Q3 2022 SeaSpine Holdings Corp Earnings Call
Good afternoon, and thank you all for joining us our organization's consistent execution and the performance of our distributor partners, including a large transformational distributors. We added during the past year delivered record third quarter revenue growth and accelerating momentum.
The tremendous momentum combined with our innovative product offerings, and ortho biologics spinal implants, and enabling technologies continue to attract larger more exclusive distributors and fuel our growth as we finish 2022 and look forward to consummating, our planned merger with orthopedics, which.
We expect to close early next year.
The momentum gave us the confidence to raise full year 2022 revenue guidance to a range of $2 36 to $2 $38 million representing year over year growth of 23% to 24%.
In the third quarter, we grew total revenues by 45% over the prior year period, a $67 1 million.
In the U S, where we generate approximately 90% of our total revenue we saw revenue increase 24%, reaching $51 1 million and international revenue grew 207% to $16 million largely as a result of the spinal implant stocking orders.
We shipped to our European distribution partners ahead of our planned exit from the spinal implants market there.
We continue to expand our product portfolio with the full commercial launches of the wave form T lift articulating inter body system and the Mariner Mis wave <unk> system the.
The wave <unk> system is the next iteration of our proprietary three D printed antibody technology that is manufactured entirely of a repeating and continuous wave like structure that absorbs and distributes a comprehensive loads I'm, sorry, compressive loads more efficiently than other three D printed.
<unk> architectures in the market without compromising strength.
The way finder system, a novel, one step K wireless screw delivery system for pedicle screw fixation that is designed to reduce the number of steps associated with fixation placement. These launches demonstrates <unk> continued commitment to advance its portfolios through product development to help surgeons improved <unk>.
<unk> outcomes and to drive market share gains.
Turning to 70 surgical.
We placed six units in the third quarter from an earn out perspective, we have executed a total of five deals since the acquisition with an aggregate annual revenue commitment of $2 8 million per year.
The sales pipeline for our flash navigation system continues to shift to a higher percentage of earn out opportunities. Additionally.
Additionally, in terms of non contractual revenue pull through of our spinal implants and ortho biologics products. We continue to see increased revenue six months post capital sale and over half of those accounts.
Before handing off the call to John I would like to take a few minutes to discuss our recently announced intent to merge with ortho fixed medical.
We believe our combined portfolios will put us in a highly differentiated position in the spine market can.
Combining leading bone growth therapy, enabling technologies spinal fixation motion preservation and ortho biologics the combined distribution network, we'll have access to greater than.
A 200 million dollar base of complementary revenue with immediate pull through opportunity via the motion preservation 70, enabling technologies and bone growth therapies portfolios.
Additionally, we believe that the revenue risk is manageable as our due diligence efforts confirmed that there is minimal geographic overlap in the United States.
This merger of two patient focused companies will create far more significant revenue upside and cost synergies and the two existing companies could accomplish on their own and now I will turn the call over to John for more detail on our financials and our financial outlook, then I will wrap up John .
Thanks, Keith and good afternoon, everyone as Keith noted earlier total revenue for the third quarter of 2022 was $67 1 million or 45% increase over the prior year.
In the U S, we posted 24% growth to $51 $1 million.
International revenue increased by 207% to $16 million.
U S spinal implant and enabling technologies revenue in the third quarter increased 30% to $27 4 million.
Products launched or enhanced via line extensions within the past five years continue to fuel revenue growth and drive market share gains and accounted for 76% of U S. Spinal implant revenue in the third quarter of 2022.
This continues to be an encouraging indicator for sustained long term revenue growth.
U S ortho biologics revenue in the third quarter increased 18% to $23 8 million and.
<unk> continues to be driven by growth in the <unk> plus fibers based DBM product line.
Sales of products launched within the past five years accounted for 49% of U S. Ortho biologics revenue.
Yeah.
