Orthofix Medical Inc.

Good morning and welcome to today's All4Fix Medical Inc. 4th Quarter 2021 Earnings Conference Call. My name is Candice and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for question and answer at the end. If you would like to ask a question, please press start followed by one on your telephone keypad. I would now like to pass the conference call over to our host, Alexa Wachter, Senior Director of Investor Relations. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to the OrthoFix fourth quarter 2021 earnings call. Joining me on the call today are our President and Chief Executive Officer John Czerbosik and Chief Financial Officer Doug Rice. I'll start with a safe harbor statement and then pass it over to John. During the call, we will be making forward-looking statements that involve risks and uncertainties. All statements other than those historical facts are forward-looking statements including any earnings guidance we provide and any statements about our plans, beliefs, strategies, expectations, goals, or objectives. Investors are cautioned not to place undue reliance on such forward-looking statements as there is no assurance that the matter contained in such statements will occur. The forward-looking statements we will make on today's call are based on our beliefs and expectations as of today, February 25, 2022. We do not undertake any obligation to revise or update such forward-looking statements. Some factors that could cause actual results to be materially different from the forward-looking statements made by us on the call include the risk factors disclosed under the heading Risk Factors in our Form 10-K for the year ended December 31st, 2021, filed this morning, February 25th, 2022, as well as additional SEC filings we make in the future. If you need copies of these documents, please contact my office at OrthoFix in Louisville, Texas. In addition, on today's call, we will refer to various non-GAAP financial measures. We believe that in order to properly understand our short-term and long-term financial trends, investors may wish to review these matters as a supplement to the financial measures determined in accordance with US GAAP. Please refer to today's press release announcing our fourth quarter 2021 results for reconciliations of these non-GAAP financial measures to our US GAAP financial results. At this point, I will turn the call over to John.

Thank you, Alexa. Welcome, everyone, and thank you for joining our fourth quarter and full year 2021 results conference call. On today's call, I'll provide an update of our fourth quarter performance and review progress against our strategic initiatives before handing the call over to Doug, who will provide our financial update. I'll close with our perspective on the business in 2022 before opening lines for questions. Turning to our fourth quarter performance, we're very pleased with what we were able to accomplish and the momentum we will continue to build despite the prevailing macro landscape. In the quarter, we delivered a total revenue of $125 million, an increase of 6% on a reported basis, and 7% on a constant currency basis compared to the prior year quarter. This growth was seen across both franchises. Starting with the global spine business unit the spinal implants team executed another outstanding quarter with strong us motion preservation performance. and market share capture overall in our global orthopedics business unit we executed double digit growth year over year growth predominantly coming from our recovery among our international markets and share capture with them. On a sequential basis, we drove double-digit growth across all product categories compared to our third quarter of 2021. Now, shifting to the performance within each of our product categories, starting with our bone growth therapies, or BGT, sales for the quarter were $50 million, down 2% versus prior year due to the negative impact of COVID, including nursing shortages on complex spine procedures within the fourth quarter, partially offset by continued market share capture with Physiostem. We are happy to announce that in the fourth quarter, we reached the one million patient treated with our BGT portfolio. This major milestone demonstrates our committed leadership position in the bone growth stimulation, one that we look to continue to build upon in the future. Thank you to our BGT sales and corporate teams for your leadership and efforts in obtaining this remarkable patient-focused achievement. Moving to spinal implants, we are excited to report that global revenue was up 12%, representing the fourth quarter in a row of double-digit year-over-year growth. As a reminder, this category is made up of our spine fixation and motion preservation projects, with the majority of which are used in procedures that are typically considered elective. The primary drivers of growth were increasing U.S. market share capture with 12% growth in the revenue from both new distributors and over 20% increase in total surgeon users and a rebound in international market procedure volumes. Turning to our biologic portfolio, revenue was down 1% compared to the fourth quarter of 2020 due primarily to the negative