Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||||||||
or | ||||||||
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended: | Commission file number: |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Part I | ||||||||
Page | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 1B. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Item 7. | ||||||||
Item 7A. | ||||||||
Item 8. | ||||||||
Item 9. | ||||||||
Item 9A. | ||||||||
Item 9B. | ||||||||
Part III | ||||||||
Item 10. | ||||||||
Item 11. | ||||||||
Item 12. | ||||||||
Item 13. | ||||||||
Item 14. | ||||||||
Part IV | ||||||||
Item 15. | ||||||||
Item 16. |
Year Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Orthopedic surgery | 43 | % | 43 | % | 49 | % | |||||||||||
General surgery | 57 | 57 | 51 | ||||||||||||||
Consolidated net sales | 100 | % | 100 | % | 100 | % | |||||||||||
Net sales (in thousands) | $ | 1,010,635 | $ | 862,459 | $ | 955,097 |
Location | Square Feet | Own or Lease | Lease Expiration | |||||||||||||||||
Utica, NY | 500,000 | Own | — | |||||||||||||||||
Largo, FL | 278,000 | Own | — | |||||||||||||||||
Chihuahua, Mexico | 207,720 | Lease | October 2024 | |||||||||||||||||
Chihuahua, Mexico | 40,626 | Lease | March 2028 | |||||||||||||||||
Lithia Springs, GA | 188,400 | Lease | January 2025 | |||||||||||||||||
Brussels, Belgium | 58,276 | Lease | June 2024 | |||||||||||||||||
Mississauga, Canada | 36,054 | Lease | July 2031 | |||||||||||||||||
Greenwood Village, CO | 27,763 | Lease | July 2024 | |||||||||||||||||
Westborough, MA | 19,533 | Lease | November 2025 | |||||||||||||||||
Frenchs Forest, Australia | 16,959 | Lease | July 2025 |
2021 | 2020 | 2019 | |||||||||||||||
Orthopedic surgery | 43 | % | 43 | % | 49 | % | |||||||||||
General surgery | 57 | 57 | 51 | ||||||||||||||
Consolidated net sales | 100 | % | 100 | % | 100 | % |
Years Ended December 31, | |||||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
Cost of sales | 43.8 | 46.6 | 45.1 | ||||||||||||||
Gross profit | 56.2 | 53.4 | 54.9 | ||||||||||||||
Selling and administrative expense | 41.0 | 43.3 | 41.9 | ||||||||||||||
Research and development expense | 4.3 | 4.7 | 4.8 | ||||||||||||||
Income from operations | 10.9 | 5.3 | 8.3 | ||||||||||||||
Interest expense | 3.5 | 5.1 | 4.5 | ||||||||||||||
Other expense | 0.1 | — | 0.5 | ||||||||||||||
Income before income taxes | 7.2 | 0.2 | 3.3 | ||||||||||||||
Provision (benefit) for income taxes | 1.0 | (0.9) | 0.3 | ||||||||||||||
Net income | 6.2 | % | 1.1 | % | 3.0 | % |
% Change from 2021 to 2020 | |||||||||||||||||||||||||||||
2021 | 2020 | As Reported | Impact of Foreign Currency | Constant Currency a | |||||||||||||||||||||||||
Orthopedic surgery | $ | 438.4 | $ | 374.7 | 17.0 | % | -1.3 | % | 15.7 | % | |||||||||||||||||||
General surgery | 572.2 | 487.8 | 17.3 | % | -0.6 | % | 16.7 | % | |||||||||||||||||||||
Net sales | $ | 1,010.6 | $ | 862.5 | 17.2 | % | -0.9 | % | 16.3 | % | |||||||||||||||||||
Single-use products | $ | 820.1 | $ | 703.0 | 16.7 | % | -0.9 | % | 15.8 | % | |||||||||||||||||||
Capital products | 190.5 | 159.5 | 19.5 | % | -1.1 | % | 18.4 | % | |||||||||||||||||||||
Net sales | $ | 1,010.6 | $ | 862.5 | 17.2 | % | -0.9 | % | 16.3 | % |
% Change from 2020 to 2019 | |||||||||||||||||||||||||||||
2020 | 2019 | As Reported | Impact of Foreign Currency | Constant Currency a | |||||||||||||||||||||||||
Orthopedic surgery | $ | 374.7 | $ | 463.3 | -19.1 | % | 0.7 | % | -18.4 | % | |||||||||||||||||||
General surgery | 487.8 | 491.8 | -0.8 | % | 0.1 | % | -0.7 | % | |||||||||||||||||||||
Net sales | $ | 862.5 | $ | 955.1 | -9.7 | % | 0.4 | % | -9.3 | % | |||||||||||||||||||
Single-use products | $ | 703.0 | $ | 756.3 | -7.0 | % | 0.4 | % | -6.6 | % | |||||||||||||||||||
Capital products | 159.5 | 198.8 | -19.8 | % | 0.2 | % | -19.6 | % | |||||||||||||||||||||
Net sales | $ | 862.5 | $ | 955.1 | -9.7 | % | 0.4 | % | -9.3 | % |
Payments Due by Period | |||||||||||||||||||||||||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | |||||||||||||||||||||||||
Long-term debt | $ | 712,569 | $ | 11,925 | $ | 380,775 | $ | 319,869 | $ | — | |||||||||||||||||||
Purchase obligations | 141,854 | 138,401 | 3,337 | 116 | — | ||||||||||||||||||||||||
Lease obligations | 22,741 | 7,486 | 10,635 | 2,445 | 2,175 | ||||||||||||||||||||||||
Total contractual obligations | $ | 877,164 | $ | 157,812 | $ | 394,747 | $ | 322,430 | $ | 2,175 |
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 | 3,264,061 | $ | 80.79 | 3,398,344 | ||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||
Total | 3,264,061 | 80.79 | 3,398,344 |
Index to Financial Statements | ||||||||
(a)(1) | List of Financial Statements | Page in Form 10-K | ||||||
Management’s Report on Internal Control Over Financial Reporting | ||||||||
Report of Independent Registered Public Accounting Firm (PCAOB ID | ||||||||
Consolidated Balance Sheets at December 31, 2021 and 2020 | ||||||||
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2021, 2020 and 2019 | ||||||||
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2021, 2020 and 2019 | ||||||||
Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020 and 2019 | ||||||||
Notes to Consolidated Financial Statements | ||||||||
(2) | List of Financial Statement Schedules | |||||||
Valuation and Qualifying Accounts (Schedule II) for the Years Ended December 31, 2021, 2020 and 2019 | ||||||||
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 35 below are filed as part of this Form 10-K. | ||||||||
CONMED CORPORATION | ||
By: /s/ Curt R. Hartman | ||
Curt R. Hartman | ||
(Chair of the Board, President and | ||
Chief Executive Officer) | ||
Date: | ||
February 22, 2022 |
Signature | Title | Date | ||||||||||||
/s/ CURT R. HARTMAN | Chair of the Board, President & | |||||||||||||
Curt R. Hartman | Chief Executive Officer | February 22, 2022 | ||||||||||||
/s/ TODD W. GARNER | Executive Vice President | |||||||||||||
Todd W. Garner | and Chief Financial Officer | February 22, 2022 | ||||||||||||
/s/ TERENCE M. BERGE | Vice President- | |||||||||||||
Terence M. Berge | Corporate Controller | February 22, 2022 | ||||||||||||
/s/ MARTHA GOLDBERG ARONSON | ||||||||||||||
Martha Goldberg Aronson | Lead Independent Director | February 22, 2022 | ||||||||||||
/s/ DAVID BRONSON | ||||||||||||||
David Bronson | Director | February 22, 2022 | ||||||||||||
/s/ BRIAN P. CONCANNON | ||||||||||||||
Brian P. Concannon | Director | February 22, 2022 | ||||||||||||
/s/ LAVERNE COUNCIL | ||||||||||||||
Laverne Council | Director | February 22, 2022 | ||||||||||||
/s/ CHARLES M. FARKAS | ||||||||||||||
Charles M. Farkas | Director | February 22, 2022 | ||||||||||||
/s/ JEROME J. LANDE | ||||||||||||||
Jerome J. Lande | Director | February 22, 2022 | ||||||||||||
/s/ BARBARA SCHWARZENTRAUB | ||||||||||||||
Barbara Schwarzentraub | Director | February 22, 2022 | ||||||||||||
/s/ MARK E. TRYNISKI | ||||||||||||||
Mark E. Tryniski | Director | February 22, 2022 | ||||||||||||
/s/ JOHN L. WORKMAN | ||||||||||||||
John L. Workman | Director | February 22, 2022 | ||||||||||||
Exhibit No. | Description | |||||||
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14 | - | Code of Ethics. The CONMED code of ethics may be accessed via the Company’s website at http://www.conmed.com/en/about-us/investors/investor-relations | ||||||
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101.INS* | - | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||||
101.SCH* | - | XBRL Taxonomy Extension Schema Document | ||||||
101.CAL* | - | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||
101.DEF* | - | XBRL Taxonomy Extension Definition Linkbase Document | ||||||
101.LAB* | - | XBRL Taxonomy Extension Label Linkbase Document | ||||||
101.PRE* | - | XBRL Taxonomy Extension Presentation Linkbase Document | ||||||
104* | - | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101) | ||||||
* | Filed herewith | |||||||
+ | Management contract or compensatory plan or arrangement |
2021 | 2020 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, less allowance for doubtful | |||||||||||
accounts of $ | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Deferred income taxes | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable | |||||||||||
Accrued compensation and benefits | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 13) | |||||||||||
Shareholders' equity: | |||||||||||
Preferred stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
authorized; | |||||||||||
Paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Less: Treasury stock, at cost; | |||||||||||
2021 and 2020, respectively | ( | ( | |||||||||
Total shareholders' equity | |||||||||||
Total liabilities and shareholders' equity | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Net sales | $ | $ | $ | ||||||||||||||
Cost of sales | |||||||||||||||||
Gross profit | |||||||||||||||||
Selling and administrative expense | |||||||||||||||||
Research and development expense | |||||||||||||||||
Operating expenses | |||||||||||||||||
Income from operations | |||||||||||||||||
Interest expense | |||||||||||||||||
Other expense | |||||||||||||||||
Income before income taxes | |||||||||||||||||
Provision (benefit) for income taxes | ( | ||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Per share data: | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted | $ | $ | $ | ||||||||||||||
Other comprehensive income (loss), before income tax: | |||||||||||||||||
Cash flow hedging | $ | $ | ( | $ | ( | ||||||||||||
Pension liability | ( | ||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||
Other comprehensive income (loss), before income tax | $ | $ | ( | $ | ( | ||||||||||||
Provision (benefit) for income taxes related to items in other comprehensive income | ( | ( | |||||||||||||||
Other comprehensive income (loss), net of income tax | $ | $ | ( | $ | ( | ||||||||||||
Comprehensive income | $ | $ | $ |
Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Shareholders’ Equity | ||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
Common stock issued under employee plans | ( | ||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Dividends on common stock ($ | ( | ( | |||||||||||||||||||||
Convertible notes discount, net | |||||||||||||||||||||||
Convertible notes debt issuance costs | ( | ( | |||||||||||||||||||||
Convertible notes hedge, net | ( | ( | |||||||||||||||||||||
Issuance of warrants | |||||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||
Cash flow hedging loss, net | ( | ||||||||||||||||||||||
Pension liability, net | |||||||||||||||||||||||
Foreign currency translation adjustments | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Total comprehensive income | |||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
Common stock issued under employee plans | ( | ||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Dividends on common stock ($ | ( | ( | |||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||
Cash flow hedging loss, net | ( | ||||||||||||||||||||||
Pension liability, net | ( | ||||||||||||||||||||||
Foreign currency translation adjustments | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Total comprehensive income | |||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
Common stock issued under employee plans | ( | ||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||
Dividends on common stock ($ | ( | ( | |||||||||||||||||||||
Comprehensive income (loss): | |||||||||||||||||||||||
Cash flow hedging gain, net | |||||||||||||||||||||||
Pension liability, net | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Total comprehensive income | |||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation | |||||||||||||||||
