CONMED Corp
For the period ended Jun 30, 2026. Filed Jul 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 29, 2026
CNMD$51.50-2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0000816956-26-000053
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-29.
0000816956-26-000102
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 117 current paragraphs.
65 unchanged; 27 reworded; 15 added; 3 removed; 0 previous and 10 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Net sales increased 0.3% in the three months ended June 30, 2026 and decreased 0.5% in the six months ended June 30, 2026 compared to the same periods a year ago. During 2026, we exited the gastroenterology product offerings, impacting net sales growth. Gastroenterology sales were $4.7 million, inclusive of $2.7 million from the manufacturing and supply agreement, in the three months ended June 30, 2026, as compared to $25.3 million in the three months ended June 30, 2025. Gastroenterology sales were $14.1 million, inclusive of $2.7 million from the manufacturing and supply agreement, in the six months ended June 30, 2026, as compared to $50.3 million in the six months ended June 30, 2025.
Current report
•an $8.5 million benefit from IEEPA tariff refunds in the three months ended June 30, 2026;
Current report
•a $6.9 million charge for inventory, equipment and tooling related to the discontinuation of certain products in the three months ended June 30, 2026;
Current report
•an $8.5 million benefit from IEEPA tariff refunds in the six months ended June 30, 2026;
Current report
•a $6.9 million charge for inventory, equipment and tooling related to the discontinuation of certain products in the six months ended June 30, 2026;
Current report
Selling and administrative expense increased to $145.6 million in the three months ended June 30, 2026 as compared to $136.0 million in the three months ended June 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 increased 270 basis points to 42.4% in the three months ended June 30, 2026 as compared to 39.7% in the three months ended June 30, 2025 and increased 60 basis points to 43.5% in the six months ended June 30, 2026 compared to 42.9% in the six months ended June 30, 2025.
Current report
•a $4.4 million loss on the sale of additional assets related to the gastroenterology product offerings which constituted a business, in the three and six months ended June 30, 2026 as further described in Note 9;
Current report
•an increase of $1.7 million in costs related to fair value adjustments to contingent consideration ($0.1 million of benefit for the three months ended June 30, 2026 compared to $1.8 million of benefit for the three months ended June 30, 2025), see Note 6;
Current report
•consulting fees, legal fees and other costs related to operational optimization of $7.1 million and $14.6 million during the three and six months ended June 30, 2026, respectively, compared to $2.5 million and $2.9 million for the three and six months ended June 30, 2025, respectively; and
Current report
Other (Income) / Expense
Current report
During the three and six months ended June 30, 2026, we recorded income of $8.1 million for the difference between the principal value of the 2.250% Notes and the amount paid to repurchase the 2.250% Notes; and expense of $3.5 million related to the write-off of deferred financing fees associated with the repurchase of $645.2 million of the 2.250% Notes and $1.8 million in related professional fees.
Current report
•During the six months ended June 30, 2026, we paid $637.2 million to repurchase $645.2 million principal value of our 2.250% Notes.
Current report
•During the six months ended June 30, 2026, we had proceeds of $450.0 million in borrowings on the Term A-2 Loan to fund a portion of the 2.250% Notes repurchase.
Current report
•During the six months ended June 30, 2025, we had net payments on our Term A-1 Loan of $29.6 million, inclusive of a $25.2 million impact on both borrowings and repayments between independent counterparties associated with the eighth amended and restated senior credit agreement.
Current report
•During the six months ended June 30, 2025, we paid $12.4 million in dividends.
Removed paragraphs (3)
Previous report
Net sales decreased 1.3% in the three months ended March 31, 2026 compared to the same period a year ago due to the exit from many products in the gastroenterology product line during the quarter. Gastroenterology sales were $9.5 million and $25.0 million during the three months ended March 31, 2026 and March 31, 2025, respectively. This decrease was partially offset by sales growth in Orthopedic surgery.
Previous report
•During the three months ended March 31, 2025, we repaid $14.6 million on our term loan.
Previous report
•During the three months ended March 31, 2025, we paid $6.2 million in dividends.
Reworded paragraphs (27)
Previous wording
A significant amount of our products are used in surgical procedures with approximately 85% 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% and 43% of our consolidated net sales during the three months ended March 31, 2026 and 2025, respectively.
Current wording
A significant amount of our products are used in surgical procedures with approximately 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 47% and 44% of our consolidated net sales during the six months ended June 30, 2026 and 2025, respectively.
Previous wording
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 are following the process to submit refund claims for such payments however this requires review and approval from the U.S. Customs and Border Protection agency and therefore we have not recorded any receivables related to these potential refunds at this time. See "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 for more information.
