Good morning. This is Bob Yedid from ICR. Before we begin, let me remind you that during this call CONMED’s management will be making comments and statements regarding their financial outlook, which represent forward-looking statements that involve risks and uncertainties as those terms are defined under the federal securities law. The company’s actual results may differ materially from our current expectations. Please refer to the risk factors and other cautionary factors in today’s press release, as well as our SEC filings, for more details on factors that may cause actual results to differ materially. You will also hear management refer to certain non-GAAP adjusted measurements during this discussion. While these figures are not a substitute for GAAP measurements, the company’s management uses these figures to aid in monitoring the company’s ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis, and for benchmarking against other medical technology companies. Adjusted net income and adjusted earnings per share measure the income of the company, excluding credits or charges that are considered by management to be unusual or outside of the normal ongoing operations of the company. These unusual items are specified in the reconciliation in the press release issued this morning. With these required announcements completed, I will call the -- I will turn the call over to Joe Corasanti, CONMED’s Chief Executive Officer and President, for his remarks. Joe?

Bob, thank you very much. Good morning, everyone. I am pleased to report that we completed the third quarter of 2012 with solid operating results. The quarter’s highlights include sales increased 5.3% to $181.9 million over sales in the third quarter of 2011 and came in within our guidance for the quarter. Adjusted earnings for the quarter were $0.43 per share and grew a robust 30% over the prior year period. Please note that we were able to resolve outstanding tax matters in a favorable way for the company, resulting in a lower than expected tax rate for the quarter. The favorable income tax benefit helped CONMED’s bottom line by $1.5 million or about $0.05 per share. Even removing this benefit, we were able to deliver results consistent with our previous guidance for the quarter of $0.38 to $0.42. On a GAAP basis, diluted EPS was $0.32, an increase of 10.3% over the third quarter of 2011. Adjusted operating margin expanded to 10.2% of sales, an increase of 50 basis points over the third quarter of 2011, as we continue to execute on our program of plant consolidation and cost reduction across our business units. Adjusted EBITDA margin expanded to 16.6%, an increase of 150 basis points over the prior year’s third quarter. Cash provided from operating activities was also strong in the quarter, amounting to $28 million with free cash flow of $23.6 million. Our Board of Directors declared a quarterly cash dividend of $0.15 per share, which reflects the dividend first instituted by the Board of Directors earlier this year. Operationally, the third quarter performance reflected steady execution and resulted in sales that were within our previously guided range. Gross and operating margins increased nicely and we delivered earnings per share that were in line with our expectations…

Thanks very much, Joe, and good morning, everyone. As Joe mentioned, the third quarter continued the strong earnings and cash flow trends seen in the first half of the year. In the September 2012 quarter, sales grew 5.3%, 6% on a constant currency basis, while adjusted earnings per share increased a robust 30.3%. For the first 9 months of 2012, adjusted earnings per share grew 21.9% on sales growth of 4.9%. That’s 5.1% on a constant currency basis. The third quarter sales totaled $181.9 million compared to sales of $172.8 million in the third quarter last year. Excluding the $7.1 million of revenues from MTF and Viking, organic sales increased by 1.2% due to the continued solid increases in single-use products, along with a more modest decline in capital equipment sales in Q3 than the first half of 2012. By geography, sales in the United States grew 4.8% on a reported basis, but excluding MTF, organic U.S. sales declined 3.3% primarily due to lower capital equipment sales. As a reminder, almost all of the MTF revenue at this point is generated in the United States. CONMED’s international sales grew 5.7%. Almost all of that was organic, and we are pleased with that solid performance. International sales continue to make up about 1/2 of our business. As we anticipated, CONMED’s adjusted gross margin expanded to 54.8%, a 150-point -- basis point improvement over that of the third quarter last year, primarily due to the MTF partnership and the improvement in manufacturing operations that we discussed on the last 2 conference calls. Our operations group has been focused on reducing inventory levels and improving manufacturing efficiency. Selling, general and administrative expense increased to $74.1 million compared to $68.4 million in the third quarter last year. As a percentage of sales, SG&A was…

