Company Quick10K Filing
CONMED
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$0.00 29 $2,496
10-Q 2019-10-31 Quarter: 2019-09-30
10-Q 2019-08-01 Quarter: 2019-06-30
10-Q 2019-04-26 Quarter: 2019-03-31
10-K 2019-02-25 Annual: 2018-12-31
10-Q 2018-11-02 Quarter: 2018-09-30
10-Q 2018-08-02 Quarter: 2018-06-30
10-Q 2018-04-26 Quarter: 2018-03-31
10-K 2018-02-26 Annual: 2017-12-31
10-Q 2017-11-02 Quarter: 2017-09-30
10-Q 2017-07-27 Quarter: 2017-06-30
10-Q 2017-04-27 Quarter: 2017-03-31
10-K 2017-02-27 Annual: 2016-12-31
10-Q 2016-10-28 Quarter: 2016-09-30
10-Q 2016-07-28 Quarter: 2016-06-30
10-Q 2016-05-02 Quarter: 2016-03-31
10-K 2016-02-23 Annual: 2015-12-31
10-Q 2015-10-23 Quarter: 2015-09-30
10-Q 2015-07-27 Quarter: 2015-06-30
10-Q 2015-04-24 Quarter: 2015-03-31
10-K 2015-02-23 Annual: 2014-12-31
10-Q 2014-10-24 Quarter: 2014-09-30
10-Q 2014-07-25 Quarter: 2014-06-30
10-Q 2014-04-25 Quarter: 2014-03-31
10-K 2014-02-24 Annual: 2013-12-31
10-Q 2013-10-28 Quarter: 2013-09-30
10-Q 2013-07-29 Quarter: 2013-06-30
10-K 2013-02-25 Annual: 2012-12-31
10-Q 2012-10-29 Quarter: 2012-09-30
10-Q 2012-07-30 Quarter: 2012-06-30
10-Q 2012-05-01 Quarter: 2012-03-31
10-K 2012-02-28 Annual: 2011-12-31
10-Q 2011-11-01 Quarter: 2011-09-30
10-Q 2011-08-09 Quarter: 2011-06-30
10-Q 2011-05-02 Quarter: 2011-03-31
10-K 2011-02-28 Annual: 2010-12-31
10-Q 2010-11-02 Quarter: 2010-09-30
10-Q 2010-08-03 Quarter: 2010-06-30
10-Q 2010-05-05 Quarter: 2010-03-31
10-K 2010-02-25 Annual: 2009-12-31
8-K 2019-11-21 Other Events
8-K 2019-10-30 Earnings, Exhibits
8-K 2019-09-22 Officers
8-K 2019-08-02 Other Events
8-K 2019-07-31 Earnings, Exhibits
8-K 2019-06-18 Officers, Regulation FD, Exhibits
8-K 2019-05-22 Shareholder Vote, Other Events
8-K 2019-04-24 Earnings, Exhibits
8-K 2019-02-26 Other Events
8-K 2019-02-11 M&A, Off-BS Arrangement, Other Events, Exhibits
8-K 2019-02-07 Enter Agreement, Off-BS Arrangement, Exhibits
8-K 2019-01-24 Other Events, Exhibits
8-K 2019-01-24 Enter Agreement, Off-BS Arrangement, Sale of Shares, Exhibits
8-K 2019-01-23 Other Events, Exhibits
8-K 2019-01-22 Earnings, Exhibits
8-K 2019-01-02 Enter Agreement, Exhibits
8-K 2018-12-13 Enter Agreement, Regulation FD, Exhibits
8-K 2018-11-01 Earnings, Exhibits
8-K 2018-09-08 Other Events
8-K 2018-08-14 Other Events
8-K 2018-08-01 Earnings, Exhibits
8-K 2018-05-23 Officers, Shareholder Vote, Other Events
8-K 2018-04-25 Earnings, Exhibits
8-K 2018-02-28 Other Events
8-K 2018-01-31 Earnings, Exhibits
8-K 2018-01-02 Officers, Exhibits
CNMD 2019-09-30
Part I Financial Information
Item 1.
Note 1 - Operations
Note 2 - Interim Financial Information
Note 3 - Business Acquisition
Note 4 - Revenues
Note 5 - Comprehensive Income
Note 6 - Fair Value of Financial Instruments
Note 7 - Inventories
Note 8 - Earnings per Share
Note 9 - Leases
Note 10 - Goodwill and Other Intangible Assets
Note 11 - Guarantees
Note 12 - Pension Plan
Note 13 - Acquisition and Other Expense
Note 14 - Business Segment
Note 15 - Legal Proceedings
Note 16 - New Accounting Pronouncements
Note 17 - Long-Term Debt
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II Other Information
Item 1. Legal Proceedings
Item 6. Exhibits
EX-31.1 cnmd93019ex311.htm
EX-31.2 cnmd93019ex312.htm
EX-32.1 cnmd93019ex321.htm

