Q3 2019 Earnings Call

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Yes, I wish and only mode.

After the speakers presentation, there will be a question and answer session to ask a question do you want me to press Star one on your telephone if you acquire any further systems press Star zero.

I like to turn call over to Brian current senior Vice President business development and Investor Relations. Sir. Please go ahead.

Thank you Jason 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, and keep filed 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 Dot Globus medical Dot com.

Before we begin let me remind you that some of the statements made during this review our or maybe considered forward looking statements. Our Form 10-K for the 2018 fiscal year and or subsequent filings with the Securities Exchange Commission identifies certain factors that could cause our actual results to differ materially from those projected I never before.

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 gap.

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 Dave Demski, our president and CEO .

Thank you, Brian and good afternoon, everyone.

Got it was not call had an outstanding third quarter, once again, delivering above market growth and industry leading profitability.

EBITDA for the quarter was $196 million up 16% over the third quarter of 2018 as muscular skeletal solutions continue to grow well in excess of the market and all sectors.

Let me 0.8% were last year.

Enabling technologies delivered back to back strong quarters, producing 13.9 million in revenue more than double our Q3 18 performance.

non-GAAP EPS was 43 cents per share versus 39 cents, a year ago, and an increase of 10%.

Adjusted EBITDA improved by 33.4% in Q3 compared to 31.5% we posted for the first half of this year.

The results include the planned investments, we made and growth initiatives, such as iron ore and trauma.

Factoring out the impact of these investments would have resulted in an improvement of six cents to non-GAAP U.P.S. and added approximately 600 basis points to adjusted EBITDA margin.

Got it just continues to achieve market, leading operating margins, even as we invest in two strategic initiatives.

Muscular skeletal solutions performed exceptionally well in all areas.

New York Spine business continued to take significant market share during the quarter driven by competitor BREP recruiting and implant pull through from Excelsius GPS installations.

We expect to finish 2019 or third consecutive record year in competitive BREP recruiting.

We also continued to see exceptional growth in the implant sales from accounts Excelsius GPS technology.

Finally, we are on pace weren't stronger product launches capped off by several exciting new projects slated for launch in Q4, including our line of Threed printed Interbody spacers and our next generation expandable to live device.

The international spine business grew by almost 15% in Q3 goals as reported and constant currency well in excess of the market in almost all significant geographies.

Third quarter growth continues to be driven by access to new technology pull through from robotic placements increased investments in peer to peer education and management changes in certain key markets in 2018.

As we alluded to on previous calls we experienced some deceleration in Q3 associated with the alleviation of pent up demand caused by previous supply chain issues that are now largely behind us.

Well some additional deceleration is expected in Q4, as we come up against difficult comps Burberry. We're excited by the strong turnaround in our international business. This year as we remain on pace to produce the highest level of international organic growth and our company's history.

Under the leadership elements will aside our business in Japan has been very strong since the acquisition from Alphatec in 2016.

After a long its successful career. So I saw in is retiring this month.

We're very pleased to announce this deep linking you've assumed the role of President Globus Medical Japan in August Steve is well suited for this position having led medtronics overall business in Japan for a number of years before becoming much medtronics global sector President of worldwide spine biologics some type of plastic.

Were excited to have Steve join our leadership team in this important role.

Our trauma business made good progress again in Q3, we launched the ought to be entrepreneur ill ask them to Peel plating system and the anthem clavicle plating system in Q3, thereby completing the development of all systems in our core portfolio.

We continue to build sales momentum matching our ninth consecutive record quarter, increasing sales by over 50% sequentially by over eight ex from a year ago, albeit off a small base.

Revenue from an enabling technologies was 13.9 million in Q3, an increase of 125% over the third quarter of 2018 and up sequentially over the 12 million recorded in Q2.

Fully recovered from a soft Q1, and very bullish about the potential of our division as we close out 2019 and look forward to 2020.

Our optimism is based on a number of factors one strong adoption trends by surgeons, who are experiencing the benefits of Excelsius technology, that's incorporated into their practice of medicine.

Well this is why they acknowledge this technology leader in spine robotics as expressed in our smarter faster stronger marketing campaign, which highlights the clinical advantages that surgeons have repeatedly endorsed and their evaluations on Excelsius GPS.

