Globus Medical, Inc. Class A

Hello, and welcome to the Globus Medical's fourth quarter and full year 2021 earnings call. At this time, all lines will be on mute, and a Q&A session will be held after the prepared remarks. 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, Chris, and thank you, everyone, for joining us today. Joining today's call from Globus Medical will be Dave Demski, President and CEO, Dan Scavilla, Executive Vice President and President of Ortho, and Keith Files, 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 some of the statements made during this review are or may be considered forward-looking statements. Our Form 10-K for the 2021 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 GAAP measures are available on 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.

Well, thank you, Brian, and good afternoon, everyone. Globus finished an outstanding 2021 with a strong fourth quarter performance. Revenue for the year was a record $958 million, an increase of 21% over 2020, or $169 million in growth. To put that in perspective, our growth dollars alone would have ranked us in the top 10 spine companies in the world. Revenue in 2021 was 22% higher than 2019, an outstanding performance in itself, given the disruption caused by COVID, but magnified further by a recent independent research report showing that each of the other top six spine companies actually had sales declines over that same time period. We achieved record sales and growth while maintaining industry-leading profitability, generating a record $2.04 in non-GAAP EPS, a 42% increase over 2020, and adjusted EBITDA of 34.6%, even as we invested heavily in INR trauma and competitive recruiting. Revenue for the quarter was $250 million, up 7% over 4Q20, as COVID-related headwinds remained strong throughout the quarter. Non-GAAP EPS was $0.49 per share, a 16% decrease compared to the artificially high 4Q20. Not only were business travel and surgeon education activities severely curtailed last year, several other non-operational factors, as Keith will expound upon in his remarks, also impacted the decline. Adjusted EBITDA in the fourth quarter was a strong 34%. Enabling technology continues to gain momentum, producing a record $25 million in revenue for Q4, an increase of 40% over 4Q20. For the full year, enabling technology revenue was $81 million, an outstanding 100% increase over 2020. The clinical superiority of Excelsis GPS is the primary factor driving this growing momentum. Robotic utilization, which is the number of cases performed per installed robot, was at an all-time high in 2021, and nearly 30,000 procedures have been completed using Excelsis GPS technology since launch. Our spinal and fat business continues to experience the flywheel effect of an increasing number of robots being sold, combined with increasing utilization of each robot. Our U.S. spine business grew by 3% in Q4, as COVID-related shutdowns had a significant impact throughout the quarter. We saw this trend continue into January, but all signs point to a rebound commencing late in Q1. For the full year, the U.S. spine business grew by 18% as we continued to take significant market share. Robotics pull-through coupled with contributions from recent product introductions and competitive recruiting were all factors driving growth. Our international spine implant business grew by 9% in the quarter, a remarkable result in light of COVID impacts and an ongoing drag from Japan. Due to the impact of strategic moves we made in Japan last year, we expect to see continued declines there through the first half of 2022 with growth to follow off our reset baselines. This should result in accelerated overall international growth in the second half of this year. Trauma revenue was up 32% in the fourth quarter and 39% for the full year. Competitive recruiting and new product launches are driving growth. The Anthem MiniFrag system was launched on a limited basis in Q4 with excellent feedback from surging users. We are proceeding to full launch in Q1 and have a series of impactful product launches planned for the first half of 2022. The clients have launched the Excelsis 3D imaging system on a limited basis later this quarter, with a full launch following in late Q2 or early Q3. There is tremendous anticipation and excitement about this technology among surgeons, and we already have double-digit orders signed. The Excelsis ecosystem, Globus Medical's unique combination of robotics, imaging, and freehand navigation that provides a seamless, scalable, and unmatched clinical experience for surgeons is about to become a reality. I'm extremely proud of our team's performance in 2021. Record growth and profitability, exciting, clinically impactful new technology introductions, and an unmatched focus on providing value to surgeons and their patients. Thank you for a great year. I will now turn the call over to Keith.