Q3 2023 Globus Medical Inc Earnings Call

Speaker 1: Oh.

Okay.

Speaker 2: Can they entangle for standing by and welcome to the Global Medical's third quarter 2023 earnings call? At this time, all lines will be on mute. In a Q&A session, we'll be held after the prepared week.

Thank you for standing by and welcome to the Globus Medical third quarter 2023 earnings call.

At this time all lines will be on mute.

Session will be held after the peak.

Speaker 2: I will now turn to go over to Brian Kerns, Senior Vice President of Business Development and Investor Relations with the Currents. Please go ahead.

I will now turn the call over to Brian <unk> Senior Vice President of business development and Investor Relations.

Please go ahead.

Speaker 3: Thank you, Lee Wei, and thank you everyone for being with us today. Joining today's call from Globus Medical will be Dan Scabella, President and CEO , and Keith Files, Chief Financial Officer.

Thank you leeway and thank you everyone for being with US today, joining todays call from Globus medical will be Danske, debello, President and CEO and Keith Pfeil, Chief Financial Officer.

Speaker 3: This review is being made available via webcast, accessible through investor relations section of the Globos Medical website at www.Clobosematical.com. Before we begin, let me remind you that some of the statements made during this review are or maybe considered forward-looking statements.

This review is being made available via webcast accessible through 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 are or maybe considered forward looking statements. Our Form 10-K for the 2022 fiscal year.

Speaker 3: Our Form 10K for the 2022 fiscal year and our subsequent filings with the Securities and Exchange Commission identified certain factors that could cause our actual results to differ materially from those projected in any forward-looking statements made today.

Our subsequent filings with the Securities and Exchange Commission identifies certain factors that could cause our actual results to differ materially from those projected in any forward looking statements made today.

Speaker 3: Our SEC filings, including the 10-K, are available on our website.

Our SEC filings, including the 10-K are available on our website.

Speaker 3: We do not undertake to update any forward-looking statements as a result of new information or future events or developments. Our discussion today will also include certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We believe these non-GAAP financial measures provide additional information pertinent to our business performance.

We do not undertake to update any forward looking statements as a result of new information or future events or developments. Our discussion. Today will also include certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP.

Believes these non-GAAP financial measures provide additional information pertinent to our business performance.

Speaker 3: These non- GAAP financial measures should not be considered replacements for and should be read together with the most directly comparable GAAP financial measures. Reconciliation to the most directly comparable GAAP measures are available in the schedules accompanying the press release and on the Investor Relations section of the Globis Medical website. With that, I'll turn the call over to Dan Skivila, our president and CEO .

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 turn the call over to Dan <unk>, our president and CEO.

Speaker 4: Thanks, Brian , and good afternoon, everyone. This quarter's earnings release will have a different format than our usual approach. On September 1st, after clearing the FTC second request timeframe, we executed the Globus Nuvasiv merger.

Thanks, Brian and good afternoon, everyone.

This quarter's earnings release will have a different format than our usual approach.

On September one after clearing the FTC second request timeframe, we executed the globus invasive merger.

Speaker 4: With the timing of this event, we have a full quarter revenue and financials for Glowless, combined with the month of September only for new base of revenue and financials.

With the timing of this event.

Fourth quarter revenue and financials for Globus combined with the month of September only for new base of revenue and financials for it.

Speaker 4: for this quarter and possibly the next, we'll share total financial results and comment on standalone Globus and standalone Nuvasiv to show how these businesses are performing. However, as we move into 2024 as one company with one focus, we're not planning on providing standalone company information.

This quarter and possibly the next where share total financial results and comment on Standalone Globus and Standalone invasive to show how these businesses are performing.

However, as you move into 'twenty 'twenty four is one company with one focus.

Not planning on providing Standalone company information.

Speaker 4: For Q3, we delivered record sales of $384 million, a day adjusted growth of 53%, or $130 million versus Q3 2022, reflecting three months of Globus and one month of Nuvasiv sales.

For Q3.

We delivered record sales of $384 million, a day adjusted growth of 53% or $130 million versus Q3, 2022, reflecting three months of Globus and one month of new base of sales.

Speaker 4: Non-GAPPPS was 57 cents, up 15 percent, and cash flow remained strong with $29 million for the 38 percent increase from prior year. Adjusted EBITDA for the quarter was 29 percent.

non-GAAP EPS was <unk> 57 up 15% and casually remains strong with $29 million for the.

38% increase from prior year adjust.

Adjusted EBITDA for the quarter was 29%.

Speaker 4: Global standalone sales for Q3 were 281 million dollars, increasing 27 million dollars or 12 percent on a day adjusted growth versus prior year, delivering an adjusted EBITDA of 32 percent. Sales were driven by the continued above market growth of 8 percent in the US versus prior year, an increasing momentum internationally of 25 percent growth, including significant gains in Japan.

Globus Standalone sales for Q3 were $281 million, increasing $27 million or 12% on a day adjusted growth versus prior year, delivering an adjusted EBITDA of 32%.

Sales were driven by the continued above market growth of 8% in the U S versus prior year, and increasing momentum internationally of 25% growth, including significant gains in Japan.

Speaker 4: enabling technology sales remain strong with 10% growth, and over 59,000 procedures performed to date. Trauma achieved its 15th consecutive quarterly record, adding 53% annual growth, or 12% sequentially. The foundation remains strong, and I'm proud of the GMED team delivering solid growth and profitability as we enter into our combined future with Nuva.

Enabling technology sales remain strong with 10% growth.

Over 59000 procedures performed to date.

Trauma achieved its 15th consecutive quarterly record, adding 53% annual growth or 12% sequentially.

Foundation remains strong and I'm proud of the <unk> team delivering solid growth and profitability as we enter into our combined future with Nova.

Speaker 4: New Vesos standalone sales for the months of September were $102 million down 2%. Primarily driven by one less selling day in the U.S. combined with a one-time 2022 credit, not repeated in 2023 for U.S. Spine.

The visa Standalone sales for the months of September were $102 million down 2% pre.

Primarily driven by one less selling day in the U S. Combined with a one time 2022 credit not repeated in 2023 for U S spine.

Speaker 4: New VASIS clinical services and Pulse Sales were lower versus prior year, partially offset by continued strength in international and new VASIS specialty orthopedics were NSO. Pulse sales have been impacted by customer uncertainty with the merger. While international remains focused on continued market penetration in NSO on market reentry of key technology.

Invasive clinical services impulse sales were lower versus prior year, partially offset by continued strength in international and Nuvasive specialty orthopedics or NSO pulse.

Wholesales had been impacted by customer uncertainty with the merger while international remains focused on continued market penetration and NSO on market reentry of key technology.

Speaker 4: I'm seeing the incredible talent we have with our new teammates from New Vase. I'm excited to join forces as we focus on gaining momentum throughout our business.

I'm seeing the incredible talent, we have with our new teammates from Nuvasive.

Two joined forces as we focus on gaining momentum throughout our businesses.

Speaker 4: In Q3, we launched Hidron A, our anterior 3D pernied antibody fusion device, and Stretto, a sirclawed wiring system for trauma. Year to date, we've launched nine products and planned to launch several more new products by the end of the year. Our product pipeline is full and further enhanced by what is being developed in San Diego, setting the stage for a record year of product introductions in 2024.

In Q3.

We launched <unk>, our anterior three D printed interbody fusion device and stretto Cerclage wiring system for trauma year to date, we've launched nine products and plan to launch several more new products by the end of the year our product pipeline is full and further enhanced by what is being developed in San Diego setting the stage for a record year of product.

In 2024.

Speaker 4: Over the next few months, we'll be adding to our best in class expandable portfolio. New INR offerings, including e-helping navigation system, to provide seamless navigation when combined with our E3D system. An expansion of the precise trauma nailing system.

Over the next few months, we'll be adding to our best in class expandable portfolio.

New INR offerings, including Ehealth navigation system to provide seamless navigation when combined with our <unk> system and expansion of the precise trauma nailing system.

Speaker 4: Moving into integration status and starting with the deal rationale.

Moving into integration status and starting with the deal rationale.

Speaker 4: Both companies recognized that a combination of Globus Innovasive would create a leading world-class organization. The global scale and expanded customer reach with minimal sales force overlap, combined with a comprehensive and innovative portfolio in spine, enabling tech and orthopedics, positioned us well for long-term, sustained growth.

Both companies recognized that a combination of Globus innovation would create a leading world class organization.

The global scale and expanded customer reach with minimal sales force overlap.

Combined with a comprehensive and innovative portfolio in spine, enabling tech in orthopedics positioning us well for long term sustained growth.

Speaker 4: Combining our product development strengths, focused on rapid development of innovative solutions to address our met clinical needs of our surgeons and their patients while continuing the focus on surgeon education and research will help us shape solutions through the continuum of care as we bring procedural solutions into the marketplace.

Combining our product development strength focused on rapid development of innovative solutions to address unmet clinical needs of our surgeons and their patients while continuing to focus on surgeon education and research will help us shape solutions through the continuum of care as we bring procedural solutions into the marketplace.

Speaker 4: Investing in our complimentary operational footprint will allow rapid expansion of in-house capabilities to support commercial growth and drive cost savings. Our financial discipline provides the ability to redirect investments into key growth areas while improving combined profitability and cashflow. With the unblinded data.

Investing in our complementary operational footprint will allow rapid expansion of in house capabilities to support commercial growth and drive cost savings our financial discipline provides the ability to redirect investments into key growth areas, while improving combined profitability and cash flow.

With the unblinded data available to us after September one.

Speaker 4: We were able to move from integration planning into execution, focused on our combination of sales forces.

We were able to move from integration planning into execution focused on a combination of sales forces. The actual surgeon overlap is better than we projected both domestically and internationally.

Speaker 4: The actual surgeon overlap is better than we projected both domestically and internationally, falling below the 5% we shared previously, which helped in defining territories and reducing overlap.

Falling below the 5% with share previously, which helps in defining territories and reducing overlap for.

Speaker 4: We're completing and communicating our US commercial structure currently. NULLE form teams are beginning to develop 2024 action plans, cross-turning and account building as they complete the busy Q4 season and prepare for launching into the new year.

We're completing and communicating our U S. Commercial structure currently newly formed teams are beginning to develop 2020 for action plans Cross training and account building as they complete the busy Q4 season and prepare for launching into the new year International.

Speaker 4: International is also progressing well with regional and market leadership defined. We're completing international territories in November with cross-training planned in December .

International is also progressing well with regional and market leadership defined we're completing international territories in November with cross training planned in December.

Speaker 4: Overall, I'm pleased with our work here and look forward to completing this shortly as we get as we set the stage for the new year.

Overall I am pleased with our work here and look forward to completing this shortly as we get as we set the stage for the new year.

Speaker 4: We're also receiving significant inbound interest from competitive sales professionals who are seeing the opportunity to carry a bag second to none. The combined company will be a destination of choice for sales personnel who cherish an incredible product portfolio, financial security, and longevity. To date, we've seen some smaller sales disenergies, but these still fall well within our projected estimates provided in the S4.

We're also receiving significant inbound interest from competitive sales professionals, who are seeing the opportunity to carry a bag second to none the combined company will be a destination of choice for sales personnel, who cherish an incredible product portfolio financial security and longevity to date, we've seen some smaller sales dis synergies.

But theres still fall well within our projected estimates provided in the S. Four.

Speaker 4: One of the immediate benefits of the combination is our ability to cross-sell our existing portfolios. We made significant investments in key product sets earlier this year and are poised to begin cross-selling as early as next quarter, expanding it over time as we get more sets completed.

