held by non-affiliates of the registrant was approximately $1,613,906,000 based upon the closing price of the Company’s common stock on the NASDAQ Stock Market.

The number of shares of the registrant's $0.01 par value common stock outstanding as of February 15, 2016 was 27,712,715.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Definitive Proxy Statement and any other informational filings for the 2016 Annual Meeting of Shareholders are incorporated by reference into Part III of this report.

CONMED CORPORATION

ANNUAL REPORT ON FORM 10-K

FOR YEAR ENDED DECEMBER 31, 2015

TABLE OF CONTENTS

	Part I
		Page
Item 1.	Business	2
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Mine Safety Disclosures	14
	Part II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	17
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 8.	Financial Statements and Supplementary Data	29
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	29
Item 9A.	Controls and Procedures	29
Item 9B.	Other Information	29
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance	30
Item 11.	Executive Compensation	30
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	30
Item 13.	Certain Relationships and Related Transactions, and Director Independence	30
Item 14.	Principal Accounting Fees and Services	30
	Part IV
Item 15.	Exhibits, Financial Statement Schedules	31
	Signatures	32

1

CONMED CORPORATION

Item 1. Business

Forward Looking Statements

This Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2015 (“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.

When used in this Form 10-K, the words “estimate”, “project”, “believe”, “anticipate”, “intend”, “expect” and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, including those identified under the caption “Item 1A-Risk Factors” and elsewhere in this Form 10-K which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following:

• general economic and business conditions;

• changes in foreign exchange and interest rates;

• cyclical customer purchasing patterns due to budgetary and other constraints;

• changes in customer preferences;

• competition;

• changes in technology;

• the introduction and acceptance of new products;

• the ability to evaluate, finance and integrate acquired businesses, products and companies;

• changes in business strategy;

• the availability and cost of materials;

• the possibility that United States or foreign regulatory and/or administrative agencies may initiate enforcement actions against us or our distributors;

• future levels of indebtedness and capital spending;

• quality of our management and business abilities and the judgment of our personnel;

• the availability, terms and deployment of capital;

• the risk of litigation, especially patent litigation as well as the cost associated with patent and other litigation;

• 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;

• compliance with and changes in regulatory requirements; and

• various other factors referenced in this Form 10-K.

See “Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Item 1-Business” and “Item 1A-Risk Factors” for a further discussion of these factors. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this Form 10-K or to reflect the occurrence of unanticipated events.

General

CONMED Corporation was incorporated under the laws of the State of New York in 1970.  CONMED is a medical technology company that provides surgical devices and equipment for minimally invasive procedures.  The Company’s products are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology.  Headquartered in Utica, New York, the Company’s 3,400 employees distribute its products worldwide from several manufacturing locations.  

We have historically used strategic business acquisitions and exclusive distribution relationships to diversify our product offerings, increase our market share in certain product lines, realize economies of scale and take advantage of growth opportunities in the healthcare field.

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We are committed to offering products with the highest standards of quality, technological excellence and customer service.  Substantially all of our facilities have attained certification under the ISO international quality standards and other domestic and international quality accreditations.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are accessible free of charge through the Investor Relations section of our website (http://www.conmed.com) as soon as practicable after such materials have been electronically filed with, or furnished to, the United States Securities and Exchange Commission (the "SEC"). Our SEC filings are also available for reading and copying at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (http:/www.sec.gov) containing reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Business Strategy

Our principal objectives are to improve the quality of surgical outcomes and patient care through the development of innovative medical devices, the refinement of existing products and the development of new technologies which reduce risk, trauma, cost and procedure time.  We believe that by meeting these objectives we will enhance our ability to anticipate and adapt to customer needs and market opportunities, and provide shareholders with superior investment returns.  We intend to achieve future growth and earnings through the following initiatives:

• Introduction of New Products and Product Enhancements.  We continually pursue organic growth through the development of new products and enhancements to 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 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 January 4, 2016 acquisition of SurgiQuest, Inc. ("SurgiQuest") as further described in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 15 to the Consolidated Financial Statements.

• Realize Manufacturing and Operating Efficiencies.  We continually review our production systems for opportunities to reduce operating costs, consolidate product lines or identical process flows, reduce inventory requirements and optimize existing processes.  Our vertically integrated manufacturing facilities allow for further opportunities to reduce overhead, increase operating efficiencies and capacity utilization.

• Geographic Diversification.  We believe that significant growth opportunities exist for our surgical products outside the United States.  Principal foreign markets for our products include Europe, Latin America and Asia/Pacific Rim.  Critical elements of our future sales growth in these markets include leveraging our existing relationships with foreign surgeons, hospitals, third-party payers and foreign distributors (including sub-distributors and sales agents), maintaining an appropriate presence in emerging market countries and continually evaluating our routes-to-market.

• Active Participation in the Medical Community.  We believe that excellent working relationships with physicians and others in the medical industry enable us to gain an understanding of new therapeutic and diagnostic alternatives, trends and emerging opportunities.  Active participation allows us to quickly respond to the changing needs of physicians and patients. 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 materials for use with our products.

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:

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	Year Ended December 31,
	2015			2014			2013
Orthopedic surgery	54		%	54		%	54		%
General surgery	38			38			37
Surgical visualization	8			8			9
Consolidated net sales	100		%	100		%	100		%
Net sales (in thousands)	$	719,168		$	740,055		$	762,704

Orthopedic Surgery

A significant portion of our business is derived from sales in our orthopedic surgery product lines, including sports medicine, powered surgical instruments, and sports biologics and tissue. These lines are marketed under a number of brands, including Hall^®, CONMED Linvatec^®, Concept^® and Shutt^®.

We offer a comprehensive range of devices and products to repair injuries which have occurred in the articulating joint areas of the body.  Many of these injuries are the result of sports related events or similar traumas.  Our sports medicine products include powered resection instruments, arthroscopes, reconstructive systems, tissue repair sets, metal and bioabsorbable implants as well as related disposable products and fluid management systems.  It is our standard practice to place some of these products, such as shaver consoles and pumps, with certain customers at no charge in exchange for commitments to purchase disposable products over certain time periods.  This capital equipment is loaned and subject to return if certain minimum single-use purchases are not met. Single-use products include products such as shaver blades, burs and pump tubing.  We have benefited from the introduction of new arthroscopic products and technologies, such as bioabsorbable screws, “push-in” and “screw-in” suture anchors and resection shavers.

In sports medicine, we compete with Smith & Nephew, plc; Arthrex, Inc.; Stryker Corporation; Johnson & Johnson: DePuy Mitek, Inc. and Zimmer Biomet, Inc.

Our powered instruments offering is sold principally under the Hall^® Surgical brand name, for use in large and small bone orthopedic, arthroscopic, oral/maxillofacial, podiatric, plastic, ENT, neurological, spinal and cardiothoracic surgeries. Our newest product is the Hall 50™ Powered Instrument System, specifically designed to meet the requirements of most orthopedic applications.  The modularity and versatility of the Hall 50™ Powered Instrument System allows a facility to purchase a single power system to perform total joint arthroplasty, trauma, arthroscopy and some small bone procedures.  

In powered instruments, our competition includes Stryker Corporation; Medtronic plc, (Midas Rex and Xomed divisions); Johnson & Johnson: DePuy Synthes, Inc.; MicroAire Surgical Instruments, LLC, and Zimmer Holdings, Inc.

As more fully described in Note 4 to the Consolidated Financial Statements, on January 3, 2012, the Company entered into the Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”) to obtain MTF's worldwide promotion rights with respect to allograft tissues within the field of sports medicine and related products. Under the terms of this agreement, we are now the exclusive worldwide promoter of these allograft tissues, which includes the reconstruction and/or replacement of tendon, ligament, cartilage or menisci, along with the correction of deformities within the extremities.  

General Surgery

Our general surgery product line offers a large range of products in the areas of advanced surgical, endoscopic technologies, and critical care.

Our advanced surgical product offering includes an extensive line of state-of-the-art electrosurgical generators, handpieces, smoke management systems and accessories. Our endomechanical instrumentation products offer a full line of instruments including trocars, suction irrigation devices, graspers, scissors and dissectors used in minimally invasive surgery. We offer a unique and premium uterine manipulator called VCARE^® for use in increasing the efficiency of laparoscopic hysterectomies and other gynecologic laparoscopic procedures. Our competition includes Medtronic plc: Covidien; Ethicon Endo-Surgery, Inc.; ERBE Elektromedizin GmbH; Megadyne; Johnson & Johnson: and Applied Medical Resources Corporation.

On January 4, 2016, we acquired SurgiQuest for $265 million in cash (on a cash-free, debt-free basis). SurgiQuest develops, manufactures and markets the AirSeal^® System, the first integrated access management technology for use in laparoscopic

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and robotic procedures. This proprietary and differentiated access system is complementary to our current advanced surgical offering.

Our endoscopic technologies offering includes a comprehensive line of minimally invasive diagnostic and therapeutic products used in conjunction with procedures which require flexible endoscopy. This offering includes mucosal management devices, forceps, scope management accessories, bronchoscopy devices, dilatation, stricture management devices, hemostasis, biliary devices and polypectomy. Our competition includes Boston Scientific Corporation - Endoscopy; Cook Medical, Inc.; Merit Medical Endotek; Olympus, Inc.; STERIS Corporation - U.S. Endoscopy; and EndoChoice, Inc.

Our critical care offering includes a line of vital signs and cardiac monitoring products including pulse oximetry sensors, ECG electrodes & accessories, and cardiac defibrillation & pacing pads.  We also offer a complete line of suction instruments and tubing that are used throughout all areas of the hospital as well as in Ambulatory Surgery Centers and the emergency medical market. In addition, we offer a line of IV products for use in the critical care areas of the hospital and the emergency medical market. This offering's competition includes Medtronic plc: (Covidien Ltd) and 3M Company.

Surgical Visualization

Our surgical visualization product line offers imaging systems for use in minimally invasive orthopedic and general surgery procedures including 2DHD and 3DHD vision technologies. Competition includes Smith & Nephew, plc; Arthrex, Inc.; Stryker Corporation; Olympus, Inc.; Richard Wolf and Karl Storz GmbH.

International

Maintaining and expanding our international presence is an important component of our long-term growth plan. Our products are sold in over 100 foreign countries. International sales efforts are coordinated through local country dealers (including sub-distributors or sales agents) or through direct in-country sales. We distribute our products through sales subsidiaries and branches with offices located in Australia, Austria, Belgium, Canada, China, Denmark, Finland, France, Germany, Italy, 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 34% of our total net sales in 2015.  In the remaining countries where our products are sold through independent distributors, sales are denominated in United States dollars.

Competition

We compete in orthopedic, surgical visualization and general surgery medical device markets across the world. Our competitors range from large manufacturers with multiple business units to smaller manufacturers with limited product offerings. We believe we have appropriate product offerings and adequate market share to compete effectively in these markets. The global markets are constantly changing due to technological advances. We seek to closely align our research and development with our key business objectives, namely developing and improving products and processes, applying innovative technology to the manufacture of products for new global markets and reducing the cost of producing core products.

The breadth of our product lines in our key product areas enables us to meet a wide range of customer requirements and preferences.  This has enhanced our ability to market our products to surgeons, hospitals, surgery centers, group purchasing organizations ("GPOs"), integrated delivery networks ("IDNs") and other customers, particularly as institutions seek to reduce costs and minimize the number of suppliers.

Marketing

A significant portion of our products are distributed domestically directly to more than 6,000 hospitals 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 2015, 2014 and 2013.

A significant portion of our U.S. sales are to customers affiliated with GPOs, IDNs and other large national or regional accounts, as well as to the Veterans Administration and other hospitals operated by the Federal government.  For hospital inventory management purposes, some of our customers prefer to purchase our products through independent third-party medical product distributors.

Our employee sales representatives are specially trained in our various product offerings. Each employee sales representative is assigned a defined geographic area and compensated on a commission basis or through a combination of salary and commission.  The sales force is supervised and supported by either area directors or district managers.  In certain geographies,

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sales agent groups are used in the United States to sell our orthopedic products.  These sales agent groups are paid a commission for sales made to customers while home office sales and marketing management provide the overall direction for marketing and positioning of our products. Our sales professionals provide surgeons and medical personnel with information relating to the technical features and benefits of our products.

Our health systems organization is responsible for interacting with large regional and national accounts (e.g. GPOs, IDNs, etc.).  We have contracts with many such organizations and believe that the loss of any individual group purchasing contract will not materially impact our business.  In addition, all of our sales professionals are required to work closely with distributors where applicable and maintain close relationships with end-users.

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.  Substantially all of our raw materials and select components used in the manufacturing process are procured from external suppliers.  We work closely with multiple suppliers to ensure continuity of supply while maintaining high quality and reliability.  As a consequence of best supply chain practices, new product development and acquisitions, we often form strategic partnerships with key suppliers. As a consequence of these supplier partnerships, components and raw materials may be sole sourced. Due to the strength of these suppliers and the variety of products we provide, we do not believe the risk of supplier interruption poses an overall material adverse effect on our financial and operational performance. We schedule production and maintain adequate levels of safety stock based on a number of factors, including experience, knowledge of customer ordering patterns, demand, manufacturing lead times and optimal quantities required to maintain the highest possible service levels.  Customer orders are generally processed for immediate shipment and backlog of firm orders is therefore not considered material to an understanding of our business.

Research and Development

New and improved products play a critical role in our continued sales growth.  Internal research and development efforts focus on the development of new products and product technological and design improvements aimed at complementing and expanding existing product lines.  We continually seek to leverage new technologies which improve the durability, performance and usability of existing products.  In addition, we maintain close working relationships with surgeons, inventors and operating room personnel who often make new product and technology disclosures, principally in procedure-specific areas.  For clinical and commercially promising disclosures, we seek to obtain rights to these ideas through negotiated agreements.  Such agreements typically compensate the originator through payments based upon a percentage of licensed product net sales.  Annual royalty expense approximated $2.3 million, $2.6 million and $2.7 million in 2015, 2014 and 2013, respectively.

Amounts expended for Company research and development were approximately $27.4 million, $27.8 million and $25.8 million during 2015, 2014 and 2013, respectively.

Intellectual Property

Patents and other proprietary rights, in general, 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.  We own a majority of these patents and have exclusive and non-exclusive licensing rights to the remainder.  In addition, certain of these patents have currently been licensed to third parties on a non-exclusive basis.  We believe that the development of new products and technological and design improvements to existing products will continue to be of primary importance in maintaining 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. 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.

The FDA’s Quality System Regulations set forth requirements for our product design and manufacturing processes, require the maintenance of certain records, provide for on-site inspection of our facilities and continuing review by the FDA.  Many of our products are also subject to industry-defined standards.  Authorization to commercially market our products in the U.S. is granted by the FDA under a procedure referred to as a 510(k) pre-market notification.  This process requires us to notify the FDA

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of the new product and obtain FDA clearance before marketing the device. We believe that our products and processes presently meet applicable standards in all material respects.

Medical device regulations continue to evolve world-wide.  Products marketed in the European Union and other countries require preparation of technical files and design dossiers which demonstrate compliance with applicable international regulations. As government regulations continue to change, there is a risk that the distribution of some of our products may be interrupted or discontinued if they do not meet the country specific requirements.

We market our products in numerous foreign countries and therefore are subject to regulations affecting, among other things, product standards, sterilization, packaging requirements, labeling requirements, import laws and onsite inspection by independent bodies with the authority to issue or not issue certifications we may require to be able to sell products in certain countries.  Many of the regulations applicable to our devices and products in these countries are similar to those of the FDA.  The member countries of the European Union have adopted the European Medical Device Directives, which create a single set of medical device regulations for all member countries.  These regulations require companies that wish to manufacture and distribute medical devices in the European Union to maintain quality system certifications through European Union recognized Notified Bodies.  These Notified Bodies authorize the use of the CE Mark allowing free movement of our products throughout the member countries.  Requirements pertaining to our products vary widely from country to country, ranging from simple product registrations to detailed submissions such as those required by the FDA.  We believe that our products and quality procedures currently meet applicable standards for the countries in which they are marketed.

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. During the third quarter of 2013, the FDA inspected our Centennial, Colorado manufacturing facility and issued a Form 483 with observations on September 20, 2013. We subsequently submitted responses to the Observations, and the FDA issued a Warning Letter on January 30, 2014 relating to the inspection and the responses to the Form 483 Observations. Accordingly, we undertook corrective actions. During the fourth quarter of 2014, the FDA again inspected our Centennial, Colorado manufacturing facility and, on November 18, 2014, issued a Form 483 with eight observations, three of which the FDA characterized as repeat observations. On December 10, 2014, we responded to the Form 483 Observations. We have received some additional questions from the FDA and responded to these questions on April 25, 2015.  The remediation costs to date have not been material, although there can be no assurance that responding to the Form 483 observations or a future inspection by the FDA will not result in an additional Form 483 or warning letter, or other regulatory actions, which may include consent decrees or fines.

Employees

As of December 31, 2015, we had approximately 3,400 full-time employees, including approximately 2,300 in operations, 140 in research and development and the remaining in sales, marketing and related administrative support.  We believe that we have good relations with our employees and have never experienced a strike or similar work stoppage.  None of our domestic employees are represented by a labor union.

Item 1A.  Risk Factors

An investment in our securities, including our common stock, involves a high degree of risk.  Investors should carefully consider the specific factors set forth below as well as the other information included or incorporated by reference in this Form 10-K. See “Forward Looking Statements”.

Our financial performance is dependent on conditions in the healthcare industry and the broader economy.

The results of our business are directly tied to the economic conditions in the healthcare industry and the broader economy as a whole.  We will continue to monitor and manage the impact of the overall economic environment on the Company. Approximately 21% of our revenues are derived from the sale of capital products.  The sales of such products are negatively impacted if hospitals and other healthcare providers are unable to secure the financing necessary to purchase these products or otherwise defer purchases.

Our significant international operations subject us to foreign currency fluctuations and other risks associated with operating in foreign countries.

A significant portion of our revenues are derived from foreign sales.  Approximately 50% of our total 2015 consolidated net sales were to customers outside the United States.  We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Canada, China and Korea.  In those countries in which we have a direct presence, our sales are denominated in the local

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currency and those sales denominated in local currency amounted to approximately 34% of our total net sales in 2015.  The remaining 16% of sales to customers outside the United States was on an export basis and transacted in United States dollars.

Because a significant portion of our operations consist of sales activities in foreign jurisdictions, 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.  While we have implemented a hedging strategy involving foreign currency forward contracts for 2015, 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 2017. 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;

• political risks, including political instability;

• reliance on third parties to distribute our products;

• hyperinflation in certain foreign countries; and

• imposition or increase of investment and other restrictions by foreign governments.

We cannot assure you that such risks will not have a material adverse effect on our business and results of operations.

Our financial performance is subject to the risks inherent in our acquisition strategy, 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.  Our success is dependent in part upon our ability to integrate acquired companies or product lines into our existing operations.  For example, we completed the acquisition of SurgiQuest, Inc. (“SurgiQuest”) on January 4, 2016 and are in the process of integrating SurgiQuest into our business. We may not have sufficient management and other resources to accomplish the integration of our past and future acquisitions and implementing our acquisition strategy may strain our relationship with customers, suppliers, distributors, personnel or others.  There can be no assurance that we will be able to identify and make acquisitions on acceptable terms or that we will be able to obtain financing for such acquisitions on acceptable terms.  In addition, while we are generally entitled to customary indemnification from sellers of businesses 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.  As a result, our financial performance is now, and will continue to be, subject to various risks associated with the acquisition of businesses, including the financial effects associated with any increased borrowing required to fund such acquisitions or with the integration of such businesses. We incurred substantial additional debt in connection with the SurgiQuest acquisition, and we cannot ensure that we will be able to successfully integrate and advance SurgiQuest’s product lines or that risks related to the SurgiQuest acquisition will not negatively impact our financial performance.

Our financial performance may be adversely impacted by healthcare reform legislation.

Provisions of healthcare legislation, including provisions of the Patient Protection and Affordable Care Act, could meaningfully change the way health care is developed and delivered and may adversely affect our business and results of operations.   For example, the Patient Protection and Affordable Care Act includes provisions aimed at improving quality and decreasing costs of Medicare, governing comparative effectiveness research, and implementing an independent payment advisory board and pilot programs to evaluate alternative payment methodologies.  That legislation also included a 2.3% excise tax imposed upon sales within the U.S. of certain medical device products, which has recently been delayed until 2018.  We cannot predict what healthcare programs and regulations will be ultimately implemented at the federal or state level, or the effect of any future legislation or regulation in the U.S. or internationally.  However, any changes that lower reimbursements or otherwise causing pricing pressures to hospitals for surgical procedures or reduce medical procedure volumes could adversely affect our results of operations and cash flows.

Failure to comply with regulatory requirements may result in recalls, fines or materially adverse implications.

Substantially all of our products are classified as class II medical devices subject to regulation by numerous agencies and legislative bodies, including the FDA and comparable foreign counterparts.  As a manufacturer of medical devices, our manufacturing processes and facilities are subject to on-site inspection and continuing review by the FDA for compliance with the Quality System Regulations.  We received a warning letter from the FDA related to our Centennial, CO facility on January 30, 2014. Accordingly, we undertook corrective actions. During the fourth quarter of 2014, the FDA again inspected our Centennial, CO manufacturing

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facility and, on November 18, 2014, issued a Form 483 with eight observations, three of which the FDA characterized as repeat observations. On December 10, 2014, we responded to the Form 483 Observations. We have received some additional questions from the FDA and responded to these questions on April 25, 2015.  The remediation costs to date have not been material, although there can be no assurance that responding to the Form 483 observations or a future inspection by the FDA will not result in an additional Form 483 or warning letter, or other regulatory actions, which may include consent decrees or fines. Manufacturing and sales of our products outside the United States are also subject to foreign regulatory requirements which vary from country to country.  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 foreign approvals may differ from FDA requirements.  Failure to comply with applicable domestic and/or foreign regulatory requirements may result in:

• fines or other enforcement actions;

• recall or seizure of products;

• total or partial suspension of production;

• loss of certification;

• withdrawal of existing product approvals or clearances;

• refusal to approve or clear new applications or notices;

• increased quality control costs; or

• criminal prosecution.

Failure to comply with Quality System Regulations and applicable foreign regulations could result in a material adverse effect on our business, financial condition or results of operations.

If we are not able to manufacture products in compliance with regulatory standards, we may decide to cease manufacturing of those products and may be subject to product recall.

In addition to the Quality System Regulations, many of our products are also 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.  If we are not able to comply with the Quality System Regulations or industry-defined standards, we may not be able to fill customer orders and we may decide to cease production of non-compliant products.  Failure to produce products could affect our profit margins and could lead to loss of customers.

Our products are subject to product recall and we have conducted product recalls in the past.  Although no recall has had a material adverse effect on our business or financial condition, we cannot assure you that regulatory issues will not have a material adverse effect on our business, financial condition or results of operations in the future or that product recalls will not harm our reputation and our customer relationships.

The highly competitive market for our products may create adverse pricing pressures.

The market for our products is highly competitive and our customers have numerous alternatives of supply.  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.  In addition, many of our competitors are large, technically competent firms with substantial assets.  Competitive pricing pressures or the introduction of new products by our competitors could have an adverse effect on our revenues.  See “Products” in Item 1 - Business for a further discussion of these competitive forces.

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 to them as a result of product recall, market withdrawal or back-order;

•the introduction by competitors of new products or new features to existing products;

•the introduction by competitors of alternative surgical technology; and

•advances in surgical procedures, discoveries or developments in the healthcare industry.

We use a variety of raw materials in our businesses, and significant shortages or price increases could increase our operating costs and adversely impact the competitive positions of our products.

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Our reliance on certain suppliers and commodity markets to secure raw materials used in our products exposes us to volatility in the prices and availability of raw materials. In some instances, we participate in commodity markets that may be subject to allocations by suppliers. A disruption in deliveries from our suppliers, price increases or decreased availability of raw materials or commodities could have an adverse effect on our ability to meet our commitments to customers or increase our operating costs. We believe that our supply management practices are based on an appropriate balancing of the foreseeable risks and the costs of alternative practices. Nonetheless, price increases or the unavailability of some raw materials may have an adverse effect on our results of operations or financial condition.

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.  Such efforts include national healthcare reform, trends towards managed care, cuts in Medicare, consolidation of healthcare distribution companies and collective purchasing arrangements by GPOs and IDNs.  Demand and prices for our products may be adversely affected by such trends.

We may not be able to keep pace with technological change or to successfully develop new products with wide market acceptance, which could cause us to lose business to competitors.

The market for our products is characterized by rapidly changing technology.  Our future financial performance will depend in part on our ability to develop and manufacture new products on a cost-effective basis, to introduce them to the market on a timely basis and to have them accepted by surgeons.

We may not be able to keep pace with technology or to develop viable new products.  In addition, many of our competitors are substantially larger with greater financial resources which may allow them to more rapidly develop new products. Factors which may result in delays of new product introductions or cancellation of our plans to manufacture and market new products include:

• capital constraints;

• research and development delays;

• delays in securing regulatory approvals; and

• changes in the competitive landscape, including the emergence of alternative products or solutions which reduce or eliminate the markets for pending products.

Our new products may fail to achieve expected levels of market acceptance.

New product introductions may fail to achieve market acceptance.  The degree of market acceptance for any of our products will depend upon a number of factors, including:

• our ability to develop and introduce new products and product enhancements in the time frames we currently estimate;

• our ability to successfully implement new technologies;

• the market’s readiness to accept new products;

• having adequate financial and technological resources for future product development and promotion;

• the efficacy of our products; and

• the prices of our products compared to the prices of our competitors’ products.

If our new products do not achieve market acceptance, we may be unable to recover our investments and may lose business to competitors.

In addition, some of the companies with which we now compete, or may compete in the future, have or may have more extensive research, marketing and manufacturing capabilities and significantly greater technical and personnel resources than we do, and may be better positioned to continue to improve their technology in order to compete in an evolving industry.  See “Products” in Item 1 - Business for a further discussion of these competitive forces.

Our senior credit agreement contains covenants which may limit our flexibility or prevent us from taking actions.

Our senior credit agreement contains, and future credit facilities are expected to contain, certain restrictive covenants which will affect, and in many respects significantly limit or prohibit, among other things, our ability to:

•incur indebtedness;

•make investments;

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•engage in transactions with affiliates;

•pay dividends or make other distributions on, or redeem or repurchase, capital stock;

•sell assets; and

•pursue acquisitions.

These covenants, unless waived, may prevent us from pursuing acquisitions, significantly limit our operating and financial flexibility and limit our ability to respond to changes in our business or competitive activities.  Our ability to comply with such provisions may be affected by events beyond our control.  In the event of any default under our credit agreement, the credit agreement lenders may elect to declare all amounts borrowed under our credit agreement, together with accrued interest, to be due and payable.  If we were unable to repay such borrowings, the credit agreement lenders could proceed against collateral securing the credit agreement which consists of substantially all of our property and assets.  Our credit agreement also contains a material adverse effect clause which may limit our ability to access additional funding under our credit agreement should a material adverse change in our business occur.

Our leverage and debt service requirements may require us to adopt alternative business strategies.

As of December 31, 2015, we had $270.8 million of debt outstanding, representing 25% of total capitalization.  On January 4, 2016, we entered into our fifth amended and restated senior credit agreement consisting of: (a) a $175.0 million term loan facility and (b) a $525.0 million revolving credit facility. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 15 to our Consolidated Financial Statements.

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.

We may not be able to generate sufficient cash to service our indebtedness, which could require us to reduce our expenditures, sell assets, restructure our indebtedness or seek additional equity capital.

Our ability to satisfy our obligations will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, many of which are beyond our control.  We may not have sufficient cash flow available to enable us to meet our obligations.  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.  We cannot assure you 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” for a discussion of our indebtedness and its implications.

We rely on a third party to obtain, process and distribute sports medicine allograft tissue. 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.

As described in Note 4 to the Consolidated Financial Statements, on January 3, 2012, we entered into an agreement with Musculoskeletal Transplant Foundation ("MTF") to obtain MTF's worldwide promotional, marketing and distribution rights with respect to allograft tissues within the field of sports medicine. The supply of human tissue is dependent on donors and MTF has numerous relationships with donor groups. Likewise, the supply of tissues available for use as allografts depends on the continued successful processing of donated tissues by MTF at its processing facilities. We cannot be certain, however, that the supply of human tissue will continue to be available at current levels or will be of sufficiently high standards to meet the high processing standards maintained for such tissues by MTF, or in volumes sufficient to meet our customers' needs or that MTF will be able to continue to process tissues to its high standards in volumes sufficient to keep pace with demand. We expect that the Company's share of revenue streams related to MTF's sports medicine allograft product line would decline in proportion to any decline or disruption in the supply of processed tissues.

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The FDA and several states have statutory authority to regulate allograft processing and allograft-based materials. The FDA could identify deficiencies in future inspections of MTF or MTF's suppliers or promulgate future regulatory rulings that could disrupt our business, reducing profitability.     

Our recent management and organizational changes could adversely affect our business.

In the latter half of 2014, Curt Hartman became our President & Chief Executive Officer, having significant industry experience. Since this time, he has implemented organizational changes within our Company, including senior management changes.  The experience of our senior executives is a valuable asset to us and, although we believe that our current senior management team has the combination of company and industry experience to be successful, our recent management and organizational changes could adversely affect our business, including through any disruption that may be associated with the organizational changes.

If the Company or our business partners are unable to adequately protect our information assets from cyber-based attacks or other security incidents, our operations could be disrupted.

We are increasingly dependent on information technology, including the internet, for the storage, processing, and transmission of our electronic, business-related, information assets. We leverage our internal information technology infrastructures, and those of our business partners, to enable, sustain, and support our global business interests. In the event that the Company or our business partners are unable to prevent, detect, and remediate cyber-based attacks or other security incidents in a timely manner, our operations could be disrupted or we may incur financial or reputational losses arising from the theft, alteration, misuse, unauthorized disclosure, or destruction of our information assets.

If we infringe third parties’ patents, or if we lose our patents or they are held to be invalid, we could become subject to liability and our competitive position could be harmed.

Much of the technology used in the markets in which we compete is covered by patents.  We have numerous U.S. patents and corresponding foreign patents on products expiring at various dates from 2016 through 2038 and have additional patent applications pending.  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.  In addition, the cost of enforcing our patents against third parties and defending our products against patent infringement actions by others could be substantial.  We cannot assure you that:

• pending patent applications will result in issued patents;

• patents issued to or licensed by us will not be challenged by competitors;

• our patents will be found to be valid or sufficiently broad to protect our technology or provide us with a competitive advantage; or

• we will be successful in defending against pending or future patent infringement claims asserted against our products.

Ordering patterns of our customers may change resulting in reductions in sales.

Our hospital and surgery center customers purchase our products in quantities sufficient to meet their anticipated demand.  Likewise, our healthcare distributor customers purchase our products for ultimate resale to healthcare providers in quantities sufficient to meet the anticipated requirements of the distributors’ customers.  Should inventories of our products owned by our hospital, surgery center and distributor customers grow to levels higher than their requirements, our customers may reduce the ordering of products from us.  This could result in reduced sales during a financial accounting period.

We can be sued for producing defective products and our insurance coverage may be insufficient to cover the nature and amount of any product liability claims.

The nature of our products as medical devices and today’s litigious environment should be regarded as potential risks which could significantly and adversely affect our financial condition and results of operations.  The insurance we maintain to protect against claims associated with the use of our products has deductibles and may not adequately cover the amount or nature of any claim asserted against us.  We are also exposed to the risk that our insurers may become insolvent or that premiums may increase substantially.  See “Item 3 - Legal Proceedings” for a further discussion of the risk of product liability actions and our insurance coverage.

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Damage to our physical properties as a result of windstorm, earthquake, fire or other natural or man-made disaster may cause a financial loss and a loss of customers.

Although we maintain insurance coverage for physical damage to our property and the resultant losses that could occur during a business interruption, we are required to pay deductibles and our insurance coverage is limited to certain caps.  For example, our deductible for windstorm damage to our Florida property amounts to 2% of any loss.

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.

Item 1B. Unresolved Staff Comments

None.

Item 2.  Properties

Facilities

The following table sets forth certain information with respect to our principal operating facilities.  We believe that our facilities are generally well maintained, are suitable to support our business and adequate for present and anticipated needs.

Location	Square Feet	Own or Lease	Lease Expiration
Utica, NY	500,000	Own	—
Largo, FL	278,000	Own	—
Centennial, CO	87,500	Own	—
Chihuahua, Mexico	207,720	Lease	September 2019
Lithia Springs, GA	188,400	Lease	December 2019
Brussels, Belgium	45,531	Lease	June 2024
Mississauga, Canada	22,378	Lease	December 2016
Westborough, MA	19,515	Lease	June 2020
Frenchs Forest, Australia	16,912	Lease	July 2020
Seoul, Korea	15,554	Lease	January 2017
Anaheim, CA	14,037	Lease	August 2018
Frankfurt, Germany	13,606	Lease	March 2023
Milan, Italy	13,024	Lease	March 2017
Beijing, China	10,255	Lease	June 2016
Swindon, Wiltshire, UK	8,562	Lease	December 2020
Askim, Sweden	8,353	Lease	May 2019
Barcelona, Spain	8,073	Lease	December 2018
Rungis Cedex, France	7,406	Lease	December 2016
Copenhagen, Denmark	5,899	Lease	December 2018
New York, NY	3,473	Lease	September 2022
Warsaw, Poland	3,222	Lease	February 2018
Espoo, Finland	3,078	Lease	Open Ended
Shanghai, China	2,269	Lease	February 2018
Innsbruck, Austria	1,820	Lease	June 2020

Our principal manufacturing facilities are located in Utica, NY, Largo, FL, Anaheim, CA and Chihuahua, Mexico. Lithia Springs, GA and Brussels, Belgium are our principal distribution centers. The remaining facilities are sales and administrative offices with certain offices also including smaller distribution centers.

Item 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 10 to the

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Consolidated Financial Statements. 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.

PART II

Item 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 NASDAQ Stock Market under the symbol “CNMD”. At January 29, 2016, there were 637 registered holders of our common stock and approximately 5,973 accounts held in “street name”.

The following table sets forth quarterly high and low closing sales prices for the years ended December 31, 2015 and 2014, as reported by the NASDAQ Stock Market.

	2015
Period	High		Low
First Quarter	$	51.88	$	44.90
Second Quarter	59.11		48.29
Third Quarter	60.19		47.09
Fourth Quarter	49.99		38.34

	2014
Period	High		Low
First Quarter	$	48.54	$	41.33
Second Quarter	49.65		42.23
Third Quarter	45.46		36.53
Fourth Quarter	45.33		37.31

Our Board of Directors has authorized a share repurchase program; see Note 7 to the Consolidated Financial Statements.

On February 29, 2012, the Board of Directors adopted a cash dividend policy and declared an initial quarterly dividend of $0.15 per share. On October 28, 2013, the Board of Directors increased the quarterly dividend to $0.20 per share. The fourth quarter dividend for 2015 was paid on January 5, 2016 to shareholders of record as of December 15, 2015. The total dividend payable at December 31, 2015 was $5.5 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, subject to conditions then existing, including our financial requirements and condition and the limitation and payment of cash dividends contained in debt agreements.

Information relating to compensation plans under which equity securities of CONMED Corporation are authorized for issuance is set forth below:

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Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	1,030,670		$43.47	2,141,538
Equity compensation plans not approved by security holders	—	—		—
Total	1,030,670		$43.47	2,141,538

The number of securities included in column (a) above consists of outstanding share appreciation rights (“SARs”) and performance share units, however the weighted-average exercise price in column (b) is for SARs only.