Current wording
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 have followed the process to submit refund claims for such payments and as a result 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 the remaining was recorded to inventory. See "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 for more information.
Previous wording
On December 5, 2025, we announced our intent to exit our gastroenterology product lines 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 lines during the three months ended March 31, 2026. We subsequently sold the remaining gastroenterology product lines during April 2026.
Current wording
On December 5, 2025, we announced our intent to exit our gastroenterology product offerings 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; the sale of certain assets related to our gastroenterology product offerings during the first quarter of 2026; and the subsequent sale of additional assets related to the gastroenterology product offerings that was recorded as a sale of a business during the 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.
Previous wording
The following table presents net sales by product line for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents net sales by product line (in millions) for the three and six months ended June 30, 2026 and 2025:
Previous wording
•Orthopedic surgery sales increased 6.8% in the three months ended March 31, 2026, primarily due to growth in our procedure-specific and BioBrace® product offerings.
Current wording
•Orthopedic surgery sales increased 8.2% and 7.5% in the three and six months ended June 30, 2026, respectively, primarily due to growth in our powered surgical instrument, sports medicine, visualization, and BioBrace® product offerings.
Previous wording
•General surgery sales decreased 7.4% in the three months ended March 31, 2026 primarily due to the exit from many products in the gastroenterology product line during the quarter.
Current wording
•General surgery sales decreased 5.2% and 6.2% in the three and six months ended June 30, 2026 primarily due to the exit from many products related to gastroenterology during the three and six months ended June 30, 2026 partially offset by growth in AirSeal® and smoke evacuation product offerings.
Previous wording
Cost of sales decreased to $133.6 million in the three months ended March 31, 2026 as compared to $143.5 million in the three months ended March 31, 2025. Gross profit margins increased 260 basis points to 57.9% in the three months ended March 31, 2026 as compared to 55.3% in the three months ended March 31, 2025.
Current wording
Cost of sales decreased to $146.0 million in the three months ended June 30, 2026 as compared to $154.0 million in the three months ended June 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 250 basis points to 57.5% in the three months ended June 30, 2026 as compared to 55.0% in the three months ended June 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.
Previous wording
The 260 basis point increase in gross profit margins during the three months ended March 31, 2026 was primarily due to a $1.9 million benefit resulting from the termination of our distribution agreement with W.L. Gore & Associates, Inc. for the Gore® VIABIL® biliary stent; the favorable impact of foreign currency exchange rates and product mix. In addition, during the three months ended March 31, 2025 we incurred costs of $3.4 million for the engagement of consultants to evaluate and propose improvements to our supply chain and manufacturing operations.
Current wording
The 250 basis point increase in gross profit margins during the three months ended June 30, 2026 was primarily impacted by the following:
Previous wording
Selling and administrative expense decreased to $141.7 million in the three months ended March 31, 2026 as compared to $148.8 million in the three months ended March 31, 2025. Selling and administrative expense as a percentage of net sales decreased 160 basis points to 44.7% in the three months ended March 31, 2026 as compared to 46.3% in the three months ended March 31, 2025. The decrease in selling and administrative expense as a percentage of sales for the three months ended March 31, 2026 was primarily driven by:
Current wording
The increase in selling and administrative expense as a percentage of sales for the three and six months ended June 30, 2026 was primarily driven by:
Previous wording
The decrease in selling and administrative expense as a percentage of sales was partially offset by $7.5 million of consulting fees, legal fees and other costs related to operational optimization during three months ended March 31, 2026; $3.3 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Financial Officer in the three months ended March 31, 2026; and increased investment into our key growth drivers.
Current wording
•$3.3 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Financial Officer in the six months ended June 30, 2026;
Previous wording
•$12.2 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Executive Officer in the three months ended March 31, 2025;
Current wording
•$12.2 million of cash and stock-based compensation costs related to advisory services provided by our former Chief Executive Officer in the six months ended June 30, 2025;
Previous wording
•a $3.9 million benefit resulting from the gain on the sale of certain assets related to gastroenterology products; and
Current wording
•$1.9 million and $5.9 million of benefit resulting from the gain on the sale of a product offering in the three and six months ended June 30, 2026, respectively; and
Previous wording
•a decrease of $3.2 million in costs related to fair value adjustments to contingent consideration ($0.7 million of expense for the three months ended March 31, 2026 compared to $4.0 million of expense for the three months ended March 31, 2025), see Note 6
Current wording
•a decrease of $1.6 million in costs related to fair value adjustments to contingent consideration ($0.6 million of expense for the six months ended June 30, 2026 compared to $2.2 million of expense for the six months ended June 30, 2025), see Note 6.