Three we're building on our technology, we've been spine robotics, we unveiled the Interbody module at the recent mass convention to outstanding reviews, and we are on schedule to launch the spine deformity with solution that early next year.

Before.

We are investing heavily to expand our scope and enabling technologies.

We gave surgeons a preview of our imaging system at NASS to an extremely enthusiastic response. We're also in the final stages on completing the cranial module for Excelsius GPS we expect both of these systems to be available in the first half of 2020.

Finally, we have a number of other projects under development and I know that will roll out in 2020, we will provide more information on these developments next year.

The long term potential of computer assisted technology to transform orthopedic surgery is tremendous.

We are aggressively and welcome to ensure the greatest remains at the forefront of this transformation with a holistic integrated and highly synchronize strategy our performance over the past two quarters demonstrates our ability to compete and capture share today as we work toward and invest for tomorrow.

In summary, we are excited about a third quarter performance and momentum and are poised to finished 2019 in record fashion as demonstrated by our market leading growth and muscular skeletal solutions sustain turnaround in enabling technologies.

Significantly improved EBITDA driving industry, leading profitability and strong pipeline of new product introduced sections on tap for Q4.

I would like to take this opportunity to and introduce Keith file, our new senior Vice President and Chief Financial Officer.

As we announced in June keys comes to US after 16 years as a publicly traded consumer products company, where he most recently served as CFO .

We're pleased to broaden our senior leadership team with the addition of key is analytical approach is experience with making and integrating acquisitions successfully and his track record of driving efficiencies windsurfing well his role with Globus.

I would also like to recognize the contributions from danskin built that Dan Scavilla has made as our CFO for the past four years.

Dan has done an outstanding job of leading our financial organization as we have expanded the scope of our businesses to iron ore and trauma and continued to grow the company, while maintaining fiscal discipline and producing exceptional cash flow.

The addition of Keith will enable Dan to focus on his role as Chief commercial officer of Globus building or trauma business and continuing to be responsible for most of the operational functions within globus.

I'll now turn the call over to Keith.

Thanks, Dave and good afternoon, everyone.

The third quarter results for Globus reflect yet again, another strong quarter of revenue profit and cash flow generation.

The growth in sales was largely driven by continued above market gains within U.S. spine as all significant growth with enabling technologies international markets and trauma.

Profitability remains robust, while we continue to invest in R&D and expand our salesforce.

Cash flow remains strong as we push for growth, while maintaining our commitment to invest and sets for future placement within spine trauma and joints.

Third quarter revenue was $196.2 million, representing 15.9% growth as reported or 14.5% on a day adjusted basis, what's one more selling day in the quarter as compared to prior year.

GAAP net income was $38.3 million and non-GAAP net income was $43.5 million driving 43 cents, a fully diluted non-GAAP earnings per share.

Adjusted EBITDA was 33.4% and we delivered $43.8 million a free cash flow.

Shifting our attention to sales U.S. revenue for the quarter was 162.7 million growing 17% versus the prior year quarter.

Our U.S. spinal implant business continues to sustain above market growth as we remain focused on transitioning competitive reps into globus, while also experiencing implant pull through from accounts utilizing our excelsius GPS platform.

International revenue for the quarter was $33.5 million growing 11.2% as reported.

Constant currency impacts are immaterial to the corner.

We continue to experience growth through market penetration across our international markets. However, we specifically no robust growth within Japan the UK.

Italy, India and Austria.

It is important to note the while our growth rate slowed as planned compared to the second quarter is inline with expectations and consistent with our previous comments related to large distributor orders placed in the first half which would not repeat in the second half.

Overall muscular skeletal sales for the quarter for $182.3 million growing 11.8% versus the prior year quarter, while enabling technology sales were $13.9 million for the quarter, representing 125% growth compared to the prior year quarter.

The significant growth in enabling technologies, it's being driven by the increasing surgeon interest in our Excelsius GPS platform.

Moving further into the piano Q3, gross profit was 76.9% compared to 77.6% in the third quarter of 2018.

The decline in gross profit was primarily due to a onetime benefit realized in the third quarter of 2018, which did not repeat in the current year quarter.

Adjusting for that benefit gross profit was 77.3% in the prior year quarter.