CONMED Earnings 2019-09-30

CNMD 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

Comparables ($MM TTM)
Ticker M Cap Assets Liab Rev G Profit Net Inc EBITDA EV G Margin EV/EBITDA ROA
LIVN 3,674 2,622 1,138 1,097 747 -262 -268 3,834 68% -14.3 -10%
CNMD 2,496 1,759 1,062 901 496 28 109 3,283 55% 30.0 2%
NXTM 1,916 377 152 426 184 -5 30 1,834 43% 60.8 -1%
VRAY 839 270 147 89 -1 -114 -104 771 -1% -7.4 -42%
BABY 832 628 226 512 296 -43 2 860 58% 367.3 -7%
AXGN 765 157 19 96 81 -26 -25 738 84% -29.6 -17%
BLFS 399 52 5 23 16 2 2 379 70% 178.5 4%
CUTR 276 108 65 170 84 -35 -14 249 49% -17.9 -32%
BSGM 200 12 2 0 0 -23 -23 190 -8.4 -188%
RMTI 190 57 27 64 5 -33 -33 168 8% -5.2 -58%

Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY 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 quarterly period ended
Commission File Number
September 30, 2019
0-16093

CONMED CORPORATION
(Exact name of the registrant as specified in its charter)

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

(315) 797-8375
(Registrant's telephone number, including area code)

Securities registered pursuant to Rule 12(b) of the Act
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 par value
CNMD
NASDAQ

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

Yes    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  

Yes    No

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

Large accelerated filer     Accelerated filer     Non-accelerated filer

Smaller reporting company     Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No

The number of shares outstanding of registrant's common stock, as of October 29, 2019 is 28,379,043 shares.



CONMED CORPORATION
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2019

PART I FINANCIAL INFORMATION
Item Number
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II OTHER INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 



Table of Contents

PART I FINANCIAL INFORMATION
Item 1.
CONMED CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited, in thousands except per share amounts)
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
Net sales
$
233,590

 
$
202,307

 
$
690,232

 
$
617,191

 
 
 
 
 
 
 
 
Cost of sales
103,479

 
91,680

 
307,492

 
280,736

 
 
 
 
 
 
 
 
Gross profit
130,111

 
110,627

 
382,740

 
336,455

 
 
 
 
 
 
 
 
Selling and administrative expense
98,187

 
84,983

 
298,140

 
259,156

 
 
 
 
 
 
 
 
Research and development expense
10,985

 
14,122

 
33,366

 
31,817

 
 
 
 
 
 
 
 
  Operating expenses
109,172

 
99,105

 
331,506

 
290,973

 
 
 
 
 
 
 
 
Income from operations
20,939

 
11,522

 
51,234

 
45,482

 
 
 
 
 
 
 
 
Other expense
321

 

 
4,867

 

 
 
 
 
 
 
 
 
Interest expense
11,174

 
5,214

 
32,382

 
15,123

 
 
 
 
 
 
 
 
Income before income taxes
9,444

 
6,308

 
13,985

 
30,359

 
 
 
 
 
 
 
 
Provision for income taxes
2,474

 
483

 
299

 
5,158

 
 
 
 
 
 
 
 
Net income
$
6,970

 
$
5,825

 
$
13,686

 
$
25,201

 
 
 
 
 
 
 
 
Comprehensive income
$
4,661

 
$
7,136

 
$
11,508

 
$
27,845

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per share data:
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 

 
 
 
 
Basic
$
0.25

 
$
0.21

 
$
0.48

 
$
0.90

Diluted
0.23

 
0.20

 
0.47

 
0.87

 
 
 
 
 
 
 
 
Weighted average common shares
 
 
 

 
 
 
 
Basic
28,353

 
28,124

 
28,280

 
28,096

Diluted
29,792

 
29,088

 
29,354

 
28,872


 See notes to consolidated condensed financial statements.

