CONMED CorpCNMD
CONMED Corp Income Taxes Disclosure
Income Taxes
If the total unrecognized tax benefits of $0.5 million at December 31, 2025 were recognized, it would reduce our annual effective tax rate. The amount of interest accrued in 2023, 2024 and 2025 related to these unrecognized tax benefits was not material and is included in the provision for income taxes in the consolidated statements of comprehensive income.
The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following:
| 2025 | 2024 | 2023 | |||||||||||||||
Current tax expense: | |||||||||||||||||
| Federal | $ | 5,732 | $ | 4,084 | $ | 2,066 | |||||||||||
| State | 2,053 | 2,875 | 3,826 | ||||||||||||||
| Foreign | 12,754 | 11,445 | 9,777 | ||||||||||||||
| 20,539 | 18,404 | 15,669 | |||||||||||||||
| Deferred income tax expense (benefit): | |||||||||||||||||
| Federal | 3,966 | 10,351 | 2,826 | ||||||||||||||
| State | 953 | 681 | (893) | ||||||||||||||
| Foreign | (1,396) | 1,170 | (1,233) | ||||||||||||||
| 3,523 | 12,202 | 700 | |||||||||||||||
Provision for income taxes | $ | 24,062 | $ | 30,606 | $ | 16,369 | |||||||||||
A reconciliation between income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2025, 2024 and 2023 follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||
| Amount | Percent(c) | Amount | Percent(c) | Amount | Percent(c) | |||||||||||||||||||||
U.S. Federal Statutory Tax Rate | $ | 14,935 | 21.0 | % | $ | 34,236 | 21.0 | % | $ | 16,974 | 21.0 | % | ||||||||||||||
State and Local Income Taxes, Net of Federal Income Tax Effect(a) | 2,571 | 3.6 | 2,743 | 1.7 | 2,160 | 2.7 | ||||||||||||||||||||
Foreign Tax Effects | 3,204 | 4.5 | 3,234 | 2.0 | 3,389 | 4.2 | ||||||||||||||||||||
Effect of Cross-Border Tax Laws | (1,743) | (2.5) | (2,822) | (1.7) | (2,323) | (2.9) | ||||||||||||||||||||
Tax Credits | (1,886) | (2.7) | (2,413) | (1.5) | (2,440) | (3.0) | ||||||||||||||||||||
Changes in Valuation Allowances | — | — | — | — | (424) | (0.5) | ||||||||||||||||||||
Nontaxable or Nondeductible Items: | ||||||||||||||||||||||||||
Contingent consideration | 2,370 | 3.3 | (7,526) | (4.6) | (1,430) | (1.8) | ||||||||||||||||||||
Other(b) | 5,840 | 8.2 | 3,321 | 2.0 | 1,080 | 1.3 | ||||||||||||||||||||
Changes in Unrecognized Tax Benefits | (684) | (1.0) | (350) | (0.2) | — | — | ||||||||||||||||||||
Other Adjustments | (545) | (0.8) | 183 | 0.1 | (617) | (0.8) | ||||||||||||||||||||
Total | $ | 24,062 | 33.8 | % | $ | 30,606 | 18.8 | % | $ | 16,369 | 20.3 | % | ||||||||||||||
(a) Florida, Illinois, Texas, & New Jersey made up greater than 50 percent of the tax effect in the “State and Local Income Taxes” category. (b) Other includes compensation expense and stock-based compensation costs related to advisory services provided by the former Chief Executive Officer in 2025 that are not deductible for income tax purposes. (c) The components of the income tax rate reconciliation may not sum to the total effective income tax rate due to rounding. | ||||||||||||||||||||||||||
The Company has elected to account for Global Intangible Low Tax Income ("GILTI") using the period cost method. The net impact of GILTI including the allowable GILTI deduction is presented in the rate reconciliation as a component of “Effect of Cross-Border Tax Laws”.