Thanks, Rob. Before we get to the questions, I just wanted to make a quick comment about our strategy, our long-term goal and our track record of growing earnings at CONMED Corporation. I’d like to remind everyone that CONMED was able to show EPS growth of 15% or greater in 2010, 2011 and the first 3 quarters of 2012 on low single-digit sales growth. The impact of the medical device tax and changes in foreign exchange rates are difficult for us to overcome in 2013. However, looking forward to 2014, we believe that with modest sales growth and neutral foreign exchange, we expect to get back to our long-term goal of growing EPS 15% annually, as we did in 2010, 2011 and the first 3 quarters of 2012. So at this point, I’d like to open up the call for questions.

[Operator Instructions] Your first question comes from the line of Dalton Chandler with Needham & Co.

First, I just want to make sure I got this right. Rob, did you say that the contribution -- the revenue contribution from MTF in the quarter was $7.1 million?

Well, the total revenue -- I’ll say it this way, Dalton. The total new revenue from acquisitions and our partnership was $7.1 million. About $900,000 of that $7.1 million was with regard to Viking. So then it would mean that the MTF revenue was $6.2 million.

Okay. And so that would have been down about $1 million quarter-over-quarter. Is that just seasonality?

That’s correct. We think that there is seasonality in their business just as we see it in the sale of medical devices. Surgeons go on vacation. Patients want to go on vacation. There is just a little less utilization in the summer months.

Okay. And so what would you expect the fourth quarter to look like?

Well, I think it would be more in line with what we saw in the first couple of quarters of this year, somewhere in the $7 million range, $7 million to $8 million.

Okay. And then just taking a look at your guidance, could you talk about what the underlying assumption is there for capital equipment versus single-use? I am talking about 2013 here.

Sure. So for 2013, I think we will see capital equipment remain flat with, obviously, growth coming from our single-use products in the U.S. and outside of the United States.

Okay. And just one last one on the calculation of your pro forma EPS. Did you back out that $.05 tax benefit from that as well, or is that still in there?

Well, that’s still in there. We think that’s appropriate to include in the adjusted numbers.

Your next question comes from the line of Matt Miksic with Piper Jaffray.

So wanted to follow-up on -- you mentioned the trends in your capital business were good, flat but relative to expectations and trends going into the quarter, certainly better than expected. Can you talk a little bit about what's different, what changed maybe from the second quarter to the third quarter? I recall that your outlook was not at all that optimistic, Rob, heading into the third quarter. What changed and do you think it’s sustainable here heading into the year end? And then I have a couple of follow-ups.

Yes, what capital -- I mean, the trend actually hasn’t changed with Electrosurgery capital. Generators remain down significantly. Unfortunately, the change really was an improvement in Powered Instrument sales and video, and I think it’s difficult for us to account for the improvement in Q3 versus Q1 and Q2. It is just, I think, the nature of our capital business. It’s choppy, and we’ve talked about that in the past.

So if I interpret your comments, it’s that the order rates were difficult in Q2 and they got better in Q3, and not an awful lot of visibility as to why that happened with your customers.

Yes. I mean, that’s really the case for power, anyway. It’s pretty choppy. Video systems seem to have stabilized. They were down significantly on the first half of last year and they have seen -- the declines moderated there and it’s -- I mean, we’re just seeing a slower decline there. But electrosurgical generators are very difficult for us to predict. We’ve got -- last year, we had growth in electrosurgical generators in the first half of 2011 and then now, for 3 quarters in 2012, we’re down 20% in each quarter. So we’re seeing a little bit of difficulty in Electrosurgery. A lot of it's coming from our O.U.S. sales of generators, and that leads us to believe that it’s related mostly to the tenders that we see, there being less tenders outside the U.S., and then there's some [indiscernible].