1

Table of Contents

CONMED CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited, in thousands except share and per share amounts)
 
 
September 30,
2019
 
December 31,
2018
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
30,068

 
$
17,511

Accounts receivable, net
173,282

 
181,550

Inventories
173,920

 
154,599

Prepaid expenses and other current assets
21,753

 
20,691

Total current assets
399,023

 
374,351

Property, plant and equipment, net
116,743

 
113,245

Goodwill
615,768

 
400,440

Other intangible assets, net
535,793

 
413,193

Other assets
91,091

 
67,909

Total assets
$
1,758,418

 
$
1,369,138

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 

Current liabilities:
 
 
 

Current portion of long-term debt
$
13,482

 
$
18,336

Accounts payable
45,852

 
53,498

Accrued compensation and benefits
45,123

 
42,924

Other current liabilities
56,208

 
46,186

Total current liabilities
160,665

 
160,944

 
 
 
 
Long-term debt
780,689

 
438,564

Deferred income taxes
76,289

 
81,061

Other long-term liabilities
39,853

 
26,299

Total liabilities
1,057,496

 
706,868

 
 
 
 
Commitments and contingencies


 


 
 
 
 
Shareholders' equity:
 
 
 

Preferred stock, par value $ .01 per share;
 
 
 

authorized 500,000 shares; none outstanding

 

Common stock, par value $ .01 per share;
100,000,000 shares authorized; 31,299,194 shares
issued in 2019 and 2018, respectively
313

 
313

Paid-in capital
379,137

 
341,738

Retained earnings
461,564

 
464,851

Accumulated other comprehensive loss
(57,915
)
 
(55,737
)
Less: 2,928,060 and 3,167,422 shares of common stock
in treasury, at cost in 2019 and 2018, respectively
(82,177
)
 
(88,895
)
Total shareholders’ equity
700,922

 
662,270

Total liabilities and shareholders’ equity
$
1,758,418

 
$
1,369,138


 See notes to consolidated condensed financial statements.

2

Table of Contents


CONMED CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited, in thousands except share and per share amounts)

 
Common Stock
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Shareholders’
Equity
 
Shares
Amount
Balance at December 31, 2018
31,299

$
313

$
341,738

$
464,851

$
(55,737
)
$
(88,895
)
$
662,270

Common stock issued under employee plans
 

 

(769
)
 
 

2,517

1,748

Stock-based compensation
 

 

2,703

 

 

 

2,703

Dividends on common stock ($0.20 per share)
 
 
 
(5,643
)
 
 
(5,643
)
Convertible note discount, net
 
 
39,145

 
 
 
39,145

Convertible note hedge, net
 
 
(38,829
)
 
 
 
(38,829
)
Issuance of warrants
 
 
30,567

 
 
 
30,567

Comprehensive income (loss):
 
 
 
 
 
 


Foreign currency translation adjustments
 
 
 
 
(578
)
 
 
Pension liability, net
 
 
 
 
547

 
 
Cash flow hedging gain, net
 
 
 
 
106

 
 
Net income
 
 
 
1,021

 
 
 
Total comprehensive income
 
 
 
 
 
 
1,096

Balance at March 31, 2019
31,299

$
313

$
374,555

$
460,229

$
(55,662
)
$
(86,378
)
$
693,057

Common stock issued under employee plans
 
 
(1,144
)
 
 
1,894

750

Stock-based compensation
 
 
3,108

 
 
 
3,108

Dividends on common stock ($0.20 per share)
 
 
 
(5,657
)
 
 
(5,657
)
Comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
 
 
 
1,108

 
 
Pension liability, net
 
 
 
 
546

 
 
Cash flow hedging loss, net
 
 
 
 
(1,598
)
 
 
Net income
 
 
 
5,695

 
 
 
Total comprehensive income
 
 
 
 
 