Previous wording
General and administrative costs and amortization expense in the three months ended March 31, 2026 were in line with the three months ended March 31, 2025 as a percentage of sales.
Current wording
Amortization expense in the three and six months ended June 30, 2026 was in line with the three and six months ended June 30, 2025 as a percentage of sales.
Previous wording
Research and development expense increased to $16.3 million in the three months ended March 31, 2026 as compared to $12.9 million in the three months ended March 31, 2025. As a percentage of net sales, research and development expense increased 120 basis points to 5.2% in the three months ended March 31, 2026 as compared to 4.0% in the three months ended March 31, 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 million in costs to comply with the European Union's Medical Device Regulations in the three months ended March 31, 2026.
Current wording
Research and development expense increased to $15.5 million in the three months ended June 30, 2026 as compared to $14.1 million in the three months ended June 30, 2025. As a percentage of net sales, research and development expense increased 40 basis points to 4.5% in the three months ended June 30, 2026 as compared to 4.1% in the three months ended June 30, 2025. The increase in research and development expense as a percentage of sales was mainly driven by $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 June 30, 2026.
Previous wording
Interest expense decreased to $7.1 million in the three months ended March 31, 2026 from $8.3 million in the three months ended March 31, 2025. The weighted average interest rates on our borrowings decreased to 2.62% in the three months ended March 31, 2026 as compared to 2.90% in the three months ended March 31, 2025. The decrease in interest expense in the three months ended March 31, 2026 was driven by lower weighted average borrowings outstanding and lower weighted average interest rates during 2026.
Current wording
Interest expense increased to $7.9 million in the three months ended June 30, 2026 from $7.8 million in the three months ended June 30, 2025. The weighted average interest rates on our borrowings increased to 2.84% in the three months ended June 30, 2026 as compared to 2.80% in the three months ended June 30, 2025. The increase in interest expense in the three months ended June 30, 2026 was driven by higher weighted average interest rates offset by lower weighted average borrowings outstanding during the three months ended June 30, 2026.
Previous wording
Income tax expense has been recorded at an effective tax rate of 24.7% for the three months ended March 31, 2026 compared to 21.3% for the three months ended March 31, 2025. The higher effective tax rate for the three months ended March 31, 2026 was primarily the result of a lower discrete benefit from changes in unrecognized tax benefits related to acquired federal research credits recorded in 2026 as compared to the same period for 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.
Current wording
Income tax expense has been recorded at an effective tax rate of 26.4% for the three months ended June 30, 2026 compared to 28.4% for the three months ended June 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 lower effective tax rate for the three and six months ended June 30, 2026 was primarily the result of lower expenses that were not deductible for tax, including fair value adjustments to contingent consideration, incurred during 2026 as compared to the same periods during 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.
Previous wording
Our net working capital position was $377.9 million at March 31, 2026. Net cash provided by operating activities was $13.5 million and $41.5 million in the three months ended March 31, 2026 and March 31, 2025, respectively, generated on net income of $13.8 million and $6.0 million for the three months ended March 31, 2026 and 2025, respectively. Net income in the three months ended March 31, 2026 included a $3.9 million 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 three months ended March 31, 2026:
Current wording
Our net working capital position was $220.3 million at June 30, 2026. Net cash provided by operating activities was $50.6 million and $70.7 million in the six months ended June 30, 2026 and June 30, 2025, respectively, generated on net income of $36.9 million and $27.5 million for the six months ended June 30, 2026 and 2025, respectively. Net income in the six months ended June 30, 2026 included a $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 six months ended June 30, 2026:
Previous wording
Net cash provided by investing activities in the three months ended March 31, 2026 increased $7.0 million from the same period a year ago mainly driven by cash proceeds of $7.0 million from the sale of certain assets related to gastroenterology products. Capital expenditures were $2.9 million in the three months ended March 31, 2026 compared to $3.8 million in the same period a year ago.
Current wording
Net cash provided by investing activities in the six months ended June 30, 2026 increased $24.3 million from the same period a year ago mainly driven by cash proceeds of $21.5 million from the sale of assets and a business related to the gastroenterology product offerings. Capital expenditures were $5.8 million in the six months ended June 30, 2026 compared to $9.5 million in the same period a year ago.
Previous wording
Net cash used in financing activities in the three months ended March 31, 2026 was $22.6 million compared to net cash used in financing activities of $28.4 million during 2025. Below is a summary of the significant financing activities impacting the change during the three months ended March 31, 2026 compared to 2025:
Current wording
Net cash used in financing activities in the six months ended June 30, 2026 was $68.8 million compared to net cash used in financing activities of $54.9 million during 2025. Below is a summary of the significant financing activities impacting the change during the six months ended June 30, 2026 compared to 2025:
Previous wording
•During the three months ended March 31, 2026, we had $25.0 million in net borrowings on our revolving line of credit and we did not have any net borrowings during the three months ended March 31, 2025.