Our U S spinal implants surgery volumes increased 30% compared to the third quarter of 2021, while revenue per case increased low single digits compared to the prior year, Utah.
Utilization of our spinal implant systems and ortho biologics products increased to two two per procedure in the third quarter of 2022 compared to $2, one a year ago.
We experienced low single digit average price declines in both the spinal implants in north of biologics portfolio is consistent with prior years.
Yeah.
GAAP gross margin for the third quarter of 2022 was 63% compared to 66% for the third quarter of 2021.
Adjusted gross margin was 61, 8% for the third quarter of 2022 compared to 64, 3% for the third quarter of 2021.
The decrease in GAAP and adjusted gross margin was primarily due to the lower gross margin associated with a $10 million increase in spinal implants revenue to European distributors in the third quarter of 2022 compared to the prior year period, which was partially offset by lower excess and obsolete inventory charges.
Operating expenses for the third quarter of 2022 totaled $55 2 million and.
At $8 8 million increase compared to the third quarter of 2021 the.
The increase in operating expenses was driven primarily by $5 4 million and higher selling and marketing expenses attributable to increased commissions and freight and logistics costs associated with increased revenue.
$3 $1 million in higher general and administrative expenses due primarily to increased head count related compensation expenses and by legal and other fees associated with the planned merger with orthopedics and $300000 in higher research and development expenses.
Net loss for the third quarter of 2022 was $15 5 million compared to a net loss of $17 6 million for the third quarter of 2021.
Adjusted EBITDA loss for the third quarter of 2022 was $2 7 million compared.
Compared to a loss of $7 4 million for the third quarter of 2021.
Adjusted EBITDA loss is a non-GAAP financial measure that we believe provides valuable information on our operating results that facilitates the comparability of our core operating performance from period to period and against other companies in our industry.
A reconciliation of GAAP net loss to adjusted EBITDA loss was presented in the financial tables of the press release, we issued this afternoon.
Cash and cash equivalents at September 32022 totaled $46 8 million and includes $25 $8 million of outstanding borrowings under the credit facility.
Our free cash flow burn, which includes operating cash flows and purchases of property and equipment was $19 million for the third quarter of 2022.
This spend is in line with the large amount of inventory and set build capital expenditures to support the recent and upcoming full product launches.
Fulfillment final European spinal implant stocking orders and our aggressive U S revenue growth expectations for the full year.
Turning to our financial outlook for 2022 as Keith noted earlier, we expect full year 2022 revenue to be in the range of $236 million to $238 million, reflecting growth of approximately 23% to 24% over full year 2021.
This revenue range reflects growth of 16% to 19% for the fourth quarter of 2022 after excluding European spinal implant revenue generated in the fourth quarter of 2021.
Moving down the P&L, we still anticipate generating 150 to 200 basis points of adjusted gross margin expansion for the full year 2022 compared to the 63, 5% we reported in 2021.
We expect to reduce our adjusted EBITDA loss by 10% to 15% compared to the $22 9 million we reported in 2021.
We expect to generate these operating improvements through a combination of more efficient revenue growth fueled by the continued onboarding of more exclusive and high quality distributor partners from the robust cadence of transformative product launches from further market penetration of the unique 70 flash technology and from higher adjusted gross.
<unk> through an increasingly favorable sales mix.
Our expectations for free cash flow burn for full year 2022 has increased to more than $70 million.
This increase is driven primarily by two factors.
One the cash expenditures, we anticipate making in the fourth quarter of 2022 related to legal accounting and other fees associated with the fixed merger and two to greater investments in additional inventory and spinal implant sets to nearly $50 million for the full year.
This higher spend underscores the confidence we have in generating long term sustained revenue growth as we continue to support product launches and the onboarding of more transformative distributor partners as we seek to exceed the 15% to 18% long term revenue growth rates, we committed to earlier this year.
To date, we have received and paid more than $35 million of that significant growth investment at.
