Orthofix Medical Inc.

Good afternoon and welcome to OrthoFix Medical's Q4 and full year 2022 earnings call. All participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the call over to Alexa Huerta, Senior Director of Investor Relations. Thank you. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to the OrthoFix fourth quarter 2022 earnings call. Joining me on the call today are President and Chief Executive Officer Keith Valentine and Chief Financial Officer John Bostjancic, as well as our Executive Chairman of the Board and OrthoFix's former Chief Executive Officer John Cervosic and former Chief Financial Officer Doug Rice. During this call, we will be making forward-looking statements that involve risks and uncertainty. All statements, other than those of historical facts, are forward-looking statements, including any financial 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, March 6, 2023. 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 31, 2022, filed this afternoon, March 6, 2023, 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 measures as a supplement to the financial measures determined in accordance with U.S. GAAP. Please refer to today's press release announcing our fourth quarter and full year 2022 results for reconciliations of these non-GAAP financial measures to our U.S. GAAP financial results. We will begin today's call with commentary from Keith Valentine and John Bosjanczyk on stand-alone cease-fine fourth quarter results, followed by John Srbocik and Doug Rice, who will speak to the stand-alone ortho-fix fourth quarter results. Keith will conclude the call with information on the newly combined company, including 2023 revenue guidance and some additional future-looking commentary from OrthoFix. At this point, I will turn the call over to Keith.

Thank you alexa and thank you everyone for joining us this afternoon before we get into each company's standalone results i'd like to take a moment to highlight the recent closing of the merger of equals between ortho fix and see spine. This merger significantly advances are objective to become a surgeon's partner of choice in their efforts to increase patient mobility and quality of life. Together, we will continue to develop creative, quality-driven procedural solutions through expanded commercial access and commitment to innovation. The new OrthoFix has an improved profile of scale, growth, and potential operating leverage, in addition to a highly complementary portfolio, expanded commercial reach, and the capacity to make meaningful investments in organic and inorganic innovations. We believe our comprehensive product offering puts us in a highly differentiated position in the spine market by combining lean bone growth therapies, enabling technologies, spinal fixation, motion preservation, and biologics. We see this combined company as a transformative organization in the musculoskeletal space that will address unmet clinical needs to improve the lives of patients worldwide. Turning to the results. Seaspine had a strong year marked by the consistent execution of our growth strategy, capturing a market share, and the announcement of the pivotal merger with Orthofix. We are excited by the momentum coming out of our fourth quarter results and the work our teams have done since the business combination on January 5th. C Spine's revenue for the fourth quarter was $63.4 million, representing 14% growth over the prior year. Additionally, we posted full year revenue of $237.5 million, up 24% year over year. US spinal implants and orthobiologics revenue grew 23% and 20% respectively in the fourth quarter over the prior year. AS A RESULT OF OUR EFFORTS IN RECENT YEARS TO PARTNER WITH LARGER, MORE FOCUSED DISTRIBUTORS. AS FOR THE ENABLING TECHNOLOGIES PLATFORM, WE PLACED 30 UNITS OF THE 70 SURGICAL FLASH NAVIGATION SYSTEMS THROUGHOUT 2022, ACHIEVED OUR 100TH UNIT PLACEMENT MILESTONE AND EXPANDED OUR INSTALL BASE INTO SIX NEW COUNTRIES, A TESTAMENT TO OUR COMMITMENT FOR INCREASED COMPETITIVENESS ACROSS GLOBAL MARKETS. In the fourth quarter, placed a record 12 units, five in the US and seven outside the US. Of those placed in the US, three were earn out arrangements, the largest quarterly placement of earn outs since we acquired the technology. As you may recall, these earn out efficient way for hospital systems to acquire a 70 unit in return for a minimum annual contractual revenue commitment for our spinal implant or biologics products for three to four years, typically at a rate of $600,000 to $800,000 per year. To date, we have executed seven earnouts that represent approximately $4 million in aggregate annual revenue commitments. i'd also like to call out the company's successful execution of further portfolio expansion through differentiated solutions across a broad spectrum of products and services in the fourth quarter such as the launch of the first component of our insights suite planning software for pre-operative screw planning and the full commercialization of our percutaneous procedures support software enabled through the 7d flash navigation system Additionally, we recently announced the full commercial launch and first patient cases of Mariner deformity system, which was built upon the strength and versatility of C-Spine's modular Mariner pedicle screw system to address the unique clinical requirements of complex adult deformity spine cases while also reducing the number of surgical trays in the operating room suite. These portfolio advancements are indicative of our commitment to restoring mobility and quality of life to patients. And we are very much looking forward to further integrating the two highly complementary organizations to establish an industry leader in spine and orthopedic technology. I will now turn the call over to John Boschanczyk to review the standalone C-Spine financial results for the fourth quarter and full year 2022.