One of the immediate benefits of the combination of our is our ability to cross sell our existing portfolios. We made significant investments in key product sets earlier this year and are poised to begin cross selling as early as next quarter expanding it over time as we get more SaaS completed.

Speaker 4: Surgeons will soon start gaining access to our broader expandable offerings, 3D printed in our body portfolio, cervical disc.

Surgeons will soon start gaining access to a broader expandable offerings three D printed interbody portfolio cervical disc.

Speaker 4: robotic prone lateral system, EGPS E3D, neuromonitoring solutions, improved retractors, magic, and the precise family of limb lengthening trauma products.

Robotic pro lateral system <unk> E <unk>.

<unk> monitoring solutions improved or tractors magic and the precise family of limb lengthening trauma products.

Speaker 4: We also made significant investments in long lead time components and manufacturing resources to scale up our enabling tech capacity, and we're increasing production output now in preparation for increased demand. For implants and instrumentation, we're not rationalizing the product offerings as part of our synergy targets.

We also made significant investments in long lead time components and manufacturing resources to scale up our enabling tech capacity and we're increasing production I'll put now in preparation for increased demand for implants and instrumentation, we're not rationalizing the product offerings as part of our synergy targets. We believe our surgeon should have their choice of products and <unk>.

Speaker 4: We believe our surgeons should have their choice of products and will, over time, shape our future portfolio offering. Our financial discipline gives us the ability to continue to keep these products available without negative impacts while continuing to innovate future offerings.

Well over time shape, our future portfolio offering our financial discipline gives us the ability to continue to keep these products available without negative impacts while continuing to innovate future offerings.

Speaker 4: In our product development innovation engines, we'll carry forward our rich histories of rapid development and launch to remain an industry thought leader, working with our certain partners to address some of that clinical needs from pioneering the excellent procedure that is now the gold standard of lateral surgery, marketing, market leading, expandable cage technology.

And our product development innovation engine. So we will carry forward, our rich histories of rapid development and launch to remain an industry thought leader.

Working with our surgeon partners to address unmet clinical needs from pioneering the excellent procedure that is now the gold standard of lateral surgery marketing market, leading expandable cage technology does.

Speaker 4: the best spinal robot, and the most advanced interoperative CT imaging. We are working to create surgical proceduralization of all key spine procedures, combining with enabling technology to create the standard of care across all of spine.

Best spinal robot and the most advanced inter operative <unk> imaging, we are working to create surgical procedure realization of all key spine procedures, combining with enabling technology to create the standard of care across all of spine.

Our intellectual property portfolio has been number one in this final industry for the last decade, and we are committed to further expanding this lead especially in the enabling tech arenas as we continue to be at the forefront of imaging navigation and robotics.

We remain committed to continuing all in progress projects on both sides and expect to have the core PD hub on the West coast.

Speaker 4: We brought together significant resources to enhance our surge in engagement program from adding scientific affairs, increasing research and clinical investments, adding strong talent to our professional affairs team, coordinating education programs and enhancing our presence in teaching institutions. In addition, we've added an invasive marketing communication team.

We brought together significant resources to enhance our surgeon engagement program from adding scientific affairs, increasing research and clinical investments.

The strong talent to our professional affairs team.

Education programs and enhancing our presence in teaching institutions. In addition, we've added invasive marketing and communication teams.

Speaker 4: We're well poised to increase our impact with surgeons and further strengthen how we interact with them in all aspects of our business.

We're well poised to increase our impact with surgeons and further strengthen how we interact with them in all aspects of our business.

Speaker 4: The complementary fit of our operations remains a strength of the merger. Our strong financial position will allow us to expand investments in West Carrollton production facility to support our inventory needs. The Memphis Distribution Center is expected to support global distribution for the combined organization. We will continue to invest in high-tech manufacturing equipment for our implants, instrumentation, enabling tech production capabilities. We're currently working to consolidate volumes and orders with third-party vendors to accelerate delivery times and drive cost savings.

The complementary fit of our operations remains a strength of the merger our strong financial position will allow us to expand investments in west Carrollton production facility to support our inventory needs to Memphis distribution Center is expected to support global distribution for the combined organization.

We will continue to invest in high tech manufacturing equipment for our implants instrumentation, enabling tech production capabilities. We're currently working to consolidate volumes and orders with third party vendors to accelerate delivery times and drive cost savings.

Speaker 4: Synergy targets have been refined and communicated to functional leads who are planning out actions for the next several years, focused on out-of-pocket spending and prioritizing investments to match our future growth plans.

Synergy targets have been refined and communicated to functional leads who are planning out actions for the next several years focused on out of pocket spending and prioritizing investments to match our future growth plans organizational.

Speaker 4: Organizational designs are in progress with planned rollout in the beginning of 2024. As we've said before, this is not a splash and burn exercise. The acquisition payback is not driven by deep sending cuts, and we're not racing to impress the market with a quarterly flash. We remain focused on long-term sustained growth and not making cuts that impact our strengths.

<unk> designs are in progress with planned rollout in the beginning of 2024 as we've said before this is not a slash and burn exercise the acquisition payback is not driven by deep spending cuts and we're not racing to impress the market with our quarterly flash we remain focused on long term sustained growth and not making cuts that impact our strengths.

Speaker 4: I want to conclude by sharing a recent event that reminded me of who we are.

I want to conclude by sharing a recent event that reminded me of who we are.

Speaker 4: As part of the integration, we sent a group of former NUVA teammates to visit our Enabling Tech facility in Methuen. They expressed excitement regarding the number of employees focused on the marketed products, the short-term development launches, and the long-term game changers, along with the building square footage we have invested in supporting Enabling Tech.

As part of the integration, we sent a group of former <unk> teammates to visit are enabling tech facility in Methuen.

The expressed excitement regarding the number of employees focused on the marketed products. The short term development launches and a long term game changers, along with the building square footage, we have invested in supporting enabling tech.

Speaker 4: This increased their realization that an ecosystem designed and built from the ground up to seamlessly communicate with each other with options to expand functionality over time is positioned to outperform patchwork to market alternatives.

This increase their realization that an ecosystem designed and built from the ground up to seamlessly communicate with each other with options to expand functionality over time.

<unk> is positioned to outperform patchwork to market alternatives we.

Speaker 4: We will continue to accelerate and increase our investment in this space and place these offerings through our expanded commercial team as part of addressing unmet clinical needs and shaping procedural solutions.

We will continue to accelerate and increase our investment in this space and place these offerings through our expanded commercial team as part of addressing unmet clinical needs and shaping procedural solutions.

Speaker 4: I believe the potential for Globius has never been greater. It's up to us to harness our resources and shape the future of our market. We have at our fingertips everything we need to realize this. I will now turn the call over to Keith. I will now turn the call over to Keith.

I believe the potential for Globus has never been greater it's up to us to harness our resources and shape the future of our market we have at our fingertips everything we need to realize this.

I will now turn the call over to Keith.

Thanks, Dan and good afternoon, everyone.

Speaker 4: As Dan alluded to in his earlier comments, our discussion today will have a different feel as compared to our earlier calls. The resulting impact of the September 1st merger completion with Nuvasiv is such that my discussion on our results will seek to identify the underlying legacy Globus medical results as well as the contributions from the inclusion of Nuvasiv financial information.

As Dan alluded to in his earlier comments, our discussion today will have a different feel as compared to our earlier calls.

The resulting impact of the September 1st merger completion with Nuvasive is such that my discussion on our results will seek to identify the underlying legacy Globus medical results as well as the contributions from the inclusion of invasive financial information.

Speaker 4: I ask everyone to remember that our Q3 2023 results include three months of legacy global financial information and one month of new days of reflective of the September 1st merger closing days.

Ask everyone to remember that our Q3 2023 results include three months of legacy Globus financial information and one month of Nuvasive reflective of the September 1st merger closing date.

Speaker 4: My comments today will seek to provide insights into our quarterly business performance, insights into our capital allocation priorities, early insights into integration and synergy tracking, as well as views on overall guidance for the remainder of the year.

My comments today will seek to provide insights into our quarterly business performance in <unk>.

Sites into our capital allocation priorities early insights into integration and synergy tracking as well as views on overall guidance for the remainder of the year.

Speaker 5: As I move through my discussion this afternoon, I will first comment on our as-reported results, providing insights into the legacy Globus business, as well as high-level comments on the contributions from Nuvasiv on an as-reported basis.

As I move through my discussion. This afternoon I will first comment on our as reported results providing insights into the legacy Globus business as well as high level comments on the contributions from Nuvasive on an as reported basis.

Speaker 5: All information presented is done so based on Globus accounting policies and is consistently applied in the as-reported results for both legacy Globus and legacy Nuvesi.

All information presented is done so based on Globus accounting policies and is consistently applied in the as reported results for both legacy Globus and legacy new basis.

Speaker 5: We are extremely pleased with our third-quarter results, both with and without the impact of an evasive. Our sales results clearly demonstrate that we are still driving market share growth.

We are extremely pleased with our third quarter results, both with and without the impact of an invasive our sales results clearly demonstrate that we are still driving market share growth.

Speaker 5: Third quarter revenue was $383.6 million, growing 51% on an as reported basis, and 50.3% on a constant currency basis, as compared to the third quarter of 2022.

Third quarter revenue was $383 $6 million growing 51% on an as reported basis and 53% on a constant currency basis as compared to the third quarter of 2022.

Speaker 5: Day-adjusted sales growth was 52.9%, with one less selling day in Q3'23 versus Q3'22. Net income in the third quarter of 2023 was $997,000, reflective of merger and acquisition related costs due to the September 1st merger completion with Nuvesi.

Day adjusted sales growth was 52, 9% with one less selling day in Q3 23 versus Q3 2002.

Net income in the third quarter of 2023 was $997000 reflective of merger and acquisition related costs due to the September 1st merger completion with new basis.

Speaker 5: Non-Gap net income was $65.5 million compared to $50.3 million in the prior year quarter, resulting in 57 cents a fully diluted non-Gap earnings per share.

non-GAAP net income was $65 5 million compared to $53 million in the prior year quarter, resulting in 57 fully diluted non-GAAP earnings per share.

Speaker 5: Our fully diluted non-gap EPS grew 14.7% versus the prior quarter, despite our diluted share count growing by 13.7% versus Q2 of 23 to 115.2 million fully diluted shares. Adjusted EBITDA was 29.4% and we generated $29 million of free cash flow during the quarter. Legacy Globis business, Adjusted EBITDA, was 31.6% while Legacy Globis free cash flow was $26 million.

Our fully diluted non-GAAP EPS grew 14, 7% versus the prior year quarter, Despite our diluted share count growing to buy.

By 13, 7% versus Q2 of 23 to $115 2 million fully diluted shares.

Adjusted EBITDA was 29, 4% and we generated $29 million of free cash flow during the quarter.

The legacy global business adjusted EBITDA was 31, 6%, while legacy Globus free cash flow was $26 million.

Speaker 5: Delving into revenue further, our third quarter net sales of $383.6 million reflect Legacy Globus sales totaling $281.2 million, growing 10.7 percent as reported compared to the prior year. Legacy Globus musculoskeletal revenue was $254.7 million, growing 10.7 percent as reported.

Delving into revenue further our third quarter net sales of $383 6 million perfect legacy global sales totaling $281 2 million growing 10, 7% as reported compared to the prior year.

Legacy Globus muscular skeletal revenue was $254 7 million growing 10, 7% as reported.

Speaker 5: Legacy Globus Enabling Technologies revenue was $26.5 million, growing 10.2% as reported.