Amortization of debt discount | |||||||||||||||||
Amortization of deferred debt issuance costs | |||||||||||||||||
Amortization | |||||||||||||||||
Stock-based compensation | |||||||||||||||||
Impairment charges | |||||||||||||||||
Deferred income taxes | ( | ( | |||||||||||||||
Loss on early extinguishment of debt | |||||||||||||||||
Increase (decrease) in cash flows from changes in assets and | |||||||||||||||||
liabilities, net of acquired assets: | |||||||||||||||||
Accounts receivable | ( | ( | |||||||||||||||
Inventories | ( | ( | ( | ||||||||||||||
Accounts payable | ( | ||||||||||||||||
Income taxes | ( | ( | ( | ||||||||||||||
Accrued compensation and benefits | ( | ||||||||||||||||
Other assets | ( | ( | ( | ||||||||||||||
Other liabilities | |||||||||||||||||
Net cash provided by operating activities | |||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Purchases of property, plant and equipment | ( | ( | ( | ||||||||||||||
Payments related to business and asset acquisitions, net of cash acquired | ( | ( | |||||||||||||||
Proceeds from sale of a facility | |||||||||||||||||
Net cash used in investing activities | ( | ( | ( | ||||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Payments on term loan | ( | ( | ( | ||||||||||||||
Proceeds from term loan | |||||||||||||||||
Payments on revolving line of credit | ( | ( | ( | ||||||||||||||
Proceeds from revolving line of credit | |||||||||||||||||
Proceeds from convertible notes | |||||||||||||||||
Payments on mortgage notes | ( | ||||||||||||||||
Payments related to contingent consideration | ( | ( | ( | ||||||||||||||
Payments related to debt issuance costs | ( | ( | ( | ||||||||||||||
Dividends paid on common stock | ( | ( | ( | ||||||||||||||
Purchases of convertible notes hedges | ( | ||||||||||||||||
Proceeds from issuance of warrants | |||||||||||||||||
Other, net | |||||||||||||||||
Net cash provided by (used in) financing activities | ( | ( | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||||||||
Cash and cash equivalents at beginning of year | |||||||||||||||||
Cash and cash equivalents at end of year | $ | $ | $ | ||||||||||||||
2021 | 2020 | 2019 | |||||||||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Contractual obligations from asset acquisition | $ | $ | $ | ||||||||||||||
Dividends payable | |||||||||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||
Cash paid during the year for: | |||||||||||||||||
Interest | $ | $ | $ | ||||||||||||||
Income taxes |
Building and improvements | ||||||||
Leasehold improvements | Shorter of life of asset or life of lease | |||||||
Machinery and equipment |
2021 | 2020 | 2019 | |||||||||||||||
Net income | $ | $ | $ | ||||||||||||||
Basic-weighted average shares outstanding | |||||||||||||||||
Effect of dilutive potential securities | |||||||||||||||||
Diluted-weighted average shares outstanding | |||||||||||||||||
Net income (per share) | |||||||||||||||||
Basic | $ | $ | $ | ||||||||||||||
Diluted |
Cash Flow Hedging Gain (Loss) | Pension Liability | Foreign Currency Translation Adjustments | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
Balance, December 31, 2018 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income before tax(a) | ( | ( | |||||||||||||||||||||
Income tax | ( | ||||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Balance, December 31, 2019 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ( | ( | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) before tax(a) | ( | ||||||||||||||||||||||
Income tax | ( | ( | |||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Balance, December 31, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications, net of tax | ( | ||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) before tax(a) | |||||||||||||||||||||||
Income tax | ( | ( | ( | ||||||||||||||||||||
Net current-period other comprehensive income (loss) | ( | ||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | ( | $ | ( | $ | ( |
2019 | ||||||||
Net sales | $ | |||||||
Net income |
2021 | 2020 | ||||||||||
Raw materials | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
$ | $ |
2021 | 2020 | ||||||||||
Land | $ | $ | |||||||||
Building and improvements | |||||||||||
Machinery and equipment | |||||||||||
Construction in progress | |||||||||||
Less: Accumulated depreciation | ( | ( | |||||||||
$ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Operating lease cost: | |||||||||||||||||
Straight-line lease cost | $ | $ | $ | ||||||||||||||
Right-of-use asset impairment cost | |||||||||||||||||
Total operating lease cost | |||||||||||||||||
Finance lease cost: | |||||||||||||||||
Depreciation | |||||||||||||||||
Interest on lease liabilities | |||||||||||||||||
Total finance lease cost | |||||||||||||||||
Total lease cost | $ | $ | $ |
2021 | 2020 | ||||||||||
Operating leases | |||||||||||
Other assets | $ | $ | |||||||||
Other current liabilities | $ | $ | |||||||||
Other long-term liabilities | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Finance leases | |||||||||||
Property, plant and equipment, gross | $ | $ | |||||||||
Accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | $ | $ | |||||||||
Current portion of long-term debt | $ | $ | |||||||||
Long-term debt | |||||||||||
Total finance lease liabilities | $ | $ | |||||||||
Weighted average remaining lease term (in years) | |||||||||||
Operating leases | |||||||||||
Finance leases | |||||||||||
Weighted average discount rate | |||||||||||
Operating leases | % | % | |||||||||
Finance leases | % | % |
2021 | 2020 | 2019 | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
Operating cash flows from operating leases | $ | $ | $ | ||||||||||||||
Financing cash flows from finance leases | |||||||||||||||||
Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
Operating leases | |||||||||||||||||
Finance leases |
Finance Lease | Operating Lease | ||||||||||
2022 | $ | $ | |||||||||
2023 | |||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Less imputed interest | ( | ( | |||||||||
Total lease liabilities | $ | $ |
2021 | 2020 | ||||||||||
Balance as of January 1, | $ | $ | |||||||||
Goodwill adjustment resulting from business combinations | ( | ||||||||||
Foreign currency translation | ( | ||||||||||
Balance as of December 31, | $ | $ |
December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||||
Weighted Average Amortization Period (Years) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||||||||||
Intangible assets with definite lives: | ||||||||||||||||||||||||||
Customer and distributor relationships | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Sales representation, marketing and promotional rights | ( | ( | ||||||||||||||||||||||||
Patents and other intangible assets | ( | ( | ||||||||||||||||||||||||
Developed technology | ( | ( | ||||||||||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||||
Trademarks and tradenames | — | — | ||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( |
Amortization included in expense | Amortization recorded as a reduction of revenue | Total | |||||||||||||||
2022 | $ | $ | $ | ||||||||||||||
2023 | |||||||||||||||||
2024 | |||||||||||||||||
2025 | |||||||||||||||||
2026 |
2021 | 2020 | ||||||||||
Revolving line of credit | $ | $ | |||||||||
Term loan, net of deferred debt issuance costs of $ | |||||||||||
Financing leases | |||||||||||
Total debt | |||||||||||
Less: Current portion | |||||||||||
Total long-term debt | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 |
2021 | 2020 | 2019 | |||||||||||||||
Current tax expense (benefit): | |||||||||||||||||
Federal | $ | ( | $ | ( | $ | ||||||||||||
State | |||||||||||||||||
Foreign | |||||||||||||||||
Deferred income tax expense (benefit): | |||||||||||||||||
Federal | ( | ( | |||||||||||||||
State | ( | ( | |||||||||||||||
Foreign | ( | ( | ( | ||||||||||||||
( | ( | ||||||||||||||||
Provision (benefit) for income taxes | $ | $ | ( | $ |
2021 | 2020 | 2019 | |||||||||||||||
Tax provision at statutory rate based on income before income taxes | % | % | % | ||||||||||||||
Stock-based compensation | ( | ( | ( | ||||||||||||||
Federal research credit | ( | ( | ( | ||||||||||||||
Valuation allowance | ( | ||||||||||||||||
US tax on worldwide earnings at different rates | ( | ( | |||||||||||||||
Settlement of taxing authority examinations | ( | ( | |||||||||||||||
Tax treaty protocols | ( | ||||||||||||||||
Non deductible/non-taxable items | |||||||||||||||||
Foreign income taxes | |||||||||||||||||
State income taxes, net of federal tax benefit | ( | ||||||||||||||||
Other, net | ( | ( | |||||||||||||||
% | ( | % | % |
2021 | 2020 | ||||||||||
Assets: | |||||||||||
Inventory | $ | $ | |||||||||
Net operating losses | |||||||||||
Capitalized research and development | |||||||||||
Deferred compensation | |||||||||||
Accounts receivable | |||||||||||
Compensation and benefits | |||||||||||
Accrued pension | |||||||||||
Research and development credit | |||||||||||
Convertible notes hedge | |||||||||||
Lease liabilities | |||||||||||
Other | |||||||||||
Less: valuation allowances | ( | ( | |||||||||
Liabilities: | |||||||||||
Goodwill and intangible assets | |||||||||||
Depreciation | |||||||||||
State taxes | |||||||||||
Unremitted foreign earnings | |||||||||||
Convertible notes debt discount | |||||||||||
Lease right-of-use assets | |||||||||||
Net liability | $ | ( | $ | ( |
2021 | 2020 | 2019 | |||||||||||||||
U.S. income | $ | $ | ( | $ | |||||||||||||
Foreign income | |||||||||||||||||
Total income | $ | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Balance as of January 1, | $ | $ | $ | ||||||||||||||
Increases for positions taken in current periods | |||||||||||||||||
Decreases in unrecorded tax positions related to settlement with the taxing authorities | ( | ( | |||||||||||||||
Decreases in unrecorded tax positions related to lapse of statute of limitations | ( | ||||||||||||||||
Balance as of December 31, | $ | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Grant date fair value of stock options and SARs | $ | $ | $ | ||||||||||||||
Expected stock price volatility | % | % | % | ||||||||||||||
Risk-free interest rate | % | % | % | ||||||||||||||
Expected annual dividend yield | % | % | % | ||||||||||||||
Expected life of options & SARs (years) |
Number of Shares (in 000’s) | Weighted- Average Exercise Price | ||||||||||
Outstanding at December 31, 2020 | $ | ||||||||||
Granted | $ | ||||||||||
Forfeited | ( | $ | |||||||||
Exercised | ( | $ | |||||||||
Outstanding at December 31, 2021 | $ | ||||||||||
Exercisable at December 31, 2021 | $ | ||||||||||
Stock options & SARs expected to vest | $ |
Number of Shares (in 000’s) | Weighted- Average Grant-Date Fair Value | ||||||||||
Outstanding at December 31, 2020 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Forfeited | ( | $ | |||||||||
Outstanding at December 31, 2021 | $ |
2021 | |||||||||||||||||
Orthopedic Surgery | General Surgery | Total | |||||||||||||||
Timing of Revenue Recognition | |||||||||||||||||
Goods transferred at a point in time | $ | $ | $ | ||||||||||||||
Services transferred over time | |||||||||||||||||
Total sales from contracts with customers | $ | $ | $ |
2020 | |||||||||||||||||
Orthopedic Surgery | General Surgery | Total | |||||||||||||||
Timing of Revenue Recognition | |||||||||||||||||
Goods transferred at a point in time | $ | $ | $ | ||||||||||||||
Services transferred over time | |||||||||||||||||
Total sales from contracts with customers | $ | $ | $ |
2019 | |||||||||||||||||
Orthopedic Surgery | General Surgery | Total | |||||||||||||||
