a world of solutions -...

CONMED Corporation

Joseph J. Corasanti President and CEO

February 7, 2012

A World of Solutions

Forward-Looking

Statements

In connection with our discussion of the Company and its results, we may refer

to some forward-looking statements that we have previously given. Such

forward looking statements are current as of the date given in previous

Company disclosures. It is the Company’s policy not to update or confirm

guidance except in a Regulation FD compliant manner. It is possible that our

actual results may differ from the forward-looking statements. Additional

information regarding factors that could cause such a difference appears in our

most recently filed Forms 10-Q and 10-K.

Corporate Overview

Our History Corporate Overview

■ Headquartered in Utica, Central New York

■ Founded in 1973 to sell disposable

medical devices

■ Growth fueled via internal product development

& acquisitions

■ 24 years as a public company on NASDAQ

Corporate Overview

ConMed develops, manufactures and markets thousands of products used in:

■ Operating Rooms

■ Surgery Centers

■ Physicians’ Offices

■ Hospitals

Products sold in 100+ countries

50% of Sales from outside the U.S.

40% Europe, 25% Americas, 35% Middle East & Asia

3,400 World-wide employees

Corporate Overview

Corporate Overview

Focus

Surgical products:

■ 90% used in surgical applications

■ Single-use, disposables: 75% - 80% of revenue (annuity)

Minimally Invasive Surgery (MIS):

■ 50% of products sales derived from minimally invasive surgical products

Corporate Overview

Primary Markets of Activity

2010 Sales: $713.7 MM

Corporate Overview

Arthroscopy 40%

Powered Instruments 20%

Electrosurgery 14%

Patient Care 9%

Endosurgery 10%

Endoscopic Technologies 7%

AR

ET EN

PC

ES PI

Growth Strategy Corporate Overview

Growth Strategy

Organic Sales Growth Mfg. & Operational Efficiencies New Product Development

Leverage Structure Cost Improvement Leverage Structure

ROW Growth

Leverage Structure

Result: Leverage the structure and increase operating margin

Research and Development Corporate Overview

Research and Development

Emphasis on Internal

Product Development

135+ Employees

in R&D Functions

R&D Spend

Target = 4 %

Sales and Distribution - US Corporate Overview

Orthopedic

Electrosurgery

Patient Care

EndoSurgery

Endoscopic Technologies

US Sales Force = 460

270

40 40

50

60

US

OUS

Sales and Distribution - OUS Corporate Overview

■ Australia

■ Austria

■ Belgium

■ Canada

■ China

■ Denmark

■ Finland

■ France

■ Germany

■ Korea

■ Italy

■ Netherlands

Direct sales in 16 Countries

OUS Sales Force = 270

■ Poland

■ Spain

■ Sweden

■ United Kingdom

Nine Mos. 2011 Results

► Sales = $539.5

1.9% increase

► Adjusted* EPS = $1.05

12% increase

► Adjusted* operating margin = 9.9%

110 basis point improvement

• Free Cash Flow = $64.0 million ($2.23 per share)

* Adjusted for unusual items and amortization of debt discount. See reconciliation in October 27,

2011 press announcement.

Business Overview

ConMed Corporation


Arthroscopy – 40 % of sales

■ Products and services

■ Procedure specific instruments and repair implants

■ Tissue removal shaver blades and consoles

■ Fluid Management

■ Allograft tissue for sports medicine starting in 2012

■ Endoscopic Video systems

■ Approx. 80% are disposables for arthroscopic sports medicine.

■ Growth – constant currency

■ 9 Mos. 2011 ■ Single-use: + 4.9%

■ Capital: -19.3%

WW Market: $1.8 BN

Market Position: 2

Normal Expected Market Growth

Rate: 6-8%

Business Overview

CONMED & MTF for

Sports Medicine

■ CONMED has become MTF’s exclusive distribution

partner for Sports Medicine

■ Effective January 3, 2012

■ Enhances CONMED’s sports medicine franchise

■ Opportunities for cross selling

■ Expansion into world-wide markets for MTF

■ Accretive on a cash basis and GAAP basis

Musculoskeletal Transplant

Foundation (MTF)

■ World’s largest tissue bank

■ Recover, process and distribute

■ Musculoskeletal tissues

■ Bone, ligaments & cartilage

■ Dermis

■ Cell based tissue forms

■ Other MedTech distribution partners for spine, dermis,

dental, non-sports medicine ortho

MTF Details

■ MTF will continue to source, process, deliver and invoice for tissue forms

■ CONMED will promote, educate and train physicians & hospitals on allograft

use

■ MTF will compensate CONMED with 50% of its tissue service revenue

■ CONMED will distribute and sell the Cascade Platelet-Rich-Plasma (PRP)

therapy product

■ Collaboration with MTF on development of new sports medicine tissue

forms

■ Initial payment of $63 million to MTF with contingent payments of up to $84

million over four years

2012 Expected Financial

Metrics from MTF

($ in millions)

Service revenue from tissue promotion $32.0 - $37.0

and PRP sales

PRP cost of sales $2.0

Selling and marketing expense $15.0 - $17.0

EBITDA $15.0 - $18.0

Amortization $6.0

Financing $2.0

Pre-Tax income $7.0 - $10.0

Tax provision $3.0 - $4.0

Net income $4.0 - $6.0

EPS $0.15 - $0.18

New Product of Note:

Sequent™ Meniscal

Repair System

Continuous stitch

technology for repair of

meniscal tears

Knotless

Simplifies the procedure

Powered Instruments

20% of sales

■ Products

■ Powered surgical instruments (e.g. as drills and saws) for orthopedic,

otolaryngology (“ENT”), neurosurgery and other surgical specialties.