Performance Graph

The performance graph below compares the yearly percentage change in the Company’s Common Stock with the cumulative total return of the NASDAQ Composite Index and the cumulative total return of 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.

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Item 6.  Selected Financial Data

The following table sets forth selected historical financial data for the years ended December 31, 2015, 2014, 2013, 2012 and 2011.  The financial data set forth below should be read in conjunction with the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of this Form 10-K and the Financial Statements of the Company and the notes thereto.

FIVE YEAR SUMMARY OF SELECTED FINANCIAL DATA

	Years Ended December 31,
	2015		2014		2013		2012		2011
	(In thousands, except per share data)
Statements of Operations Data (1):
Net sales	$	719,168	$	740,055	$	762,704	$	767,140	$	725,077
Cost of sales (2)	337,466		335,998		350,287		361,297		350,143
Gross profit	381,702		404,057		412,417		405,843		374,934
Selling and administrative expense (3)	303,091		323,492		330,078		312,419		277,707
Research and development expense	27,436		27,779		25,831		28,214		28,651
Impairment of goodwill (4)	—		—		—		—		60,302
Income from operations	51,175		52,786		56,508		65,210		8,274
Loss on early extinguishment of debt (5)	—		—		263		—		—
Amortization of debt discount	—		—		—		—		3,903
Interest expense	6,031		6,111		5,613		5,730		6,676
Income (loss) before income taxes	45,144		46,675		50,632		59,480		(2,305		)
Provision (benefit) for income taxes	14,646		14,483		14,693		18,999		(3,057		)
Net income	$	30,498	$	32,192	$	35,939	$	40,481	$	752
Per Share Data:
Basic earnings per share	$	1.10	$	1.17	$	1.30	$	1.43	$	0.03
Diluted earnings per share	$	1.09	$	1.16	$	1.28	$	1.41	$	0.03
Dividends per share of common stock	$	0.80	$	0.80	$	0.65	$	0.60	$	—
Weighted Average Number of Common Shares In Calculating:
Basic earnings per share	27,653		27,401		27,722		28,301		28,246
Diluted earnings per share	27,858		27,769		28,114		28,653		28,633
Other Financial Data:
Depreciation and amortization	$	43,879	$	45,734	$	47,867	$	46,616	$	42,687
Capital expenditures	15,009		15,411		18,445		21,532		17,552
Balance Sheet Data (at period end):
Cash and cash equivalents	$	72,504	$	66,332	$	54,443	$	23,720	$	26,048
Total assets	1,112,944		1,098,194		1,090,508		1,078,849		935,594
Long-term obligations	408,153		400,940		372,924		346,637		231,339
Total shareholders’ equity	585,073		581,298		606,319		606,998		573,071

(1) Results of operations of acquired businesses have been recorded in the financial statements since the date of acquisition. Refer to Note 4.

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(2) In 2015, 2014, 2013, 2012 and 2011, we incurred charges related to the restructuring of certain of our manufacturing operations of $8.0 million, $5.6 million, $6.5 million, $7.1 million and $3.5 million, respectively; in 2013 we incurred charges of $2.1 million related to the termination of a product offering.  See additional discussion in Note 11 to the Consolidated Financial Statements.

(3) Restructuring and other expense included in selling and administrative costs are the following:

	2015		2014		2013		2012		2011
Restructuring costs	$	13,655	$	3,354	$	8,750	$	6,497	$	792
Business and asset acquisition costs	2,543		722		—		1,898		300
Management restructuring costs	—		12,546		—		—		—
Shareholder activism costs	—		3,966		—		—		—
Patent dispute and other matters	—		3,374		3,206		1,555		—
Pension settlement expense	—		—		1,443		—		—
Restructuring and other expense included in selling and administrative expense	$	16,198	$	23,962	$	13,399	$	9,950	$	1,092

See additional discussion in Note 11 to the Consolidated Financial Statements.

(4) During 2011, we recorded a $60.3 million charge for the impairment of goodwill related to the legacy CONMED Patient Care reporting unit.

(5) Includes a charge of $0.3 million in 2013 related to a loss on the early extinguishment of debt. See additional discussion in Note 5 to the Consolidated Financial Statements.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Selected Financial Data (Item 6), and our Consolidated Financial Statements and related notes contained elsewhere in this report.

Overview of CONMED Corporation

CONMED Corporation (“CONMED”, the “Company”, “we” or “us”) is a medical technology company that provides surgical devices and equipment for minimally invasive procedures.  The Company’s products are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology.  

Our product lines consist of orthopedic surgery, general surgery and surgical visualization. Orthopedic surgery consists of sports medicine instrumentation and small bone, large bone and specialty powered surgical instruments and service fees related to the promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. Surgical visualization consists of imaging systems for use in minimally invasive orthopedic and general surgery procedures including 2DHD and 3DHD vision technologies. These product lines as a percentage of consolidated net sales are as follows:

	2015		2014		2013
Orthopedic surgery	54	%	54	%	54	%
General surgery	38		38		37
Surgical visualization	8		8		9
Consolidated net sales	100	%	100	%	100	%

A significant amount of our products are used in surgical procedures with approximately 79% of our revenues derived from the sale of disposable products.  Our capital equipment offerings also facilitate the ongoing sale of related disposable products and accessories, thus providing us with a recurring revenue stream.  We manufacture substantially all of our products in facilities located in the United States and Mexico.  We market our products both domestically and internationally directly to customers and through distributors.  International sales approximated 50%, 51% and 51% in 2015, 2014 and 2013, respectively.

Business Environment

2015 was a year of continued change and transformation for CONMED Corporation. During the year, we filled the remaining executive positions in a now entirely revamped leadership team. We also aligned our marketing product strategy road map with our research and development resource allocation to re-invigorate our organic product pipeline, while leveraging our restored business development function to actively pursue additional acquisitions. During the year, we had three business acquisitions as more fully disclosed in Note 4 to the Consolidated Financial Statements.

On January 4, 2016, we acquired SurgiQuest, Inc. ("SurgiQuest") for $265 million in cash (on a cash-free, debt-free basis). SurgiQuest develops, manufactures, and markets the AirSeal^® System, the first integrated access management technology for use in laparoscopic and robotic procedures. This proprietary and differentiated access system is complementary to our current advanced surgical offering. We expect this access system to generate approximately $55 to $60 million in revenue in 2016.

We plan to continue to restructure both operations and administrative functions as necessary throughout the organization. We have successfully completed our restructuring plans over the past few years, however, we cannot be certain further activities, will be completed in the estimated time period or that planned cost savings will be achieved.

Finally, 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. During the third quarter of 2013, the FDA inspected our Centennial, Colorado manufacturing facility and issued a Form 483 with observations on September 20, 2013. We subsequently submitted responses to the Observations, and the FDA issued a Warning Letter on January 30, 2014 relating to the inspection and the responses to the Form 483 Observations. Accordingly, we undertook corrective actions. During the fourth quarter of 2014, the FDA again inspected our Centennial, Colorado manufacturing facility and, on November 18, 2014, issued a Form 483 with eight observations, three of which the FDA characterized as repeat observations. On December 10, 2014,

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we responded to the Form 483 Observations. We have received some additional questions from the FDA and responded to these questions on April 25, 2015. The remediation costs to date have not been material, although there can be no assurance that responding to the Form 483 observations or a future inspection by the FDA will not result in an additional Form 483 or warning letter, or other regulatory actions, which may include consent decrees or fines.

Critical Accounting Policies

Preparation of our financial statements requires us to make estimates and assumptions which affect the reported amounts of assets, liabilities, revenues and expenses.  Note 1 to the Consolidated Financial Statements describes the significant accounting policies used in preparation of the Consolidated Financial Statements.  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.

Revenue Recognition

Revenue is recognized when title has been transferred to the customer which is at the time of shipment.  The following policies apply to our major categories of revenue transactions:

• Sales to customers are evidenced by firm purchase orders. Title and the risks and rewards of ownership are transferred to the customer when product is shipped under our stated shipping terms.  Payment by the customer is due under fixed payment terms and collectability is reasonably assured.

• We place certain of our capital equipment with customers on a loaned basis in return for commitments to purchase related single-use products over time periods generally ranging from one to three years. In these circumstances, no revenue is recognized upon capital equipment shipment as the equipment is loaned and subject to return if certain minimum single-use purchases are not met. Revenue is recognized upon the sale and shipment of the related single-use products. The cost of the equipment is amortized over its estimated useful life.

• We recognize revenues related to the promotion and marketing of sports medicine allograft tissue in accordance with the contractual terms of our agreement with Musculoskeletal Transplant Foundation (“MTF”) on a net basis as our role is limited to that of an agent earning a commission or fee. MTF records revenue when the tissue is shipped to the customer. Our services are completed at this time and net revenues for the “Service Fee” for our promotional and marketing efforts are then recognized based on a percentage of the net amounts billed by MTF to its customers. The timing of revenue recognition is determined through review of the net billings made by MTF each month. Our net commission Service Fee is based on the contractual terms of our agreement and is currently 50%. This percentage can vary over the term of the agreement but is contractually determinable. Our Service Fee revenues are recorded net of amortization of the acquired assets, which are being expensed over the expected useful life of 25 years.

• Product returns are only accepted at the discretion of the Company and in accordance with our “Returned Goods Policy”.  Historically, the level of product returns has not been significant.  We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.

• Our terms of sale to customers generally do not include any obligations to perform future services.  Limited warranties are provided for capital equipment sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.

• Amounts billed to customers related to shipping and handling have been included in net sales.  Shipping and handling costs included in selling and administrative expense were $12.6 million, $13.6 million and $12.6 million for 2015, 2014 and 2013, respectively.

• We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk.

• We assess the risk of loss on accounts receivable and adjust the allowance for doubtful accounts based on this risk assessment.  Historically, losses on accounts receivable have not been material.  Management believes that the allowance for doubtful accounts of $1.3 million at December 31, 2015 is adequate to provide for probable losses resulting from accounts receivable.

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Inventory Valuation

We write-off excess and obsolete inventory resulting from the inability to sell our products at prices in excess of current carrying costs. The markets in which we operate are highly competitive, with new products and surgical procedures introduced on an on-going basis. Such marketplace changes may result in our products becoming obsolete. We make estimates regarding the future recoverability of the costs of our products and record a provision for excess and obsolete inventories based on historical experience and expected future trends. If actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write-downs may be required.

Goodwill and Intangible Assets

We have a history of growth through acquisitions.  Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition.  Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.  Customer relationships, trademarks, tradenames, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Promotional, marketing and distribution rights represent intangible assets created under our Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”).  We have accumulated goodwill of $260.7 million and other intangible assets of $308.2 million as of December 31, 2015.

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to at least annual impairment testing. It is our policy to perform our annual impairment testing in the fourth quarter. 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. During 2015, we completed our goodwill impairment testing with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with Financial Accounting Standards Board Accounting Standard Codification (“ASC”) 350-20-35 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, we believe the fair value continues to exceed carrying value.

Intangible assets with a finite life are amortized over the estimated useful life of the asset and are evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization.  Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of an intangible asset subject to amortization is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.  An impairment loss is recognized by reducing the carrying amount of the intangible asset to its current fair value.

Customer relationship assets arose principally as a result of the 1997 acquisition of Linvatec Corporation.  These assets represent the acquisition date fair value of existing customer relationships based on the after-tax income expected to be derived during their estimated remaining useful life.  The useful lives of these customer relationships were not, and are not, limited by contract or any economic, regulatory or other known factors.  The estimated useful life of the Linvatec customer relationship assets was determined as of the date of acquisition as a result of a study of the observed pattern of historical revenue attrition during the 5 years immediately preceding the acquisition of Linvatec Corporation.  This observed attrition pattern was then applied to the existing customer relationships to derive the future expected useful life of the customer relationships.  This analysis indicated an annual attrition rate of 2.6%.  Assuming an exponential attrition pattern, this equated to an average remaining useful life of approximately 38 years for the Linvatec customer relationship assets.  Customer relationship intangible assets arising as a result of other business acquisitions are being amortized over a weighted average life of 18 years.  The weighted average life for customer relationship assets in aggregate is 33 years.

We evaluate the remaining useful life of our customer relationship intangible assets each reporting period in order to determine whether events and circumstances warrant a revision to the remaining period of amortization.  In order to further evaluate the remaining useful life of our customer relationship intangible assets, we perform an analysis and assessment of actual customer attrition and activity as events and circumstances warrant.  This assessment includes a comparison of customer activity since the acquisition date and review of customer attrition rates.  In the event that our analysis of actual customer attrition rates indicates a level of attrition that is in excess of that which was originally contemplated, we would change the estimated useful life of the related customer relationship asset with the remaining carrying amount amortized prospectively over the revised remaining useful life.

We test our customer relationship assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Factors specific to our customer relationship assets which might lead to an impairment charge include a significant increase in the annual customer attrition rate or otherwise significant loss of customers, significant

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decreases in sales or current-period operating or cash flow losses or a projection or forecast of losses. We do not believe that there have been events or changes in circumstances which would indicate the carrying amount of our customer relationship assets might not be recoverable.

Trademarks and tradenames were recognized principally in connection with the 1997 acquisition of Linvatec Corporation.  We continue to market products, release new product and product extensions and maintain and promote these trademarks and tradenames in the marketplace through legal registration and such methods as advertising, medical education and trade shows.  It is our belief that these trademarks and tradenames will generate cash flow for an indefinite period of time.  Therefore, our trademarks and tradenames intangible assets are not amortized. During 2015, we completed our impairment testing of trademarks and tradenames with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with ASC 350-30-35 utilizing the relief from royalty income approach to determine whether the fair value of the Linvatec trademark and tradenames are less than their carrying amounts. Fair value is determined based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average cost of capital, and assumed royalty rates. Based upon our assessment, we believe the fair value continues to exceed carrying value.

For all other indefinite lived intangible assets, we perform a qualitative impairment test in accordance with ASC 350-30-35. Based upon this assessment, we have determined that it is unlikely that our indefinite lived intangible assets are impaired.

See Note 4 to the Consolidated Financial Statements for further discussion of goodwill and other intangible assets.

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. Major assumptions used in accounting for the plan include the discount rate, expected return on plan assets, rate of increase in employee compensation levels and expected mortality.  Assumptions are determined based on Company data and appropriate market indicators, and are evaluated annually as of the plan’s measurement date.  A change in any of these assumptions would have an effect on net periodic pension costs reported in the consolidated financial statements.

The weighted-average discount rate used to measure pension liabilities at December 31, 2015 and estimated 2016 pension expense is set by reference to the Mercer Above Mean Yield Curve. We changed to this curve as we believe it provides a better representation of yields on bonds if we were to settle the liabilities than the prior use of the Citigroup Pension Liability Index. Prior year pension liabilities and 2015 and 2014 pension expense are set by reference to the Citigroup Pension Liability Index. However, these indices give only an indication of the appropriate discount rate because the cash flows of the bonds comprising the index do not match precisely the projected benefit payment stream of the plan. For this reason, we also consider the individual characteristics of the plan, such as projected cash flow patterns and payment durations, when setting the discount rate.  As further discussed in Note 9 to the Consolidated Financial Statements, for 2016 we are changing the method we use to estimate the interest cost component of the pension expense to the spot rate approach. The rates used in determining 2016 pension expense and December 31, 2015 pension liabilities were 3.77% and 4.54%, respectively. The rate used in determining 2015 pension expense and December 31, 2014 pension liabilities was 3.81%.

We have used an expected rate of return on pension plan assets of 8.0% for purposes of determining the net periodic pension benefit cost.  In determining the expected return on pension plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance.  In addition, we consult with financial and investment management professionals in developing appropriate targeted rates of return.

Pension expense in 2016 is expected to be $0.9 million, a reduction of $0.6 million using the spot rate approach. Pension expense was $1.2 million in 2015.  In addition, we do not expect to make any contributions to the pension plan for the 2016 plan year.

In performing a sensitivity analysis on our pension plan expense, we do not believe a 0.25% increase or decrease in discount rate or investment return would have a material impact on our pension expense.

See Note 9 to the Consolidated Financial Statements for further discussion.

Stock-based Compensation

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All share-based payments to employees, including grants of restricted stock units, performance share units and stock appreciation rights are recognized in the financial statements based at their fair values.  Compensation expense is generally recognized using a straight-line method over the vesting period. Compensation expense for performance share units is recognized using the graded vesting method.

Income Taxes

The recorded future tax benefit arising from deductible temporary differences and tax carryforwards is approximately $43.1 million at December 31, 2015.  Management believes that earnings during the periods when the temporary differences become deductible will be sufficient to realize the related future income tax benefits.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our Federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2013. Tax years subsequent to 2013 are subject to future examination.

Consolidated 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:

	Year Ended December 31,
	2015		2014		2013
Net sales	100.0	%	100.0	%	100.0	%
Cost of sales	46.9		45.4		45.9
Gross margin	53.1		54.6		54.1
Selling and administrative expense	42.1		43.7		43.3
Research and development expense	3.8		3.8		3.4
Income from operations	7.1		7.1		7.4
Interest expense	0.8		0.8		0.7
Income before income taxes	6.3		6.3		6.7
Provision for income taxes	2.0		2.0		1.9
Net income	4.3	%	4.3	%	4.8	%

Net Sales

Net sales decreased 2.8% to $719.2 million in 2015 after a decrease in sales of 3.0% in 2014 to $740.1 million from $762.7 million in 2013. The decrease in 2015 occurred across all product lines. In local currency, excluding the effects of the hedging program, sales increased 0.3% in 2015.  Sales of capital equipment increased 3.8% to $151.9 million in 2015, while sales of single-use products decreased 4.5% to $567.3 million in 2015.  In local currency, excluding the effects of the hedging program, sales of capital equipment increased 7.1% in 2015, while single-use products decreased 1.3% in 2015. The decrease in 2014 sales also occurred across product lines. In local currency, excluding the effects of the hedging program, sales decreased 2.4% in 2014.  Sales of capital equipment decreased 4.8% to $146.3 million in 2014 from $153.7 million in 2013; sales of single-use products decreased 2.5% to $593.8 million in 2014 from $609.0 million in 2013.  In local currency, excluding the effects of the hedging program, sales of capital equipment decreased 4.3% in 2014 while single-use products decreased 1.9% in 2014.

• Orthopedic surgery sales decreased 3.4% in 2015 to $389.0 million after a decrease of 1.8% in 2014 to $402.8 million from $410.2 million in 2013. In 2015, the decrease was mainly due to lower sales in our procedure specific and resection product offerings as well as our powered instrument burs and blades offset by increases in our powered instrument handpieces. In 2014, the decrease was mainly due to lower sales in our procedure specific, fluid and resection product offerings and the discontinuation of the Cascade PRP product line offset by increased sales of large bone and small bone handpieces. In local currency, excluding the effects of the hedging program, sales increased 0.7% in 2015 after a decrease of 1.3% in 2014.

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• General surgery sales decreased 1.8% in 2015 to $274.2 million after a decrease of 2.5% in 2014 to $279.4 million from $286.7 million in 2013. In 2015 and 2014, we experienced decreases across all product offerings. In local currency, excluding the effects of the hedging program, sales decreased 0.1% in 2015 and 2.0% in 2014.

• Surgical visualization sales decreased 3.3% in 2015 to $56.0 million after a decrease of 12.0% to $57.9 million in 2014 from $65.8 million in 2013. The decrease in 2015 resulted from the discontinuation of an OEM video product line during 2015 offset by the increase in video system sales of our new IM8000 2DHD camera system. We believe the decrease in 2014 was driven by customers awaiting the release of our new IM8000 2DHD camera system. In local currency, excluding the effects of the hedging program, sales decreased 0.1% in 2015 and 10.9% in 2014.

Cost of Sales

Cost of sales was $337.5 million in 2015, $336.0 million in 2014 and $350.3 million in 2013.  Gross profit margins were 53.1% in 2015, 54.6% in 2014 and 54.1% in 2013.  The decrease in gross profit margins of 1.5 percentage points in 2015 is a result of the impact of unfavorable foreign currency exchange rates on sales (1.5 percentage points) and higher costs associated with the operational restructuring (0.4 percentage points) offset by favorable production variances (0.3 percentage points) and product mix (0.1 percentage points). The increase of 0.5 percentage points in 2014 is primarily a result of lower costs resulting from the restructuring initiatives we have completed throughout our operations.

Selling and Administrative Expense

Selling and administrative expense was $303.1 million in 2015, $323.5 million in 2014 and $330.1 million in 2013. Selling and administrative expense as a percentage of net sales were 42.1% in 2015, 43.7% in 2014 and 43.3% in 2013.  The decrease of 1.6 percentage points in 2015 compared to 2014 is attributable to $12.5 million in executive management restructuring costs in 2014 as further described in Note 11 to the Consolidated Financial Statements; lower medical device tax; lower benefit costs; legal fees associated with a patent infringement claim that we settled in the first quarter of 2014 as well as costs associated with a legal matter in which we prevailed at trial in the second quarter of 2014; and shareholder activism related charges in 2014. The increase of 0.4 percentage points in 2014 compared to 2013 is attributable to lower sales in 2014 compared to 2013.

Research and Development Expense

Research and development expense was $27.4 million, $27.8 million and $25.8 million in 2015, 2014 and 2013, respectively.  As a percentage of net sales, research and development expense remained flat at 3.8% in 2015 and 2014 and was 3.4% in 2013. The increase of 0.4 percentage points in 2014 was mainly the result of the timing of projects.

Loss on Early Extinguishment of Debt

As discussed in Note 5 to the Consolidated Financial Statements, we entered into an amended and restated senior credit agreement on January 17, 2013. In connection with the refinancing, we recorded a $0.3 million loss on the early extinguishment of debt in 2013 related to the write-off of unamortized deferred financing costs under the then existing senior credit agreement.

Interest Expense

Interest expense was $6.0 million in 2015 compared to $6.1 million in 2014 and $5.6 million in 2013.  Interest expense remained flat in 2015 compared to 2014 as higher weighted average borrowings were offset by lower interest rates. The increase in 2014 compared to 2013 is due to the cost associated with higher weighted average borrowings as compared to the same period a year ago. The weighted average interest rates on our borrowings were 2.23% in 2015 declining from 2.40% in 2014 and 2.39% in 2013.

Provision for Income Taxes

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A provision for income taxes was recorded at an effective rate of 32.4%, 31.0% and 29.0% in 2015, 2014 and 2013, respectively, as compared to the Federal statutory rate of 35.0%. The effective tax rate in 2015 is higher than that recorded in 2014 due to the domestic impact, net of foreign tax credits, associated with the repatriation of foreign earnings to the United States, which increased tax expense by $1.1 million in the fourth quarter. Additionally, the 2015 rate increased compared to 2014 as a result of lower foreign tax benefits resulting from the change in the governmental rate upon which European permanent deductions are calculated and due to benefits recorded in 2014 related to settlements with taxing authorities.  These items are offset by decreases resulting from domestic manufacturing benefits and lower state tax expense as a result of a New York State legislative change recorded in 2014. The effective tax rate in 2014 is higher than that recorded in 2013 due to tax legislation changes. In New York State, corporate tax reform enacted in March 2014 changed the tax rate of a manufacturing company such as CONMED to essentially 0%. While this will be positive for the future, previously recorded New York State deferred tax assets of $2.3 million that would have been used to offset taxes otherwise payable, no longer have value due to a zero percent tax rate. Accordingly, we wrote off these New York State tax assets as a non-cash charge to income tax expense. A reconciliation of the United States statutory income tax rate to our effective tax rate is included in Note 6 to the Consolidated Financial Statements.

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. 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. 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 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 amended and restated senior credit agreement, described below. We have historically met these liquidity requirements with funds generated from operations and borrowings under our revolving credit facility. In addition, we have historically used term borrowings, including borrowings under the amended and restated senior credit agreement and borrowings under separate loan facilities, in the case of real property purchases, to finance our acquisitions. 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 believe that our cash on hand, cash from operating activities and proceeds from our amended and restated senior credit agreement provide us with sufficient financial resources to meet our anticipated capital requirements and obligations as they come due.

We had total cash on hand at December 31, 2015 of $72.5 million, of which approximately $65.9 million was held by our foreign subsidiaries outside the United States with unremitted earnings. We have not repatriated, nor do we anticipate the need to repatriate, permanently reinvested earnings to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business or associated with our domestic debt service requirements.  During the fourth quarter of 2015, we redeployed cash from certain non-U.S. subsidiaries for U.S. debt reduction of $33.0 million which includes $9.3 million of 2015 foreign earnings not previously permanently reinvested and a $23.7 million return of accumulated foreign basis. We recorded a tax charge of $1.1 million and increased foreign borrowings under our revolving credit facility by $33.0 million related to this cash redeployment.  It is our intention to permanently reinvest the remaining amount of unremitted earnings. If we were to repatriate these funds, we would be required to accrue and pay taxes on such amounts.

Operating Cash Flows

Our net working capital position was $287.8 million at December 31, 2015.  Net cash provided by operating activities was $48.1 million in 2015, $65.2 million in 2014 and $80.9 million in 2013 generated on net income of $30.5 million in 2015, $32.2 million in 2014 and $35.9 million in 2013.  

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The decrease in cash provided by operating activities from 2014 to 2015 is mainly related to inventory being higher as of December 31, 2015 compared to the year ended December 31, 2014 as we built additional inventory due to consolidating the Centennial, Colorado manufacturing facility into other manufacturing facilities, had higher levels of inventory for evaluation to support our salesforce and lower than anticipated video sales in the fourth quarter. In addition, we had higher payments related to our operational and administrative restructuring during 2015 compared to 2014.

Investing Cash Flows

Net cash used in investing activities during 2015, consisted primarily of capital expenditures, cash paid for business acquisitions, an asset acquisition and the purchase of a distributor.  Capital expenditures were $15.0 million, $15.4 million and $18.4 million in 2015, 2014 and 2013, respectively.  Capital expenditures are expected to be in the $15.0 million to $20.0 million range for 2016. Payments related to acquiring businesses, assets and a distributor resulted in a $9.4 million use of cash in 2015. During 2014, we made payments of $5.0 million for the purchase of a business.

Financing Cash Flows

Financing activities in 2015 resulted in a use of cash of $9.8 million compared to $26.4 million in 2014 and $31.3 million in 2013. Dividend payments totaled $22.1 million, $22.0 million and $16.7 million in 2015, 2014 and 2013, respectively. The increase in dividend payments from 2013 to 2014 is due to the increased per share quarterly dividend from $0.15 per share in 2013 to $0.20 per share in 2014. We also had $16.7 million in payments in each of 2015 and 2014 and $34.0 million in 2013 associated with the distribution and development agreement with Musculoskeletal Transplant Foundation. Contingent consideration payments associated with a prior year business acquisition totaled $3.9 million in 2015. We repurchased common stock totaling $16.9 million and $50.6 million in 2014 and 2013, respectively. These uses of cash were offset by borrowings on our senior credit agreement of $30.7 million, $27.0 million and $55.0 million in 2015, 2014 and 2013, respectively; and $0.8 million, $2.3 million and $17.3 million in proceeds from the issuance of common stock under our equity compensation plans and employee stock purchase plan in 2015, 2014 and 2013, respectively. 2013 resulted in higher proceeds from the issuance of common stock as more stock options were available for exercise during the period.

On April 28, 2015, we entered into an amended and restated $450.0 million senior credit agreement (the "fourth amended and restated senior credit agreement"). The fourth amended and restated senior credit agreement consists of a $450.0 million revolving credit facility expiring on April 28, 2020. The fourth amended and restated senior credit agreement was used to repay borrowings outstanding on the revolving credit facility under the then existing senior credit agreement. Interest rates are at LIBOR plus 1.50% (1.93% at December 31, 2015) or an alternative base rate. For those borrowings where we elect to use the alternative base rate, the base rate will be the greater of the Prime Rate, the Federal Funds Rate in effect on such date plus 0.50%, or the one month Eurocurrency rate plus 1%, plus an additional margin of 0.50%.

There were $265.6 million in borrowings outstanding under the revolving credit facility as of December 31, 2015.  Our available borrowings on the revolving credit facility at December 31, 2015 were $179.3 million with approximately $5.1 million of the facility set aside for outstanding letters of credit.

The fourth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets.  The 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, 2015. We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales.

As described in Note 15 to the Consolidated Financial Statements, on January 4, 2016, we entered into a fifth amended and restated senior credit agreement (the “fifth amended and restated senior credit agreement”) consisting of: (a) a $175.0 million term loan facility and (b) a $525.0 million revolving credit facility both expiring on January 4, 2021. The term loan is payable in quarterly installments increasing over the term of the facility. Proceeds from the term loan facility and borrowings under the revolving credit facility were used to repay the then existing senior credit agreement and to finance the acquisition of SurgiQuest. Initial interest rates are at LIBOR plus a base rate or a Eurocurrency rate plus an applicable margin (2.43% at January 4, 2016). Initially, the applicable margin for base rate loans is 1.00% and for Eurocurrency rate loans is 2.00%.

The fifth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets.  The 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.  

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We have a mortgage note outstanding in connection with the Largo, Florida property and facilities bearing interest at 8.25% per annum with semiannual payments of principal and interest through June 2019.  The principal balance outstanding on the mortgage note aggregated $5.2 million at December 31, 2015.  The mortgage note is collateralized by the Largo, Florida property and facilities.

Our Board of Directors has authorized a $200.0 million share repurchase program. Through December 31, 2015, 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.  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 did not purchase any shares of common stock under the share repurchase program during 2015.  We have financed the repurchases and may finance additional repurchases through operating cash flow and from available borrowings under our revolving credit facility.

Management believes that cash flow from operations, including cash and cash equivalents on hand and available borrowing capacity under our amended and restated senior credit agreement, will be adequate to meet our anticipated operating working capital requirements, debt service, funding of capital expenditures and common stock repurchases in the foreseeable future. See “Item 1. Business – Forward Looking Statements.”

Restructuring

During 2015, 2014 and 2013, we continued our operational restructuring plan. In 2015, we completed the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. During 2014, we completed the consolidation of our Finland operations into our Largo, Florida and Utica, New York manufacturing facilities and the consolidation of our Westborough, Massachusetts manufacturing operations into our Largo, Florida and Chihuahua, Mexico facilities. We incurred $8.0 million, $5.6 million, and $6.5 million in costs associated with the operational restructuring during the years ending December 31, 2015, 2014 and 2013, respectively. These costs were charged to cost of goods sold and include severance and other charges associated with the consolidation of our Finland, Westborough, Massachusetts and Centennial, Colorado operations.

As part of our ongoing restructuring, the Company discontinued a patient monitoring product offering and incurred $2.1 million in costs which were charged to cost of goods sold during 2013.

During 2015, 2014 and 2013, we restructured certain administrative functions throughout the Company. We incurred $13.7 million, $3.4 million, and $8.8 million, respectively, in related costs consisting principally of severance charges and, for the 2013 year, also included the write-off of certain patents. These costs were charged to selling and administrative expense.

During 2014, we incurred $12.5 million in costs associated with restructuring of executive management. These costs include severance payments, accelerated vesting of stock-based compensation awards, accrual of the present value of deferred compensation and other benefits to our then Chief Executive Officer as defined in his termination agreement; accelerated vesting of stock-based compensation awards to certain members of executive management, consulting fees and other benefits earned as further described in our Form 8-K filing on July 23, 2014.

We have recorded an accrual in current and other long-term liabilities of $7.2 million at December 31, 2015 mainly related to severance associated with these restructurings.  

We plan to continue to restructure both operations and administrative functions as necessary throughout the organization, however this plan is currently being evaluated and therefore we cannot estimate the costs.  When this plan is finalized it will result in additional charges, including employee termination costs and other exit costs that will be charged to cost of sales and selling and administrative expense. 

We expect $3.5 million to $4.5 million in net annual savings in cost of sales from the Centennial consolidation principally as a result of lower employee costs which is expected to result in higher earnings and cash flows in future periods. These savings are expected to be fully realized in 2016. We do not anticipate any reductions in revenues associated with the Centennial consolidation.

Refer to Note 11 to the Consolidated Financial Statements for further discussions regarding restructuring.

Contractual Obligations

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The following table summarizes our contractual obligations for the next five years and thereafter (amounts in thousands) as of December 31, 2015.  Purchase obligations represent purchase orders for goods and services placed in the ordinary course of business.  There were no capital lease obligations as of December 31, 2015.

	Payments Due by Period
	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
Long-term debt	$	270,810	$	1,339	$	3,026	$	266,445	$	—
Contingent consideration	22,905		19,167		2,000		1,174		564
Purchase obligations	33,529		33,475		31		23		—
Operating lease obligations	23,670		5,344		9,336		5,726		3,264
Total contractual obligations	$	350,914	$	59,325	$	14,393	$	273,368	$	3,828

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. “Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk” and Note 5 to the Consolidated Financial Statements).  The above table also does not include unrecognized tax benefits of approximately $0.6 million, the timing and certainty of recognition for which is not known (See Note 6 to the Consolidated Financial Statements).

Stock-based Compensation

We have reserved shares of common stock for issuance to employees and directors under three shareholder-approved share-based compensation plans (the "Plans").  The Plans provide for grants of 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.  The exercise price on all outstanding SARs is equal to the quoted fair market value of the stock at the date of grant.  RSUs and PSUs are valued at the market value of the underlying stock on the date of grant.  SARs, RSUs and PSUs are non-transferable other than on death and generally become exercisable over a five year period from date of grant.  SARs expire ten years from date of grant.  SARs are only settled in shares of the Company’s stock (See Note 7 to the Consolidated Financial Statements).

New Accounting Pronouncements

See Note 14 to the Consolidated Financial Statements for a discussion of new accounting pronouncements.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices such as commodity prices, foreign currency exchange rates and interest rates.  In the normal course of business, we are exposed to various market risks, including changes in foreign currency exchange rates and interest rates.  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 50% of our total 2015 consolidated net sales were to customers outside the United States.  We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Canada, China and Korea.  In those countries in which we have a direct presence, our sales are denominated in the local currency amounting to approximately 34% of our total net sales in 2015.  The remaining 16% of sales to customers outside the United States was on an export basis and transacted in United States dollars.

Because a significant portion of our operations consist of sales activities in foreign jurisdictions, 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.  During 2015, foreign currency exchange rates, including the effects of the hedging program, caused sales to decrease by approximately $23.0 million and income before income taxes to decrease by approximately $8.2 million, compared to sales and income before income taxes in 2014.

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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.  To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss.  These changes in fair value will be recognized into earnings as a component of sales or cost of sales when the forecasted transaction occurs.  The notional contract amounts for forward contracts outstanding at December 31, 2015 which have been accounted for as cash flow hedges totaled $105.5 million.  Net realized gains recognized for forward contracts accounted for as cash flow hedges approximated $10.4 million, $0.6 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.  Net unrealized gains on forward contracts outstanding which have been accounted for as cash flow hedges and which have been included in other comprehensive income totaled $1.2 million at December 31, 2015.  It is expected these unrealized gains will be recognized in the consolidated statement of comprehensive income in 2016.

We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables denominated in foreign currencies.  These forward contracts settle each month at month-end, at which time we enter into new forward contracts.  We have not designated these forward contracts as hedges and have not applied hedge accounting to them.  The notional contract amounts for forward contracts outstanding at December 31, 2015 which have not been designated as hedges totaled $22.3 million.  Net realized gains (losses) recognized in connection with those forward contracts not accounted for as hedges approximated $0.4 million, -$0.2 million and -$0.3 million for the years ended December 31, 2015, 2014 and 2013, respectively, offsetting losses on our intercompany receivables of -$0.8 million, -$0.5 million and -$0.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.  These gains and losses have been recorded in selling and administrative expense in the consolidated statements of comprehensive income.