Timing of Revenue Recognition | |||||||||||||||||
Goods transferred at a point in time | $ | $ | $ | ||||||||||||||
Services transferred over time | |||||||||||||||||
Total sales from contracts with customers | $ | $ | $ |
December 31, 2021 | December 31, 2020 | ||||||||||
Contract Liability | $ | $ |
2021 | |||||||||||||||||
Orthopedic Surgery | General Surgery | Total | |||||||||||||||
Primary Geographic Markets | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Europe, Middle East & Africa | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Americas (excluding the United States) | |||||||||||||||||
Total sales from contracts with customers | $ | $ | $ |
2020 | |||||||||||||||||
Orthopedic Surgery | General Surgery | Total | |||||||||||||||
Primary Geographic Markets | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Europe, Middle East & Africa | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Americas (excluding the United States) | |||||||||||||||||
Total sales from contracts with customers | $ | $ | $ |
2019 | |||||||||||||||||
Orthopedic Surgery | General Surgery | Total | |||||||||||||||
Primary Geographic Markets | |||||||||||||||||
United States | $ | $ | $ | ||||||||||||||
Europe, Middle East & Africa | |||||||||||||||||
Asia Pacific | |||||||||||||||||
Americas (excluding the United States) | |||||||||||||||||
Total sales from contracts with customers | $ | $ | $ |
2021 | 2020 | ||||||||||
Accumulated benefit obligation | $ | $ | |||||||||
Change in benefit obligation | |||||||||||
Projected benefit obligation at beginning of year | $ | $ | |||||||||
Service cost | |||||||||||
Interest cost | |||||||||||
Actuarial loss (gain) | ( | ||||||||||
Benefits paid | ( | ( | |||||||||
Settlements | ( | ( | |||||||||
Projected benefit obligation at end of year | $ | $ | |||||||||
Change in plan assets | |||||||||||
Fair value of plan assets at beginning of year | $ | $ | |||||||||
Actual gain on plan assets | |||||||||||
Benefits paid | ( | ( | |||||||||
Settlements | ( | ( | |||||||||
Fair value of plan assets at end of year | $ | $ | |||||||||
Funded status | $ | ( | $ | ( |
2021 | 2020 | ||||||||||
Other long-term liabilities | $ | ( | $ | ( | |||||||
Accumulated other comprehensive loss | ( | ( |
2021 | 2020 | ||||||||||
Discount rate | % | % |
2021 | 2020 | ||||||||||
Current year actuarial loss (gain) | $ | $ | ( | ||||||||
Amortization of actuarial loss | |||||||||||
Total recognized in other comprehensive income (loss) | $ | $ | ( |
2021 | 2020 | 2019 | |||||||||||||||
Service cost | $ | $ | $ | ||||||||||||||
Interest cost on projected benefit obligation | |||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||
Amortization of loss | |||||||||||||||||
Net periodic pension cost | $ | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Discount rate on benefit obligation | % | % | % | ||||||||||||||
Effective rate for interest on benefit obligation | % | % | % | ||||||||||||||
Expected return on plan assets | % | % | % |
Percentage of Pension Plan Assets | Target Allocation | ||||||||||||||||
2021 | 2020 | 2022 | |||||||||||||||
Equity securities | % | % | % | ||||||||||||||
Debt securities | % | % | % | ||||||||||||||
Total | % | % | % |
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. | ||||
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. | ||||
Money Market Fund: | These investments are public investment vehicles valued using the Net Asset Value (NAV). | ||||
Mutual Funds: | These investments are public investment vehicles valued using the Net Asset Value (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. |
2021 | 2020 | ||||||||||
Investments measured at fair value: | |||||||||||
Level 1 | |||||||||||
Common Stock | $ | $ | |||||||||
Fixed Income Securities | |||||||||||
Total Investments measured at fair value | |||||||||||
Investments measured at NAV: | |||||||||||
Money Market Fund | |||||||||||
Mutual Funds | |||||||||||
Total Investments measured at NAV | |||||||||||
Total Investments | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
2027-2031 |
2021 | 2020 | 2019 | |||||||||||||||
Plant underutilization costs | $ | $ | $ | ||||||||||||||
Manufacturing consolidation costs | |||||||||||||||||
Acquisition and integration costs | |||||||||||||||||
Product rationalization costs - inventory | |||||||||||||||||
Restructuring costs | |||||||||||||||||
Acquisition and other expense included in cost of sales | $ | $ | $ | ||||||||||||||
Restructuring and related costs | $ | $ | $ | ||||||||||||||
Product rationalization costs - field inventory | |||||||||||||||||
Acquisition and integration costs | |||||||||||||||||
Acquisition and other expense included in selling and administrative expense | $ | $ | $ | ||||||||||||||
Debt refinancing costs included in other expense | $ | $ | $ |
2021 | 2020 | 2019 | |||||||||||||||
Balance as of January 1, | $ | $ | $ | ||||||||||||||
Provision for warranties | |||||||||||||||||
Claims made | ( | ( | ( | ||||||||||||||
Balance as of December 31, | $ | $ | $ |
As of | |||||||||||||||||
FASB ASC Topic 815 Designation | December 31, 2021 | December 31, 2020 | |||||||||||||||
Forward exchange contracts | Cash flow hedge | $ | $ | ||||||||||||||
Forward exchange contracts | Non-designated |
Amount of Gain (Loss) Recognized in AOCI | Consolidated Statements of Comprehensive Income | Amount of Gain (Loss) Reclassified from AOCI | ||||||||||||||||||||||||||||||||||||||||||
Years Ended | Total Amount of Line Item Presented | Years Ended | ||||||||||||||||||||||||||||||||||||||||||
Derivative Instrument | 2021 | 2020 | 2019 | Location of amount reclassified | 2021 | 2020 | 2019 | 2021 | 2020 | 2019 | ||||||||||||||||||||||||||||||||||
Foreign exchange contracts | $ | $ | ( | $ | Net Sales | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Cost of Sales | ( | |||||||||||||||||||||||||||||||||||||||||||
Pre-tax gain (loss) | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
Tax expense (benefit) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Net gain (loss) | $ | $ | ( | $ | $ | ( | $ | $ |
Years Ended | ||||||||||||||||||||||||||
Derivative Instrument | Location on Consolidated Statements of Comprehensive Income | 2021 | 2020 | 2019 | ||||||||||||||||||||||
Net loss on currency forward contracts | Selling and administrative expense | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Net gain (loss) on currency transaction exposures | Selling and administrative expense | $ | ( | $ | $ | ( |
December 31, 2021 | Location on Consolidated Balance Sheet | Asset Fair Value | Liabilities Fair Value | Net Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | $ | ( | $ | ||||||||||||||||||
Foreign exchange contracts | Other long-term liabilities | ( | ( | ||||||||||||||||||||
$ | $ | ( | $ | ||||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange contracts | Other current liabilities | ( | ( | ||||||||||||||||||||
Total derivatives | $ | $ | ( | $ |
December 31, 2020 | Location on Consolidated Balance Sheet | Asset Fair Value | Liabilities Fair Value | Net Fair Value | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange contracts | Other current liabilities | $ | $ | ( | $ | ( | |||||||||||||||||
Foreign exchange contracts | Other long-term liabilities | ( | ( | ||||||||||||||||||||
$ | $ | ( | $ | ( | |||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||||||
Foreign exchange contracts | Other current liabilities | ( | ( | ||||||||||||||||||||
Total derivatives | $ | $ | ( | $ | ( |
Additions | ||||||||||||||||||||||||||
Balance at Beginning of Period | Charged to Costs and Expenses | |||||||||||||||||||||||||
Balance at End of Period | ||||||||||||||||||||||||||
Description | Deductions | |||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||
Allowance for bad debts | $ | $ | $ | ( | $ | |||||||||||||||||||||
Sales returns and | ||||||||||||||||||||||||||
allowance | ( | |||||||||||||||||||||||||
Deferred tax asset | ||||||||||||||||||||||||||
valuation allowance | ( | |||||||||||||||||||||||||
2020 | ||||||||||||||||||||||||||
Allowance for bad debts | $ | $ | $ | ( | $ | |||||||||||||||||||||
Sales returns and | ||||||||||||||||||||||||||
allowance | ( | |||||||||||||||||||||||||
Deferred tax asset | ||||||||||||||||||||||||||
valuation allowance | ||||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||
Allowance for bad debts | $ | $ | $ | ( | $ | |||||||||||||||||||||
Sales returns and | ||||||||||||||||||||||||||
allowance | ( | |||||||||||||||||||||||||
Deferred tax asset | ||||||||||||||||||||||||||
valuation allowance |
Name | State or Country of Incorporation | |||||||
Aspen Laboratories, Inc. | Colorado | |||||||
Buffalo Filter LLC | Delaware | |||||||
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 Japan K. K. | Japan | |||||||
CONMED Linvatec Australia PTY Ltd | Australia | |||||||
CONMED Linvatec (Beijing) Medical Appliances Co., Ltd | China | |||||||
CONMED Linvatec Biomaterials Oy | Finland | |||||||
CONMED Switzerland GmbH | Switzerland | |||||||
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 | |||||||
Conmed do Brasil Comércio Importação e Exportação de Produtos Médicos Hospitalares Ltda. | Brazil | |||||||
Largo Lakes I Limited Partnership | Delaware | |||||||
Linvatec Corporation | Florida | |||||||
Linvatec Belgium NV | Belgium | |||||||
Linvatec Canada ULC | Canada | |||||||
CONMED Europe BV | Belgium | |||||||
CONMED Korea Ltd. | Korea | |||||||
Linvatec Nederland B.V. | Netherlands | |||||||
Linvatec Polska Sp. z.o.o | Poland | |||||||
Linvatec Conmed Sweden AB | Sweden | |||||||
Palmerton Holdings, Inc. | New York | |||||||
SurgiQuest, Inc. | Delaware | |||||||
Viking Systems, Inc. | Delaware | |||||||
Linvatec India Private Limited | India |
/s/ Curt R. Hartman | ||
Curt R. Hartman | ||
Chair of the Board, President and | ||
Chief Executive Officer |
/s/ Todd W. Garner | ||
Todd W. Garner | ||
Executive Vice President and | ||
Chief Financial Officer |
Date: | February 22, 2022 | /s/ Curt R. Hartman | ||||||
Curt R. Hartman | ||||||||
Chair of the Board, President and | ||||||||
Chief Executive Officer | ||||||||
Date: | February 22, 2022 | /s/ Todd W. Garner | ||||||
Todd W. Garner | ||||||||
Executive Vice President and | ||||||||
Chief Financial Officer |
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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 4,528 | $ 3,876 |
Preferred stock, par value (in dollars per per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 31,299,194 | 31,299,194 |
Treasury stock, shares (in shares) | 1,925,893 | 2,410,045 |
Consolidated Statements of Shareholder's Equity (Parenthetical) - $ / shares |
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 28, 2013 |
Feb. 29, 2012 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Statement of Shareholders' Equity Parenthetical [Abstract] | |||||
Dividends per share of common stock (in dollars per share) | $ 0.20 | $ 0.15 | $ 0.80 | $ 0.80 | $ 0.80 |
Operations and Significant Accounting Policies |
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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 devices and equipment for surgical procedures. The Company’s products are used by surgeons and other healthcare professionals in a variety of specialties including orthopedics, general surgery, gynecology, thoracic surgery and gastroenterology. 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. The Company considered COVID-19 related impacts on its estimates, as appropriate, within its consolidated financial statements and there may be changes to those estimates in future periods. The Company believes that the accounting estimates are appropriate after giving consideration to the increased uncertainties surrounding the severity and duration of the COVID-19 pandemic. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ from those estimates. 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 and net realizable value determined on the FIFO (first-in, first-out) cost method. 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:
Leases The Company leases various manufacturing facilities, office facilities and equipment under operating and finance leases. We determine if an arrangement is a lease at inception. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We use the implicit rate when readily determinable. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Certain of our leases include variable lease payments, mainly when a lease is tied to an index rate. These variable lease payments are recorded as expense in the period incurred and are not material. The Company has lease agreements with lease and non-lease components, which we account for separately. For certain equipment leases, we apply a portfolio approach to efficiently account for the operating lease ROU assets and lease liabilities. We also elected the short-term lease exemption and do not recognize leases with terms less than one year on the balance sheet. The related short-term lease expense is not material. Our leases have remaining lease terms of one year to ten years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. We only account for such extensions or early terminations when it is reasonably certain we will exercise such options. Refer to Note 5 for further detail on leases. The Company places certain of our capital equipment with customers on a loaned basis and at no charge in exchange for commitments to purchase related single-use products over time periods generally ranging from one to three years. Placed equipment is loaned and subject to return if minimum single-use purchases are not met. The Company accounts for these placements as operating leases but applies a practical expedient and does not separate the non-lease and lease components from the combined component. Accordingly, the Company accounts for the combined component as a single performance obligation with revenue recognized upon shipment of the related single use-products. The cost of the equipment is amortized over its estimated useful life which is generally five 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. Factors that contribute to the recognition of goodwill include synergies expected to increase net sales and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. Customer and distributor relationships, trademarks, tradenames, developed technology, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Sales representation, marketing and promotional rights represent intangible assets created under our agreement with Musculoskeletal Transplant Foundation (“MTF”). 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. We completed our goodwill impairment testing of our single reporting unit during the fourth quarter of 2021. We performed our impairment test utilizing the market capitalization approach to determine whether the fair value of a reporting unit is less than its carrying amount. Based upon our assessment, the fair value of our reporting unit continues to exceed carrying value. 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. For all other indefinite-lived intangible assets, we perform a qualitative impairment test. Based upon this assessment, we have determined that our indefinite-lived intangible assets are not impaired. Other long-lived assets We review other long-lived assets consisting of property, plant and equipment and field inventory for impairment 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. The Company maintains field inventory consisting of capital equipment for customer demonstration and evaluation purposes. Field inventory is generally not sold to customers but rather continues to be used over its useful life for demonstration, evaluation and loaner purposes. An annual wear and tear provision has been recorded on field inventory. The net book value of such equipment at December 31, 2021 and 2020 is $42.5 million and $43.3 million, respectively. 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 following tax law ordering rules. 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 certain subsidiaries outside of the United States earned after December 31, 2017 as 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 The Company recognizes revenue when we have satisfied a performance obligation by transferring a promised good or service (that is an asset) to a customer. An asset is transferred when the customer obtains control of that asset. The following policies apply to our major categories of revenue transactions: •Revenue is recognized when product is shipped at which point the performance obligation is satisfied and the customer obtains control of the product. •We place certain of our capital equipment with customers on a loaned basis and at no charge in exchange 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 which is generally five years. •We recognize revenues in accordance with the terms of our agreement with MTF on a net basis as our role is that of an agent earning a commission or fee. MTF is responsible for the sourcing, processing and distribution of allograft tissue for sports medicine procedures while the Company represents, markets and promotes MTF’s sports medicine allograft tissues to customers. The Company is paid a fee by MTF which is calculated as a percentage of the net amounts invoiced by MTF to customers for sports medicine allograft tissues. The Company accounts for the services provided to MTF as a series of distinct performance obligations and each service is recognized over time as MTF simultaneously receives and consumes the benefit. •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 $17.0 million, $14.6 million and $15.4 million for 2021, 2020 and 2019, 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. We do so by applying historical loss rates to our accounts receivable aging schedule to estimate expected credit losses. We further adjusted expected credit losses for specifically identified and forecasted credit losses. Historically, losses on accounts receivable have not been material. Management believes that the allowance for doubtful accounts is adequate to provide for probable losses resulting from accounts receivable. •We sell extended warranties to customers that are typically for a period of one to three years. The related revenue is recorded as a contract liability and recognized over the life of the contract on a straight-line basis, which is reflective of our obligation to stand ready to provide repair services. Please refer to Note 10 for further detail on revenue. 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, 2021, 2020 and 2019, respectively:
The shares used in the calculation of diluted EPS exclude options and stock appreciation rights ("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 0.6 million, 1.4 million and 0.7 million at December 31, 2021, 2020 and 2019, respectively. As more fully described in Note 7, our 2.625% convertible notes due in 2024 (the “Notes”) are convertible under certain circumstances, as defined in the indenture, into a combination of cash and CONMED common stock. The following is intended to describe the impact of the Notes and related hedge transactions on the calculation of diluted EPS. Additional shares to be issued pursuant to the terms of the Notes and related hedge transactions, if any, would occur at maturity. The calculation of diluted EPS would include potential diluted shares upon conversion of the Notes when the average market price per share of our common stock for the period, is greater than the conversion price of the Notes of $88.80. We intend to settle in cash the principal outstanding and use the treasury stock method when calculating their potential dilutive effect, if any. During the year ended December 31, 2021, our average share price exceeded the conversion price of the Notes and we included in our diluted share count 1.3 million shares assumed to be issued if the Notes were converted. During the years ended December 31, 2020 and 2019, our average share price had not exceeded the conversion price of the Notes; therefore, under the net share settlement method, there were no potential shares issuable under the Notes to be used in the calculation of diluted EPS. We previously entered into convertible note hedge transactions to increase the effective conversion price of the Notes to $114.92. However, our convertible notes hedges are not included when calculating potential dilutive shares since their effect is always anti-dilutive. Concurrently with entering into the hedge transactions, we also previously entered into warrant transactions under which we agreed to sell shares of our common stock at $114.92. The calculation of diluted EPS also includes potential diluted shares to be issued under the warrants when the average market price per share of our common stock for the period is greater than $114.92. During the year ended December 31, 2021, our average share price exceeded $114.92 and we therefore included in our diluted share count an additional 0.5 million shares assumed to be issued under the warrants. During the years ended December 31, 2020 and 2019, our average share price had not exceeded $114.92; therefore, there were no potential shares issuable under the warrants to be used in the calculation of diluted EPS. 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 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:
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Business Acqusition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||
Business Acquisition | Business Acquisitions On February 11, 2019 we acquired Buffalo Filter, LLC and all of the issued and outstanding common stock of Palmerton Holdings, Inc. from Filtration Group FGC LLC (the "Buffalo Filter Acquisition") for approximately $365 million in cash. Buffalo Filter develops, manufactures and markets smoke evacuation technologies that are complementary to our general surgery offering. The business combination was funded through a combination of cash on hand and long-term borrowings as further described in Note 7. The unaudited pro forma information for the year ended December 31, 2019, assuming the Buffalo Filter Acquisition occurred as of January 1, 2018 is presented below. This information has been prepared for comparative purposes only and does not purport to be indicative of the results of operations which actually would have resulted had the Buffalo Filter acquisition occurred on the dates indicated, or which may result in the future.
These pro forma results include certain adjustments, primarily due to increases in amortization expense due to fair value adjustments of intangible assets, increases in interest expense due to additional borrowings incurred to finance the acquisition, and acquisition related costs including transaction costs such as legal, accounting, valuation and other professional services as well as integration costs such as severance and retention. Net sales associated with Buffalo Filter of $49.6 million have been recorded in the consolidated statement of comprehensive income for the year ended December 31, 2019. It is impracticable to determine the earnings recorded in the consolidated statement of comprehensive income for the year ended December 31, 2019 as these amounts are not separately measured.