 
5,751

Balance at June 30, 2019
31,299

$
313

$
376,519

$
460,267

$
(55,606
)
$
(84,484
)
$
697,009

Common stock issued under employee plans
 
 
(390
)
 
 
2,307

1,917

Stock-based compensation
 
 
3,008

 
 
 
3,008

Dividends on common stock ($0.20 per share)
 
 
 
(5,673
)
 
 
(5,673
)
Comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustments
 
 
 
 
(4,770
)
 
 
Pension liability, net
 
 
 
 
546

 
 
Cash flow hedging gain, net
 
 
 
 
1,915

 
 
Net income
 
 
 
6,970

 
 
 
Total comprehensive income
 
 
 
 
 
 
4,661

Balance at September 30, 2019
31,299

$
313

$
379,137

$
461,564

$
(57,915
)
$
(82,177
)
$
700,922



3

Table of Contents

 
Common Stock
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Treasury
Stock
Shareholders’
Equity
 
Shares
Amount
Balance at December 31, 2017
31,299

$
313

$
333,795

$
440,085

$
(49,078
)
$
(93,683
)
$
631,432

Common stock issued under employee plans
 

 

(1,344
)
 
 

2,001

657

Stock-based compensation
 

 

2,303

 

 

 

2,303

Dividends on common stock ($0.20 per share)
 
 
 
(5,606
)
 
 
(5,606
)
Comprehensive income:
 
 
 
 
 
 


Foreign currency translation adjustments
 
 
 
 
649

 
 
Pension liability, net
 
 
 
 
510

 
 
Cash flow hedging gain, net
 
 
 
 
1,586

 
 
Net income
 
 
 
10,657

 
 
 
Total comprehensive income
 
 
 
 
 
 
13,402

Cumulative effect of change in accounting principle(1)
 
 
 
440

 
 
440

Balance at March 31, 2018
31,299

$
313

$
334,754

$
445,576

$
(46,333
)
$
(91,682
)
$
642,628

Common stock issued under employee plans
 

 

(844
)
 
 

2,071

1,227

Stock-based compensation
 

 

2,650

 

 

 

2,650

Dividends on common stock ($0.20 per share)
 
 
 
(5,620
)
 
 
(5,620
)
Comprehensive income (loss):
 
 
 
 
 
 


Foreign currency translation adjustments
 
 
 
 
(5,749
)
 


Pension liability, net
 
 
 
 
510

 
 
Cash flow hedging gain, net
 
 
 
 
3,827

 
 
Net income
 
 
 
8,719

 
 
 
Total comprehensive income
 
 
 
 
 
 
7,307

Balance at June 30, 2018
31,299

$
313

$
336,560

$
448,675

$
(47,745
)
$
(89,611
)
$
648,192

Common stock issued under employee plans
 

 

(39
)
 
 

480

441

Stock-based compensation
 

 

2,512

 

 

 

2,512

Dividends on common stock ($0.20 per share)
 
 
 
(5,625
)
 
 
(5,625
)
Comprehensive income (loss):
 
 
 
 
 
 


Foreign currency translation adjustments
 
 
 
 
(384
)
 
 
Pension liability, net
 
 
 
 
510

 
 
Cash flow hedging gain, net
 
 
 
 
1,185

 
 
Net income
 
 
 
5,825

 
 
 
Total comprehensive income
 
 
 
 
 
 
7,136

Balance at September 30, 2018
31,299

313

339,033

448,875

(46,434
)
(89,131
)
652,656


(1)We recorded the cumulative impact of adopting ASU 2014-09, Revenue from Contracts with Customers, (and its amendments) as of January 1, 2018.

See notes to consolidated condensed financial statements.


4

Table of Contents

CONMED CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
 
Nine Months Ended
 
September 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income
$
13,686

 
$
25,201

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 

Depreciation
14,225

 
13,881

Amortization of debt discount
6,038

 

Amortization
41,372

 
32,329

Stock-based compensation
8,819

 
7,465

Impairment charges
312

 
4,212

Deferred income taxes
(5,506
)
 
(1,268
)
Loss on early extinguishment of debt
300

 

Increase (decrease) in cash flows from changes in assets and liabilities:
 

 
 

Accounts receivable
10,756

 
4,361

Inventories
(15,645
)
 
(13,677
)
Accounts payable
(10,104
)
 