At this point I'd like to turn the call back over to Keith for closing comments.
Thank you John Seaspan continues to gain momentum as evidenced by our sustained an outstanding results, while increasing revenue guidance.
We are simply winning and taking market share the winning recipe requires hard work.
Take a lot of product innovation combined with proper execution and mix in a great crew.
The outcomes of our increased market share improving financial results and overall success. We are taking this winning recipe with us as we chart, our course into our future merger with ortho effects and I look forward to the combined entity, yielding even better outcomes by becoming stronger together with that thank you all.
For your time and more importantly, your support we will now open it up to questions.
Thank you Sir.
Ladies and gentlemen.
We will begin the question and then one quick question.
If you would like to ask a question. Please press star.
And then one no telephone keypad.
<unk> Tom will indicate your line is in the question queue.
You mean, Christophe and then two if you would like to move your question.
Again, he would like to ask a question. Please.
And then one.
Just last question.
A question from Ryan Zimmerman from <unk>.
Please go ahead.
Good afternoon, thanks for taking the question.
They don't have or not.
Just wanted to ask if you could take us.
Through kind of your thoughts on the low and high end of guidance for the fourth quarter kind of what your underlying assumptions are for the low end what are your underlying assumptions are for the high end as we think about the revenue implied for fourth quarter.
Yes, it's obviously driven by U S revenue with 90% of our revenue coming to U S. Spinal implants, and ortho biologics are both coming off great quarters and were getting deepening penetration with the capital sales team from 70. So again the expectation is it's going to come from across the board in the.
U S.
We exited the spinal implants market in Europe in the third quarter with those final stocking orders that doesn't change our ability to sell spinal implants elsewhere in the world and it doesn't impact our ability to sell or the biologics or 70 in Europe right because it was a different distributor network, but obviously the European piece.
Expect to see down.
But the growth is picking up on the momentum we've seen in the U S. In both spinal implants, north biologics from recent product launches, we've got expectations for upcoming product launches with Mariner adult deformity and really it's just continuing to see the benefits of those larger transformative distribute.
As we brought on board.
Most meaningfully in the past year or even six months and we've got a pipeline of additional distributors, we want to bring in that exclusive capacity and think we'll be able to capitalize on some of those opportunities in the fourth quarter. So really it's a lot of the same of what we did in the third quarter minus the stocking orders for the European distributor.
Yeah.
Okay, and just to be clear, there's no kind of underlying macro assumptions.
And our Covid way Ryan I, just wanted to get it off the table.
For anyone that Matt talked about that.
Yeah.
Correct no assumptions for Covid, assuming continuing volumes at the same level we've seen.
It really all this year since the omicron wave we've been fortunate that we have not been impacted by any COVID-19 waves and expect to see the same kind of volumes continuing in the fourth quarter that we saw in the third quarter.
Okay.
Just a follow up question for me.
About the merger keys and.
I appreciate the commentary about revenue synergies and also certainly revenue opportunities.
Yes.
One.
How do you feel like Youre mitigating any risk around the merger, especially around integration of the two organizations and just where you see kind of the greatest revenue synergy, whether that's an opportunity with them.
Preservation or enabling tech or specific product categories that you are and where do you think you can grab to capture the most cross sell thank you.
Yes, you bet right I think you captured all of them, there's there's components to each I mean, one one area that we are excited about us.
We feel like in the research that we did that there is minimal overlap and so dealing with minimal overlap means that we're going to be able to really.
Hit the ground running with distribution, especially our exclusive distributors, who will have the ability to now have motion preservation with what we think and feel strongly about is the best cervical fusion product portfolio and that combination will be very powerful. In addition to that I think that there is going to be interest in us.
Exploring how exclusive distribution has the ability to drive.
Greater <unk> opportunity, so bone growth therapies, and what we can do on the Sterne business by having focused distributors also interested in and driving that platform I think.
