NuVasive, Inc.

Greetings and welcome to the Newvasive Inc. First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow our prepared remarks today. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference call over to your host, Matt Harbaugh, Chief Financial Officer. Thank you. You may begin.

Thank you. Welcome to Nuvasiv's first quarter 2021 earnings call. Joining me on the call is Nuvasiv's CEO, Chris Berry. Chris will provide opening remarks and then I will share additional details on our financial results before we open it up for Q&A. The company's earnings release, which we issued earlier this afternoon, has been filed on Form 8K with the Securities and Exchange Commission. We have also posted supplemental financial slides on our website and the investor relations section to accompany our discussion today. I would like to remind you the discussions during today's call will include forward-looking statements, which are based on current expectations and involve risks and uncertainties, assumptions, and other factors which, if they do not materialize or prove to be correct, could cause new basis results to differ materially from those expressed or implied by such forward-looking statements. In particular, there is significant uncertainty about the duration and impact of the COVID-19 pandemic on the company's business, operations, and financials. The COVID-19 pandemic continues to evolve, and it is important to note that our commentary reflects our best estimates as of today. Additional risks and uncertainties that may affect future results are described in Nuvasiv's news releases and periodic filings with the Securities and Exchange Commission. Nuvasiv assumes no obligation to update any forward-looking statements or information which speak as of their respective dates. This call will also include a discussion of several financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Many of the financial measures covered in today's call are on a non-GAAP basis unless noted otherwise. These measures include non-GAAP gross margin, selling general and administrative expenses, research and development expenses, operating margin, other income and expense, tax expense, net income, diluted earnings per share, free cash flow, and net sales reported on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures may be found in today's earnings release in the supplemental financial slides posted on our website, which are accessible on www.newvasive.com. in the investor relations section. With that, I'd like to turn the call over to Chris.