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consist of the following at December 31:
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Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment consist of the following at December 31:
Internal-use software, included in gross machinery and equipment at December 31, 2021 and 2020 was $49.1 million and $50.3 million, respectively, with related accumulated depreciation of $45.3 million and $42.9 million, respectively. Internal use software depreciation expense was $3.3 million, $4.7 million and $4.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. Also, during 2020, we sold a vacant facility for $3.2 million.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases Lease costs for the year ended December 31, consist of the following:
Supplemental balance sheet information related to leases as of December 31, is as follows:
Supplemental cash flow information related to leases for the year ended December 31, was as follows:
Maturities of lease liabilities as of December 31, 2021 are as follows:
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Leases | Leases Lease costs for the year ended December 31, consist of the following:
Supplemental balance sheet information related to leases as of December 31, is as follows:
Supplemental cash flow information related to leases for the year ended December 31, was as follows:
Maturities of lease liabilities as of December 31, 2021 are as follows:
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Goodwill and Other Intangible Assets |
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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:
Total accumulated goodwill impairment losses aggregated $107.0 million at December 31, 2021 and 2020, respectively. During 2019, the Company acquired a distributor and in 2020 recorded a measurement period adjustment related to the acquired distributor. Other intangible assets consist of the following:
Amortization expense related to intangible assets which are subject to amortization totaled $33.3 million, $34.2 million and $32.3 million for the years ending December 31, 2021, 2020 and 2019, respectively, and is included as a reduction of revenue (for amortization related to our sales representation, marketing and promotional rights) and in selling and administrative expense (for all other intangible assets) in the consolidated statements of comprehensive income. The estimated amortization expense related to intangible assets at December 31, 2021 and for each of the five succeeding years is as follows:
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Long Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long Term Debt | Long Term Debt Long-term debt consists of the following at December 31:
On July 16, 2021, we entered into a seventh amended and restated senior credit agreement consisting of: (a) a $233.5 million term loan facility and (b) a $585.0 million revolving credit facility. The revolving credit facility will terminate and the loans outstanding under the term loan facility will expire on July 16, 2026. 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. Interest rates are at LIBOR (subject to 0.125% floor) plus an interest rate margin of 1.50% (1.625% at December 31, 2021). For borrowings where we elect to use the alternate base rate, the initial base rate is the greatest of (i) the Prime Rate, (ii) the Federal Funds Rate plus 0.50% or (iii) the one-month Adjusted LIBOR plus 1.00%, plus, in each case, an interest rate margin. There were $227.6 million in borrowings outstanding on the term loan facility as of December 31, 2021. There were $140.0 million in borrowings outstanding under the revolving credit facility as of December 31, 2021. Our available borrowings on the revolving credit facility at December 31, 2021 were $442.5 million with approximately $2.5 million of the facility set aside for outstanding letters of credit. The carrying amounts of the term loan and revolving credit facility approximate fair value. The seventh amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The seventh amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. We were in full compliance with these covenants and restrictions as of December 31, 2021. 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 29, 2019, we issued $345.0 million in 2.625% convertible notes due in 2024 (the "Notes"). Interest is payable semi-annually in arrears on February 1 and August 1 of each year, commencing August 1, 2019. The Notes will mature on February 1, 2024, unless earlier repurchased or converted. The Notes represent subordinated unsecured obligations and are convertible under certain circumstances, as defined in the indenture, into a combination of cash and CONMED common stock. The Notes may be converted at an initial conversion rate of 11.2608 shares of our common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $88.80 per share of common stock). Holders of the Notes may convert the Notes at their option at any time on or after November 1, 2023 through the second scheduled trading day preceding the maturity date. Holders of the Notes will also have the right to convert the Notes prior to November 1, 2023, but only upon the occurrence of specified events. The conversion rate is subject to anti-dilution adjustments if certain events occur. A portion of the net proceeds from the offering of the Notes were used as part of the financing for the Buffalo Filter acquisition and $21.0 million were used to pay the cost of certain convertible notes hedge transactions as further described below. Our effective borrowing rate for nonconvertible debt at the time of issuance of the Notes was estimated to be 6.14%, which resulted in $51.6 million of the $345.0 million aggregate principal amount of Notes issued, or $39.1 million after taxes, being attributable to equity. For the years ended December 31, 2021, 2020 and 2019, we have recorded interest expense related to the amortization of debt discount on the Notes of $10.2 million, $9.7 million and $8.3 million respectively, at the effective interest rate of 6.14%. The debt discount on the Notes is being amortized through February 2024. For the years ended December 31, 2021, 2020 and 2019, we have recorded interest expense on the Notes of $9.1 million, $9.1 million and $8.4 million, respectively, at the contractual coupon rate of 2.625%. The estimated fair value of the Notes was approximately $576.0 million as of December 31, 2021 based on a market approach which represents a Level 2 valuation in the fair value hierarchy. The estimated fair value was determined based on the estimated or actual bids and offers of the Notes in an over-the-counter market transaction on the last business day of the period. In connection with the offering of the Notes, we entered into convertible note hedge transactions with a number of financial institutions (each, an “option counterparty”). The convertible note hedge transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of our common stock underlying the Notes. Concurrently with entering into the convertible note hedge transactions, we also entered into separate warrant transactions with each option counterparty whereby we sold to such option counterparty warrants to purchase, subject to customary anti-dilution adjustments, the same number of shares of our common stock. The convertible note hedge transactions are expected generally to reduce the potential dilution upon conversion of the Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Notes, as the case may be, in the event that the market price per share of our common stock, as measured under the terms of the convertible note hedge transactions, is greater than the strike price of the convertible note hedge transactions, which initially corresponds to the conversion price of the Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Notes. If, however, the market price per share of our common stock, as measured under the terms of the warrant transactions, exceeds the strike price ($114.92) of the warrants, there would nevertheless be dilution to the extent that such market price exceeds the strike price of the warrants, unless we elect to settle the warrants in cash. See additional discussion regarding a new accounting standard and related impact on our Notes in Note 17. The scheduled maturities of long-term debt outstanding at December 31, 2021 are as follows:
The above amounts exclude debt discount,deferred debt issuance costs and financing leases.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision (benefit) for income taxes for the years ended December 31, 2021, 2020 and 2019 consists of the following:
A reconciliation between income taxes computed at the statutory federal rate and the provision (benefit) for income taxes for the years ended December 31, 2021, 2020 and 2019 follows:
The Company has elected to account for Global Intangible Low Tax Income ("GILTI") using the period cost method. The net impact of GILTI including the allowable GILTI deduction is presented in the rate reconciliation as a component of “US tax on worldwide earnings at different rates” and is offset in part by the Foreign Derived Intangible Income deduction (“FDII”). The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2021 and 2020 are as follows:
Income before income taxes consists of the following U.S. and foreign income:
As of December 31, 2021, the amount of federal net operating loss carryforward was $15.7 million and begins to expire in 2027. As of December 31, 2021, the amount of federal research credit carryforward available was $15.5 million. These credits begin to expire in 2027. We have accrued tax liabilities related to the amount of unremitted earnings at December 31, 2017 and certain subsequent unremitted earnings as these are not considered permanently reinvested. Deferred taxes have not been accrued on unremitted earnings subsequent to December 31, 2017 that are considered permanently reinvested. The amount of such untaxed foreign earnings for the periods occurring after December 2017 totaled $20.3 million. If we were to repatriate these funds, we would be required to accrue and pay taxes on such amounts. The Company has estimated foreign withholding taxes of $0.9 million would be due if these earnings were repatriated. 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 2019. 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,:
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Shareholders' Equity |
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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 total dividend per share was $0.80 for each of 2021, 2020 and 2019. The fourth quarter dividend for 2021 was paid on January 5, 2022 to shareholders of record as of December 15, 2021. The total dividend payable was $5.9 million and $5.8 million at December 31, 2021 and 2020, respectively, 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, 2021 and 2020, no preferred stock had been issued. Our Board of Directors has authorized a $200.0 million share repurchase program. Through December 31, 2021, 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 2021, 2020, and 2019 we did not repurchase any shares. We have reserved 6.7 million shares of common stock for issuance to employees and directors under two shareholder approved share-based compensation plans (the "Plans") of which approximately 3.4 million shares remain available for grant at December 31, 2021. The exercise price on all outstanding stock options and 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. Stock options, SARs, RSUs and PSUs are generally non-transferable other than on death and generally become exercisable over a 4 to 5 year period from date of grant. Stock options and SARs expire 10 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 $16.3 million, $13.1 million and $11.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts are included in selling and administrative expense. Tax related benefits of $3.9 million, $3.2 million and $2.8 million were also recognized for the years ended December 31, 2021, 2020 and 2019, respectively. Cash received from the exercise of stock options was $19.6 million, $13.7 million and $7.7 million for the years ended December 31, 2021, 2020 and 2019, 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 stock 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 stock option and SAR grant. The risk free interest rate is based on the stock 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 stock options and SARs are expected to be outstanding based on a study of historical data of option holder exercise and termination behavior. Forfeitures are recognized as incurred. The following table illustrates the assumptions used in estimating fair value in the years ended December 31, 2021, 2020 and 2019:
The following table illustrates the stock option and SAR activity for the year ended December 31, 2021:
The weighted average remaining contractual term for SARs and stock options outstanding and exercisable at December 31, 2021 was 7.0 years and 5.5 years, respectively. The aggregate intrinsic value of SARs and stock options outstanding and exercisable at December 31, 2021 was $199.0 million and $105.8 million, respectively. The aggregate intrinsic value of stock options and SARs exercised during the years ended December 31, 2021, 2020 and 2019 was $49.2 million, $26.6 million and $17.0 million, respectively. The following table illustrates the RSU activity for the year ended December 31, 2021:
The weighted average fair value of RSU awards granted in the years ended December 31, 2021, 2020 and 2019 was $129.94, $85.45 and $78.64, respectively. The total fair value of RSUs and PSUs vested was $2.2 million, $6.2 million and $2.8 million for the years ended December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, there was $45.4 million of total unrecognized compensation cost related to nonvested stock options, SARs and RSUs granted under the Plans which is expected to be recognized over a weighted average period of 3.5 years. We offer to our employees a shareholder-approved Employee Stock Purchase Plan (the “Employee Plan”), under which we 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 2021, we issued approximately 13,024 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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Revenues |
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Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues The following tables present revenue disaggregated by product line and timing of revenue recognition for the years ended December 31, 2021, 2020 and 2019:
Revenue disaggregated by primary geographic market where the products are sold is included in Note 11. Contract liability balances related to the sale of extended warranties to customers are as follows:
Revenue recognized during years ended December 31, 2021, 2020 and 2019 from amounts included in contract liabilities at the beginning of the period were $10.3 million, $9.3 million and $6.8 million, respectively. There were no material contract assets as of December 31, 2021 and December 31, 2020.
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Business Segments and Geographic Areas |
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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, cash flow metrics and allocates resources on a consolidated worldwide basis due to shared infrastructure and resources. Our product lines consist of orthopedic surgery and general surgery. Orthopedic surgery consists of sports medicine instrumentation and small bone, large bone and specialty powered surgical instruments as well as imaging systems for use in minimally invasive surgical procedures and fees related to sales representation, 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, smoke evacuation devices, a line of cardiac monitoring products as well as electrosurgical generators and related instruments. These product lines' net sales and primary geographic market where the products are sold, are as follows for the years ended December 31, 2021, 2020 and 2019:
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, 2021 and 2020. No single customer represented over 10% of our consolidated net sales for the years ended December 31, 2021, 2020 and 2019.
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Employee Benefit Plans |
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Retirement Benefits [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 $9.2 million, $8.9 million and $9.1 million during the years ended December 31, 2021, 2020 and 2019, respectively. We use a December 31, measurement date for our pension plan. Cumulative gains and losses in excess of 10% of the greater of the benefit obligation or the market-related value of assets are amortized on a straight-line basis over the lesser of the expected average remaining life expectancy of the plan's participants or 12 years. The limit of 12 years is adjusted to reflect the percentage change in the average remaining service period for the plan's active membership. The following table provides a reconciliation of the projected benefit obligation, plan assets and funded status of the pension plan at December 31:
The projected benefit obligation decreased $5.7 million as of December 31, 2021 mainly due to the increase in the discount rate from 2.44% at December 31, 2020 to 2.81% at December 31, 2021. Amounts recognized in the consolidated balance sheets consist of the following at December 31,:
Accumulated other comprehensive loss for the years ended December 31, 2021 and 2020 consists of net actuarial losses not yet recognized in net periodic pension cost (before income taxes). The following actuarial assumptions were used to determine our accumulated and projected benefit obligations as of December 31,:
Other changes in plan assets and benefit obligations recognized in other comprehensive income in 2021 and 2020 are as follows:
Net periodic pension cost for the years ended December 31, consists of the following:
Non-service cost of $0.4 million and $1.3 million is included in other expense in the consolidated statements of comprehensive income for the years ended 2020 and 2019, respectively. Non-service pension cost was immaterial for the year ended 2021. The following actuarial assumptions were used to determine our net periodic pension benefit cost for the years ended December 31,:
The Company’s discount rate and mortality assumptions are the significant assumptions in determining the projected benefit obligation of the Company’s pension plan. The discount rate represents the interest rate used in estimating the present value of projected cash flows to settle the Company’s pension obligations. The discount rate assumption is determined by management using a full yield curve approach, which involves applying the specific spot rates along the yield curve used in the determination of the benefit obligation that correlates to the relevant projected cash flows. Mortality assumptions are based on published mortality studies developed primarily based on past experience of the broad population and modified for projected longevity trends. The mortality assumptions used for 2021 and 2020 are based on the Pri-2012 Mortality Tables using the MP-2021 and MP-2020, respectively, mortality improvement scales. 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 plan assets by category is as follows at December 31,:
As of December 31, 2021, the pension plan held 27,562 shares of our common stock, which had a fair value of $3.9 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. FASB guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements as described in Note 16. Following is a description of the valuation methodologies used for our pension assets. There have been no changes in the methodologies used at December 31, 2021 and 2020:
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 the value of the pension plan's assets as of December 31, 2021 and December 31, 2020:
We do not expect to make any contributions to our pension plan for 2022. The following table summarizes the benefits and settlements 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 payments are estimated based on the same assumptions used to measure the Company’s projected benefit obligation at December 31, 2021 and reflect the impact of expected future employee service.