Legacy Globus, enabling technologies revenue was $26 5 million growing 10, 2% as reported <unk>.

Speaker 5: NewVASIS contributed $102.4 million of revenue during the quarter, inclusive of $92.8 million of Musculoskeletal revenue, $8.5 million of Neuromonaturing revenue, and $1 million of enabling technologies revenue.

<unk> contributed $102 $4 million of revenue during the quarter inclusive of $92 $8 million of musculoskeletal revenue $8 $5 million of neuro monitoring revenue and $1 $1 million of enabling technologies revenue.

Speaker 5: U.S. revenue during the third quarter of 2023 was $309.3 million, growing 42.5% as reported. Legacy Globus U.S. revenue during the third quarter of 2023 was $234.7 million, growing 8.1% versus the prior year quarter.

U S revenue during the third quarter of 2023 was $309 $3 million growing 42, 5% as reported legs.

The legacy Globus U S revenue during the third quarter of 2023 was $234 $7 million growing eight 1% versus the prior year quarter.

Speaker 5: Our legacy Globus business continues to drive share growth across its U.S. spine and trauma portfolios, while our enabling technologies business is benefiting from the continued uptake of our systems, namely eGPS and e3D.

Our legacy Globus business continues to drive share growth across its U S spine and trauma portfolios, while our enabling technologies business is benefiting from the continued uptake of our systems, namely GPS and <unk>.

Speaker 5: Q3 international revenue was $74.3 million, growing 100.2% as reported and 96% on a constant currency basis.

Q3 International revenue was $74 $3 million growing 102% as reported and 96% on a constant currency basis.

Speaker 5: International revenue for the legacy Globus business was $46.6 million, growing 25.5% as reported compared to the prior year quarter. The continued strong growth from our international business was driven by further penetration of our focus countries, including Australia, Italy, Belgium, Poland, Austria, and Ireland.

International revenue for the legacy <unk> business was $46 6 million growing 25, 5% as reported compared to the prior year quarter.

The continued strong growth from our international business was driven by further penetration of our focused countries, including Australia, Italy, Belgium, Poland, Austria and Ireland.

Speaker 5: Shifting to an evasive, standalone September 2023 results total $102.4 million, which was $2.5 million or 2.4% lower as compared to the prior year month. This is driven by one less selling day in the month of September , as well as a $2.7 million non-repeating sales credit in the prior year, which did not repeat in the current year.

Shifting to invasive Standalone September 2023 results totaled $102 $4 million, which was $2 5 million or two 4% lower as compared to the prior year month. This is driven by one less selling day in the month of September as well as a $2 $7 million non repeating sales credit in the prior year, which did not repeat.

Speaker 5: The gross profit in a third quarter was 64.7% compared to 74.2% in the prior quarter, and is inclusive of the mixed impacts from New VACIV, as well as $19 million of inventory step-up amortization related to the merger.

In the current year.

Gross profit in the third quarter was 64, 7% compared to 74, 2% in the prior year quarter and is inclusive of the mix impacts from Nuvasive as well as $19 million of inventory step up amortization related to the merger.

Speaker 5: Given the impact of step-up amortization on gap results, we are introducing an adjusted gross profit metric to better provide comparability with actual operating results.

Given the impact of step up amortization on GAAP results, we are introducing an adjusted gross profit metric to better provide comparability with actual operating results.

Speaker 5: Adjusted gross profit was 69.7% compared to 74.2% in the prior year quarter. Looking ahead, we expect step-up amortization to impact gap gross profit for at least the next four fiscal quarters, thus we plan to report on this metric more during this time.

Adjusted gross profit was 69, 7% compared to 74, 2% in the prior year quarter.

Looking ahead, we expect step up amortization to impact GAAP gross profit for at least the next four fiscal quarters. Thus we plan to report on this metric moving more during this time.

Speaker 5: Legacy Globus' gap in adjusted gross profit was 73.9%, essentially in line to the 74.2% in the prior quarter, with the slight decline being driven by primarily higher inventory obsolescence reserves and write-off expense.

Legacy Globus GAAP and adjusted gross profit was 73, 9% essentially in line to the 74, 2% in the prior year quarter with a slight decline being driven by primarily higher inventory obsolescence reserves and write off expenses.

Speaker 5: New Vays for the Justice Grills Prophet was $59.4 million dollars or 58% in the quarter.

<unk> adjusted gross profit was $59 4 million or 58% in the quarter.

Speaker 5: On a pro forma basis, newvasive gross profit of 58% in September 2023 compares to 62% in the prior year month, reflective primarily of higher depreciation expenses and operational spending.

On a pro forma basis Nuvasive gross profit of 58% in September 2023, compared to 62% in the prior year month reflective primarily of higher depreciation expenses and operational spending.

Speaker 5: Q3 research and development expenses were $29.3 million or 7.6 percent of sales compared to $18.7 million or 7.4 percent of sales in the prior year quarter.

Q3 research and development expenses were $29 3 million or seven 6% of sales compared to $18 7 million or seven 4% of sales in the prior year quarter.

Speaker 5: Legacy Globus R&D expenses totaled $20.4 million or 7.3% of sales compared to the prior year quarter of 7.4%.

Legacy Globus R&D expenses totaled $20 4 million or seven 3% of sales compared to the prior year quarter of seven 4%.

Speaker 5: The growth in legacy global R&D spending is reflective of additional headcount primarily within our spine and enabling technologies businesses which is in line with our expectations.

The growth in legacy Globus R&D spending is reflective of additional head count primarily within our spine and enabling technologies businesses, which is in line with our expectations.

Speaker 5: Our consolidated R&D expense of $29.3 million includes $8.9 million of R&D expense from New VACIV which equates to 8.7% of sales based on the 102.4 million dollars of revenue contributed from New VACIV during our fiscal third quarter.

Our consolidated R&D expense of $29 3 million includes $8 9 million of R&D expense from innovative which equates to eight 7% of sales based on the $102 4 million of revenue contributed from Nuvasive during our fiscal third quarter.

Speaker 5: The September 2023 nuvasive R&D expense of $8.9 million, or 8.7% of sales, compares to September 2022 R&D expense of $7.5 million, or 7.1% of sales.

The September 2023, Nuvasive R&D expense of $8 9 million or eight seven.

7% of sales compared to September 2020 to R&D expense of $7 5 million or seven 1% of sales the increase in pro forma new base of R&D expense. In 2023 is primarily the result of adopting globus accounting policies, specifically that internal labor and third party consulting expenses are treated as period.

Speaker 5: The increase in pro forma nuvasive R&D expense in 2023 is primarily the result of adopting globus accounting policies, specifically that internal labor and third-party consulting expenses are treated as period costs and not capitalized on the balance sheet and ultimately amortized.

Costs and not capitalized on the balance sheet and ultimately amortized.

Speaker 5: SGNA expenses for the third quarter were $156.2 million or 40.7% of sales compared to $106.6 million or 41.9% of sales in the third quarter of the prior year.

SG&A expenses for the third quarter were $156 2 million or 47% of sales compared to $106 6 million or 41, 9% of sales in the third quarter of the prior year.

Speaker 5: Legacy Globus SG&A expenses were $118.7 million, or 42.2%. The increased spending is primarily reflective of additional sales compensation costs from higher volume, higher benefit costs, and some additional bad debt expenses.

Legacy Globus SG&A expenses were $118 $7 million or 42, 2%.

The increased spending is primarily reflective of additional sales compensation costs from higher volume higher benefit costs and some additional bad debt expenses.

Speaker 5: New VASIF contributed $37.5 million of SGNA expenses in the quarter or 36.6% of sales.

<unk> contributed $37 $5 million of SG&A expenses in the quarter or 36, 6% of sales.

Speaker 5: Turning our attention to cash and liquidity, as part of the merger closing on September 1st, Globus paid off the outstanding invasive line of credit balance and subsequently terminated the former invasive line of credit. The total amount paid was $420.8 million.

Turning our attention to cash and liquidity as part of the merger closing on September one lowest paid off the outstanding Debase of line of credit balance and subsequently terminated the former new base of line of credit. The total amount paid was $428 million. In addition to the line of credit globally also assumed the point $3, 75% senior convertible.

Speaker 5: In addition to the line of credit, Globus also assumed the 0.375 percent senior convertible notes due in 2025, which have a principal balance of $450 million. Our current intent for these notes is to remain part of our capital structure until they are due to be settled in March 2025.

<unk> notes due in 2025, which have a principal balance of $450 million. Our current intent for these notes is to remain part of our capital structure until they are due to be settled in March 2025.

Speaker 5: During the month of September 2023, we entered into a new 5-year unsecured $400 million syndicated line of credit agreement. At our request, this line of credit has the ability to flex up to $600 million if needed.

During the month of September 2023, we entered into a new five year unsecured $400 million syndicated line of credit agreement.

At our request this line of credit as the ability to flex up to $600 million if needed.

Speaker 5: As of September 30th, 2023, we have not borrowed under this credit facility and fully expect this credit facility to provide sufficient additional liquidity if needed.

As of September 32023, we have not borrowed under this credit facility and fully expect this credit facility to provide sufficient additional liquidity if needed.

Speaker 5: Cash, cash equivalents and marketable securities were $744.9 million at September 30th. Our net cash, defined as total cash, cash equivalents and marketable securities less debt was $335.2 million at September 30th.

Cash cash equivalents in marketable securities were $744 9 million at September 30, our net cash divided defined as total cash cash equivalents in marketable securities less debt was $335 2 million at September 30.

Speaker 5: Shifting to cash flow, our net cash provided by operating activities was $50.4 million, and free cash flow was $28.9 million for the third quarter of 2023. Net cash provided by operating activities for the nine months ended with $138.8 million, and free cash flow was $83.4 million.

Shifting to cash flow, our net cash provided by operating activities was $54 million and free cash flow was $28 9 million for the third quarter of 2023.

Net cash provided by operating activities for the nine months ended was $138 $8 million and free cash flow was $83 4 million.

Speaker 5: Our capital allocation priorities remain unchanged. Our primary use of capital will be to fund internal investment and drive complimentary M&A. Our share repurchase program will remain an integral part of our capital allocation priorities. However, we will continue to focus our primary use of capital on driving investments for long-term growth.

Our capital allocation priorities remain unchanged our primary use of capital will be to fund internal investment and drive complementary M&A.

Our share repurchase program will remain an integral part of our capital allocation priorities. However, we will continue to focus our primary use of capital on driving investments for long term growth.

Speaker 5: During the quarter, our Board of Directors authorized an additional $350 million to be used to fund share repurchases, bringing the total amount authorized to $500.8 million. The company will utilize its cash reserves to fund share repurchases.

During the quarter, our board of directors authorized an additional $350 million to be used to fund share repurchases, bringing the total amount authorized to $508 million. The company will utilize its cash reserves to fund share repurchases.

Speaker 5: Turning our attention to integration, Dan provided a detailed update in his earlier comments. However, I'd like to add a few comments in addition to his prepared remarks. We are actively working to integrate the business and are laser focused on the key activities that will help drive commercial success and generate internal efficiency.

Turning our attention to integration Dan provided a detailed update in his earlier comments. However, I would like to add a few comments. In addition to his prepared remarks, we are actively working to integrate the business and are laser focused on the key activities that will help drive commercial success and generate internal efficiencies.

Speaker 5: Our integration activities are deliberate and aggressive. We want to go fast to maximize our ability to generate value. However, we are taking the time to understand differing processes and approaches as we bring the two organizations together. Our global sculpture is one where we will seek to move and drive actions which lead to swift decision making.