Okay. But the change, the pickup in powered instruments, is predominately a U.S. -- strapped [ph] into Q2 to Q3?

Well, powered instruments in the second quarter were $16 million of sales compared to $18.5 million of sales a year prior. So it’s a $2 million change. In this third quarter, powered instruments were $16.4 million compared to $16.1 million, so a slight increase compared to the second quarter last year. But on a sequential basis, really, we had the same amount of hand piece sales and powered instruments in both the second and third quarters of this year. I think the difference, Matt, frankly, is a more difficult comp in the second quarter of 2011, when we just had some good sales in that particular period. So I -- the percentages sound big, but in actual dollar terms, a few big orders can change the whole outlook here fairly quickly. I think the trend is pretty much the same. Capital is more or less flat, continues to be flat, and a percentage point here or there probably doesn’t indicate there is any real change one way or the other.

And heading into Q4, sort of your best guess is sort of steady, or should we see a seasonal pickup, as we often do in Q4, for capital?

Yes, we would expect a pickup in the fourth quarter, as we always do. There is just more activity in the fourth quarter and that tends to help us.

Okay. And then a follow-up on just your procedure performance excluding MTF and some of the other -- I guess, yes, just excluding MTF, really. Just trying to get a sense of your base Sports Medicine business in particular. I guess it was sort of roughly in line with our number, a number you sound like you are pleased with. Would you look at the trends and say, "This looks like normal seasonality to me. This looks like secular kind of improvements need or the stability." How would you characterize what you are seeing just in terms of historical performance of the market or what you view as market trend?

Well, I think that pretty much we were in line with our thoughts, with our expectations on single-use products, Matt. I think that where we may have been a little disappointed is with European Sports Medicine sales. I think that there seems to be, in the third quarter, a little bit more of a deceleration in business in Europe than we saw in the first 6 months of the year. And we’ll see how that plays out here in the next -- in this quarter, but it seemed to us that Europe was under a little bit more pressure in the third quarter than what we saw earlier.

Okay. And then if I could, just one clarification on your comments on Altrus. Joe, you mentioned -- I think I understand you are setting the tone for the rest of the year based on the run rate you’ve seen so far, but is the manufacturing issue -- and supply, I guess, yield issue that you had earlier in the year, is that resolved or is that something you carried over into third quarter? In other words, is the manufacturing challenges still in play, or is that behind you and now it’s just a matter of getting the sales force to sort of have more confidence and getting the product out there?

Yes, I think -- well, for the entirety of the third quarter, we did not have supply issues or yield issues, and product performance has been very, very good, and I think that the reason why we didn’t see an improvement in Q3 versus Q2 is because we had to pretty much reset everything with the sales force, get the sales force recalibrated, essentially, in many instances, retrained. And we have an ongoing effort right now to upgrade the sales force. We’ve done -- we did a lot of that in Q3. So we’ve got some new faces in the sales force. And I think we’re just resetting it all right now. Looking forward, we know what we have to do. We’ve got a great product that performs really better than the competition, and we just started with O.U.S. sales that will help us pick things up a bit here. And I think as we reach a certain level of penetration, we are going to have to start now to pay attention to GPO contracts. And let me explain that just a little bit further. I think it’s pretty easy for us to get in and penetrate a hospital account with 1 or 2 surgeons and it kind of flies under the radar screen, but once you get beyond that level, the administration starts to take notice and asks if you have contracts. So I think that’s our next item of business, to go out and get the Altrus product put on a few contracts so we don’t run into any road blocks as we further penetrate into some of these hospital accounts. So we’re very well positioned to start growing this. We’re disappointed that we had a -- that the product essentially has stalled Q3 versus Q2, especially when you have a product that we believe is superior to the competition. You kind of expect it to just start flying and taking off quickly. It hasn’t happened, but we do believe we'll have very good penetration into this very large and growing market.

Your next question comes from the line of Jeffrey Cohen with Ladenburg.