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Legal Matters and Contingencies |
12 Months Ended |
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Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters and Contingencies | Legal Matters and Contingencies From time to time, the Company may receive an information request, subpoena or warrant 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 United States Food and Drug Administration, the Department of Labor, the Treasury Department or other federal and state agencies or foreign governments or government agencies. These information requests, subpoenas or warrants may or may not be routine inquiries, or may begin as routine inquiries and over time develop into enforcement actions of various types. Likewise, if we receive reports of alleged misconduct from employees and third parties, we investigate as appropriate. Manufacturers of medical devices have been the subject of various enforcement actions relating to interactions with health care providers domestically or internationally whereby companies are claimed to have provided health care providers with inappropriate incentives to purchase their products. Similarly, the Foreign Corrupt Practices Act ("FCPA") imposes obligations on manufacturers with respect to interactions with health care providers who may be considered government officials based on their affiliation with public hospitals. The FCPA also requires publicly listed manufacturers to maintain accurate books and records, and maintain internal accounting controls sufficient to provide assurance that transactions are accurately recorded, lawful and in accordance with management's authorization. The FCPA poses unique challenges both because manufacturers operate in foreign cultures in which conduct illegal under the FCPA may not be illegal in local jurisdictions, and because, in some cases, a United States manufacturer may face risks under the FCPA based on the conduct of third parties over whom the manufacturer may not have complete control. While CONMED has not experienced any material enforcement action to date, there can be no assurance that the Company will not be subject to a material enforcement action in the future, or that the Company will not incur costs including, in the form of fees for lawyers and other consultants, that are material to the Company’s results of operations in the course of responding to a future inquiry or investigation. Manufacturers of medical products may face exposure to significant product liability claims, as well as patent infringement and other claims incurred in the ordinary course of business. To date, we have not experienced any 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, results of operations or cash flows. We currently maintain commercial product liability insurance of $35 million per incident and $35 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. Likewise, the operations of our suppliers and sterilizers are subject to similar environmental laws and regulations. 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. In 2014, the Company acquired EndoDynamix, Inc. The agreement governing the terms of the acquisition provides that, if various conditions are met, certain contingent payments relating to the first commercial sale of the products (the milestone payment), as well as royalties based on sales (the revenue based payments), are due to the seller. In 2016, we notified the seller that there was a need to redesign the product, and that, as a consequence, the first commercial sale had been delayed. Consequently, the payment of contingent milestone and revenue-based payments were delayed. On January 18, 2017, the seller provided notice (the "Notice") seeking $12.7 million under a liquidated damages clause, which essentially represents the seller's view as to the sum of the projected contingent milestone and revenue-based payments on an accelerated basis. CONMED responded to the Notice denying that there was any basis for acceleration of the payments due under the acquisition agreement. On February 22, 2017, the representative of the former shareholders of EndoDynamix filed a complaint in Delaware Chancery Court claiming breach of contract with respect to the duty to commercialize the product and seeking the contingent payments on an accelerated basis. We believe that there was a substantive contractual basis to support the Company's decision to redesign the product, such that there was no legitimate basis for seeking the liquidated damages. In the third quarter of 2018, the Company decided to halt the development of the EndoDynamix clip applier and recorded a charge to write off assets and released a previously accrued contingent consideration liability. In court filings the Plaintiffs claim to seek liquidated damages, as well as additional damages up to $24.8 million. A non-jury trial in the Delaware Chancery Court commenced on March 18, 2021, and testimony concluded on April 7, 2021. The parties have submitted post-trial briefs, the Court heard oral arguments at a hearing on September 16, 2021 and requested additional briefs which are expected to be filed at the end of February 2022. The Court will thereafter issue a ruling. The Company has not recorded any expense related to potential damages in connection with this matter because the Company does not believe any potential loss is probable. We expect to defend the claims asserted by the sellers of EndoDynamix, although there can be no assurance that we will prevail in the trial and/or any resulting appeals. CONMED is defending two Georgia State Court actions. The first in Cobb County was filed by various employees, former employees, contract workers and others against CONMED, and against a contract sterilizer. The second action in Douglas County is against CONMED’s landlord and other allegedly related entities. Plaintiffs in the lawsuits allege personal injury and related claims purportedly arising from or relating to exposure to Ethylene Oxide, a chemical used to sterilize certain products. CONMED is defending the claims asserted directly against it and is providing indemnification for certain other defendants based on contractual provisions. CONMED has submitted all of the claims for insurance coverage. One insurer is providing coverage for certain of the claims asserted directly against the Company. CONMED is currently in litigation with one of the other insurers regarding coverage for certain of the indemnification claims. Both actions are in their early stages and discovery has not yet started. The Company’s motion to dismiss in the Cobb County action was heard on January 10, 2022. CONMED believes it has strong defenses to the claims and will vigorously defend itself and all parties it is indemnifying. As with any litigation, there are risks, including the risk that CONMED may not prevail with respect to the defense of the underlying claims, or with respect to securing adequate insurance coverage for the indemnification claims. The Company is unable to estimate any range of possible loss at this time, and has not recorded any expense related to potential damages in connection with this matter because the Company does not believe any potential loss is probable. From time to time, we are also subject to negligence and other claims arising out of the ordinary conduct of our business, including, for example, accidents our employees may experience within the course of their employment or otherwise. We are currently defending one such claim, which we expect to be fully covered by insurance, involving potentially significant personal injuries. The Company is unable to estimate any range of possible loss at this time, and therefore has not recorded any liability related to potential damages in connection with this matter. We record reserves sufficient to cover probable and estimable losses associated with any such pending claims. We do not expect that the resolution of any pending claims, investigations or reports of alleged misconduct 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, investigations or reports of misconduct, 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.
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Acquisition and Other Expense |
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Acquisition and Other Expense | Acquisition and Other Expense Acquisition and other expense for the year ended December 31, consists of the following:
During 2020, we recorded a $6.6 million charge to cost of sales related to plant underutilization due to abnormally low production as a result of decreased sales caused by the COVID-19 pandemic. During 2020, we incurred $4.0 million in costs related to the consolidation of manufacturing operations which were charged to cost of sales. These costs included winding down operations at certain locations and moving production lines to other facilities. During 2019, we incurred $2.9 million in severance and other costs related to the consolidation of certain manufacturing operations which were charged to cost of sales. During 2020, we recognized costs for inventory step-up adjustments and other costs related to a previous acquisition of $2.8 million. During 2019, we incurred $1.3 million in costs for inventory adjustments and other costs associated with the acquisition of Buffalo Filter as further described in Note 2. These costs were charged to cost of sales. During 2020, we performed an analysis of our product lines and determined certain catalog numbers, principally related to capital equipment, would be discontinued and consolidated into existing product offerings. We consequently recorded a $2.2 million charge to cost of sales to write-off inventory of the discontinued products. In addition, we incurred $2.1 million in costs related to the write-off of field inventory used for customer demonstration and evaluation of the discontinued products which we charged to selling and administrative expense. During 2020, we incurred $1.1 million in restructuring costs related to a voluntary separation arrangement with employees as a result of the COVID-19 pandemic which were charged to cost of sales based on the job function of the affected employees. Substantially all of the costs associated with the voluntary separation arrangement were paid during 2020. During 2021 and 2020, we recorded charges of $0.4 million and $3.8 million, respectively, related to the restructuring of our sales force which consisted primarily of termination payments to Orthopedic distributors made in exchange for ongoing assistance to transition to employee-based sales representatives and severance that was charged to selling and administrative expense. During 2020, we recorded $0.9 million in restructuring charges principally related to a voluntary separation arrangement with employees as a result of the COVID-19 pandemic which were charged to selling and administrative expense based on the nature of the costs and function of the affected employees. Substantially all of the costs associated with the voluntary separation arrangement were paid during 2020. During 2020 and 2019, we incurred $1.2 million and $13.1 million, respectively, in costs associated with the February 11, 2019 acquisition of Buffalo Filter as further described in Note 2 that were included in selling and administrative expense. These costs include investment banking fees, consulting fees, legal fees, severance and integration related costs. During 2021, we recorded $1.1 million related to a loss on early extinguishment and third party fees associated with the seventh amended and restated senior credit agreement as further described in Note 7. These costs were included in other expense. During 2019, we incurred a $3.6 million charge related to commitment fees paid to certain of our lenders, which provided a financing commitment for the Buffalo Filter acquisition and recorded a loss on the early extinguishment of debt of $0.3 million in conjunction with the sixth amended and restated senior credit agreement.
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Guarantees |
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Guarantees | Guarantees We provide warranties on certain of our products at the time of sale and sell extended warranties. The standard warranty period for our capital equipment is generally one year and our extended warranties typically vary from one to three years. 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 standard warranties for the year ended December 31, are as follows:
Costs associated with extended warranty repairs are recorded as incurred and amounted to $6.8 million, $6.1 million and $5.3 million for the years ended December 31, 2021, 2020 and 2019 respectively.
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Fair Value Measurement |
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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. We also enter into forward contracts to exchange foreign currencies for United States dollars in order to hedge our currency transaction exposures. 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 following table presents the notional contract amounts for forward contracts outstanding:
The remaining time to maturity as of December 31, 2021 is within two years for hedge designated foreign exchange contracts and approximately one month for non-hedge designated forward exchange contracts. Statement of comprehensive income presentation Derivatives designated as cash flow hedges Foreign exchange contracts designated as cash flow hedges had the following effects on accumulated other comprehensive income (loss) ("AOCI") and net earnings on our consolidated statements of comprehensive income and our consolidated balance sheets:
At December 31, 2021, $3.7 million of net unrealized gains on forward contracts accounted for as cash flow hedges, and included in accumulated other comprehensive loss, are expected to be recognized in earnings in the next twelve months. Derivatives not designated as cash flow hedges Net gains and losses from derivative instruments not accounted for as hedges offset by gains and losses on our intercompany receivables on our consolidated statements of comprehensive income were:
Balance sheet presentation 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, 2021 and 2020:
Our forward foreign exchange contracts are subject to a master netting agreement and qualify for netting in the consolidated balance sheets. 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. Valuation Techniques. Assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2021 consist of forward foreign exchange contracts. 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. |
New Accounting Pronouncements |
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Dec. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles | New Accounting Pronouncements Recently Issued Accounting Standards, Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance if certain criteria are met for entities that have contracts, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company has not adopted the ASU as of December 31, 2021. Our seventh amended and restated senior credit agreement includes language to address the change from LIBOR to an alternative base rate, therefore we do not believe reference rate reform will have a significant impact on our consolidated financial statements, however we will continue to monitor our transition away from LIBOR and the potential to elect to apply this guidance in our consolidated financial statements in the event that we are impacted by reference rate reform. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models requiring separate accounting for embedded conversion features which will result in more convertible debt instruments accounted for as a single liability. The ASU eliminates certain settlement conditions that are required for equity classification to qualify for the derivative scope exception. The ASU addresses how convertible instruments are accounted for in the calculation of diluted earnings per share by using the if-converted method. The ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard on January 1, 2022 using the modified retrospective method. The adoption of this new guidance is estimated to result in an increase of approximately $22.6 million to long-term debt in the consolidated balance sheets, to reflect the full principal amount of the convertible notes outstanding net of issuance costs, a reduction of approximately $37.9 million to additional paid-in capital, net of estimated income tax effects, to remove the equity component separately recorded for the conversion features associated with the convertible notes, a decrease to deferred tax liabilities, net of approximately $5.5 million, and a cumulative-effect adjustment of approximately $20.8 million, net of estimated income tax effects, to the beginning balance of retained earnings as of January 1, 2022. The adoption of this new guidance is anticipated to reduce interest expense by approximately $10.4 million during the year ended December 31, 2022. Additionally, the modified retrospective approach will result in an increase in the dilutive share count as a result of calculating the impact of dilution from the Company's convertible notes using the if-converted method.
