Orthofix Medical Inc.

Good afternoon and welcome to OrthoFix Medical's Q4 and full year 2023 earnings call. All participants are in a listen-only mode. After the speaker's remarks, we will have a question and answer session. To ask a question, you'll need to press star followed by the number one on your telephone keypad. To withdraw any questions, please press star one again. As a reminder, this conference call is being recorded. I would now like to turn the call over to Louisa Smith, Vice President of Gill Mountain Group. Thank you. Please go ahead.

Good afternoon, everyone. Welcome to the OrthoFix fourth quarter 2023 earnings call. Joining me on the call today are President and Chief Executive Massimo Calfiore and Chief Financial Officer Julie Andrews. 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, 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 5th, 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, filed this afternoon, March 5, 2024, for the year ended December 31, 2023, as well as additional SEC filings we make in the future. 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 news release announcing our fourth quarter 2023 results for reconciliations of these non-GAAP financial measures to our U.S. GAAP financial results. At this point, I will turn the call over to Massimo.

Thank you, Louisa, and thank you, everyone, for joining us this afternoon for my first quarterly earning call as Orthopex CEO. I'll begin by saying how happy I am to be part of Orthopex and this impressive organization. The company has strong fundamentals and, I believe, great potential for future value creation. This is why I joined Orthofix. Yes, the company has been through much change in the last 12 months, but our business fundamentals have remained strong and our talented leaders and committed employees have executed exceptionally well. For quarter performance was no exception. We executed against our guidance, gained momentum, and accelerated strategic initiatives. Despite that prediction otherwise, we also expanded our distribution network in our USA Spine sales channel. I'm so pleased to be part of the OrthoFix team, and I will work to build on past successes leverage our current momentum, and unlock future value-creating opportunities. During the last eight weeks, I've had the chance to speak to many stakeholders, and I'm more encouraged than ever about the opportunity for growth and value creation that is in front of us. I joined OrthoFix having admired the company and its innovative solutions, and my early insights have affirmed those long-held beliefs I want to spend some time on this call sharing my initial thoughts and observation about our business and highlighting some areas we prioritized throughout the year. Then I'll turn the call over to Julie to provide a more in-depth look at our fourth quarter performance and financial results. First and foremost, I've observed that the company has remained stable throughout the recent periods of transition, demonstrating our durable business model. I have spent a great deal of time understanding internal operations, as well as how OrthoFix fits into the markets where we are competing. I'm confident in our fundamental strategy across orthopedics, spine, biologics, and bone growth therapies. There should be no misgiving about the ability of this company to serve the evolving clinical needs of surgeons and patients, while also delivering strong growth combined with improved operational efficiencies. We performed well throughout 2023, gaining market share and maintaining a relationship with our partners. Disruption and consolidation within the spinal market specifically, have created commercial opportunities in spine and orthopedics. We have taken advantage of these opportunities, continuing to build out our network. I want to quell any notion that OrthoFix is losing distributors. We are adding high-value relationships while optimizing our existing sales channel. In the fourth quarter alone, 8% of USA's panel implant sales were attributed to new distributors alone. Additionally, it's important to note that our merger thesis remains intact. With last January's business combination, Orthofix brought together uniquely complementary best-in-class portfolios to create a compelling product platform across spine and orthopedic. we are well-positioned to capture value within specialized market and have already seen the inherent cross-selling benefit of being able to leverage our portfolios as a whole. I want to highlight that as spine surgery progresses towards data-driven solutions, a gap remains in detecting changes in the operating room. Translating a surgical plan to reality requires real-time information with the flexibility and tools to adapt. OrthoFix is a leader in this space, and we plan to fully leverage the 7D flash navigation system. In third, the growth within OrthoFix's spine segment has been supported by a 29% increase in our global 7D installations over the past year. With continued investment Our next-generation advancement in enabling technology and hardware will build upon this unique foundation and establish us as the partner of choice for surgeons seeking real-time data-driven intraoperative solutions in orthopedics and spine. The merger between OrthoFix and C-Spine also created a biologics business