Our integration activities are deliberate and aggressive we want to go fast to maximize our ability to generate value. However, we are taking the time to understand differing processes and approaches as we bring the two organizations together our Globus culture is one where we will seek to move and drive actions, which lead to Swift decision, making.

Speaker 5: When we announced the deal earlier in 2023, we commented on generating $170 million in cost energy savings over three years.

When we announced the deal earlier in 2023 earlier in 2023, we commented on generating $170 million in cost synergy savings over three years internal synergy targets have been defined and the team is actively taking steps to achieve the savings previously stated given.

Speaker 5: Given the delay in our merger closing with the FTC second request process, we now expect our synergy targets to push out to 2024. As such, we still expect to generate the $170 million in synergies as previously communicated. However, this will begin with the 2024 fiscal year and will be realized over three years with 40% in year one, 70% in year two, and 100% by year three.

Given the delay in our merger closing with the FTC second request process. We now expect our synergy targets to push out to 2024 as such we still expect to generate the $170 million in synergies as previously communicated. However, this will begin with the 2020 for fiscal year and will be realized over three years with 40% in year, 170%.

In year, two and 100% by year three.

Speaker 5: The realization of synergies will come predominantly from the legacy new base of business and will be across most facets of the business with the exception of the commercial portion of the business.

The realization of synergies will come predominantly from the legacy Nuvasive business and will be across most facets of the business with the exception of the commercial portion of the business. The primary areas of focus are on a operations be spending specifically more stringent spending controls as well as see the eliminate elimination of redundant costs.

Speaker 5: The primary areas of focus are on A, operations, B, spending, specifically more stringent spending controls, as well as C, the elimination of redundant costs.

Speaker 5: Our operational synergies will focus on manufacturing insourcing, renegotiating supplier and raw material contracts, and enhanced controls around capital expenditures.

Our operational synergies will focus on manufacturing and sourcing renegotiating supplier and raw material contracts and enhanced controls around capital expenditures spend.

Speaker 5: Spending controls will seek to eliminate or greatly reduce third-party spending while further centralizing decision-making around cash and cash expenditures.

Spending controls will seek to eliminate or greatly reduce third party spending while further centralizing decision, making around cash and cash expenditures.

Speaker 5: Cost reductions will occur in a manner that allows us to deliver best-in-class service to our internal organization while setting the business up for success through greater cash and profitability. As Dan stated earlier, we do not need a slash-and-burn exercise to drive success. We seek to institute a more disciplined approach to spending and investment, moving ahead to drive greater value creation.

Cost reductions will occur in a manner that allows us to deliver best in class service to our internal organization, while setting the business up for success through greater cash and profitability.

As Dan stated earlier, we do not need a slash and burn exercise to drive success, we seek to institute a more disciplined approach to spending and investment moving ahead to drive greater value creation.

Speaker 5: Shifting attention to guidance, the company is updating its financial guidance for 2023. We expect our full-year 2023 revenue guidance to be $1.55 billion, representing 51.5% growth over the prior year. Our non-GAAP EPS guidance remains unchanged at $2.30 per share. However, it is important to note that our full-year share count will increase as a result of the merger and the 0.75 exchange ratio of global shares for each former new base of share.

Shifting attention to guidance. The company is updating its financial guidance for 2023, we expect our full year 2023 revenue guidance to be $1 55 billion.

Representing 51, 5% growth over the prior year.

Our non-GAAP EPS guidance remains unchanged at $2 30 per share. However, it is important to note that our full year share count will increase as a result of the merger and the <unk> 75 exchange ratio of Globus shares for each former Nuvasive share.

Speaker 5: on a pro forma basis, assuming globalists and new bases were together on January 1st, 2023, our $1.55 billion revised guidance of pre-revenue implies full year pro forma revenue of $2.377 billion or 6.9% growth over the prior year 2022 combined revenues of globalists and new bases, which was $2.225 billion.

On a pro forma basis, assuming globus invasive or together on January one 2023, or 155 billion revised guidance of for revenue implies full year pro forma revenue of $2 $3 $77 billion or six 9% growth over the prior year 2022 combined revenues of Globus.

New basis, which was two to two 5 billion.

Speaker 5: I also point out that our revised revenue guidance of $2.377 billion is in line with the Globus Management combined stand-alone revenue estimate of $2.361 billion as reflected in our S-IV document.

I also point out that our revised revenue guidance of $2 $3 77 billion.

As in line with the Globus management combined Standalone revenue estimate of $2 361 billion as reflected in our S. Four document.

Speaker 5: 2023 has been a year of dramatic change for Globus, as well as a larger spine industry. Our merger with NewVasive brings together two industry powerhouses.

2023 has been a year of dramatic change for Globus as well as the largest spine industry. Our merger with Nuvasive brings together two industry powerhouses to our patients we will remain focused on improving your outcomes by bringing our best in class product portfolio to market. The combined resources will drive future innovation to solve unmet clinical needs.

Speaker 5: To our patients, we will remain focused on improving your outcomes by bringing a best-in-class product portfolio to market. The combined resources will drive future innovation to solve unmet clinical needs.

Speaker 5: To our surgeons, we will continue to expand our product offerings and drive procedural improvements with our implants and enabling technologies.

To our surgeons, we will continue to expand our product offerings and drive procedural improvements with our implants and enabling technologies, we will leverage the talent of both organizations and remain committed to global surgeon education and research.

Speaker 5: we will leverage the talent of both organizations and remain committed to global surge in education and research. To our employees, we will drive passion and a shared commitment to patient-focused innovation. Specific to our commercial team, we will bring our groups together in a manner that drives success for the organization and for you.

Our employees will drive passion and a shared commitment to patient focused innovation specific to our commercial team will bring our groups together in a manner that drive success for the organization and for you to remember that you have access to the best products in the market and Youll be someplace, where the innovation engine keeps running giving you new and exciting things to discuss with.

Speaker 5: Remember that you have access to the best products in the market, and you'll be someplace where the innovation engine keeps running, giving you new and exciting things to discuss with your customers.

Speaker 5: To our shareholders, we will remain focused on driving innovation and investing for the long term, taking our globalist approach to advance patient care while maintaining operational excellence and a focused, disciplined approach to cost containment, driving expanded profitability.

Your customers to our shareholders, we will remain focused on driving innovation and investing for the long term, taking our globus approach to advanced patient care, while maintaining operational excellence and a focused disciplined approach to cost containment driving expanded profitability.

Speaker 5: We couldn't be more excited with where we are. There's still a lot of work to do, however, we have a team capable of executing the integration and truly separating ourselves from the competition. As always, thank you to the Globus team, including our newest team members from NewVasive, as we continue our pursuit for excellence. The best is yet to come. We will now open the call for questions.

We couldnt be more excited with where we are there's still a lot of work to do however, we have a team capable of executing the integration and truly separating ourselves from the competition as always thank you to the globus team, including our newest team members from Nuvasive as we continue our pursuit for excellence. The best is yet to come we will now open the call for questions.

Speaker 2: Thank you so much presenters, and ladies and gentlemen, to ask a question, press star 1 on your telephone. So, if you have a question, please press star 1 again, and please stand by while we...

Thank you so much John Lynch April thus far.

One on your telephone.

Good question.

Thats Star one again.

And please standby will be compiling Q&A roster.

Speaker 2: Your first question comes from the line of Matt Miksic of Barclays. Your line is now open.

Your first question comes from the line of Matt <unk> of Barclays.

Your line is now open.

Can you hear me okay.

Yes.

Speaker 6: Great. Well, congrats on a solid start here to the new company.

Great well congrats on a solid start here.

Speaker 6: You know, maybe first, I think we'd love to hear about, you know, what.

New company.

Maybe first I think.

We'd love to hear about.

Speaker 6: What kinds of things were sort of positive surprises to you as you sort of like wrapped up this quarter and headed to the end of the year in terms of momentum or synergies or lack thereof? And then maybe what are some of the areas where you feel you need to maybe work a little harder? And I, you know, focus areas maybe, and I have one follow-up. Thank you.

What what.

What kinds of things.

We're sort of positive surprises to you.

Sort of like wrapped up this quarter.

At the end of the year, Joseph momentum or the synergies or lack thereof, and then maybe what what are some of the areas, where you feel you need to maybe work a little harder.

And.

Focus areas, maybe and then I have one follow up.

Okay.

Hey, Thanks, Matt, It's Dan I'll start with that.

Speaker 4: You know, truthfully, a lot of positive things and you know, you're right like anything when you come into this size Some things are working some things are not so I it's not all sunshine. It's a lot of hard work, but with the positive things

Truthfully, a lot of positive things and Youre right like anything when you come in at this size. Some things are working some things are not so it's not all Sunshine is a lot of hard work, but with a positive things. It really is going to get back down to the people and the fit I know that everyone goes to extremes to talk about different cultures, but I'm going to go back and say the more work with <unk>.

Speaker 4: It really is going to get back down to the people and the fit. I know that everyone goes to extremes to talk about different cultures, but I'm going to go back and say the more I work with everybody, the more I see how much we have in common versus apart. I really think that's big.

Body than more I see how much we have in common versus apart I really think thats big.

Speaker 4: The rate and the depth at which I see the teams working together, whether it be U.S. commercial or international commercial, or even all the support teams, it really is amazing. I think that they're positive more than anything.

The rate and the depth at which I see the teams working together, whether it be U S commercial or international commercial where even all of the support teams. It really is amazing I think they're positive more than anything.

Speaker 4: I mean, areas of harder focus, look, we're creating a great deal of disruption and in that creates some uncertainty and there are some folks that are looking to get answers faster. So what I'd like to do is move at a faster pace. I know we're moving quickly, but the sooner we can move and create a steady state and get back into the stronger growth that we're poised to do all the better. So for me, it's about keep moving forward, make the tough decisions and get into the steady state at a faster pace.

Areas of harder focus look we're creating a great deal of disruption and then that creates some uncertainty and there are some folks that are looking to get answers faster. So what I'd like to do is move at a faster pace I know, we're moving quickly, but the sooner we can move and create a steady state and get back into the stronger growth that were poor.

To do all the better so for me, it's about keep moving forward make the tough decisions and get into the steady state at a faster pace.

Speaker 6: That's great. So follow up on the cost side. I think the Navy would mind it. I know there was a number of cost avoidance opportunities for you to combine organization and just the contributions. There's obviously, you know, as you talk about some it's leverage opportunity of existing facilities that you know, ramp up in sourcing and things like that. To get remind us maybe specifically what's included and what's excluded in that $179.

That's great so.

Follow up on the cost side.

Could you remind us I know there was a number of cost avoidance opportunities.

The combined organization and position for distribution, there's obviously.

<unk> talked about leverage.

Leverage opportunity of the existing facilities that do ramp up in sourcing and things like that.

Remind us maybe specifically wasn't included in <unk>.

Excluded in that $170 million.

Speaker 6: target. I have lots of follow-ups, but I'll just stop there and pass it.

Target.

I have quick follow ups, but ill just stop there.

Pass it back to you guys and the rest of the group.

Speaker 5: Sure, Matt. Great question. This is Keith talking. You know, as we think about the $170 million, really, it's going to touch on a couple of things. It's going to touch on manufacturing and product insourcing. You know, when I say that, we have the ability to positively impact gross margin on a combined basis going forward. That's really going to be achieved by, you know, bringing products from the outside in, getting more efficient with our spending.

Sure Matt Great question. This is Keith talking.

As we think about the $170 million right, it's going to touch on a couple of things, it's going to touch on manufacturing and product and sourcing.

I say that we have the ability to positively impact gross margin on a combined basis Gulf going forward, that's really going to be achieved by bringing products from the outside in getting more efficient with our spending.