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Schedule II - Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation and Qualifying Accounts | SCHEDULE II—Valuation and Qualifying Accounts (In thousands)
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Operations and Significant Accounting Policies (Policies) |
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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.
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Use of estimates | Use of estimates |
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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.
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Inventories | Inventories Inventories are valued at the lower of cost and net realizable value determined on the FIFO (first-in, first-out) cost method. |
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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:
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Lessee, Leases | Leases The Company leases various manufacturing facilities, office facilities and equipment under operating and finance leases. We determine if an arrangement is a lease at inception. Right-of-use ("ROU") assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. We use the implicit rate when readily determinable. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Certain of our leases include variable lease payments, mainly when a lease is tied to an index rate. These variable lease payments are recorded as expense in the period incurred and are not material. The Company has lease agreements with lease and non-lease components, which we account for separately. For certain equipment leases, we apply a portfolio approach to efficiently account for the operating lease ROU assets and lease liabilities. We also elected the short-term lease exemption and do not recognize leases with terms less than one year on the balance sheet. The related short-term lease expense is not material. Our leases have remaining lease terms of one year to ten years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. We only account for such extensions or early terminations when it is reasonably certain we will exercise such options. Refer to Note 5 for further detail on leases.
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Lessor, Leases | The Company places certain of our capital equipment with customers on a loaned basis and at no charge in exchange for commitments to purchase related single-use products over time periods generally ranging from one to three years. Placed equipment is loaned and subject to return if minimum single-use purchases are not met. The Company accounts for these placements as operating leases but applies a practical expedient and does not separate the non-lease and lease components from the combined component. Accordingly, the Company accounts for the combined component as a single performance obligation with revenue recognized upon shipment of the related single use-products. The cost of the equipment is amortized over its estimated useful life which is generally five 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. Factors that contribute to the recognition of goodwill include synergies expected to increase net sales and profits; acquisition of a talented workforce; cost savings opportunities; the strategic benefit of expanding our presence in core and adjacent markets; and diversifying our product portfolio. Customer and distributor relationships, trademarks, tradenames, developed technology, patents and other intangible assets primarily represent allocations of purchase price to identifiable intangible assets of acquired businesses. Sales representation, marketing and promotional rights represent intangible assets created under our agreement with Musculoskeletal Transplant Foundation (“MTF”). 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. We completed our goodwill impairment testing of our single reporting unit during the fourth quarter of 2021. We performed our impairment test utilizing the market capitalization approach to determine whether the fair value of a reporting unit is less than its carrying amount. Based upon our assessment, the fair value of our reporting unit continues to exceed carrying value. 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. For all other indefinite-lived intangible assets, we perform a qualitative impairment test. Based upon this assessment, we have determined that our indefinite-lived intangible assets are not impaired.
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Other long-lived assets | Other long-lived assets We review other long-lived assets consisting of property, plant and equipment and field inventory for impairment 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.
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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.
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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.
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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 following tax law ordering rules. 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. |
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Revenue recognition | Revenue recognition The Company recognizes revenue when we have satisfied a performance obligation by transferring a promised good or service (that is an asset) to a customer. An asset is transferred when the customer obtains control of that asset. The following policies apply to our major categories of revenue transactions: •Revenue is recognized when product is shipped at which point the performance obligation is satisfied and the customer obtains control of the product. •We place certain of our capital equipment with customers on a loaned basis and at no charge in exchange 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 which is generally five years. •We recognize revenues in accordance with the terms of our agreement with MTF on a net basis as our role is that of an agent earning a commission or fee. MTF is responsible for the sourcing, processing and distribution of allograft tissue for sports medicine procedures while the Company represents, markets and promotes MTF’s sports medicine allograft tissues to customers. The Company is paid a fee by MTF which is calculated as a percentage of the net amounts invoiced by MTF to customers for sports medicine allograft tissues. The Company accounts for the services provided to MTF as a series of distinct performance obligations and each service is recognized over time as MTF simultaneously receives and consumes the benefit. •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 $17.0 million, $14.6 million and $15.4 million for 2021, 2020 and 2019, 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. We do so by applying historical loss rates to our accounts receivable aging schedule to estimate expected credit losses. We further adjusted expected credit losses for specifically identified and forecasted credit losses. Historically, losses on accounts receivable have not been material. Management believes that the allowance for doubtful accounts is adequate to provide for probable losses resulting from accounts receivable. •We sell extended warranties to customers that are typically for a period of one to three years. The related revenue is recorded as a contract liability and recognized over the life of the contract on a straight-line basis, which is reflective of our obligation to stand ready to provide repair services.
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Earnings per share | Earnings per shareBasic 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. | ||||||||||||||||||||||||||||||||||||
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 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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New Accounting Pronouncements New Accounting Pronouncements (Policies) |
12 Months Ended |
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Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Issued Accounting Standards, Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance if certain criteria are met for entities that have contracts, hedging relationships, and other transactions that reference LIBOR or other reference rates expected to be discontinued as a result of reference rate reform. This ASU is effective as of March 12, 2020 through December 31, 2022. The Company has not adopted the ASU as of December 31, 2021. Our seventh amended and restated senior credit agreement includes language to address the change from LIBOR to an alternative base rate, therefore we do not believe reference rate reform will have a significant impact on our consolidated financial statements, however we will continue to monitor our transition away from LIBOR and the potential to elect to apply this guidance in our consolidated financial statements in the event that we are impacted by reference rate reform. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models requiring separate accounting for embedded conversion features which will result in more convertible debt instruments accounted for as a single liability. The ASU eliminates certain settlement conditions that are required for equity classification to qualify for the derivative scope exception. The ASU addresses how convertible instruments are accounted for in the calculation of diluted earnings per share by using the if-converted method. The ASU is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. The Company will adopt this standard on January 1, 2022 using the modified retrospective method. The adoption of this new guidance is estimated to result in an increase of approximately $22.6 million to long-term debt in the consolidated balance sheets, to reflect the full principal amount of the convertible notes outstanding net of issuance costs, a reduction of approximately $37.9 million to additional paid-in capital, net of estimated income tax effects, to remove the equity component separately recorded for the conversion features associated with the convertible notes, a decrease to deferred tax liabilities, net of approximately $5.5 million, and a cumulative-effect adjustment of approximately $20.8 million, net of estimated income tax effects, to the beginning balance of retained earnings as of January 1, 2022. The adoption of this new guidance is anticipated to reduce interest expense by approximately $10.4 million during the year ended December 31, 2022. Additionally, the modified retrospective approach will result in an increase in the dilutive share count as a result of calculating the impact of dilution from the Company's convertible notes using the if-converted method.
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Operations and Significant Accounting Policies (Tables) |
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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:
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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, 2021, 2020 and 2019, respectively:
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Schedule of accumulated other comprehensive loss | Accumulated other comprehensive loss consists of the following:
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Business Acqusition Business Acquisition (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The unaudited pro forma information for the year ended December 31, 2019, assuming the Buffalo Filter Acquisition occurred as of January 1, 2018 is presented below. This information has been prepared for comparative purposes only and does not purport to be indicative of the results of operations which actually would have resulted had the Buffalo Filter acquisition occurred on the dates indicated, or which may result in the future.
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Inventories (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | Inventories consist of the following at December 31:
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Property, Plant and Equipment (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property, plant and equipment | Property, plant and equipment consist of the following at December 31:
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost [Table Text Block] | Lease costs for the year ended December 31, consist of the following:
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Supplemental Balance Sheet Information Related to Leases [Table Text Block] | Supplemental balance sheet information related to leases as of December 31, is as follows:
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Supplemental Cash Flow Information Related to Leases [Table Text Block] | Supplemental cash flow information related to leases for the year ended December 31, was as follows:
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Operating Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2021 are as follows:
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Finance Lease, Liability, Maturity | Maturities of lease liabilities as of December 31, 2021 are as follows:
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Goodwill and Other Intangible Assets (Tables) |
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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:
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Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following:
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Schedule of Indefinite-Lived Intangible Assets | Other intangible assets consist of the following:
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Schedule of Estimated Amortization Expense | The estimated amortization expense related to intangible assets at December 31, 2021 and for each of the five succeeding years is as follows:
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Long Term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consists of the following at December 31:
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Schedule of Maturities of Long-term Debt | The scheduled maturities of long-term debt outstanding at December 31, 2021 are as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Provision for Income Taxes | The provision (benefit) for income taxes for the years ended December 31, 2021, 2020 and 2019 consists of the following:
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Schedule of Effective Income Tax Rate Reconciliation | A reconciliation between income taxes computed at the statutory federal rate and the provision (benefit) for income taxes for the years ended December 31, 2021, 2020 and 2019 follows:
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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, 2021 and 2020 are as follows:
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Schedule of Income before Income Tax | Income before income taxes consists of the following U.S. and foreign income:
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Schedule of Unrecognized Tax Benefits Rollforward | The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:
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Shareholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2021, 2020 and 2019:
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Schedule of stock option and SAR activity | The following table illustrates the stock option and SAR activity for the year ended December 31, 2021:
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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 activity for the year ended December 31, 2021:
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Revenues (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables present revenue disaggregated by product line and timing of revenue recognition for the years ended December 31, 2021, 2020 and 2019:
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Contract with Customer, Asset and Liability | Contract liability balances related to the sale of extended warranties to customers are as follows:
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Business Segments and Geographic Areas (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Areas and Product Line | These product lines' net sales and primary geographic market where the products are sold, are as follows for the years ended December 31, 2021, 2020 and 2019:
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Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [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:
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Schedule of amounts recognized in the consolidated balance sheets | Amounts recognized in the consolidated balance sheets consist of the following at December 31,:
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Schedule of actuarial assumptions used | The following actuarial assumptions were used to determine our accumulated and projected benefit obligations as of December 31,:
The following actuarial assumptions were used to determine our net periodic pension benefit cost for the years ended December 31,:
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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 2021 and 2020 are as follows:
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Schedule of net benefit cost | Net periodic pension cost for the years ended December 31, consists of the following:
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Schedule of allocation of plan assets | The allocation of plan assets by category is as follows at December 31,:
The following table sets forth the value of the pension plan's assets as of December 31, 2021 and December 31, 2020:
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Schedule of expected benefit payments | The following table summarizes the benefits and settlements 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 payments are estimated based on the same assumptions used to measure the Company’s projected benefit obligation at December 31, 2021 and reflect the impact of expected future employee service.
