Globus Medical, Inc. Class A

Welcome to Globus Medical's first quarter 2021 earnings call. At this time, all lines will be on mute and a Q&A session will be held after the prepared remarks. At that time, if you would like to ask a question, please press star and the number one on your telephone keypad to enter the queue. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, please go ahead.

Thank you, Catherine, and thank you, everyone, for being with us today. Joining today's call from Globus Medical will be Dave Demski, President and CEO, Dan Scavilla, Executive Vice President, Chief Commercial Officer, President of Trauma, and Keith Feil, Senior Vice President and Chief Financial Officer. This review is being made available via webcast, accessible through the Investor Relations section of the Globus Medical website at www.globusmedical.com. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2020 fiscal year and our subsequent filings with the Securities and Exchange Commission identify certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today. Our SEC filings, including the 10-K, are available on our website. We do not undertake to update any forward-looking statements as a result of new information or future events or developments. Our discussion today will also include certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We believe these non-GAAP financial measures provide additional information pertinent to our business performance. These non-GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures. Reconciliations to the most directly comparable gap measures are available in the schedules accompanying the press release and on the investor relations section of the Globus Medical website. With that, I will now turn the call over to Dave Dembski, our president and CEO.

Thank you, Brian, and good afternoon, everyone. We got off to a great start in Q1, continuing the momentum we established in 2020. All facets of the business performed well in the quarter as we continued to take meaningful market share. Revenue for the quarter was $227 million, up 21% on a day-adjusted basis over the first quarter of last year. Non-GAAP EPS was 49 cents per share, an increase of 67%, and adjusted EBITDA was 35%. Once again, INR and U.S. Spine led the way. INR revenue for Q1 was $15 million, up 86% over the first quarter of last year. Q1 is typically a slow quarter for capital sales. but our revenue in Q1 actually surpassed our revenue for the entire first half of 2020. The clinical superiority of our robotic technology continues to be recognized by surgeons, as shown by back-to-back quarters of strong growth. U.S. Fine continues to take significant market share, growing by almost 22% on a day-adjusted basis. Pull-through from robotics, contributions from new product introductions, a resurgence in our biologics business, and competitive recruiting were all factors driving growth. Our international spinal implant business was essentially flat for the quarter. Strong growth in most markets was offset by declines in Japan, as expected, primarily due to the transition of our sales force composition there. We expect both of these trends, strong growth in the rest of the world and headwinds in Japan, to continue throughout 2021 and remain very positive about the health of our international business. We had a number of exciting product introductions in the quarter, but I would like to highlight two because they demonstrate the synergies inherent between our capital and implant product development engines. The first is the Corbel Lateral ALIF system, comprised of a novel retractor and an innovative interbody spacer designed for the L5 S1 disk space through a lateral patient position. Corbel is the latest addition to the most comprehensive suite of lateral interbody solutions on the market today. Our lateral technology includes multiple expandable options, static spacers, and integrated plate spacer solutions that can address all levels of the lumbar spine to either a prone or lateral patient position. Furthermore, the Excelsius Lateral 360 Procedural Solution allows surgeons to safely and efficiently treat multiple inner body levels and place MIS pedicle screws while the patient remains in a single position. The second is Creo 1, the market's first pedicle screw designed specifically for robotic spine surgery with Excelsis GPS. Creo 1 simplifies pedicle preparation while maintaining navigational accuracy and increasing pull-out strength by 86% compared to traditional pedicle screws tapped to size. The rigid robotic arm and navigational accuracy of Excelsis GPS combined with 301's unique screw tip are designed to save time and improve efficiency in the OR by eliminating procedural steps. Early feedback on both systems has been very positive. Shifting to trauma, Revit is up over 100% in Q1 compared to the first quarter of 2020. We are focused on Salesforce expansion and have several exciting product launches planned for the second half of this year. While we expect continued sequential growth, Year-over-year growth may slow a bit in the coming quarters as we face challenging comps. We have filed with the FDA for 510 clearance on our imaging system and are ramping up manufacturing and operations for an anticipated Q3 launch. We also plan to launch the cranial module for eGPS later this quarter. Glibus has emerged from the pandemic as a stronger company, growing much faster than our larger peers with a strong balance sheet and healthy cash flows. As we look forward to the future, we see tremendous opportunities to accelerate our growth in INR, spine, trauma, and total joints. We have an exciting lineup of product introductions planned for 2021, but to take full advantage of our potential beyond this year, we are going to ramp up investments in R&D resources moving forward. We will also be aggressive in pursuing acquisition targets that enable us to further differentiate our portfolio. Globus had an outstanding first quarter, producing excellent financial results and delivering on several key strategic objectives. We're set up for an amazing year if we continue to execute. All parts of the company are performing well, and we're working together as a team. I'm grateful for the dedication, ability, and effort of our worldwide Globus team members as they serve our customers and patients. I will now turn the call over to Keith.