Research and development expenses for the quarter were 14.5 million or 7.4% of sales compared to 15.5 million or 9.2% of sales in the third quarter of 2018.

It is important to note that we incurred $2.5 million a onetime expenses in the third quarter of 2018, primarily related to technology in licensing fees.

Our R&D expense continues to be reflective of significant investments in iron ore platforms, which will be realized in 2020, as we continue to lead the market and drive innovation through new product launches.

S. Gina expenses for the third quarter were $88.5 million versus $75.1 million in the third quarter of 2018, reflecting our expansion of the U.S. spine salesforce investment to international and robotics.

The GAAP income tax rate for the third quarter was 18.1% compared to 17.3% in the third quarter of 2018.

The slight uptick in rate was there were the result of slightly lower deductible expenses as compared to prior year, which was inline with expectations.

Adjusted EBITDA for the quarter was 33.4%, which improved its planned growing 140 basis points sequentially versus the second quarter of 2019.

First of the third quarter of 2018, adjusted EBITDA is lower by 70 basis points, which is reflective of the continued R&D investments within robotics as well as increased investments within our U.S. salesforce driven by competitive replacements in our international sales force due to our focused market penetration expanded outreach.

GAAP net income was $38.3 million and non-GAAP net income was $43.5 million.

GAAP diluted earnings per share for 38 cents, while non-GAAP diluted earnings per share were 43 cents compared to 39 cents in the third quarter of 2018, reflecting 9.9% growth.

This growth is reflective of the continued strong sales performance across the portfolio, while driving investments for the long term.

We ended the quarter with $660.7 million of cash cash equivalents and marketable securities.

Third quarter net cash provided by operating activities was $55.9 million and free cash flow was $43.8 million.

Our Q3 cash flow includes $10.1 million of tax payments in the quarter as well as ongoing investments in sets for our spine and trauma businesses.

The company remains debt free.

This company is increasing its full year 2019 sales guidance from 775 million to 783 million, reflecting the continued overall strength across our portfolio, while maintaining appropriate conservatism.

non-GAAP diluted earnings per share guidance remains unchanged at $1.72 has remained steadfast driving investments within our iron ore platform, which will fuel new and exciting product launches in 2020 and beyond.

We remain on track to deliver strong year over year growth both in sales and earnings.

We'll now open the call for questions.

[laughter], yes, Sir at this time as a reminder, if you'd like to ask a question. Please press Star then the number one on your telephone keypad again that star one [laughter] and your first question comes from the line of Matt Miksic Credit Suisse.

Hi can you hear me okay.

Yeah, we can't Matt.

Great. Thanks for taking the question.

So and congrats on a on a pretty strong quarter here.

So maybe one question on just the tone of the of the spine market and you know it gives you mentioned David you're opening remarks is driven in part by pull through.

Celsius.

Maybe if you could give us a sense it did anything else sort of what would use lineup maybe after after the robot.

In terms of in terms of growth drivers are competitive competitive share gains and I have one follow up.

Well thanks, Matt.

Think did the two drivers of our growth in spine, our competitive <unk> rep recruiting and onboarding as well as the pull through from Excelsius.

After that you've just you've got their normal product.

Product launches in spine.

Right well see other products I guess I was fishing for a bit but just really impressive underlying spine growth. So maybe go to the robot and then jump jump back in queue here.

Just the.

Third quarter, historically kind of a maybe slightly tougher quarter capital sales for everybody.

And then you have folks who sell robots.

As well what what if anything have you seen in terms of interest or acceleration or.

Yeah competitive dynamics that drove some of the at least upside to our estimates in the third quarter here for Excelsius.

Yeah, well I think the market over all remain strong there's there's just a growing interest on the part of surgeons in terms of robotics in general and then I think we've done a really good job of articulating the differences in excelsius through our marketing campaign I know, if you've seen any but on social media, but surgeons have consistently as.

They've done their evaluations pointed out that they think our products better and we needed to just really go back and focus on those basics and to me that information to surgeons and our team did a great job of getting on to understand that and getting the deals close in Q3.

That's great I'll keep it to two and jump back in queue, but congrats again. Thank you.

Okay.

Your next question comes from Shagun Singh of Wells Fargo.