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Acquisition and Other Expense (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Acquisition and Other Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquisition and Other Operating Expense | Acquisition and other expense for the year ended December 31, consists of the following:
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Guarantees (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Guarantees [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the carrying amount of service and product warranties | Changes in the carrying amount of standard warranties for the year ended December 31, are as follows:
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Fair Value Measurement (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block] | The following table presents the notional contract amounts for forward contracts outstanding:
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Foreign exchange contracts designated as cash flow hedges had the following effects on accumulated other comprehensive income (loss) ("AOCI") and net earnings on our consolidated statements of comprehensive income and our consolidated balance sheets:
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Derivatives Not Designated as Hedging Instruments [Table Text Block] | Net gains and losses from derivative instruments not accounted for as hedges offset by gains and losses on our intercompany receivables on our consolidated statements of comprehensive income were:
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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, 2021 and 2020:
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Operations and Significant Accounting Policies (Property, Plant and Equipment) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
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 |
Operations and Significant Accounting Policies (Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Earnings per share: | |||
Net income | $ 62,542 | $ 9,517 | $ 28,620 |
Basic-weighted average shares outstanding (in shares) | 29,162 | 28,581 | 28,325 |
Effect of dilutive potential securities (in shares) | 3,054 | 883 | 1,170 |
Diluted-weighted average shares outstanding (in shares) | 32,216 | 29,464 | 29,495 |
Basic EPS (in dollars per share) | $ 2.14 | $ 0.33 | $ 1.01 |
Diluted EPS (in dollars per share) | $ 1.94 | $ 0.32 | $ 0.97 |
Shares excluded from computation of earnings per share | 600 | 1,400 | 700 |
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities | 1,300 | ||
Incremental Common Shares Attributable to Dilutive Effect of Warrants | 500 |
Business Acqusition Business Acquisition (Details) - USD ($) $ in Thousands |
12 Months Ended | |||
---|---|---|---|---|
Feb. 11, 2019 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | ||||
Payments to acquire business | $ 365,000 | |||
Revenues | $ 1,010,635 | $ 862,459 | $ 955,097 | |
Pro Forma Information [Abstract] | ||||
Business Acquisition, Pro Forma Revenue | 960,115 | |||
Business Acquisition, Pro Forma Net Income (Loss) | 44,361 | |||
Buffalo Filter LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | $ 49,600 |
Inventories (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 83,386 | $ 71,807 |
Work in process | 17,449 | 15,864 |
Finished goods | 130,809 | 107,197 |
Total inventory | $ 231,644 | $ 194,868 |
Leases Lease Cost (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Leases [Abstract] | |||
Straight-line lease cost | $ 7,720 | $ 7,255 | $ 7,780 |
Operating Lease, Impairment Loss | 0 | 0 | 312 |
Operating Lease, Expense | 7,720 | 7,255 | 8,092 |
Depreciation | 389 | 355 | 238 |
Interest on lease liabilities | 30 | 33 | 27 |
Total finance lease cost | 419 | 388 | 265 |
Total lease cost | $ 8,139 | $ 7,643 | $ 8,357 |
Leases Supplementary Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 7,791 | $ 7,535 | $ 8,459 |
Financing cash flows from finance leases | 287 | 373 | 380 |
Right-of-use assets obtained in exchange for lease obligations: | |||
Operating leases | 4,704 | 4,242 | 12,800 |
Finance leases | $ 305 | $ 76 | $ 563 |
Leases Maturities of Operating and Financing Lease Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Operating Lease | ||
2022 | $ 7,162 | |
2023 | 5,830 | |
2024 | 4,555 | |
2025 | 1,637 | |
2026 | 795 | |
Thereafter | 2,174 | |
Total lease payments | 22,153 | |
Less imputed interest | (2,265) | |
Total lease liabilities | 19,888 | $ 22,225 |
Finance Lease | ||
2022 | 324 | |
2023 | 188 | |
2024 | 62 | |
2025 | 8 | |
2026 | 5 | |
Thereafter | 1 | |
Total lease payments | 588 | |
Less imputed interest | (24) | |
Total lease liabilities | 564 | $ 587 |
Lessee, Operating Lease, Lease Not yet Commenced, Fair Value | $ 100 |
Goodwill and Other Intangible Assets (Goodwill) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Goodwill [Roll Forward] | ||
Goodwill beginning balance | $ 618,440 | $ 618,042 |
Goodwill, Purchase Accounting Adjustments | 0 | (1,009) |
Foreign currency translation | (912) | 1,407 |
Goodwill ending balance | 617,528 | 618,440 |
Accumulated goodwill impairment loss | $ 107,000 | $ 107,000 |
Long Term Debt (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
Jan. 29, 2019 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Long-term Debt and Lease Obligation, Including Current Maturities | $ 684,656 | $ 753,636 | |
Current portion of long-term debt | 12,249 | 18,415 | |
Financing leases | 564 | 587 | |
Long-term debt | 672,407 | 735,221 | |
Revolving Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 140,000 | 207,000 | |
Term Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Total long-term debt | 226,196 | 240,145 | |
Unamortized Debt Issuance Expense | 1,373 | 1,668 | |
Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Convertible Debt | 317,896 | 305,904 | |
Unamortized Debt Issuance Expense | 3,700 | 5,475 | |
Debt Instrument, Unamortized Discount | $ 23,404 | $ 33,620 | |
2.625 Percent Convertible Notes Due 2024 [Member] | Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Stated Percentage | 2.625% |
Long Term Debt (Maturities of Long-term Debt) (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Scheduled maturities of long-term debt outstanding [Abstract] | |
2022 | $ 11,925 |
2023 | 14,906 |
2024 | 365,869 |
2025 | 23,850 |
2026 | $ 296,019 |
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Current tax expense: | |||
Current Federal Tax Expense (Benefit) | $ (97) | $ (729) | $ 96 |
Current State and Local Tax Expense (Benefit) | 609 | 86 | 444 |
Current Foreign Tax Expense (Benefit) | 7,046 | 6,963 | 8,375 |
Current income tax expense (benefit) | 7,558 | 6,320 | 8,915 |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Deferred Federal Income Tax Expense (Benefit) | 3,466 | (12,253) | (3,970) |
Deferred State and Local Income Tax Expense (Benefit) | 1,449 | (1,173) | (938) |
Deferred Foreign Income Tax Expense (Benefit) | (1,910) | (808) | (1,402) |
Deferred income tax expense (benefit): | 3,005 | (14,234) | (6,310) |
Provision (benefit) for income taxes | $ 10,563 | $ (7,914) | $ 2,605 |
Income Taxes (Income Before Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Tax Disclosure [Abstract] | |||
Undistributed Earnings of Foreign Subsidiaries | $ 20,300 | ||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 900 | ||
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest [Abstract] | |||
U.S. income | 45,260 | $ (16,026) | $ 5,332 |
Foreign income | 27,845 | 17,629 | 25,893 |
Income before income taxes | $ 73,105 | $ 1,603 | $ 31,225 |
Income Taxes (Tax Credit Carryforwards) (Details) - Federal [Member] $ in Millions |
Dec. 31, 2021
USD ($)
|
---|---|
Tax Credit Carryforward [Line Items] | |
Operating Loss Carryforwards, After Tax Effects | $ 15.7 |
Research and Development Credit [Member] | |
Tax Credit Carryforward [Line Items] | |
Tax Credit Carryforwards, After Tax Effects, Amount | $ 15.5 |
Income Taxes (Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Unrecognized Tax Benefits [Roll Forward] | |||
Balance as of January 1 | $ 200 | $ 2,170 | $ 3,073 |
Increases for positions taken in current periods | 0 | 0 | 1,650 |
Decreases in unrecorded tax positions related to settlement with the taxing authorities | 0 | (1,970) | (2,404) |
Decreases in unrecorded tax positions related to lapse of statute of limitations | 0 | 0 | (149) |
Balance as of December 31 | $ 200 | $ 200 | $ 2,170 |
Shareholders' Equity (Employee Plan) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2021
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares reserved for share-based compensation plans | 6,700,000 |
Employee Plan [Member] | 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 | 13,024 |
Revenues Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue from Contract with Customer [Abstract] | |||
Contract with Customer, Liability, Revenue Recognized | $ 10,300 | $ 9,300 | $ 6,800 |
Contract with Customer, Liability | $ 16,760 | $ 13,666 |
Employee Benefit Plans (Defined Contribution Plan) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Employee Savings Plan [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer contributions | $ 9.2 | $ 8.9 | $ 9.1 |
Employee Benefit Plans (Amounts Recognized in Balance Sheet) (Details) - USD ($) $ in Thousands |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Retirement Benefits [Abstract] | ||
Liability, Defined Benefit Plan, Noncurrent | $ (16,104) | $ (24,302) |
Accumulated other comprehensive loss | $ (39,122) | $ (48,285) |
Employee Benefit Plans (Actuarial Assumptions) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Retirement Benefits [Abstract] | |||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 2.81% | 2.44% | |
Defined Benefit Plan, Assumptions Used Calculating Net Period Benefit Cost, Benefit Obligation, Discount Rate | 2.44% | 3.33% | 4.37% |
Effective rate for interest on benefit obligation (percent) | 1.83% | 2.88% | 4.01% |
Expected return on plan assets (percent) | 7.00% | 7.00% | 7.50% |
Cumulative Gains and Losses Amortization Period Limit | 12 years |
Employee Benefit Plans (Other Changes in Plan Assets and Benefit Obligations) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Retirement Benefits [Abstract] | ||
Current year actuarial loss | $ 5,836 | $ (9,320) |
Amortization of actuarial loss | 3,327 | 2,821 |
Total recognized in other comprehensive loss | $ 9,163 | $ (6,499) |
Employee Benefit Plans (Net Periodic Pension Cost) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Retirement Benefits [Abstract] | |||
Defined Benefit Plan, Non-Service Cost | $ 400 | $ 1,300 | |
Service cost | $ 991 | 717 | 1,010 |
Interest cost on projected benefit obligation | 1,803 | 2,555 | 3,130 |
Expected return on plan assets | (5,155) | (5,021) | (4,725) |
Amortization of loss | 3,327 | 2,821 | 2,881 |
Net periodic pension cost | $ 966 | $ 1,072 | $ 2,296 |
Employee Benefit Plans (Allocation of Pension Plan Assets) (Details) - USD ($) $ in Millions |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
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 | $ 3.9 | |
Equity Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of pension plan assets | 73.00% | 76.00% |
Target allocation (percent) | 75.00% | |
Debt Securities [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Percentage of pension plan assets | 27.00% | 24.00% |
Target allocation (percent) | 25.00% |
Employee Benefit Plans (Expected Future Employee Service) (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Retirement Benefits [Abstract] | |
2022 | $ 6,427 |
2023 | 5,801 |
2024 | 5,627 |
2025 | 5,890 |
2026 | 6,026 |
2027-2031 | $ 26,543 |
Legal Matters and Contingencies (Details) - USD ($) $ in Millions |
Jan. 18, 2017 |
Dec. 31, 2021 |
---|---|---|
Loss Contingencies [Line Items] | ||
Product liability insurance, amount per incident | $ 35.0 | |
Product liability insurance, aggregate annual amount | $ 35.0 | |
Pending Litigation [Member] | EndoDynamix, Inc. [Member] | Liquidated Damages [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 12.7 | |
Pending Litigation [Member] | EndoDynamix, Inc. [Member] | Additional Damages [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 24.8 |
Guarantees (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Guarantees [Abstract] | |||
Standard warranty period (in years) | 1 year | ||
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | $ 1,826 | $ 2,186 | $ 1,585 |
Provision for warranties | 1,458 | 783 | 1,699 |
Claims made | (940) | (1,143) | (1,098) |
Ending balance | 2,344 | 1,826 | 2,186 |
Extended Product Warranty Disclosure [Abstract] | |||
Product Warranty Expense | $ 6,800 | $ 6,100 | $ 5,300 |
New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Jan. 01, 2022 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Long-term debt | $ 672,407 | $ 735,221 | |||
Paid-in capital | 396,771 | 382,628 | |||
Deferred income taxes | 68,537 | 57,875 | |||
Interest expense | 35,485 | 44,052 | $ 42,701 | ||
Retained earnings | $ 496,605 | $ 457,417 | |||
Accounting Standards Update 2020-06 | Forecast | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Long-term debt | $ 22,600 | ||||
Paid-in capital | (37,900) | ||||
Deferred income taxes | (5,500) | ||||
Interest expense | $ (10,400) | ||||
Retained earnings | $ 20,800 |
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