CNMD 10-K & 10-Q changes, risk factors and insider trading

The results of our business are directly tied to the economic conditions in the healthcare industry and the broader economy as a whole. We believe that the health carehealthcare industry will continue to be impacted by judicial decisions, increasing regulation, political and legal action at both the federal and state/local levels in the United StatesU.S. and internationally, and USU.S. executive orders, and it is uncertain how such developments will affect our business. We will continue to monitor and manage the impact of the overall economic environment on the Company.

In this regard, approximately 15%14% of our 20242025 revenues arewere derived from the sale of capital products. The sales of such products may be negatively impacted if hospitals and other healthcare providers are unable to secure the financing necessary to purchase these products or otherwise defer purchases.

Approximately 31% of our productsproducts, when measured in terms of revenues for 2024,2025, are sterilized by third-party sterilizers using ethylene oxide,EtO, a chemical which, when present or used in high levels or concentrations, has raised some environmental concerns in some areas within the United States,U.S., with the result that some EtO sterilization facilities have closed, or are threatened with closure, either temporarily or permanently, in connection with government enforcement actions or enhanced regulations prompted by environmental concerns. We have been able to secure EtO sterilization services to date, and do not currently expect sterilization availability to have a material impact on our business. If, however, there are further restrictions on capacity of sterilization services providers or further government actions adverse to EtO sterilization, we may be unable to transition to other contract sterilizers or sterilization methods in a timely or cost-effective manner or at all, and it is possible that we could be impacted materially in the future.

As a medical device manufacturer that interacts with physicians and health carehealthcare providers domestically and internationally, we face risks under domestic and foreign laws and regulations, including theanti-bribery, Foreign Corrupt Practices Actanti-corruption, and similarfalse statutesclaims inlaws, other countries,globally, and governmentcould enforcementface actionssubstantial morepenalties generally.if we fail to comply with such regulations and laws.

Manufacturers of medical devices have been the subject of various investigations and enforcement actions relating to interactions with health carehealthcare providers, both domestically and internationally. The interactions with domestic health carehealthcare providers are subject to various federal and state laws and regulations, including the federal Anti-Kickback Statute, which prohibits entities from knowingly and willfully soliciting, offering, receiving or paying remuneration (including kickbacks or bribes) in exchange for or to induce the referral of an individual for the purchase, order, lease or recommendation of any good, item or service for which payment may be made under federal healthcare programs; and the federal civil False Claims Act, which prohibits individuals or entities from knowingly presenting or causing to be presented false or fraudulent claims for payment or knowingly using false statements to obtain payment from the federal government. Suits filed under the False Claims Act may be brought by “relators” or “whistleblowers” on behalf of the government, who may share in amounts paid by the entity to the government in fines or settlement. Also, many states have enacted laws similar to the federal Anti-Kickback Statute and the False Claims Act, and some of these may be broader in scope in that some extend to all payors.

The Foreign Corrupt Practices Act (“FCPA”) prohibits U.S. companies and their representatives from offering or making payments to foreign officials for the purpose of securing aan improper business advantage; and in many countries, the healthcare professionals with whom we regularly interact may meet the definition of a foreign government official for purposes of this law. Similar anti-bribery laws are in effect in many of the countries in which we operate. The FCPA also imposes obligations on manufacturerscompanies listed on U.S. stock exchanges to maintainkeep accurate books and records,records and maintain internal accounting controls sufficient to provide assurance that transactions are accurately recorded, lawfulrecorded and in accordance with management’s authorization. The FCPA can pose unique challenges for manufacturers that operate in foreign culturescountries where conduct prohibited by the FCPA may not be viewed as illegal in local jurisdictionsjurisdictions. andIn because, in some cases,addition, a United StatesU.S. manufacturer may face risks under the FCPA based on the conduct of third parties (i.e.,e.g., distributors) over whom the manufacturer may not have complete control.

Furthermore, due to the nature of our business, which includes the sourcing, marketing and manufacturing of medical devices, we regularly become involved in disputes, litigation and regulatory matters. Litigation is inherently unpredictable, disruptive, and time consuming, and we cannot predict the timing, outcome or impact of any such investigations. For example, we voluntarily informed the U.S. Department of Justice ("DOJ") of potential issues with certain royalty payments related to surgeons involved in design teams. WeOn areSeptember fully5, cooperating with2025, the DOJ andinformed theirthe reviewCompany ofthat thisit matter.was Although we are currently unabledeclining to predictprosecute the outcomeCompany, ofcivilly or criminally, for any conduct related to the investigationsvoluntary ordisclosure and that it was closing its investigation without requiring anything further from the potential impact, if any, on our business, financial condition, and results of operations, the impacts could potentially be significant and material. Any adverse outcome in one or more of these investigations could include the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, including exclusion from government reimbursement programs and/or entry into Corporate Integrity Agreements (CIAs) with governmental agencies. In addition, resolution of any of these matters could involve the imposition of additional, costly compliance obligations.Company.

We have ongoing responsibilities under FDA regulations, the EU MDR and otherthird supranational,parties national,we federal,contract regional, state and local requirements. These requirements relatewith to qualityprovide systems,regulated recordkeeping, labeling, promotional and marketing requirements, adverse event reporting regulations and other matters, whichservices are subject to continual review and are monitored rigorously through periodic inspections by regulators,regulators to assess compliance with regulatory requirements, which may result in observations (such as on FDA Form 483), and in some cases warning letters, that require corrective action or other forms of enforcement. There can be no assurance that the consequences and costs of responding to such inspections will not be material. Additionally, the availability of designatedindependent Europeanthird-party notifiedorganizations body services tothat certify compliance with the new EU MDR requirements is limited, which may delay the marketing approval for some of our products under the EU MDR (and, potentially, the UK MDR). Furthermore, regulators strictly regulate the promotional claims that we may make about approved or cleared products. For example, the FDA and other regulatory authorities have taken the position that device manufacturers are prohibited from promoting their products other than for the uses and indications set forth in the cleared or approved product labeling.

