Orthofix Medical Inc.

Good morning. My name is Gavin and I will be your conference operator today. At this time, I would like to welcome everyone to the All36 Medical Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. Alex Werthe may now begin your conference.

Thank you, operator and good morning everyone welcome to the ortho fix third quarter 2022 earnings call. Joining me on the call today are our President and Chief Executive Officer john for both big and she financial officer Doug right. i'll start with a safe harbor statement and then pass it over to john during this call, we will be making forward looking statements that involve risks and uncertainties. All statements other than those of 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, November 3, 2022. We do not take 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, and Form 10-Q for the quarter ended September 30th, 2022, filed this morning, November 3rd, 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 U.S. GAAP. Please refer to today's press release announcing our third quarter 2022 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 third quarter 2022 results conference call. On today's call, I will provide an update of our third quarter performance, review progress against our strategic initiatives, and discuss the planned merger with C Spine before handing the call over to Doug, who will provide our financial update. I will close the call with our perspectives on the balance of 2022 and near-term growth drivers before I open the line for questions. Starting with our third quarter performance, as announced in October, total revenue for the quarter was $114 million, increasing 1% over 2021 on a reported basis and 5% on a constant currency basis. Our strategic investments in our commercial channel and innovation pipeline are paying off as global orthopedics, biologics, and bone growth therapies continue their strong performance despite lingering macro headwinds. Specific to innovation, we are encouraged by the several new products we introduced this year. DSL stem bone healing therapy, TruLock Evo, Galaxy Gemini, our next generation pin-to-bar system, and the Virtuos Lyograph have been very well received in the market. Turning to the performance of each of our product categories, starting with bone growth therapies or BGT, sales for the quarter were 46.5 million, up 3% on both a reported and constant currency basis compared to third quarter of 2021. Growth was driven by higher order volumes as well as revenue from a sales down, which initiated its launch in the second quarter of this year. Moving to spinal implants, which includes both spine fixation and motion preservation, revenue was down approximately 8% on a reported basis and 7% on a constant currency basis compared to the third quarter of 2021. The decline was due to a change in the procedure mix in the U.S., large international orders in 2021 that did not reoccur, as well as global competitive headwinds in the motion preservation area. However, motion preservation exited the corner with year-over-year growth in September in the US. Turning to our biologic portfolio, revenue was up 8% on a reported and constant currency basis as compared to 2021. The successful launch of new products like FiberFuse and Virtuos contributed to the strong performance. Lastly, in our global orthopedics business, revenue for the third quarter was up 6% on a reported basis and 19% on a constant currency basis over 2021. Double-digit growth at constant currency in both our US and international businesses was driven by strategic investments in our commercial channels and momentum of new product introductions. Our orthopedics business is performing well, and five of the last six quarters have shown double-digit growth. Now, moving on to our strategic initiatives let's start with product innovation and differentiation. In the third quarter we continued our rollout of virtuals live graph shelf stable complete autograph substitute certain feedback has been positive and we continue to work on getting virtuous added to our existing and new accounts. We also saw initial cases of legacy. Our new demineralized bone matrix produced in our partnership with MTF Biologics. Both Virtuos and Legacy DBM are examples of our continued commitment to expand biologic offerings and strengthen our partnership with MTF Biologics to meet the needs of surgeons and their patients. Our cell stem bone growth therapy is gaining traction and we are seeing high rate of physician interest with access to new prescribing doctors. early adoption has has us tracking ahead of plan and we are encouraged by these results we have added sales reps and sales management to grow our fracture channel with both fresh and non-needing fracture indications with addition of payer coverage of over 40 million lives starting october 1st we expect our positive trajectory to continue I would also like to give a quick update on Orthodex's participation at NASS just last month in Chicago. First off, we sure created a buzz at the conference with the merger announcements with C-Spine. We are very encouraged by the positive surgeon, distributor channel, and future partner conversations. They see the value of the combined portfolio and are excited about what lies ahead and the opportunities for the new organization's position for both growth and profitability. Turning to a few key events at the conference or the fix hosted a successful clinical symposium to discuss long term clinical evidence. Radiographic graphic classification and clinical management of cervical disc arthroplasty. We're pleased to be leading this important effort to gather surgeon and research leaders from around the world to develop and share best practices. This will provide clinical experiences and data to support market expansion of cervical motion preservation in our technology-leading M6 cervical disc. On an exciting note, we received a 2020 Spine Technology Award from Orthopedics This Week, the most widely read publication in the orthopedics industry for the Virtuos Lyograph. Virtuos is the first of its kind shell-stable and complete autograph substitute for spine and orthopedic procedures, which was launched in partnership with MTF Biologics late in the second quarter of this year. Lastly, at a celebration held at our booth, we're able to commemorate with CG Bio our new partnership to commercialize Novus' RH-BMP2 bone graft solutions in the US and Canada. Turning to our second initiative, the ongoing development of our commercial channel to expand patient and surgeon access to our products worldwide. In Q3, our U.S. strategic channel partners, which we define as distribution partners that carry multiple orthofix product categories, such as hardware and biologics, generated over one-third of our spinal implants, biologics, and orthopedics U.S. revenue. year-to-date, this strategic group has grown double digits when compared to the prior year. We will continue to invest in the development and optimization of these channels to support our growth initiatives moving forward. We appreciate how well our team has managed the ongoing macro headwinds throughout the quarter and how we've progressed with our transformation, building the framework for long-term growth and innovation while maintaining operational execution. Before turning the call over to Doug, I want to touch on the recently announced agreement to merge with C-Spine. The combined company will be a leading global spine and orthopedics company with highly complimentary portfolios of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system with products that will be distributed in 68 countries worldwide. a global R&D and manufacturing footprint, and revenues of nearly $700 million, we are positioned to become the sixth largest global spine business. This merger significantly advances our objective to become a surgeon's partner of choice in their efforts to increase patient mobility by enabling us to develop creative, quality-driven solutions. The combined company's unique profile of scale, growth, and profitability, broad portfolio of technology, expanded commercial capabilities, and ability to make greater investments in innovative, differentiated solutions provides a clear roadmap to sustainable, top-tier growth and increasing competitiveness across global markets and a broad spectrum of products and services. The combination of these two innovative and ambitious companies is incredibly exciting. The combined company will ultimately, and most importantly, provide surgeons with the best resources, technologies, products, and procedures needed to improve patient outcomes. I'll now turn the call over to Doug to review our financial performance. Doug?