I appreciate the previous discussion on Altrus. Could you maybe talk about the arthroscopic market as far as some of your sales in the single-use area and talk about how you're seeing the macro environment for the market, as well as maybe talk about your products and if you are picking up share and what you are seeing out there in the general landscape?

Well, in arthroscopy, we are doing very well in the Shoulder segment. The SRS system continues to do well. The Y-Knot that was launched at the midpoint of the year -- or at the end of Q1 is doing very well, and we expect that segment to continue to do well. We’ve got new products that will be coming out, as we do every year, and we would expect to continue to do well in Sports Medicine arthroscopy. That’s a growth area for the company.

Okay. And could you talk about how are you going to be dealing with the excise tax as far as your income statement for 2013? Will you be breaking that out as a separate item next to tax rates, or to be included in your tax rate for the quarters?

Well, Jeff, what we plan on doing is breaking that out as a separate line item in the P&L below operating income. So it will be in the same general area as interest expense and before pre-tax income. I don’t know if the FASB is going to be issuing any pronouncement with regard to where this should be recorded, so I don’t know if anybody has any real guidance on this at this point. I know no one does, as a matter of fact. So I think it will be up to individual companies to decide where they put it. But that’s our present intention, separate line item.

Okay. And one last one for you, in the -- are you seeing more or less or about the same kind of deals out there as far as acquisition opportunities or partnership opportunities? Are you seeing the landscape changing at all throughout the past few months?

I think it’s a -- we are seeing about the same amount of opportunities and we're evaluating some at about the same pace. And they come in all different types of flavors, small technology plays and maybe some larger type of opportunities. But if you are looking for an answer about a change or an increased frequency, we are not seeing anything like that.

Your next question comes from the line of James Sidoti with Sidoti & Company.

So just a follow-up on the last question. It’s been several years since you guys did some deals, and then you did 2 in 2012, the MTF and the Viking deal. Is there a change within the company with regard to acquisitions, or you more open to them at this point as a use of your cash flow?

Actually, no, the strategy has been the same. We’ve been looking at acquisitions. We did -- we essentially kind of had a, I guess, maybe a bit of a dry spell between 2004 and 2012. But we were looking and we participated in some processes, and we just weren’t able to close or we couldn’t find exactly what we were looking for. I mean, our strategy is pretty specific. We’re looking for tuck-in acquisitions that can be breakeven or accretive in the first 12 months. So I guess we had been limiting ourselves. Now it just turns out that, in 2012, things that we had been working on in probably 2010 and ‘11 came to fruition in 2012. So I think our -- and going forward, our strategy will remain the same.

All right. But there is no reason to think that because you did 2 in 2012 that you’re going to be on a 1 or 2 a year kind of pace at this point?

No, we’re still -- it’s just -- it's opportunistic. There is no way to, I think, for anybody to predict what we’re going to do in terms of acquisitions.

All right. And Rob, on the device tax, have you heard any inklings that maybe this gets delayed 6 months until the regulations get finalized, or do you expect this to kick in on January 1?

Well, our expectation is it’s still going to kick in on January 1. Certainly, there is a lot of discussion among a lot of people about what could happen. But you are absolutely right, the regulations are not -- have not been issued by the IRS at this point. Our information is that it won’t be until mid-November before the IRS issues those regulations. Congress could act to remove the tax before the end of the year or early next year. There is a lot still up in the air, but we’re planning that we’re going to have pay that medical device tax.

Okay. And then as far as consolidation is going, you do have the 2 plants that you are consolidating at this point. Is this it for a while, or will there be additional consolidations in ‘13?

Well, I think that our operations group has a lot on their plate. So for now, this is what they’re going to be working on.

Okay. And can you just remind me, what was made in Finland?

Finland came to us through an acquisition of Bionics in 2004 -- 2003. And they had a plant in Finland that manufactured bioabsorbable suture anchors. And so we’ve been manufacturing a good deal of our bioabsorbable shoulder anchors in that plant in Finland. So that’s going to be moving here to our U.S. plants.