We incur significant costs to comply with regulations, including the EU MDR. IfLegal we fail to comply with applicableand regulatory requirements,requirements weand maypolicies beare subject to achange, rangewhich could impose additional or different regulatory requirements on us that could increase the costs of sanctions,compliance, includingdelay substantial fines, warning letters that require corrective action, product seizures, recalls, import restrictions, the suspension of product manufacturingapprovals, or sales,otherwise revocationnegatively ofaffect approvals,our exclusion from future participation in government healthcare programs, substantial fines and criminal prosecution.business.

Moreover, we are generally required to obtain regulatory clearance or approval prior to marketing a new product.product or making certain changes to our existing products. The time required to obtain approvals from foreign countries may be longer or shorter than that required for FDA clearance, and requirements for such approvals may differ from FDA requirements. We cannot guarantee that we will be able to obtain or maintain marketing clearance for our new products or modifications to existing products. The failure to maintain or obtain approval or clearance on a timely basis, or at all, could have a material adverse effect on our business, financial condition or results of operations. Even if we are able to obtain approval or clearance, it may take a significant amount of time, require the expenditure of substantial resources, or be more limited than we anticipated.

Factors whichthat may influence our customers’ choice of competitor products include:

The increases in costs or availability of raw materials may be exacerbated as a result of the conflicts in Ukraine andUkraine, the Middle East and elsewhere, and ongoing global supply chain challenges. In addition, increased inflation in wages and materials and the imposition of tariffs have increased, and may alsoin the future increase our costs,costs. or retaliatoryRetaliatory tariffs imposed by other governments would also increase our costs. We believe that our supply management practices are based on an appropriate balancing of the foreseeable risks and the costs of alternative practices. Where possible, we have addressed increasing supply chain costs in pricing, yet continued cost pressures and raw material availability have had and may continue to have an adverse effect on our business, financial condition or results of operations.

As of December 31, 2024,2025, we had $914.6$840.0 million of debt outstanding, representing 48%44% of total capitalization. In particular, on June 6, 2022, we completed an $800 million offering of the 2.250% Convertible Notes due 2027 (the "2.250% Notes" or the “Convertible Notes”) through a private offering pursuant to Rule 144A (the “2.250% Notes Offering”). We may not have sufficient cash flow available to enable us to meet our obligations. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as foregoing acquisitions, reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital. We cannot be certain that any of these strategies could be implemented on terms acceptable to us, if at all. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and Note 8.7 to our consolidated financial statements in this Annual Report on Form 10-K.

•a portion of our cash flow from operations must be dedicated to debt service and will not be available for operations, capital expenditures, acquisitions, dividendsdividends, share repurchases and other purposes;

Borrowings under our senior credit agreement are at variable rates of interest and expose us to interest rate risk. If interest rates were to increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income (loss) and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease. In the future, we may enter into interest rate swaps that involve the exchange of floating for fixed rate interest payments in order to reduce interest rate volatility. However, we may not maintain interest rate swaps with respect to all of our variable rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

We may incur substantial additional indebtedness, including secured indebtedness. As of December 31, 2024,2025, we havehad $583.4$648.5 million of availability under the senior credit agreement. If we incur secured indebtedness and such secured indebtedness is either accelerated or becomes subject to a bankruptcy, liquidation or reorganization, our assets would be used to satisfy obligations with respect to the indebtedness secured thereby before any payment could be made on the debt that is not similarly secured. If new debt or other liabilities are added to our current debt levels, the related risks that we now face could intensify. Our senior credit agreement restricts our ability to incur additional indebtedness, including secured indebtedness, but if the facilities mature or are repaid, we may not be subject to such restrictions under the terms of any subsequent indebtedness.

In the event the conditional conversion features of the 2.250% Notes issued on June 6, 2022 are triggered, holders of the Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option. If one or more holders elect to convert their Convertible Notes, we would be required to make cash payments to satisfy all or a portion of our conversion obligation based on the conversion rate, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the Convertible Notes as a current rather than long-term liability, which could result in a material reduction of our net working capital. Refer to Note 87 to our consolidated financial statements in this Annual Report on Form 10-K for further details on the Convertible Notes.