unit with best-in-class products in the three of the most significant bond substitute segments. Cellular bond matrices, the mineralized bond matrices, and synthetic bond substitutes. The breadth of our biologics portfolio enable OrthoVix to meet surgeon preference and procedure specific requirements. Furthermore, biologics is a capital efficient unit. driving cash and EBITDA gains for the company. As it relates to platform synergies, biologics remain an integral part of our overall spine and orthopedic server strategy, carrying with it a diverse offering with the associated clinical data to broaden IDN and GPO access that helps attract and retain spine distributors. Moving to bone growth therapies, or BGT, this business is well positioned to continue growing the market and take share. We have the industry's only cervical indication and are the only company to offer both lipus and TEMP solutions for fracture healing. In addition, the opportunity to support acute trauma with our Excel STEAM solution is propelling the growth of this franchise to well above market. Throughout the 2024, we expect to accelerate the cross-selling of BGT through our spine and orthopedics sales channels. The orthopedic business has an impressive portfolio and pipeline of highly specialized internal and external solutions for complex limb reconstruction and deformity correction. It is uniquely positioned to lead pediatric and adult limb deformity correction. And we are just starting to tap into its potential in the United States. Additionally, we have recently rolled out Orthonex, our case planning software platform for use with our orthopedic products. We'll be expanding the Orthonex application to incorporate many of our products platform across segments. Moving to TechReap priorities for 2024. First off, our mandate is to grow the company and grow it profitably. A key part of the merger thesis was to combine CISPines innovative growth engine with the capital efficiencies of Orthofix. Throughout 2023, We have been able to do just that. We have sequentially improved adjusted EBITDA every quarter, and we are effectively managing cash flow to exit 2024 cash flow positive. We believe that profitable growth will be a key differentiator for Ortofix amongst our peers, and will ultimately be a driving force in creating shareholder value. we will not subscribe to a growth of all cost mindset. And we intend to use one of the orthofix greatest trends and my second key area of focus, our balanced portfolio platform to accomplish that goal. As stated, the second priority is to further leverage our technologies and sales channels across all product segments. we are not a pure play spine company nor a commodity products orthopedics company ortho fix occupies a unique corner of the end market itself and we intend to highlight the entire portfolio platform as the key driver of further market share gains in addition we believe enabling technology is critical in positioning us for long-term sustained growth and future success. The capabilities of 7D to redefine image-guided surgery within spine and orthopedics is an increasingly important aspect of how we fuel growth. Adding to that, the application of stretch structure and spine indication for our BGT business layered in with integration of a surgeon preference market for biologics across spine and orthopedics. The complementary nature of our portfolio becomes even more evident. Our products work together to create a best-in-class offering, each improving the performance of the other and enabling growth through cross-selling opportunities. And finally, The third priority is our commitment to innovation. As I've just noted, 7D is a key contributor to our growth engine. We envision that the combination of 7D with our spinal hardware will strengthen our position in selected market segments, especially in spine deformities, where we expect to emerge as a formidable contender. We will also continue to commit to resources developing high-value initiatives that will enable profitable growth and market share gain. In recent years, the decision to invest more heavily in BGT by seeking a fresh structure indication for Accel's team has led to unprecedented growth in the franchise. We have delivered four consecutive quarters double-digit growth, and the traction in BGT is a direct result of reallocating investments to a high-growing business. Similarly, the investment in the Fitbon platform and the best-in-class TrueLock circular frame platform are driving growth well above historical norms for the business. The current and planned pipeline within orthopedic should take this business to a market-leading position in complex lean deformity corrections. We will continue to invest strategically across the entire portfolio and put resources behind products where we can create or deepen market segments and drive above market growth without burdening the bottom line. I'm very pleased with the team's performance in the last several months. and incredibly encouraged by my initial findings. OrthoPIX is on very solid footing, and I anticipate being able to share increasingly meaningful updates about key opportunities as we move into the next chapter of our story. With that, I will now turn the call over to Jury for further detail on our first quarter and full year results.