And will you make those yourself or will you outsource those?

We’ll make them ourselves.

[Operator Instructions] Your next question comes from the line of Bob Goldman with C.L. King.

A couple of questions. First, Rob, on the operating margin guidance for 2013, I thought you said it would be less than the 100 basis points that you would normally target in part because of the medical device excise tax, but the medical device excise tax, by your accounting, is going to be under the operating profit line. Could you help me to reconcile that?

Yes, I may have misspoken there, Bob. You are right. The medical device excise tax wouldn’t affect that 50 basis point improvement that we are expecting, so it’s really foreign currency as much as anything and the weaker outlook that we have relative to sales.

Okay. And then you spoke generally about Y-Knot and arthroscopy, but you’ve given us some numbers on the Sequent for the Meniscal Repair Device. Can you give us some sense of how that’s doing and what your sales expectations for that are for the year? And would you be able to put any sort of sales expectation dollar number on Y-Knot for the year?

Well, the Sequent device is doing well. As you know, we now have a 2-stitch and a 3-stitch to complement what we originally launched, which was the 7-stitch. And at this point, I think we’re going to start getting away from specific sales forecasts on a lot of these products. I think, just generally speaking, we expect growth, organic growth from new product sales, and we could tell you that they will be led by certain focus products, and Sequent and Y-Knot are those focused products, really, along with SRS, the Shoulder Restoration System, in the Sports Medicine franchise. I think, because we’ve gone out with discussions about Altrus and sales forecasts, we’ll probably continue to do that for Altrus. But I think, at this point, we’re probably going to get away from that with some of these other smaller products. It’s interesting, I mean, I’m saying smaller products. SRS is -- I mean, the last time we talked about it, it’s about a $30 million product line. It’s done extremely well for us and it happened in just a little over about 1 year since the launch. So I think that’s how we’ll start reporting some of the new product launches here at the company.

All right. Then, Joe, in prior public commentary as far as your use of cash, I think you’d outlined it to be acquisition, dividends, share repurchases, in that order. But it sure sounds to me, today, it’s sort of dividend, share repurchase, acquisitions, in that order. Can you speak to that?

Well, Bob, certainly, dividends would be the first on the list, because once we have gone down this path to pay a dividend, it’s certainly our intention to continue to pay a dividend, so that would be top on the list. With regard to acquisitions and share repurchases, we think that both are important for the return of value to shareholders. I don’t know if I can rank one over the other. Certainly, we have to do each of those knowing the constraints that we have on our business, either as a result of our current cash flow or what the financing arrangements might be with regard to both of those items. So I don’t know if I can rank one over the other. Certainly, we think both of those activities would be beneficial to our company and to shareholders.

And then, Rob, finally, and on the share repurchases, I think your press release says -- I don’t have it in front of me, but that you are going to repurchase about $50 million worth of shares in the 6 months to 9 months?

Yes.

How does that occur? Will it be just sort of a regular repurchase program, or will it be opportunistic based on price? And within that timeframe of 6 to 9 months, will we enjoy any of that in 2012?

Well, I think that we’ll be opportunistic, but also I believe that we will have a somewhat of a regular program to repurchase shares. So to the extent that we can be more opportunistic, that’s fine, but I tend to think that over the next several months, even in the short-term here, that we would have a more regular program of repurchasing shares. There are certain limits that the SEC has on us in terms of how many shares we can repurchase on a given day. So we are somewhat limited by that. But I do think that we will have some of that repurchasing going on here in the fourth quarter.

I show no further questions in the queue.

Okay. There being no further questions, I would like to thank everyone for participating in CONMED Corporation’s third quarter earnings conference call, and we look forward to talking to you for the year-end and fourth quarter conference call in February of 2013. Thank you very much.

This concludes the presentation. Thank you for your participation and you may all now disconnect. Good day.