(iii) Risks Related to Our AcquisitionStrategic StrategyTransactions

We rely extensively on information technology (“IT”) systems for the storage, processing, and transmission of our electronic, business-related, information assets used in or necessary to conduct business. We leverage our internal IT infrastructures, and those of our business partners or other third parties, to enable, sustain, and support our global business activities. In addition, we rely on networks and services, including internet sites, data hosting and processing facilities and tools and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist in conducting our business. The data we store and process may include customer payment information, personal information concerning our employees, confidential financial information, and other types of sensitive business-related information. In limited instances, we may also come into possession of information related to patients of our physician customers. Numerous and evolving cybersecurity threats pose potential risks to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data. In addition, the laws and regulations governing security of data on IT systems and otherwise collected, processed, stored, transmitted, disclosed and disposed of by companies are evolving, adding another layer of complexity in the form of new requirements. We have made, and continue to make investments, seeking to address these threats, including monitoring of networks and systems, hiring of third party service providers with expertise in cybersecurity, employee training and security policies for employees and third-party providers. In addition, we currently maintain cybersecurity insurance, although the cost of cybersecurity insurance has been increasing and there can be no assurances that we will continue to maintain cybersecurity insurance at the same levels of coverage, or at all. TheDespite techniquesour usedsecurity in these attacks change frequentlymeasures and those of third parties with whom we do business, our respective systems and facilities and those of our third-party vendors may be difficultvulnerable to detectsecurity incidents, disruptions, cyberattacks, ransomware, data breaches, viruses, phishing attacks and other forms of social engineering, denial-of-service attacks, third-party or employee theft or misuse and other negligent actions. Hackers, data thieves and rogue insiders are increasingly sophisticated and operate social engineering, such as phishing, and large-scale, complex automated attacks that can evade detection for long periods of timetime. Any breach of our or our service providers’ network, or other vendor systems, may result in the loss of confidential business and difficultfinancial data, misappropriation of our customers’ or employees’ personal information or a disruption of our business. Any of these outcomes could have a material adverse effect on our business, including unwanted media attention, impairment of our customer relationships, damage to anticipateour reputation, resulting in lost sales and consumers, fines, lawsuits, or significant legal and remediation expenses. We also may need to expend significant resources to protect against, respond to and/or redress problems caused by implementingany adequatebreach. preventativeInsurance measures.policies that may provide coverage with regard to such incidents may not cover any or all of the resulting financial losses.

Our worldwide operations mean that we are subject to laws and regulations, including data protection and cybersecurity laws and regulations, in many jurisdictions. For example, the European Union ("EU") General Data Protection Regulation ("GDPR") requires us to manage personal data in the EU and may impose fines of up to four percent of our global revenue in the event of certain violations. In addition, legal requirements standards for cross-border personal data transfers from outside the United StatesU.S. are constantly changing, including the revisions made by the European Economic Area (“EEA”) that require the use of revised Standard Contractual Clauses (“SCCs”) for international data transfers from the EEA. The SCCs are required to be used for new agreements involving the cross-border transfer of personal data from the EEA and must be supplemented by an assessment and due diligence of the legal and regulatory landscape of the jurisdiction of the data importer, the channels used to transmit personal data and any sub-processors that may receive personal data. The UK has developed its own set of SCCs that must be used for transfers of personal data from the UK to the U.S. In July 2023, the European Commission determined that the Data Privacy Framework (“DPF”), a replacement for the invalidated EU-US Privacy Shield, ensures an adequate level of protection for EU personal data transferred to the United States.U.S. Compliance with these changes and any future changes to data transfer or privacy requirements could potentially require us to make significant technological and operational changes, any of which could result in substantial costs, and failure to comply with applicable data protection and transfer or privacy laws requirements could subject us to fines or regulatory oversight.

Likewise, the California Consumer Privacy Act ("CCPA") imposes obligations on companies that conduct business in California, and meet other requirements, with respect to the collection or sale of specified personal information. In November 2020, voters in the State of California approved the California Privacy Rights Act (“CPRA”), a ballot measure that amends and supplements the CCPA by, among other things, expanding certain rights relating to personal information and its use, collection, deletion, and disclosure by covered businesses. In addition, approximately 20 other states have adopted similar comprehensive privacy laws, which may require companies to change their practices for collecting and handling personal information. Compliance with the CCPA, the CPRA, and other state statutes, common law, or regulations designed to protect consumer, employee, or job applicant personal information could potentially require substantive technology infrastructure and process changes across many of our businesses. OtherAny jurisdictionsperceived arefailure to comply with these regulatory standards could subject us to legal and reputational risks. Misuse of or failure to secure personal information could also implementingresult orin proposing a varietyviolation of data privacy laws and regulations.regulations, proceedings against the Company by governmental entities or others, damage to our reputation and credibility and could have a negative impact on revenues and profits. Further, there has been a developing trend of civil lawsuits and class actions relating to breaches of consumer data held by large companies or incidents arising from other cyber-attacks. Any data security breaches, cyber-attacks, malicious intrusions or significant disruptions could result in actions by regulatory bodies and/or civil litigation, any of which could materially and adversely affect our business, financial condition, results of operations, reputation or competitive position.

We rely on various software programs and information technology systems to run our business, some of which may be old, have suffered outages, or may no longer be supported. System disruptions could cause the Company to incur incremental costs and expenses in connection with resolving ongoing or implementation issues. To the extent that these disruptions recur and/or persist over time, this could negatively impact our competitive position and our relationships with our customers and thus could have a material adverse effect on our business, financial condition or results of operations. ForWe example,will also update and implement new software of information technology from time to time and any material disruptions, delays or deficiencies in the fourthdesign quarterand implementation of 2022,such weupdated launched aor new warehousetechnology managementmay systemhave (“WMS”),an whichadverse causedaffect service level disruptions that impactedon our abilityoperations toand shipoperating certain quantities of finished goods to customers. Although we believe sales are no longer being delayed or lost as a result of WMS issues, there can be no assurances that such issues will not re-occur.results.

We rely on a third party to obtain, process and distribute sports medicine allograft tissue. If such tissue cannot be obtained, is not accepted by the market or is not acceptedcompliant underwith numerousapplicable government regulations, our results of operations could be negatively impacted.