We record these forward foreign exchange contracts at fair value; the net fair value for forward foreign exchange contracts outstanding at December 31, 2015 was $1.9 million and is included in prepaids and other current assets in the Consolidated Balance Sheets.

Refer to Note 13 in the Consolidated Financial Statements for further discussion.

Interest rate risk

At December 31, 2015, we had approximately $265.6 million of variable rate long-term debt outstanding under our senior credit agreement.  Assuming no repayments, if market interest rates for similar borrowings averaged 1.0% more in 2016 than they did in 2015, interest expense would increase, and income before income taxes would decrease by $2.7 million.  Comparatively, if market interest rates for similar borrowings average 1.0% less in 2016 than they did in 2015, our interest expense would decrease, and income before income taxes would increase by $2.7 million.

Item 8. Financial Statements and Supplementary Data

Our 2015 Financial Statements are included elsewhere herein.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosures

There were no changes in or disagreement with accountants on accounting and financial disclosure.

Item 9A. Controls and Procedures

As of the end of the period covered by this report, an evaluation was carried out by CONMED Corporation’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934).  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures were effective as of the end of the period covered by this report.  In addition, no change in our internal control over financial reporting (as defined in Rule 13a-15 under the Securities Exchange Act of 1934) occurred during the fourth quarter of the year ended December 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm thereon are set forth in Part IV, Item 15 of the Annual Report on Form 10-K.

Item 9B. Other Information

Not applicable.

29

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated herein by reference to the sections captioned “Proposal One: Election of Directors”, “Directors, Executive Officers, Other Company Officers and Nominees for the Board of Directors”, “Section 16(a) Beneficial Ownership Reporting Compliance”, “Ethics Disclosure” and "Meetings of Board of Directors and Committees, Leadership Structure and Risk Oversight” in CONMED Corporation’s definitive Proxy Statement or other informational filing to be filed with the Securities and Exchange Commission on or about April 15, 2016.

Item 11. Executive Compensation

The information required by this item is incorporated herein by reference to the sections captioned “Compensation Discussion and Analysis”, “Compensation Committee Report on Executive Compensation”, “Summary Compensation Table”, “Grants of Plan-Based Awards”, “Outstanding Equity Awards at Fiscal Year-End”, “Option Exercises and Stock Vested”, “Pension Benefits”, “Non-Qualified Deferred Compensation”, “Potential Payments on Termination or Change-in-Control”, “Director Compensation” and “Board of Directors Interlocks and Insider Participation; Certain Relationships and Related Transactions” in CONMED Corporation’s definitive Proxy Statement or other informational filing to be filed with the Securities and Exchange Commission on or about April 15, 2016.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is incorporated herein by reference to the section captioned “Security Ownership of Certain Beneficial Owners and Management” in CONMED Corporation’s definitive Proxy Statement or other informational filing to be filed with the Securities and Exchange Commission on or about April 15, 2016.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporatedherein by reference to the section captioned “Directors, Executive Officers and Nominees for the Board of Directors” and “Board of Directors Interlocks and Insider Participation; Certain Relationships and Related Transactions” in CONMED Corporation’s definitive Proxy Statement or other informational filing to be filed with the Securities and Exchange Commission on or about April 15, 2016.

Item 14. Principal Accounting Fees and Services

The information required by this item is incorporatedherein by reference to the section captioned “Principal Accounting Fees and Services” in CONMED Corporation’s definitive Proxy Statement or other informational filing to be filed with the Securities and Exchange Commission on or about April 15, 2016.

30

PART IV

Item 15. Exhibits, Financial Statement Schedules

Index to Financial Statements
(a)(1)	List of Financial Statements	Page in Form 10-K
	Management’s Report on Internal Control Over Financial Reporting	37
	Report of Independent Registered Public Accounting Firm	38
	Consolidated Balance Sheets at December 31, 2015 and 2014	39
	Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013	40
	Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2015, 2014 and 2013	41
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	43
	Notes to Consolidated Financial Statements	45
(2)	List of Financial Statement Schedules
	Valuation and Qualifying Accounts (Schedule II)	73
	All other schedules have been omitted because they are not applicable, or the required information is shown in the financial statements or notes thereto.
(3)	List of Exhibits
	The exhibits listed on the accompanying Exhibit Index on page 34 below are filed as part of this Form 10-K.

31

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the date indicated below.

CONMED CORPORATION

By: /s/ Curt R. Hartman

Curt R. Hartman

(President and Chief

Executive Officer)

Date:

February 22, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

32

Signature	Title	Date
/s/ MARK E. TRYNISKI	Chairman of the Board
Mark E. Tryniski	of Directors	February 22, 2016
/s/ CURT R. HARTMAN	President, Chief Executive
Curt R. Hartman	Officer and Director	February 22, 2016
/s/ LUKE A. POMILIO	Executive Vice President-Finance
Luke A. Pomilio	and Chief Financial Officer (Principal Financial Officer)	February 22, 2016
/s/ TERENCE M. BERGE	Vice President-
Terence M. Berge	Corporate Controller	February 22, 2016
/s/ BRIAN CONCANNON
Brian Concannon	Director	February 22, 2016
/s/ DAVID BRONSON
David Bronson	Director	February 22, 2016
/s/ CHARLES M. FARKAS
Charles M. Farkas	Director	February 22, 2016
/s/ JO ANN GOLDEN
Jo Ann Golden	Director	February 22, 2016
/s/ DIRK M. KUYPER
Dirk M. Kuyper	Director	February 22, 2016
/s/ JEROME J. LANDE
Jerome J. Lande	Director	February 22, 2016
/s/ JOHN WORKMAN
John Workman	Director	February 22, 2016

33

Exhibit Index

Exhibit No.		Description
3.1	-	Amended and Restated By-Laws, as adopted by the Board of Directors on April 29, 2011 (Incorporated by reference to the Company’s Current Report on Form 10-Q filed with the Securities and Exchange Commission on May 2, 2011).
3.2	-	1999 Amendment to Certificate of Incorporation and Restated Certificate of Incorporation of CONMED Corporation (Incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 1999).
4.1	-	See Exhibit 3.1.
4.2	-	See Exhibit 3.2.
4.3	-	Guarantee and Collateral Agreement, dated August 28, 2002, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2002).
4.4	-	First Amendment to Guarantee and Collateral Agreement, dated June 30, 2003, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003).
4.5	-	Second Amendment to Guarantee and Collateral Agreement, dated April 13, 2006, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 19, 2006).
4.6	-	Third Amendment to Guarantee and Collateral Agreement, dated as of January 17, 2013, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank (Incorporated by reference to Exhibit 4.6 of the Company's Annual Report on Form 10-K for the year ended December 31, 2012).
4.7		Fourth Amendment to Guarantee and Collateral Agreement, dated as of January 4, 2016, made by CONMED Corporation and certain of its subsidiaries in favor of JP Morgan Chase Bank (Incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on January 4, 2016).
10.1+	-	Employment Agreement between the Company and Curt R. Hartman, dated November 9, 2014 (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 10, 2014).
10.2+	-	Amended and Restated Employment Agreement, dated October 30, 2009, by and between CONMED Corporation and Joseph J. Corasanti, Esq. (Incorporated by reference to the Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009).
10.3	-	Amended and Restated 1999 Long Term Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on November 3, 2009).

34

10.4	-	2002 Employee Stock Purchase Plan (Incorporated by reference to the Company’s Definitive Proxy Statement for the 2002 Annual Meeting filed with the Securities and Exchange Commission on April 17, 2002).
10.5	-	Amendment to CONMED Corporation 2002 Employee Stock Purchase Plan (Incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005).
10.6	-	2006 Stock Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on August 8, 2006).
10.7	-	Amended and Restated 2007 Non-Employee Director Equity Compensation Plan of CONMED Corporation (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on August 3, 2010).
10.8	-	Amended and Restated Long Term Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-8 on July 27, 2012).
10.9	-	Amended and Restated 2015 Long-Term Incentive Plan (Incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-8 on October 23, 2015).
10.10	-	Amended and Restated Credit Agreement, dated January 4 2016, among CONMED Corporation, JP Morgan Chase Bank and the several banks and other financial institutions or entities from time to time parties thereto (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 4, 2016).
10.11	-	Change in Control Severance Agreement for Joseph J. Corasanti (Incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
10.12	-	Change in Control Severance Agreement for Robert D. Shallish, Jr. (Incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
10.13	-	Change in Control Severance Agreement for Daniel S. Jonas (Incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
10.14	-	Change in Control Severance Agreement for Luke A. Pomilio (Incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008).
10.15	-	Sports Medicine Joint Development and Distribution Agreement by and between Musculoskeletal Transplant Foundation, Inc. and CONMED Corporation dated as of January 3, 2012 (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated January 3, 2012).
10.16+	-	Employment Agreement between the Company and Patrick Beyer, dated December 9, 2014 (Incorporated by reference to Exhibit 10.21 of the Company's Annual Report on Form 10-K for the year ended December 31, 2014)
10.17+	-	Separation Agreement, by and between CONMED Corporation and Joseph J. Corasanti, dated July 22, 2014. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 23, 2014).
10.18+	-	Retirement Agreement, by and between CONMED Corporation and Robert D. Shallish, Jr., dated December 9, 2014. (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 9, 2014).

35

10.19+	-	Separation Agreement, by and between CONMED Corporation and Joseph Darling, dated December 9, 2014. (Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 9, 2014).
10.20	-	Agreement and Plan of Merger, dated November 15, 2015, by and among CONMED Corporation, Nemo Acquisition Sub, Inc., SurgiQuest, Inc. and Shareholder Representative Services LLC (Incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on November 16, 2015).
14	-	Code of Ethics. The CONMED code of ethics may be accessed  via the Company’s website at http://www.CONMED.com/conmed_investor_template.php
21*	-	Subsidiaries of the Registrant.
23*	-	Consent of Independent Registered Public Accounting Firm.
31.1*	-	Certification of Curt R. Hartman pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	-	Certification of Luke A. Pomilio. pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	-	Certifications of Curt R. Hartman and Luke A. Pomilio pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*		The following materials from CONMED Corporation's Annual Report on Form 10-K for the year ended December 31, 2015 formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Statements of Comprehensive Income for the three years ended December 31, 2015, (ii) Consolidated Balance Sheets at December 31, 2015 and 2014, (iii) Consolidated Statements of Shareholders' Equity for the three years ended December 31, 2015 (iv) Consolidated Statements of Cash Flows for the three years ended December 31, 2015, (v) Notes to the Consolidated Financial Statements for the year ended December 31, 2015 and (vi) Schedule II - Valuation and Qualifying Accounts. In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
	*	Filed herewith
	+	Management contract or compensatory plan or arrangement.

36

MANAGEMENT’S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

The management of CONMED Corporation is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.  Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Management assessed the effectiveness of CONMED’s internal control over financial reporting as of December 31, 2015.  In making its assessment, management utilized the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control-Integrated Framework”, released in 2013.  Management has concluded that based on its assessment, CONMED’s internal control over financial reporting was effective as of December 31, 2015.  The effectiveness of the Company’s internal control over financial reporting as of December 31, 2015 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

/s/  Curt R. Hartman

Curt R. Hartman

President and

Chief Executive Officer

/s/  Luke A. Pomilio

Luke A. Pomilio

Executive Vice President-Finance and

Chief Financial Officer

37

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of CONMED Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, of shareholders’ equity and of cash flows present fairly, in all material respects, the financial position of CONMED Corporation and its subsidiariesatDecember 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2015in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidatedfinancial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013)issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 /s/ PricewaterhouseCoopers LLP

Rochester, New York

February 22, 2016

38

CONMED CORPORATION

CONSOLIDATED BALANCE SHEETS

December 31, 2015 and 2014

(In thousands except share and per share amounts)

	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	72,504		$	66,332
Accounts receivable, less allowance for doubtful
accounts of $1,336 in 2015 and $1,239 in 2014	133,863			129,287
Inventories	166,894			148,149
Income taxes receivable	1,879			583
Deferred income taxes	14,150			14,348
Assets held for sale	3,095			—
Prepaid expenses and other current assets	15,102			22,451
Total current assets	407,487			381,150
Property, plant and equipment, net	125,452			133,429
Deferred income taxes	1,332			1,398
Goodwill	260,651			256,232
Other intangible assets, net	308,171			316,440
Other assets	9,851			9,545
Total assets	$	1,112,944		$	1,098,194
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	1,339		$	1,234
Accounts payable	34,720			23,752
Accrued compensation and benefits	31,823			36,446
Income taxes payable	2,903			2,668
Other current liabilities	48,933			51,856
Total current liabilities	119,718			115,956
Long-term debt	269,471			240,201
Deferred income taxes	114,623			112,223
Other long-term liabilities	24,059			48,516
Total liabilities	527,871			516,896
Commitments and contingencies (Note 10)
Shareholders' equity:
Preferred stock, par value $.01 per share; authorized
500,000 shares, none issued or outstanding	—			—
Common stock, par value $.01 per share; 100,000,000
authorized; 31,299,194 issued in 2015 and 2014, respectively	313			313
Paid-in capital	324,915			319,752
Retained earnings	414,506			406,145
Accumulated other comprehensive loss	(53,894		)	(39,822		)
Less:  Treasury stock, at cost;
3,590,409 and 3,744,473 shares in
2015 and 2014, respectively	(100,767		)	(105,090		)
Total shareholders' equity	585,073			581,298
Total liabilities and shareholders' equity	$	1,112,944		$	1,098,194

The accompanying notes are an integral part of the consolidated financial statements.

39

CONMED CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31, 2015, 2014 and 2013

(In thousands except per share amounts)

	2015			2014			2013
Net sales	$	719,168		$	740,055		$	762,704
Cost of sales	337,466			335,998			350,287
Gross profit	381,702			404,057			412,417
Selling and administrative expense	303,091			323,492			330,078
Research and development expense	27,436			27,779			25,831
	330,527			351,271			355,909
Income from operations	51,175			52,786			56,508
Loss on early extinguishment of debt	—			—			263
Interest expense	6,031			6,111			5,613
Income before income taxes	45,144			46,675			50,632
Provision for income taxes	14,646			14,483			14,693
Net income	$	30,498		$	32,192		$	35,939
Per share data:
Basic	$	1.10		$	1.17		$	1.30
Diluted	$	1.09		$	1.16		$	1.28
Dividends per share of common stock	$	0.80		$	0.80		$	0.65
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	$	(16,775	)	$	(15,069	)	$	(1,193	)
Pension liability	7,578			(18,781		)	18,175
Cash flow hedging gain (loss)	(3,291		)	7,393			(404		)
Other comprehensive income, before tax	18,010			5,735			52,517
Provision (benefit) for income taxes related to items of other comprehensive income	1,584			(4,207		)	6,569
Comprehensive income	$	16,426		$	9,942		$	45,948

The accompanying notes are an integral part of the consolidated financial statements.

40

CONMED CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Years Ended December 31, 2015, 2014 and 2013

(In thousands)

	Common Stock			Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Shareholders’ Equity
	Shares	Amount
Balance at December 31, 2012	31,299	$	313	$	324,322		$	377,907		$	(27,581	)	$	(67,963	)	$	606,998
Common stock issued
under employee plans				(4,576		)							19,772			15,196
Repurchase of treasury stock													(50,556		)	(50,556		)
Tax benefit arising from
common stock issued
under employee plans				1,097												1,097
Stock-based compensation				5,593												5,593
Dividends on common stock							(17,957		)							(17,957		)
Comprehensive income (loss):
Foreign currency translation adjustments										(1,193		)
Pension liability (net of income tax expense of $6,718)										11,457
Cash flow hedging loss (net of income tax benefit of $149)										(255		)
Net income							35,939
Total comprehensive
income																45,948
Balance at December 31, 2013	31,299	$	313	$	326,436		$	395,889		$	(17,572	)	$	(98,747	)	$	606,319
Common stock issued
under employee plans				(16,658		)							10,519			(6,139		)
Repurchase of treasury
stock													(16,862		)	(16,862		)
Tax benefit arising from
common stock issued
under employee plans				644												644
Stock-based compensation				9,330												9,330
Dividends on common stock							(21,936		)							(21,936		)

41

	Common Stock			Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Shareholders’ Equity
	Shares	Amount
Comprehensive income (loss):
Foreign currency   translation adjustments										(15,069		)
Pension liability (net of income tax benefit $6,939)										(11,842		)
Cash flow hedging gain (net of income tax expense of $2,732)										4,661
Net income							32,192
Total comprehensive
income																9,942
Balance at December 31, 2014	31,299	$	313	$	319,752		$	406,145		$	(39,822	)	$	(105,090	)	$	581,298
Common stock issued
under employee plans				(6,297		)							4,323			(1,974		)
Tax benefit arising from
common stock issued
under employee plans				3,961												3,961
Stock-based compensation				7,499												7,499
Dividends on common stock							(22,137		)							(22,137		)
Comprehensive income (loss):
Foreign currency translation adjustments										(16,775		)
Pension liability (net of income tax expense of $2,800)										4,778
Cash flow hedging loss (net of income tax benefit of $1,216)										(2,075		)
Net income							30,498
Total comprehensive
income																16,426
Balance at December 31, 2015	31,299	$	313	$	324,915		$	414,506		$	(53,894	)	$	(100,767	)	$	585,073

The accompanying notes are an integral part of the consolidated financial statements.

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CONMED CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2015, 2014 and 2013

(In thousands)

	2015			2014			2013
Cash flows from operating activities:
Net income	$	30,498		$	32,192		$	35,939
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation	18,704			19,792			18,653
Amortization	25,175			25,942			29,214
Stock-based compensation	7,499			9,330			5,593
Deferred income taxes	2,251			(284		)	7,218
Income tax benefit of stock
option exercises	3,961			644			1,097
Excess tax benefit from stock
option exercises	(4,081		)	(922		)	(1,518		)
Loss on early extinguishment of debt	—			—			263
Increase (decrease) in cash flows from changes in assets and
liabilities, net of effects from acquisitions:
Accounts receivable	(9,643		)	5,255			(798		)
Inventories	(34,536		)	(20,940		)	(1,817		)
Accounts payable	11,508			(3,449		)	4,223
Income taxes	(1,357		)	5,291			(1,098		)
Accrued compensation and benefits	(3,964		)	3,572			(71		)
Other assets	3,950			(546		)	(5,222		)
Other liabilities	(1,897		)	(10,701		)	(10,727		)
	17,570			32,984			45,010
Net cash provided by operating activities	48,068			65,176			80,949
Cash flows from investing activities:
Payments related to business acquisitions and asset acquisitions,
net of cash acquired	(9,353		)	(5,265		)	—
Purchases of property, plant and equipment	(15,009		)	(15,411		)	(18,445		)
Net cash used in investing activities	(24,362		)	(20,676		)	(18,445		)
Cash flows from financing activities:
Net proceeds from common stock issued
under employee plans	833			2,316			17,264
Repurchase of common stock	—			(16,862		)	(50,556		)
Excess tax benefit from stock option exercises	4,081			922			1,518
Proceeds of senior credit agreement	30,680			27,000			55,000
Payments related to distribution agreement	(16,667		)	(16,667		)	(34,000		)
Payments on mortgage notes	(1,234		)	(1,140		)	(1,050		)
Payments on senior subordinated notes	—			—			(227		)
Payments related to contingent consideration	(3,876		)	—			—
Payments related to debt issuance costs	(1,485		)	—			(1,725		)
Dividends paid on common stock	(22,105		)	(21,959		)	(16,696		)
Other, net	—			—			(824		)
Net cash provided by (used in) financing activities	(9,773		)	(26,390		)	(31,296		)
Effect of exchange rate changes
on cash and cash equivalents	(7,761		)	(6,221		)	(485		)

43

	2015		2014		2013
Net increase (decrease) in cash
and cash equivalents	6,172		11,889		30,723
Cash and cash equivalents at beginning of year	66,332		54,443		23,720
Cash and cash equivalents at end of year	$	72,504	$	66,332	$	54,443
Non-cash investing activities:
Contractual obligations for acquisition of a business	$	440	$	10,137	$	—
Non-cash financing activities:
Dividends payable	$	5,542	$	5,510	$	5,545
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest	$	5,434	$	5,532	$	5,143
Income taxes	10,261		10,206		6,837

The accompanying notes are an integral part of the consolidated financial statements.

44

CONMED CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands except per share amounts)

Note 1 — Operations and Significant Accounting Policies

Organization and operations

CONMED Corporation (“CONMED”, the “Company”, “we” or “us”) is a medical technology company that provides surgical devices and equipment for minimally invasive procedures.  The Company’s products are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology.

Principles of consolidation

The consolidated financial statements include the accounts of CONMED Corporation and its controlled subsidiaries.  All significant intercompany accounts and transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments which affect the reported amounts of assets, liabilities, related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, purchased in-process research and development, pension benefits, goodwill and intangible assets, contingent consideration, contingencies and other accruals.  We base our estimates on historical experience and on various other assumptions which are believed to be reasonable under the circumstances.  Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates.  Estimates and assumptions are reviewed periodically, and the effect of revisions is reflected in the consolidated financial statements in the period they are determined to be necessary.

Cash and cash equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Inventories

Inventories are valued at the lower of cost or market.  Cost is determined on the FIFO (first-in, first-out) method of accounting.

We write-off excess and obsolete inventory resulting from the inability to sell our products at prices in excess of current carrying costs.  We make estimates regarding the future recoverability of the costs of our products and record a provision for excess and obsolete inventories based on historical experience and expected future trends. 

Property, plant and equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the following estimated useful lives:

Building and improvements	12 to 40 years
Leasehold improvements	Shorter of life of asset or life of lease
Machinery and equipment	2 to 15 years

Goodwill and other intangible assets

We have a history of growth through acquisitions.  Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition.  Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.   Customer relationships, trademarks, tradenames, patents and other intangible assets primarily

45

represent allocations of purchase price to identifiable intangible assets of acquired businesses. Promotional, marketing and distribution rights represent intangible assets created under our Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”).  We have accumulated goodwill of $260.7 million and other intangible assets of $308.2 million as of December 31, 2015.

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to at least annual impairment testing. It is our policy to perform our annual impairment testing in the fourth quarter. 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. During 2015, we completed our goodwill impairment testing with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with Financial Accounting Standards Board Accounting Standard Codification (“ASC”) 350-20-35 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, we believe the fair value continues to exceed carrying value.

Intangible assets with a finite life are amortized over the estimated useful life of the asset and are evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization.  Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of an intangible asset subject to amortization is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.  An impairment loss is recognized by reducing the carrying amount of the intangible asset to its current fair value.

Customer relationship assets arose principally as a result of the 1997 acquisition of Linvatec Corporation.  These assets represent the acquisition date fair value of existing customer relationships based on the after-tax income expected to be derived during their estimated remaining useful life.  The useful lives of these customer relationships were not, and are not, limited by contract or any economic, regulatory or other known factors.  The estimated useful life of the Linvatec customer relationship assets was determined as of the date of acquisition as a result of a study of the observed pattern of historical revenue attrition during the 5 years immediately preceding the acquisition of Linvatec Corporation.  This observed attrition pattern was then applied to the existing customer relationships to derive the future expected useful life of the customer relationships.  This analysis indicated an annual attrition rate of 2.6%.  Assuming an exponential attrition pattern, this equated to an average remaining useful life of approximately 38 years for the Linvatec customer relationship assets.  Customer relationship intangible assets arising as a result of other business acquisitions are being amortized over a weighted average life of 18 years.  The weighted average life for customer relationship assets in aggregate is 33 years.

We evaluate the remaining useful life of our customer relationship intangible assets each reporting period in order to determine whether events and circumstances warrant a revision to the remaining period of amortization.  In order to further evaluate the remaining useful life of our customer relationship intangible assets, we perform an analysis and assessment of actual customer attrition and activity as events and circumstances warrant.  This assessment includes a comparison of customer activity since the acquisition date and review of customer attrition rates.  In the event that our analysis of actual customer attrition rates indicates a level of attrition that is in excess of that which was originally contemplated, we would change the estimated useful life of the related customer relationship asset with the remaining carrying amount amortized prospectively over the revised remaining useful life.

We test our customer relationship assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Factors specific to our customer relationship assets which might lead to an impairment charge include a significant increase in the annual customer attrition rate or otherwise significant loss of customers, significant decreases in sales or current-period operating or cash flow losses or a projection or forecast of losses. We do not believe that there have been events or changes in circumstances which would indicate the carrying amount of our customer relationship assets might not be recoverable.

Trademarks and tradenames were recognized principally in connection with the 1997 acquisition of Linvatec Corporation.  We continue to market products, release new product and product extensions and maintain and promote these trademarks and tradenames in the marketplace through legal registration and such methods as advertising, medical education and trade shows.  It is our belief that these trademarks and tradenames will generate cash flow for an indefinite period of time.  Therefore, our trademarks and tradenames intangible assets are not amortized. During 2015, we completed our impairment testing of trademarks and tradenames with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with ASC 350-30-35 utilizing the relief from royalty income approach to determine whether the fair value of the Linvatec trademark and tradenames are less than their carrying amounts. Fair value is determined based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average cost of capital, and assumed royalty rates. Based upon our assessment, we believe the fair value continues to exceed carrying value.

46

For all other indefinite lived intangible assets, we perform a qualitative impairment test in accordance with ASC 350-30-35. Based upon this assessment, we have determined that it is unlikely that our indefinite lived intangible assets are impaired.

Other long-lived assets

We review asset carrying amounts for impairment (consisting of intangible assets subject to amortization and property, plant and equipment) whenever events or circumstances indicate that such carrying amounts may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value to its current fair value.

Translation of foreign currency financial statements

Assets and liabilities of foreign subsidiaries have been translated into United States dollars at the applicable rates of exchange in effect at the end of the period reported. Revenues and expenses have been translated at the applicable weighted average rates of exchange in effect during the period reported. Translation adjustments are reflected in accumulated other comprehensive loss. Transaction gains and losses are included in net income.

Foreign exchange and hedging activity

We manage our foreign currency transaction risks through the use of forward contracts to hedge forecasted cash flows associated with foreign currency transaction exposures. We account for these forward contracts as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss. These changes in fair value will be reclassified into earnings as a component of sales or cost of sales when the forecasted transaction occurs.

We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables denominated in foreign currencies. These forward contracts settle each month at month-end, at which time we enter into new forward contracts. We have not designated these forward contracts as hedges and have not applied hedge accounting to them. We record these forward contracts at fair value with resulting gains and losses included in selling and administrative expense in the consolidated statements of comprehensive income.

Income taxes

Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities and operating loss and tax credit carryforwards as measured by the enacted tax rates that are anticipated to be in effect in the respective jurisdictions when these differences reverse. The deferred income tax provision generally represents the net change in the assets and liabilities for deferred income taxes. A valuation allowance is established when it is necessary to reduce deferred income tax assets to amounts for which realization is likely. In assessing the need for a valuation allowance, we estimate future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards. Valuation allowances related to deferred tax assets may be impacted by changes to tax laws, changes to statutory tax rates, reversal of temporary differences and ongoing and future taxable income levels.

Deferred income taxes are not provided on the unremitted earnings of subsidiaries outside of the United States when it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon a repatriation of assets from a subsidiary or the sale or liquidation of a subsidiary. Deferred income taxes are provided when the Company no longer considers subsidiary earnings to be permanently invested, such as in situations where the Company’s subsidiaries plan to make future dividend distributions.

Revenue recognition

Revenue is recognized when title has been transferred to the customer which is at the time of shipment. The following policies apply to our major categories of revenue transactions:

• Sales to customers are evidenced by firm purchase orders. Title and the risks and rewards of ownership are transferred to the customer when product is shipped under our stated shipping terms.  Payment by the customer is due under fixed payment terms and collectability is reasonably assured.

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• We place certain of our capital equipment with customers on a loaned basis in return for commitments to purchase related single-use products over time periods generally ranging from one to three years.  In these circumstances, no revenue is recognized upon capital equipment shipment as the equipment is loaned and subject to return if certain minimum single-use purchases are not met.  Revenue is recognized upon the sale and shipment of the related single-use products.  The cost of the equipment is amortized over its estimated useful life.

• We recognize revenues related to the promotion and marketing of sports medicine allograft tissue in accordance with the contractual terms of our agreement with Musculoskeletal Transplant Foundation (“MTF”) on a net basis as our role is limited to that of an agent earning a commission or fee. MTF records revenue when the tissue is shipped to the customer. Our services are completed at this time and net revenues for the “Service Fee” for our promotional and marketing efforts are then recognized based on a percentage of the net amounts billed by MTF to its customers. The timing of revenue recognition is determined through review of the net billings made by MTF each month. Our net commission Service Fee is based on the contractual terms of our agreement and is currently 50%. This percentage can vary over the term of the agreement but is contractually determinable. Our Service Fee revenues are recorded net of amortization of the acquired assets, which are being expensed over the expected useful life of 25 years.

• Product returns are only accepted at the discretion of the Company and in accordance with our “Returned Goods Policy”.  Historically, the level of product returns has not been significant.  We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.

• Our terms of sale to customers generally do not include any obligations to perform future services.  Limited warranties are provided for capital equipment sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.

• Amounts billed to customers related to shipping and handling have been included in net sales.  Shipping and handling costs included in selling and administrative expense were $12.6 million, $13.6 million and $12.6 million for 2015, 2014 and 2013, respectively.

• We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk.

• We assess the risk of loss on accounts receivable and adjust the allowance for doubtful accounts based on this risk assessment.  Historically, losses on accounts receivable have not been material.  Management believes that the allowance for doubtful accounts of $1.3 million at December 31, 2015 is adequate to provide for probable losses resulting from accounts receivable.

Earnings per share

Basic earnings per share (“basic EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding resulting from employee stock options, restricted stock units, performance share units and stock appreciation rights during the period. The following table sets forth the computation of basic and diluted earnings per share at December 31, 2015, 2014 and 2013, respectively: 

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	2015		2014		2013
Net income	$	30,498	$	32,192	$	35,939
Basic-weighted average shares outstanding	27,653		27,401		27,722
Effect of dilutive potential securities	205		368		392
Diluted-weighted average shares outstanding	27,858		27,769		28,114
Basic EPS	$	1.10	$	1.17	$	1.30
Diluted EPS	$	1.09	$	1.16	$	1.28

The shares used in the calculation of diluted EPS exclude options and SARs to purchase shares where the exercise price was greater than the average market price of common shares for the year and the effect of the inclusion would be anti-dilutive. Such shares aggregated approximately 0.5 million, 0.0 million and 0.0 million at December 31, 2015, 2014 and 2013, respectively.  

Stock-based compensation

All share-based payments to employees, including grants of employee stock options, restricted stock units, performance share units and stock appreciation rights are recognized in the financial statements based at their fair values.  Compensation expense is generally recognized using a straight-line method over the vesting period. Compensation expense for performance share units is recognized using the graded vesting method.

We issue shares under our stock based compensation plans out of treasury stock whereby treasury stock is reduced by the weighted average cost of such treasury stock.  To the extent there is a difference between the cost of the treasury stock and the exercise price of shares issued under stock based compensation plans, we record gains to paid in capital;  losses are recorded to paid in capital to the extent any gain was previously recorded, otherwise the loss is recorded to retained earnings.

Accumulated other comprehensive loss

Accumulated other comprehensive loss consists of the following:

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2014	$	3,276		$	(30,760	)	$	(12,338	)	$	(39,822	)
Other comprehensive income (loss) before reclassifications, net of tax	4,482			2,739			(16,775		)	(9,554		)
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(10,399		)	3,233			—			(7,166		)
Tax expense (benefit)	3,842			(1,194		)	—			2,648
Net current-period other comprehensive income (loss)	(2,075		)	4,778			(16,775		)	(14,072		)
Balance, December 31, 2015	$	1,201		$	(25,982	)	$	(29,113	)	$	(53,894	)

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	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2013	$	(1,385	)	$	(18,918	)	$	2,731		$	(17,572	)
Other comprehensive income (loss) before reclassifications, net of tax	5,061			(10,551		)	(15,069		)	(20,559		)
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(635		)	(2,048		)	—			(2,683		)
Tax expense	235			757			—			992
Net current-period other comprehensive income (loss)	4,661			(11,842		)	(15,069		)	(22,250		)
Balance, December 31, 2014	$	3,276		$	(30,760	)	$	(12,338	)	$	(39,822	)

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2012	$	(1,130	)	$	(30,375	)	$	3,924		$	(27,581	)
Other comprehensive income (loss) before reclassifications, net of tax	(158		)	8,618			(1,193		)	7,267
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(153		)	4,502			—			4,349
Tax expense (benefit)	56			(1,663		)	—			(1,607		)
Net current-period other comprehensive income (loss)	(255		)	11,457			(1,193		)	10,009
Balance, December 31, 2013	$	(1,385	)	$	(18,918	)	$	2,731		$	(17,572	)

(a) The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 13 and Note 9, respectively, for further details.

Note 2 — Inventories

Inventories consist of the following at December 31:

	2015		2014
Raw materials	$	47,681	$	44,847
Work in process	13,922		13,876
Finished goods	105,291		89,426
	$	166,894	$	148,149

Note 3 — Property, Plant and Equipment

Property, plant and equipment consist of the following at December 31:

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	2015			2014
Land	$	4,027		$	4,243
Building and improvements	90,272			96,953
Machinery and equipment	193,630			191,306
Construction in progress	5,281			5,140
	293,210			297,642
Less:  Accumulated depreciation	(167,758		)	(164,213		)
	$	125,452		$	133,429

We lease various manufacturing facilities, office facilities and equipment under operating leases.  Leasehold improvements related to these facilities are included in building and improvements above. Rental expense on these operating leases was approximately $5,464, $5,897 and $6,713 for the years ended December 31, 2015, 2014 and 2013, respectively. The aggregate future minimum lease commitments for operating leases at December 31, 2015 are as follows:

2016	$	5,344
2017	4,769
2018	4,567
2019	4,302
2020	1,424
Thereafter	3,264

Note 4 – Goodwill and Other Intangible Assets

The changes in the net carrying amount of goodwill for the years ended December 31, are as follows:

	2015			2014
Balance as of January 1,	$	256,232		$	248,428
Goodwill resulting from business acquisitions	5,369			7,773
Reduction in goodwill resulting from a business acquisition purchase price allocation adjustment	(525		)	—
Foreign currency translation	(425		)	31
Balance as of December 31,	$	260,651		$	256,232

Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition.  Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.  During 2015, the Company entered into three acquisitions totaling a cash purchase price of $6.1 million. Goodwill resulting from business acquisitions in 2015 amounted to $5.4 million. The purchase price in a prior acquisition was allocated based on information available at the acquisition date. During the quarter ended March 31, 2015, we recorded a measurement period adjustment, which reduced goodwill by $0.5 million. The amount was not considered material and therefore prior periods have not been revised.

Total accumulated impairment losses aggregated $106,991 at December 31, 2015 and 2014, respectively.

Other intangible assets consist of the following:

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	December 31, 2015					December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	136,871	$	(64,423	)	$	136,126	$	(59,707	)
Promotional, marketing & distribution rights	149,376		(24,000		)	149,376		(18,000		)
Patents and other intangible assets	66,688		(42,885		)	63,464		(41,363		)
Unamortized intangible assets:
Trademarks and tradenames	86,544		—			86,544		—
	$	439,479	$	(131,308	)	$	435,510	$	(119,070	)

Customer relationships, trademarks and tradenames, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Promotional, marketing and distribution rights represent intangible assets created under our Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”).

On January 3, 2012, the Company entered into the JDDA with MTF to obtain MTF's worldwide promotion rights with respect to allograft tissues within the field of sports medicine and related products. The initial consideration from the Company included a $63.0 million up-front payment for the rights and certain assets, with an additional $84.0 million contingently payable over a four year period depending on MTF meeting supply targets for tissue. On January 6, 2016, January 5, 2015 and January 3, 2014, we paid equal installments of $16.7 million and on January 3, 2013, we paid $34.0 million of the additional consideration. The $16.7 million related to the remaining contingent obligation as of December 31, 2015 is accrued in other current liabilities.