The tax effects of the significant temporary differences which comprise the deferred income tax assets and liabilities at December 31, 2025 and 2024 are as follows:
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Inventory | $ | 8,392 | $ | 5,771 | |||||||
| Net operating losses | 840 | 1,700 | |||||||||
| Capitalized research and development | 22,782 | 20,615 | |||||||||
| Deferred compensation | 2,993 | 3,305 | |||||||||
| Accounts receivable | 3,414 | 3,796 | |||||||||
| Compensation and benefits | 16,168 | 14,754 | |||||||||
| Accrued pension | 1,363 | 1,556 | |||||||||
| Research and development credit | — | 2,972 | |||||||||
| Interest limitation | 27,319 | 26,234 | |||||||||
| Convertible notes hedge | 13,072 | 21,205 | |||||||||
Depreciation | 1,108 | — | |||||||||
| Lease liabilities | 9,495 | 7,772 | |||||||||
| Other | 6,716 | 4,482 | |||||||||
| 113,662 | 114,162 | ||||||||||
| Liabilities: | |||||||||||
| Goodwill and intangible assets | 157,080 | 155,931 | |||||||||
| Depreciation | — | 1,120 | |||||||||
| State taxes | 11,639 | 10,670 | |||||||||
| Unremitted foreign earnings | 2,110 | 1,893 | |||||||||
| Lease right-of-use assets | 9,054 | 7,555 | |||||||||
| 179,883 | 177,169 | ||||||||||
| Net liability | $ | (66,221) | $ | (63,007) | |||||||
Income before income taxes consists of the following U.S. and foreign income:
| 2025 | 2024 | 2023 | |||||||||||||||
U.S. income | $ | 34,063 | $ | 124,401 | $ | 51,568 | |||||||||||
| Foreign income | 37,054 | 38,628 | 29,260 | ||||||||||||||
Total income | $ | 71,117 | $ | 163,029 | $ | 80,828 | |||||||||||
As of December 31, 2025, the amount of federal net operating loss carryforward was $0.8 million and begins to expire in 2027. As of December 31, 2025, the federal research credit carryforward has been fully utilized.
We have accrued tax liabilities related to the amount of unremitted earnings at December 31, 2017 and certain subsequent unremitted earnings as these are not considered permanently reinvested. Deferred taxes have not been accrued on unremitted earnings subsequent to December 31, 2017 that are considered permanently reinvested. The amount of such untaxed foreign earnings for the periods occurring after December 2017 totaled $40.2 million. If we were to repatriate these funds, we would be required to accrue and pay taxes on such amounts. The Company has estimated foreign withholding taxes of $1.3 million would be due if these earnings were repatriated.
Supplemental cash flow information related to income taxes for the years ended December 31, was as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
Cash paid for income taxes, net of refunds: | |||||||||||||||||
Federal | $ | 6,761 | $ | 3,600 | $ | 1,670 | |||||||||||
State | 2,593 | 3,843 | 2,053 | ||||||||||||||
| Foreign | 11,624 | 9,117 | 15,728 | ||||||||||||||
Total | $ | 20,978 | $ | 16,560 | $ | 19,451 | |||||||||||
Foreign income taxes paid during 2023 included $8.0 million of net payments in France.
The Company is subject to taxation in the United States and various states and foreign jurisdictions. Taxing authority examinations can involve complex issues and may require an extended period of time to resolve. Our federal income tax returns have been examined by the Internal Revenue Service (“IRS”) for calendar years ending through 2023.
We recognize tax liabilities in accordance with the provisions for accounting for uncertainty in income taxes. Such guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.
The following table summarizes the activity related to our unrecognized tax benefits for the years ending December 31,:
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance as of January 1, | $ | 1,154 | $ | 1,704 | $ | 200 | |||||||||||
Increases for positions taken in prior periods | — | — | 1,504 | ||||||||||||||
| Decreases in unrecorded tax positions related to settlement with the taxing authorities | (684) | (350) | — | ||||||||||||||
| Decreases in unrecorded tax positions related to lapse of statute of limitations | — | (200) | — | ||||||||||||||
| Balance as of December 31, | $ | 470 | $ | 1,154 | $ | 1,704 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 25, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 23, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.