A portion of our orthopedic revenues relate to our share of the service fees from the Musculoskeletal Transplant Foundation ("MTF") allograft tissues for which we have exclusive worldwide sales representation, marketing and promotion rights, as further described in our revenue recognition policy in Note 1.1 to our consolidated financial statements in this Annual Report on Form 10-K. Our primary costs related to these revenues come from our commission expense and certain marketing costs. Our ability to increase the service fees may be constrained by certain factors which are outside of our control, such as the limited supply of donors and donated tissue that meets the quality standards of MTF. Similarly, under the terms of the agreement, MTF remains responsible for tissue procurement and processing, shipment of tissues and invoicing of service fees to customers. To the extent MTF’s performance does not meet customer expectations or otherwise fails, we may be unable to increase the allograft service fees or to find a suitable replacement for MTF on terms that are acceptable.

The FDA and several states have statutory authority to regulate allograft processing and allograft-based materials. The FDA could identify deficiencies in future inspections of MTF or MTF's suppliers or promulgate future regulatory rulings that could have an adverse effect on our business, financial condition or results of operations.

While we generally own the products' designs and rights to the products we sell, in some cases we distribute products for third-parties. While these third-parties may have business reasons for contracting with us to distribute their products, we may face the risk that the third-parties may seek alternate distribution partners when their distribution contracts with us expire or are scheduled for renewal. For instance, in December 2025, we announced that we were terminating our distribution agreement with W.L. Gore & Associates, Inc. for the Gore® VIABIL® biliary stent. If we lose the distribution rights to such products, we may not be able to find replacement products that are acceptable to our customers, or to us.us, and this may have negative effect on our business.

MuchWe ofrely theon technologypatent usedand inother theproprietary marketsrights, inincluding whichtrademarks, wetradenames, competecopyrights, istrade coveredsecrets, byand patents.agreements (such as employee and non-disclosure agreements) to protect our business and proprietary intellectual property. We have numerous U.S. patents and corresponding international patents on products expiring at various dates from 20252026 through 2043 and have additional patent applications pending. See Item 1 Business “Research and Development” and “Intellectual Property” for a further description of our patents. The loss of our patents could reduce the value of the related products and any related competitive advantage. Competitors may also be able to design around our patents and to compete effectively with our products. In addition, the cost of enforcing our patents against third parties and defending our products against patent infringement actions by others could be substantial, and we may not prevail.

Our manufacturing facilities or our suppliers’ manufacturing facilities could be damaged or disrupted by, among other things, a natural disaster, terrorist activity, interruption of utilities or public health crises (such as the COVID-19 pandemic). Although we have obtained property damage and business interruption insurance where we deem appropriate, a major catastrophe (such as a fire, flood, hurricanenatural or other naturalman-made disaster) or public health crisis in any of the areas where we or our suppliers conduct operations could result in a prolonged interruption of all or a substantial portion of our business. For example, the path of Hurricane HeleneMilton temporarily impacted our manufacturing facility in Largo, Florida and our distribution center in Lithia Springs, Georgia.Florida. Any disruption resulting from these events could cause significant delays in shipments of products and the loss of sales and customers. We may not have insurance to adequately compensate us for any of these events.

Our significant international operations subject us to foreign currency fluctuations and other risks associated with operating in countries outside the United States.U.S.

A significant portion of our revenues, approximately 43%44% of 20242025 consolidated net sales, were to customers outside the United States.U.S. We have sales subsidiaries in a significant number of countries in Europe as well as Australia, Canada, China, Japan, and Korea. In those countries in which we have a direct presence, our sales are denominated in the local currency and those sales denominated in local currency amounted to approximately 32% of our total net sales in 2024.2025. The remaining 11%12% of sales to customers outside the United StatesU.S. was on an export basis and transacted in United StatesU.S. dollars.

Because a significant portion of our operations consist of sales activities in jurisdictions outside the United States,U.S., our financial results may be affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the markets in which we distribute products. While we have a hedging strategy involving foreign currency forward contracts for 2024,contracts, our revenues and earnings are only partially protected from foreign currency translation if the United StatesU.S. dollar strengthens as compared with currencies such as the Euro. Further, as of the date of this Annual Report on Form 10-K, we have not entered into any foreign currency forward contracts beyond 2026.2027. Our international presence exposes us to certain other inherent risks, including:

•hyperinflation in certain countries outside the United StatesU.S.; and

Our Board of Directors may, in the future, limitnot or discontinueapprove payment of a dividend on common stock.

We have paid a quarterly dividend to our shareholders sincefrom 2012.2012 However,until weOctober 2025, when our Board of Directors suspended our dividend payments in connection with the decision to extend our share repurchase program. We may not pay such dividends in the future at the prior rate, or at all.future. All decisions regarding our payment of dividends will be made by our Board of Directors from time to time, and are subject to an evaluation of our financial condition, results of operations and capital requirements, applicable law, industry practice, contractual restraints and other business considerations. In addition, our senior credit agreement may restrictrestricts our ability to pay dividends, and the terms of agreements governing debt that we may incur in the future may also limit or prohibit dividend payments. We may not have sufficient surplus or net profits under Delaware law to be able to pay any dividends, which may result from extraordinary cash expenses, actual expenses exceeding contemplated costs, funding of capital expenditures or increases in reserves.

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.

TheIn recent years, the Company has been and continues to be impacted by the macro-economic environmentenvironment, including inflationary pressures, and we arehave been experiencing higher manufacturing and operating costs causedas bywell inflationary pressures andas ongoing supply chain challenges. WeIn workaddition, withour suppliersresults of operations are being impacted by tariffs placed on imported goods to mitigatethe United States as well as exporting of products to other countries. We continue to monitor our spending and expenses in light of these impacts; however, we expect these challenges to continue in 2025.factors. This will likely continue to impact our results of operations and we therefore have engaged a consulting firm in 2025 to evaluate and propose improvements in our manufacturing operations. We are actively working to mitigate this impact. See "Item 1A. Risk Factors" for more information.