On July 30, 2014, the Company purchased the stock of EndoDynamix, Inc., a developer of minimally invasive surgical instruments. The purchase price included $13.9 million in contingent consideration based upon certain milestones being achieved totaling $10.3 million and future royalties to be incurred of $3.6 million. Contingent consideration was valued using a discounted cash flow method. We paid $3.7 million of the milestone payment on October 17, 2014, another $2.4 million payment on April 13, 2015 and a third payment of $1.5 million on November 4, 2015. We expect the remaining milestones to be achieved, and royalty payments to be made, between 2016 and 2021. The remaining contingent consideration totaled $6.3 million as of December 31, 2015 and is included in other current and other long term liabilities.

Amortization expense related to intangible assets which are subject to amortization totaled $12.6 million, $13.0 million and $13.7 million for the years ending December 31, 2015, 2014 and 2013, respectively, and is included as a reduction of revenue (for amortization related to our promotional, marketing and distribution rights) and in selling and administrative expense (for all other intangible assets) in the consolidated statements of comprehensive income. The weighted average amortization period for intangible assets which are amortized is 27 years.  Customer relationships are being amortized over a weighted average life of 33 years.  Promotional, marketing and distribution rights are being amortized over a weighted average life of 25 years. Patents and other intangible assets are being amortized over a weighted average life of 12 years. Included in patents and other intangible assets at December 31, 2015 is an in-process research and development asset related to the EndoDynamix, Inc. acquisition that is not currently amortized.

The estimated amortization expense related to intangible assets at December 31, 2015 for each of the five succeeding years is as follows:

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	Amortization included in expense	Amortization recorded as a reduction of revenue	Total
2016	6,882	6,000	$	12,882
2017	7,578	6,000	$	13,578
2018	7,525	6,000	$	13,525
2019	7,525	6,000	$	13,525
2020	6,906	6,000	$	12,906

Note 5 — Long Term Debt

Long-term debt consists of the following at December 31:

	2015		2014
Revolving line of credit	$	265,609	$	235,000
Mortgage notes	5,201		6,435
Total long-term debt	270,810		241,435
Less:  Current portion	1,339		1,234
	$	269,471	$	240,201

On April 28, 2015, we entered into an amended and restated $450.0 million senior credit agreement (the "amended and restated senior credit agreement"). The amended and restated senior credit agreement consists of a $450.0 million revolving credit facility expiring on April 28, 2020. There were $265.6 million in borrowings outstanding on the revolving credit facility as of December 31, 2015.  Our available borrowings on the revolving credit facility at December 31, 2015 were $179.3 million with approximately $5.1 million of outstanding letters of credit.

Interest rates on the amended and restated senior credit agreement are at LIBOR plus 1.50% (1.93% at December 31, 2015) or an alternative base rate.  For those borrowings where we elect to use the alternative base rate, the base rate will be the greater of the Prime Rate, the Federal Funds Rate in effect on such date plus 0.50%, or the one month Eurocurrency rate plus 1.00%, plus an additional margin of 0.50%.

The amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets.  The amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios (the most restrictive of which is the senior leverage ratio) 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, 2015. We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales.

On January 17, 2013, we had entered into an amended and restated credit agreement. In connection with the refinancing, we recorded a $0.3 million loss on the early extinguishment of debt related to the write-off of unamortized deferred financing costs under the then existing senior credit agreement.

As further described in Note 15, on January 4, 2016, we entered into a fifth amended and restated senior credit agreement (the “fifth amended and restated senior credit agreement”) consisting of: (a) a $175.0 million term loan facility and (b) a $525.0 million revolving credit facility both expiring on January 4, 2021. The term loan is payable in quarterly installments increasing over the term of the facility.

We have a mortgage note outstanding in connection with the Largo, Florida property and facilities bearing interest at 8.25% per annum with semiannual payments of principal and interest through June 2019.  The principal balance outstanding on

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the mortgage note aggregated $5.2 million at December 31, 2015.  The mortgage note is collateralized by the Largo, Florida property and facilities.

The scheduled maturities of long-term debt outstanding at December 31, 2015 are as follows:

2016	$	1,339
2017	1,452
2018	1,574
2019	836
2020	265,609
Thereafter	—

Note 6 — Income Taxes

The provision for income taxes for the years ended December 31, 2015, 2014 and 2013 consists of the following:

	2015		2014			2013
Current tax expense (benefit):
Federal	$	4,208	$	2,256		$	(2,274	)
State	1,238		516			502
Foreign	6,949		11,995			9,247
	12,395		14,767			7,475
Deferred income tax expense (benefit)	2,251		(284		)	7,218
Provision for income taxes	$	14,646	$	14,483		$	14,693

A reconciliation between income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2015, 2014 and 2013 follows:

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	2015		2014		2013
Tax provision at statutory rate based on income before income taxes	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	3.2		1.7		1.8
Impact of repatriation of foreign earnings	2.5		—		—
New York State corporate tax reform	—		5.5		—
Stock-based compensation	—		(0.2	)	(0.5	)
Foreign income taxes	(3.6	)	(4.8	)	(3.1	)
Federal research credit	(2.0	)	(2.1	)	(2.8	)
Settlement of taxing authority examinations	(0.6	)	(3.7	)	(2.0	)
European permanent deduction	(2.1	)	(3.8	)	(2.4	)
Non deductible/non-taxable items	1.8		1.8		2.9
Other, net	(1.8	)	1.6		0.1
	32.4	%	31.0	%	29.0	%

The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:

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	2015			2014
Assets:
Inventory	$	3,938		$	4,476
Net operating losses	6,421			10,207
Capitalized research and development	5,733			1,850
Deferred compensation	2,557			3,507
Accounts receivable	2,938			2,604
Compensation and benefits	7,365			6,003
Accrued pension	3,944			6,186
Research and development credit	7,094			6,198
Other	3,245			1,564
Foreign tax credit	—			2,283
Less: valuation allowances	(124		)	(293		)
	43,111			44,585
Liabilities:
Goodwill and intangible assets	122,623			120,012
Depreciation	11,999			14,041
State taxes	7,427			6,737
Contingent interest	203			272
	142,252			141,062
Net liability	$	(99,141	)	$	(96,477	)

Income before income taxes consists of the following U.S. and foreign income:

	2015		2014		2013
U.S. income	$	18,119	$	12,374	$	20,106
Foreign income	27,025		34,301		30,526
Total income	$	45,144	$	46,675	$	50,632

As of December 31, 2015, the amount of federal net operating loss carryforward was $18.0 million and begins to expire in 2026. As of December 31, 2015, the amount of federal research credit carryforward available was $7.1 million.  These credits begin to expire in 2027.  

In New York State, corporate tax reform enacted in March 2014 changed the tax rate of a manufacturing company such as our Company to essentially 0%. Previously recorded New York State net deferred tax assets of $2.3 million, including $3.3 million of future tax benefits associated with state tax credits, have been written off as a non-cash charge to income tax expense.

During the fourth quarter of 2015, the Company repatriated $9.3 million of 2015 foreign earnings and recorded a tax charge of $1.1 million. The repatriated earnings represented a portion of the current year earnings of certain foreign subsidiaries and affiliates and thus were not previously permanently reinvested.  There has been no change in our longer term international plans as our intent to indefinitely reinvest foreign earnings accumulated through the year ended December 31, 2014 has not changed.

U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. The amount of such temporary differences totaled $95.1 million as of December 31, 2015. It is not practicable given the complexities of the hypothetical foreign tax credit calculation to determine the tax liability on this temporary difference.

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The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our Federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2013.

We recognize tax liabilities in accordance with the provisions for accounting for uncertainty in income taxes. Such guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:

	2015			2014			2013
Balance as of January 1,	$	581		$	1,689		$	1,587
Increases for positions taken in prior periods	100			45			70
Increases for positions taken in current periods	—			—			1,132
Decreases in unrecorded tax positions related to settlement with the taxing authorities	—			(1,073		)	(1,010		)
Decreases in unrecorded tax positions related to lapse of statute of limitations	(65		)	(80		)	(90		)
Balance as of December 31,	$	616		$	581		$	1,689

If the total unrecognized tax benefits of $0.6 million at December 31, 2015 were recognized, it would reduce our annual effective tax rate.  The amount of interest accrued in 2015 related to these unrecognized tax benefits was not material and is included in the provision for income taxes in the consolidated statements of comprehensive income. 

Note 7 – Shareholders’ Equity

On February 29, 2012, the Board of Directors adopted a cash dividend policy and declared an initial quarterly dividend of $0.15 per share. On October 28, 2013, the Board of Directors increased the quarterly dividend to $0.20 per share. The fourth quarter dividend for 2015 was paid on January 5, 2016 to shareholders of record as of December 15, 2015. The total dividend payable at December 31, 2015 was $5.5 million and is included in other current liabilities in the consolidated balance sheet.

Our shareholders have authorized 500,000 shares of preferred stock, par value $.01 per share, which may be issued in one or more series by the Board of Directors without further action by the shareholders. As of December 31, 2015 and 2014, no preferred stock had been issued.

Our Board of Directors has authorized a $200.0 million share repurchase program. Through December 31, 2015, 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.  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.  During 2015, we did not repurchase any shares. During 2014, we repurchased 0.4 million shares for an aggregate cost of $16.9 million.  During 2013, we repurchased 1.6 million shares for an aggregate cost of $50.6 million.

We have reserved 8.8 million shares of common stock for issuance to employees and directors under three shareholder approved share-based compensation plans (the "Plans") of which approximately 2.1 million shares remain available for grant at December 31, 2015.  The exercise price on all outstanding stock appreciation rights (“SARs”) is equal to the quoted fair market value of the stock at the date of grant.  Restricted stock units (“RSUs”) and performance stock units (“PSUs”) are valued at the market value of the underlying stock on the date of grant.  SARs, RSUs and PSUs are non-transferable other than on death and generally become exercisable over a five year period from date of grant.  SARs expire ten years from date of grant.  SARs are only settled in shares of the Company’s stock.  The issuance of shares pursuant to the exercise of stock options and SARs and vesting of RSUs and PSUs are from the Company’s treasury stock.

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Total pre-tax stock-based compensation expense recognized in the consolidated statements of comprehensive income was $7.5 million, $9.3 million and $5.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.  These amounts are included in selling and administrative expenses, and in 2015 and 2014, $1.0 million and $3.9 million, respectively, of the total relates to acceleration of awards associated with the Company's restructuring as further described in Note 11.  Tax related benefits of $2.7 million, $3.4 million and $2.1 million were also recognized for the years ended December 31, 2015, 2014 and 2013, respectively.  Cash received from the exercise of stock options was $0.2 million, $1.8 million and $16.7 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is reflected in cash flows from financing activities in the consolidated statements of cash flows.

The Company uses the Black-Scholes option pricing model to estimate the fair value of options and SARs at the date of grant. Use of a valuation model requires management to make certain assumptions with respect to select model inputs. Expected volatilities are based upon historical volatility of the Company’s stock over a period equal to the expected life of each option and SAR grant. The risk free interest rate is based on the option and SAR grant date for a traded U.S. Treasury bond with a maturity date closest to the expected life. The expected annual dividend yield is based on the Company's anticipated cash dividend payouts. The expected life represents the period of time that the options and SARs are expected to be outstanding based on a study of historical data of option holder exercise and termination behavior.

The following table illustrates the assumptions used in estimating fair value in the years ended December 31, 2015, 2014 and 2013.

	2015			2014			2013
Grant date fair value of SARs	$	11.37		$	13.40		$	9.77
Expected stock price volatility	25.96		%	34.85		%	35.88		%
Risk-free interest rate	1.49		%	1.53		%	1.04		%
Expected annual dividend yield	1.55		%	1.80		%	1.79		%
Expected life of options & SARs (years)	5.7			6.4			6.3

The following table illustrates the stock option and SAR activity for the year ended December 31, 2015.

	Number of Shares (in 000’s)		Weighted- Average Exercise Price
Outstanding at December 31, 2014	453		$	28.85
Granted	609		$	51.48
Forfeited	(19	)	$	48.32
Exercised	(123	)	$	29.01
Outstanding at December 31, 2015	920		$	43.47
Exercisable at December 31, 2015	219		$	26.00
SARs expected to vest	701		$	48.92

The weighted average remaining contractual term for SARs outstanding and exercisable at December 31, 2015 was 7.9 years and 4.8 years, respectively.  The aggregate intrinsic value of SARs outstanding and exercisable at December 31, 2015 was $5.0 million and $4.0 million, respectively.  The aggregate intrinsic value of stock options and SARs exercised during the years ended December 31, 2015, 2014 and 2013 was $2.8 million, $10.7 million and $4.7 million, respectively.

The following table illustrates the RSU and PSU activity for the year ended December 31, 2015.  

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	Number of Shares (in 000’s)		Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2014	322		$	33.14
Granted	226		$	45.75
Vested	(138	)	$	32.04
Forfeited	(57	)	$	35.63
Outstanding at December 31, 2015	353		$	41.23

The weighted average fair value of awards of RSUs and PSUs granted in the years ended December 31, 2015, 2014 and 2013 was $45.75, $43.21 and $33.02, respectively.

The total fair value of shares vested was $6.0 million, $11.6 million and $7.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

As of December 31, 2015, there was $17.4 million of total unrecognized compensation cost related to nonvested SARs, RSUs and PSUs granted under the Plans which is expected to be recognized over a weighted average period of 3.3 years.

We offer to our employees a shareholder-approved Employee Stock Purchase Plan (the “Employee Plan”), under which we have reserved 1.0 million shares of common stock for issuance to our employees.  The Employee Plan provides employees with the opportunity to invest from 1% to 10% of their annual salary to purchase shares of CONMED common stock at a purchase price equal to 95% of the fair market value of the common stock on the exercise date.  During 2015, we issued approximately 13,000 shares of common stock under the Employee Plan.  No stock-based compensation expense has been recognized in the accompanying consolidated financial statements as a result of common stock issuances under the Employee Plan.

Note 8 — Business Segments and Geographic Areas

We are accounting and reporting for our business as a single operating segment entity engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. Our chief operating decision maker (the CEO) evaluates the various global product portfolios on a net sales basis and evaluates profitability, investment and cash flow metrics on a consolidated worldwide basis due to shared infrastructure and resources.

Our product lines consist of orthopedic surgery, general surgery and surgical visualization. Orthopedic surgery consists of sports medicine instrumentation and small bone, large bone and specialty powered surgical instruments and service fees related to the promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. Surgical visualization consists of imaging systems for use in minimally invasive orthopedic and general surgery procedures including 2DHD and 3DHD vision technologies. These product lines' net sales are as follows:

	2015		2014		2013
Orthopedic surgery	$	388,948	$	402,750	$	410,171
General surgery	274,190		279,356		286,747
Surgical visualization	56,030		57,949		65,786
Consolidated net sales	$	719,168	$	740,055	$	762,704

Net sales information for geographic areas consists of the following:

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	2015		2014		2013
United States	$	361,452	$	360,960	$	375,473
Canada	57,629		63,686		73,457
United Kingdom	26,703		30,496		28,471
Japan	37,809		37,230		36,705
Australia	33,810		38,711		38,752
All other countries	201,765		208,972		209,846
Total	$	719,168	$	740,055	$	762,704

Sales are attributed to countries based on the location of the customer. There were no significant investments in long-lived assets located outside the United States at December 31, 2015 and 2014.  No single customer represented over 10% of our consolidated net sales for the years ended December 31, 2015, 2014 and 2013.

Note 9 — Employee Benefit Plans

We sponsor an employee savings plan (“401(k) plan”) covering substantially all of our United States based employees. We also 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.

Total employer contributions to the 401(k) plan were $7.6 million, $6.9 million and $7.3 million during the years ended December 31, 2015, 2014 and 2013, respectively.

We use a December 31, measurement date for our pension plan.  Gains and losses are amortized on a straight-line basis over the average remaining service period of active participants.

The following table provides a reconciliation of the projected benefit obligation, plan assets and funded status of the pension plan at December 31:

	2015			2014
Accumulated Benefit Obligation	$	78,437		$	91,107
Change in benefit obligation
Projected benefit obligation at beginning of year	$	91,107		$	75,946
Service cost	240			271
Interest cost	3,394			3,465
Actuarial (gain) loss	(11,806		)	16,546
Benefits paid	(1,620		)	(1,414		)
Settlement	(2,878		)	(3,707		)
Projected benefit obligation at end of year	$	78,437		$	91,107
Change in plan assets
Fair value of plan assets at beginning of year	$	73,431		$	76,442
Actual gain on plan assets	(1,765		)	2,110
Benefits paid	(1,620		)	(1,414		)
Settlement	(2,878		)	(3,707		)
Fair value of plan assets at end of year	$	67,168		$	73,431
Funded status	$	(11,269	)	$	(17,676	)

Amounts recognized in the consolidated balance sheets consist of the following at December 31,:

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	2015			2014
Other long-term liabilities	$	(11,269	)	$	(17,676	)
Accumulated other comprehensive loss	(41,205		)	(48,782		)

The following actuarial assumptions were used to determine our accumulated and projected benefit obligations as of December 31,:

	2015		2014
Discount rate	4.54	%	3.81	%
Expected return on plan assets	8.00	%	8.00	%

Accumulated other comprehensive loss for the years ended December 31, 2015 and 2014 consists of net actuarial losses of $41,205 and $48,782, respectively, not yet recognized in net periodic pension cost (before income taxes).

Other changes in plan assets and benefit obligations recognized in other comprehensive income in 2015 are as follows:

Current year actuarial gain	$	4,344
Amortization of actuarial loss	3,233
Total recognized in other comprehensive loss	$	7,577

The estimated portion of net actuarial loss in accumulated other comprehensive loss that is expected to be recognized as a component of net periodic pension cost in 2016 is $2.8 million.

Net periodic pension cost for the years ended December 31, consists of the following:

	2015			2014			2013
Service cost	$	240		$	271		$	253
Interest cost on projected benefit obligation	3,394			3,465			3,315
Expected return on plan assets	(5,697		)	(2,297		)	(5,491		)
Amortization of loss	3,233			(2,048		)	3,059
Settlement expense	—			—			1,443
Net periodic pension (income) cost	$	1,170		$	(609	)	$	2,579

The following actuarial assumptions were used to determine our net periodic pension benefit cost for the years ended December 31,:

	2015		2014		2013
Discount rate	3.81	%	4.75	%	3.90	%
Expected return on plan assets	8.00	%	8.00	%	8.00	%

In 2016, we are changing the method we use to estimate the interest cost component of net periodic pension cost. Historically, we estimated the interest cost component using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to use a full yield curve approach in the estimation of this component of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation that correlate to the relevant projected cash flows ("spot rate approach"). This change provides a more precise measurement of interest cost. This change does not affect the measurement of our total benefit obligation as the change in interest cost is completely offset by the actuarial (gain) loss reported. We have accounted for this change as a change in estimate and, accordingly, will account for it prospectively in 2016.

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In determining the expected return on pension plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance.  In addition, we consult with financial and investment management professionals in developing appropriate targeted rates of return.

Asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk and providing adequate liquidity to meet immediate and future benefit payment requirements.

The allocation of pension plan assets by category is as follows at December 31,:

	Percentage of Pension Plan Assets				Target Allocation
	2015		2014		2016
Equity securities	86	%	84	%	75	%
Debt securities	14		16		25
Total	100	%	100	%	100	%

As of December 31, 2015, the Plan held 27,562 shares of our common stock, which had a fair value of $1.2 million.  We believe that our long-term asset allocation on average will approximate the targeted allocation. We regularly review our actual asset allocation and periodically rebalance the pension plan’s investments to our targeted allocation when deemed appropriate.

The following table sets forth the fair value of pension plan assets as of December 31:

	2015		2014
Common Stock	$	34,466	$	35,337
Money Market Fund	1,302		3,320
Mutual Funds	23,576		26,671
Fixed Income Securities	7,824		8,103
Total Assets at Fair Value	$	67,168	$	73,431

FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. A valuation hierarchy was established for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2015 and 2014:

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Common Stock:	Common stock is valued at the closing price reported on the common stock’s respective stock exchange and is classified within level 1 of the valuation hierarchy.
Money Market Fund:	These investments are public investment vehicles valued using $1 for the Net Asset Value (NAV). The money market fund is classified within level 2 of the valuation hierarchy.
Mutual Funds:	These investments are public investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and is classified within level 1 of the valuation hierarchy.
Fixed Income Securities:	Valued at the closing price reported on the active market on which the individual securities are traded and are classified within level 1 of the valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the pension plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the pension plan's assets at fair value as of December 31, 2015 and December 31, 2014:

December 31, 2015	Level 1		Level 2		Total
Common Stock	$	34,466	$	—	$	34,466
Money Market Fund	—		1,302		1,302
Mutual Funds	23,576		—		23,576
Fixed Income Securities	7,824		—		7,824
	$	65,866	$	1,302	$	67,168

December 31, 2014	Level 1		Level 2		Total
Common Stock	$	35,337	$	—	$	35,337
Money Market Fund	—		3,320		3,320
Mutual Funds	26,671		—		26,671
Fixed Income Securities	8,103		—		8,103
	$	70,111	$	3,320	$	73,431

We do not expect to make any contributions to our pension plan for 2016.

The following table summarizes the benefits expected to be paid by our pension plan in each of the next five years and in aggregate for the following five years. The expected benefit payments are estimated based on the same assumptions used to measure the Company’s projected benefit obligation at December 31, 2015 and reflect the impact of expected future employee service.

2016		$4,164
2017	4,210
2018	4,304
2019	4,741
2020	4,982
2021-2025	24,828

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Note 10 — Legal Matters and Contingencies

From time to time, we are subject to claims alleging product liability, patent infringement or other claims incurred in the ordinary course of business. These may involve our United States or foreign operations, or sales by foreign distributors. Likewise, from time to time, the Company may receive an information request or subpoena from a government agency such as the Securities and Exchange Commission, Department of Justice, Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Department of Labor, the Treasury Department or other federal and state agencies or foreign governments or government agencies. These information requests or subpoenas may or may not be routine inquiries, or may begin as routine inquiries and over time develop into enforcement actions of various types. The product liability claims are generally covered by various insurance policies, subject to certain deductible amounts, maximum policy limits and certain exclusions in the respective policies or as required as a matter of law. In some cases, we may be entitled to indemnification by third parties. We establish reserves sufficient to cover probable losses associated with any such pending claims. We do not expect that the resolution of any pending claims or investigations will have a material adverse effect on our financial condition, results of operations or cash flows. There can be no assurance, however, that future claims or investigations, or the costs associated with responding to such claims or investigations, especially claims and investigations not covered by insurance, will not have a material adverse effect on our financial condition, results of operations or cash flows.

Manufacturers of medical products may face exposure to significant product liability claims. To date, we have not experienced any product liability claims that have been material to our financial statements or financial condition, but any such claims arising in the future could have a material adverse effect on our business or results of operations. We currently maintain commercial product liability insurance of $25 million per incident and $25 million in the aggregate annually, which we believe is adequate. This coverage is on a claims-made basis. There can be no assurance that claims will not exceed insurance coverage, that the carriers will be solvent or that such insurance will be available to us in the future at a reasonable cost.

Our operations are subject, and in the past have been subject, to a number of environmental laws and regulations governing, among other things, air emissions; wastewater discharges; the use, handling and disposal of hazardous substances and wastes; soil and groundwater remediation and employee health and safety. In some jurisdictions, environmental requirements may be expected to become more stringent in the future. In the United States, certain environmental laws can impose liability for the entire cost of site restoration upon each of the parties that may have contributed to conditions at the site regardless of fault or the lawfulness of the party’s activities. While we do not believe that the present costs of environmental compliance and remediation are material, there can be no assurance that future compliance or remedial obligations would not have a material adverse effect on our financial condition, results of operations or cash flows.

During the third quarter of 2013, the U.S. Food and Drug Administration ("FDA") inspected our Centennial, Colorado manufacturing facility and issued a Form 483 with observations on September 20, 2013. We subsequently submitted responses to the Observations and the FDA issued a Warning Letter on January 30, 2014 relating to the inspection and the responses to the Form 483 Observations. Accordingly, we undertook corrective actions. During the fourth quarter of 2014, the FDA again inspected our Centennial, Colorado manufacturing facility and, on November 18, 2014, issued a Form 483 with eight observations, three of which the FDA characterized as repeat observations. On December 10, 2014, we responded to the Form 483 Observations. We have received some additional questions from the FDA and responded to these questions on April 25, 2015.  The remediation costs to date have not been material, although there can be no assurance that responding to the Form 483 observations or a future inspection by the FDA will not result in an additional Form 483 or warning letter, or other regulatory actions, which may include consent decrees or fines.

Note 11 — Restructuring and Other Expense

Restructuring and other expense for the year ended December 31, consists of the following:

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	2015		2014		2013
Facility consolidation costs	$	8,016	$	5,612	$	6,489
Termination of a product offering	—		—		$	2,137
Restructuring costs included in cost of sales	$	8,016	$	5,612	$	8,626
Restructuring costs	$	13,655	$	3,354	$	8,750
Business and asset acquisition costs	2,543		722		—
Management restructuring costs	—		12,546		—
Shareholder activism costs	—		3,966		—
Patent dispute and other matters	—		3,374		3,206
Pension settlement expense	—		—		1,443
Restructuring and other expense included in selling and administrative expense	$	16,198	$	23,962	$	13,399

During 2015, we incurred $2.5 million in acquisition related costs associated with the January 4, 2016 acquisition of SurgiQuest, Inc. as further described in Note 15 and other acquisitions during 2015. During 2014, we incurred $0.7 million in costs associated with the EndoDynamix, Inc. acquisition as further described in Note 4.

During 2014, we incurred $4.0 million in professional fees related to shareholder activism.

During 2014 and 2013, we incurred $3.4 million and $3.2 million, respectively in legal and settlement costs. Legal costs for a patent infringement claim that we settled totaled $1.9 million and $3.2 million in 2014 and 2013, respectively. The 2014 patent infringement claim costs included $0.9 million in settlement costs during the first quarter of 2014. The remaining $1.5 million in 2014 legal costs were associated with a legal matter in which we prevailed at trial and consulting fees.

During 2013, we had a higher level of lump sum withdrawals from pension plan participants. This resulted in an acceleration of the recognition of a portion of our projected benefit obligation and we therefore recorded a pension settlement expense of $1.4 million.

During 2015, 2014 and 2013, we continued our operational restructuring plan. In 2015, we completed the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. During 2014, we completed the consolidation of our Finland operations into our Largo, Florida and Utica, New York manufacturing facilities and the consolidation of our Westborough, Massachusetts manufacturing operations into our Largo, Florida and Chihuahua, Mexico facilities. We incurred $8.0 million, $5.6 million and $6.5 million in costs associated with the operational restructuring during the years ending December 31, 2015, 2014 and 2013, respectively. These costs were charged to cost of sales and include severance and other charges associated with the consolidation of our Finland, Westborough, Massachusetts and Centennial, Colorado operations.

In conjunction with the consolidation of our Centennial, Colorado manufacturing operations, the facility is currently held for sale and classified as a current asset in the Consolidated Balance Sheet. The net book value of this facility at December 31, 2015 was $3.1 million.

As part of our ongoing restructuring, the Company discontinued a patient monitoring product offering and incurred $2.1 million in costs which were charged to cost of sales during 2013.

During 2015, 2014 and 2013, we restructured certain selling and administrative functions and incurred $13.7 million, $3.4 million and $8.8 million, respectively, in related costs consisting principally of severance charges and, for the 2013 year, also included the write-off of certain patents.

During 2014, we incurred $12.5 million in costs associated with restructuring of executive management. These costs include severance payments, accelerated vesting of stock-based compensation awards, accrual of the present value of deferred compensation and other benefits to our then Chief Executive Officer as defined in his termination agreement; accelerated vesting of stock-based compensation awards to certain members of executive management, consulting fees and other benefits earned as further described in our Form 8-K filing on July 23, 2014.

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We have recorded an accrual in current and other long term liabilities of $7.2 million at December 31, 2015 mainly related to severance costs associated with restructuring. Below is a rollforward of the costs incurred and cash expenditures associated with these activities during 2015, 2014 and 2013:

Balance as of January 1, 2013	$	4,123
Expenses incurred	17,376
Payments made	(18,371		)
Balance as of December 31, 2013	3,128
Expenses incurred	21,512
Payments made	(16,386		)
Balance as of December 31, 2014	8,254
Expenses incurred	21,671
Payments made	(22,750		)
Balance, December 31, 2015	$	7,175

A significant portion of this accrual will be paid out in 2016.

Note 12 — Guarantees

We provide warranties on certain of our products at the time of sale.  The standard warranty period for our capital and reusable equipment is generally one year.  Liability under service and warranty policies is based upon a review of historical warranty and service claim experience.  Adjustments are made to accruals as claim data and historical experience warrant.

Changes in the carrying amount of service and product warranties for the year ended December 31, are as follows:

	2015			2014			2013
Balance as of January 1,	$	2,286		$	2,422		$	3,636
Provision for warranties	3,836			3,492			3,061
Claims made	(3,613		)	(3,628		)	(4,275		)
Balance as of December 31,	$	2,509		$	2,286		$	2,422

Note 13 – Fair Value Measurement

We enter into derivative instruments for risk management purposes only.  We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We use forward contracts, a type of derivative instrument, to manage certain foreign currency exposures.

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By nature, all financial instruments involve market and credit risks. We enter into forward contracts with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties.  While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties.

Foreign Currency Forward Contracts. 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.  To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss.  These changes in fair value will be recognized into earnings as a component of sales or cost of sales when the forecasted transaction occurs.  The notional contract amounts for forward contracts outstanding at December 31, 2015 which have been accounted for as cash flow hedges totaled $105.5 million.  Net realized gains recognized for forward contracts accounted for as cash flow hedges approximated $10.4 million, $0.6 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.  Net unrealized gains on forward contracts outstanding which have been accounted for as cash flow hedges and which have been included in other comprehensive income totaled $1.2 million at December 31, 2015.  It is expected these unrealized gains will be recognized in the consolidated statement of comprehensive income in 2016.

We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables denominated in foreign currencies.  These forward contracts settle each month at month-end, at which time we enter into new forward contracts.  We have not designated these forward contracts as hedges and have not applied hedge accounting to them.  The notional contract amounts for forward contracts outstanding at December 31, 2015 which have not been designated as hedges totaled $22.3 million.  Net realized gains (losses) recognized in connection with those forward contracts not accounted for as hedges approximated $0.4 million, -$0.2 million and -$0.3 million for the years ended December 31, 2015, 2014 and 2013, respectively, offsetting losses on our intercompany receivables of -$0.8 million, -$0.5 million and -$0.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.  These gains and losses have been recorded in selling and administrative expense in the consolidated statements of comprehensive income.

We record these forward foreign exchange contracts at fair value; the following tables summarize the fair value for forward foreign exchange contracts outstanding at December 31, 2015 and 2014:

December 31, 2015	Asset Balance Sheet Location	Fair Value		Liabilities Balance Sheet Location	Fair Value			Net  Fair Value
Derivatives designated as hedged instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	$	2,931	Prepaid expenses & other current assets	$	(1,026	)	$	1,905
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	4		Prepaid expenses & other current assets	(38		)	(34		)
Total derivatives		$	2,935		$	(1,064	)	$	1,871

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December 31, 2014	Asset Balance Sheet Location	Fair Value		Liabilities Balance Sheet Location	Fair Value			Net  Fair Value
Derivatives designated as hedged instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	$	6,167	Prepaid expenses & other current assets	$	(971	)	$	5,196
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	44		Prepaid expenses & other current assets	(61		)	(17		)
Total derivatives		$	6,211		$	(1,032	)	$	5,179

Our forward foreign exchange contracts are subject to a master netting agreement and qualify for netting in the consolidated balance sheets.  Accordingly, at December 31, 2015 and December 31, 2014 we have recorded the net fair value of $1.9 million and $5.2 million, respectively, in prepaids and other current assets.

Fair Value Disclosure. FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. This guidance applies when fair value measurements are required or permitted. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is defined based upon an exit price model.

Valuation Hierarchy. A valuation hierarchy was established for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. There have been no significant changes in the assumptions since the acquisition.

Valuation Techniques. Assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2015 consist of forward foreign exchange contracts and contingent liabilities associated with a business acquisition as further described in Note 4. The Company values its forward foreign exchange contracts using quoted prices for similar assets. The most significant assumption is quoted currency rates. The value of the forward foreign exchange contract assets and liabilities were valued using Level 2 inputs and are listed in the table above.  

The EndoDynamix, Inc. acquisition involves the potential for the payment of future contingent consideration upon the achievement of certain product development milestones and revenue based payments as further described in Note 4. Contingent consideration is recorded at the estimated fair value of the contingent milestone and revenue based payments on the acquisition date. The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within selling and administrative expenses in the consolidated statements of comprehensive income. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. There have been no significant changes in the assumptions since the acquisition.

The carrying amounts reported in our balance sheets for cash and cash equivalents, accounts receivable, accounts payable and long-term debt approximate fair value.  

Note 14 - New Accounting Pronouncements

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In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers". This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 by one year. This ASU is effective for annual reporting periods beginning after December 15, 2017 and early adoption is permitted as of January 1, 2017. We plan to adopt this ASU on January 1, 2018. The new standard will become effective beginning with the first quarter of 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating both the impact of adopting this new guidance on the consolidated financial statements and the method of adoption.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This ASU requires an entity to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability consistent with debt discounts. In August 2015, the FASB also issued ASU No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" to clarify the guidance in ASU 2015-03 as it does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 was issued to clarify that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These ASUs are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory". An entity should measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. This ASU is effective for annual periods beginning after December 15, 2016. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments". This ASU simplifies the accounting for changes in measurement period adjustments associated with a business combination. It requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This ASU is effective for annual periods beginning after December 15, 2015. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17 "Income Taxes (ASC 740): Balance Sheet Classification of Deferred Taxes". This ASU requires all deferred income tax assets and liabilities be presented as non-current in classified balance sheets. This can be applied prospectively or retrospectively and must disclose the reason for the change in accounting principle, the application applied and if applied retrospectively, include quantitative information about the effects of the change on prior periods. This standard is effective for annual and interim periods beginning after December 15, 2016. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

Note 15 – Subsequent Events

On January 4, 2016, we completed the acquisition of SurgiQuest, Inc. ("SurgiQuest") for $265 million in cash, subject to customary purchase price adjustments related to the amount of SurgiQuest's cash, debt, working capital and transaction expenses. SurgiQuest develops, manufactures, and markets the AirSeal^® System, the first integrated access management technology for use in laparoscopic and robotic procedures. This proprietary and differentiated access system is complementary to our current advanced surgical offering. The acquisition was funded through a combination of cash on hand and long-term borrowings as further described below.

In 2015, we incurred pre-tax transaction costs of $1.7 million related to the SurgiQuest acquisition which are recorded in selling and administrative expense. We are currently working through the purchase price allocation process.

On January 4, 2016, we entered into a fifth amended and restated senior credit agreement (the “fifth amended and restated senior credit agreement”) consisting of: (a) a $175.0 million term loan facility and (b) a $525.0 million revolving credit facility

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both expiring on January 4, 2021. The term loan is payable in quarterly installments increasing over the term of the facility. Proceeds from the term loan facility and borrowings under the revolving credit facility were used to repay the then existing senior credit agreement and to finance the acquisition of SurgiQuest, Inc. Initial interest rates are at LIBOR plus a base rate or a Eurocurrency rate plus an applicable margin. Initially, the applicable margin for base rate loans is 1.00% and for Eurocurrency rate loans is 2.00%.