From a distribution perspective, we believe that there is efficiencies to be gained nuvasive has a facility in Memphis, we think that we could further leverage that facility to drive distribution for both companies moving forward. So that's included in the $170 million and then on top of that is redundant costs, primarily find in SG&A and focused approaches.

Speaker 5: a discerning look at cash spending. That's what's contemplated in the $170 million. As we've closed this merger and are looking forward, we feel confident about achieving that $170 million. And at this point, it ties back to Dan's earlier comments that we're finalizing org design. We're really going to be rolling things out as we get into 2024.

Taking a more.

Turning look at cash spending.

That's what's contemplated in $170 million as we as we close this merger and are looking forward, we feel confident about achieving that $170 million and at this point it ties back to Dan's earlier comments that we're finalizing org design and we're really going to be rolling things out as we get into 2024.

Speaker 6: Great. Well, thanks and I'll pass it on to the next.

That's great well thanks Ed.

As to the delivery.

Thanks.

Thank you.

Speaker 2: Thank you so much. Your next question comes from the line of Shagun Singh of RBC. Your line is now open.

Thank you so much. Your next question comes from the line of Shannon.

RBC Your line is now open.

Speaker 7: and congratulations on the combined entity. I'm sorry for any background noise here.

How much of a congratulations on the combined entities.

I'm, sorry for any background noise here.

Speaker 7: I was just wondering if you can help us, you know, with the framework for 2024, you know, how should we think about, you know, top-line growth, you know, what are you assuming initially for maybe the synergy, you know, is mid-single-digit growth the right target? I think on a combined basis, you guys called out 6.9% for 23, and then for EBITDA, you know, should we be in the high 20s, you know, any comments on EPS attrition? I think last time you had indicated plus 20% at year one. Any tips and takes on 2024, even directionally, would be really helpful.

Hum.

I was just wondering if you can help us.

With Bill framework for 2024, how should we think about top line growth.

What are you assuming in Michigan equal maybe dis synergy is mid.

Mid single digit growth the rate started yet I think on a combined.

Combined basis.

As called out to $6, 9% from 23, and then for EBITDA should we be.

And the high Twenty's.

Any comments on EPS accretion I think last time, you had indicated plus 20% at year one.

<unk> 2024, even directionally would be really helpful.

Speaker 5: Thanks, again, you were very limited on the information we're going to provide for 2024. At this time, I would reference folks back to the to the s4 document. We still feel positive that this could be creative in year one. So we feel good about that. But as as time passes, and we get closer to providing initial insights in the 24 in early January , we'll have more color then.

Thanks again.

We're very limited on the information, we're going to provide FERC for 2024 at this time I would reference folks back to the S. Four document.

We still feel positive that this could be EPS accretive in year one.

We feel good about that but as time passes and we get closer to providing initial insights into 'twenty four in early January we will have more color then.

Speaker 4: I'll just add to that, too, that with Keith and the team and the projections they put out in the S4, we're not anticipating making any material moves off of that at this point. We certainly have one month under our belt and a whole quarter to go, but feel positive that we're in the right direction and have shared that earlier with our submissions.

I'll, just add to that too that with Keith and the team and the projections. They put out in the S. Four were not anticipating making any material moves off of that at this point, we certainly have one month under our belt and a whole quarter to go but feel positive that we are in the right direction and have shared that earlier with our recent with our submissions.

Speaker 7: Got it. And then, you know, I was just wondering if you can elaborate a little bit more on on Salesforce integration plans, you know, how you're thinking about territory, you know, obviously, that has been, you know, kind of a sticking point for, you know, for a lot of previous, you know, mergers, but, you know, we do think this is different. So, you know, maybe you can you can elaborate on Salesforce integration and how you think about that. Thank you for taking the question.

Got it and then I was just wondering if you can elaborate a little bit more on the import integration plan.

How are you thinking about territory, obviously that has been kind of a sticking point for.

Coronado previous.

Modules, but.

We do think this is definitely so maybe you can you can elaborate on Salesforce integration and how you think about that thank you for taking the questions.

Speaker 4: You've got it, and I'll take that for you. So, you know, we'll go down into the two areas, obviously being U.S. and international with that, and remember what we've called out and have been calling out is we felt that there's a small amount of overlap, and what we're signaling is with the actual data, that's proven correct and better than we anticipated.

No you've got it and I will take that for you. So we will go down into the two areas, obviously being U S and international with that and remember what we've called out and have been calling out is we felt that there is a small amount of overlap in what we're signaling is with the actual data that's proven correct in better than we anticipated and remember we.

Speaker 4: And remember, we're not a 20-share company and a 20-share company coming together and bumping in. Both of us were in that range of, say, 7% to 9% of market share in the US. So it did naturally leave a lot of room for us to move around and grow without redundancy. What I would tell you is throughout the world.

We're not a 20 share company into 'twenty share company coming together and bumping in.

Both of US were in that range of say, 7% to 9% of market share in the U S. So it didn't naturally leave a lot of room for us to move around and grow without redundancy.

What I would tell you is throughout the world.

Speaker 4: We really did well with the existing management team with very small changes. And our intent is, and to date has been, to keep all reps. Like I said, we don't see any reason why we would have to shift or change from that. Even with our distributor partners, the message is clear. We want to go forward with you and work with you on that. And to date, we've been lucky with that, unlike other acquisitions of the past where we have less redundancy and the chance, therefore, to grow and focus faster.

We really did well with the existing management team with very small changes and our intent is and to date has been to keep all reps and like I said, we don't see any reason why we would have to shift or change from that even with our distributor partners. The message is clear we want to go forward with you and work with you on that and.

To date, we've been lucky with that unlike other acquisitions in the past, where we have less redundancy and the chance therefore to grow and focus faster.

Speaker 2: Thank you so much. Your next question comes from the line of Vivek Chopra of Wells Fargo. You may now ask your question.

Thank you.

Thanks. So much. Your next question comes from the line of Nick <unk> of Wells Fargo. You May now ask your question.

Speaker 6: Hey Andy, good afternoon. Thanks for taking the question and congrats on the deal close. So two for me, I guess on the first one is maybe on the guidance, you know, you provided the top line guidance, which you increased as a result of the invasive, but you kept the EPS the same at 230. Maybe just talk about why the EPS guide is not being raised for the deal close. And then I just had one follow up.

Andy Good afternoon, thanks for taking the questions.

Congrats on the deal close so two for me I guess on the first one and maybe on the guidance you provided top line guidance, which have increased as a result of new basin, but you kept the EPS the <unk>.

At June 30, if you could just talk about why the EPS guidance not being raised of deal closed and then I just have one follow up please.

Speaker 5: Yeah, sure. Thanks. This is Keith. Really, the primary driver of that is you have to remember the share count is increasing. So we had give or take 102 million shares coming into or coming out of the second quarter. That grew to about 115 here in Q3, and that'll grow to about 140 in Q4. So your share counts really growing there. And that's really the driver of keeping up to 230.

Yes sure. Thanks, Nick This is Keith really the primary driver of that is you have to remember the share count is increasing so we had give or take 102 million shares coming into or coming out of the second quarter that grew to about 115 here in Q3 and that will grow to about 140 in Q4. So your share count's really growing there and thats really the driver of keeping up to $2.

Speaker 6: Okay, great. Thanks for that color. And then I was just wondering on the hiring trends, maybe talk about what the hiring trends were like in Q3, heading into Q4, and how you see your recruiting and retention efforts shaking out given the deal close. Thanks so much for taking the questions and congrats again.

Okay.

Okay, great. Thanks for that color and then I was just wondering on the hiring trends maybe talk about what the hiring trends were like in Q3.

Heading into Q4, and how you see your recruiting and retention efforts shaking out given the deal closed.

So much for taking the questions and congrats again.

Speaker 4: Thanks, Rick. No, no problem. So, you know, admittedly, we obviously went a bit slower in the third quarter, even though we are getting a lot of

Thanks, Vic no no problem. So admittedly, we obviously went a bit slower in the third quarter, even though we are getting a lot of activity with competitive reps, but just making sure that we flushed out where our territories would be and what we're doing we're on the tail end of that now which is good news for us as we move forward and so we're going back as we are.

Speaker 4: Activity with competitive reps, but just making sure that we fleshed out where our territories would be and what we're doing We're on the tail end of that now, which is good news for us as we move forward

Speaker 4: And so we're going back as we enter into the fourth quarter, ramping up competitive recruiting, been very active with it. And like I said, now that we really know and define the seats, we're able to see where some of those opportunities are.

Or into the fourth quarter ramping up competitive recruiting been very active with it and like I said now that we really know and define the seats, we're able to see where some of those opportunities are and I think like I said it was an okay third quarter intentionally bit slower will accelerate in the fourth quarter now that we've got the roadmap in place.

Speaker 4: And I think, like I said, it was an okay third quarter, intentionally a bit slower. We'll accelerate in the fourth quarter now that we've got the roadmap in place.

Speaker 2: All right. Thank you so much. And your next question comes from the line of the big man from Oppenheimer. Go ahead.

Alright. Thank you so much and your next question comes from the line of Steve Mcmahon from all.

Oppenheimer. Please go ahead.

Speaker 8: Thank you. Hi guys. Thanks for all the color. I appreciate the color on the surgeon overlap. Can you give us a sense of what the overlap is by account, which I assume would be higher than that?

Hi, guys.

Thanks for all the color.

Appreciate the color on the surge in overlap can you give us a sense of what the overlap is by account, which I assume would be higher than that.

Speaker 4: You know, Steve, probably not right off the top of my head, what I would tell you is it's not materially different where you would get into, because keep in mind if you've got a surgeon, which is what you're right, we were talking about, and it's there, it's okay. We'll keep the reps in both of those places. We're capable of doing that if we can support the sales. So we're not.

Yes.

Steve probably not right off the top of my head what I would tell you. It is not materially different where you would get into because keep in mind, if you've got a surge into which is what youre right. We were talking about and it's there.

This okay, we will keep the reps in both of those places we're capable of doing that is we can support the sales. So we're not parsing. This out by account, we still keep a surgeon focus where that is so.

Speaker 4: Parsing this out by account. We still keep a surgeon focus where that is. So, you know I would certainly agree with you that that would get up higher But it's not going to get into the teens of an overlap or anything material that way when it really looks at it again But we're more focused on the surgeon side of this than it is by by a hospital or location

I would certainly agree with you that that would get up higher but it's not going to get into the teens of an overlap or anything material that way when it really looks at it again, but we're more focused on the surgeon side of this then it is by by a hospital or location.

Speaker 8: Okay, got it. Thanks. And keep again, thanks for the color on the layout of the cost synergies. What is going to be the cash outlay to achieve those synergies? And will that will that will that be about the same percentages in terms of the timing of those costs?

Okay got it thanks, Dan and Ken and Keith.

Again, thanks for the color on the layout of the cost synergies, but what is going to be the cash outlay to achieve those synergies and will that will that.

Will that be about the same percentages in terms of the timing of those cost yes. It is.

Speaker 5: No, it's a great question. Our assumption is that the cost to achieve the synergy will be $0.50 on the dollar, and I would lay that out over the trajectory of the three years equally as I stated in my prepared statements.

Great question, our assumption is that the cost to achieve the synergy will be <unk> 50 on the dollar and I would lay that out over the trajectory of the three years equally as.

As I stated in my prepared statements.

Speaker 2: Thank you so much. Then your next question comes to the line of Matthew O'Brien of Fiber Stamberer. Your line is now open.

Okay, great. Thank you guys.

