Enovis Corporation

Good day and welcome to the ANOVA's first quarter 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Derek Letko, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Letko. Good morning, everyone. Thank you for joining us today for our first quarter 2023 results conference call. I'm Derek Letko, Vice President of Investor Relations. Joining me on the call today are Matt Trutola, Chairman and Chief Executive Officer, and Ben Barry, Chief Financial Officer. Our earnings release was issued earlier this morning and is available in the investors section of our website, enovus.com. We'll be using a slide presentation in today's call, which can also be found on our website. Both the audio and the slide presentation of this call will be archived on the website later today. During this call, we'll make some forward-looking statements about our beliefs and estimates regarding future events and results. Those forward-looking statements are subject to risks and uncertainties, including those set forth in the Safe Harbor language in today's earnings release and our filings with the SEC. Actual results may differ materially from any forward-looking statements that we may make today. The forward-looking statements speak only as of today, and we do not assume any obligation or intend to update them, except as required by law. With respect to any non-GAAP financial measures referenced in the call today, the accompanying reconciliation information related to those measures can be found in our earnings press release in the appendix of today's slide presentation. With that, let me turn the call over to Matt, who will begin on slide three. Matt.

Thanks, Derek. Hello, everyone, and thanks for joining us today. We had a strong first quarter, but before I discuss the results, I want to recognize the efforts of our fantastic global team of dedicated associates who work hard every day to execute our strategies and help our patients live more active and fulfilling lives. It was a great quarter. Let's go to slide three and talk about some of the highlights. We grew organically by over 9% with 19% growth in recon and 4% growth in P&R. Clearly, there were some tailwinds out there on the recon side, but the step-back view is continued strong outperformance in a strong recon market and the expected market recovery in P&R. We expanded our EBITDA, adjusted EBITDA margins by 120 basis points, reflecting the mixed impact of strong recon growth productivity from EGX, price progress, and moderation in some areas of inflation. We signed a key strategic acquisition in foot and ankle in the quarter and another one in April. And we're seeing strong growth momentum and healthy scaling of the full set of acquisitions we completed in the last few years. Overall, a really great start toward our 2023 objectives. In recon on slide four, we had high double-digit growth in the U.S., led by over 20% organic growth in knees and hips. Extremities grew 14% led by shoulder. Outside the U.S., we grew over 20% organically, also led by knee and hip, and we're pleased to see our brand and presence flourishing in a strong European market and a recovery-building momentum in Australia. I'm excited about the initial traction we're seeing as we begin to cross-sell our market-leading Empower and Altivate products internationally. And we have a strong pipeline of innovation in the U.S. as we continue the rollout of the Empower Revision Neat and the Altivate Augmented Glenoid. The markets were strong in Q1, and we took full advantage, once again growing well above the other recon leaders. Turning to slide five, I want to take a moment to discuss what we're doing to further strengthen our position in the fast-growing foot and ankle market. We've built a strong foundation with differentiated product offerings in the hindfoot and midfoot segments, and we're adding some key new technologies for the rapidly growing bunion and forefoot space. We announced the acquisition of Novastep, which gives us a comprehensive set of products for bunion surgery. the largest and fastest growing part of the foot and ankle market at almost a billion dollars per year of market. Whenever possible, surgeons want to address these issues with a minimally invasive solution, and now we have the leading percutaneous MIS solution for these procedures. And in Q2, we will launch Evolve34, a product focused on the large, fast-growing lapidus segment of the bunion market. This will be a terrific complement to the Novastep MIS offering, and coupled with our great plating and staple lines, gives us a robust offering for the entire bunion segment, regardless of severity or indication. Novastep also brings channel and approved products outside the U.S., accelerating our global progress in foot and ankle. We also announced the acquisition of SEAL's leading external fixation product line, which complements our existing offerings and strengthens our channel position. Overall, I'm very pleased with the progress we're making to build a leading foot and ankle platform. In P&R on page six, our 4% organic growth reflects a rebound in volume as markets recovered. You can see on the right that over the past five quarters, we've had average growth in the 3% to 4% range in line with our expectations. We've applied EGX principles and tools to improve and strengthen our supply chain, and we're seeing the results with more resiliency and better service levels, even as we begin to bring back down inventory levels in some areas. And stay tuned, we have a nice pipeline of additional bracing launches coming later in 2023 that will help us to support P&R growth. Now I'll let Ben take you through the P&L details and our positive guidance update. Ben?