Q3 2022 Enovis Corp Earnings Call
Good morning, everyone. Thank you for standing by and walking to the <unk> third quarter 2022 earnings call.
We'd now like to turn the call over to Derrick <unk>, Vice President of Investor Relations. Please go ahead.
Thank you good morning, everyone. Thank you for joining us today for our third quarter results Conference call I'm, Derik lockout, Vice President of Investor Relations and joining me on the call today are Matt <unk>, our CEO and Chris Hix Executive Vice President and CFO and Ben buried who we previously announced will serve as the CFO when Chris retires at the end of the year.
Our earnings release was issued earlier this morning and is available in the Investor Relations section of our website <unk> Dot com will be using a slide presentation on 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.
This call will make some forward looking statements about our beliefs and estimates regarding future events and results. These forward looking statements are subject to risks and uncertainties, including those set forth in the safe Harbor language in today's earnings release and in our filings with the SEC actual results may differ materially from any forward looking statements that we make today.
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 during the call today. The accompanying reconciliation information relating to those measures can be found in our earnings press release and in the appendix of today's slide presentation.
With that let me turn the call over to Matt on slide three.
Thanks, Eric.
I'm pleased to discuss our great operating and strategic progress this quarter.
We had strong growth and are demonstrating clear strides toward our strategic goal of sustainable high single digit organic growth.
Our growth is supported by an innovation engine that continues to produce exciting new technologies and solutions to improve patient outcomes and health care workflows.
In a moment I will discuss the latest PNR product offering that highlights our innovation vitality and momentum.
Despite a high load of inflation on our results we continue to improve our core margin this quarter.
Aided in part by price versus cost progress and operating leverage from our strong sales growth.
Teams are using our business system Etfs to drive an improvement in productivity gains throughout I notice.
We've also taken actions this year to improve our cost structure.
Our acquisitions expand our addressable market and fuel our strong share gain.
These businesses are performing as expected, including double digit growth in our foot and ankle business. After reconfiguring the sales channels earlier this year.
I continue to be impressed by the dedication and excitement of our global teams and want to thank our associates for their contributions this quarter as we continue to build a high value Med Tech growth company.
Our strong growth is underscored by another quarter of double digit return requirements highlighted on slide four total sales grew 23%, including strong contributions from acquisitions.
Organic growth of 15% is again well above market level.
This double digit growth was achieved across all of our product lines.
We had strong growth in the U S and international markets, demonstrating our favorable market segment positioning product portfolio strength and successful commercial execution.
In the third quarter, we expanded our U S surgical facility to further support our double digit revenue growth and in sourcing programs for margin expansion.
Math has also achieved double digit growth we acquired this strong franchise a year ago and it will now start contributing fully to our organic results.
Our recon segment is well positioned for very strong and sustainable organic growth.
As you can see on slide five we have successfully invested in exciting and faster growing opportunities.
Foot and ankle is a rapidly growing market segment at the recent <unk> conference. We highlighted several products that were recently FDA five 10-K cleared including the dining clipped Delta Donna clipped cuatro and the dine in nail helix. These products expand our innovative shape metal technology into new indications they can bear.
Patients and surgeons.
Our mattress business is growing strongly and we're making great progress on cross selling that will solidify well above market growth and improved gross margins in international Recon markets.
We recently conducted workshops with surgeons from seven European countries, leveraging our U S cable network showing the advantages of our products our commitment to innovation I got to attend one of those sessions in Switzerland and was extremely excited to see the interest from competitive surgeons as well as the great teamwork between our Novus teams.
We are very we have very healthy opportunity funnels for both our empower knee and our alternate shoulder.
We recently completed the acquisition of insight medical systems, and it's augmented reality technology.
Harvest delivers real time enhance free surgical guidance that is highly accurate and also space and cost efficient.
The number of procedures is ramping very quickly and positive surgeon feedback gives us confidence in the accretive growth potential of this differentiated surgical system.
Turning to slide six our prevention and recovery business also had a strong quarter.
It's 4% organic growth was in line with our strategic goals for the segment and we believe the business continues to grow faster than its underlying markets.
We are the market leader in most of our segments and our strengthened operational capabilities and a healthy vitality levels are clearly reading through.
PNR as incurred most of our companies inflation pressures and the team continues to increase prices to customers to mitigate the net effect.
Third quarter. These actions stemmed further net price cost erosion with sequential and year over year improvement in gross margins.
We remain committed to recover the cumulative heavy inflation for the past two years as the environment normalizes in the coming years.