I think also when you look at enabling Tech I think as we know <unk> is a great agnostic platform, meaning not only can it be used in all different spine surgeries, but it can also be used in surgeries outside of spine and I think that's going to be a great opportunity for us is as we start combining and understanding what other areas.
As of Oh, what areas of the organization can benefit from the use of 70 and benefit from either placements outright or or some sort of earn outs.
Okay I appreciate it I'll hop back in queue. Thanks, guys.
Thanks.
Yeah.
Next question, we have is from pound rose from Canaccord.
Great Good afternoon, everyone.
I wondered just to start if we could get.
The U S O U S breakout for <unk> 70 in the quarter.
And then just your expectations as far as how you expect that will trend through year end here.
Yes, remember Ryan we talked about giving revenue guidance on capital sales revenue through the anniversary.
The acquisition, because we wanted to provide organic versus inorganic but now that we've anniversaried. The acquisition, we're shifting to just focus on placements because the placements is the critical part right. We get the benefit of either a capital sales revenue, which is the upfront revenue, while we get the benefit of the longer term revenue growth from an earn out so we're not going to give color on the <unk>.
Different capital sales opportunities or results, but we're going to instead to stay focused on talking about units because the more units, we are placing the field, whether its capital sale or earn out for <unk>.
The uptick in spinal implants revenue, obviously with the earn outs its contractual but as we mentioned over half. The accounts were a 70 units been sold we're starting to see non contractual pull through of revenue for our spinal implants, north biologics. So it's kind of that other benefit to the capital sale.
Great. Thank you and then.
With respect to just.
Both the merger as well as the commercial team you talked about your new transformative exclusive type distributors could you just help us understand I realize it's still early but how has.
Yes.
Those conversations with either potential.
Potential distributors trended since the merger announcement as well as how have the conversations with your existing commercial team now that you're presumably you had a chance to check in with everybody at NASS and thereafter, just overall reaction after a little bit the dust settled with respect to the merger.
So I'll tell you there was there was a real palpable energy at NASS I think that we were really pleased with not only the enthusiasm that our distribution team had.
Which was.
<unk> a lot of along the lines of what I just answered previously on what the synergies can be on the upside opportunity could be for them, but I was also impressed with our sales management team and marketing teams and development teams that were all there as well I mean, obviously these kind of this kind of news can create a certain level.
Tension or apprehension so to speak.
Everyone was very excited they're excited about what this opportunity is going to bring they're excited about being part of a larger company. That's gonna have certainly a strong balance sheet that will enable further investments in spine and further growth opportunities. So I think even post NASS meeting that momentum.
<unk> has continued we're excited about how the quarter shaping up and I think it's a demonstration to how focused the teams arent and where they want to see their roles moving forward as the companies combine.
Okay.
Yeah.
Great and then just overall just kind of piggybacking on Ryans question previously with regards to the macro any.
Changes youre seeing with respect to your staffing challenges across the environment expectations, when you're speaking of hospital.
Partners do you think they'll get those will get easier ended the Q4, just macro demand trends into the end of the year would be really helpful. Thank you.
Yeah.
Kind of our market checks and conversations with surgeons have been very positive most are completely booked up for their fourth quarter not unusual knowing that how that usually shapes up in Q4, no. One seems to be expressing any concerns about staffing I think that everyone wants there to be more flex ability the ability to work.
Weekends or work longer shifts.
<unk> not sure everyone is going to have that flexibility I think most surgeons spoke that.
It is stable again and that they're not worried about.
Any kind of.
Slowdowns from an or perspective, and absolutely looking forward to getting through their scheduling and so.
I view it as it should be very similar to what we saw in the third quarter as far as staffing and availability and everything else and don't anticipate any kind of disruption at this point.
Great. Thank you for taking the questions.
Yep.
Thank you.
Gentlemen, just a reminder, if you would like to ask a question.
And then one no.
Next question is from Richard real.
Kirkland trades.