Note 16 — Selected Quarterly Financial Data (Unaudited)

Selected quarterly financial data for 2015 and 2014 are as follows:

	Three Months Ended
	March		June		September		December
2015
Net sales	$	177,940	$	181,027	$	169,184	$	191,017
Gross profit	92,282		93,498		93,546		102,376
Net income	6,312		7,461		8,873		7,852
EPS:
Basic	$	.23	$	.27	$	.32	$	.28
Diluted	.23		.27		.32		.28

	Three Months Ended
	March		June		September		December
2014
Net sales	$	181,941	$	188,150	$	174,961	$	195,003
Gross profit	102,582		101,028		96,414		104,033
Net income	8,626		10,255		1,972		11,339
EPS:
Basic	$	.32	$	.38	$	.07	$	.41
Diluted	.31		.37		.07		.41

Items Included In Selected Quarterly Financial Data:

2015

First Quarter

During the first quarter of 2015, we incurred $2.3 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales and include severance and other charges associated with the consolidation – see Note 11.

During the first quarter of 2015, we recorded a charge of $6.2 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

Second Quarter

During the second quarter of 2015, we incurred $1.5 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales and include severance and other charges associated with the consolidation – see Note 11.

During the second quarter of 2015, we recorded a charge of $2.2 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

Third Quarter

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During the third quarter of 2015, we incurred $1.3 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales and include severance and other charges associated with the consolidation – see Note 11.

During the third quarter of 2015, we recorded a charge of $1.1 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

Fourth Quarter

During the fourth quarter of 2015, we incurred $2.8 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales – see Note 11.

During the fourth quarter of 2015, we recorded a charge of $4.3 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

During the fourth quarter of 2015, we recorded a charge of $2.1 million to selling and administrative expense associated with the purchase of SurgiQuest, Inc and other acquisitions. - see Note 11 and Note 15.

2014

First Quarter

During the first quarter of 2014, we incurred $0.9 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico; consolidation of our Finland operations into our Largo, Florida and Utica, New York manufacturing facilities; consolidation of our Westborough, Massachusetts operations into our Largo, Florida and Chihuahua, Mexico manufacturing facilities and the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales – see Note 11.

During the first quarter of 2014, we recorded a charge of $0.7 million to selling and administrative expense related to the restructuring of certain administrative functions - see Note 11.

During the first quarter of 2014, we recorded a charge of $1.9 million to selling and administrative expense related to legal fees associated with a patent infringement claim, including $0.9 million in settlement costs - see Note 11.

During the first quarter of 2014, we recorded a charge of $0.6 million in selling and administrative expense for professional fees associated with shareholder activism - see Note 11.

In New York State, corporate tax reform enacted in March 2014 changed the tax rate of a manufacturing company such as CONMED to essentially 0%. Previously recorded New York State net deferred tax assets of $2.3 million have been written off as a non-cash charge to income tax expense - see Note 6.

Second Quarter

During the second quarter of 2014, we incurred $1.4 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico and the consolidation of our Centennial, Colorado manufacturing operations into our other existing CONMED manufacturing facilities. These costs were charged to cost of sales – see Note 11.

During the second quarter of 2014, we recorded a charge of $0.5 million to selling and administrative expense related to consolidating certain administrative functions - see Note 11.

During the second quarter of 2014, we recorded a charge of $1.4 million to selling and administrative expense related to a legal matter in which we prevailed at trial and consulting fees - see Note 11.

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During the second quarter of 2014, we recorded a charge of $0.9 million to selling and administrative expense related to professional fees associated with shareholder activism - see Note 11.

Third Quarter

During the third quarter of 2014, we incurred $1.4 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico and the consolidation of our Centennial, Colorado manufacturing operations into our other existing CONMED manufacturing facilities.  These costs were charged to cost of sales – see Note 11.

During the third quarter of 2014, we recorded a charge of $0.6 million to selling and administrative expense related to consolidating certain administrative functions - see Note 11.

During the third quarter of 2014, we recorded a charge of $2.4 million to selling and administrative expense related to professional fees associated with shareholder activism - see Note 11.

During the third quarter of 2014, we recorded a charge of $11.0 million to selling and administrative expense related to costs associated with restructuring of executive management. These costs include severance payments, accelerated vesting of stock-based compensation awards, accrual of the present value of deferred compensation and other benefits to our then Chief Executive Officer as defined in his termination agreement; accelerated vesting of stock-based compensation awards to certain members of executive management and other benefits earned - see Note 11.

During the third quarter of 2014, we recorded a charge of $0.3 million to selling and administrative expense associated with the purchase of EndoDynamix, Inc. - see Note 11.

Fourth Quarter

During the fourth quarter of 2014, we incurred $1.9 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico and the consolidation of our Centennial, Colorado manufacturing operations into our other existing CONMED manufacturing facilities.  These costs were charged to cost of sales – see Note 11.

During the fourth quarter of 2014, we recorded a charge of $1.5 million to selling and administrative expense related to consolidating certain administrative functions - see Note 11.

During the fourth quarter of 2014, we recorded a charge of $1.5 million to selling and administrative expense related to costs associated with restructuring of executive management. These costs include accelerated vesting of stock-based compensation awards to certain members of executive management, consulting fees and other benefits earned - see Note 11.

During the fourth quarter of 2014, we recorded a charge of $0.3 million to selling and administrative expense associated with the purchase of EndoDynamix, Inc. - See Note 11.

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SCHEDULE II—Valuation and Qualifying Accounts

(In thousands)

			Additions
	Balance at Beginning of Period		Charged to Costs and Expenses
								Balance at End of Period
Description					Deductions
2015
Allowance for bad debts	$	1,239	$	493	$	(396	)	$	1,336
Sales returns and
allowance	3,081		521		(185		)	3,417
Deferred tax asset
valuation allowance	293		—		(169		)	124
2014
Allowance for bad debts	$	1,384	$	517	$	(662	)	$	1,239
Sales returns and
allowance	3,098		252		(269		)	3,081
Deferred tax asset
valuation allowance	—		293		—			293
2013
Allowance for bad debts	$	1,203	$	421	$	(240	)	$	1,384
Sales returns and
allowance	3,609		398		(909		)	3,098
Deferred tax asset
valuation allowance	—		—		—			—

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EX-21

EXHIBIT 21

CONMED Corporation

Subsidiaries of the Registrant

Name	State or Country of Incorporation
Aspen Laboratories, Inc.		Colorado
CONMED Andover Medical, Inc.		New York
CONMED Austria GmbH		Austria
CONMED Denmark ApS		Denmark
CONMED Deutschland GmbH		Germany
CONMED Endoscopic Technologies, Inc.		Massachusetts
CONMED Finland Oy		Finland
CONMED France SAS		France
CONMED Iberia SL		Spain
CONMED Italia SrL		Italy
CONMED Linvatec Australia PTY Ltd		Australia
CONMED Linvatec (Beijing) Medical Appliances Co., Ltd		China
CONMED Linvatec Biomaterials Oy		Finland
CONMED U.K. Ltd.		United Kingdom
Consolidated Medical Equipment Company S. de R.L. de C.V.		Mexico
EndoDynamix, Inc.		Delaware
GWH Limited Partnership		Florida
Largo Lakes I Limited Partnership		Delaware
Linvatec Corporation		Florida
Linvatec Belgium NV		Belgium
Linvatec Canada ULC		Canada
Linvatec Europe SPRL		Belgium
Linvatec Korea Ltd.		Korea
Linvatec Nederland B.V.		Netherlands
Linvatec Polska Sp. z.o.o		Poland
Linvatec Sweden AB		Sweden
Viking Systems, Inc.		Delaware

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-78987, 333-90444, 333-124202, 333-136453, 333-145150, 333-162834, 333-168493, 333-182878 and 333-207852) of CONMED Corporation of our report dated February 22, 2016 relating to the consolidated financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

Rochester, New York

February 22, 2016

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Curt R. Hartman, certify that:

1. I have reviewed this annual report on Form 10-K of CONMED Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 22, 2016

/s/ Curt R. Hartman

Curt R. Hartman

President and

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Luke A. Pomilio, certify that:

1. I have reviewed this annual report on Form 10-K of CONMED Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

February 22, 2016

/s/ Luke A. Pomilio

Luke A. Pomilio

Executive Vice President - Finance and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of CONMED Corporation, a New York corporation (the “Corporation”), does hereby certify that:

The Annual Report on Form 10-K for the year ended December 31, 2015 (the “Form 10-K”) of the Corporation fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Date:	February 22, 2016	/s/ Curt R. Hartman
		Curt R. Hartman
		President and
		Chief Executive Officer
Date:	February 22, 2016	/s/ Luke A. Pomilio
		Luke A. Pomilio
		Executive Vice President-Finance and
		Chief Financial Officer

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Feb. 15, 2016	Jun. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	CONMED CORP
Entity Central Index Key	0000816956
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		27,712,715
Entity Public Float			$ 1,613,906,000
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 72,504	$ 66,332
Accounts receivable, less allowance for doubtful accounts of $1,336 in 2015 and $1,239 in 2014	133,863	129,287
Inventories	166,894	148,149
Income taxes receivable	1,879	583
Deferred income taxes	14,150	14,348
Assets held for sale	3,095	0
Prepaid expenses and other current assets	15,102	22,451
Total current assets	407,487	381,150
Property, plant and equipment, net	125,452	133,429
Deferred income taxes	1,332	1,398
Goodwill	260,651	256,232
Other intangible assets, net	308,171	316,440
Other assets	9,851	9,545
Total assets	1,112,944	1,098,194
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term debt	1,339	1,234
Accounts payable	34,720	23,752
Accrued compensation and benefits	31,823	36,446
Income taxes payable	2,903	2,668
Other current liabilities	48,933	51,856
Total current liabilities	119,718	115,956
Long-term debt	269,471	240,201
Deferred income taxes	114,623	112,223
Other long-term liabilities	24,059	48,516
Total liabilities	527,871	$ 516,896
Commitments and contingencies
Preferred stock, par value $.01 per share; authorized 500,000 shares, none issued or outstanding	0	$ 0
Common stock, par value $.01 per share; 100,000,000 authorized; 31,299,194 issued in 2015 and 2014, respectively	313	313
Paid-in capital	324,915	319,752
Retained earnings	414,506	406,145
Accumulated other comprehensive loss	(53,894)	(39,822)
Less: Treasury stock, at cost; 3,590,409 and 3,744,473 shares in 2015 and 2014, respectively	(100,767)	(105,090)
Total shareholders' equity	585,073	581,298
Total liabilities and shareholders' equity	$ 1,112,944	$ 1,098,194

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 1,336	$ 1,239
Preferred stock, par value (in dollars per per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	31,299,194	31,299,194
Treasury stock, shares	3,590,409	3,744,473

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Net sales	$ 719,168	$ 740,055	$ 762,704
Cost of sales	337,466	335,998	350,287
Gross profit	381,702	404,057	412,417
Selling and administrative expense	303,091	323,492	330,078
Research and development expense	27,436	27,779	25,831
Total operating expenses	330,527	351,271	355,909
Income from operations	51,175	52,786	56,508
Loss on early extinguishment of debt	0	0	263
Interest expense	6,031	6,111	5,613
Income before income taxes	45,144	46,675	50,632
Provision for income taxes	14,646	14,483	14,693
Net income	$ 30,498	$ 32,192	$ 35,939
Earnings per share:
Basic (in dollars per share)	$ 1.10	$ 1.17	$ 1.30
Diluted (in dollars per share)	1.09	1.16	1.28
Dividends per share of common stock (in dollars per share)	$ 0.80	$ 0.80	$ 0.65
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	$ (16,775)	$ (15,069)	$ (1,193)
Pension liability	7,578	(18,781)	18,175
Cash flow hedging gain (loss)	(3,291)	7,393	(404)
Other comprehensive income, before tax	18,010	5,735	52,517
Provision (benefit) for income taxes related to items of other comprehensive income	1,584	(4,207)	6,569
Comprehensive income	$ 16,426	$ 9,942	$ 45,948

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Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Treasury Stock [Member]
Balance (shares) at Dec. 31, 2012		31,299
Balance at Dec. 31, 2012	$ 606,998	$ 313	$ 324,322	$ 377,907	$ (27,581)	$ (67,963)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under employee plans	15,196		(4,576)			19,772
Repurchase of treasury stock	(50,556)					(50,556)
Tax benefit arising from common stock issued under employee plans	1,097		1,097
Stock-based compensation	5,593		5,593
Dividends on common stock	(17,957)			(17,957)
Comprehensive income (loss):
Foreign currency translation adjustments					(1,193)
Pension liability (net of income tax expense/benefit)					11,457
Cash flow hedging gain (loss) (net of income tax expense/benefit)					(255)
Net income	35,939			35,939
Comprehensive income	45,948
Balance (shares) at Dec. 31, 2013		31,299
Balance at Dec. 31, 2013	606,319	$ 313	326,436	395,889	(17,572)	(98,747)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under employee plans	(6,139)		(16,658)			10,519
Repurchase of treasury stock	(16,862)					(16,862)
Tax benefit arising from common stock issued under employee plans	644		644
Stock-based compensation	9,330		9,330
Dividends on common stock	(21,936)			(21,936)
Comprehensive income (loss):
Foreign currency translation adjustments					(15,069)
Pension liability (net of income tax expense/benefit)					(11,842)
Cash flow hedging gain (loss) (net of income tax expense/benefit)					4,661
Net income	32,192			32,192
Comprehensive income	9,942
Balance (shares) at Dec. 31, 2014		31,299
Balance at Dec. 31, 2014	581,298	$ 313	319,752	406,145	(39,822)	(105,090)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued under employee plans	(1,974)		(6,297)			4,323
Tax benefit arising from common stock issued under employee plans	3,961		3,961
Stock-based compensation	7,499		7,499
Dividends on common stock	(22,137)			(22,137)
Comprehensive income (loss):
Foreign currency translation adjustments					(16,775)
Pension liability (net of income tax expense/benefit)					4,778
Cash flow hedging gain (loss) (net of income tax expense/benefit)					(2,075)
Net income	30,498			30,498
Comprehensive income	16,426
Balance (shares) at Dec. 31, 2015		31,299
Balance at Dec. 31, 2015	$ 585,073	$ 313	$ 324,915	$ 414,506	$ (53,894)	$ (100,767)

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Consolidated Statements of Shareholder's Equity (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Stockholders' Equity [Abstract]
Pension liability, income tax expense (benefit)	$ 2,800	$ (6,939)	$ 6,718
Cash flow hedging gain (loss), income tax expense (benefit)	$ (1,216)	$ 2,732	$ (149)

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Consolidated Statements of Cash Flows $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Cash flows from operating activities:
Net income	$ 30,498	$ 32,192	$ 35,939
Adjustments to reconcile net income to net cash provided by operating acitivites:
Depreciation	18,704	19,792	18,653
Amortization	25,175	25,942	29,214
Stock-based compensation	7,499	9,330	5,593
Deferred income taxes	2,251	(284)	7,218
Income tax benefit of stock option exercises	3,961	644	1,097
Excess tax benefit from stock option exercises	(4,081)	(922)	(1,518)
Loss on early extinguishment of debt	0	0	263
Increase (decrease) in cash flows from changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	(9,643)	5,255	(798)
Inventories	(34,536)	(20,940)	(1,817)
Accounts payable	11,508	(3,449)	4,223
Income taxes	(1,357)	5,291	(1,098)
Accrued compensation and benefits	(3,964)	3,572	(71)
Other assets	3,950	(546)	(5,222)
Other liabilities	(1,897)	(10,701)	(10,727)
Total operating	17,570	32,984	45,010
Net cash provided by operating activities	48,068	65,176	80,949
Cash flows from investing activities:
Payments related to business acquisitions and asset acquisitions, net of cash acquired	(9,353)	(5,265)	0
Purchases of property, plant and equipment	(15,009)	(15,411)	(18,445)
Net cash used in investing activities	(24,362)	(20,676)	(18,445)
Cash flows from financing activities:
Net proceeds from common stock issued under employee plans	833	2,316	17,264
Repurchase of common stock	0	(16,862)	(50,556)
Excess tax benefit from stock option exercises	4,081	922	1,518
Proceeds of senior credit agreement	30,680	27,000	55,000
Payments related to distribution agreement	(16,667)	(16,667)	(34,000)
Payments on mortgage notes	(1,234)	(1,140)	(1,050)
Payments on senior subordinated notes	0	0	(227)
Payments related to contingent consideration	(3,876)	0	0
Payments related to debt issuance costs	(1,485)	0	(1,725)
Dividends paid on common stock	(22,105)	(21,959)	(16,696)
Other, net	0	0	(824)
Net cash provided by (used in) financing activities	(9,773)	(26,390)	(31,296)
Effect of exchange rate changes on cash and cash equivalents	(7,761)	(6,221)	(485)
Net increase (decrease) in cash and cash equivalents	6,172	11,889	30,723
Cash and cash equivalents at beginning of year	66,332	54,443	23,720
Cash and cash equivalents at end of year	72,504	66,332	54,443
Non-cash investing and financing activities:
Contractual obligations for acquisition of a business	440	10,137	0
Dividends payable	5,542	5,510	5,545
Cash paid during the year for:
Interest	5,434	5,532	5,143
Income taxes	$ 10,261	$ 10,206	$ 6,837

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Operations and Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Operations and Significant Accounting Policies

Operations and Significant Accounting Policies

Organization and operations

CONMED Corporation (“CONMED”, the “Company”, “we” or “us”) is a medical technology company that provides surgical devices and equipment for minimally invasive procedures.  The Company’s products are used by surgeons and physicians in a variety of specialties including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology.

Principles of consolidation

The consolidated financial statements include the accounts of CONMED Corporation and its controlled subsidiaries.  All significant intercompany accounts and transactions have been eliminated.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments which affect the reported amounts of assets, liabilities, related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, purchased in-process research and development, pension benefits, goodwill and intangible assets, contingent consideration, contingencies and other accruals.  We base our estimates on historical experience and on various other assumptions which are believed to be reasonable under the circumstances.  Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates.  Estimates and assumptions are reviewed periodically, and the effect of revisions is reflected in the consolidated financial statements in the period they are determined to be necessary.

Cash and cash equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Inventories

Inventories are valued at the lower of cost or market.  Cost is determined on the FIFO (first-in, first-out) method of accounting.

We write-off excess and obsolete inventory resulting from the inability to sell our products at prices in excess of current carrying costs.  We make estimates regarding the future recoverability of the costs of our products and record a provision for excess and obsolete inventories based on historical experience and expected future trends. 

Property, plant and equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the following estimated useful lives:

Building and improvements	12 to 40 years
Leasehold improvements	Shorter of life of asset or life of lease
Machinery and equipment	2 to 15 years

Goodwill and other intangible assets

We have a history of growth through acquisitions.  Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition.  Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.   Customer relationships, trademarks, tradenames, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Promotional, marketing and distribution rights represent intangible assets created under our Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”).  We have accumulated goodwill of $260.7 million and other intangible assets of $308.2 million as of December 31, 2015.

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to at least annual impairment testing. It is our policy to perform our annual impairment testing in the fourth quarter. 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. During 2015, we completed our goodwill impairment testing with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with Financial Accounting Standards Board Accounting Standard Codification (“ASC”) 350-20-35 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, we believe the fair value continues to exceed carrying value.

Intangible assets with a finite life are amortized over the estimated useful life of the asset and are evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization.  Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of an intangible asset subject to amortization is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.  An impairment loss is recognized by reducing the carrying amount of the intangible asset to its current fair value.

Customer relationship assets arose principally as a result of the 1997 acquisition of Linvatec Corporation.  These assets represent the acquisition date fair value of existing customer relationships based on the after-tax income expected to be derived during their estimated remaining useful life.  The useful lives of these customer relationships were not, and are not, limited by contract or any economic, regulatory or other known factors.  The estimated useful life of the Linvatec customer relationship assets was determined as of the date of acquisition as a result of a study of the observed pattern of historical revenue attrition during the 5 years immediately preceding the acquisition of Linvatec Corporation.  This observed attrition pattern was then applied to the existing customer relationships to derive the future expected useful life of the customer relationships.  This analysis indicated an annual attrition rate of 2.6%.  Assuming an exponential attrition pattern, this equated to an average remaining useful life of approximately 38 years for the Linvatec customer relationship assets.  Customer relationship intangible assets arising as a result of other business acquisitions are being amortized over a weighted average life of 18 years.  The weighted average life for customer relationship assets in aggregate is 33 years.

We evaluate the remaining useful life of our customer relationship intangible assets each reporting period in order to determine whether events and circumstances warrant a revision to the remaining period of amortization.  In order to further evaluate the remaining useful life of our customer relationship intangible assets, we perform an analysis and assessment of actual customer attrition and activity as events and circumstances warrant.  This assessment includes a comparison of customer activity since the acquisition date and review of customer attrition rates.  In the event that our analysis of actual customer attrition rates indicates a level of attrition that is in excess of that which was originally contemplated, we would change the estimated useful life of the related customer relationship asset with the remaining carrying amount amortized prospectively over the revised remaining useful life.

We test our customer relationship assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Factors specific to our customer relationship assets which might lead to an impairment charge include a significant increase in the annual customer attrition rate or otherwise significant loss of customers, significant decreases in sales or current-period operating or cash flow losses or a projection or forecast of losses. We do not believe that there have been events or changes in circumstances which would indicate the carrying amount of our customer relationship assets might not be recoverable.

Trademarks and tradenames were recognized principally in connection with the 1997 acquisition of Linvatec Corporation.  We continue to market products, release new product and product extensions and maintain and promote these trademarks and tradenames in the marketplace through legal registration and such methods as advertising, medical education and trade shows.  It is our belief that these trademarks and tradenames will generate cash flow for an indefinite period of time.  Therefore, our trademarks and tradenames intangible assets are not amortized. During 2015, we completed our impairment testing of trademarks and tradenames with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with ASC 350-30-35 utilizing the relief from royalty income approach to determine whether the fair value of the Linvatec trademark and tradenames are less than their carrying amounts. Fair value is determined based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average cost of capital, and assumed royalty rates. Based upon our assessment, we believe the fair value continues to exceed carrying value.

For all other indefinite lived intangible assets, we perform a qualitative impairment test in accordance with ASC 350-30-35. Based upon this assessment, we have determined that it is unlikely that our indefinite lived intangible assets are impaired.

Other long-lived assets

We review asset carrying amounts for impairment (consisting of intangible assets subject to amortization and property, plant and equipment) whenever events or circumstances indicate that such carrying amounts may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value to its current fair value.

Translation of foreign currency financial statements

Assets and liabilities of foreign subsidiaries have been translated into United States dollars at the applicable rates of exchange in effect at the end of the period reported. Revenues and expenses have been translated at the applicable weighted average rates of exchange in effect during the period reported. Translation adjustments are reflected in accumulated other comprehensive loss. Transaction gains and losses are included in net income.

Foreign exchange and hedging activity

We manage our foreign currency transaction risks through the use of forward contracts to hedge forecasted cash flows associated with foreign currency transaction exposures. We account for these forward contracts as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss. These changes in fair value will be reclassified into earnings as a component of sales or cost of sales when the forecasted transaction occurs.

We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables denominated in foreign currencies. These forward contracts settle each month at month-end, at which time we enter into new forward contracts. We have not designated these forward contracts as hedges and have not applied hedge accounting to them. We record these forward contracts at fair value with resulting gains and losses included in selling and administrative expense in the consolidated statements of comprehensive income.

Income taxes

Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities and operating loss and tax credit carryforwards as measured by the enacted tax rates that are anticipated to be in effect in the respective jurisdictions when these differences reverse. The deferred income tax provision generally represents the net change in the assets and liabilities for deferred income taxes. A valuation allowance is established when it is necessary to reduce deferred income tax assets to amounts for which realization is likely. In assessing the need for a valuation allowance, we estimate future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards. Valuation allowances related to deferred tax assets may be impacted by changes to tax laws, changes to statutory tax rates, reversal of temporary differences and ongoing and future taxable income levels.

Deferred income taxes are not provided on the unremitted earnings of subsidiaries outside of the United States when it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon a repatriation of assets from a subsidiary or the sale or liquidation of a subsidiary. Deferred income taxes are provided when the Company no longer considers subsidiary earnings to be permanently invested, such as in situations where the Company’s subsidiaries plan to make future dividend distributions.

Revenue recognition

Revenue is recognized when title has been transferred to the customer which is at the time of shipment. The following policies apply to our major categories of revenue transactions:

• Sales to customers are evidenced by firm purchase orders. Title and the risks and rewards of ownership are transferred to the customer when product is shipped under our stated shipping terms.  Payment by the customer is due under fixed payment terms and collectability is reasonably assured.

• We place certain of our capital equipment with customers on a loaned basis in return for commitments to purchase related single-use products over time periods generally ranging from one to three years.  In these circumstances, no revenue is recognized upon capital equipment shipment as the equipment is loaned and subject to return if certain minimum single-use purchases are not met.  Revenue is recognized upon the sale and shipment of the related single-use products.  The cost of the equipment is amortized over its estimated useful life.

• We recognize revenues related to the promotion and marketing of sports medicine allograft tissue in accordance with the contractual terms of our agreement with Musculoskeletal Transplant Foundation (“MTF”) on a net basis as our role is limited to that of an agent earning a commission or fee. MTF records revenue when the tissue is shipped to the customer. Our services are completed at this time and net revenues for the “Service Fee” for our promotional and marketing efforts are then recognized based on a percentage of the net amounts billed by MTF to its customers. The timing of revenue recognition is determined through review of the net billings made by MTF each month. Our net commission Service Fee is based on the contractual terms of our agreement and is currently 50%. This percentage can vary over the term of the agreement but is contractually determinable. Our Service Fee revenues are recorded net of amortization of the acquired assets, which are being expensed over the expected useful life of 25 years.

• Product returns are only accepted at the discretion of the Company and in accordance with our “Returned Goods Policy”.  Historically, the level of product returns has not been significant.  We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.

• Our terms of sale to customers generally do not include any obligations to perform future services.  Limited warranties are provided for capital equipment sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.

• Amounts billed to customers related to shipping and handling have been included in net sales.  Shipping and handling costs included in selling and administrative expense were $12.6 million, $13.6 million and $12.6 million for 2015, 2014 and 2013, respectively.

• We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk.

• We assess the risk of loss on accounts receivable and adjust the allowance for doubtful accounts based on this risk assessment.  Historically, losses on accounts receivable have not been material.  Management believes that the allowance for doubtful accounts of $1.3 million at December 31, 2015 is adequate to provide for probable losses resulting from accounts receivable.

Earnings per share

Basic earnings per share (“basic EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding resulting from employee stock options, restricted stock units, performance share units and stock appreciation rights during the period. The following table sets forth the computation of basic and diluted earnings per share at December 31, 2015, 2014 and 2013, respectively: 

	2015		2014		2013
Net income	$	30,498	$	32,192	$	35,939
Basic-weighted average shares outstanding	27,653		27,401		27,722
Effect of dilutive potential securities	205		368		392
Diluted-weighted average shares outstanding	27,858		27,769		28,114
Basic EPS	$	1.10	$	1.17	$	1.30
Diluted EPS	$	1.09	$	1.16	$	1.28

The shares used in the calculation of diluted EPS exclude options and SARs to purchase shares where the exercise price was greater than the average market price of common shares for the year and the effect of the inclusion would be anti-dilutive. Such shares aggregated approximately 0.5 million, 0.0 million and 0.0 million at December 31, 2015, 2014 and 2013, respectively.  

Stock-based compensation

All share-based payments to employees, including grants of employee stock options, restricted stock units, performance share units and stock appreciation rights are recognized in the financial statements based at their fair values.  Compensation expense is generally recognized using a straight-line method over the vesting period. Compensation expense for performance share units is recognized using the graded vesting method.

We issue shares under our stock based compensation plans out of treasury stock whereby treasury stock is reduced by the weighted average cost of such treasury stock.  To the extent there is a difference between the cost of the treasury stock and the exercise price of shares issued under stock based compensation plans, we record gains to paid in capital;  losses are recorded to paid in capital to the extent any gain was previously recorded, otherwise the loss is recorded to retained earnings.

Accumulated other comprehensive loss

Accumulated other comprehensive loss consists of the following:

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2014	$	3,276		$	(30,760	)	$	(12,338	)	$	(39,822	)
Other comprehensive income (loss) before reclassifications, net of tax	4,482			2,739			(16,775		)	(9,554		)
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(10,399		)	3,233			—			(7,166		)
Tax expense (benefit)	3,842			(1,194		)	—			2,648
Net current-period other comprehensive income (loss)	(2,075		)	4,778			(16,775		)	(14,072		)
Balance, December 31, 2015	$	1,201		$	(25,982	)	$	(29,113	)	$	(53,894	)

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2013	$	(1,385	)	$	(18,918	)	$	2,731		$	(17,572	)
Other comprehensive income (loss) before reclassifications, net of tax	5,061			(10,551		)	(15,069		)	(20,559		)
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(635		)	(2,048		)	—			(2,683		)
Tax expense	235			757			—			992
Net current-period other comprehensive income (loss)	4,661			(11,842		)	(15,069		)	(22,250		)
Balance, December 31, 2014	$	3,276		$	(30,760	)	$	(12,338	)	$	(39,822	)

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2012	$	(1,130	)	$	(30,375	)	$	3,924		$	(27,581	)
Other comprehensive income (loss) before reclassifications, net of tax	(158		)	8,618			(1,193		)	7,267
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(153		)	4,502			—			4,349
Tax expense (benefit)	56			(1,663		)	—			(1,607		)
Net current-period other comprehensive income (loss)	(255		)	11,457			(1,193		)	10,009
Balance, December 31, 2013	$	(1,385	)	$	(18,918	)	$	2,731		$	(17,572	)

(a) The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 13 and Note 9, respectively, for further details.

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Inventories

12 Months Ended

Dec. 31, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following at December 31:

	2015		2014
Raw materials	$	47,681	$	44,847
Work in process	13,922		13,876
Finished goods	105,291		89,426
	$	166,894	$	148,149

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Property, Plant and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant and equipment consist of the following at December 31:

	2015			2014
Land	$	4,027		$	4,243
Building and improvements	90,272			96,953
Machinery and equipment	193,630			191,306
Construction in progress	5,281			5,140
	293,210			297,642
Less:  Accumulated depreciation	(167,758		)	(164,213		)
	$	125,452		$	133,429

We lease various manufacturing facilities, office facilities and equipment under operating leases.  Leasehold improvements related to these facilities are included in building and improvements above. Rental expense on these operating leases was approximately $5,464, $5,897 and $6,713 for the years ended December 31, 2015, 2014 and 2013, respectively. The aggregate future minimum lease commitments for operating leases at December 31, 2015 are as follows:

2016	$	5,344
2017	4,769
2018	4,567
2019	4,302
2020	1,424
Thereafter	3,264

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the net carrying amount of goodwill for the years ended December 31, are as follows:

	2015			2014
Balance as of January 1,	$	256,232		$	248,428
Goodwill resulting from business acquisitions	5,369			7,773
Reduction in goodwill resulting from a business acquisition purchase price allocation adjustment	(525		)	—
Foreign currency translation	(425		)	31
Balance as of December 31,	$	260,651		$	256,232

Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition.  Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.  During 2015, the Company entered into three acquisitions totaling a cash purchase price of $6.1 million. Goodwill resulting from business acquisitions in 2015 amounted to $5.4 million. The purchase price in a prior acquisition was allocated based on information available at the acquisition date. During the quarter ended March 31, 2015, we recorded a measurement period adjustment, which reduced goodwill by $0.5 million. The amount was not considered material and therefore prior periods have not been revised.

Total accumulated impairment losses aggregated $106,991 at December 31, 2015 and 2014, respectively.

Other intangible assets consist of the following:

	December 31, 2015					December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	136,871	$	(64,423	)	$	136,126	$	(59,707	)
Promotional, marketing & distribution rights	149,376		(24,000		)	149,376		(18,000		)
Patents and other intangible assets	66,688		(42,885		)	63,464		(41,363		)
Unamortized intangible assets:
Trademarks and tradenames	86,544		—			86,544		—
	$	439,479	$	(131,308	)	$	435,510	$	(119,070	)

Customer relationships, trademarks and tradenames, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Promotional, marketing and distribution rights represent intangible assets created under our Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”).

On January 3, 2012, the Company entered into the JDDA with MTF to obtain MTF's worldwide promotion rights with respect to allograft tissues within the field of sports medicine and related products. The initial consideration from the Company included a $63.0 million up-front payment for the rights and certain assets, with an additional $84.0 million contingently payable over a four year period depending on MTF meeting supply targets for tissue. On January 6, 2016, January 5, 2015 and January 3, 2014, we paid equal installments of $16.7 million and on January 3, 2013, we paid $34.0 million of the additional consideration. The $16.7 million related to the remaining contingent obligation as of December 31, 2015 is accrued in other current liabilities.

On July 30, 2014, the Company purchased the stock of EndoDynamix, Inc., a developer of minimally invasive surgical instruments. The purchase price included $13.9 million in contingent consideration based upon certain milestones being achieved totaling $10.3 million and future royalties to be incurred of $3.6 million. Contingent consideration was valued using a discounted cash flow method. We paid $3.7 million of the milestone payment on October 17, 2014, another $2.4 million payment on April 13, 2015 and a third payment of $1.5 million on November 4, 2015. We expect the remaining milestones to be achieved, and royalty payments to be made, between 2016 and 2021. The remaining contingent consideration totaled $6.3 million as of December 31, 2015 and is included in other current and other long term liabilities.

Amortization expense related to intangible assets which are subject to amortization totaled $12.6 million, $13.0 million and $13.7 million for the years ending December 31, 2015, 2014 and 2013, respectively, and is included as a reduction of revenue (for amortization related to our promotional, marketing and distribution rights) and in selling and administrative expense (for all other intangible assets) in the consolidated statements of comprehensive income. The weighted average amortization period for intangible assets which are amortized is 27 years.  Customer relationships are being amortized over a weighted average life of 33 years.  Promotional, marketing and distribution rights are being amortized over a weighted average life of 25 years. Patents and other intangible assets are being amortized over a weighted average life of 12 years. Included in patents and other intangible assets at December 31, 2015 is an in-process research and development asset related to the EndoDynamix, Inc. acquisition that is not currently amortized.

The estimated amortization expense related to intangible assets at December 31, 2015 for each of the five succeeding years is as follows:

	Amortization included in expense	Amortization recorded as a reduction of revenue	Total
2016	6,882	6,000	$	12,882
2017	7,578	6,000	$	13,578
2018	7,525	6,000	$	13,525
2019	7,525	6,000	$	13,525
2020	6,906	6,000	$	12,906

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Long Term Debt

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Long-term Debt

Long Term Debt

Long-term debt consists of the following at December 31:

	2015		2014
Revolving line of credit	$	265,609	$	235,000
Mortgage notes	5,201		6,435
Total long-term debt	270,810		241,435
Less:  Current portion	1,339		1,234
	$	269,471	$	240,201

On April 28, 2015, we entered into an amended and restated $450.0 million senior credit agreement (the "amended and restated senior credit agreement"). The amended and restated senior credit agreement consists of a $450.0 million revolving credit facility expiring on April 28, 2020. There were $265.6 million in borrowings outstanding on the revolving credit facility as of December 31, 2015.  Our available borrowings on the revolving credit facility at December 31, 2015 were $179.3 million with approximately $5.1 million of outstanding letters of credit.