We talked earlier about the inflation with our recon business.
We continue to make great strides.
In PNR as well on innovation.
We've been investing in R&D and are now sustaining a healthy mid teens vitality rate.
<unk>.
On slide seven we highlight an exciting development that furthers, our PNR market leadership and company digital strategy.
We recently introduced significant updates to our motion IQ platform the extra <unk> IQ post operative in the SRP IQ3 <unk> net compression sleeve.
These award winning solutions combined smart sensors, and great functional braces with groundbreaking apps to help patients achieve better recovery and rehabilitation outcomes.
<unk> access videos of proper rehab exercise tech not niques and receive real time monitoring and feedback.
The Cara team can monitor patients on a dashboard and dynamically intervene to encourage patient compliance.
Adjusting customize recovery programs during the patients rehab journey.
These innovations were recognized recently at the American Orthopedic Society for sports medicines annual meeting winning the coveted Ace Award.
Yeah.
In addition to the terrific performance in Q3, we're also making important progress toward our strategic goal to create a $2 billion revenue Med Tech company by 2024.
Slide eight shows our accelerating organic growth this year on the path towards sustainable high single digit organic growth.
Our success reflects the strengthening cornerstones of our strategy high performing teams continuous improvement in everything that we do better innovation processes and acquisitions that position us in faster growing market segments.
We are well positioned to outgrow our markets and execute against our large M&A target funnel to achieve our goals.
Slide nine shows that we're also improving our margins in a year when most of the industry or not.
Considering the significant inflation that we have encountered since COVID-19. We are proud of this performance.
If you Peel away the impacts of currency movements and recent acquisitions, we've increased our core margins 80 basis points year to date.
Our strong growth creates operating leverage that helps our margin journey and we've also taken $25 million of structural cost out versus 2021.
As our acquisitions continue to scale, we expect further margin expansion.
We've made great progress, but recognize that inflation and currency pressures are extending the time required to achieve our 20% goal in 2022 alone we have about 100 basis points of headwind from FX and additional net inflation.
We remain confident in our ability to leverage our <unk> toolkit, driving long term productivity and pricing that will move us forward every year and ultimately drive the 20% margin and beyond.
Now I'll turn the call over to Chris take you through our Q3 financial results and near term Chris.
Well, thanks, Matt I'll start my prepared remarks on slide 10.
We had a strong operating quarter Q3 was above market organic growth in core margin expansion.
We're 7% with a strong organic component of the acquisition and FX factors offset each other.
Gross margins grew 140 basis points year over year, reflecting our faster growing higher margin recon segment.
We also reduced the net inflation pressures that had been increasing each quarter in our PNR business.
We expect another strong quarter of year over year gross margin expansion in the fourth quarter.
Our year over year EBITDA margins of 14, 9% in the quarter reflects several key drivers.
Recent acquisitions joined the Novus with less than company average margins, which reduced year over year margins by a full point.
We expect margins to expand as these acquisitions scale from fast growth.
Our core margins increased 40 basis points in the quarter or 80 basis points year to date, despite having significant pressure from net inflation.
Besides having strong operating performance our EPS results of <unk> 59 in the quarter included one time tax benefits that temporarily pushed our tax rate below 10% in Q3.
We expect the tax rate to pop back into the mid Twenty's in Q4 and in the full year at around 18%.
We are working to implement changes that can sustainably reduce our tax rate to 20% or lower next year.
Our Q3 results also include higher interest costs that reflect the current value of the <unk> retained stake and higher interest rates.
We are pleased with the results of Q3 and are positioned for a healthy finish to the year as shown on slide 11.
As Matt noted earlier, we expect Q4 organic growth to be at or higher than Q3 rates.
We are expecting about six 5% full year organic growth.
Supported by strong product vitality and operating execution to continue our fast growth and market share gains.
Overall market growth is improving seasonally but there are pockets of pressure from the procedure cancellations caregiver staffing and other market disruptions we.
We are projecting total growth of about 10% for the year, including roughly three points of currency headwind.
We're updating our full year EBITDA towards the lower end of previous guidance to reflect market demand trends persistent inflation and currency challenges that we believe will continue into 2023.
We expect to outgrow our markets and expand our margins. This year. Despite the combined 100 basis points of FX and net inflation pressures that we are absorbing.
This performance include strong sequential margin growth in Q4 to reflect our seasonally highest revenues.
Our 2022 EPS outlook includes this year's margin expansion, increasing interest costs and recent onetime tax benefits.
We are pleased with our forecast for double digit EPS growth this year.
