UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 

Form 11-K

 

 

 

ý   Annual Report Pursuant To Section 15(d) Of

The Securities Exchange Act of 1934

For the fiscal year ended December 31, 2012

 

OR

 

o   Transition Report Pursuant To Section 15(d) Of

The Securities Exchange Act of 1934

For the transition period from ________ to _________

 

 

Commission File Number 0-16093

 

 

(A) Full title of the plan and the address

of the plan, if different from that of

the issuer named below:

 

 

CONMED CORPORATION

Retirement Savings Plan

 

 

(B) Name of issuer of the securities held

pursuant to the plan and the address

of its principal executive office:

 

 

CONMED CORPORATION

525 French Road

Utica, New York 13502

 

 

 
 

CONMED Corporation

Retirement Savings Plan

Index to Financial Statements

December 31, 2012 and 2011

 

 

  Page
   
Report of Independent Registered Public Accounting Firm 1
   
Financial Statements:  
   
Statements of Net Assets Available for Benefits at December 31, 2012 and 2011 2
   
Statement of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2012 3
   
Notes to Financial Statements 4 - 12
   
Supplemental Schedule: *  
   
Schedule H, line 4i - Schedule of Assets (Held at End of Year) at December 31, 2012 13
   
Signatures 14
   

 

 

*All other schedules required by 29 CFR 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable.

 

 

 
 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Participants and Administrator of

CONMED Corporation Retirement Savings Plan

 

We have audited the accompanying statements of net assets available for benefits of CONMED Corporation Retirement Savings Plan as of December 31, 2012 and 2011, and the related statement of changes in net assets available for benefits for the year ended December 31, 2012. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of CONMED Corporation Retirement Savings Plan as of December 31, 2012 and 2011, and the changes in net assets available for benefits for the year ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2012, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

 

/s/Insero & Company CPAs, P.C.
Certified Public Accountants

Rochester, New York
June 18, 2013

 

 

1
Index

CONMED Corporation

Retirement Savings Plan

 

Statements of Net Assets Available for Benefits

December 31, 2012 and 2011

 

Assets  2012   2011 
Investments, at Fair Value          
Mutual Funds  $105,484,093   $87,923,347 
Common Collective Trust   11,643,643    11,453,366 
Common Stock   6,830,418    6,259,751 
Preferred Stock   217,584    95,137 
Corporate Bonds   152,892    161,750 
Money Market Funds   9,190,558    8,878,734 
Non-interest Bearing Cash       957 
           
Total Investments, at Fair Value   133,519,188    114,773,042 
           
Notes Receivable from Participants   4,261,606    3,785,901 
           
Other Receivable   117,576    4,067 
           
Total Assets   137,898,370    118,563,010 
           
           
Liabilities          
Excess Contributions Payable   43,755    96,439 
Other Liabilities   5,041    24,356 
           
Total Liabilities   48,796    120,795 
           
Net Assets Available for Benefits at Fair Value   137,849,574    118,442,215 
           
Adjustment from Fair Value to Contract Value for          
Interest in Common Collective Trust Relating to          
Fully Benefit-Responsive Investment Contracts   (339,973)   (282,484)
           
Net Assets Available for Benefits  $137,509,601   $118,159,731 
           

 

The accompanying notes are an integral part of the financial statements.
2
Index

CONMED Corporation

Retirement Savings Plan

 

Statement of Changes in Net Assets Available for Benefits

Year Ended December 31, 2012

 

Additions to net assets attributed to:     
Investment income:     
Interest and dividends  $3,221,992 
Net appreciation in fair value of investments   10,193,856 
Interest on notes receivable from participants   193,154 
Plan transfer in   865,062 
Contributions:     
Participants   10,840,093 
Employer   6,584,910 
      
Total additions   31,899,067 
      
Deductions from net assets attributed to:     
Administrative expenses   79,530 
Distributions to participants   12,469,667 
      
Total deductions   12,549,197 
      
Net Increase   19,349,870 
      
Net assets available for benefits at beginning of year   118,159,731 
      
Net assets available for benefits at end of year  $137,509,601 

 

 

The accompanying notes are an integral part of the financial statements.
3
Index

CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

 

1.Establishment and Description of Plan

Effective January 1992, CONMED Corporation (the "Company") established the CONMED Corporation Retirement Savings Plan (the "Plan"). The Plan is a defined contribution plan covering all employees of the Company and its subsidiaries who meet the service requirements set forth in the Plan document. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). The following brief description of the Plan is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information.

Administration of the Plan

The Company serves as Plan Administrator with full power, authority and responsibility to control and manage the operation and administration of the Plan.

