CONMED Corporation (NYSE:CNMD) Q4 2022 Earnings Call Transcript

Young Li: I appreciate the additional color. I guess one more just maybe your thoughts around salesforce hiring for ’23. How much of that was maybe a little bit impacted or delayed since you had to pivot and focus on the warehouse situation? I think you typically would have hired and trained them for 20 23 by now?

Curt Hartman: Yes, I’m going to separate the topic from the warehouse. We do typically do salesforce expansions in the first part of the New Year. But I’m going to go back to June, July as a leadership team, we took a very hard look at our overall headcount and looked at the recessionary elements in the global marketplace and said is now the time that we want to be expanding or do we want to perhaps move a little bit sideways and we made a decision then to prioritize our hiring to be more backfill, driven versus expansion driven. We want to understand more where the market may be going if there is recessionary headwinds in 2023. And so as that relates to the salesforce, we have done some expansion, but I would put it more on the minimal side relative to prior years. So salesforce expansion happened, but probably on the lower end of our typical range of expansion.

Young Li: Okay, understood. Thank you so much.

Operator: And thank you. And one moment for our next question. And our next question comes from Mike Matson from Needham. Your line is now open.

Mike Matson: Yes, thanks. Just following up on the questions on the salesforce. I understand the decision around not expanding it, but you know, just curious if you did anything to try to retain the reps after, kind of, a difficult fourth quarter. I imagine a lot of them probably didn’t end up hitting their quotas. So they — was there some kind of retention comp or something like that given wasn’t really something within their sort of control and is there any risk of sort of turnover happening there?

Curt Hartman: Great question, Mike. We — in the U.S. and outside the U.S., we do have pursuit of quota mentality. And we have the ability to track that with great regularity and great frequency and prior to the installation of the warehouse system, we knew where every individual reps stood and after the implementation and at the end of the year we knew where reps stood and we had a couple different set of metrics that we were tracking relative to that. And in spite of some of our issues, we had plenty of reps that made their original quota and we had plenty of reps that were at their quota before the installation. So we think we came up with a fair approach for our salesforces. And recognition of their accomplishments and we’ve actually at this point in time already had our sales meeting and I would say coming out of our sales meeting I was very bullish.

That was — we were completely transparent with our salesforce to understand that we couldn’t give them everything, because we had not yet had this call. But we felt like we were very transparent. We felt they left their very engaged across the portfolio of products. And that’s inclusive of the acquisition. It’s the first time we’ve had the In2Bones organization at a sales meeting and I had the opportunity to interact with our salesforce. We have every one of our orthopedics reps now trained and certified on Biorez, so we feel very good about how they left our sales meeting and how they’re feeling about this year. Can I guarantee you that we will not lose people? I can’t, but I feel we’ve done everything possible to retain our salesforce, our best and our brightest.

Operator: And thank you.

Curt Hartman: Thanks.