6,212

Accrued compensation and benefits
1,728

 
465

Other assets
(13,202
)
 
(20,323
)
Other liabilities
1,478

 
(8,860
)
 
40,571

 
24,797

Net cash provided by operating activities
54,257

 
49,998

 
 
 
 
Cash flows from investing activities:
 
 
 

Purchases of property, plant and equipment
(13,875
)
 
(11,751
)
Payments related to business acquisition, net of cash acquired
(364,928
)
 

Net cash used in investing activities
(378,803
)
 
(11,751
)
 
 
 
 
Cash flows from financing activities:
 
 
 

Payments on term loan
(151,000
)
 
(9,844
)
Proceeds from term loan
265,000

 

Payments on revolving line of credit
(435,000
)
 
(119,000
)
Proceeds from revolving line of credit
370,000

 
104,000

Proceeds from convertible notes
345,000

 

Payments related to contingent consideration
(5,687
)
 

Payments related to debt issuance costs
(16,210
)
 

Dividends paid on common stock
(16,927
)
 
(16,819
)
Purchases of convertible hedges
(51,198
)
 

Proceeds from issuance of warrants
30,567

 

Other, net
3,310

 
1,043

Net cash provided by (used in) financing activities
337,855

 
(40,620
)
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
(752
)
 
(558
)
 
 
 
 
Net increase (decrease) in cash and cash equivalents
12,557

 
(2,931
)
 
 
 
 
Cash and cash equivalents at beginning of period
17,511

 
32,622

 
 
 
 
Cash and cash equivalents at end of period
$
30,068

 
$
29,691

 
 
 
 
Non-cash investing and financing activities:
 
 
 
Contractual obligations from asset acquisition
$
5,639

 
$
25,849

   Dividends payable
$
5,673

 
$
5,625


See notes to consolidated condensed financial statements.

5

Table of Contents

CONMED CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited, in thousands except per share amounts)

Note 1 – Operations

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

Note 2 - Interim Financial Information

The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for annual financial statements. The information herein reflects all normal recurring material adjustments, which are, in the opinion of management, necessary for the fair statements of the results for the periods presented. The consolidated condensed financial statements herein consist of all wholly-owned domestic and foreign subsidiaries with all significant intercompany transactions eliminated. Results for the period ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

The consolidated condensed financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes for the year ended December 31, 2018 included in our Annual Report on Form 10-K.

Note 3 - Business Acquisition

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 acquisition was funded through a combination of cash on hand and long-term borrowings as further described below.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as a result of the Buffalo Filter Acquisition.
Cash
$
119

Other current assets
9,315

Current assets
9,434

Property, plant & equipment
4,036

Deferred income taxes
80

Goodwill
215,793

Customer relationships
124,000

Developed technology
9,000

Trademarks & tradenames
7,000

Other non-current assets
166

Total assets acquired
$
369,509

 
 
Current liabilities assumed
4,462

Total liabilities assumed
4,462

Net assets acquired
$
365,047



The goodwill recorded as part of the acquisition primarily represents revenue synergies, as well as operating efficiencies and cost savings. The goodwill deductible for tax purposes is $215.8 million. The weighted amortization period for intangibles

6

Table of Contents

acquired is 16 years. Customer relationships, developed technology and trademarks and tradenames are being amortized over a weighted average life of 16, 10 and 20 years, respectively.

The unaudited pro forma information for the three and nine months ended September 30, 2019 and 2018, assuming Buffalo Filter Acquisition occurred as of January 1, 2018 are 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.

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Net sales
$
233,590

 
$
211,421

 
$
695,250

 
$
645,101

Net income (loss)
8,675

 
(140
)
 
26,045

 
(1,459
)

 
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 amortization of debt issuance costs incurred to finance the transaction, 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.

Acquisition related costs included in the determination of pro forma net income for the three months ended September 30, 2018 included $0.2 million in cost of goods sold and $1.5 million in selling and administrative expense and the nine months ended September 30, 2018 included $1.3 million in cost of goods sold and $11.2 million in selling and administrative expense on the consolidated condensed statement of comprehensive income. Such amounts are excluded from the determination of pro forma net income for the three and nine months ended September 30, 2019.

