ZimVie Inc.

Good afternoon and welcome to ZimV's first quarter 2022 earning conference call. Currently, all participants are in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero on your telephone keypad. We will be felicitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa from Gilmartin Group Investor Relations for a few introductory comments. Please go ahead.

Thank you all for joining today's call. Joining me are Vassa Jamali, President and Chief Executive Officer, and Rich Happenstall, Chief Financial Officer of Zimbi. Earlier today, Zimbi released financial results for the quarter ended March 31, 2022. A copy of the press release is available on the company's website, cindy.com, as well as on sec.gov. Before we begin, I'd like to remind you that management will make comments during this call that include forward-looking statements. Actual results may differ materially from those indicated by the forward-looking statement due to a variety of risks and uncertainties. Please refer to the company's 2021 Form 10-K and subsequent SEC filings for a detailed discussion of these risks and uncertainties. Additionally, the discussion on this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included within the earnings release and or the investor deck issued today found on the investor relations section of the company's website, zimd.com. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 5, 2022. ZIMB disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Vassa Jamali, President and Chief Executive Officer of ZIMB.

Thank you, Marissa. Good afternoon, and thank you all for joining us. for our first earnings call as an independent public company. My name is Dafa Jamali, and I'm honored to serve as the president and CEO of Zimvi. I'm on the call today with Rich Happenstall, our chief financial officer, and I believe I speak on behalf of our entire leadership team in saying that we're very excited to be here as a standalone business following our spinoff of Zero Biomet on March 1st, 2022. I'd like to kick off our call by introducing who we are at Zimvi, including our dental and spine businesses and the opportunities, and then reviewing our recent financial performance. Before I dive in, I want to thank all of our employees for their efforts made towards our spinoff to become an independent company. Despite COVID-related macro trends that both disrupted our employees, our end users, and created a very difficult hiring period, our team was able to stand up this new organization and begin our turnaround. As a reminder, Zimbi is a global medical technology leader dedicated to enhancing the quality of life of dental and spine patients. And we participate in a $20 billion global market opportunity across these markets. We are the number five largest player in the worldwide dental market and the number six in spine. We have over 20 brands trusted by clinicians and surgeons worldwide. We operate in 70 plus countries and we have approximately 2,700 team members. Our vision is that everyone deserves to feel better, healthier, and stronger. Our mission is to advance clinical technology foundation restoring daily life, and we offer dental and spine solutions that do exactly that, enabling our patients to better enjoy and experience life. Our team shares a growth mindset that gives us the energy and the inspiration we need to do more for those patients. As I mentioned earlier, we have the fortune of being a leading player in two substantial and growing markets. Our product platforms address a broad set of critical patient needs, across those markets and are substantially differentiated from competitive solutions in several cases. Our dental business is very well positioned in the growing global dental implant and biomaterials markets. Within this segment, we operate in three key categories. Dental implant solutions, which is our largest contributor. Biomaterials, which support the durability and sustainability of the implant. And digital dentistry. which is an emerging technology that provides significant workflow to support to the clinician across their office and derivatively both improves the quality of the implant while reducing the time that a patient spends in the chair. As we scale our digital dentistry solutions, we're also driving strong pull through of our implant business. Our spine business comprises of a broad portfolio addressing all areas of the market. Within spine, our largest category is core and complex solutions, followed by bone healing. We also have exposure to two exciting emerging categories, minimally invasive surgery, which typically requires some sort of an enabling technology to be effective, and is an area we intend to grow into. And motion preservation devices, an area we're actively leading and remain very excited about. This category includes the MOVIC, the market-leading cervical disc replacement, as well as the Tether, a novel treatment for pediatric scoliosis. The opportunity here is to transition more patients from fusion to one of these two modalities. These are great market development opportunities requiring substantial clinical selling, which we believe we can leverage to our advantage. The breadth of our portfolio and our strong market positioning are a function of our rich history. Looking forward, we intend to maintain our breadth to address a broad diversity of patient conditions while optimizing our exposure to the highest growth segments and continuing to evolve our solutions to best meet patient and provider needs. As part of that, we're committed to ongoing innovation in both these segments. We have approximately 300 in-house R&D employees across