Hey, guys. Thank you so much for taking my question I guess I'm you know the first one on on on the robot you know can you can you give us a little bit more color on what's driving the uptake and then you know how should we think about Q4, historically, you've indicated that 20% to 40% of the yours. So do placements wouldn't be placed in Q4 is that how you think.

About it I think that would imply about 14 to 21 systems are pretty broad range, but at Q4. It is the strongest quarter and then I was just wondering if you could go I love the contribution to your yield over here.

Okay, let's get to have grown from excelsius blow through competitive reps and new products I think in Q2 weeks you'd indicated that it was about 40%, 40% and 20%. So just looking for an update there. Thank you so much.

Sure sure going out I'll try to tackle those in order I think I as I spoke to Mad about I think our success in the third quarter was really about being able to articulate the advantages our system.

Getting surgeons to really understand that and buy into that and get the deals closed.

We're not going to comment on a quarter by quarter basis in terms of what we think the cadence will be it's it's really challenging to predict a capital in general and then it's not our practice to really get into the quarter. So I will say our pipeline is very strong we're really comfortable with the team we have in place and we're working hard to two good.

Deals closed at this point and up to your last question about the break down I don't think we've actually commented on that split I don't think your split that you just mentioned was accurate.

We're in we're not going to get into that granular level of detail. That's a its competitive information that I'm I'm not comfortable sharing.

Got it thank you sure.

Our next question comes from Richard Newitter of STB Leerink.

Hi, Thanks for taking my question, guys and a solid quarter here.

I have a couple I wanted to start maybe just making sure that I'm understanding what the core U.S. implant.

Spine U.S. implant growth rate is I'm calculating something in ER.

They either have to 9% range inclusive of an extra day and about.

Well call it 7% or eight excluding it's selling day and that assumes about it you know 2 million contribution from still plan to sell cash revenue.

Is that Directionally correct, I, just want to make sure I'm kind of getting it right sense of what your core U.S. implant growth rate is.

This is Keith and thanks for the question you know this quarter, we decided to really focus on talking about muscular skeletal in total.

Our business, you know, whether its muscular skeletal or enabling with <unk>, we feel strong about where our businesses across the entire portfolio.

In saying that the strength within muscular skeletal is really a across the entire entire thing and the reason why we are really pulling up and want to talk about muscular skeletal in total is because some of these smaller acquisitions, such as a stall cas or the growth of trauma at this point there, they're really small immaterial to the total and you know.

Until these businesses grow to a more meaningful number we're going to really focus on talking about muscular skeletal and enabling.

Okay I guess.

Yes.

Material like sub sub 5 million immaterial is that fair.

That's that's fair.

Okay.

And while we're on the subject of trauma would love to just a here Dave you know in the past you. When we've asked you about ways to calibrate for next year, just because it's truly an incremental revenue opportunity the street just modeling it.

The right way to think of that ramping I think the consensus has you in the $10 million to $12 million range do you feel comfortable with that as a as a place holder for right now.

Hey, rich as Dan. Thanks for the question I I would think that's fair. If you remember one of the things. We've said is the Q4 for us with trauma would be a significant quarter because we've got our products launch we're starting to make access into the market and in itself that would be one of the main drivers I think this early on for 2020, that's a reasonable place holder to take.

And as you know well fine tune that as we get through January into our release.

Great, maybe if I could squeeze one more and you mentioned.

Some new robot indications ONTAP next year.

David at NASS, one of the things that we consistently heard about is it a.

The killer apps, so to speak from physicians is going to be saying that gets into the disk space and that actually allows for bone cutting I'm. Just curious if that is that something that is potentially for globus being that you're one of the bigger innovators <unk> on the robotic front right now is that something that's possible within kind of a 2020, maybe even 20.

21 timeframe.

Or is that something that's kind of further out more in the three to four years that somebody other competitors you're talking about thanks.

Yeah, Rich I'll say this about that and we won't be next year, Oh, I don't want to comment further than that on it but that is not one of the things that we're planning on rolling out next year.

Okay. Thanks sure.

Our next question comes from Craig base you.

I've Cantor Fitzgerald.

Thanks, guys for taking the questions. Congrats on a on a strong quarter wanted to start maybe a follow up on on robots and I know earlier in the year you referenced.