Contributions

A participant can contribute 1 to 50 percent of his or her annual compensation, as defined, up to the maximum annual limitations as provided by the Internal Revenue Code (“IRC”). Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified plans. The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at 3% of eligible compensation and their contribution invested in a designated balanced fund until changed by the participant. The Company matches 100 percent of each participant's contribution up to a maximum of 7 percent of participant compensation. Forfeitures of terminated participants’ non-vested accounts are used to reduce employer contributions or to pay Plan expenses. Forfeitures reduced employer contributions by approximately $496,000 in 2012. At December 31, 2012 and 2011, forfeited non-vested accounts totaled $350 and $30,700, respectively.

At December 31, 2012 and 2011, the Plan has recorded a liability of $43,755 and $96,439, respectively, for amounts refundable by the Plan to participants for contributions made in excess of amounts allowed under the IRC.

Participant Accounts

Each participant's account is credited with the participant's contribution and allocation of (a) the Company's contribution, (b) Plan earnings and (c) administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account.

During 2012, CONMED Corporation purchased Viking Systems, Inc. Effective December 31, 2012, the Viking Systems Inc., 401(k) Plan was merged into the CONMED Corporation Retirement Savings Plan. The total transfer into the Plan was $865,062 as noted in the Statement of Changes in Net Assets Available for Benefits for the year ended December 31, 2012.

4
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

 

Vesting

Each participant is immediately vested in his or her voluntary contributions plus earnings thereon. A participant becomes fully vested in the remainder of his or her account upon the completion of five years of service.

Investment Options

Participants are allowed to invest in a variety of investment choices as more fully described in the Plan literature. Participants may change their investment options on a daily basis.

Notes Receivable from Participants

A participant may obtain a loan between $500 and $50,000, limited to 50 percent of his or her vested account balance. Each loan bears interest at prime plus 1 percent and is secured by the balance in the participant's account. Repayment is required over a period not to exceed five years or up to fifteen years where the loan is for the purchase of a primary residence. Loan repayments are allocated among the investment options consistent with the participant's contribution investment election.

Payment of Benefits

Participants or their beneficiaries are eligible to receive benefits under the Plan upon normal retirement, death, total and permanent disability or termination for any reason including those previously mentioned. Benefits are payable in accordance with the Plan agreement.

Plan Termination

While the Company anticipates and believes that the Plan will continue, it reserves the right to discontinue the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts.

2.Significant Accounting Policies

Basis of Accounting

The accounts of the Plan are maintained on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

Investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. The plan invests in investment contracts through a common collective trust. The Statements of Net Assets Available for Benefits present the fair value of the investment in the common collective trust as well as the adjustment of the investment in the common collective trust from fair value to contract value relating to the investment contracts. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.

5
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent notes receivable from participants are reclassified as distributions based upon the terms of the Plan document.

Investment Valuation and Income Recognition

Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Financial Accounting Standards Board (“FASB”) guidance defines fair value and establishes a framework for measuring fair value and related disclosure requirements. The FASB defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction value hierarchy which requires an entity to maximize the use of observable inputs when measuring fair value. The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

 

  Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

 

  Level 2 - Inputs to the valuation methodology include:

 

·Quoted prices for similar assets or liabilities in active markets;
·Quoted prices for identical or similar assets or liabilities in inactive markets;
·Inputs other than quoted prices that are observable for the asset or liability;
·Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

 

  Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

 

6
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

 

Following is a description of the valuation methodologies used for investments measured at fair value. There have been no changes in the methodologies used at December 31, 2012 and 2011.

Mutual Funds

These investments are valued using the Net Asset Value (“NAV”) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is a quoted price in an active market and classified within level 1 of the valuation hierarchy.

 

Common Collective Trust

 

These investments are valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares outstanding. The NAV is classified within level 2 of the valuation hierarchy because the NAV’s unit price is quoted on a private market that is not active; however, the unit price is based on underlying investments which are traded on an active market. The fair value of the underlying investments is obtained from information provided by the investment advisor using the audited financial statements of the common collective trust at year end.

 

Common Stock

 

Common stock is valued at the closing price reported on the common stock’s respective stock exchange and is classified within level 1 of the valuation hierarchy.

 

Preferred Stock

 

Preferred stock is valued at the closing price reported on the New York Stock Exchange and is classified within level 1 of the valuation hierarchy.

 

Corporate Bonds

 

Corporate Bonds are valued at the closing price reported on the active market on which the individual securities are traded and is classified within level 1 of the valuation hierarchy.