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 2024.2025. We performed our impairment test utilizing the market capitalization approach to determine whether the fair value of aour single reporting unit is less than its carrying amount. Based upon our assessment, the fair value of our reporting unit continues to exceed carrying value.

Certain acquisitions involve potential payments of future consideration that is contingent upon the acquired businesses reaching certain performance milestones. The Company records contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value. The fair value of contingent consideration is measured using projected payment dates, discount rates, revenue volatilities, and projected revenues. Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans. The discount rate used is determined at the time of measurement in accordance with accepted valuation methodologies. Changes in projected revenues, revenue volatilities, discount rates, and projected payment dates may result in adjustments to the fair value measurements. Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized as income or expense within selling and administrative expense in the consolidated statements of comprehensive income (loss).income. The fair value of contingent consideration at December 31, 20242025 was $11.2$2.2 million for the In2Bones Global, Inc. acquisition and $61.0$59.2 million for the BiorezBiorez, Inc. acquisition. Contingent consideration payments made soon after the acquisition date are classified as investing activities in the consolidated statements of cash flows. Contingent consideration payments not made soon after the acquisition date that are related to the acquisition date fair value are reported as financing activities in the consolidated statements of cash flows, and amounts paid in excess of the original acquisition date fair value are reported as operating activities in the consolidated statements of cash flows. See Note 1615 for further discussion of contingent consideration.

The following table presents, as a percentage of net sales, certain categories included in our consolidated statements of comprehensive income (loss) for the periods indicated:

•General surgery sales increased 7.2%4.9% in 20242025 as a result of growth in our AirSeal®, specimen bags and biliary product offerings.

The decreaseincrease in selling and administrative expense as a percentage of net sales in 20242025 was primarily driven by:

•aan decreaseincrease of $38.6$64.0 million in costs related to fair value adjustments to contingent consideration ($23.0 million of expense in 2025 compared to $41.0 million of income in 2024 compared to $2.4 million of income in 2023), see Note 1615;

Research and development expense was $55.9 million in 2025 and $54.4 million in 2024 and $52.6 million in 2023.2024. As a percentage of net sales, research and development expense was 4.1% and 4.2% in both 20242025 and 2023.2024, Therespectively. increaseAs ina spendingpercentage inof 2024sales comparedresearch toand 2023development wasexpense relateddecreased to0.1 percentage points mainly driven by the timing of research and development projects.

Interest expense decreased to $31.1 million in 2025 compared to $37.3 million in 2024 compared to $39.8 million in 2023.2024. The weighted average interest rates on our borrowings were 2.79% in 2025 decreasing from 3.15% in 2024 increasing from 3.12% in 2023.2024. The decrease in interest expense in 20242025 was driven by lower weighted average borrowings outstanding and lower weighted average interest rates during 2024.2025.

A provision for income taxes was recorded at an effective rate of 18.8%33.8% and 20.3%18.8% in 20242025 and 2023,2024, respectively. As compared to the federal statutory rate of 21.0%, the 2025 effective tax rate was higher primarily due to state tax expense, foreign tax expense from jurisdictions with higher statutory tax rates, the change in fair value of contingent consideration that is not deductible for income tax purposes and certain compensation expense and stock-based compensation costs related to advisory services provided by the former Chief Executive Officer that are not deductible for income tax purposes. This expense was offset by federal tax benefits from research credits and the effect of cross-border tax laws. The 2024 effective tax rate was lower primarily due to the change in fair value of contingent consideration that is excluded from income for tax purposes, federal tax benefits from the research creditcredits and US tax on worldwide earnings at different rates. These benefits were offset by state tax expense and foreign tax expense from jurisdictions with higher statutory tax rates. The 2023 effective tax rate was lower primarily due to federal tax benefits from the research credit and USU.S. tax on worldwide earnings at different rates. These benefits were offset by state tax expense and foreign tax expense from jurisdictions with higher statutory tax rates. A reconciliation of the United States statutory income tax rate to our effective tax rate is included in Note 9.8.

Our liquidity needs arise primarily from capital investments, working capital requirements and payments on indebtedness under the seventheighth amended and restated senior credit agreement and outstanding convertible notes. We have historically met these liquidity requirements with funds generated from operations, borrowings under our revolving credit facility and issuances of debt in the capital markets. In addition, we have historically used term borrowings, including borrowings under the amended and restated senior credit agreement and borrowings under separate loan facilities, in the case of real property purchases, to finance our acquisitions, including payments of contingent consideration. We also have the ability to raise funds through the sale of stock or we may issue debt through a private placement or public offering.

Our net working capital position was $361.9$357.8 million at December 31, 2024.2025. Net cash provided by operating activities was $170.7 million in 2025 and $167.0 million in 2024 and $125.3 million in 2023 generated on net income of $47.1 million in 2025 and $132.4 million in 2024. Net income during 2024 andincluded $64.5a $41.0 million innon-cash 2023.gain Therelated changeto inthe cashadjustment providedto byfair operatingvalue activitiesof inthe 2024contingent asconsideration liability compared to 2023a was$23.0 mainlymillion drivennon-cash bycharge higherin net income.2025. In addition, below is a summary of significant changes in assets and liabilities:

•AnA increasedecrease in cash flows from accounts receivable due to timing of sales and cash receipts compared to the same period a year ago;

•A decrease in cash flows from inventory as we increased inventory dueto tomitigate supply chain challenges; and

•AAn decreaseincrease in cash flows from accrued compensation and benefits asdue ato result of higherlower incentive compensation payments during 20242025 compared to 2023.2024 and higher incentive compensation accruals in 2025; and

Net cash used in investing activities decreasedincreased by $6.9$7.9 million in the year ended December 31, 20242025 mainly due to capital expenditures being lowerhigher at $13.1$19.8 million in 20242025 compared to $19.0$13.1 million in the year ended December 31, 2023.2024.