Hi, Thanks for taking the question. This is Sam on for rich.
Just.
First question from Us.
Arms are the plans to add direct reps are those conversations still happening and how should we think about.
As a combined entity when those direct reps are going to come onboard and where they should be felt there and one that should be felt.
Yes, so the strategy.
All along has been to add direct reps second half of the year and we have been.
And I know that in general speaking during during the process of diligence.
We're all in agreement that direct reps do makes sense in a progressive manner, meaning in areas that we have both now will have white space or have areas. That's good distribution can't be found but a direct is an alternative that we will pursue it so.
Typically speaking the strategy Hasnt changed it may even accelerate once once we have the combined entities will just have to see once we once we are able to look at that and look at the overlaps.
Where there could be white space for both of us and take advantage of it.
Okay.
<unk>.
Pickup in R&D sequentially here in <unk> can you just give us any guidance on how to think about opex spend sort of over the next few quarters, leading up to the merger.
Yes, R&D spend has picked up in that.
A lot of it's influenced by the acceleration of the 70 development programs in our next generation camera system in it.
Proceeding with the integration of the <unk> system, with our spinal implants, and making that more seamless. So we talked about that dating back to the acquisition of the seven day and how we expect that to pick up over time and gave some guidance in accelerating R&D spend as a percentage of revenue in 2022, So I think youre seeing that play out large.
Influenced by 70.
And then.
Consistent with that long term guidance, we expect R&D expenses at least on a standalone basis would have been similar for 2023 as a percentage of revenue again heavily influenced by accelerating all those 70 development programs.
That is going to shape up post merger.
You haven't given guidance on that yet but.
We're continuing to invest aggressively in spinal implant and ortho biologics product development programs and gathering clinical data, so that hasnt changed and.
It has not grown at the same rate as revenue has grown but the increase in R&D is mostly coming from that increasing spending 70 weeks because we want to continue to keep that technology ahead of all the competition before there's another entry into the market.
Great. Thanks, just any like similar commentary on SG&A over the next few quarters, how we should think.
Yes that question Michael.
Okay.
The G&A component, which we split out.
Just the G&A has been.
Growing typically mid single digits year over year. So I think that will continue to be the long term trends because we're able to get leverage in that G&A line again, how that changes with the merger.
We've yet to give guidance, but I don't see that changing fund.
Fundamentally if getting leverage out of the G&A line and from our Standalone sales and marketing perspective, we're really starting to see the benefits of those more efficient commission rates on distributors, because we're well into multiple year arrangements with distributors and where we had offered premiums in the past because we didn't perhaps have the most.
Up to date portfolio to take market share we did offer premium commissions early on but now that we've got a complete bag and we believe the best hardware spinal implant portfolio in the business across the board when you.
Look at cervical Interbody <unk> lumbar, we don't need to offer those premium commission rates, yet, we're still able to sign up. These transformative large distributors that are driving market share. So I think we'll continue to see gradual leverage and the commission lines from the distribution model, but also as we continue to hire more direct sales reps longer term, we're going to get.
More leverage out of that but because of typical upfront cost of bringing on a direct sales force it might be dilutive in the near term, but I think the distributor commission efficiency can outweigh that in the near term as well.
Great. Thank you.
Thank you.
Question from.
Jeffrey Cohen from Ladenburg Thalmann.
Alright, Keith and John how are you.
Hey, Jeff good.
Just two questions from our side I guess.
The macro questions into 'twenty three with the close so.
As you've seen and we've seen the pull through from the 70 folks with respect to your hardware in your repair and penetration in the marketplace. So perhaps you can hypothesize how that might play out through 'twenty three with the worth of fixed portfolio.
<unk> to yours.
Yes, I think it opens up more opportunities for both capital sales and earn outs and as Keith said right not just in the spine space, but there is opportunity to leverage 70 technology in the same way through the orthopedics channel with oil affects whether it's capital sale or earn out in those accounts. So I think.