So to summarize on slide 12, we've created a company with sustainable market outperformance both for growth and margins. We have strong teams healthy innovation engine, a business system that drives continuous improvement.
And a successful M&A strategy with capacity for a lot more.
We are shaping the company to be an enduring med tech growth leader.
On a personal note to be my last earnings call as our editor retirement at the end of the month.
I am retiring of dissatisfaction and having been in harvest strong team accomplished a lot in August and Colfax and I'm pleased that we have such a strong new CFO veterinarian will step into my shoes.
With that mandate, let's go ahead and open up the call.
<unk>.
Yes.
The floor is now open for your questions to ask a question at this time. Please press star one on your telephone keypad. If at any point you would like to withdraw from the queue. Please press star one again, we will take a moment to render our roster.
Yeah.
Yeah.
Our first question comes from Vijay Kumar from Evercore ISI. Please proceed.
Hey, guys. Thanks for taking my question.
Congrats on a steady execution here maybe.
Maybe my first question is on top line.
Q4 implied a 78% organically, that's coming as evinced pretty tough comp.
Can you just talk about the visibility here on that high singles Whats driving this growth.
And in any early thoughts on 'twenty three should we be still be looking at the high singles.
Bio industry growth model for 'twenty three.
Yeah. Thanks, Thanks for the question Vijay.
Yes, we did try to give a narrow guide at this point in terms of how we expect the year to finish out from a from a growth standpoint, and we are.
We think that our growth in Q3, as nice and strong and shows nice nice share gain across our businesses, we're expecting to see sort of a normal seasonal step up on the recon side as we head into Q.
Q4.
At this point the possibility of a real kick up late in the year is probably off the table that was a possibility.
Going back a few months, but at the same time, we're not feeling some of the some of the heavier pressure on that business that there was say back in June and July So we're expecting a sort of a normal seasonal finish to the year.
On the recon side.
And.
On the PNR side, we feel like.
The markets are steady.
Steady and.
Beyond some of the back side of that re con pressure. So we feel good about the path to have the same or better growth here in the fourth quarter of the year as we had in the third.
Gotcha, and Chris maybe one on margins here.
Just look at the guidance at the midpoint I think EBITDA margins for the year as you know.
Around 15% up 50 basis points year on year.
Can you just.
Talk about the different moving parts, what's what's implied in.
Total FX headwinds and the 15% what is the impact of inflation.
The name <unk>.
Can I ask as well.
Of those three buckets, FX inflation and M&A, what pieces improve or should we expect any improvements heading into 'twenty three.
Yes, I'll take that this is Ben thanks, Thanks for the question.
Yeah, Yeah, if you think about kind of our margin performance. This year I mean, we're continuing to control the controllable.
As Matt mentioned, we've taken some of the cost out of the system, which has given us some benefit as we manage through some of the FX pressure and the inflation that we with that.
We mentioned in the prepared remarks of about 100 basis points, we do expect some of that to continue.
As we go into next year and it continues to be a tough environment and.
What we're showing is that we're showing that we're expanding while a lot of our competitors are contracting. So we're making a good step forward, but we do expect some of those pressures to continue as we go into next year and then I'll just add one comment that as we started the year with the expectation that margins would expand roughly 150 basis points.
Plus or minus and it's interesting if you look at that piece that we're absorbing FX and inflation, which is about 100 basis points.
Sure.
We're pretty much right on right on track controllable part of the business, So executing where we can and now as were getting gaining ground on the inflation price dynamic, we'll see that continue to to to help us to drive margins a little bit as we go forward here.
Understood. Thanks, guys.
Okay.
Our next question comes from Big Chopra from Wells Fargo. Please proceed.
Hey, good morning, and thanks, so much for taking the question congrats on a great third quarter and Chris.
Thanks for all your help this year and best of luck in your retirement I had two questions I guess I'll ask them upfront.
Just following up on <unk> questions on 2023, I know youre not providing guidance right now, but can you give us a framework on how to think about 2023, specifically any items you are aware of now.
That inflation.
Running through the P&L that you can share any potential headwinds in tailwind.
And the second question I had was on <unk>.
The European business, obviously map has performed really well this quarter, but just given talks of a potential recession in Europe have you seen any demand disruption when it comes to procedure volumes.
And are you expecting a slowdown in Q4 in procedure volumes in Europe . Thanks, so much.
Alright. Thanks, Thanks, a lot back let me try to pick those up I think we're certainly not ready to guide 2023, we will do that.
Early next year.