Thank you, Matt, and good afternoon, everyone. I hope you're well. Let me begin by thanking the incredible researchers, scientists, and healthcare workers for their tireless work on the COVID-19 vaccine and distribution. It's a true testament to the strength of our healthcare system, and I'm encouraged by the progress and its eventual impact on returning to normal business operations and daily lives. Earlier today, we reported first quarter 2021 financial results. On today's call, I will provide an overview of our first quarter 2021 performance, a review of our key innovation highlights, and thoughts on how our culture will support our continued success. After that, Matt will provide additional details on the quarter and his thoughts on the remainder of the year. Nuvasiv delivered first quarter 2021 net sales of $271.2 million, an increase of 4.4% on a reported basis or 3.1% on a constant currency basis compared to prior year. Throughout the quarter, there were continued signs of recovery in the global market as the impact of COVID-19 on elective surgeries lessened, specifically within our corresponding business across Europe and Asia Pacific. This was evident in our overall results, with strong international performance and U.S. procedural volumes improving month to month. I'm confident in the deliberate investments we're making in the right people, innovation, and organizational processes to globalize the business. In particular, U.S. funnel hardware delivered year-over-year growth, led by adoption of new product introductions in the interior portfolios, surge in demand for the invasive anterior cervical plate and growth in pediatric fixation with reliant 3d these results were offset by decline in our u.s surgical support business line where we experience pressure from procedural mix on our biologics and intraoperative neuromonitoring products i'm proud of our continued success in our global markets in q1 2021 we delivered low double-digit growth on a reported basis with the core spine business growing across all key regions. In particular, Asia Pacific continues to execute and deliver double-digit growth across all major geographies. Especially in Japan, we saw further adoption of cervical and anterior products tailored for the surgeons and patients in the market. While we are still managing through the pandemic, The signs of recovery we're seeing in elective surgical volumes and patient sentiment in pockets around the globe are promising. In order to fulfill our vision to change a patient's life every minute, we remain committed to investing in new innovation. Our year-over-year increase in R&D investment further supports our long-held position as the innovation leader in spine. This will result in new market-leading technologies across all procedural segments. unlocking further opportunities for multiple vectors of growth across the business. As we shared on our last earnings call, we closed the Simplify Medical acquisition in February, advancing our cervical portfolio with the most clinically effective technology in cervical total disc replacement. We received great response from our surgeon partners with this latest addition to our C360 portfolio, which now includes a comprehensive offering for both anterior and posterior cervical surgery. The Simplify Cervical Artificial Disc is designed to offer surgeons best-in-class capabilities, including radiologic design, which allows for enhanced visualization through MRI postoperatively compared to competitive devices, various anatomic disc heights, including the lowest available disc height in the market, and physiological motion designed to balance mobility and stability. Recently, the simplified disc received U.S. FDA approval for two-level cervical total disc replacement, making it only one of three devices approved for this procedure. In a two-level FDA investigational device exemption study, the simplified disc demonstrated clinical superiority at 24 months compared to ACDS. The device achieved the highest overall clinical success rate at both one and two levels compared to any other approved cervical disc. This is a milestone achievement. It demonstrates the value of our discipline investment strategy and better positions us to take share in cervical spine surgery, which represents an approximately $2.6 billion global opportunity. We're working through integration efforts and commercialization of the simplified disc as we invest in sales training, surgeon training, and manufacturing to bring this product to more surgeons and patients around the world. Anterior spine surgery is roughly a $900 million global opportunity. We are the leader in lateral and single position surgery and are well positioned to become number one in ALIF. The Modulus ALIF implant is the latest addition to our advanced material science portfolio, which features our Modulus 3D printed porous titanium technology and Cohere porous peak technology. This is designed for both supine ALIF and an invasive ex-ALIF procedure and rounds out our Modulus offering across all procedures. Throughout last quarter, We continue to see success with the clinical evaluation of modulus ALIF as we prepare for a full global commercial launch this summer. Surgeon feedback has been extremely positive, from the various implant sizes to the versatile instrumentation. And we look forward to bringing this technology to more patients. Posterior spine surgery is another important growth driver for our business, representing an estimated global opportunity of $1.6 billion. We see tremendous runway in the posterior segment with the comprehensive reline fixation system, further adoption of our mass T-lift and mass midline procedural offerings, and our advanced material science implant portfolio. In enabling technology, the launch preparations for the Pulse platform continue as we await FDA 510K clearance and CE mark approval prior to our anticipated summer release. We continue to build the commercial pipeline and have developed labs for surgeons to engage with our R&D teams on this differentiated platform. These labs give surgeons a hands-on opportunity to experience the power of pulses enhanced workflow in a simulated case. We are preparing to start clinical evaluations with surgeons and hospitals that specialize in broad surgical approaches as we bring the platform to market. Enabling technology remains a cornerstone of our long-term strategy as we continue to enhance the Pulse platform in future enabling technologies. There remains a substantial opportunity to integrate enabling technology with spine surgical procedures. With its ability to be utilized in 100% of spine cases, we believe Pulse can play a pivotal role in accelerating the procedural shift to less invasive surgery with navigation. Research and development continues on Pulse Robotics, which is one of many future applications supported by the Pulse platform to help drive better clinical outcomes in spine surgery. We had an increase in surgeons trained both virtually and at our state-of-the-art West Coast Experience Center in San Diego compared to Q1 of 2020. From courses on X360, X-Lift, and Mass T-Lift, we provide opportunities for seasoned surgeons along with residents and fellows, to learn the clinical and technical skills behind new invasive procedures. Construction on our East Coast Experience Center is ahead of schedule, and we look forward to the opening of this facility in Q3 2021. This new center will further our ability to train surgeons in the U.S., as well as other key global markets, on our less invasive surgical approaches integrated with enabling technology. It is our goal through our clinical, professional development programs, coupled with the premier training facilities at our experience centers to educate surgeons on new techniques to improve clinical, operational, and financial outcomes. Finally, I'm excited to see our employees rallying around our vision. The culture we're building requires a shared mindset where we collectively leverage our differences to best serve our surgeons and patients around the world. We continue to advance our diversity and inclusion initiatives. embed our core values, and improve organizational alignment, which will further our success. Recently, we received recognition from Forbes as one of America's best midsize employers, a reflection on the people and passion here at New Basis. I'm encouraged by the current global market recovery and the momentum we are seeing in our business. The company's continued commitment to R&D investment furthers our ability to deliver the strongest innovation pipeline in spine. Our long-term strategy provides opportunities for multiple vectors of growth, and we will continue to operate with discipline, further globalize the business, and proceduralize each spine segment with market-leading technology as we work to become the largest spine technology company in the world. I'll now turn the call over to Matt to discuss the company's financial results in more detail.