Interest rates on the amended and restated senior credit agreement are at LIBOR plus 1.50% (1.93% at December 31, 2015) or an alternative base rate.  For those borrowings where we elect to use the alternative base rate, the base rate will be the greater of the Prime Rate, the Federal Funds Rate in effect on such date plus 0.50%, or the one month Eurocurrency rate plus 1.00%, plus an additional margin of 0.50%.

The amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets.  The amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios (the most restrictive of which is the senior leverage ratio) 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, 2015. We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales.

On January 17, 2013, we had entered into an amended and restated credit agreement. In connection with the refinancing, we recorded a $0.3 million loss on the early extinguishment of debt related to the write-off of unamortized deferred financing costs under the then existing senior credit agreement.

As further described in Note 15, on January 4, 2016, we entered into a fifth amended and restated senior credit agreement (the “fifth amended and restated senior credit agreement”) consisting of: (a) a $175.0 million term loan facility and (b) a $525.0 million revolving credit facility both expiring on January 4, 2021. The term loan is payable in quarterly installments increasing over the term of the facility.

We have a mortgage note outstanding in connection with the Largo, Florida property and facilities bearing interest at 8.25% per annum with semiannual payments of principal and interest through June 2019.  The principal balance outstanding on the mortgage note aggregated $5.2 million at December 31, 2015.  The mortgage note is collateralized by the Largo, Florida property and facilities.

The scheduled maturities of long-term debt outstanding at December 31, 2015 are as follows:

2016	$	1,339
2017	1,452
2018	1,574
2019	836
2020	265,609
Thereafter	—

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes for the years ended December 31, 2015, 2014 and 2013 consists of the following:

	2015		2014			2013
Current tax expense (benefit):
Federal	$	4,208	$	2,256		$	(2,274	)
State	1,238		516			502
Foreign	6,949		11,995			9,247
	12,395		14,767			7,475
Deferred income tax expense (benefit)	2,251		(284		)	7,218
Provision for income taxes	$	14,646	$	14,483		$	14,693

A reconciliation between income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2015, 2014 and 2013 follows:

	2015		2014		2013
Tax provision at statutory rate based on income before income taxes	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	3.2		1.7		1.8
Impact of repatriation of foreign earnings	2.5		—		—
New York State corporate tax reform	—		5.5		—
Stock-based compensation	—		(0.2	)	(0.5	)
Foreign income taxes	(3.6	)	(4.8	)	(3.1	)
Federal research credit	(2.0	)	(2.1	)	(2.8	)
Settlement of taxing authority examinations	(0.6	)	(3.7	)	(2.0	)
European permanent deduction	(2.1	)	(3.8	)	(2.4	)
Non deductible/non-taxable items	1.8		1.8		2.9
Other, net	(1.8	)	1.6		0.1
	32.4	%	31.0	%	29.0	%

The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:

	2015			2014
Assets:
Inventory	$	3,938		$	4,476
Net operating losses	6,421			10,207
Capitalized research and development	5,733			1,850
Deferred compensation	2,557			3,507
Accounts receivable	2,938			2,604
Compensation and benefits	7,365			6,003
Accrued pension	3,944			6,186
Research and development credit	7,094			6,198
Other	3,245			1,564
Foreign tax credit	—			2,283
Less: valuation allowances	(124		)	(293		)
	43,111			44,585
Liabilities:
Goodwill and intangible assets	122,623			120,012
Depreciation	11,999			14,041
State taxes	7,427			6,737
Contingent interest	203			272
	142,252			141,062
Net liability	$	(99,141	)	$	(96,477	)

Income before income taxes consists of the following U.S. and foreign income:

	2015		2014		2013
U.S. income	$	18,119	$	12,374	$	20,106
Foreign income	27,025		34,301		30,526
Total income	$	45,144	$	46,675	$	50,632

As of December 31, 2015, the amount of federal net operating loss carryforward was $18.0 million and begins to expire in 2026. As of December 31, 2015, the amount of federal research credit carryforward available was $7.1 million.  These credits begin to expire in 2027.  

In New York State, corporate tax reform enacted in March 2014 changed the tax rate of a manufacturing company such as our Company to essentially 0%. Previously recorded New York State net deferred tax assets of $2.3 million, including $3.3 million of future tax benefits associated with state tax credits, have been written off as a non-cash charge to income tax expense.

During the fourth quarter of 2015, the Company repatriated $9.3 million of 2015 foreign earnings and recorded a tax charge of $1.1 million. The repatriated earnings represented a portion of the current year earnings of certain foreign subsidiaries and affiliates and thus were not previously permanently reinvested.  There has been no change in our longer term international plans as our intent to indefinitely reinvest foreign earnings accumulated through the year ended December 31, 2014 has not changed.

U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. The amount of such temporary differences totaled $95.1 million as of December 31, 2015. It is not practicable given the complexities of the hypothetical foreign tax credit calculation to determine the tax liability on this temporary difference.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our Federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2013.

We recognize tax liabilities in accordance with the provisions for accounting for uncertainty in income taxes. Such guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:

	2015			2014			2013
Balance as of January 1,	$	581		$	1,689		$	1,587
Increases for positions taken in prior periods	100			45			70
Increases for positions taken in current periods	—			—			1,132
Decreases in unrecorded tax positions related to settlement with the taxing authorities	—			(1,073		)	(1,010		)
Decreases in unrecorded tax positions related to lapse of statute of limitations	(65		)	(80		)	(90		)
Balance as of December 31,	$	616		$	581		$	1,689

If the total unrecognized tax benefits of $0.6 million at December 31, 2015 were recognized, it would reduce our annual effective tax rate.  The amount of interest accrued in 2015 related to these unrecognized tax benefits was not material and is included in the provision for income taxes in the consolidated statements of comprehensive income.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

On February 29, 2012, the Board of Directors adopted a cash dividend policy and declared an initial quarterly dividend of $0.15 per share. On October 28, 2013, the Board of Directors increased the quarterly dividend to $0.20 per share. The fourth quarter dividend for 2015 was paid on January 5, 2016 to shareholders of record as of December 15, 2015. The total dividend payable at December 31, 2015 was $5.5 million and is included in other current liabilities in the consolidated balance sheet.

Our shareholders have authorized 500,000 shares of preferred stock, par value $.01 per share, which may be issued in one or more series by the Board of Directors without further action by the shareholders. As of December 31, 2015 and 2014, no preferred stock had been issued.

Our Board of Directors has authorized a $200.0 million share repurchase program. Through December 31, 2015, 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.  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.  During 2015, we did not repurchase any shares. During 2014, we repurchased 0.4 million shares for an aggregate cost of $16.9 million.  During 2013, we repurchased 1.6 million shares for an aggregate cost of $50.6 million.

We have reserved 8.8 million shares of common stock for issuance to employees and directors under three shareholder approved share-based compensation plans (the "Plans") of which approximately 2.1 million shares remain available for grant at December 31, 2015.  The exercise price on all outstanding stock appreciation rights (“SARs”) is equal to the quoted fair market value of the stock at the date of grant.  Restricted stock units (“RSUs”) and performance stock units (“PSUs”) are valued at the market value of the underlying stock on the date of grant.  SARs, RSUs and PSUs are non-transferable other than on death and generally become exercisable over a five year period from date of grant.  SARs expire ten years from date of grant.  SARs are only settled in shares of the Company’s stock.  The issuance of shares pursuant to the exercise of stock options and SARs and vesting of RSUs and PSUs are from the Company’s treasury stock.

Total pre-tax stock-based compensation expense recognized in the consolidated statements of comprehensive income was $7.5 million, $9.3 million and $5.6 million for the years ended December 31, 2015, 2014 and 2013, respectively.  These amounts are included in selling and administrative expenses, and in 2015 and 2014, $1.0 million and $3.9 million, respectively, of the total relates to acceleration of awards associated with the Company's restructuring as further described in Note 11.  Tax related benefits of $2.7 million, $3.4 million and $2.1 million were also recognized for the years ended December 31, 2015, 2014 and 2013, respectively.  Cash received from the exercise of stock options was $0.2 million, $1.8 million and $16.7 million for the years ended December 31, 2015, 2014 and 2013, respectively, and is reflected in cash flows from financing activities in the consolidated statements of cash flows.

The Company uses the Black-Scholes option pricing model to estimate the fair value of options and SARs at the date of grant. Use of a valuation model requires management to make certain assumptions with respect to select model inputs. Expected volatilities are based upon historical volatility of the Company’s stock over a period equal to the expected life of each option and SAR grant. The risk free interest rate is based on the option and SAR grant date for a traded U.S. Treasury bond with a maturity date closest to the expected life. The expected annual dividend yield is based on the Company's anticipated cash dividend payouts. The expected life represents the period of time that the options and SARs are expected to be outstanding based on a study of historical data of option holder exercise and termination behavior.

The following table illustrates the assumptions used in estimating fair value in the years ended December 31, 2015, 2014 and 2013.

	2015			2014			2013
Grant date fair value of SARs	$	11.37		$	13.40		$	9.77
Expected stock price volatility	25.96		%	34.85		%	35.88		%
Risk-free interest rate	1.49		%	1.53		%	1.04		%
Expected annual dividend yield	1.55		%	1.80		%	1.79		%
Expected life of options & SARs (years)	5.7			6.4			6.3

The following table illustrates the stock option and SAR activity for the year ended December 31, 2015.

	Number of Shares (in 000’s)		Weighted- Average Exercise Price
Outstanding at December 31, 2014	453		$	28.85
Granted	609		$	51.48
Forfeited	(19	)	$	48.32
Exercised	(123	)	$	29.01
Outstanding at December 31, 2015	920		$	43.47
Exercisable at December 31, 2015	219		$	26.00
SARs expected to vest	701		$	48.92

The weighted average remaining contractual term for SARs outstanding and exercisable at December 31, 2015 was 7.9 years and 4.8 years, respectively.  The aggregate intrinsic value of SARs outstanding and exercisable at December 31, 2015 was $5.0 million and $4.0 million, respectively.  The aggregate intrinsic value of stock options and SARs exercised during the years ended December 31, 2015, 2014 and 2013 was $2.8 million, $10.7 million and $4.7 million, respectively.

The following table illustrates the RSU and PSU activity for the year ended December 31, 2015.  

	Number of Shares (in 000’s)		Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2014	322		$	33.14
Granted	226		$	45.75
Vested	(138	)	$	32.04
Forfeited	(57	)	$	35.63
Outstanding at December 31, 2015	353		$	41.23

The weighted average fair value of awards of RSUs and PSUs granted in the years ended December 31, 2015, 2014 and 2013 was $45.75, $43.21 and $33.02, respectively.

The total fair value of shares vested was $6.0 million, $11.6 million and $7.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

As of December 31, 2015, there was $17.4 million of total unrecognized compensation cost related to nonvested SARs, RSUs and PSUs granted under the Plans which is expected to be recognized over a weighted average period of 3.3 years.

We offer to our employees a shareholder-approved Employee Stock Purchase Plan (the “Employee Plan”), under which we have reserved 1.0 million shares of common stock for issuance to our employees.  The Employee Plan provides employees with the opportunity to invest from 1% to 10% of their annual salary to purchase shares of CONMED common stock at a purchase price equal to 95% of the fair market value of the common stock on the exercise date.  During 2015, we issued approximately 13,000 shares of common stock under the Employee Plan.  No stock-based compensation expense has been recognized in the accompanying consolidated financial statements as a result of common stock issuances under the Employee Plan.

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Business Segments and Geographic Areas

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Business Segments and Geographic Areas

Business Segments and Geographic Areas

We are accounting and reporting for our business as a single operating segment entity engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. Our chief operating decision maker (the CEO) evaluates the various global product portfolios on a net sales basis and evaluates profitability, investment and cash flow metrics on a consolidated worldwide basis due to shared infrastructure and resources.

Our product lines consist of orthopedic surgery, general surgery and surgical visualization. Orthopedic surgery consists of sports medicine instrumentation and small bone, large bone and specialty powered surgical instruments and service fees related to the promotion and marketing of sports medicine allograft tissue. General surgery consists of a complete line of endo-mechanical instrumentation for minimally invasive laparoscopic and gastrointestinal procedures, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. Surgical visualization consists of imaging systems for use in minimally invasive orthopedic and general surgery procedures including 2DHD and 3DHD vision technologies. These product lines' net sales are as follows:

	2015		2014		2013
Orthopedic surgery	$	388,948	$	402,750	$	410,171
General surgery	274,190		279,356		286,747
Surgical visualization	56,030		57,949		65,786
Consolidated net sales	$	719,168	$	740,055	$	762,704

Net sales information for geographic areas consists of the following:

	2015		2014		2013
United States	$	361,452	$	360,960	$	375,473
Canada	57,629		63,686		73,457
United Kingdom	26,703		30,496		28,471
Japan	37,809		37,230		36,705
Australia	33,810		38,711		38,752
All other countries	201,765		208,972		209,846
Total	$	719,168	$	740,055	$	762,704

Sales are attributed to countries based on the location of the customer. There were no significant investments in long-lived assets located outside the United States at December 31, 2015 and 2014.  No single customer represented over 10% of our consolidated net sales for the years ended December 31, 2015, 2014 and 2013.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

We sponsor an employee savings plan (“401(k) plan”) covering substantially all of our United States based employees. We also 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.

Total employer contributions to the 401(k) plan were $7.6 million, $6.9 million and $7.3 million during the years ended December 31, 2015, 2014 and 2013, respectively.

We use a December 31, measurement date for our pension plan.  Gains and losses are amortized on a straight-line basis over the average remaining service period of active participants.

The following table provides a reconciliation of the projected benefit obligation, plan assets and funded status of the pension plan at December 31:

	2015			2014
Accumulated Benefit Obligation	$	78,437		$	91,107
Change in benefit obligation
Projected benefit obligation at beginning of year	$	91,107		$	75,946
Service cost	240			271
Interest cost	3,394			3,465
Actuarial (gain) loss	(11,806		)	16,546
Benefits paid	(1,620		)	(1,414		)
Settlement	(2,878		)	(3,707		)
Projected benefit obligation at end of year	$	78,437		$	91,107
Change in plan assets
Fair value of plan assets at beginning of year	$	73,431		$	76,442
Actual gain on plan assets	(1,765		)	2,110
Benefits paid	(1,620		)	(1,414		)
Settlement	(2,878		)	(3,707		)
Fair value of plan assets at end of year	$	67,168		$	73,431
Funded status	$	(11,269	)	$	(17,676	)

Amounts recognized in the consolidated balance sheets consist of the following at December 31,:

	2015			2014
Other long-term liabilities	$	(11,269	)	$	(17,676	)
Accumulated other comprehensive loss	(41,205		)	(48,782		)

The following actuarial assumptions were used to determine our accumulated and projected benefit obligations as of December 31,:

	2015		2014
Discount rate	4.54	%	3.81	%
Expected return on plan assets	8.00	%	8.00	%

Accumulated other comprehensive loss for the years ended December 31, 2015 and 2014 consists of net actuarial losses of $41,205 and $48,782, respectively, not yet recognized in net periodic pension cost (before income taxes).

Other changes in plan assets and benefit obligations recognized in other comprehensive income in 2015 are as follows:

Current year actuarial gain	$	4,344
Amortization of actuarial loss	3,233
Total recognized in other comprehensive loss	$	7,577

The estimated portion of net actuarial loss in accumulated other comprehensive loss that is expected to be recognized as a component of net periodic pension cost in 2016 is $2.8 million.

Net periodic pension cost for the years ended December 31, consists of the following:

	2015			2014			2013
Service cost	$	240		$	271		$	253
Interest cost on projected benefit obligation	3,394			3,465			3,315
Expected return on plan assets	(5,697		)	(2,297		)	(5,491		)
Amortization of loss	3,233			(2,048		)	3,059
Settlement expense	—			—			1,443
Net periodic pension (income) cost	$	1,170		$	(609	)	$	2,579

The following actuarial assumptions were used to determine our net periodic pension benefit cost for the years ended December 31,:

	2015		2014		2013
Discount rate	3.81	%	4.75	%	3.90	%
Expected return on plan assets	8.00	%	8.00	%	8.00	%

In 2016, we are changing the method we use to estimate the interest cost component of net periodic pension cost. Historically, we estimated the interest cost component using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. We have elected to use a full yield curve approach in the estimation of this component of benefit cost by applying the specific spot rates along the yield curve used in the determination of the benefit obligation that correlate to the relevant projected cash flows ("spot rate approach"). This change provides a more precise measurement of interest cost. This change does not affect the measurement of our total benefit obligation as the change in interest cost is completely offset by the actuarial (gain) loss reported. We have accounted for this change as a change in estimate and, accordingly, will account for it prospectively in 2016.

In determining the expected return on pension plan assets, we consider the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance.  In addition, we consult with financial and investment management professionals in developing appropriate targeted rates of return.

Asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk and providing adequate liquidity to meet immediate and future benefit payment requirements.

The allocation of pension plan assets by category is as follows at December 31,:

	Percentage of Pension Plan Assets				Target Allocation
	2015		2014		2016
Equity securities	86	%	84	%	75	%
Debt securities	14		16		25
Total	100	%	100	%	100	%

As of December 31, 2015, the Plan held 27,562 shares of our common stock, which had a fair value of $1.2 million.  We believe that our long-term asset allocation on average will approximate the targeted allocation. We regularly review our actual asset allocation and periodically rebalance the pension plan’s investments to our targeted allocation when deemed appropriate.

The following table sets forth the fair value of pension plan assets as of December 31:

	2015		2014
Common Stock	$	34,466	$	35,337
Money Market Fund	1,302		3,320
Mutual Funds	23,576		26,671
Fixed Income Securities	7,824		8,103
Total Assets at Fair Value	$	67,168	$	73,431

FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. A valuation hierarchy was established for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2015 and 2014:

Common Stock:	Common stock is valued at the closing price reported on the common stock’s respective stock exchange and is classified within level 1 of the valuation hierarchy.
Money Market Fund:	These investments are public investment vehicles valued using $1 for the Net Asset Value (NAV). The money market fund is classified within level 2 of the valuation hierarchy.
Mutual Funds:	These investments are public investment vehicles valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and is classified within level 1 of the valuation hierarchy.
Fixed Income Securities:	Valued at the closing price reported on the active market on which the individual securities are traded and are classified within level 1 of the valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the pension plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following table sets forth by level, within the fair value hierarchy, the pension plan's assets at fair value as of December 31, 2015 and December 31, 2014:

December 31, 2015	Level 1		Level 2		Total
Common Stock	$	34,466	$	—	$	34,466
Money Market Fund	—		1,302		1,302
Mutual Funds	23,576		—		23,576
Fixed Income Securities	7,824		—		7,824
	$	65,866	$	1,302	$	67,168

December 31, 2014	Level 1		Level 2		Total
Common Stock	$	35,337	$	—	$	35,337
Money Market Fund	—		3,320		3,320
Mutual Funds	26,671		—		26,671
Fixed Income Securities	8,103		—		8,103
	$	70,111	$	3,320	$	73,431

We do not expect to make any contributions to our pension plan for 2016.

The following table summarizes the benefits expected to be paid by our pension plan in each of the next five years and in aggregate for the following five years. The expected benefit payments are estimated based on the same assumptions used to measure the Company’s projected benefit obligation at December 31, 2015 and reflect the impact of expected future employee service.

2016		$4,164
2017	4,210
2018	4,304
2019	4,741
2020	4,982
2021-2025	24,828

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Legal Matters and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Legal Matters and Contingencies

Legal Matters and Contingencies

From time to time, we are subject to claims alleging product liability, patent infringement or other claims incurred in the ordinary course of business. These may involve our United States or foreign operations, or sales by foreign distributors. Likewise, from time to time, the Company may receive an information request or subpoena from a government agency such as the Securities and Exchange Commission, Department of Justice, Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, the Department of Labor, the Treasury Department or other federal and state agencies or foreign governments or government agencies. These information requests or subpoenas may or may not be routine inquiries, or may begin as routine inquiries and over time develop into enforcement actions of various types. The product liability claims are generally covered by various insurance policies, subject to certain deductible amounts, maximum policy limits and certain exclusions in the respective policies or as required as a matter of law. In some cases, we may be entitled to indemnification by third parties. We establish reserves sufficient to cover probable losses associated with any such pending claims. We do not expect that the resolution of any pending claims or investigations will have a material adverse effect on our financial condition, results of operations or cash flows. There can be no assurance, however, that future claims or investigations, or the costs associated with responding to such claims or investigations, especially claims and investigations not covered by insurance, will not have a material adverse effect on our financial condition, results of operations or cash flows.

Manufacturers of medical products may face exposure to significant product liability claims. To date, we have not experienced any product liability claims that have been material to our financial statements or financial condition, but any such claims arising in the future could have a material adverse effect on our business or results of operations. We currently maintain commercial product liability insurance of $25 million per incident and $25 million in the aggregate annually, which we believe is adequate. This coverage is on a claims-made basis. There can be no assurance that claims will not exceed insurance coverage, that the carriers will be solvent or that such insurance will be available to us in the future at a reasonable cost.

Our operations are subject, and in the past have been subject, to a number of environmental laws and regulations governing, among other things, air emissions; wastewater discharges; the use, handling and disposal of hazardous substances and wastes; soil and groundwater remediation and employee health and safety. In some jurisdictions, environmental requirements may be expected to become more stringent in the future. In the United States, certain environmental laws can impose liability for the entire cost of site restoration upon each of the parties that may have contributed to conditions at the site regardless of fault or the lawfulness of the party’s activities. While we do not believe that the present costs of environmental compliance and remediation are material, there can be no assurance that future compliance or remedial obligations would not have a material adverse effect on our financial condition, results of operations or cash flows.

During the third quarter of 2013, the U.S. Food and Drug Administration ("FDA") inspected our Centennial, Colorado manufacturing facility and issued a Form 483 with observations on September 20, 2013. We subsequently submitted responses to the Observations and the FDA issued a Warning Letter on January 30, 2014 relating to the inspection and the responses to the Form 483 Observations. Accordingly, we undertook corrective actions. During the fourth quarter of 2014, the FDA again inspected our Centennial, Colorado manufacturing facility and, on November 18, 2014, issued a Form 483 with eight observations, three of which the FDA characterized as repeat observations. On December 10, 2014, we responded to the Form 483 Observations. We have received some additional questions from the FDA and responded to these questions on April 25, 2015.  The remediation costs to date have not been material, although there can be no assurance that responding to the Form 483 observations or a future inspection by the FDA will not result in an additional Form 483 or warning letter, or other regulatory actions, which may include consent decrees or fines.

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Restructuring and Other Expense

12 Months Ended

Dec. 31, 2015

Restructuring Expenses and Other Operating Expenses [Abstract]

Restructuring and Other Expense

Restructuring and Other Expense

Restructuring and other expense for the year ended December 31, consists of the following:

	2015		2014		2013
Facility consolidation costs	$	8,016	$	5,612	$	6,489
Termination of a product offering	—		—		$	2,137
Restructuring costs included in cost of sales	$	8,016	$	5,612	$	8,626
Restructuring costs	$	13,655	$	3,354	$	8,750
Business and asset acquisition costs	2,543		722		—
Management restructuring costs	—		12,546		—
Shareholder activism costs	—		3,966		—
Patent dispute and other matters	—		3,374		3,206
Pension settlement expense	—		—		1,443
Restructuring and other expense included in selling and administrative expense	$	16,198	$	23,962	$	13,399

During 2015, we incurred $2.5 million in acquisition related costs associated with the January 4, 2016 acquisition of SurgiQuest, Inc. as further described in Note 15 and other acquisitions during 2015. During 2014, we incurred $0.7 million in costs associated with the EndoDynamix, Inc. acquisition as further described in Note 4.

During 2014, we incurred $4.0 million in professional fees related to shareholder activism.

During 2014 and 2013, we incurred $3.4 million and $3.2 million, respectively in legal and settlement costs. Legal costs for a patent infringement claim that we settled totaled $1.9 million and $3.2 million in 2014 and 2013, respectively. The 2014 patent infringement claim costs included $0.9 million in settlement costs during the first quarter of 2014. The remaining $1.5 million in 2014 legal costs were associated with a legal matter in which we prevailed at trial and consulting fees.

During 2013, we had a higher level of lump sum withdrawals from pension plan participants. This resulted in an acceleration of the recognition of a portion of our projected benefit obligation and we therefore recorded a pension settlement expense of $1.4 million.

During 2015, 2014 and 2013, we continued our operational restructuring plan. In 2015, we completed the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. During 2014, we completed the consolidation of our Finland operations into our Largo, Florida and Utica, New York manufacturing facilities and the consolidation of our Westborough, Massachusetts manufacturing operations into our Largo, Florida and Chihuahua, Mexico facilities. We incurred $8.0 million, $5.6 million and $6.5 million in costs associated with the operational restructuring during the years ending December 31, 2015, 2014 and 2013, respectively. These costs were charged to cost of sales and include severance and other charges associated with the consolidation of our Finland, Westborough, Massachusetts and Centennial, Colorado operations.

In conjunction with the consolidation of our Centennial, Colorado manufacturing operations, the facility is currently held for sale and classified as a current asset in the Consolidated Balance Sheet. The net book value of this facility at December 31, 2015 was $3.1 million.

As part of our ongoing restructuring, the Company discontinued a patient monitoring product offering and incurred $2.1 million in costs which were charged to cost of sales during 2013.

During 2015, 2014 and 2013, we restructured certain selling and administrative functions and incurred $13.7 million, $3.4 million and $8.8 million, respectively, in related costs consisting principally of severance charges and, for the 2013 year, also included the write-off of certain patents.

During 2014, we incurred $12.5 million in costs associated with restructuring of executive management. These costs include severance payments, accelerated vesting of stock-based compensation awards, accrual of the present value of deferred compensation and other benefits to our then Chief Executive Officer as defined in his termination agreement; accelerated vesting of stock-based compensation awards to certain members of executive management, consulting fees and other benefits earned as further described in our Form 8-K filing on July 23, 2014.

We have recorded an accrual in current and other long term liabilities of $7.2 million at December 31, 2015 mainly related to severance costs associated with restructuring. Below is a rollforward of the costs incurred and cash expenditures associated with these activities during 2015, 2014 and 2013:

Balance as of January 1, 2013	$	4,123
Expenses incurred	17,376
Payments made	(18,371		)
Balance as of December 31, 2013	3,128
Expenses incurred	21,512
Payments made	(16,386		)
Balance as of December 31, 2014	8,254
Expenses incurred	21,671
Payments made	(22,750		)
Balance, December 31, 2015	$	7,175

A significant portion of this accrual will be paid out in 2016.

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Guarantees

12 Months Ended

Dec. 31, 2015

Guarantees [Abstract]

Guarantees

Guarantees

We provide warranties on certain of our products at the time of sale.  The standard warranty period for our capital and reusable equipment is generally one year.  Liability under service and warranty policies is based upon a review of historical warranty and service claim experience.  Adjustments are made to accruals as claim data and historical experience warrant.

Changes in the carrying amount of service and product warranties for the year ended December 31, are as follows:

	2015			2014			2013
Balance as of January 1,	$	2,286		$	2,422		$	3,636
Provision for warranties	3,836			3,492			3,061
Claims made	(3,613		)	(3,628		)	(4,275		)
Balance as of December 31,	$	2,509		$	2,286		$	2,422

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Fair Value Measurement

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

We enter into derivative instruments for risk management purposes only.  We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We use forward contracts, a type of derivative instrument, to manage certain foreign currency exposures.

By nature, all financial instruments involve market and credit risks. We enter into forward contracts with major investment grade financial institutions and have policies to monitor the credit risk of those counterparties.  While there can be no assurance, we do not anticipate any material non-performance by any of these counterparties.

Foreign Currency Forward Contracts. 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.  To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss.  These changes in fair value will be recognized into earnings as a component of sales or cost of sales when the forecasted transaction occurs.  The notional contract amounts for forward contracts outstanding at December 31, 2015 which have been accounted for as cash flow hedges totaled $105.5 million.  Net realized gains recognized for forward contracts accounted for as cash flow hedges approximated $10.4 million, $0.6 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively.  Net unrealized gains on forward contracts outstanding which have been accounted for as cash flow hedges and which have been included in other comprehensive income totaled $1.2 million at December 31, 2015.  It is expected these unrealized gains will be recognized in the consolidated statement of comprehensive income in 2016.

We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables denominated in foreign currencies.  These forward contracts settle each month at month-end, at which time we enter into new forward contracts.  We have not designated these forward contracts as hedges and have not applied hedge accounting to them.  The notional contract amounts for forward contracts outstanding at December 31, 2015 which have not been designated as hedges totaled $22.3 million.  Net realized gains (losses) recognized in connection with those forward contracts not accounted for as hedges approximated $0.4 million, -$0.2 million and -$0.3 million for the years ended December 31, 2015, 2014 and 2013, respectively, offsetting losses on our intercompany receivables of -$0.8 million, -$0.5 million and -$0.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.  These gains and losses have been recorded in selling and administrative expense in the consolidated statements of comprehensive income.

We record these forward foreign exchange contracts at fair value; the following tables summarize the fair value for forward foreign exchange contracts outstanding at December 31, 2015 and 2014:

December 31, 2015	Asset Balance Sheet Location	Fair Value		Liabilities Balance Sheet Location	Fair Value			Net  Fair Value
Derivatives designated as hedged instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	$	2,931	Prepaid expenses & other current assets	$	(1,026	)	$	1,905
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	4		Prepaid expenses & other current assets	(38		)	(34		)
Total derivatives		$	2,935		$	(1,064	)	$	1,871

December 31, 2014	Asset Balance Sheet Location	Fair Value		Liabilities Balance Sheet Location	Fair Value			Net  Fair Value
Derivatives designated as hedged instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	$	6,167	Prepaid expenses & other current assets	$	(971	)	$	5,196
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	44		Prepaid expenses & other current assets	(61		)	(17		)
Total derivatives		$	6,211		$	(1,032	)	$	5,179

Our forward foreign exchange contracts are subject to a master netting agreement and qualify for netting in the consolidated balance sheets.  Accordingly, at December 31, 2015 and December 31, 2014 we have recorded the net fair value of $1.9 million and $5.2 million, respectively, in prepaids and other current assets.

Fair Value Disclosure. FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. This guidance applies when fair value measurements are required or permitted. The guidance indicates, among other things, that a fair value measurement assumes that the transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. Fair value is defined based upon an exit price model.

Valuation Hierarchy. A valuation hierarchy was established for disclosure of the inputs to the valuations used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from or corroborated by observable market data through correlation. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. There have been no significant changes in the assumptions since the acquisition.

Valuation Techniques. Assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2015 consist of forward foreign exchange contracts and contingent liabilities associated with a business acquisition as further described in Note 4. The Company values its forward foreign exchange contracts using quoted prices for similar assets. The most significant assumption is quoted currency rates. The value of the forward foreign exchange contract assets and liabilities were valued using Level 2 inputs and are listed in the table above.  

The EndoDynamix, Inc. acquisition involves the potential for the payment of future contingent consideration upon the achievement of certain product development milestones and revenue based payments as further described in Note 4. Contingent consideration is recorded at the estimated fair value of the contingent milestone and revenue based payments on the acquisition date. The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within selling and administrative expenses in the consolidated statements of comprehensive income. We measure the initial liability and remeasure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements. There have been no significant changes in the assumptions since the acquisition.

The carrying amounts reported in our balance sheets for cash and cash equivalents, accounts receivable, accounts payable and long-term debt approximate fair value.

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New Accounting Pronouncements

12 Months Ended

Dec. 31, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers". This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. In July 2015, the FASB decided to delay the effective date of ASU 2014-09 by one year. This ASU is effective for annual reporting periods beginning after December 15, 2017 and early adoption is permitted as of January 1, 2017. We plan to adopt this ASU on January 1, 2018. The new standard will become effective beginning with the first quarter of 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating both the impact of adopting this new guidance on the consolidated financial statements and the method of adoption.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs. This ASU requires an entity to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability consistent with debt discounts. In August 2015, the FASB also issued ASU No. 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements" to clarify the guidance in ASU 2015-03 as it does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, ASU 2015-15 was issued to clarify that the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. These ASUs are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurement of Inventory". An entity should measure inventory within the scope of this Update at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. This ASU is effective for annual periods beginning after December 15, 2016. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

In September 2015, the FASB issued ASU No. 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments". This ASU simplifies the accounting for changes in measurement period adjustments associated with a business combination. It requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This ASU is effective for annual periods beginning after December 15, 2015. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

In November 2015, the FASB issued ASU No. 2015-17 "Income Taxes (ASC 740): Balance Sheet Classification of Deferred Taxes". This ASU requires all deferred income tax assets and liabilities be presented as non-current in classified balance sheets. This can be applied prospectively or retrospectively and must disclose the reason for the change in accounting principle, the application applied and if applied retrospectively, include quantitative information about the effects of the change on prior periods. This standard is effective for annual and interim periods beginning after December 15, 2016. The Company does not believe this new guidance will have a material impact on the consolidated financial statements.

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Subsequent Events

12 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

Subsequent events

Subsequent Events

On January 4, 2016, we completed the acquisition of SurgiQuest, Inc. ("SurgiQuest") for $265 million in cash, subject to customary purchase price adjustments related to the amount of SurgiQuest's cash, debt, working capital and transaction expenses. SurgiQuest develops, manufactures, and markets the AirSeal^® System, the first integrated access management technology for use in laparoscopic and robotic procedures. This proprietary and differentiated access system is complementary to our current advanced surgical offering. The acquisition was funded through a combination of cash on hand and long-term borrowings as further described below.

In 2015, we incurred pre-tax transaction costs of $1.7 million related to the SurgiQuest acquisition which are recorded in selling and administrative expense. We are currently working through the purchase price allocation process.

On January 4, 2016, we entered into a fifth amended and restated senior credit agreement (the “fifth amended and restated senior credit agreement”) consisting of: (a) a $175.0 million term loan facility and (b) a $525.0 million revolving credit facility both expiring on January 4, 2021. The term loan is payable in quarterly installments increasing over the term of the facility. Proceeds from the term loan facility and borrowings under the revolving credit facility were used to repay the then existing senior credit agreement and to finance the acquisition of SurgiQuest, Inc. Initial interest rates are at LIBOR plus a base rate or a Eurocurrency rate plus an applicable margin. Initially, the applicable margin for base rate loans is 1.00% and for Eurocurrency rate loans is 2.00%.

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

Selected Quarterly Financial Data (Unaudited)

Selected quarterly financial data for 2015 and 2014 are as follows:

	Three Months Ended
	March		June		September		December
2015
Net sales	$	177,940	$	181,027	$	169,184	$	191,017
Gross profit	92,282		93,498		93,546		102,376
Net income	6,312		7,461		8,873		7,852
EPS:
Basic	$	.23	$	.27	$	.32	$	.28
Diluted	.23		.27		.32		.28

	Three Months Ended
	March		June		September		December
2014
Net sales	$	181,941	$	188,150	$	174,961	$	195,003
Gross profit	102,582		101,028		96,414		104,033
Net income	8,626		10,255		1,972		11,339
EPS:
Basic	$	.32	$	.38	$	.07	$	.41
Diluted	.31		.37		.07		.41

Items Included In Selected Quarterly Financial Data:

2015

First Quarter

During the first quarter of 2015, we incurred $2.3 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales and include severance and other charges associated with the consolidation – see Note 11.

During the first quarter of 2015, we recorded a charge of $6.2 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

Second Quarter

During the second quarter of 2015, we incurred $1.5 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales and include severance and other charges associated with the consolidation – see Note 11.

During the second quarter of 2015, we recorded a charge of $2.2 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

Third Quarter

During the third quarter of 2015, we incurred $1.3 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales and include severance and other charges associated with the consolidation – see Note 11.