Current wording
•During the six months ended June 30, 2026, we had $193.0 million in net borrowings on our revolving line of credit compared to $4.0 million in net borrowings during the six months ended June 30, 2025. The increase in borrowings was mainly to fund a portion of the 2.250% Notes repurchase.
Previous wording
•During the three months ended March 31, 2026, we paid $37.0 million for repurchases of common stock.
Current wording
•During the six months ended June 30, 2026, we paid $43.2 million for repurchases of common stock.
Previous wording
•During the three months ended March 31, 2026, we paid $11.4 million in contingent consideration related to the Biorez acquisition compared to $7.2 million related to the Biorez acquisition in the same period a year ago.
Current wording
•During the six months ended June 30, 2026, we paid $28.9 million in contingent consideration related to the Biorez acquisition compared to $14.1 million related to the Biorez acquisition in the same period a year ago.
Previous wording
There were $40.0 million in borrowings outstanding on the term loan facility as of March 31, 2026. There were $25.0 million in borrowings outstanding under the revolving credit facility as of March 31, 2026. Our available borrowings on the revolving credit facility at March 31, 2026 were $623.4 million with approximately $1.6 million of the facility set aside for outstanding letters of credit.
Current wording
There were $40.0 million in borrowings outstanding on the Term A-1 Loan facility as of June 30, 2026. There were $193.0 million in borrowings outstanding under the revolving credit facility as of June 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 June 30, 2026 were $455.5 million with approximately $1.5 million of the facility set aside for outstanding letters of credit.
Previous wording
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 March 31, 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.
Current wording
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. We were in full compliance with these covenants and restrictions as of June 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.
Previous wording
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. We intend to secure incremental financing to fund the maturity of the 2.250% Convertible Notes. There can be no assurance we will be able to obtain such financing on acceptable terms. 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.
Current wording
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 fund the maturity of the remaining 2.250% Convertible Notes using cash flows from our operations, along with capacity on our 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.
Previous wording
Our Board of Directors has authorized a $150.0 million share repurchase program. Through March 31, 2026, we repurchased a total of 0.9 million shares of common stock aggregating $37.4 million under this program. The program calls for shares to be purchased in the open market or in private transactions from time to time. 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.
Current wording
Our Board of Directors has authorized a $150.0 million share repurchase program. Through June 30, 2026, we repurchased a total of 1.0 million shares of common stock aggregating $43.7 million, 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. Subject 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.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
•a $5.1 million charge for the engagement of consultants to evaluate and propose improvements to our supply chain and manufacturing operations during the three months ended June 30, 2025; and
Current report — wording carried from elsewhere
•favorable foreign exchange rates and product mix.
Current report — wording carried from elsewhere
The 250 basis point increase in gross profit margins during the six months ended June 30, 2026 was primarily impacted by the following:
Current report — wording carried from elsewhere
•a $1.9 million benefit resulting from the termination of our distribution agreement with W.L. Gore & Associates, Inc. for the Gore® VIABIL® biliary stent during the six months ended June 30, 2026;
Current report — wording carried from elsewhere
•an $8.5 million charge for the engagement of consultants to evaluate and propose improvements to our supply chain and manufacturing operations during the six months ended June 30, 2025; and
Current report — wording carried from elsewhere
•favorable foreign exchange rates and product mix.
Current report — wording carried from elsewhere
•increased investment into our key growth drivers.
Current report — wording carried from elsewhere
The increase in selling and administrative expense as a percentage of sales was partially offset by:
Current report — wording carried from elsewhere
Research and development expense increased to $31.8 million in the six months ended June 30, 2026 as compared to $27.1 million in the six months ended June 30, 2025. As a percentage of net sales, research and development expense increased 70 basis points to 4.8% in the six months ended June 30, 2026 compared to 4.1% in the six months ended June 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 $2.3 million in costs to comply with the European Union's Medical Device Regulations in the six months ended June 30, 2026.
Current report — wording carried from elsewhere
Interest expense decreased to $14.9 million in the six months ended June 30, 2026 from $16.1 million in the six months ended June 30, 2025. The weighted average interest rates on our borrowings decreased to 2.80% in the six months ended June 30, 2026 as compared to 2.85% in the six months ended June 30, 2025. The change in interest expense in the six months ended June 30, 2026 was driven by lower weighted average borrowings outstanding and lower weighted average interest rates during the six months ended June 30, 2026.