dental and spine. Much of this team has contributed to some of the best innovations in the past, and we are excited to have this team continue their journey with Zimbi as we look to bring new technologies to market for the benefit of patients going forward. Turning to our strategic objectives as a standalone entity. At this stage of our independence, it's important to share the progress we're making towards our long-term priorities to define and accelerate our growth drivers while expanding our operating margin. We have developed a strategic framework that will shape our priorities and direct our approach towards investment supporting sustainable growth and value creation for Zimbi. The intention of our margin expansion plans are to provide the fuel necessary to drive our growth aspirations. We are focused on three strategic factors. stability and separation from Zimmer Biomet, operational excellence, and portfolio optimization. Stabilizing the business and separating from the remaining arrangements with Zimmer Biomet remains a critical short-term priority. Our team has been hired with no major vacancies remaining. The team is now staffed with the right people, with the right attitudes, and the right jobs. We're continuing to make progress separating our OUS, our outside of U.S. spine business, and setting up our regional infrastructure, largely utilizing the existing outside of U.S. dental back office infrastructure. A major short-term priority here is consolidated and upgrading our ERP platform and distribution centers across the globe. These transitions have been completed in the U.S. and Canada and underway in Asia Pacific and Europe. These transitions are critical to building an efficient and connected global business infrastructure to execute on our operational objectives going forward. Completion of these projects will also resolve the majority of our transition service agreements with Zimmer Viament. Operational excellence is our second critical vector. I'm also pleased to share that we've kicked off our operational excellence plan designed to improve our overall profitability through the next several years. We are aggressively examining our cost structure in terms of how we do business, both for manufacturing and operations, as well as commercial and corporate infrastructure. Initially, we exited unprofitable geographies and implemented a brand rationalization program. These efforts will have a small negative impact on spine revenues for 2022, but no impact on profit, and will improve our focus, our profit, and our future prospects. I'm confident that we have multiple opportunities to take costs out of our business without impacting patient care, nor impacting our growth and ambitions. Finally, with respect to portfolio optimization, we have implemented disciplined portfolio management. Here, we run a deep analysis of our portfolio of initiatives. We then streamline our focus of top projects that are in the best markets while eliminating time-consuming and low-return projects. As a result, we will allocate investments based on the ability to drive innovation. Specific to Spine, we started aligning our U.S. channel to our most important business priorities and adjusted financial incentives accordingly. We have clearly communicated what's expected and are now moving into more directional performance management. So how are we doing up to now? First, I'd like to reiterate that it remains very early days for Zimby. Nonetheless, I'm pleased to announce that we recognize $234.7 million in total revenue for the quarter, declining modestly year over year, but offering a baseline against where we're confident we can grow over time. Rich, our Chief Financial Officer, will provide greater detail on our first quarter financial performance shortly. But before I turn it over to Rich, let me briefly detail the impact of a pandemic on our recent performance and financial outlook. In the first quarter, our dental business was largely immune to pandemic-related disruption of the clinician's set of care, and we saw strong, high single-digit constant currency growth, as which we'll detail shortly. However, our spine business has periodically been affected by COVID-related hospital slowdowns, most recently in China. Spine procedure volumes across the market did improve over the course of the first quarter, and we have continued to see moderate improvement through our call today, although some challenges in inpatient procedures, such as staffing shortages, remain. Into the remainder of the year, as we transition from pandemic to endemic, we are hopeful that the US healthcare system will remain resilient against further variants, and business conditions, particularly for our spine business, will continue to improve. Perhaps more importantly, we have a chance to identify several operating model improvements driven by lessons we learned from the pandemic. Internally, we have learned how to operate remotely and more efficiently when needed. Externally, we have learned how and where customers have flexibility to adapt and where they still face substantial need. For example, we saw our dental customers adjust quite quickly to pandemic results, pandemic restraints by increasing their use of PPE and adapting their office setups to keep seeing patients. We saw similar trends within Spine, albeit later in the pandemic, but providing takeaways for us on how we can continue to evolve and meet the greatest needs of providers and patients through our people and our platforms. I'll now hand the line over to Rich Happenstall, our Chief Financial Officer, to review more details of the first quarter performance outlook.