The merger only increases the opportunity of what we've been able to take advantage of an earn out some capital sales in.
<unk> pull through whether it's contractual revenue pull through on an earn out with a broader revenue base to now include motion preservation. In addition to our spinal implants and biologics.
But also the non contractual pull through that we're seeing.
The unit is placed in an account so I am excited to see where we can take it with the merger because it just <unk>.
Increases the opportunity we've already been able to take advantage over 70.
Okay got it.
Could you hypothesize, how that might play out in the future as far as.
Due to our research organizations.
Edwards restrictions will cease Brian thanks.
And perhaps talk to us a little bit about.
On your side some of your thoughts on motion preservation.
Other areas of the skull.
Yes, what was that again the other researches going to combine was that the question.
R&D related to perhaps taking some of your spine innovation to other areas of the body and vice versa.
So I guess I'm not tracking on that so.
The combined groups for spy and haven't been decided that'll be.
That's a work stream and effort on on how that combination will look and how it will be.
Splitting up.
Not only talent, but also how we'll be thinking about new product introductions and new product.
Innovation, so that work stream is not done yet but.
We're excited from the perspective of there is.
Really a big bag of products right now and Theres really not a lot to fill out a lot of what we'll be doing is working on next generation products, probably moving forward as well so but again that work stream is in process and won't be finalized really until after the combination.
Okay.
Great. Thanks for taking the questions.
Yes, the one thing I'll add Jeff is we've been pretty clear it doesn't change our commitment to innovation.
<unk> all the different portfolios of the combined business right. So that's something I think both groups are aligned on is continue to invest in innovation and take market share as a larger organization.
Got it perfect. Thanks for taking the questions.
Thank you.
Ladies and gentlemen.
As a reminder.
The Orca question. Please go ahead.
And then one now.
Next question, we have is from Antoine from harmful.
Sure.
Hi, everyone congrats on the quarter and thanks for taking my questions.
Alright.
Starting off on I realize the full answer percutaneous, so neal but is there any feedback you'd like to share at this point maybe from conversation to ask.
Kathy Burke.
70 percutaneous.
Yes.
Yes. So percutaneous continues to we had a good alpha and beta with it which which created some minor changes that went into the considerations for full launch I think what's interesting with the PERC module. It is it is a seamless.
System to use when you look at what other competitors used for PERC, but one big advantage that we found that that was just the definition of PERC is very clear, but a lot of folks do many opens as well and so with a mini open you can use the regular system you don't have to have happen.
To use the PERC, which we would require.
The inter operative scan and so.
So that's a big feature because some some folks do do traditional very percutaneous type procedures, but most do many opened in that many open could give enough exposure that we can use the standard system, which makes it even a quicker registration if you will.
Okay got it thanks for that and then just one on the merger given or that fixes international presence how should we start to think about the sales ramp with respective slides <unk> current portfolio of U S.
What areas of the portfolio do you expect to perform particularly well and what areas do you expect will be more challenging to gain traction initially.
Yeah. So.
I think that one one opportunity, which we're looking forward to is the enabling technology broader footprint internationally now.
So that's one that I think is super exciting, we havent really a.
Evaluated yet and it probably won't happen until after.
The merger is finalized.
Does this present, a new opportunity for us with spine implants.
In Europe for example, I still think it's a very burdensome regulatory commitment, but there may be maybe other pathways now that we can consider that we're holding that open as a.
I'll wait and see I.
I think from from a spinal implant perspective.
Other than the European presence remains to be seen it's just something that we haven't really.
<unk> spent.
Spend a great deal of time on but it is part of one of our integration streams that we'll be looking at but for sure. The 70, I think is going to be a much broader opportunity with the better.
Broader distribution networks that ortho fixed brings internationally.
Great. Thanks for taking my questions.
Yep. Thanks.
Thank you our final question is from Jason.