Thank you so much and your next question comes from the line of Matthew O'brien of Piper Sandler. Your line is now open.

Speaker 9: Fill on for Matt. Thanks for taking our questions for starters on the enabling tech side of things. How are those early conversations going with replacing the robot with new accounts? I can appreciate the uncertainty that led to some weakness in sales.

Still on for Matt Thanks for taking our questions for starters on the enabling tech side of things how are those early conversations going with placing a robot with new accounts I can appreciate the uncertainty that led to some weakness in sale.

Speaker 9: on the pole side of things as well, but any color on that would be fine.

On the pulp side of things as well, but any color on that would be helpful.

Speaker 4: Sure, I'll take that so let's start with the Globis enabling tech like I said we've actually been working with

Sure I'll take that so let's start with the Globus, enabling tech like I said, we've actually been working with.

Speaker 4: our former invasive counterparts to train them on the systems, get them familiar with what we offer, understand where these things are going, and create that familiarity as we start getting out to the surgeons. We've not been pushing hard on surgeons. We have done several.

Our former an invasive counterparts to train them on the systems get them familiar with what we offer understand where these things are going and create that familiarity as we start getting out to the surgeons, we have not been pushing hard on surgeons, we have done several.

Speaker 4: but the real goal is to make sure that we have one team that can support this and do it in a way that's non-disruptive. And so that's been progressing and it will accelerate into the fourth quarter as we get ready for next year that way.

But the real goal is to make sure that we have one team that can support this and do it in a way that's non disruptive and so thats been progressing and then we will accelerate into the fourth quarter as we get ready for next year that way.

Speaker 4: The pull system itself, I think there is a natural hesitancy of customers who thought we were going to pull it and get rid of it.

Full system itself I think there is a natural hesitancy of customers, who thought we are going to pull it didn't get rid of it we've been communicating that our intent is to support it not only as is and in the field, but actually enhance it and finish up some of the in progress ways to expand its capabilities and we will make sure that we take that forward in a way that they can perform the functions.

Speaker 4: We've been communicating that our intent is to support it, not only as is and in the field, but actually enhance it and finish up some of the in-progress ways to expand its capabilities.

Speaker 4: and we'll make sure that uh... you know we take that forward in a way that they can perform the functions they want with their system

They want with their systems.

Speaker 9: That's helpful and just as a quick follow up, any color on upcoming pieces of the enabling technical system, how big of a deal is it to combine the legacy offering with neuro monitoring, the new, the neuro monitoring down the road, any idea in terms of Excel to software updates for a first area of target, and then any update to the extended reality headset.

That's helpful and just as a quick follow up any color on upcoming pieces will be enabling tech ecosystem.

Big of a deal is it combined the legacy offering with neuro monitoring by Nuvasive neuro monitoring down the road any idea.

In terms of <unk> software update for area of the target and then any update to the extended reality headset. Thank you.

Speaker 4: Sure. So, you kind of hit a lot of those things. So, one of the first things coming out is going to be our Nav Hub and the instrumentation for that, so that, you know, we've got the robotic navigation through GPS, and now we'll come out and do the freehand navigation with our hub that we plan to put out. A key part of that can be, as you said, the augmented reality headset. The anticipation is an approval, obviously, in 2024. I'm hesitant to give you a date, but I would tell you in mid.

Sure. So you kind of hit a lot of those things. So one of the first things coming out is going to be our NAV hub and the instrumentation for that so that we've got the robotic navigation through GPS and now will come out and do the freehand navigation with our hub that we plan to put out.

A key part of that can be as you said the augmented reality headset.

The anticipation is an approval obviously in 2024 I'm hesitant to give you a date, but I would tell you in mid year.

Speaker 4: year, possibly into third quarters, what I'm looking at, depending on what we get, or push back from FDA, so we're waiting for that through the thing. As far as one of your questions, which if I understood it correctly, we are evaluating the benefits of Pulse and Nura monitoring and seeing where it would make sense.

Year, possibly into third quarter is what I'm looking at depending on what we get or pushback from ft. FDA. So we're waiting for that through the thing.

As far as one of your questions, which if I understood. It correctly, we are evaluating the benefits of pulse and neuro monitoring and seeing where it would make sense if at all to build that capabilities into our existing enabling TACAN and in fact blend them together. So that progress is occurring right now we'll decide probably within that.

Speaker 4: if at all, to build that capabilities into our existing enabling tech and, in effect, blend them together. So that progress is occurring right now. We'll decide probably within the next month or two what we think the future of that will be.

The next month or two what we think the future of that will be.

Thanks, so much.

Speaker 2: Thank you so much. Your next question comes from Alina David Saxon of Feedham. Your line is now open.

Yes.

Thank you so much.

Your next question comes from the line of Steven <unk>.

Your line is now open.

Speaker 9: Oh, great. Good afternoon, Dan and Keith. Thanks for taking my questions. Maybe I'll have a follow-up question on the integration of the Salesforce. I guess, you know, how long does that take? I think you said you're doing territories in November , crossing in December . So, you know, what are the next steps after that? And then which, I guess, major milestones or steps in that process do you think carries the most risk?

Oh, great good afternoon.

Thanks for taking my questions maybe.

Maybe I'll.

I have a follow up question on the integration of the sales force I guess.

How long does that take I think you said.

Youre doing territories in November crossing in December so what what are the next steps after that.

And then rich.

Rich I guess major milestones are steps in that process do you think carries the most risk.

Speaker 4: That's a great question. So we're doing it in two phases, the U.S.

So it's a great question so.

We're doing it in two phases. The U S. We're just finishing up territory. So we've gone from the senior leadership into the field leadership to the territory level and we're just communicating that out and getting them together, we're doing cross training in the fourth quarter for products and the availability for them as a form teams to obviously support each other.

Speaker 4: We're just finishing up territory. So we've gone from the senior leadership into the field leadership to the territory level. And we're just communicating that out and getting them together. We're doing cross-training in the fourth quarter for product.

Speaker 4: and the availability for them as they form teams to obviously support each other so that they would be active in doing that beginning in January .

So that they would be active in doing that beginning in January.

Speaker 4: Um, we're looking to do something similar internationally. We're probably, you know, say about a month behind with that, where we have the leadership to find. We're finishing up territories probably in November start to cross training as well in December , and I think that will probably take us into January with a little more solidity internationally in the February time frame.

We're looking to do something similar internationally, we're probably say about a month behind with that where we have the leadership defined we're finishing up territories probably in November start to cross training as well in December and I think that will probably take us into January with a little more solidity internationally in the February timeframe.

Speaker 4: Great limiting steps. I think you're just going to be the availability of the people to get to get together and train without disrupting surgeon support. We're going to make sure that that's first and foremost, I would think one of the key milestones for us is the combination of our systems that will support the field and the replenishment and the ordering. We're working on that at a rapid pace as well. And I would think that they're the two items that are probably first and foremost on us to make sure we get right.

Great limiting step so I think you're just going to be the availability of the people to get to get together and train without disrupting surgeon support we're going to make sure that that's first and foremost.

I would think one of the key milestones for US is the combination of our systems that will support the field and the replenishment in the ordering we're working on that at a rapid pace as well and I would think that they're the two items that are probably first and foremost on us to make sure we get right.

Speaker 9: Okay, super helpful. Thanks for that. And then just on the knee robot, you know, I feel like I ask about it every once in a while. So just, you know, what's the update there, especially around timing? Is that, you know, an early 24 launch? And then also how are you feeling about the StelCast implant portfolio and, you know, the strategy with that on the back of the knee robot launch? Thanks so much.

Okay Super.

Thanks for that and then just on the knee robot.

I feel like I asked about it every once in a while so just.

What's the update there.

Especially around timing is that an early 24 launch and then also how are you feeling about the stall cap implant portfolio.

The strategy with that on the on the back of the knee robot launch. Thanks, so much.

Speaker 4: Yeah, you're welcome. I'll answer that one as well. The knee robots really progressed far. I think we're in the process of fine tuning what we want to do for filings. I would tell you the first half.

Youre welcome I'll answer that one as well the knee robot has really progressed far I think we're in the process of fine tuning what we want to do for filings I would tell you. The first half of 2024 is the target again remember we are at the Fda's disposal with that but I would be surprised honestly, if we didn't exit the first half of the year with that.

Speaker 4: Of 2024 is the target. Again, remember, we're at the FDA's disposal with that. But I would be surprised, honestly, if we didn't exit the first half of the year with that. With that comes, obviously, the cementless knee, which I think will be the major player there. And that as well, progressing on a good pace with it. I think 2024 we'll start talking, obviously, more about.

With that comes obviously, the cement less knee, which I think will be the major player there and that is well progressing on a good pace with it I think 2024, we will start talking obviously more about.

Speaker 4: uh... the joints in total while i don't know if given our current size with the merger it'll be a material left it'll be nice to actually get out the door with the start talking about it and then see it contribute in the years after that

The joints in total while I don't know if given our current size with the merger it'll be a material lift it will be nice to actually get out the door with this start talking about it and then see it contribute in the years after that.

Great. Thanks, so much.

Speaker 2: Thank you so much. Your next question comes through the line of black men of Stevele. Your line is now open.

Thank you. So much. Your next question comes from the line of software Blackman of Stifel. Your line is now open.

Speaker 9: I appreciate you taking my questions, and I appreciate it's really early, but just curious if you're seeing any, call it green shoots as we think about cross-selling and potential revenue synergies. For instance, any uptick in surgeon engagement or training from the new basis side, just anything worth calling out, and I've got one quick follow-up.

I appreciate you taking my questions and I appreciate it's really early but just curious if youre seeing any call. It green shoots as we think about cross selling and potential revenue synergies for instance, any uptick in surgeon engagement or training from the new base Aside just anything worth calling out and I've got one quick follow up.

Speaker 4: I would say that that's probably a great question, and the answer is yes. So what you're seeing is there's some great products that come together, whether it be the pedicle screw system with a different retractor or expandables with a lateral, different items like that. So as we've talked about, when we begin coming out with one combined portfolio,

I would say that that's probably a great question.

And the answer is yes, so what youre, saying is theres some great products that come together, whether it be the pedicle screw system with a different retractor are expandable as with the lateral different items like that so as we've talked about when we begin coming out with one combined portfolio. The surgeons are excited about that they see the ability to do that obviously, we need <unk>.

Speaker 4: The surgeons are excited about that. They see the ability to do that. Obviously, we need surgeons to help us cross-train our reps and to help spread those around. So you're right.

To help us cross train our reps into help spread those around so you're right. We're looking to increase surgeon engagement through different paths like that.

Speaker 4: We're looking to increase surge in engagement through different paths like that.

Speaker 4: We're also being mindful as to what products are in development for, you know, the Nuva team and the GMAT team, and looking to make sure that they come out as a complementary approach and not conflicting, and again, working with surgeons and those development teams to do that as well.

We're also being mindful as to what products are in development for the <unk> team and the <unk> team and looking to make sure that they come out as a complementary approach and not conflicting and again working with surgeons in those development teams to do that as well.

Speaker 10: Okay, I appreciate that. And then a specific question. Do you need 510K approvals to get the new days of implants on the robot, or any help on how to think about potential timelines for when that might be available? Thanks.

Okay. I appreciate that and then specific question need 500, 10-K approvals to get the new base of implants on the robot.

Any help on how to think about potential timelines for when that might be available. Thanks I appreciate it.

Speaker 4: All right. Well, listen, I would tell you that we're in the process of designing instrumentation. The implants are there. We're putting the software in place. I think we have to evaluate what that would warrant. We're obviously going to do what's required. Some may and some may not, depending on the extent of where we're going with that. So we're in the evaluation of it. Your real question and what I'm going to answer is we're actively modifying software and making sure that there's instrumentation that allow our system.