■ 9 Mos. 2011 ■ Single-use -0.3%

■ Capital: +8.7%

Business Overview

WW Market: $500 MM

Market Position: 2


Rate: 4-5%


Mpower ™ Large and Small Bone Handpiece

Business Overview

■ Battery powered orthopedic handpiece

■ Robust power and torque for Large bone procedures

■ High speed for Small bone procedures

■ Also suitable for delicate Small bone procedures

■ Provides technology leadership in Large and Small

bone markets

Electrosurgery

14% of sales

■ Products

■ Radio frequency (“RF”) electrosurgery systems used routinely to

cut and cauterize tissue in nearly all types of surgical procedures worldwide.


■ 9 Mos. 2011 + 2.3% ■ Single-use: - 3.6%

■ Capital: +20.1%

Business Overview

WW Market: $400 MM

Market Position: 2


Rate: 3-5%

Altrus®


Thermal tissue fusion system

Seals

Cuts

Grasps

Dissects

Thermal technology permits

use in fluid environments

Models for open and minimally

invasive procedures

Current market approximates

$1.5 billion

EndoSurgery

10% of sales

■ Products

■ Endomechanical products such as trocars, clip appliers,

scissors and surgical staplers


■ 9 Mos. 2011 + 6.7%

Business Overview

WW Market: $1 BN

Market Position: 3


Rate: 4-6%

Patient Care

9% of sales

■ Products

■ Full line of electrocardiogram (“ECG”) electrodes for heart monitoring,

surgical suction instruments, IV controllers, pulse oximetry, and other

clinical care products


■ 9 Mos. 2011 – 4.7%

Business Overview

Market Position: 2 (ECG)


Rate: 2-3%

Endoscopic Technologies

7% of sales

■ Products: a full range of single-use gastro-intestinal (GI) and pulmonary

endoscopy products such as biopsy forceps, polypectomy snares,

hemostasis devices, biliary stents and other devices.

■ Administrative office consolidated ■ 2010 saving of $4 million


■ 9 Mos. 2011 +0.6%

Normal Expected Market

Growth Rate: 5-7%

WW Market: $900 MM

Business Overview

Trends, Growth Drivers, Long-Term View

ConMed Corporation


Demographics:

Driving Growth Trends, Growth Drivers, Long-Term View

Demographics

Increase in Surgical Procedures Increase in Ave. Life Expectancy

Longer, Active Lives

More Injuries at Earlier Ages Aging Population

Technological Advancements

90% of ConMed Sales are Surgical Products

Growth in Minimally

Invasive Technologies Trends, Growth Drivers, Long-Term View

Minimally Invasive Technologies

Reduces Patient Trauma Increases Recovery Time

50% of ConMed’s Products Are

Designed For MIS Procedures

Cost Containment

Increased Demand for

Single-Use Disposables Trends, Growth Drivers, Long-Term View

Demand for Single-Use Disposables

Reduces Costs Eliminate Risk of Cross Contamination

75% - 80% of ConMed’s Sales Are Derived

From Single-Use Disposables

Health Cost Pressures:

Driving Growth Trends, Growth Drivers, Long-Term View

Economics of Healthcare

Comprehensive

Purchasing Agreements Broader Array of Products

ConMed Offers a Diverse,

Yet Integrated Product Portfolio

GPO’s, IDN’s

Leveraging Purchasing Power

Fewer Suppliers

Global Demand Trends, Growth Drivers, Long-Term View

Global Demand

ROW Medical Spend Increasing

(Demographics Mirror US)

ROW Shifting to

Single-Use Disposables

CONMED Markets to Over 100 Foreign Countries

ROW Sales Represent approximately 50% of Total Revenue

Financial Review

ConMed Corporation


Outlook For 2012 Financial Review

We expect improved profitability over 2011 due to:

■ New products gain traction

■ MTF distribution financial benefit

■ We realize economic benefit of cost efficiencies

■ Manufacturing consolidation ■ Lean manufacturing initiatives

■ Product line moves to Mexican plant

■ Leverage the fixed cost structure

Revenue (in millions) Financial Review

Forecast as of October 28, 2011 press announcement plus

anticipated effect of MTF.

$0

$100

$200

$300

$400

$500

$600

$700

$800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Est.

2012 Est.

Earnings Per Share Financial Review

As of October 27, 2011 press release plus anticipated effect of MTF

Estimates exclude unusual charges and additional non-cash interest expense on

convertible notes required by FASB.

$0.00

$0.50

$1.00

$1.50

$2.00

20062007

20082009

20102011 Est.

2012 Est.

Non-GAAP

Strong Cash Flow

9 Mos 2010* 9 Mos. 2011

(millions)

Cash From Operations* $44.3 $76.7

Capital Expenditures 10.9 12.7

Free Cash Flow* $33.4 $64.0

Cash flow per share* $1.15 $ 2.23

EPS per share $ .80 $ 0.90

Cash greater than EPS $0.35 $ 1.33

*Non-GAAP measurement for 2010. See reconciliation in October 27, 2011 press announcement.

Capitalization Financial Review

($ in Millions) December 2010 September 2011

Cash and Equivalents $ 12.4 $ 39.9

Total Assets $ 985.8 $ 999.2

Total Debt $ 195.6 $ 175.5

Total Equity $ 586.6 $ 609.8

TD / Book Cap 25.0% 22.3%

Our Strengths Financial Review

Intense focus on growing markets

■ Strong brand

■ Leading market positions

■ Superior technologies

Solid Infrastructure

■ Extensive marketing and distribution capabilities

■ Vertically integrated manufacturing

■ Research and development expertise

■ Positive free cash flow

■ Operating margin expansion

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