 

Money Market Funds

 

These investments are valued using $1 for the NAV. The money market funds are classified within level 2 of the valuation hierarchy.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

7
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

The following table sets forth by level, within the fair value hierarchy, the Plan's investments at fair value:

   Investments at Fair Value as of December 31, 2012 
   Level 1   Level 2   Total 
Mutual Funds:               
Balanced  $10,387,248   $   $10,387,248 
Communications   23,829        23,829 
Diversified Emerging Markets   443,790        443,790 
Fixed Income Funds   938,068        938,068 
High Yield Bond   18,647        18,647 
Intermediate Term Bond   11,299,486        11,299,486 
International   7,348,936        7,348,936 
Large Blend   11,146,647        11,146,647 
Large Growth   5,910,292        5,910,292 
Large Value   6,882,018        6,882,018 
Mid Cap Value   9,877        9,877 
Mid Cap Blend   8,957,241        8,957,241 
Mid Cap Growth   14,172,832        14,172,832 
Real Estate   15,592        15,592 
Sector Funds   12,356        12,356 
Small Blend   3,528,803        3,528,803 
Small Growth   31,050        31,050 
Small Value   9,657        9,657 
Target Date Funds   24,347,724        24,347,724 
Common Stock   6,830,418        6,830,418 
Preferred Stock   217,584        217,584 
Common Collective Trust (a)       11,643,643    11,643,643 
Corporate Bonds   152,892        152,892 
Money Market Funds (b)       9,190,558    9,190,558 
Total Investments at Fair Value  $112,684,987   $20,834,201   $133,519,188 

 

8
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

   Investments at Fair Value as of December 31, 2011 
   Level 1   Level 2   Total 
Mutual Funds:               
Balanced  $9,391,497   $   $9,391,497 
Communications   19,422        19,422 
Diversified Emerging Markets   37,701        37,701 
Fixed Income Funds   10,342,389        10,342,389 
High Yield Bond   2,852        2,852 
Intermediate Term Bond   130,298        130,298 
International   6,033,258        6,033,258 
Large Blend   9,230,756        9,230,756 
Large Growth   4,441,169        4,441,169 
Large Value   6,086,703        6,086,703 
Mid Cap Value   39,406        39,406 
Mid Cap Blend   10,636,876        10,636,876 
Mid Cap Growth   10,731,539        10,731,539 
Sector Funds   115,496        115,496 
Small Blend   3,067,313        3,067,313 
Target Date Funds   17,616,672        17,616,672 
Common Stock   6,259,751        6,259,751 
Preferred Stock   95,137        95,137 
Common Collective Trust (a)       11,453,366    11,453,366 
Corporate Bonds   161,750        161,750 
Money Market Funds (b)       8,878,734    8,878,734 
Total Investments at Fair Value  $94,439,985   $20,332,100   $114,772,085 

 

(a)Represents a Managed Income Portfolio consisting of a commingled group of assets managed by Fidelity Management Trust Company. The portfolio’s investment objective is to seek the preservation of capital and to provide a competitive level of income over time that is consistent with the preservation of capital.

 

(b)This category is comprised of the interest bearing cash and the Fidelity Retirement Money Market. The Fidelity Retirement Money Market fund seeks to obtain as high a level of current income as is consistent with the preservation of capital and liquidity.

 

Purchases and sales of securities are recorded on a trade-date basis. Dividends are recorded on the ex-dividend date. Interest is recorded on the accrual basis. Net appreciation includes the Plan's gains and losses on investments bought and sold as well as held during the year.

9
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

Contributions

Participant contributions and matching employer contributions are recorded in the period during which the Company makes payroll deductions from the participants’ earnings.

Administrative Expenses

The Plan’s administrative expenses are paid by either the Plan or the Plan’s Sponsor as defined in the Plan document.

Payment of Benefits

Benefit payments to participants are recorded upon distribution.

Use of Estimates

The preparation of the Plan’s financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

Risks and Uncertainties

The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with these investments, it is at least reasonably possible that changes in their values will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the Statements of Net Assets Available for Benefits.

3.Income Tax Status

The trust established under the Plan to hold the Plan’s assets is qualified pursuant to the appropriate section of the IRC, and, accordingly, the trust’s net investment income is exempt from income taxes. The Plan has obtained a favorable tax determination letter, dated January 11, 2013, from the Internal Revenue Service (“IRS”). The Plan was last amended in October 2012 and has not been amended since receiving the determination letter. The Plan Administrator and the Plan’s tax counsel believe that the Plan, as amended, is designed and is currently being operated in compliance with the applicable requirements of the IRC.

Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan Administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2012, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The Plan Administrator believes it is no longer subject to income tax examinations for years prior to 2009.

10
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

4.Investments

Fidelity Management Trust Company (“Fidelity”) is the trustee of the Plan. As trustee, Fidelity holds the Plan’s investment assets and executes investment transactions.