A lengthening selling cycle.

And obviously coming out of Nash we saw.

The.

We saw a competitive offering that is.

It's going to come so maybe if you can just talked about what you're seeing from a robotic selling cycle now if it if it's kind of shortening again and then as we start to hear more about competitors systems coming next year.

How do you how do you see that.

And in.

That environment evolving.

Over the next say 12, 12 month 12 18 months.

Thanks, Craig.

It's hard to say, how it's going to evolve I can comment on where we are I don't think its shortened again I think it's still a highly competitive I think right now it's a two horse race.

But I think we're both in most of those deals. So there's there's a longer process, it's sort of go back and forth and evaluate both alternatives.

I would imagine more viable competitors would make that process, even more challenging to wade through and for for surgeons and executives to decide what technology is best for their purpose, but we can only.

Wait to see what will happen if some others get some products out there.

Okay. That's helpful. And then you know I know you talked about the international strength and maybe just a little bit more color. There you are the market. So you really see as an opportunity for the sustained are durable growth over the next couple of years I know, Japan has been a focus ever since you guys, maybe alphatec acquisition, but maybe just a little.

Little bit more color on.

The markets and the potential there.

This is Keith thanks for the question.

The common I would make here is that a the international business. It's an area of growth growth for US. Obviously, we had a strong first half we expected a slowdown in the second half its inline with expectations, but when you step back and say, okay. We know what's driving it we have we have new management in place over there we invested in education and outreach.

To to ER doctors and facilities on the international basis, and really that's that's taking hold and help driving the growth and from our perspective, we're small from a from a market share perspective. There. So we view, we view that'd be a lot of white space and you can take share as as we look to grow.

Great. Thanks for taking the questions guys.

Our next question comes from Matt Taylor of MBS.

Hi, Thanks for taking the questions.

So first thing I wanted to ask about was.

Just on some of the new offerings that you introduced a nason so to give some color commentary on how the responses bend to the.

But the interbody offering in the single position.

Surgery that you.

Our pushing out with with the Excelsius robot in your as new instrumentation.

Okay.

Oh sure Matt.

In terms of single positioned lateral that that's actually been part of those technology. Since day, one we have several sites doing that every day.

And the response has been been fantastic. It really gets a lot of time out of the procedure. If you don't have to flip the patient and we're seeing a just fantastic accuracy and not the comfort level complications that folks have experienced in a manual situation.

Terms of anybody we haven't launched after the market yet I would say that the response at our booth and NASS was tremendous there was a lot of interest there and.

We're trying to get the equipment together to get that launched in early in the in Q1. So we expect to see some uptick in the early part of next year on that.

Thanks, and you mentioned, you're hiring continues to be strong in the past you've talked about a record hiring are you still seeing those kind of levels of hiring [noise].

Yeah, I think a I think we're already past, where we were last year as we speak today and we've got a couple more months left in the and the year.

Okay, great. Thank you sure.

Yes.

Our next question comes from Matt to O'brien of Piper Jaffray.

Oh, Hi, guys. This is that drew on for Matt. Thank you for taking the questions and congrats on a on a nice quarter here.

On the need platform you acquired that's corridor I guess kind of as we monitor progress with with your robotic platform. There. Obviously is that a new market for you guys are there any milestones we should be watching for here in 2019 through probably more likely into 2020.

Yeah, no no milestones and and 2019, that's going to be more Oh, 2020 effort and even even that late in the year.

Okay helpful. And then you kind of touched on this a little bit earlier, but I mean, as we said a little bit later here in the Med Tech earnings cycle, a lot of the spine pure plays have not.

Pretty strong performance domestically.

I guess that their question more specifically are you seeing an uptick in the bike market at all and then kind of what in your view it could be driving that be it conversions office, yes, or pricing et cetera. Thank you.

Sure sure were small player drew so it's hard for us to really understand what the entire market is doing.

But I would say anecdotally it continues to be relatively strong, but no no no big Spike, we're we're going into the time of year when we've seen a.

A big amount of demand is as the high deductible.

Ah coverage folks go into get surgery that that's going to happen again. This year it appears to be but nothing over all that I would say is been either good or bad I think it's just kind of business as usual from up from our perspective.

Thank you.