I'll say a few things, though first I think what we are.
Demonstrating this year in terms of our growth and our relative growth.
Really I think certainly shows that we are capable of.
Driver assistant.
Consistent high single digit organic growth performance.
As far as.
As next year, we'll have to kind of see how things look as we turned the corner this year into next year, but.
Thank you.
Back half of this year does have a little bit of recovery tailwind in it.
Maybe a little bit a little bit extra price in it and so.
Thank you.
Probably.
Probably not not going to be super lean in and on next year versus having kind of a.
Thoughtful thoughtful kind of guide there.
And as far as the inflation part.
<unk> commented on before.
We're confident that we'll be able to keep moving our margins forward, but we also expect that next year is going to have some of the same conferred currency and inflation pressure that we're feeling feeling this year and so.
We'd expect to take taken another good step forward towards our 20%.
Goal, but as I said in my comment.
The path to that goal has gotten a little bit longer based on the way. This couple of years are are playing out.
On the <unk>.
The Europe question.
We're seeing pretty healthy demand in Europe , and strong performance by our math his team a lot of positive energy in that business both between the existing products and some of the innovation and hip they've they've been bringing to market and then bring in <unk>.
Bringing our products from the U S over there and so we are seeing a kind of a healthy healthy finish to the year and not.
Not seeing a lot of market pressure over there is certainly the one market that's still dragging as Australia. That's one that we had thought might really kick here at the end of the year and we're now seeing it just just sort of slowly improving back.
But.
The.
The markets on the continent.
A solid place right now and we're certainly very very excited about the momentum we've got in the math this team over there.
Our next question comes from Matthew Miss Sean from Keybanc. Please proceed.
Hey, good morning, and thank you for taking the questions.
Morning, Matt.
First I just want to understand the change in the fourth quarter guidance.
Because I think it implied.
So you had implied a stronger ramp in the fourth quarter.
<unk>.
And you had a really good third quarter. So what's changed in your thinking around around Lake <unk> organic growth.
Yes, Matt Thanks for the question.
Our comments on the last call I think we tried to be transparent that we're keeping a pretty wide band on the fourth quarter in terms of what the growth.
What the growth could be in keeping in that frame the full range of possibilities.
Heavier COVID-19 pressure that might even lead to a small D cell two real kicker with everything kind of clearing in the back half of the year and some backlog clear. So yes, I think we did signal.
Mid range of possibilities in the fourth quarter and what we are now dialing in as you can see is an expectation that.
We will have at least the growth we had in third quarter and.
A little bit of acceleration and I think thats.
Really what we're seeing in terms of the elective path that there is a normal seasonality playing out but there are still pockets around the market of.
Pressure pockets of pressure in the U S. Whether it's cancellations in certain areas or staffing pressure in certain areas and a couple of markets outside of the U S. Australia. The one I mentioned, that's one of the larger ones that.
That's still under some pressure and then on the PNR side, we have seen in Q3 and expect in Q4, a little bit of of the backside of the elective pressure that there was back in June and July .
In our PNR business some of the impacts are delayed there and so we're kind of seeing some of that in thinking about how it can affect the PNR business in Q <unk> Q4.
We've put up a thoughtful guide out there as to what we now expect is going to happen down the back half of the year, which would be a good good strong finish about six and a half full year full year growth for the for the company something were certainly proud of in terms of how it how it stacks up and how it shows our ability to make good strong progress on our.
TG goals.
Okay excellent.
And then I think you mentioned that the path to the 20%.
Is it is extended.
Your long term goal I'm not sure you ever put it.
<unk> frame on that but just can you put that comment into context.
And how we should think about.
A timeline to achieve that 20%.
Yes, as Chris said as we as we talked about our path to 20% we talked about the various factors that would drive drive that very credible path in terms of taking some structural costs out of the system driving productivity recovering some of the price cost squeeze that we had started to already feel.
Back.
Then in the scaling of the acquisitions.
As they as they grew up against high gross margins that we have in those acquisitions, we talked about that credible path and talked about a pacing that then.
That implied maybe closer to 150 basis points, a year of progress for 100 150 basis points of Europe of progress to move towards that.
<unk>.
At the time.
We could see a very credible path to how that could happen. What's happened this year and we're expecting to see carry a little bit into next year is that there is this this currency pressure.
Continuing waves of inflation and so while we can execute that our underlying basis. There's been headwinds that are offsetting a portion of that and so we're trying to be transparent here to say that.
Until this.
<unk> inflation and currency situation clears, our annual progress towards that goal is going to be a little more modest.