Net sales associated with Buffalo Filter of $13.9 million and $33.4 million have been recorded in the consolidated condensed statement of comprehensive income for the three and nine months ended September 30, 2019, respectively. It is impracticable to determine the earnings recorded in the consolidated condensed statement of comprehensive income for the three and nine months ended September 30, 2019 as these amounts are not separately measured.

Note 4 - Revenues
    
The following tables present revenue disaggregated by primary geographic market where the products are sold, by product line and timing of revenue recognition:
 
Three Months Ended
 
Three Months Ended
 
September 30, 2019
 
September 30, 2018
 
Orthopedic Surgery
 
General Surgery
 
Total
 
Orthopedic Surgery
 
General Surgery
 
Total
Primary Geographic Markets
 
 
 
 
 
 
 
 
 
 
 
United States
$
42,530

 
$
85,652

 
$
128,182

 
$
39,574

 
$
67,955

 
$
107,529

Americas (excluding the United States)
17,069

 
7,356

 
24,425

 
14,949

 
7,347

 
22,296

Europe, Middle East & Africa
24,692

 
14,139

 
38,831

 
23,206

 
11,492

 
34,698

Asia Pacific
26,037

 
16,115

 
42,152

 
25,200

 
12,584

 
37,784

Total sales from contracts with customers
$
110,328

 
$
123,262

 
$
233,590

 
$
102,929

 
$
99,378

 
$
202,307

 
 
 
 
 
 
 
 
 
 
 
 
Timing of Revenue Recognition
 
 
 
 
 
 
 
 
 
 
 
Goods transferred at a point in time
$
101,454

 
$
122,620

 
$
224,074

 
$
94,640

 
$
98,992

 
$
193,632

Services transferred over time
8,874

 
642

 
9,516

 
8,289

 
386

 
8,675

Total sales from contracts with customers
$
110,328

 
$
123,262

 
$
233,590

 
$
102,929

 
$
99,378

 
$
202,307



7

Table of Contents

 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 30, 2018
 
Orthopedic Surgery
 
General Surgery
 
Total
 
Orthopedic Surgery
 
General Surgery
 
Total
Primary Geographic Markets
 
 
 
 
 
 
 
 
 
 
 
United States
$
131,120

 
$
243,023

 
$
374,143

 
$
123,782

 
$
199,653

 
$
323,435

Americas (excluding the United States)
47,890

 
22,644

 
70,534

 
48,307

 
23,374

 
71,681

Europe, Middle East & Africa
86,199

 
45,826

 
132,025

 
80,951

 
38,420

 
119,371

Asia Pacific
74,313

 
39,217

 
113,530

 
68,883

 
33,821

 
102,704

Total sales from contracts with customers
$
339,522

 
$
350,710

 
$
690,232

 
$
321,923


$
295,268

 
$
617,191

 
 
 
 
 
 
 
 
 
 
 
 
Timing of Revenue Recognition
 
 
 
 
 
 
 
 
 
 
 
Goods transferred at a point in time
$
312,964

 
$
348,972

 
$
661,936

 
$
297,096

 
$
294,196

 
$
591,292

Services transferred over time
26,558

 
1,738

 
28,296

 
24,827

 
1,072

 
25,899

Total sales from contracts with customers
$
339,522

 
$
350,710

 
$
690,232

 
$
321,923

 
$
295,268

 
$
617,191



Contract liability balances related to the sale of extended warranties to customers are as follows:
 
September 30, 2019
 
December 31, 2018
 
 
 
 
Contract liability
$
13,718

 
$
11,043



Revenue recognized during the nine months ended September 30, 2019 and September 30, 2018 from amounts included in contract liabilities at the beginning of the period were $5.5 million and $4.1 million, respectively. There were no material contract assets as of September 30, 2019 and December 31, 2018.

Note 5 – Comprehensive Income

Comprehensive income consists of the following:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
6,970

 
$
5,825

 
$
13,686

 
$
25,201

 
 
 
 
 
 
 
 
Other comprehensive income (loss):
 
 
 
 
 
 
 
Pension liability, net of income tax (income tax expense of $174 and $162 for the three months ended September 30, 2019 and 2018, respectively, and $521 and $488 for the nine months ended September 30, 2019 and 2018, respectively)