And our next question comes from Mike Mattson of Needham and company.

Yeah. Thanks for taking my questions just wanted to start with the imaging systems. So I think you said or be out in the first half a 2020. So how should we think about the launch and the trajectory there as compared to Excelsius I realize that's more of kind of a you're coming into or more of an established.

A mature market.

And I mean, it's I can have a.

Material contribution in 20 years that really more of a 21 story with the sales cycle and everything.

Thanks, Mike I do anticipate having its a fairly significant sales next year.

Really challenging to predict when at this point, we're we're still finishing up the development, we need to get it to the FDA and get it launch so.

It's a little early to <unk> could be predicting sort of the amount of revenue but.

The response that we've gotten from folks who have seen a it brings a lot of value. It really surpasses what's out there today and a lot of respect so we're excited about being able to sell it.

And we hope that we will see a nice nice ramp in it.

Okay.

And then I know there are few other questions about the rep hires but is it safe to assume that you expect a kind of similar.

Plan similar amount of hires in 2021, starting 2020 to what we've seen in 18 and 19.

It's a big focus of our sales team I think we're becoming more and more attractive to spinal implant sales people because of our enabling technology as well as the breadth of our implant technology. So.

I think our story gets better and better and and the best people want wants to come in so the best product. So.

I do I do even trying to continue to focus on it and we continue to see opportunity. So I see no reason why would would back off at all next year.

Okay. Thanks, and then just excelsius outside the U.S. can maybe comment on how that's going.

I'm very happy with it we've got several installations, we've not broken out the numbers for folks, but we're seeing a being utilize all over the world and it's very exciting to see that.

Okay, great. Thank you Chuck.

And our next question comes from Ryan Zimmerman E G.

Thank you.

So I want to ask first on guidance for this year and then I have a couple others. So you guys be by $11 million on your took up guidance by essentially 8 million for the year I'm. Just curious if you can is is that all essentially international headwinds that you're referring to or is there something else contemplated in those in that guidance.

<unk> for 19.

This is Keith thanks for the question.

When we looked at guidance ticking up $8 million really.

We really we feel good about our business across muscular skeletal and enabling a when you go back to the beginning of the year. We start the year at 770, we've taken our number up $13 million or from the beginning of the year. When we look out there is nothing that that you know peaks, our interest or causes rise of concern, it's really more of supplying them.

Perfect conservatism to to our sales number.

Okay. That's helpful.

And then.

Yes, it's really a question on margins, but it gets to the introduction of the mobiles are the C arm next year.

The these will combine with Axcelis is a way to some extent on margins and I'm just kind of curious what your view is or how we should be thinking about your gross margins into 2020, given the introduction of some of these higher capital dollar systems that make carry lower gross margins.

Relative to your implant business, Yeah, I mean, thanks for the question really want to think about when I think about gross profit I think for next year any impact would be would be small immaterial.

When I step back and look at the business I think our gross margin profile is it's pretty pretty strong a you know the last couple of quarters again, we're sitting 70 770 777 to.

In the near term I don't really see that change.

Hi, Thanks Keith.

And our next question comes from Steven Lichtman of Oppenheimer.

Hey, guys. Thanks for taking the questions. This is actually David on for Steve.

Starting off could you provide any color on sales contribution from trauma in the quarter and.

Just on pace for about 5 million for full year. Thank you.

I think I'd go back to I had said earlier first off thanks for the question you know, we're looking muscular skeletal as a whole those pieces of business are really small immaterial I would really refer back to some of David or Dave's comments in his in his script, but overall muscular skeletal performed strong we don't.

See any issues across the business and we continue to move forward to closing out the year.

Okay. Thanks, and then just one follow up on the marketing campaign, you mentioned last quarter, how is that being received and did you see an impact from that program that third quarter thing.

Yes, David we did Ah thanks to the question I.

As a couple of other callers have asked about why we saw such a strong quarter I think it's been our ability to ER to articulate the advantages of our system over the competition.

Sure just to understand that.

Marketing campaign really does a good job of drilling down into into the unique aspects of Excelsius why its smarter wise stronger wise faster so yes.

Okay. Thank you.

Sure.

With no further questions. This concludes the Globus medicals third quarter earnings call. Thank you for joining.

You may now disconnect.

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