Alright, well listen I would tell you that we're in the process of designing instrumentation and implants are there we're putting the software in place I think we have to evaluate what that would warrant. We're obviously going to do what's required some may and so it may not depending on the extent of where we're going with that so we're in the evaluation of it your real question of what I'm going to answer is were actively.

Modifying software and making sure that there's instrumentation that allow our systems to use the innovative products and that is first and foremost with enabling tech doing it in a compliant way that makes sense is what we will do as a next step.

Speaker 4: to use the Innovasiv products and that is first and foremost with the enabling tech.

Speaker 4: Doing it in a compliant way that makes sense is what we'll do as a next step.

Thanks again.

Speaker 2: And your next question comes from the line of Jason Witt of Ross, your line is now open.

Our next question comes from the line of Jason Lee.

Your line is now open.

Speaker 11: I'm just curious on sales horse just energy things like that. I know there's been quite a few questions on this for obvious reasons, but when do you guys think you have a handle on sort of worthings fall? Is that after you've kind of just made your final decisions on management territories, or is it six months out after that, or is it kind of something middleing years for two years?

Yeah.

I'm just curious on Salesforce dis synergies things like that I know, there's been quite a few questions on this for obvious reasons, but when do you guys think you have a handle on.

Where things fall is that after you kind of just major final decisions on management territories or is it six months out after that or is it kind of a good lingers for two years.

Speaker 4: Yeah, Jason, it's a good question. Look, like anything, you've got to tease out natural moves and attrition with maybe something that is a bit more because of the disruption created. You know, things will always be ongoing, but I wouldn't say that because of the coming together of the merger that we would be experiencing this two years from now. We've already defined the U.S. Salesforce in particular, and that's where most of you guys have your focus on all the way down and just finishing up rep levels.

Yes, Jason that's a good question look like anything you've got a tease out natural moves in attrition with maybe something that is a bit more because of the disruption created.

Things will always be ongoing, but I wouldn't say that because of the coming together of the merger that we would be experiencing this two years from now.

Already defined the U S sales force in particular, and that's where most of you guys have your focus on all the way down and just finishing up rollout rep levels and so I think as we on Ts that and make sure that people understand where they sit and how beneficial. This is to them I would think that when we get through the third quarter and the fourth quarter through this call and into it.

Speaker 4: And so I think as we untease that and make sure that people understand where they sit and how beneficial this is to them, I would think that as we get through the third quarter and the fourth quarter through this call and into it, that we should see things settle down more. And then as we get into a stabilizing of this in the first quarter, that's where I'm going now. I think folks will decide and move as always.

That we should see things settle down more and then as we get into a stabilizing of this in the first quarter, that's where ongoing now.

Think folks will decide and move as always.

Speaker 4: But I don't think there's a big holding the breath and all of a sudden this will happen. I don't anticipate that at this point.

But I don't think Theres, a big holding their breath and all of a sudden this will happen I don't anticipate that at this point.

Speaker 11: Okay, that's very helpful. And maybe just a very quick follow up. I don't know if this has been asked in the past, but I assume for the knee products, it's going to be completely focused on robotics. There's not going to be manual tools to put them in as well. I just want to clarify that for the knee launch.

Okay. That's very helpful and maybe just a very quick follow up I don't know if this has been asked in the past but.

I assume for the knee products, it's going to be completely focused on robotics or is it going to be manual tools to put them in as well just wanted to clarify that for the <unk> launch.

Speaker 4: Yeah, there's definitely the ability to do it freehand, do it robotically, do it through navigated procedures. We're going to give all of the options needed so the surgeon's choice to do that, not just a pure robotic move for our implants.

Yes, there is definitely the ability to do it.

Freehand do it robotically do it through navigated procedures, we're going to give all of the options needed. So the surgeons choice to do that not just a pure robotic move for our implants.

Got it thank you very much.

Speaker 2: Thank you so much. And again, if you would like to ask a question, please press star one one on your telephone.

Thank you so much and again, if you would like to ask a question Revpar one one on your telephone.

Speaker 2: And your next question comes from the line of the leader of Truett Security. Your line is now open.

And your next question comes from the line of Richard <unk>.

Up to the security your line is now open.

Sam on for Rich can you hear me okay.

Yes.

Speaker 10: Just I know I know we're not talking about 2024 But just want to see we could put a finer point on the EPS side of things I'm pretty wide range of consensus right now looks like about a 40 cent range in 2024 For EPS and it is the midpoint of call it like 260 to $3 Directionally a good place to start and could you just walk us through the puts and takes the bridge? Yeah, so the consensus to an arrow range, maybe

Just I know I know, we're not talking about 2024, but I just wanted to say, we could put a finer point on the EPS side of things.

<unk> wide range of consensus right now it looks like about 40% range in 2024 for EPS the midpoint of call. It like 260 to $3 Directionally a good place to start and could you just walk us through the puts and takes to bridge.

Turning to consensus to a narrow range maybe yes.

Speaker 5: Yes, Sam, I'm not going to give point of guidance here as it relates to 2024. What I will tell you is.

Sam I'm not going to give point of guidance here as it relates to 2024, what I. What I will tell you is we're excited about where the business is going there is lots of products coming Dan talked about the number of product launches that we had this year.

Speaker 5: We're excited about where the business is going. There's lots of products coming. Dan talked about the number of product launches that we had this year. Next year, there's a lot of capital coming out. The cross selling is going to take effect. Obviously, that's going to be offset by some sales synergies. But that, to me, points positive and really ties back to the earlier comment that I made that for now, I would focus on our S4 estimate for revenue.

Next year, there is a lot of capital coming out the cross selling is going to take effect, obviously, that's going to be offset by some sales dis synergies, but that to me points positive and really ties back to the earlier comment that I made that for now I would focus on our S. Four estimate for revenue.

Speaker 5: As it relates to cost synergies and achieving synergies, a couple of things that are going to happen. Obviously, you're going to be looking to eliminate redundant costs, but one of the things that I talked about was manufacturing and manufacturing efficiencies and supply chain efficiencies. You have to remember that some of those costs will get captured on the balance sheet and roll through the P&L in future periods.

It relates to cost synergies and achieving synergies a couple of things that are going to happen, obviously youre going to be looking to eliminate redundant costs, but one of the things that I talked about was manufacturing and manufacturing efficiencies and supply chain efficiencies you have to remember that some of those costs will get captured on the balance sheet and roll through the P&L in future periods the thing.

Speaker 5: The thing to pay attention to is the cash and the cash flow generation of the business as you move forward.

Attention to is the cash and the cash flow generation of the business as we move forward. That's about all I would say right now as it relates to 2024.

Speaker 5: That's about all I would say right now as it relates to 2024. If I think about consensus and consensus estimates, I know there is a wide range out there. But I also recall that not all of the models were updated for 2024. So that's how.

If I think about consensus and consensus estimates I know there is a wider range out there, but I also recall that not all of the models are updated for 'twenty four.

So that's how I'd leave it.

Speaker 10: And then I guess on the synergy side, I think one of the areas a little bit less focused on is potential for trauma or overlap and potential cross-selling there. Could you just sort of tell us how you think about those portfolios getting integrated and where that growth rate can go going forward?

Got it and then I guess on the synergy side I think one of the areas a little bit less focused on is the potential for trauma over overlap and potential cross selling there.

Could you just sort of tell us how you think about those portfolios getting integrated and where that growth rate can go going forward. Thanks.

Speaker 4: Thanks, and I'll take that. So there's a couple things. Really, the NSO specialty orthopedics part is a fantastic add to our bag. That nail will allow us to do many things for long bones. Its ability with ankle fusion will be amazing with hind foot. And so that in itself we see bringing in and bringing to our existing trauma team that will further accelerate growth and create pathways into accounts.

Thanks, Jim I'll take that so there's a couple of things really the NSO.

Specialty orthopedics part is a fantastic add to our bag that now will allow us to do many things for long bones.

Ability with ankle fusion will be amazing with hind foot and so that in itself, we see bringing in and bringing to our existing trauma team that will further accelerate growth and create pathways into accounts.

Speaker 4: The majority, if not all, of the Nuvasiv activity is really done through third parties, and so we're evaluating those distributorships and understanding where they are, and making the determination if we want to do anything with our Globus trauma business that way or not. But really the goal here, and what was a great add, was those nails from Nuvasiv coming into our bag and actually pulling us forward several years in our innovation and ability to address the market.

The majority if not all of the new base of activity is really done through third parties and so we're evaluating those distributorships and understanding where they are.

In making the determination if we want to do anything with our globus trauma business that way or not but really the goal here in what was a great add was those nails from new base of coming into our bag and actually pulling us forward several years in our innovation and ability to address the market.

Thanks for taking the questions.

Speaker 2: Thank you so much and your next question comes from the line of Drew Ranier of Morgan Stanley . Your line is now open.

Thank you so much.

The next question comes from the line of Gene <unk> of Morgan Stanley. Your line is now open.

Speaker 12: about the background noise here. But could you speak to maybe some of the enabling technology trends that you saw in the quarter? And just as we do think about the merger looking ahead, you've had a history of really kind of placing systems via capital versus lease, but you have a significant cross-selling opportunity ahead of you with the new basis account. So do you expect a dramatic change in the mix of capital versus leasing looking ahead? And then I have a follow-up.

Sorry about the background noise here.

But could you just speak to maybe some of the enabling technology trends that you saw in the quarter and just as we do think about the merger looking ahead <unk> had a history of really kind of placing systems via capital versus lease or you have a significant cross selling opportunity ahead of you with the new base of accounts. So you expect to.

<unk> change.

And the mix of capital versus leasing.

Looking ahead that I had a follow up.

Speaker 4: This is Keith. I'll take the question. So as I think about enabling tech.

This is Keith I'll take the question so as I think about enabling tech the market is still the market still has a lot of appetite for enabling tech I will say that I think capital dollars are perhaps a little bit tighter. So there are more options available to customers in terms of how they acquire the capital.

Speaker 5: The market is still has a lot of appetite for enabling tech. I will say that I think capital dollars are perhaps a little bit tighter. So there are more options available to customers in terms of how they acquire the capital. You commented on leasing. I want to remind everyone that, yes, the majority of our capital purchases are outright sales. We net 30 terms.

You commented on leasing.

To remind everyone that yes, the majority of our capital purchases or outright sales.

Speaker 5: We have the ability to offer other ways to acquire the capital, including rental programs, leases, you name it. So as the market shifts,

30 terms, but we have the ability to offer other ways to acquire the capital including rental programs leases.

<unk>. So so as the market shifts we have the ability to respond to the market.

Speaker 5: We have the ability to respond to the market. We're taking into consideration the point of, obviously, all these newvasive territories opening up to ourselves to sell the capital. Dan commented earlier that from a manufacturing perspective, we've been building that capital to have it ready because we want to be able to strike as we really roll out the cross-selling plan. But to answer your question, we will be able to address the market to sell the capital in any way that the customer needs to acquire it.

We're taking into consideration of the point of obviously, all these new nuvasive territories opening up to ourselves to sell the capital Dan commented earlier that from a from a manufacturing perspective, we've been building that capital take habit ready because we want to be able to strike as we really roll out the cross selling plan.

To answer your question, we will be able to address the market to sell the capital in any way that the customer needs to acquire it.

Speaker 12: Thanks, Keith. And maybe also for you, with breaking out kind of three segments now for revenue, can you just give us a little better sense of maybe how you expect growth to play out in the fourth quarter now that you are breaking up this revenue a little bit of a different way? Thanks for taking the question.