Investments representing 5 percent or more of the net assets available for benefits at December 31, 2012 and 2011 consist of the following:

 

   2012   2011 
   Current   Current 
   Value   Value 
         
Fidelity Managed Income          
Portfolio Fund  $11,643,643   $11,453,366 
Fidelity Puritan Fund   10,387,248    9,391,497 
Fidelity Investment Grade Bond Fund   9,337,067    8,103,126 
Fidelity Low-Priced Stock Fund   8,487,057    7,173,664 
Rainier Small/Mid Cap Fund   8,195,744    7,630,019 
Spartan 500 Index Fund   7,921,738    6,748,676 
Fidelity Retirement Money          
Market Fund   7,671,190    7,462,941 
Fidelity Diversified International Fund   6,911,557    N/A 

 

Net appreciation in the fair value of investments for the year ended December 31, 2012 is as follows:

 

Mutual funds  $9,594,916 
Common stocks   551,723 
Preferred stocks   36,075 
Corporate bonds   11,142 
   $10,193,856 

 

5.Transactions with Parties-in-Interest

As of December 31, 2012 and 2011, the Plan held certain securities issued by the Company as follow:

   December 31, 2012   December 31, 2011 
   Number   Fair   Number   Fair 
   of Shares   Value   of Shares   Value 
                 
CONMED Corporation                    
Common Stock   133,992   $3,745,076    143,361   $3,680,077 

 

In addition, certain assets of the Plan are invested in funds managed by Fidelity. Fidelity is the trustee of the Plan and, therefore, is considered to be a party-in-interest. Notes receivable from participants also qualify as party-in-interest transactions.

11
Index

 
CONMED Corporation
Retirement Savings Plan
Notes to Financial Statements
December 31, 2012 and 2011

6.Reconciliation of Financial Statements to Form 5500

The following is a reconciliation of the financial statements to the Form 5500:

 

   December 31,   December 31, 
   2012   2011 
Net Assets Available for Benefits Per the Financial Statements  $137,509,601   $118,159,731 
           
Adjustment from Contract Value to Fair Value for Interest in
  Common Collective Trust Relating to Fully Benefit-Responsive
  Investment Contracts
   339,973    282,484 
           
Net Assets Available for Benefits Per the Form 5500  $137,849,574   $118,442,215 
           
Net Increase in Net Assets Available for Benefits Per the Financial Statements  $19,349,870      
           
Change in Adjustment from Contract Value to Fair Value for
  Interest in Common Collective Trust Relating to Fully
  Benefit-Responsive Investment Contracts
   57,489      
           
Net Income Per the Form 5500  $19,407,359      

 

12
Index

 
CONMED Corporation
Retirement Savings Plan

Schedule H, line 4i - Sechedule of Assets (Held at End of Year)
December 31, 2012

   Current 
Identity of Issue/Description of Investment  Value 
     
     
Fidelity Freedom Funds**  $25,050,190 
Fidelity Managed Income Portfolio Fund**   11,643,643 
Fidelity Puritan Fund**   10,387,248 
Fidelity Investment Grade Bond Fund**   9,337,067 
Fidelity Low-Priced Stock Fund**   8,487,057 
Rainier Small/Mid Cap Fund   8,195,744 
Spartan 500 Index Fund**   7,921,738 
Fidelity Retirement Money Market Fund**   7,671,190 
Fidelity Diversified International Fund**   6,911,557 
Participant - Directed Brokerage Link Account   6,253,476 
Fidelity Capital Appreciation Fund**   5,708,770 
CONMED Corporation Common Stock **   3,745,076 
Fidelity Equity Income Fund**   3,640,221 
WFA Small Cap Value Fund   3,517,846 
T. Rowe Price Dividend Growth Fund   3,159,380 
MFS Value Fund R4   3,155,874 
Needham Growth Fund   3,042,380 
FAM Value Fund   2,706,793 
Vanguard Total Bond Market Index Signal Fund   1,696,778 
Spartan Extended Market Index Fund**   465,032 
WFA Emerging Markets Equity Fund   400,946 
Spartan Global ex U.S. Index Fund**   232,445 
Interest Bearing Cash Accounts   188,737 
Participant loans, interest rates from 4.25% to 10.5%
  and maturities from 2013 to 2027**
   4,261,606 
      
   $137,780,794 

 

**Denotes party-in-interest

 

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SIGNATURES

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this Annual Report to be signed by the undersigned hereunto duly authorized.

 

 

  CONMED CORPORATION
  Retirement Savings Plan
     
     
     
     
     
  By: /S/ Robert D. Shallish, Jr.
     
    Robert D. Shallish, Jr.
    Executive VP, Finance and
    Chief Financial Officer
    CONMED Corporation

 

 

 

Date: June 18, 2013

 

 

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