Globus Medical, Inc. Class A

Welcome to the Globus Medical's first quarter 2022 earnings call. At this time, all lines will be on mute, and a Q&A session will be held after the prepared remarks. During the question and answer session, if you have a question, please press 01 on your touchstone phone. I will now turn the call over to Brian Kearns, Senior Vice President of Business Development and Investor Relations. Mr. Kearns, you may begin.

Thank you, Richard, and thank you, everyone, for being with us today. Joining today's call from Globus Medical will be Dan Scavilla, President and Chief Executive Officer, and Keith Fowle, 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 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 in the schedules accompanying the press release and on the investor relations section of the Globus Medical website. With that, I'll now turn the call over to Dan Scavilla, our president and CEO.

Thanks, Brian, and good afternoon, everyone. Q1 sales were $231 million, or 1.4% growth, with non-GAAP EPS of 42 cents a share and an adjusted EBITDA of 32%. These results reflect modest revenue growth against a difficult prior year comp coupled with COVID-related revenue impacts in key countries and a slower capital purchasing quarter. While these revenue headwinds impacted EPS and adjusted EBITDA results, it is important to point out that we remain unaltered in investing in our strategy of above-market growth by increasing investments in R&D resources, competitive rep recruiting, and surge in education, focusing on the goal of sustained long-term growth. U.S. spine grew 3% for the quarter against headwinds of a challenging Q1 prior year comp of 20% growth, coupled with additional COVID impacts. January was slow, as noted in our Q4 earnings call. February showed sequential improvement, and March became our highest sales month on record. The strong performance continued in April, where we achieved our highest average daily sales. In addition, our competitive recruiting pipeline is strengthening, which is a leading indicator of future growth. Enabling technology sales were $13 million, down $2 million from prior year, due to lower placements in the quarter. After a record Q4, we experienced a slowdown in hospital purchasing as administration focused more on COVID and staffing shortages in Q1. Robotic procedures and implant pull-through continue to accelerate, growing 27% versus prior year, and surpassing approximately 31,000 robotic procedures performed since launch. Entering Q2, our pipeline is stronger and we're focusing on driving robotic sales throughout the rest of the year. In May, we began shipment of our Excelsis 3D imaging system and successfully completed the first surgeries in several sites. Surgeons have said this is a game changer. Excelsis 3D is a three-in-one imaging platform offering three image modalities in a single cart with high maneuverability, a large field of view, and seamless integration with our Xcelcius GPS robotic navigation system. It is a key component to realizing the Globus ecosystem in the operating room. Market interest is high on the state-of-the-art technology and customer orders continue to grow. Xcelcius 3D is positioned to be a major growth driver for us as we continue to penetrate the market. On the international front, our spinal implant business was flat in Q1. Strong mid-teens growth driven by the UK, Italy, Belgium, and Brazil was offset by declines in Japan, a trend we identified last year and expect to continue through the third quarter. We remain positive on the potential of our international business for long-term growth as we continue to reset the Japanese market. Our trauma business delivered its strongest quarter to date, with 61% annual and 28% sequential growth, driven by Salesforce expansion, strong uptake of our Anthem MiniFrag plating system, and double-digit growth in every product family. We're on track to launch meaningful products throughout the rest of 2022, while investing in future product lines and Salesforce expansion. In Q1, we launched Hedron T, a 3D-printed articulating lumbar interbody spacer, adding to our hedron portfolio, one of our fastest-growing product lines, as well as increasing the articulating spacer offering along with Signature and Altera. As we move into the rest of 2022, we remain focused on three core elements for long-term growth, innovative new product introductions, robot and imaging placements, and competitive rep recruiting. I'm pleased with the record U.S. sales in March, April's highest average daily sales record, the Excelsius 3D imaging system launch, and the strengthening competitive rep pipeline. Globus Medical is well positioned to achieve our mission of becoming the preeminent musculoskeletal company in the world. I will now turn the call over to Keith.