Thanks, Keith and maybe also also for you.

With breaking out kind of three segments now for revenue can you just give us a little better sense of maybe how you expect growth to play out in the fourth quarter.

Breaking up this.

The revenue a little bit of a different way thanks for taking the question.

Speaker 5: The revenue is broken out, so historically we reported on musculoskeletal and enabling technologies. That obviously remains. We added the neuromonitoring services. As I think about Q4, you would expect to see the same seasonality in capital as you always do. Q2 and Q4 are the two highest quarters. We don't expect that to change. And obviously you would expect to see the seasonal bump that you would experience in spine as we get towards the end of the year and the harvest season.

The revenues broken out so historically, we reported on musculoskeletal and enabling technologies.

Obviously remains we added the Neuromodulators services.

I think about Q4, you would expect to see the same seasonality in capital as you always do Q2 and Q4, the two highest quarters, we don't expect that to change and obviously you would expect to see the seasonal bump that you would experience in spine as it gets towards the end of the year in the harvest season.

Speaker 4: Yeah, you're one thing out at two from my earlier comment. We are breaking that out more for visibility right now. We made decide that it fits better, can solidate that over time. But right now we're just kind of following through what our new guys did as we got into the year for our first time announcing some of this.

Yes drew one thing I would add too from my earlier comment we are breaking that out more for visibility right. Now we may decide that it fits better consolidate out over time, but right now we're just kind of following through what our newer guys did as we got into the year for our first time announcing some of this.

Speaker 12: Got it. Maybe one last question, but as you are looking at the businesses today that you're now combined, do you see any incremental opportunities to divest anything non-core or slower growth just to refine the portfolio and really get some more accretive growth out of the merger bank?

Got it maybe one last question, but as you are looking at the business is today.

You are now combined do you see any incremental opportunities to divest anything non core.

Or slower growth just to refine the portfolio.

Really that's more accretive growth out of the merger.

Speaker 4: Yeah, I would say no, not at this time. We're evaluating everything. We've not seen anything that would be a good candidate at this point. We'll always do what's best. But right now, there's nothing that comes to mind.

Yes, I would say no not at this time, we're evaluating everything we've not seen anything that would be a good candidate at this point, we'll always do what's best for <unk>.

Now there is nothing that comes to mind.

Okay.

Speaker 2: All right, well, thank you so much. And your next question comes from the line of Ryan Zimmerman of BPIG. Your line is now open.

Alright, well. Thank you so much and your next question comes from the line of Ryan Zimmerman of <unk>. Your line is now open.

Speaker 13: I'm glad I could get squeezed in here. Just on the quarter itself, if I look at kind of new as revenue, look at kind of next quarter, I think, you know, the street.

I'm glad I could get squeeze in here.

Just on the quarter.

If I look at kind of newest revenue.

Okay.

Next quarter.

I think.

Speaker 13: $445 million or so for consensus, for NUVA, you know, we're kind of going to hone in on maybe $415.

<unk> was estimated around <unk>.

400.

<unk> $45 million or so.

For consensus for <unk>.

We're kind of kind of hone in on maybe $4 15.

Speaker 13: And I'm just wondering if you could kind of comment on that, that Delta, you know, is that in line with kind of

And just wondering if you could kind of comment on that that delta.

Is that in line with kind of.

Speaker 13: where you're tracking from a dis-synergy standpoint, kind of how to think about that difference there.

Where you're tracking from a synergy standpoint.

Kind of how to think about that that difference there.

Speaker 13: And then I'll ask another question after.

And then I'll ask another question afterwards.

Speaker 5: Thanks, Ryan. This is Keith. Your question. You said the street was modeling 415 for new bases.

Thanks, Brian This is Keith.

Your question you said the street was modeling for 15 for Nuvasive.

Speaker 13: now i think what we take a hundred and two uh... and you assume that coupled with i think next quarter which was maybe uh... about three hundred so million

No I think well if you take the 102.

You assume that coupled with I think next quarter, which was may be.

About 300 or so million.

Speaker 13: 415, and I think the street was around 445 for the, if my numbers are correct.

Come out.

The 415 and I think the 445 for the if my numbers are correct.

Speaker 5: Yeah, I think that it's a great question, and as I think about the numbers we put out, the implied guidance represents $2.377 billion. Coming into the year, Globus projected guidance of $1.1 billion in evasive. They were a range of 6% to 8%. If I take the low end of the range in our number, that's $2.374.

Yes, I think that it's a great question and as I think about the numbers, we put out the implied guidance represents $2 $3 77 billion.

Coming into the year Globus projected guidance of 1 billion won an invasive they were a range of 6% to 8% if.

If I take the low end of it particularly the range in our number that's two to $3 74, we're projecting to 377% on a combined basis.

Speaker 5: We're projecting 2377 on a combined basis. We think that relative to what we've previously stated in our S4, we feel that the business is lined up as to where it should be.

We think that that relative to what we've previously stated our S. Four we feel that the business is lined up to as to where it should be yes, Ryan one thing that I'd add in there because I'm not sure if im reading this between the lines. So forgive me but.

Speaker 4: Yeah, and Ryan, one of the things I'd add in there, because I'm not sure if I'm reading this between the lines, so forgive me, but I'm

Speaker 4: We're not saying we're bleeding out because of the synergies. We've not seen anything that would have materially moved us off of any of our estimates related to that.

We're not saying, we're bleeding out because the dis synergies, we've not seen anything that would have materially moved us off of any of our estimates related to that.

Speaker 13: Yeah, no, I appreciate Dan and recognizing right now, consensus is kind of messy, but with the integration and the merger, just want to ask why. And then the second question I want to ask is just around your margins, particularly your gross margins, Keith, I recognize there's this step up in inventory that you're accounting for.

Yes.

I appreciate that and recognizing right now consensus is kind of messy, but with the integration and the merger just wanted to ask about it and then the second question I wanted to ask is just around your margins, particularly your gross margins Keith.

I recognize there is the step up in inventory.

The accounting for it.

Speaker 13: Just maybe help us, because I'm not entirely clear where your gross margins can go on a combined basis and how to think about those.

Just maybe help us because I'm not entirely clear.

Where your gross margins can go on a combined basis.

And how to think about those not just for the fourth quarter, but really into 2020 for longer term, yes, that's a great question.

Speaker 5: or long-term? Yeah, no, that's a great question. It's always our intent to be extremely clear to be a mid-70s gross profit business. That is the goal of Globus. It has been and it will be going forward. As we work through bringing the businesses together, I commented on earlier about some of the manufacturing efficiencies that we see, some of the warehousing efficiencies that we see. Those, to me, will all contribute to us.

It's always our intent to be extremely clear to be a mid seventies gross profit business that is the goal of globus. It has been and it will be going forward as we work through bringing the businesses together I commented on earlier about some of the manufacturing efficiencies that we see some of the warehousing efficiencies that we see those to me will all contribute to us showing.

Speaker 5: showing an increasing consolidated gross profit from where we are versus the initial combination of the business.

An increase in consolidated gross profit from where we are versus the initial combination of the business. It.

Speaker 4: It's our belief that we can still drive mid-70s GP going forward. Obviously, there's going to be some step changes as we get there, as we bring the companies together. But, you know, the global goal of mid-70s hasn't changed. Yeah. And, Ryan, I'll build on that, too. So we talk a lot about insourcing and investing in manufacturing and additional, like he said, because that will be a key driver. We can drive our product costs down.

It's our belief that we can still drive mid Seventy's GP going forward, obviously, there's going to be some step changes as we get there as we bring the companies together, but.

Globus goal of mid seventies, Hasnt changed Dan Ryan I'll build on that too. So we talked a lot about in sourcing and investing in manufacturing and additional keys said because that will be a key driver. We can drive our product cost down that will allow us to not only improve gross margin, but instead to turnaround and invest deeper into the.

Speaker 4: That will allow us to not only improve gross margin, but instead to turn around and invest deeper into the sales force. So it's a major focus of us to do in-house manufacturing, line up with our contracts and come out with the best pricing with our vendors.

Our sales force. So it's a major focus of us to do in house manufacturing lineup with our contracts and come out with the best pricing with our vendors and that in itself will help lift us back to our targets that Keith mentioned.

Speaker 4: And that in itself will help lift us back to our targets that Keith mentioned.

Okay. Thanks, guys.

Speaker 2: Thank you. Thank you so much. And your next question comes from the line of Matt Taylor of Trend Reads. Your line is now open.

Thank you.

Thank you so much and your next question comes from the line of Matt Taylor of Jefferies. Your line is now open.

Speaker 9: Hey, thanks guys. I wanted to ask a similar question, slightly different way. I guess I'll start with, you know, some of your competitors have made noise about taking reps from the combined entity, you know, big for them, kind of small for you. And everything I heard on this call from you today in terms of lower surgeon overlap and being within your targets and seeing competitive activity coming your way sounds positive for the integration.

Hey, Thanks, guys I wanted to ask.

Similar question slightly different way.

I guess I'll start with some of your competitors have made noise about taking reps from the combined entity for them kind of small for you and everything I heard on this call from you today in terms of lower surgeon overlap and being within your target and seeing.

Additive activity coming your way it sounds positive for the integration.

Speaker 14: So my question is really, is that right? Are you on track? And is there any thought or potential for you to actually outperform?

So my question is really.

Is that right or you you're on track and is there any thought or potential for you to actually outperform the.

Speaker 14: the synergy or dis-synergy estimates that you've put out there or the right to think about being straight down the fairway or the base case is most likely.

The synergy or the synergy estimates that you've put out there or is it right to think about being straight down the fairway of the base cases, most likely.

Speaker 4: that were were early on on that so i'm gonna let you know about three years now that i have a book will be right now is we've not seen surprises and and i think we're standing behind our numbers is what we're saying and and we're getting there's one month of actual and everything you've said is legitimate what we've got to do is focus on getting the commercial team

Yeah, Matt were early on on that so I'm going to let you know in about three years now.

What we will do right now is we have not seen surprises and I think we are standing behind our numbers is what we're saying and again there was one month of actual and everything you've said is legitimate but we've got to do is focus on getting the commercial team stabilized make sure. We trained get our products delivered accelerate how we have common systems, bringing in house manufacturing for <unk>.

Speaker 4: Make sure we train, get our products delivered, accelerate how we have common systems, bring in-house manufacturing for more flexibility, and then go back and flex all of that strength to become who we need to be.

More flexibility and they go back and flex all of that strength to become who we need to be.

Speaker 5: But, you know, at this point, we're going to shy away from saying we can outperform or fall short. We're going to stick to the synergies that we've thrown out. We've got a pathway to go get there. As we get more data and experience under our belt, maybe that's a different conversation. And the only comment that I would add there is, obviously, change creates disruption in the market. But as I think about Globus...

But at this point, we're going to shy away from saying, we can outperform our fall short we're going to stick to the synergies that we've thrown out we've got a pathway to go get there as we get more data and experience under our belt, maybe that's a different conversation and the only comment that I would add there is obviously change creates disruption in the market, but as I think about globus wheat globus need.

<unk> to be Globus and focus on our plan, we obviously need to be aware of the competitive landscape, but we have to stick to our plan and work our plan and if we do that we believe will be successful.

Okay, great. Thank you guys.

Speaker 2: Thank you so much. And with no further questions, that concludes the Global Medical Earnings Call. Thank you for participating and you may now disconnect.

Thank you so much and with no further questions that concludes the globus.

Medical earnings call. Thank you for including you may now begin.

Got it.

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