•During 2024,2025, we paid $56.9$33.8 million in contingent consideration related to the In2BonesBiorez, andInc. Biorez acquisitionsacquisition compared to $13.9$56.9 million in 2023.2024 for the In2Bones Global, Inc. and Biorez, Inc acquisitions.

•During 2024,2025, we did not makehave any net payments on our termrevolving loanline of credit, compared to $20.0$2.0 million in net payments in 2023.2024.

Our cash balances and cash flows generated from operations may be used to fund strategic investments, business acquisitions, including contingent consideration payments, working capital needs, repayment of debt, research and development, common stock repurchases and payments of dividends to our shareholders. Management believes that cash flow from operations, including cash and cash equivalents on hand and available borrowing capacity under our seventheighth amended and restated senior credit agreement, will be adequate to meet our anticipated operating working capital requirements, debt service, funding of capital expenditures, dividend payments and common stock repurchases infor at least the foreseeablenext future.twelve months from the filing of this annual report on Form 10-K. In addition, management believes we could access capital markets, as necessary, to fund future business acquisitions.

WeIn arerecent alsoyears, beingthe Company has been impacted by the macro-economic environment and we are experiencing higher manufacturing and operating costs caused by inflationary pressurespressures, tariffs and ongoing supply chain challenges. We continue to monitor our spending and expenses in light of these factors. However, we may need to take further steps to reduce our costs, or to refinance our debt.debt if we cannot mitigate these higher costs. See “Item 1A. Risk Factors - Risks Related to Our Indebtedness."

The seventheighth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The eighth amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. It also includes a minimum liquidity covenant that commences 91 days prior to the earliest scheduled maturity date of the Company’s convertible notes. This covenant requires the Company to maintain liquidity of at least $75 million plus the aggregate principal amount of the early maturing debt so long as the aggregate principal amount of such early maturing debt exceeds $200 million. We were in full compliance with these covenants and restrictions as of December 31, 2024.2025. We are also required, under certain circumstances, to make mandatory prepayments from net cash proceeds from any issuance of equity and asset sales.

OurEffective October 31, 2025, our Board of Directors has authorized a $150.0 million share repurchase program (the "Modified Program") which modified our prior $200.0 million share repurchase program.program (the “Prior Program”), under which $37.4 million had remained available for repurchases prior to the establishment of the Modified Program. Through DecemberOctober 31,30, 2024,2025, we have repurchased a total of 6.1 million shares of common stock aggregating $162.6 million under thisthe authorizationPrior and have $37.4 million remaining available for share repurchases.Program. The repurchaseModified programProgram calls for shares to be purchased in the open market or in private transactions from time to time. We may suspend or discontinue the shareModified repurchase programProgram at any time. We have not purchased any shares of common stock under the sharePrior Program or the Modified Program during 2025. The Company expects to repurchase programat duringleast 2024.$25.0 million in shares annually beginning in 2026. We have financed the repurchases and may finance additional repurchases through operating cash flow and from available borrowings under our revolving credit facility. With the decision to extend the share repurchase program, we have suspended our dividend payments and the Board of Directors will consider whether to declare dividends and the amount of such dividends from time to time in the future. We paid approximately $24.7 million of dividends during 2025.

We have reserved shares of common stock for issuance to employees and directors under twoone shareholder-approved share-based compensation plansplan (the "PlansPlan"). The PlansPlan provideprovides for grants of stock options, stock appreciation rights (“SARs”), dividend equivalent rights, restricted stock, restricted stock units (“RSUs”), performance share units (“PSUs”) and other equity-based and equity-related awards. The exercise price on all outstanding stock options and SARs is equal to the quoted fair market value of the stock at the date of grant. RSUs are valued at the market value of the underlying stock on the date of grant. PSUs are valued using a Monte Carlo valuation model at the date of grant. Stock options, SARs, and RSUs are generally non-transferable other than on death and generally become exercisable over a four to five year period from date of grant. PSUs are generally non-transferable other than on death and cliff vest afterover a three yearsyear period from date of grant.grant, PSUs are not earned unless performance targets are achieved after the three year period. Stock options and SARs expire ten years from date of grant. SARs are only settled in shares of the Company’s stock (See Note 109). Total pre-tax stock-based compensation expense recognized in the consolidated statements of comprehensive income (loss) was $25.6$28.3 million, $24.3$25.6 million and $21.7$24.3 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively.