And there is still that big opportunity there.
Eventually have larger larger strides of annual progress into blow.
That 20% goal, but we're trying to be transparent about what the first couple of years here look like.
Okay excellent and then just on motion IQ I love the idea of that being connected solution.
How are you thinking about getting paid for it and being reimbursed for it.
And how do you see that.
You could show improved outcomes as a result of that and then going back to your your customers and saying this is what we get you with this solution.
Yes, I mean, that's a great question, Matt first of all is as the leader in embracing and the only player that really plays along the full orthopedic continuum of care in our company we really.
I have decided we're going to lead the way in connected bracing because there clearly is a great opportunity there.
That really has the potential to meet the health care system need of better outcomes at less total cost and so we're confident that with the technology, that's available and the need there, there's a big opportunity and we're leading leading the way here.
And we've got a great great solution out there that that we've got some really good positive feedback on.
Now at the same time this is going to be a journey in terms of how how things develop.
Over time.
Because I think we got a great solution. We're now working with a number of number of very excited docs about getting that into their protocols and being able to start to demonstrate the benefits that that solution provides and we're confident that.
We've seen in other parts of the health care industry that if you have a great solution you demonstrate the benefits that it brings over time.
Our reimbursement.
Can follow Fortunately the solution it doesn't have a lot of extra cost and so getting it out there into the marketplace and an environment, where it's not reimbursed as a great way to lead the way and to start to get some of the data.
<unk> that that could lead to reimbursement over time and we've seen other other other connected applications in the U S. Getting reimbursed. There's also several countries outside the U S. Now that have reimbursement for connected medicine solutions and so we feel like that's the way things are going to likely go here over time.
And we're going to be.
A company that is leading the way.
Thank you very much.
Our next question comes from young Li from Jefferies. Please proceed.
Alright, great. Thanks for taking our question.
Congrats on your retirement and Chris Thanks for all your help during this transition and best of luck going forward and looking forward to working with you as well.
I guess, maybe for the first question.
Good to see that.
Foot and ankle returned to strong double digit growth in the quarter. It sounds like you made a lot of good progress with channel integration and helped by some new products as well.
Should we assume most of the disruption <unk> seen in Q2 are behind us.
And can you give us an update on the start ankle outlook for the intermediate peers as you modernize it.
Yes. Thanks. Thanks for the question Young we are excited about the progress and opportunity in foot and ankle.
We have worked through the channel integration and so feel like we're now on a on a good good path. There we are.
On the on the Star front, we expected as we move into next year, we will have.
The new cutting guide in the market and have our.
Our poly switched out in that product and so we've already been out I've been able to start to reintroduce that product.
To the marketplace and get people excited about what's coming and so we do think that that next year will start start to start recovery and Theres certainly a lot of lot of share to get back after and we've got a number of surgeons that used to use and love star that are excited about the potential to come back and start to start using it again and then we've got a great.
Pipeline in that business, some great new products that I talked about on the call there here.
Coming into the market as well as the ankle the arsenal ankle plating that we launched last quarter. So between the integrated channel, great innovation and being able to kind of lean in on Star next year, we feel like the.
Foot and ankle business is going to be on a very very nice growth path and there is also some interesting bolt ons.
There are potential in that space as well.
Okay, Great that's really helpful.
Yes.
The M&A environment.
Thank you have around 1 billion in capacity in the intermediate term.
How's the pipeline looking.
And your discussions with targets and valuation going.
Are there any areas or more focus on either from a product or scale perspective.
Yes, so our M&A pipeline pipeline is healthy and it's in the same area as we've talked about in the past in terms of differentiated offerings that we can bring into our into our recon.
Businesses that can accelerate our growth.
Opportunities to expand our market access geographically.
And things that we'll be bringing into the PNR portfolio that would shape that portfolio in a positive direction from a growth and margin standpoint. So we do see a number of different opportunities in the funnel there. It is.
Definitely a less frothy environment in terms of.
The kind of the valuation.
Environment.
But at the same time.
We're looking at high value businesses, and so I do think we're going to be able to find some good things to get done here in the coming quarters.
But.
And I do think that that is going to be a better valuation discussion than it was a year ago.
But at the same time, if theyre high value businesses, we're going to have to pay a fair price in order to get them acquired.
Alright, great. Thank you so much.
Our next question comes from Kyle Rose from Canaccord Genuity. Please proceed.
These risks and uncertainties. In addition to the inherent limitations of such forward looking.
Hey, Kevin are you there.