During the third quarter of 2015, we recorded a charge of $1.1 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

Fourth Quarter

During the fourth quarter of 2015, we incurred $2.8 million in costs associated with the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales – see Note 11.

During the fourth quarter of 2015, we recorded a charge of $4.3 million to selling and administrative expense related to the restructuring of certain selling and administrative functions which includes severance costs and other related costs - see Note 11.

During the fourth quarter of 2015, we recorded a charge of $2.1 million to selling and administrative expense associated with the purchase of SurgiQuest, Inc and other acquisitions. - see Note 11 and Note 15.

2014

First Quarter

During the first quarter of 2014, we incurred $0.9 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico; consolidation of our Finland operations into our Largo, Florida and Utica, New York manufacturing facilities; consolidation of our Westborough, Massachusetts operations into our Largo, Florida and Chihuahua, Mexico manufacturing facilities and the consolidation of our Centennial, Colorado manufacturing operations into other existing CONMED manufacturing facilities. These costs were charged to cost of sales – see Note 11.

During the first quarter of 2014, we recorded a charge of $0.7 million to selling and administrative expense related to the restructuring of certain administrative functions - see Note 11.

During the first quarter of 2014, we recorded a charge of $1.9 million to selling and administrative expense related to legal fees associated with a patent infringement claim, including $0.9 million in settlement costs - see Note 11.

During the first quarter of 2014, we recorded a charge of $0.6 million in selling and administrative expense for professional fees associated with shareholder activism - see Note 11.

In New York State, corporate tax reform enacted in March 2014 changed the tax rate of a manufacturing company such as CONMED to essentially 0%. Previously recorded New York State net deferred tax assets of $2.3 million have been written off as a non-cash charge to income tax expense - see Note 6.

Second Quarter

During the second quarter of 2014, we incurred $1.4 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico and the consolidation of our Centennial, Colorado manufacturing operations into our other existing CONMED manufacturing facilities. These costs were charged to cost of sales – see Note 11.

During the second quarter of 2014, we recorded a charge of $0.5 million to selling and administrative expense related to consolidating certain administrative functions - see Note 11.

During the second quarter of 2014, we recorded a charge of $1.4 million to selling and administrative expense related to a legal matter in which we prevailed at trial and consulting fees - see Note 11.

During the second quarter of 2014, we recorded a charge of $0.9 million to selling and administrative expense related to professional fees associated with shareholder activism - see Note 11.

Third Quarter

During the third quarter of 2014, we incurred $1.4 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico and the consolidation of our Centennial, Colorado manufacturing operations into our other existing CONMED manufacturing facilities.  These costs were charged to cost of sales – see Note 11.

During the third quarter of 2014, we recorded a charge of $0.6 million to selling and administrative expense related to consolidating certain administrative functions - see Note 11.

During the third quarter of 2014, we recorded a charge of $2.4 million to selling and administrative expense related to professional fees associated with shareholder activism - see Note 11.

During the third quarter of 2014, we recorded a charge of $11.0 million to selling and administrative expense related to costs associated with restructuring of executive management. These costs include severance payments, accelerated vesting of stock-based compensation awards, accrual of the present value of deferred compensation and other benefits to our then Chief Executive Officer as defined in his termination agreement; accelerated vesting of stock-based compensation awards to certain members of executive management and other benefits earned - see Note 11.

During the third quarter of 2014, we recorded a charge of $0.3 million to selling and administrative expense associated with the purchase of EndoDynamix, Inc. - see Note 11.

Fourth Quarter

During the fourth quarter of 2014, we incurred $1.9 million in costs associated with the moving of additional product lines to our manufacturing facility in Chihuahua, Mexico and the consolidation of our Centennial, Colorado manufacturing operations into our other existing CONMED manufacturing facilities.  These costs were charged to cost of sales – see Note 11.

During the fourth quarter of 2014, we recorded a charge of $1.5 million to selling and administrative expense related to consolidating certain administrative functions - see Note 11.

During the fourth quarter of 2014, we recorded a charge of $1.5 million to selling and administrative expense related to costs associated with restructuring of executive management. These costs include accelerated vesting of stock-based compensation awards to certain members of executive management, consulting fees and other benefits earned - see Note 11.

During the fourth quarter of 2014, we recorded a charge of $0.3 million to selling and administrative expense associated with the purchase of EndoDynamix, Inc. - See Note 11.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2015

Valuation and Qualifying Accounts [Abstract]

Valuation and Qualifying Accounts

SCHEDULE II—Valuation and Qualifying Accounts

(In thousands)

			Additions
	Balance at Beginning of Period		Charged to Costs and Expenses
								Balance at End of Period
Description					Deductions
2015
Allowance for bad debts	$	1,239	$	493	$	(396	)	$	1,336
Sales returns and
allowance	3,081		521		(185		)	3,417
Deferred tax asset
valuation allowance	293		—		(169		)	124
2014
Allowance for bad debts	$	1,384	$	517	$	(662	)	$	1,239
Sales returns and
allowance	3,098		252		(269		)	3,081
Deferred tax asset
valuation allowance	—		293		—			293
2013
Allowance for bad debts	$	1,203	$	421	$	(240	)	$	1,384
Sales returns and
allowance	3,609		398		(909		)	3,098
Deferred tax asset
valuation allowance	—		—		—			—

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Operations and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principles of consolidation

Principles of consolidation

The consolidated financial statements include the accounts of CONMED Corporation and its controlled subsidiaries.  All significant intercompany accounts and transactions have been eliminated.

Use of estimates

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments which affect the reported amounts of assets, liabilities, related disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, allowances for doubtful accounts, rebates and sales allowances, inventory allowances, purchased in-process research and development, pension benefits, goodwill and intangible assets, contingent consideration, contingencies and other accruals.  We base our estimates on historical experience and on various other assumptions which are believed to be reasonable under the circumstances.  Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates.  Estimates and assumptions are reviewed periodically, and the effect of revisions is reflected in the consolidated financial statements in the period they are determined to be necessary.

Cash and cash equivalents

Cash and cash equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Inventories

Inventories

Inventories are valued at the lower of cost or market.  Cost is determined on the FIFO (first-in, first-out) method of accounting.

We write-off excess and obsolete inventory resulting from the inability to sell our products at prices in excess of current carrying costs.  We make estimates regarding the future recoverability of the costs of our products and record a provision for excess and obsolete inventories based on historical experience and expected future trends. 

Property, plant and equipment

Property, plant and equipment

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the following estimated useful lives:

Building and improvements	12 to 40 years
Leasehold improvements	Shorter of life of asset or life of lease
Machinery and equipment	2 to 15 years

Goodwill and other intangible assets

Goodwill and other intangible assets

We have a history of growth through acquisitions.  Assets and liabilities of acquired businesses are recorded at their estimated fair values as of the date of acquisition.  Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses.   Customer relationships, trademarks, tradenames, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Promotional, marketing and distribution rights represent intangible assets created under our Sports Medicine Joint Development and Distribution Agreement (the "JDDA") with Musculoskeletal Transplant Foundation (“MTF”).  We have accumulated goodwill of $260.7 million and other intangible assets of $308.2 million as of December 31, 2015.

Goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to at least annual impairment testing. It is our policy to perform our annual impairment testing in the fourth quarter. 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. During 2015, we completed our goodwill impairment testing with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with Financial Accounting Standards Board Accounting Standard Codification (“ASC”) 350-20-35 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, we believe the fair value continues to exceed carrying value.

Intangible assets with a finite life are amortized over the estimated useful life of the asset and are evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization.  Intangible assets subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The carrying amount of an intangible asset subject to amortization is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset.  An impairment loss is recognized by reducing the carrying amount of the intangible asset to its current fair value.

Customer relationship assets arose principally as a result of the 1997 acquisition of Linvatec Corporation.  These assets represent the acquisition date fair value of existing customer relationships based on the after-tax income expected to be derived during their estimated remaining useful life.  The useful lives of these customer relationships were not, and are not, limited by contract or any economic, regulatory or other known factors.  The estimated useful life of the Linvatec customer relationship assets was determined as of the date of acquisition as a result of a study of the observed pattern of historical revenue attrition during the 5 years immediately preceding the acquisition of Linvatec Corporation.  This observed attrition pattern was then applied to the existing customer relationships to derive the future expected useful life of the customer relationships.  This analysis indicated an annual attrition rate of 2.6%.  Assuming an exponential attrition pattern, this equated to an average remaining useful life of approximately 38 years for the Linvatec customer relationship assets.  Customer relationship intangible assets arising as a result of other business acquisitions are being amortized over a weighted average life of 18 years.  The weighted average life for customer relationship assets in aggregate is 33 years.

We evaluate the remaining useful life of our customer relationship intangible assets each reporting period in order to determine whether events and circumstances warrant a revision to the remaining period of amortization.  In order to further evaluate the remaining useful life of our customer relationship intangible assets, we perform an analysis and assessment of actual customer attrition and activity as events and circumstances warrant.  This assessment includes a comparison of customer activity since the acquisition date and review of customer attrition rates.  In the event that our analysis of actual customer attrition rates indicates a level of attrition that is in excess of that which was originally contemplated, we would change the estimated useful life of the related customer relationship asset with the remaining carrying amount amortized prospectively over the revised remaining useful life.

We test our customer relationship assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Factors specific to our customer relationship assets which might lead to an impairment charge include a significant increase in the annual customer attrition rate or otherwise significant loss of customers, significant decreases in sales or current-period operating or cash flow losses or a projection or forecast of losses. We do not believe that there have been events or changes in circumstances which would indicate the carrying amount of our customer relationship assets might not be recoverable.

Trademarks and tradenames were recognized principally in connection with the 1997 acquisition of Linvatec Corporation.  We continue to market products, release new product and product extensions and maintain and promote these trademarks and tradenames in the marketplace through legal registration and such methods as advertising, medical education and trade shows.  It is our belief that these trademarks and tradenames will generate cash flow for an indefinite period of time.  Therefore, our trademarks and tradenames intangible assets are not amortized. During 2015, we completed our impairment testing of trademarks and tradenames with data as of October 1, 2015. We performed a Step 1 impairment test in accordance with ASC 350-30-35 utilizing the relief from royalty income approach to determine whether the fair value of the Linvatec trademark and tradenames are less than their carrying amounts. Fair value is determined based on discounted cash flow analyses that include significant management assumptions such as revenue growth rates, weighted average cost of capital, and assumed royalty rates. Based upon our assessment, we believe the fair value continues to exceed carrying value.

For all other indefinite lived intangible assets, we perform a qualitative impairment test in accordance with ASC 350-30-35. Based upon this assessment, we have determined that it is unlikely that our indefinite lived intangible assets are impaired.

Other long-lived assets

Other long-lived assets

We review asset carrying amounts for impairment (consisting of intangible assets subject to amortization and property, plant and equipment) whenever events or circumstances indicate that such carrying amounts may not be recoverable. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the asset, an impairment loss is recognized by reducing the recorded value to its current fair value.

Translation of foreign currency financial statements

Translation of foreign currency financial statements

Assets and liabilities of foreign subsidiaries have been translated into United States dollars at the applicable rates of exchange in effect at the end of the period reported. Revenues and expenses have been translated at the applicable weighted average rates of exchange in effect during the period reported. Translation adjustments are reflected in accumulated other comprehensive loss. Transaction gains and losses are included in net income.

Foreign exchange and hedging activity

Foreign exchange and hedging activity

We manage our foreign currency transaction risks through the use of forward contracts to hedge forecasted cash flows associated with foreign currency transaction exposures. We account for these forward contracts as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in current earnings but are included in accumulated other comprehensive loss. These changes in fair value will be reclassified into earnings as a component of sales or cost of sales when the forecasted transaction occurs.

We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures on intercompany receivables denominated in foreign currencies. These forward contracts settle each month at month-end, at which time we enter into new forward contracts. We have not designated these forward contracts as hedges and have not applied hedge accounting to them. We record these forward contracts at fair value with resulting gains and losses included in selling and administrative expense in the consolidated statements of comprehensive income.

Income taxes

Income taxes

Deferred income tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities and operating loss and tax credit carryforwards as measured by the enacted tax rates that are anticipated to be in effect in the respective jurisdictions when these differences reverse. The deferred income tax provision generally represents the net change in the assets and liabilities for deferred income taxes. A valuation allowance is established when it is necessary to reduce deferred income tax assets to amounts for which realization is likely. In assessing the need for a valuation allowance, we estimate future taxable income, considering the feasibility of ongoing tax planning strategies and the realizability of tax loss carryforwards. Valuation allowances related to deferred tax assets may be impacted by changes to tax laws, changes to statutory tax rates, reversal of temporary differences and ongoing and future taxable income levels.

Deferred income taxes are not provided on the unremitted earnings of subsidiaries outside of the United States when it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon a repatriation of assets from a subsidiary or the sale or liquidation of a subsidiary. Deferred income taxes are provided when the Company no longer considers subsidiary earnings to be permanently invested, such as in situations where the Company’s subsidiaries plan to make future dividend distributions.

Revenue recognition

Revenue recognition

Revenue is recognized when title has been transferred to the customer which is at the time of shipment. The following policies apply to our major categories of revenue transactions:

• Sales to customers are evidenced by firm purchase orders. Title and the risks and rewards of ownership are transferred to the customer when product is shipped under our stated shipping terms.  Payment by the customer is due under fixed payment terms and collectability is reasonably assured.

• We place certain of our capital equipment with customers on a loaned basis in return for commitments to purchase related single-use products over time periods generally ranging from one to three years.  In these circumstances, no revenue is recognized upon capital equipment shipment as the equipment is loaned and subject to return if certain minimum single-use purchases are not met.  Revenue is recognized upon the sale and shipment of the related single-use products.  The cost of the equipment is amortized over its estimated useful life.

• We recognize revenues related to the promotion and marketing of sports medicine allograft tissue in accordance with the contractual terms of our agreement with Musculoskeletal Transplant Foundation (“MTF”) on a net basis as our role is limited to that of an agent earning a commission or fee. MTF records revenue when the tissue is shipped to the customer. Our services are completed at this time and net revenues for the “Service Fee” for our promotional and marketing efforts are then recognized based on a percentage of the net amounts billed by MTF to its customers. The timing of revenue recognition is determined through review of the net billings made by MTF each month. Our net commission Service Fee is based on the contractual terms of our agreement and is currently 50%. This percentage can vary over the term of the agreement but is contractually determinable. Our Service Fee revenues are recorded net of amortization of the acquired assets, which are being expensed over the expected useful life of 25 years.

• Product returns are only accepted at the discretion of the Company and in accordance with our “Returned Goods Policy”.  Historically, the level of product returns has not been significant.  We accrue for sales returns, rebates and allowances based upon an analysis of historical customer returns and credits, rebates, discounts and current market conditions.

• Our terms of sale to customers generally do not include any obligations to perform future services.  Limited warranties are provided for capital equipment sales and provisions for warranty are provided at the time of product sale based upon an analysis of historical data.

• Amounts billed to customers related to shipping and handling have been included in net sales.  Shipping and handling costs included in selling and administrative expense were $12.6 million, $13.6 million and $12.6 million for 2015, 2014 and 2013, respectively.

• We sell to a diversified base of customers around the world and, therefore, believe there is no material concentration of credit risk.

• We assess the risk of loss on accounts receivable and adjust the allowance for doubtful accounts based on this risk assessment.  Historically, losses on accounts receivable have not been material.  Management believes that the allowance for doubtful accounts of $1.3 million at December 31, 2015 is adequate to provide for probable losses resulting from accounts receivable.

Earnings per share

Earnings per share

Basic earnings per share (“basic EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding resulting from employee stock options, restricted stock units, performance share units and stock appreciation rights during the period. The following table sets forth the computation of basic and diluted earnings per share at December 31, 2015, 2014 and 2013, respectively: 

	2015		2014		2013
Net income	$	30,498	$	32,192	$	35,939
Basic-weighted average shares outstanding	27,653		27,401		27,722
Effect of dilutive potential securities	205		368		392
Diluted-weighted average shares outstanding	27,858		27,769		28,114
Basic EPS	$	1.10	$	1.17	$	1.30
Diluted EPS	$	1.09	$	1.16	$	1.28

The shares used in the calculation of diluted EPS exclude options and SARs to purchase shares where the exercise price was greater than the average market price of common shares for the year and the effect of the inclusion would be anti-dilutive. Such shares aggregated approximately 0.5 million, 0.0 million and 0.0 million at December 31, 2015, 2014 and 2013, respectively.

Stock-based compensation

Stock-based compensation

All share-based payments to employees, including grants of employee stock options, restricted stock units, performance share units and stock appreciation rights are recognized in the financial statements based at their fair values.  Compensation expense is generally recognized using a straight-line method over the vesting period. Compensation expense for performance share units is recognized using the graded vesting method.

We issue shares under our stock based compensation plans out of treasury stock whereby treasury stock is reduced by the weighted average cost of such treasury stock.  To the extent there is a difference between the cost of the treasury stock and the exercise price of shares issued under stock based compensation plans, we record gains to paid in capital;  losses are recorded to paid in capital to the extent any gain was previously recorded, otherwise the loss is recorded to retained earnings.

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Operations and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of property plant and equipment useful life

Property, plant and equipment are stated at cost and depreciated using the straight-line method over the following estimated useful lives:

Building and improvements	12 to 40 years
Leasehold improvements	Shorter of life of asset or life of lease
Machinery and equipment	2 to 15 years

Schedule of calculation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share at December 31, 2015, 2014 and 2013, respectively: 

	2015		2014		2013
Net income	$	30,498	$	32,192	$	35,939
Basic-weighted average shares outstanding	27,653		27,401		27,722
Effect of dilutive potential securities	205		368		392
Diluted-weighted average shares outstanding	27,858		27,769		28,114
Basic EPS	$	1.10	$	1.17	$	1.30
Diluted EPS	$	1.09	$	1.16	$	1.28

Schedule of accumulated other comprehensive loss

Accumulated other comprehensive loss consists of the following:

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2014	$	3,276		$	(30,760	)	$	(12,338	)	$	(39,822	)
Other comprehensive income (loss) before reclassifications, net of tax	4,482			2,739			(16,775		)	(9,554		)
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(10,399		)	3,233			—			(7,166		)
Tax expense (benefit)	3,842			(1,194		)	—			2,648
Net current-period other comprehensive income (loss)	(2,075		)	4,778			(16,775		)	(14,072		)
Balance, December 31, 2015	$	1,201		$	(25,982	)	$	(29,113	)	$	(53,894	)

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2013	$	(1,385	)	$	(18,918	)	$	2,731		$	(17,572	)
Other comprehensive income (loss) before reclassifications, net of tax	5,061			(10,551		)	(15,069		)	(20,559		)
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(635		)	(2,048		)	—			(2,683		)
Tax expense	235			757			—			992
Net current-period other comprehensive income (loss)	4,661			(11,842		)	(15,069		)	(22,250		)
Balance, December 31, 2014	$	3,276		$	(30,760	)	$	(12,338	)	$	(39,822	)

	Cash Flow Hedging Gain (Loss)			Pension Liability			Cumulative Translation Adjustments			Accumulated Other Comprehensive Loss
Balance, December 31, 2012	$	(1,130	)	$	(30,375	)	$	3,924		$	(27,581	)
Other comprehensive income (loss) before reclassifications, net of tax	(158		)	8,618			(1,193		)	7,267
Amounts reclassified from accumulated other comprehensive income (loss) before taxa	(153		)	4,502			—			4,349
Tax expense (benefit)	56			(1,663		)	—			(1,607		)
Net current-period other comprehensive income (loss)	(255		)	11,457			(1,193		)	10,009
Balance, December 31, 2013	$	(1,385	)	$	(18,918	)	$	2,731		$	(17,572	)

(a) The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 13 and Note 9, respectively, for further details.

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Inventories (Tables)

12 Months Ended

Dec. 31, 2015

Inventory Disclosure [Abstract]

Schedule of inventory

Inventories consist of the following at December 31:

	2015		2014
Raw materials	$	47,681	$	44,847
Work in process	13,922		13,876
Finished goods	105,291		89,426
	$	166,894	$	148,149

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Property, Plant and Equipment (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

Property, plant and equipment consist of the following at December 31:

	2015			2014
Land	$	4,027		$	4,243
Building and improvements	90,272			96,953
Machinery and equipment	193,630			191,306
Construction in progress	5,281			5,140
	293,210			297,642
Less:  Accumulated depreciation	(167,758		)	(164,213		)
	$	125,452		$	133,429

Schedule of aggregate future minimum lease commitments for operating leases

The aggregate future minimum lease commitments for operating leases at December 31, 2015 are as follows:

2016	$	5,344
2017	4,769
2018	4,567
2019	4,302
2020	1,424
Thereafter	3,264

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Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the net carrying amount of goodwill for the years ended December 31, are as follows:

	2015			2014
Balance as of January 1,	$	256,232		$	248,428
Goodwill resulting from business acquisitions	5,369			7,773
Reduction in goodwill resulting from a business acquisition purchase price allocation adjustment	(525		)	—
Foreign currency translation	(425		)	31
Balance as of December 31,	$	260,651		$	256,232

Schedule of Finite-Lived and Indefinite-Lived Intangible Assets

Other intangible assets consist of the following:

	December 31, 2015					December 31, 2014
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets:
Customer relationships	$	136,871	$	(64,423	)	$	136,126	$	(59,707	)
Promotional, marketing & distribution rights	149,376		(24,000		)	149,376		(18,000		)
Patents and other intangible assets	66,688		(42,885		)	63,464		(41,363		)
Unamortized intangible assets:
Trademarks and tradenames	86,544		—			86,544		—
	$	439,479	$	(131,308	)	$	435,510	$	(119,070	)

Schedule of Estimated Amortization Expense

The estimated amortization expense related to intangible assets at December 31, 2015 for each of the five succeeding years is as follows:

	Amortization included in expense	Amortization recorded as a reduction of revenue	Total
2016	6,882	6,000	$	12,882
2017	7,578	6,000	$	13,578
2018	7,525	6,000	$	13,525
2019	7,525	6,000	$	13,525
2020	6,906	6,000	$	12,906

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Long Term Debt (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Long-term debt consists of the following at December 31:

	2015		2014
Revolving line of credit	$	265,609	$	235,000
Mortgage notes	5,201		6,435
Total long-term debt	270,810		241,435
Less:  Current portion	1,339		1,234
	$	269,471	$	240,201

Schedule of Maturities of Long-term Debt

The scheduled maturities of long-term debt outstanding at December 31, 2015 are as follows:

2016	$	1,339
2017	1,452
2018	1,574
2019	836
2020	265,609
Thereafter	—

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

The provision for income taxes for the years ended December 31, 2015, 2014 and 2013 consists of the following:

	2015		2014			2013
Current tax expense (benefit):
Federal	$	4,208	$	2,256		$	(2,274	)
State	1,238		516			502
Foreign	6,949		11,995			9,247
	12,395		14,767			7,475
Deferred income tax expense (benefit)	2,251		(284		)	7,218
Provision for income taxes	$	14,646	$	14,483		$	14,693

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation between income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2015, 2014 and 2013 follows:

	2015		2014		2013
Tax provision at statutory rate based on income before income taxes	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	3.2		1.7		1.8
Impact of repatriation of foreign earnings	2.5		—		—
New York State corporate tax reform	—		5.5		—
Stock-based compensation	—		(0.2	)	(0.5	)
Foreign income taxes	(3.6	)	(4.8	)	(3.1	)
Federal research credit	(2.0	)	(2.1	)	(2.8	)
Settlement of taxing authority examinations	(0.6	)	(3.7	)	(2.0	)
European permanent deduction	(2.1	)	(3.8	)	(2.4	)
Non deductible/non-taxable items	1.8		1.8		2.9
Other, net	(1.8	)	1.6		0.1
	32.4	%	31.0	%	29.0	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2015 and 2014 are as follows:

	2015			2014
Assets:
Inventory	$	3,938		$	4,476
Net operating losses	6,421			10,207
Capitalized research and development	5,733			1,850
Deferred compensation	2,557			3,507
Accounts receivable	2,938			2,604
Compensation and benefits	7,365			6,003
Accrued pension	3,944			6,186
Research and development credit	7,094			6,198
Other	3,245			1,564
Foreign tax credit	—			2,283
Less: valuation allowances	(124		)	(293		)
	43,111			44,585
Liabilities:
Goodwill and intangible assets	122,623			120,012
Depreciation	11,999			14,041
State taxes	7,427			6,737
Contingent interest	203			272
	142,252			141,062
Net liability	$	(99,141	)	$	(96,477	)

Schedule of Income before Income Tax

Income before income taxes consists of the following U.S. and foreign income:

	2015		2014		2013
U.S. income	$	18,119	$	12,374	$	20,106
Foreign income	27,025		34,301		30,526
Total income	$	45,144	$	46,675	$	50,632

Schedule of Unrecognized Tax Benefits Rollforward

The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:

	2015			2014			2013
Balance as of January 1,	$	581		$	1,689		$	1,587
Increases for positions taken in prior periods	100			45			70
Increases for positions taken in current periods	—			—			1,132
Decreases in unrecorded tax positions related to settlement with the taxing authorities	—			(1,073		)	(1,010		)
Decreases in unrecorded tax positions related to lapse of statute of limitations	(65		)	(80		)	(90		)
Balance as of December 31,	$	616		$	581		$	1,689

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2015

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of stock option and SAR activity

The following table illustrates the stock option and SAR activity for the year ended December 31, 2015.

	Number of Shares (in 000’s)		Weighted- Average Exercise Price
Outstanding at December 31, 2014	453		$	28.85
Granted	609		$	51.48
Forfeited	(19	)	$	48.32
Exercised	(123	)	$	29.01
Outstanding at December 31, 2015	920		$	43.47
Exercisable at December 31, 2015	219		$	26.00
SARs expected to vest	701		$	48.92

Stock Options and Stock Appreciation Rights (SARs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Valuation Assumptions

The following table illustrates the assumptions used in estimating fair value in the years ended December 31, 2015, 2014 and 2013.

	2015			2014			2013
Grant date fair value of SARs	$	11.37		$	13.40		$	9.77
Expected stock price volatility	25.96		%	34.85		%	35.88		%
Risk-free interest rate	1.49		%	1.53		%	1.04		%
Expected annual dividend yield	1.55		%	1.80		%	1.79		%
Expected life of options & SARs (years)	5.7			6.4			6.3

Restricted Stock Units (RSUs) and Performance Share Units (PSUs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of RSU and PSU activity

The following table illustrates the RSU and PSU activity for the year ended December 31, 2015.  

	Number of Shares (in 000’s)		Weighted- Average Grant-Date Fair Value
Outstanding at December 31, 2014	322		$	33.14
Granted	226		$	45.75
Vested	(138	)	$	32.04
Forfeited	(57	)	$	35.63
Outstanding at December 31, 2015	353		$	41.23

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Business Segments and Geographic Areas (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Schedule of net sales information by product line and reportable segment

These product lines' net sales are as follows:

	2015		2014		2013
Orthopedic surgery	$	388,948	$	402,750	$	410,171
General surgery	274,190		279,356		286,747
Surgical visualization	56,030		57,949		65,786
Consolidated net sales	$	719,168	$	740,055	$	762,704

Schedule of net sales information for geographic areas

Net sales information for geographic areas consists of the following:

	2015		2014		2013
United States	$	361,452	$	360,960	$	375,473
Canada	57,629		63,686		73,457
United Kingdom	26,703		30,496		28,471
Japan	37,809		37,230		36,705
Australia	33,810		38,711		38,752
All other countries	201,765		208,972		209,846
Total	$	719,168	$	740,055	$	762,704

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Schedule of reconciliation of the projected benefit obligation, plan assets and funded status of the pension plan

The following table provides a reconciliation of the projected benefit obligation, plan assets and funded status of the pension plan at December 31:

	2015			2014
Accumulated Benefit Obligation	$	78,437		$	91,107
Change in benefit obligation
Projected benefit obligation at beginning of year	$	91,107		$	75,946
Service cost	240			271
Interest cost	3,394			3,465
Actuarial (gain) loss	(11,806		)	16,546
Benefits paid	(1,620		)	(1,414		)
Settlement	(2,878		)	(3,707		)
Projected benefit obligation at end of year	$	78,437		$	91,107
Change in plan assets
Fair value of plan assets at beginning of year	$	73,431		$	76,442
Actual gain on plan assets	(1,765		)	2,110
Benefits paid	(1,620		)	(1,414		)
Settlement	(2,878		)	(3,707		)
Fair value of plan assets at end of year	$	67,168		$	73,431
Funded status	$	(11,269	)	$	(17,676	)

Schedule of amounts recognized in the consolidated balance sheets

Amounts recognized in the consolidated balance sheets consist of the following at December 31,:

	2015			2014
Other long-term liabilities	$	(11,269	)	$	(17,676	)
Accumulated other comprehensive loss	(41,205		)	(48,782		)

Schedule of actuarial assumptions used

The following actuarial assumptions were used to determine our net periodic pension benefit cost for the years ended December 31,:

	2015		2014		2013
Discount rate	3.81	%	4.75	%	3.90	%
Expected return on plan assets	8.00	%	8.00	%	8.00	%

The following actuarial assumptions were used to determine our accumulated and projected benefit obligations as of December 31,:

	2015		2014
Discount rate	4.54	%	3.81	%
Expected return on plan assets	8.00	%	8.00	%

Schedule of plan assets and benefit obligations recognized in other comprehensive income

Other changes in plan assets and benefit obligations recognized in other comprehensive income in 2015 are as follows:

Current year actuarial gain	$	4,344
Amortization of actuarial loss	3,233
Total recognized in other comprehensive loss	$	7,577

Schedule of net benefit cost

Net periodic pension cost for the years ended December 31, consists of the following:

	2015			2014			2013
Service cost	$	240		$	271		$	253
Interest cost on projected benefit obligation	3,394			3,465			3,315
Expected return on plan assets	(5,697		)	(2,297		)	(5,491		)
Amortization of loss	3,233			(2,048		)	3,059
Settlement expense	—			—			1,443
Net periodic pension (income) cost	$	1,170		$	(609	)	$	2,579

Schedule of allocation of plan assets

The following table sets forth by level, within the fair value hierarchy, the pension plan's assets at fair value as of December 31, 2015 and December 31, 2014:

December 31, 2015	Level 1		Level 2		Total
Common Stock	$	34,466	$	—	$	34,466
Money Market Fund	—		1,302		1,302
Mutual Funds	23,576		—		23,576
Fixed Income Securities	7,824		—		7,824
	$	65,866	$	1,302	$	67,168

December 31, 2014	Level 1		Level 2		Total
Common Stock	$	35,337	$	—	$	35,337
Money Market Fund	—		3,320		3,320
Mutual Funds	26,671		—		26,671
Fixed Income Securities	8,103		—		8,103
	$	70,111	$	3,320	$	73,431

The following table sets forth the fair value of pension plan assets as of December 31:

	2015		2014
Common Stock	$	34,466	$	35,337
Money Market Fund	1,302		3,320
Mutual Funds	23,576		26,671
Fixed Income Securities	7,824		8,103
Total Assets at Fair Value	$	67,168	$	73,431

The allocation of pension plan assets by category is as follows at December 31,:

	Percentage of Pension Plan Assets				Target Allocation
	2015		2014		2016
Equity securities	86	%	84	%	75	%
Debt securities	14		16		25
Total	100	%	100	%	100	%

Schedule of expected benefit payments

The following table summarizes the benefits expected to be paid by our pension plan in each of the next five years and in aggregate for the following five years. The expected benefit payments are estimated based on the same assumptions used to measure the Company’s projected benefit obligation at December 31, 2015 and reflect the impact of expected future employee service.