Capital.
Hi, Thanks, So maybe if I could just ask.
The spread has closed a bit or quite a bit, but there's still a spread here.
You've spoken to shareholders I mean, what has been the support of the steel.
So have you can you give any qualitative commentary on that.
I mean.
Spoken to our shareholders and we're touching base with a fixed because obviously the shareholder vote will be important so we're.
Making sure that we're getting the message out clearly that this is a great opportunity to create scale and growth and profitability at the same time right.
Got channels that we can leverage and we've got channels. They can leverage so I think the conversations with investors has been positive I think we're starting to really beat home. The message that this is not a spine merger of giant companies right that we sometimes get lumped into where you're going to have big dis synergies you've got two.
Companies with a combined market share of less than 5% in spinal implants.
You Shouldnt see a lot of geographic overlap and revenue dis synergy risk and thats, what the due diligence bore out. So I think we're really putting that to bid because that was an initial concern after the announcement of the merger but.
It just doesn't makes sense it would be a lot of overlap and that's why we focus that on the due diligence.
And now we're really focusing on as well just talking about the $200 million of complementary revenue that represents upside for revenue synergies right. There were none that were built into the model and that's the way the deal model was built.
But with $200 million of complementary revenue that each side can pull through its distribution channel there.
There is going to be revenue synergies, there and thats something were working and focusing on in the integration planning to be able to jump on that from day, one right and so I think those conversations it's becoming a lot clearer to people as we talked to them that there is not that big revenue synergy risk, but theres a lot of upside on the revenue synergies that we're going to really focus on and don't forget.
The operating expense synergies right, we're going to get scale and efficiency out of this combined organization, so with an opportunity to grow revenue, even faster get cross selling opportunities and take out costs I think it's it's a it's a situation.
So that people appreciate better then I think after the initial announcement.
Okay, that's very helpful and.
I know you probably made some comments, but I don't know if you could maybe review them in terms of I understand you guys are both companies are under scaled, especially you guys in terms of Salesforce, just salesforce penetration and distribution, but are there regions that you are strong and that they are not strong in or how would you characterize the overlap in as much detail as I guess youre able to provide it.
This point.
So I mean, if you take it portfolio by portfolio the motion preservation rate, that's all opportunity upside for us because we don't have motion preservation.
Both sides have talked about the investments we've made in the spinal fixation hardware and in the market share we've been able to take and they've got similar plans to take market share by innovation and the great thing is as a combined company. We can continue to move forward with projects they've got in their pipeline projects. We've got in our pipeline, but we can immediately bring.
And to the market the portfolio, we've got through their distributor network. So again I view that as a lot of upside.
Continuing to invest in innovation on the biologics side, we've got we believe and data shows the best DBM in the entire marketplace. They've got the best cellular graph in Trinity in the marketplace and there's a very clear surgeon preference in some cases, where some are going to be true believers in cells and they want to use cells into patients others.
Our true believers and DBM and the data we've been able to provide so.
We now as a combined company, we don't think of it as competing we think of it as we can span the spectrum of surgeon preferences in an area that has very clear surgeon preference. So we have the best offerings in both worlds of DBM and cellular grass.
<unk> is a great channel as Keith talked about to pull through 70 in the enabling technologies not just your spine business, but the other orthopedics business and through their much larger international sales channel that they can bring to bear so to me, it's all opportunity to be able to take advantage of the complementary nature of the products and there's there's cross.
Selling opportunities everywhere you look.
Yeah.
Great I'll jump back in queue, thanks for that Paul.
Thanks.
Thank you Sir.
Ladies and gentlemen.
There are no further questions at this time.
Now I'd like to turn the floor back over to Keith Robinson for closing comments.
Yeah. Thank you everyone for joining us and we will talk with you again on our next call have a great evening.
Thank you, Sir ladies and gentlemen.
Today's conference. Thank you for joining US you may now disconnect your line.
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