Yeah.
Hey, Kyle you there.
Okay.
Looks like we lost Kyle operator.
We can get them back in the queue. If he if he wants to.
Yes.
Yes.
Our next question comes from called Rose from Canaccord. Please proceed.
I'm, hoping you can hear me this time.
Yes.
Claire.
Alright, sorry about that gentlemen, and yes, Chris we echo the sentiment congrats on a well deserved.
Time off and inbound we look forward to working together.
What do we think about just.
The medium term margin outlook and I am not looking for guidance, but just directionally. When you think of the puts and takes I mean, you're now lapping Mathis from an M&A perspective, I think you've called out 1% with respect to EBITDA headwinds. There just wondering how should we expect the pace of that rolling off from a headwind.
Perspective.
And moving forward.
Yeah, Kyle it's Chris.
What I would say there is that as we do acquisitions, we bring them and if theyre going to have the profile of what we've been searching out. These differentiated solutions that that have a lot of high growth in them oftentimes they come in.
Earlier stage haven't quite caught up with the with the cost structure that they've got they come in with typically lower margins, but they have got that sort of fast paced growth that that expands the margins and so as we look at acquisitions as they get into it depends on.
Which ones, we're talking about but they get to kind of years 2345, and you see them really pickup quite a head of steam on the margins and being contributory, we're accretive to company margins Thats been the game plan all along here. So as we're looking at the current year, we've got the headwinds from the most recent acquisitions that we have.
Done.
Which includes insight for example, which had brings the rvs system along with it but these are also the seed corn for future rapid growth and margin expansion.
So as we as we think about margins heading forward, we were going to continue to be driving productivity. We're always going to have I think a good grasp on right sizing the cost structure to support the growth that we've got it as efficiently as possible we're going to have good operating leverage with these kinds of gross margins you could expect that.
So all of that is very much in front of us along with the accretive growth.
We're going to get out of the acquisitions, the part thats less in our control, but we've been transparent about this year is more on the inflation and FX side and everything we see today would suggest that that's going to continue to be a headwind as we go roll into 2023, but we are making up good ground on the pricing side to try to mitigate that so we still can.
That big cumulative load of net inflation thats been on us for the last couple of years, but we expect that to become less and less of a drag still cumulative drag for us for a little while but less of.
Increasing drag as we head forward, so thats sort of a broader answer on the margin front.
But as folks are thinking about 2023, it's a little early for us to talk definitively about it but those are the factors certainly that are going to play in as we were working towards talking more about 2023 early early next year.
Yes.
Okay.
Fair and then Matt I think you spoke.
In your prepared remarks, just about.
<unk> seen a strong demand funnel for <unk>.
Both the U S hip or both the U S knee and shoulder business I Wonder if you could just characterize that as well as some of the some of the upside performance you've seen recently.
Are there specific pockets of strength that youre seeing is it regionally is it by specialty.
ASC versus hospital, just really trying to understand what's driving some of that sustained top line share taking.
Yeah, and I'll make two comments I'll make my comment was actually.
About the funneling in Europe or outside the U S Europe and Australia in terms of the funnel for all debate and empower as we're driving the cross selling.
And there we see it in a number of countries. We had some some great events in the last few months, where we were able to engage surgeons.
A number of countries outside the U S and really show them.
The great attributes of those two great products in power and all debate and there's a lot of excitement building surgeons wanted to get their hands on sets in.
Do do trials and look at potentially converting.
But beyond that here in the U S. Kyle Yes, we continue to drive nice nice share gain gain across all of the Anatomies as Youll see we showed we talked about we've had growth double digit growth across all of the Anatomies and.
I think we continue to win with our empower knee, we continue to win in the ASC environment and have that be higher.
A higher part of our.
Higher portion of our business.
Then it is for the market.
Overall and in each part of the anatomy, we've had some some good innovation coming to year. This this year and last year and then certainly in the <unk> area knee in particular rvs is creating a lot of energy.
And excitement.
Okay, great well, thank you for taking the call.
Yes, thanks, Kevin.
That does conclude today's questions I would now like to turn the call over to Matt for closing remarks.
Yeah. Thank you thanks for joining and before we close I do just want I want to say to Chris Chris. Thank you for your many years of terrific service to our company and your partnership with me I know they join everyone on the call and wishing you all the best as we head towards your retirement at the end of the year. Thanks, Chris and thank you Matt. Thanks.
One.
Thank you ladies and gentlemen, this does conclude today's call. Thank you for your participation you may now disconnect.
[music].