2016		$4,164
2017	4,210
2018	4,304
2019	4,741
2020	4,982
2021-2025	24,828

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Restructuring and Other Expense (Tables)

12 Months Ended

Dec. 31, 2015

Restructuring Expenses and Other Operating Expenses [Abstract]

Schedule of Restructuring Expense and Other Operating Expense

Restructuring and other expense for the year ended December 31, consists of the following:

	2015		2014		2013
Facility consolidation costs	$	8,016	$	5,612	$	6,489
Termination of a product offering	—		—		$	2,137
Restructuring costs included in cost of sales	$	8,016	$	5,612	$	8,626
Restructuring costs	$	13,655	$	3,354	$	8,750
Business and asset acquisition costs	2,543		722		—
Management restructuring costs	—		12,546		—
Shareholder activism costs	—		3,966		—
Patent dispute and other matters	—		3,374		3,206
Pension settlement expense	—		—		1,443
Restructuring and other expense included in selling and administrative expense	$	16,198	$	23,962	$	13,399

Schedule of Restructuring Accrual

Below is a rollforward of the costs incurred and cash expenditures associated with these activities during 2015, 2014 and 2013:

Balance as of January 1, 2013	$	4,123
Expenses incurred	17,376
Payments made	(18,371		)
Balance as of December 31, 2013	3,128
Expenses incurred	21,512
Payments made	(16,386		)
Balance as of December 31, 2014	8,254
Expenses incurred	21,671
Payments made	(22,750		)
Balance, December 31, 2015	$	7,175

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Guarantees (Tables)

12 Months Ended

Dec. 31, 2015

Guarantees [Abstract]

Changes in the carrying amount of service and product warranties

Changes in the carrying amount of service and product warranties for the year ended December 31, are as follows:

	2015			2014			2013
Balance as of January 1,	$	2,286		$	2,422		$	3,636
Provision for warranties	3,836			3,492			3,061
Claims made	(3,613		)	(3,628		)	(4,275		)
Balance as of December 31,	$	2,509		$	2,286		$	2,422

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Fair Value Measurement (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Schedule of fair value for forward foreign exchange contracts

We record these forward foreign exchange contracts at fair value; the following tables summarize the fair value for forward foreign exchange contracts outstanding at December 31, 2015 and 2014:

December 31, 2015	Asset Balance Sheet Location	Fair Value		Liabilities Balance Sheet Location	Fair Value			Net  Fair Value
Derivatives designated as hedged instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	$	2,931	Prepaid expenses & other current assets	$	(1,026	)	$	1,905
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	4		Prepaid expenses & other current assets	(38		)	(34		)
Total derivatives		$	2,935		$	(1,064	)	$	1,871

December 31, 2014	Asset Balance Sheet Location	Fair Value		Liabilities Balance Sheet Location	Fair Value			Net  Fair Value
Derivatives designated as hedged instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	$	6,167	Prepaid expenses & other current assets	$	(971	)	$	5,196
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses & other current assets	44		Prepaid expenses & other current assets	(61		)	(17		)
Total derivatives		$	6,211		$	(1,032	)	$	5,179

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of Selected Quarterly Financial Data

Selected quarterly financial data for 2015 and 2014 are as follows:

	Three Months Ended
	March		June		September		December
2015
Net sales	$	177,940	$	181,027	$	169,184	$	191,017
Gross profit	92,282		93,498		93,546		102,376
Net income	6,312		7,461		8,873		7,852
EPS:
Basic	$	.23	$	.27	$	.32	$	.28
Diluted	.23		.27		.32		.28

	Three Months Ended
	March		June		September		December
2014
Net sales	$	181,941	$	188,150	$	174,961	$	195,003
Gross profit	102,582		101,028		96,414		104,033
Net income	8,626		10,255		1,972		11,339
EPS:
Basic	$	.32	$	.38	$	.07	$	.41
Diluted	.31		.37		.07		.41

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Operations and Significant Accounting Policies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Goodwill and Intangible Asset Impairment [Abstract]
Goodwill	$ 260,651	$ 256,232	$ 248,428
Other intangible assets, net	$ 308,171	316,440
Acquired Intangible Assets [Abstract]
Weighted average amortization period (in years)	27 years
Revenue Recognition [Abstract]
Net Commission Service Fee Revenue	50.00%
Shipping and handling costs	$ 12,600	13,600	$ 12,600
Allowance for doubtful accounts	$ 1,336	$ 1,239
Linvatec Corporation [Member]
Acquired Intangible Assets [Abstract]
Number of years of historical revenue attrition used to evaluate acquired finite-lived intangible assets useful life	5 years
Annual attrition rate used to evaluate acquired finite-lived intangible assets useful life	2.60%
Customer Relationships [Member]
Acquired Intangible Assets [Abstract]
Weighted average amortization period (in years)	33 years
Customer Relationships [Member] | Linvatec Corporation [Member]
Acquired Intangible Assets [Abstract]
Weighted average amortization period (in years)	38 years
Customer Relationships [Member] | Other Acquisitions Excluding Linvatec Corporation[Member]
Acquired Intangible Assets [Abstract]
Weighted average amortization period (in years)	18 years
Promotional, Marketing and Distribution Rights [Member]
Acquired Intangible Assets [Abstract]
Weighted average amortization period (in years)	25 years

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Operations and Significant Accounting Policies (Property, Plant and Equipment) (Details)	12 Months Ended
	Dec. 31, 2015
Building and improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life, average (in years)	12 years
Building and improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life, average (in years)	40 years
Machinery and equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life, average (in years)	2 years
Machinery and equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life, average (in years)	15 years

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Operations and Significant Accounting Policies (Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Earnings Per Share [Abstract]
Net income	$ 7,852	$ 8,873	$ 7,461	$ 6,312	$ 11,339	$ 1,972	$ 10,255	$ 8,626	$ 30,498	$ 32,192	$ 35,939
Basic-weighted average shares outstanding									27,653	27,401	27,722
Effect of dilutive potential securities									205	368	392
Diluted-weighted average shares outstanding									27,858	27,769	28,114
Basic EPS (in dollars per share)	$ 0.28	$ 0.32	$ 0.27	$ 0.23	$ 0.41	$ 0.07	$ 0.38	$ 0.32	$ 1.10	$ 1.17	$ 1.30
Diluted EPS (in dollars per share)	$ 0.28	$ 0.32	$ 0.27	$ 0.23	$ 0.41	$ 0.07	$ 0.37	$ 0.31	$ 1.09	$ 1.16	$ 1.28
Shares excluded from computation of earnings per share									500	0	0

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Operations and Significant Accounting Policies (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accumulated other comprehensive income (loss) [Roll Forward]
Accumulated other comprehensive income (loss), beginning of the period		$ (39,822)
Tax expense (benefit)		(14,646)	$ (14,483)	$ (14,693)
Accumulated other comprehensive income (loss), end of the period		(53,894)	(39,822)
Accumulated Other Comprehensive Loss [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Accumulated other comprehensive income (loss), beginning of the period		(39,822)	(17,572)	(27,581)
Other comprehensive income (loss) before reclassifications		(9,554)	(20,559)	7,267
Amounts reclassified from accumulated other comprehensive income (loss) before tax	[1]	(7,166)	(2,683)	4,349
Tax expense (benefit)		2,648	992	(1,607)
Net current-period other comprehensive income (loss)		(14,072)	(22,250)	10,009
Accumulated other comprehensive income (loss), end of the period		(53,894)	(39,822)	(17,572)
Cash Flow Hedging Gain (Loss) [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Accumulated other comprehensive income (loss), beginning of the period		3,276	(1,385)	(1,130)
Other comprehensive income (loss) before reclassifications		4,482	5,061	(158)
Amounts reclassified from accumulated other comprehensive income (loss) before tax	[1]	(10,399)	(635)	(153)
Tax expense (benefit)		3,842	235	56
Net current-period other comprehensive income (loss)		(2,075)	4,661	(255)
Accumulated other comprehensive income (loss), end of the period		1,201	3,276	(1,385)
Pension Liability [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Accumulated other comprehensive income (loss), beginning of the period		(30,760)	(18,918)	(30,375)
Other comprehensive income (loss) before reclassifications		2,739	(10,551)	8,618
Amounts reclassified from accumulated other comprehensive income (loss) before tax	[1]	3,233	(2,048)	4,502
Tax expense (benefit)		(1,194)	757	(1,663)
Net current-period other comprehensive income (loss)		4,778	(11,842)	11,457
Accumulated other comprehensive income (loss), end of the period		(25,982)	(30,760)	(18,918)
Cumulative Translation Adjustment [Member]
Accumulated other comprehensive income (loss) [Roll Forward]
Accumulated other comprehensive income (loss), beginning of the period		(12,338)	2,731	3,924
Other comprehensive income (loss) before reclassifications		(16,775)	(15,069)	(1,193)
Amounts reclassified from accumulated other comprehensive income (loss) before tax	[1]	0	0	0
Tax expense (benefit)		0	0	0
Net current-period other comprehensive income (loss)		(16,775)	(15,069)	(1,193)
Accumulated other comprehensive income (loss), end of the period		$ (29,113)	$ (12,338)	$ 2,731

[1] The cash flow hedging gain (loss) and pension liability accumulated other comprehensive income components are included in sales or cost of sales and as a component of net periodic pension cost, respectively. Refer to Note 13 and Note 9, respectively, for further details.

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Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 47,681	$ 44,847
Work in process	13,922	13,876
Finished goods	105,291	89,426
Total inventory	$ 166,894	$ 148,149

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Property, Plant and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Abstract]
Rental expense	$ 5,464	$ 5,897	$ 6,713
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	293,210	297,642
Less: Accumulated depreciation	(167,758)	(164,213)
Total property, plant and equipment	125,452	133,429
Future minimum lease commitments for operating leases
2016	5,344
2017	4,769
2018	4,567
2019	4,302
2020	1,424
Thereafter	3,264
Land [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	4,027	4,243
Building and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	90,272	96,953
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	193,630	191,306
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 5,281	$ 5,140

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Goodwill and Other Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Cash paid for acquisition	$ 6,100
Goodwill [Roll Forward]
Goodwill beginning balance	256,232	$ 248,428
Goodwill resulting from business acquisitions	5,369	7,773
Reduction in goodwill resulting from a business acquisition purchase price allocation adjustment	(525)	0
Foreign currency translation	(425)	31
Goodwill ending balance	260,651	256,232
Accumulated goodwill impairment loss	$ 106,991	$ 106,991

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Goodwill and Other Intangible Assets (Intangible Assets) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items]
Intangible assets, gross carrying amount	$ 439,479	$ 435,510
Intangible assets, accumulated amortization	(131,308)	(119,070)
Amortization of Intangible Assets	$ 12,600	13,000	$ 13,700
Weighted average amortization period (in years)	27 years
Future amortization expense [Abstract]
2016	$ 12,882
2017	13,578
2018	13,525
2019	13,525
2020	12,906
Trademarks and Tradenames [Member]
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items]
Unamortized intangible assets, gross carrying amount	86,544	86,544
Customer Relationships [Member]
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items]
Amortized intangible assets, gross carrying amount	136,871	136,126
Intangible assets, accumulated amortization	$ (64,423)	(59,707)
Weighted average amortization period (in years)	33 years
Promotional, Marketing and Distribution Rights [Member]
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items]
Amortized intangible assets, gross carrying amount	$ 149,376	149,376
Intangible assets, accumulated amortization	$ (24,000)	(18,000)
Weighted average amortization period (in years)	25 years
Patents and Other Intangible Assets [Member]
Schedule of Finite-Lived and Indefinite-Lived Assets [Line Items]
Amortized intangible assets, gross carrying amount	$ 66,688	63,464
Intangible assets, accumulated amortization	$ (42,885)	$ (41,363)
Weighted average amortization period (in years)	12 years
Expense [Member]
Future amortization expense [Abstract]
2016	$ 6,882
2017	7,578
2018	7,525
2019	7,525
2020	6,906
Reduction of Revenue [Member]
Future amortization expense [Abstract]
2016	6,000
2017	6,000
2018	6,000
2019	6,000
2020	$ 6,000

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Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) $ in Thousands									12 Months Ended
	Jan. 06, 2016	Nov. 04, 2015	Apr. 13, 2015	Jan. 05, 2015	Oct. 17, 2014	Jan. 03, 2014	Jan. 03, 2013	Jan. 03, 2012	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jul. 30, 2014
Other Intangible Assets [Line Items]
Up-front payment								$ 63,000
Contingent payment period								4 years
Additional contingent cash payment								$ 84,000
Conditional payment amount accrued									$ 16,700
Contractual obligations for acquisition of a business									440	$ 10,137	$ 0
Payments related to contingent consideration									3,876	$ 0	$ 0
After One Year of Meeting Supply Target [Member]
Other Intangible Assets [Line Items]
Conditional payment, amount paid							$ 34,000
After Two Year of Meeting Supply Target [Member]
Other Intangible Assets [Line Items]
Conditional payment, amount paid						$ 16,700
After Year Three of Meeting Supply Target [Member]
Other Intangible Assets [Line Items]
Conditional payment, amount paid				$ 16,700
Subsequent Event [Member] | After Year Four of Meeting Supply Target [Member]
Other Intangible Assets [Line Items]
Conditional payment, amount paid	$ 16,700
EndoDynamix, Inc. [Member]
Other Intangible Assets [Line Items]
Contractual obligations for acquisition of a business									$ 6,300			$ 13,900
Milestone Based Payment Obligation [Member] | EndoDynamix, Inc. [Member]
Other Intangible Assets [Line Items]
Contractual obligations for acquisition of a business												10,300
Payments related to contingent consideration		$ 1,500	$ 2,400		$ 3,700
Royalty Agreements [Member] | EndoDynamix, Inc. [Member]
Other Intangible Assets [Line Items]
Contractual obligations for acquisition of a business												$ 3,600

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Long Term Debt (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Total long-term debt	$ 270,810	$ 241,435
Current portion of long-term debt	1,339	1,234
Long-term debt	269,471	240,201
Revolving Line of Credit [Member]
Debt Instrument [Line Items]
Total long-term debt	265,609	235,000
Mortgages Notes [Member]
Debt Instrument [Line Items]
Total long-term debt	$ 5,201	$ 6,435

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Long Term Debt (Narrative) (Details) - USD ($)		12 Months Ended
	Jan. 04, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Apr. 28, 2015
Debt Instrument [Line Items]
Loss on early extinguishment of debt		$ 0	$ 0	$ 263,000
Long-term debt outstanding		270,810,000	241,435,000
Subsequent Event [Member] | Amended and Restated Senior Credit Agreement [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	2.00%
Revolving Line of Credit [Member]
Debt Instrument [Line Items]
Long-term debt outstanding		265,609,000	235,000,000
Line of credit facility, available borrowing capacity		$ 179,300,000
Revolving Line of Credit [Member] | Amended and Restated Senior Credit Agreement [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 450,000,000
Revolving Line of Credit [Member] | Amended and Restated Senior Credit Agreement [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.50%
Interest rate at period end (percent)		1.93%
Revolving Line of Credit [Member] | Amended and Restated Senior Credit Agreement [Member] | Federal Funds Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		0.50%
Revolving Line of Credit [Member] | Amended and Restated Senior Credit Agreement [Member] | Eurodollar [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		1.00%
Revolving Line of Credit [Member] | Amended and Restated Senior Credit Agreement [Member] | Alternate Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate (percent)		0.50%
Revolving Line of Credit [Member] | Subsequent Event [Member] | Amended and Restated Senior Credit Agreement [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 525,000,000.0
Letters of Credit [Member]
Debt Instrument [Line Items]
Letters of credit outstanding		$ 5,100,000
Term Loan Facility [Member] | Subsequent Event [Member] | Amended and Restated Senior Credit Agreement [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 175,000,000.0
Mortgages Notes [Member]
Debt Instrument [Line Items]
Long-term debt outstanding		$ 5,201,000	$ 6,435,000
Debt interest rate (percent)		8.25%

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Long Term Debt (Maturities of Long-term Debt) (Details) $ in Thousands	Dec. 31, 2015 USD ($)
Scheduled maturities of long-term debt outstanding [Abstract]
2016	$ 1,339
2017	1,452
2018	1,574
2019	836
2020	265,609
Thereafter	$ 0

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Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Current tax expense (benefit):
Federal	$ 4,208	$ 2,256	$ (2,274)
State	1,238	516	502
Foreign	6,949	11,995	9,247
Current income tax expense (benefit)	12,395	14,767	7,475
Deferred income tax expense (benefit)	2,251	(284)	7,218
Provision for income taxes	$ 14,646	$ 14,483	$ 14,693

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Income Taxes (Effective Income Tax Rate Reconciliation) (Details)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
Tax provision at statutory rate based on income before income taxes (percent)	35.00%	35.00%	35.00%
State income taxes, net of federal tax benefit (percent)	3.20%	1.70%	1.80%
Impact of repatriation of foreign earnings (percent)	2.50%	0.00%	0.00%
New York State corporate tax reform (percent)	0.00%	5.50%	0.00%
Stock-based compensation (percent)	(0.00%)	(0.20%)	(0.50%)
Foreign income taxes (percent)	(3.60%)	(4.80%)	(3.10%)
Federal research credit (percent)	(2.00%)	(2.10%)	(2.80%)
Settlement of taxing authority examinations (percent)	(0.60%)	(3.70%)	(2.00%)
European permanent deduction (percent)	(2.10%)	(3.80%)	(2.40%)
Non deductible/non-taxable items (percent)	1.80%	1.80%	2.90%
Other, net (percent)	(1.80%)	1.60%	0.10%
Effective income tax rate, continuing operations (percent)	32.40%	31.00%	29.00%

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Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Components of Deferred Tax Assets [Abstract]
Inventory	$ 3,938	$ 4,476
Net operating losses	6,421	10,207
Capitalized research and development	5,733	1,850
Deferred compensation	2,557	3,507
Accounts receivable	2,938	2,604
Compensation and benefits	7,365	6,003
Accrued pension	3,944	6,186
Research and development credit	7,094	6,198
Other	3,245	1,564
Foreign tax credit	0	2,283
Less: valuation allowances	(124)	(293)
Deferred Tax Assets, Net of Valuation Allowance	43,111	44,585
Components of Deferred Tax Liabilities [Abstract]
Goodwill and intangible assets	122,623	120,012
Depreciation	11,999	14,041
State taxes	7,427	6,737
Contingent interest	203	272
Deferred tax liabilities	142,252	141,062
Net liabilitiy	(99,141)	$ (96,477)
Cumulative amount of temporary difference	$ 95,100

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Income Taxes (Income Before Income Taxes) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract]
U.S. income	$ 18,119	$ 12,374	$ 20,106
Foreign income	27,025	34,301	30,526
Income before income taxes	$ 45,144	$ 46,675	$ 50,632

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Income Taxes (Tax Credit Carryforwards) (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2015	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Tax Credit Carryforward [Line Items]
State income taxes, net of federal tax benefit (percent)			3.20%	1.70%	1.80%
Deferred income taxes			$ 2,251	$ (284)	$ 7,218
Foreign earnings repatriated	$ 9,300
Tax impact of repatriated foreign earnings	1,100
New York [Member]
Tax Credit Carryforward [Line Items]
State income taxes, net of federal tax benefit (percent)		0.00%		0.00%
Deferred income taxes		$ 2,300		$ 2,300
Federal [Member]
Tax Credit Carryforward [Line Items]
Operating loss carryforwards	18,000		18,000
Federal [Member] | Research and Development Credit [Member]
Tax Credit Carryforward [Line Items]
Tax credit carryforward	$ 7,100		$ 7,100
State and Local Jurisdiction [Member]
Tax Credit Carryforward [Line Items]
Tax credit carryforward				$ 3,300

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Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Unrecognized Tax Benefits [Roll Forward]
Balance as of January 1	$ 581	$ 1,689	$ 1,587
Increases for positions taken in prior periods	100	45	70
Increases for positions taken in current periods	0	0	1,132
Decreases in unrecorded tax positions related to settlement with the taxing authorities	0	(1,073)	(1,010)
Decreases in unrecorded tax positions related to lapse of statute of limitations	(65)	(80)	(90)
Balance as of December 31	$ 616	$ 581	$ 1,689

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Shareholders' Equity (Details) $ / shares in Units, $ in Thousands			12 Months Ended
	Oct. 28, 2013 $ / shares	Feb. 29, 2012 $ / shares	Dec. 31, 2015 USD ($) plans $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2013 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends per share of common stock (in dollars per share) | $ / shares	$ 0.20	$ 0.15	$ 0.80	$ 0.80	$ 0.65
Dividends payable			$ 5,542	$ 5,510	$ 5,545
Preferred stock, shares authorized | shares			500,000	500,000
Preferred stock, par value (in dollars per per share) | $ / shares			$ 0.01	$ 0.01
Shares authorized under repurchase program			$ 200,000
Total stock repurchased under plan, shares | shares			6,100,000
Total stock repurchased under plan, value			$ 162,600
Remaining authorized repurchase amount			$ 37,400
Number of share repurchased | shares				400,000	1,600,000
Repurchase of treasury stock				$ 16,862	$ 50,556
Number of shares reserved for share-based compensation plans | shares			8,800,000
Number of share-based compensation plans | plans			3
Number of shares available for grant | shares			2,100,000
Vesting term (in years)			5 years
Stock-based compensation			$ 7,499	9,330	5,593
Tax benefit from stock-based compensation			2,700	3,400	2,100
Proceeds from stock options exercised			$ 200	1,800	$ 16,700
Stock Options and Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period from date of grant (in years)			10 years
Selling and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation			$ 1,000	$ 3,900

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Shareholders' Equity (Stock Options) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unrecognized compensation cost	$ 17.4
Weighted average period costs expected to be recognized (in years)	3 years 4 months 6 days
Stock Options and Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grant date fair value of SARs (in dollars per share)	$ 11.37	$ 13.40	$ 9.77
Expected stock price volatility (percent)	25.96%	34.85%	35.88%
Risk-free interest rate (percent)	1.49%	1.53%	1.04%
Expected annual dividend yield (percent)	1.55%	1.80%	1.79%
Expected term of option & SARs (in years)	5 years 8 months 12 days	6 years 4 months 24 days	6 years 3 months 18 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of shares, Outstanding at December 31, 2014	453
Number of shares, Granted	609
Number of shares, Forfeited	(19)
Number of shares, Exercised	(123)
Number of shares, Outstanding at December 31, 2015	920	453
Number of shares, Exercisable	219
Number of shares, SARs expected to vest	701
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Weighted average exercise price, Outstanding at December 31, 2014 (in dollars per share)	$ 28.85
Weighted average exercise price, Granted (in dollars per share)	51.48
Weighted average exercise price, Forfeited (in dollars per share)	48.32
Weighted average exercise price, Exercised (in dollars per share)	29.01
Weighted average exercise price, Outstanding at December 31, 2015 (in dollars per share)	43.47	$ 28.85
Exercisable, Weighted Average Exercise Price (in dollars per share)	26.00
SARs expected to vest, Weighted Average Exercise Price (in dollars per share)	$ 48.92
Weighted average remaining contractual term, options outstanding (in years)	7 years 11 months 1 day
Weighted average remaining contractual term, options exercisable (in years)	4 years 9 months 27 days
Aggregate intrinsic value, options outstanding	$ 5.0
Aggregate intrinsic value, options exercisable	4.0
Aggregate intrinsic value	$ 2.8	$ 10.7	$ 4.7
Restricted Stock Units (RSUs) and Performance Share Units (PSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of shares, Outstanding at December 31, 2014	322
Number of shares, Granted	226
Number of shares, Vested	(138)
Number of shares, Forfeited	(57)
Number of shares, Outstanding at December 31, 2015	353	322
Share-based Compensation Arrangement by Share-based Payment Award, Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Weighted average grant date fair value, Outstanding at December 31, 2014 (in dollars per share)	$ 33.14
Weighted average grant date fair value, Granted (in dollars per share)	45.75	$ 43.21	$ 33.02
Weighted average grant date fair value, Vested (in dollars per share)	32.04
Weighted average grant date fair value, Forfeited (in dollars per share)	35.63
Weighted average grant date fair value, Outstanding at December 31, 2015 (in dollars per share)	$ 41.23	$ 33.14
Total fair value of shares vested	$ 6.0	$ 11.6	$ 7.1

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Shareholders' Equity (Employee Plan) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved for share-based compensation plans	8,800,000
Unrecognized compensation cost | $	$ 17.4
Employee Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved for share-based compensation plans	1,000,000
Minimum percent of salary employees can invest	1.00%
Maximum percent of salary employees can invest	10.00%
Purchase prices percent of fair market value	95.00%
Number of shares issued under Plan	13,000

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Business Segments and Geographic Areas (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) Customers	Dec. 31, 2014 USD ($) Customers	Dec. 31, 2013 USD ($) Customers
Segment Reporting Information [Line Items]
Net sales	$ 191,017	$ 169,184	$ 181,027	$ 177,940	$ 195,003	$ 174,961	$ 188,150	$ 181,941	$ 719,168	$ 740,055	$ 762,704
Number of customer representing over 10% of consolidated net sales | Customers									0	0	0
United States [Member]
Segment Reporting Information [Line Items]
Net sales									$ 361,452	$ 360,960	$ 375,473
Canada [Member]
Segment Reporting Information [Line Items]
Net sales									57,629	63,686	73,457
United Kingdom [Member]
Segment Reporting Information [Line Items]
Net sales									26,703	30,496	28,471
Japan [Member]
Segment Reporting Information [Line Items]
Net sales									37,809	37,230	36,705
Australia [Member]
Segment Reporting Information [Line Items]
Net sales									33,810	38,711	38,752
All other countires [Member]
Segment Reporting Information [Line Items]
Net sales									201,765	208,972	209,846
Orthopedic Surgery [Member]
Segment Reporting Information [Line Items]
Net sales									388,948	402,750	410,171
General Surgery [Member]
Segment Reporting Information [Line Items]
Net sales									274,190	279,356	286,747
Surgical Visualization [Member]
Segment Reporting Information [Line Items]
Net sales									$ 56,030	$ 57,949	$ 65,786

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Employee Benefit Plans (Defined Contribution Plan) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Employee Savings Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Employer contributions	$ 7.6	$ 6.9	$ 7.3

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Employee Benefit Plans (Employee Benefit Reconciliation) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Service cost	$ 240	$ 271	$ 253
Interest cost	3,394	3,465	3,315
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	73,431
Fair value of plan assets at end of year	67,168	73,431
Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Accumulated Benefit Obligation	78,437	91,107
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Projected benefit obligation at beginning of year	91,107	75,946
Service cost	240	271
Interest cost	3,394	3,465
Actuarial (gain) loss	(11,806)	16,546
Benefits paid	(1,620)	(1,414)
Settlement	(2,878)	(3,707)
Projected benefit obligation at end of year	78,437	91,107	75,946
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward]
Fair value of plan assets at beginning of year	73,431	76,442
Actual gain on plan assets	(1,765)	2,110
Benefits paid	(1,620)	(1,414)
Settlement	(2,878)	(3,707)
Fair value of plan assets at end of year	67,168	73,431	$ 76,442
Funded status	$ (11,269)	$ (17,676)

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Employee Benefit Plans (Amounts Recognized in Balance Sheet) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]
Other long-term liabilities	$ (11,269)	$ (17,676)
Accumulated other comprehensive loss	$ (41,205)	$ (48,782)

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Employee Benefit Plans (Actuarial Assumptions) (Details)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]
Discount rate (percent)	4.54%	3.81%
Discount rate (percent)	3.81%	4.75%	3.90%
Expected return on plan assets (percent)	8.00%	8.00%	8.00%

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Employee Benefit Plans (Other Changes in Plan Assets and Benefit Obligations) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($)
Compensation and Retirement Disclosure [Abstract]
Current year actuarial loss	$ 4,344
Amortization of actuarial loss	3,233
Total recognized in other comprehensive loss	7,577
Estimated portion of net actuarial loss in accumulated other comprehensive loss	$ 2,800

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Employee Benefit Plans (Net Periodic Pension Cost) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]
Service cost	$ 240	$ 271	$ 253
Interest cost on projected benefit obligation	3,394	3,465	3,315
Expected return on plan assets	(5,697)	(2,297)	(5,491)
Amortization of loss	3,233	(2,048)	3,059
Settlement expense	0	0	1,443
Net periodic pension (income) cost	$ 1,170	$ (609)	$ 2,579

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Employee Benefit Plans (Allocation of Pension Plan Assets) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Percentage of pension plan assets	100.00%	100.00%
Target allocation (percent)	100.00%
Number of CONMED shares in Plan	27,562
Fair value of CONMED shares in Plan	$ 1.2
Equity Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Percentage of pension plan assets	86.00%	84.00%
Target allocation (percent)	75.00%
Debt Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Percentage of pension plan assets	14.00%	16.00%
Target allocation (percent)	25.00%

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Employee Benefit Plans (Fair Value of Plan Assets) (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 67,168	$ 73,431
Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	65,866	70,111
Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,302	3,320
Common Stock [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	34,466	35,337
Common Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	34,466	35,337
Common Stock [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Money Market Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,302	3,320
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,302	3,320
Mututal Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	23,576	26,671
Mututal Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	23,576	26,671
Mututal Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	0	0
Fixed Income Securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,824	8,103
Fixed Income Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,824	8,103
Fixed Income Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 0	$ 0

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Employee Benefit Plans (Expected Future Employee Service) (Details) $ in Thousands	Dec. 31, 2015 USD ($)
Compensation and Retirement Disclosure [Abstract]
2016	$ 4,164
2017	4,210
2018	4,304
2019	4,741
2020	4,982
2021-2025	$ 24,828

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Legal Matters and Contingencies (Details) $ in Millions	Dec. 31, 2015 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Product liability insurance, amount per incident	$ 25
Product liability insurance, aggregate annual amount	$ 25

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Restructuring and Other Expense (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Restructuring and Other Expense [Line Items]
Restructuring charges									$ 21,671	$ 21,512	$ 17,376
Assets held for sale	$ 3,095				$ 0				3,095	0
Pension settlement expense									0	0	1,443
Legal Fees [Member]
Restructuring and Other Expense [Line Items]
Legal Fees										1,500
Patent Dispute and Other Matters [Member]
Restructuring and Other Expense [Line Items]
Legal Fees							$ 1,400	$ 1,900		1,900
Settlement cost								900		900
Cost of Sales [Member]
Restructuring and Other Expense [Line Items]
Restructuring charges									8,016	5,612	8,626
Cost of Sales [Member] | Facility Consolidation Costs [Member]
Restructuring and Other Expense [Line Items]
Restructuring charges	2,800	$ 1,300	$ 1,500	$ 2,300	1,900	$ 1,400	1,400	900	8,016	5,612	6,489
Cost of Sales [Member] | Termination of Product Offering [Member]
Restructuring and Other Expense [Line Items]
Restructuring charges									0	0	2,137
Selling and Administrative Expenses [Member]
Restructuring and Other Expense [Line Items]
Business and asset acquisition costs	2,100
Pension settlement expense									0	0	1,443
Restructuring and other expense									16,198	23,962	13,399
Selling and Administrative Expenses [Member] | Business [Member]
Restructuring and Other Expense [Line Items]
Business and asset acquisition costs									2,543	722	0
Selling and Administrative Expenses [Member] | Shareholder Activism Costs [Member]
Restructuring and Other Expense [Line Items]
Professional fees						2,400	900	600	0	3,966	0
Selling and Administrative Expenses [Member] | Patent Dispute and Other Matters [Member]
Restructuring and Other Expense [Line Items]
Legal Fees									0	3,374	3,206
Selling and Administrative Expenses [Member] | Administrative Restructuring [Member]
Restructuring and Other Expense [Line Items]
Restructuring charges	$ 4,300	$ 1,100	$ 2,200	$ 6,200	1,500	600	$ 500	$ 700	13,655	3,354	8,750
Selling and Administrative Expenses [Member] | Executive Restructuring [Member]
Restructuring and Other Expense [Line Items]
Restructuring charges					$ 1,500	$ 11,000			$ 0	$ 12,546	$ 0

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Restructuring and Other Expense (Restructuring Accrual) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Restructuring accrual
Restructuring accrual, beginning balance	$ 8,254	$ 3,128	$ 4,123
Expenses incurred	21,671	21,512	17,376
Payments made	(22,750)	(16,386)	(18,371)
Restructuring accrual, ending balance	$ 7,175	$ 8,254	$ 3,128

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Guarantees (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Guarantees [Abstract]
Standard warranty period (in years)	1 year
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 2,286	$ 2,422	$ 3,636
Provision for warranties	3,836	3,492	3,061
Claims made	(3,613)	(3,628)	(4,275)
Ending balance	$ 2,509	$ 2,286	$ 2,422

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Fair Value Measurement (Foreign Currency Forward Contracts) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Derivative [Line Items]
Gains (losses) on intercompany receivables	$ (800)	$ (500)	$ (800)
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
Derivative Asset, Fair Value, Gross Asset	2,935	6,211
Derivative Liability, Fair Value, Gross Liability	(1,064)	(1,032)
Fair value, assets (liabilities), net	1,871	5,179
Foreign Exchange Contracts [Member]
Derivative [Line Items]
Forward contracts not designated as hedging instruments net realized gains (losses)	400	(200)	(300)
Designated as Hedging Instrument [Member] | Foreign Exchange Contracts [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
Derivative Asset, Fair Value, Gross Asset	2,931	6,167
Derivative Liability, Fair Value, Gross Liability	(1,026)	(971)
Fair value, assets (liabilities), net	1,905	5,196
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts [Member]
Derivative [Line Items]
Notional amount of cash flow hedges	22,300
Not Designated as Hedging Instrument [Member] | Foreign Exchange Contracts [Member] | Prepaid Expenses and Other Current Assets [Member]
Derivative Assets (Liabilities), at Fair Value, Net, by Balance Sheet Classification [Abstract]
Derivative Asset, Fair Value, Gross Asset	4	44
Derivative Liability, Fair Value, Gross Liability	(38)	(61)
Fair value, assets (liabilities), net	(34)	(17)
Cash Flow Hedging [Member] | Foreign Exchange Contracts [Member]
Derivative [Line Items]
Notional amount of cash flow hedges	105,500
Cash flow hedges realized gains (losses)	10,400	$ 600	$ 200
Unrealized gain (loss) on cash flow hedges in accumulated other comprehensive income (loss) expected to be recognized in next fiscal year	$ 1,200

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Subsequent Events - Business Acquisition (Details) - USD ($) $ in Millions		3 Months Ended	12 Months Ended
	Jan. 04, 2016	Dec. 31, 2015	Dec. 31, 2015
Subsequent Event [Line Items]
Cash paid for acquisition			$ 6.1
Selling and Administrative Expenses [Member]
Subsequent Event [Line Items]
Business and asset acquisition costs		$ 2.1
SurgiQuest, Inc. [Member] | Selling and Administrative Expenses [Member]
Subsequent Event [Line Items]
Business and asset acquisition costs			$ 1.7
Subsequent Event [Member] | SurgiQuest, Inc. [Member]
Subsequent Event [Line Items]
Cash paid for acquisition	$ 265.0

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Subsequent Events - Debt Disclosure (Details) - Amended and Restated Senior Credit Agreement [Member] - USD ($)		12 Months Ended
	Jan. 04, 2016	Dec. 31, 2015	Apr. 28, 2015
Revolving Line of Credit [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity			$ 450,000,000
Revolving Line of Credit [Member] | Eurodollar [Member]
Subsequent Event [Line Items]
Basis spread on variable rate (percent)		1.00%
Subsequent Event [Member] | Base Rate [Member]
Subsequent Event [Line Items]
Basis spread on variable rate (percent)	1.00%
Subsequent Event [Member] | Eurodollar [Member]
Subsequent Event [Line Items]
Basis spread on variable rate (percent)	2.00%
Subsequent Event [Member] | Term Loan Facility [Member]
Subsequent Event [Line Items]
Debt Instrument, Face Amount	$ 175,000,000.0
Subsequent Event [Member] | Revolving Line of Credit [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 525,000,000.0

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Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 191,017	$ 169,184	$ 181,027	$ 177,940	$ 195,003	$ 174,961	$ 188,150	$ 181,941	$ 719,168	$ 740,055	$ 762,704
Gross profit	102,376	93,546	93,498	92,282	104,033	96,414	101,028	102,582	381,702	404,057	412,417
Net income	$ 7,852	$ 8,873	$ 7,461	$ 6,312	$ 11,339	$ 1,972	$ 10,255	$ 8,626	$ 30,498	$ 32,192	$ 35,939
EPS:
Basic (in dollars per share)	$ 0.28	$ 0.32	$ 0.27	$ 0.23	$ 0.41	$ 0.07	$ 0.38	$ 0.32	$ 1.10	$ 1.17	$ 1.30
Diluted (in dollars per share)	$ 0.28	$ 0.32	$ 0.27	$ 0.23	$ 0.41	$ 0.07	$ 0.37	$ 0.31	$ 1.09	$ 1.16	$ 1.28

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Selected Quarterly Financial Data (Unaudited) (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information [Line Items]
Restructuring charges									$ 21,671	$ 21,512	$ 17,376
State income taxes, net of federal tax benefit (percent)									3.20%	1.70%	1.80%
Deferred income taxes									$ 2,251	$ (284)	$ 7,218
Cost of Sales [Member]
Quarterly Financial Information [Line Items]
Restructuring charges									8,016	5,612	8,626
Cost of Sales [Member] | Facility Consolidation Costs [Member]
Quarterly Financial Information [Line Items]
Restructuring charges	$ 2,800	$ 1,300	$ 1,500	$ 2,300	$ 1,900	$ 1,400	$ 1,400	$ 900	8,016	5,612	6,489
Selling and Administrative Expenses [Member]
Quarterly Financial Information [Line Items]
Business and asset acquisition costs	2,100
Selling and Administrative Expenses [Member] | Administrative Restructuring [Member]
Quarterly Financial Information [Line Items]
Restructuring charges	$ 4,300	$ 1,100	$ 2,200	$ 6,200	1,500	600	500	700	13,655	3,354	8,750
Selling and Administrative Expenses [Member] | Executive Restructuring [Member]
Quarterly Financial Information [Line Items]
Restructuring charges					1,500	11,000			0	12,546	0
Patent Dispute and Other Matters [Member]
Quarterly Financial Information [Line Items]
Legal Fees							1,400	1,900		1,900
Settlement cost								900		900
Patent Dispute and Other Matters [Member] | Selling and Administrative Expenses [Member]
Quarterly Financial Information [Line Items]
Legal Fees									0	3,374	3,206
Shareholder Activism Costs [Member] | Selling and Administrative Expenses [Member]
Quarterly Financial Information [Line Items]
Shareholder activism costs						2,400	$ 900	$ 600	$ 0	3,966	$ 0
Legal Fees [Member]
Quarterly Financial Information [Line Items]
Legal Fees										$ 1,500
New York [Member]
Quarterly Financial Information [Line Items]
State income taxes, net of federal tax benefit (percent)								0.00%		0.00%
Deferred income taxes								$ 2,300		$ 2,300
EndoDynamix, Inc. [Member] | Selling and Administrative Expenses [Member]
Quarterly Financial Information [Line Items]
Business and asset acquisition costs					$ 300	$ 300

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Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Allowance for Bad Debts [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	$ 1,239	$ 1,384	$ 1,203
Charged to costs and expenses	493	517	421
Deductions	(396)	(662)	(240)
Balance at end of period	1,336	1,239	1,384
Sales Returns and Allowance [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	3,081	3,098	3,609
Charged to costs and expenses	521	252	398
Deductions	(185)	(269)	(909)
Balance at end of period	3,417	3,081	3,098
Deferred Tax Asset Valuation Allowance [Member]
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	293	0	0
Charged to costs and expenses	0	293	0
Deductions	(169)	0	0
Balance at end of period	$ 124	$ 293	$ 0