A significant amount of our products are used in surgical procedures with approximately 85%86% of our revenues derived from the sale of single-use products. Our capital equipment offerings also facilitate the ongoing sale of related single-use products and accessories, thus providing us with a recurring revenue stream. We manufacture substantially all of our products in facilities located in the United States and Mexico. We market our products both domestically and internationally directly to customers and through distributors. International sales approximated 45%47% and 43%44% of our consolidated net sales during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

In recent years, the Company has experienced higher manufacturing and operating costs as well as ongoing supply chain challenges. We continue to monitor our spending and expenses in light of these factors. We engaged a consulting firm during the past year to evaluate and propose improvements in our manufacturing operations. In addition, our results of operations are being impacted by tariffs placed on imported goods to the United States as well as exporting of products to other countries. During the first quarter of 2026, the Supreme Court ruled tariffs paid under the International Emergency Economic Powers Act ("IEEPA") were illegal. We arehave followingfollowed the process to submit refund claims for such payments howeverand thisas requiresa reviewresult received $10.2 million of IEEPA tariff refunds during the second quarter of 2026, of which $8.5 million was recorded in cost of goods sold and approval from the U.S.remaining Customs and Border Protection agency and therefore we have notwas recorded any receivables related to these potential refunds at this time.inventory. See "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 for more information.

On December 5, 2025, we announced our intent to exit our gastroenterology product linesofferings as part of our portfolio optimization strategy. This included the termination of our distribution agreement with W.L. Gore & Associates, Inc. ("Gore") for the Gore® VIABIL® biliary stent effective January 1, 2026 and; the subsequent sale of certain assets related to our gastroenterology product linesofferings during the threefirst monthsquarter endedof March2026; 31, 2026. We subsequently soldand the remainingsubsequent sale of additional assets related to the gastroenterology product linesofferings that was recorded as a sale of a business during Aprilthe second quarter of 2026. In conjunction with the transaction in the second quarter, we entered into a manufacturing and supply agreement where CONMED will continue to manufacture certain gastroenterology products for the buyer for twelve months.

The following table presents net sales by product line (in millions) for the three and six months ended MarchJune 31,30, 2026 and 2025:

•Orthopedic surgery sales increased 6.8%8.2% and 7.5% in the three and six months ended MarchJune 31,30, 2026, respectively, primarily due to growth in our procedure-specificpowered surgical instrument, sports medicine, visualization, and BioBrace® product offerings.

•General surgery sales decreased 7.4%5.2% and 6.2% in the three and six months ended MarchJune 31,30, 2026 primarily due to the exit from many products inrelated theto gastroenterology product line during the quarter.three and six months ended June 30, 2026 partially offset by growth in AirSeal® and smoke evacuation product offerings.

Cost of sales decreased to $133.6$146.0 million in the three months ended MarchJune 31,30, 2026 as compared to $143.5$154.0 million in the three months ended MarchJune 31,30, 2025 and decreased to $279.6 million in the six months ended June 30, 2026 compared to $297.5 million in the six months ended June 30, 2025. Gross profit margins increased 260250 basis points to 57.9%57.5% in the three months ended MarchJune 31,30, 2026 as compared to 55.3%55.0% in the three months ended MarchJune 31,30, 2025. Gross profit margins increased 250 basis points to 57.7% in the six months ended June 30, 2026 compared to 55.2% in the six months ended June 30, 2025.

Selling and administrative expense decreasedincreased to $141.7$145.6 million in the three months ended MarchJune 31,30, 2026 as compared to $148.8$136.0 million in the three months ended MarchJune 31,30, 2025 and increased to $287.3 million in the six months ended June 30, 2026 as compared to $284.9 million in the six months ended June 30, 2025. Selling and administrative expense as a percentage of net sales decreasedincreased 160270 basis points to 44.7%42.4% in the three months ended MarchJune 31,30, 2026 as compared to 46.3%39.7% in the three months ended MarchJune 31,30, 2025.2025 Theand decreaseincreased 60 basis points to 43.5% in selling and administrative expense as a percentage of sales for the threesix months ended MarchJune 31,30, 2026 wascompared primarilyto driven42.9% by:in the six months ended June 30, 2025.

•$12.2$3.3 million of cash and stock-based compensation costs related to advisory services provided by our former Chief ExecutiveFinancial Officer in the threesix months ended MarchJune 31,30, 20252026;

General•an andincrease administrativeof $1.7 million in costs andrelated amortizationto expensefair invalue adjustments to contingent consideration ($0.1 million of benefit for the three months ended MarchJune 31,30, 2026 werecompared into line$1.8 withmillion of benefit for the three months ended MarchJune 31,30, 2025), assee aNote percentage of sales.6;

Research and development expense increased to $16.3$15.5 million in the three months ended MarchJune 31,30, 2026 as compared to $12.9$14.1 million in the three months ended MarchJune 31,30, 2025. As a percentage of net sales, research and development expense increased 12040 basis points to 5.2%4.5% in the three months ended MarchJune 31,30, 2026 as compared to 4.0%4.1% in the three months ended MarchJune 31,30, 2025. The increase in research and development expense as a percentage of sales was mainly driven by increased investments into our key growth drivers as well as $1.2$1.1 million in costs to comply with the European Union's Medical Device Regulations as well as increased investments into our key growth drivers in the three months ended MarchJune 31,30, 2026.

Interest expense decreasedincreased to $7.1$7.9 million in the three months ended MarchJune 31,30, 2026 from $8.3$7.8 million in the three months ended MarchJune 31,30, 2025. The weighted average interest rates on our borrowings decreasedincreased to 2.62%2.84% in the three months ended MarchJune 31,30, 2026 as compared to 2.90%2.80% in the three months ended MarchJune 31,30, 2025. The decreaseincrease in interest expense in the three months ended MarchJune 31,30, 2026 was driven by higher weighted average interest rates offset by lower weighted average borrowings outstanding and lower weighted average interest rates during the three months ended June 30, 2026.