impact of COVID on procedures and nursing shortages in the fourth quarter. offset somewhat by sales growth from our fiber fused allografts, which continue to gain momentum with our fiber fused strip introduction this past fiscal year. Lastly, moving to our global orthopedics business, which is primarily focused on limb reconstruction and deformity correction. Sales in the fourth quarter were up 21% over 2020. This increase is primarily a result of recovery of our international markets and share capture driven by the Fitbone Intermedullary Limb Lengthening System. During the fourth quarter, Fitbone generated over $2 million in sales, mainly in the European markets, bringing the full year revenue contribution from Fitbone to over $7 million. Thank you to our orthopedics team for their leadership and market success with Fitbone in its first full year of commercialization. Before discussing our key initiatives, I want to share how excited we are that Thomas West joined our Board of Directors in December. He brings over 30 years of global experience in the medical device industry to OrthFix. Tom is currently the President, CEO, and Director of Intersect ENT, where he's led the transformation of that business, resulting in a definitive agreement to be acquired by Medtronic. Prior to Intersect E&T, Tom served as the division president of the diagnostic solutions at Hologic after spending over 20 years at Johnson & Johnson. Tom's varied global experience will be an asset as we continue to scale the company, and we look forward to working with him on our board. Now, I would like to provide an overview of our progress we have made in the past year on key initiatives around product innovation, commercial channel, and operational execution. starting with product innovation differentiation. During 2021, we made solid progress developing and acquiring products and procedural solutions to address unmet needs in the marketplace and strengthen our product portfolio. We introduced key products in our spinal implant portfolio with the launch of Construx Mini and Forza 3D printed titanium inner bodies. While we are happy with the progress we've made in the year, We anticipate further growth acceleration of these products as they gain traction in the marketplace. We continue to also provide additional investments in the portfolio in both organic and inorganic technologies. Keeping a pipeline of new technology introductions is key to our strategy and will fuel future revenue growth. Within biologics, our goal is to have a comprehensive offering of products and solutions for surgeons to use in our spine and orthopedic procedures. We significantly expanded our portfolio during the year with introductions of eloquent structural allograft to pack fiber few strips and opus mg set. We also recently extended our exclusive partnership agreement with mtf by biologics for Trinity cellular based allograft lines through 2032. OrthoFix and MTF Biologics have a long history of bringing advanced biologic solutions to the market with over 350,000 patients treated and that number is growing. We anticipate this more robust portfolio will continue to help drive incremental pull through of our spine and orthopedics hardware products. Finally, within orthopedics, we focused on investments in limb reconstruction and pediatric deformity, which included upgrades to our existing products, as well as new products with incremental indications to increase our addressable markets. The strong performance of FitBone throughout the year following its global introduction in early 2021 is an example of the success we have been able to bring to this highly innovative technology to the market to address unmet needs. Turning to our second initiative, commercial channel development, for this initiative we are focused on our U.S. channels for biologics, spinal implants, orthopedics, and working to make these channels as dedicated and predictable as our current BGT channel. In Q4, our U.S. strategic channel partners, which we define as distributor partners that carry multiple orthopedic product categories, Like hardware and biologics generated over one third of our spinal implants biologics and orthopedics us revenue and has grown 5% when compared to the prior year quarter and 15% compared to the fourth quarter of 2019. We will continue to invest in the development and optimization of these channels to support our growth initiatives moving forward. Moving on to our third and final initiative, operational execution. Throughout 2021, we have managed through several supply chain challenges, including the microchip shortage, without missing a beat. We are very proud of how our team has managed through all of the macro challenges during the year and believe that we are well positioned to continue to execute all aspects of our global supply chain. I'm very proud of what our organization has been able to accomplish during 2021, which was, without a doubt, a challenging year. The momentum we were able to generate was a direct result of a successful execution of our strategy, and we look forward to continuing that momentum into 2022 and beyond. With that, I'll turn the call over to Doug to review our financial performance. Doug?