Income tax expense has been recorded at an effective tax rate of 24.7%26.4% for the three months ended MarchJune 31,30, 2026 compared to 21.3%28.4% for the three months ended MarchJune 31,30, 2025. Income tax expense has been recorded at an effective tax rate of 25.8% for the six months ended June 30, 2026 compared to 27.0% for the six months ended June 30, 2025. The higherlower effective tax rate for the three and six months ended MarchJune 31,30, 2026 was primarily the result of a lower discreteexpenses benefitthat fromwere changesnot indeductible unrecognizedfor taxtax, benefitsincluding relatedfair value adjustments to acquiredcontingent federalconsideration, researchincurred credits recorded induring 2026 as compared to the same periodperiods forduring 2025. A reconciliation of the United States statutory income tax rate to our effective tax rate is included in our Annual Report on Form 10-K for the year ended December 31, 2025 under Note 8 to the consolidated financial statements.

Our net working capital position was $377.9$220.3 million at MarchJune 31,30, 2026. Net cash provided by operating activities was $13.5$50.6 million and $41.5$70.7 million in the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, generated on net income of $13.8$36.9 million and $6.0$27.5 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Net income in the threesix months ended MarchJune 31,30, 2026 included a $3.9$4.6 million gain on extinguishment of the 2.250% Notes as well as a $1.5 million net gain on the sale of certain assets related to gastroenterology products. In addition, below is a summary of significant changes in assets and liabilities in the threesix months ended MarchJune 31,30, 2026:

Net cash provided by investing activities in the threesix months ended MarchJune 31,30, 2026 increased $7.0$24.3 million from the same period a year ago mainly driven by cash proceeds of $7.0$21.5 million from the sale of certainassets assetsand a business related to the gastroenterology products.product offerings. Capital expenditures were $2.9$5.8 million in the threesix months ended MarchJune 31,30, 2026 compared to $3.8$9.5 million in the same period a year ago.

Net cash used in financing activities in the threesix months ended MarchJune 31,30, 2026 was $22.6$68.8 million compared to net cash used in financing activities of $28.4$54.9 million during 2025. Below is a summary of the significant financing activities impacting the change during the threesix months ended MarchJune 31,30, 2026 compared to 2025:

•During the threesix months ended MarchJune 31,30, 2026, we paid $37.0$637.2 million forto repurchasesrepurchase $645.2 million principal value of commonour stock.2.250% Notes.

•During the threesix months ended MarchJune 31,30, 2025,2026, we repaidhad $14.6proceeds of $450.0 million in borrowings on ourthe termTerm loan.A-2 Loan to fund a portion of the 2.250% Notes repurchase.

•During the threesix months ended MarchJune 31,30, 2025,2026, we paid $6.2$43.2 million infor dividends.repurchases of common stock.

There were $40.0 million in borrowings outstanding on the termTerm loanA-1 Loan facility as of MarchJune 31,30, 2026. There were $25.0$193.0 million in borrowings outstanding under the revolving credit facility as of MarchJune 31,30, 2026. There was $450.0 million in borrowings outstanding under the Term A-2 Loan facility as of June 30, 2026. Our available borrowings on the revolving credit facility at MarchJune 31,30, 2026 were $623.4$455.5 million with approximately $1.6$1.5 million of the facility set aside for outstanding letters of credit.

The eighth amended and restated senior credit agreement is collateralized by substantially all of our personal property and assets. The eighth amended and restated senior credit agreement contains covenants and restrictions which, among other things, require the maintenance of certain financial ratios and restrict dividend payments and the incurrence of certain indebtedness and other activities, including acquisitions and dispositions. It also includes a minimum liquidity covenant that commences 91 days prior to the earliest scheduled maturity date of the Company’s convertible notes. This covenant requires the Company to maintain liquidity of at least $75 million plus the aggregate principal amount of the early maturing debt so long as the aggregate principal amount of such early maturing debt exceeds $200 million. We were in full compliance with these covenants and restrictions as of MarchJune 31,30, 2026. We are also required, under certain circumstances, to make mandatory prepayments with net cash proceeds from the incurrence of certain additional indebtedness, certain asset sales, or insurance proceeds or condemnation awards, in each case, subject to certain exceptions and reinvestment rights.

On June 6, 2022, we issued $800.0 million aggregate principal amount of 2.250% Convertible Notes due 2027 (the "2.250% Notes"). Interest is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2022. The 2.250% Notes will mature on June 15, 2027, unless earlier repurchased or converted. During the quarter ended June 30, 2026, we repurchased $645.2 million principal amount of the 2.250% Notes for cash consideration of $637.2 million. We intend to secure incremental financing to fund the maturity of the remaining 2.250% Convertible Notes.Notes Thereusing cancash beflows nofrom assuranceour weoperations, willalong bewith able to obtain such financingcapacity on acceptableour terms.revolving credit facility. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as foregoing acquisitions, reducing or delaying capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.

Our Board of Directors has authorized a $150.0 million share repurchase program. Through MarchJune 31,30, 2026, we repurchased a total of 0.91.0 million shares of common stock aggregating $37.4$43.7 millionmillion, inclusive of excise tax, under this program. The program calls for shares to be purchased in the open market or in private transactions from time to time. WeSubject to applicable law, we may suspend, modify or discontinue the program at any time. The Company expects to repurchase at least $25.0 million in shares annually with $61.8 million planned for 2026. We have financed the repurchases and may finance additional repurchases through operating cash flow and from available borrowings under our revolving credit facility. With the authorization of the share repurchase program, we have suspended our dividend payments and the Board of Directors will consider whether to declare dividends and the amount of such dividends from time to time in the future.